Murugan’s Dependants’ Award Raised To ₹15.37 Lakh, But Madras HC Orders Owner—Not Insurer—to Pay After Upholding Fake-Policy Finding

The appellants, dependants of Murugan, sought compensation for his death in a road accident on 22 March 2014.

The Tribunal found the accident was caused by the first respondent’s negligent driving and awarded Rs.13,51,000 with interest at 9% per annum.

It accepted the insurer’s contention that the policy produced for the offending vehicle was fake, exonerated the insurer, and directed the vehicle owner to pay the award.

The claimants appealed, seeking both enhanced compensation and application of the pay-and-recover principle against the insurer.

Section 173 of the Motor Vehicles Act, 1988, provides for an appeal to the High Court against an award of the Claims Tribunal.

The Court referred to National Insurance Co. Ltd. v. Pranay Sethi for future-prospects principles and Sarla Verma v. Delhi Transport Corporation for the deduction of personal and living expenses and selection of the multiplier.

On pay and recover, the Court reasoned that a third-party claimant’s status alone does not establish an insurer’s liability where the policy is affirmatively found to be fake; the finding must be assessed on its evidentiary basis.

No specific statutory provision or precedent governing pay and recover was identified in the judgment.

The Tribunal had accepted the insurer’s evidence that the policy was fake, and the owner had not effectively rebutted that contention.

On that basis, the Court declined to impose pay-and-recover liability and sustained the insurer’s exoneration.

On quantum, it considered the Tribunal’s monthly-income assessment of Rs.6,500 low for the deceased’s agricultural and vegetable-vending work and fixed income at Rs.7,500, adding 40% for future prospects.

It then applied a one-third deduction and multiplier of 16 to calculate loss of dependency at Rs.13,44,000, and enhanced the conventional heads.

The reasoning contains an internal inconsistency: paragraph 9.4 states that the deceased was a bachelor and that a 50% deduction ordinarily applies, but paragraph 9.5 uses a one-third deduction.

The judgment does not explain the departure.

The total award was enhanced from Rs.13,51,000 to Rs.15,37,000, with interest at 7.5% per annum from the date of the claim petition.

The pay-and-recover plea was rejected; the vehicle owner was directed to deposit the award, including the enhanced amount and interest, within eight weeks.

The claimants may withdraw their shares in accordance with the Tribunal’s apportionment.