24 June 2024


High Court of Jammu and Kashmir

United India Insurance Company Limited Vs. Gulshana and Ors.



Motor Vehicles

'Just compensation' has to be determined on basis of fairness, reasonableness and equitability

Impugned in present Appeal is Award passed by Motor Accident Claims Tribunal ("Tribunal") on a Claim Petition directing Appellant Insurance Company to pay compensation in the amount of Rs. 6,83,000 along with 6% interest per annum from the date of institution of claim till realization, on the grounds made mention of therein.

A claim petition was filed by Respondents 1 to 9 before the Tribunal averring therein that, deceased, aged 23 years, died in an accident, which took place on 10th April 2011 at Sopat National Highway, due to rash and negligent driving of driver of offending vehicle, which was insured with Appellant Insurance Company.

Deceased, as is evident from the file and impugned Award, was a skilled labour and was also studying side by side. He was hit by offending vehicle while he was unloading fertilizer bags from the vehicle. The income has been rightly computed by the Tribunal as Rs. 6000 per month.

There is a contention of learned counsel for Appellant that, Respondents 3 to 9 are not dependents on deceased and one-half deduction in income of deceased was to be made by Tribunal. This contention of Appellant Insurance Company is specious. The Tribunal relied upon the law laid down by the Supreme Court in the case of Sarla Verma vs. Delhi Transport Corporation, in which it was held that in case where deceased has a large number of younger non-earning sisters or brothers, his personal and living expenses can be restricted to one-third and contribution to the family will be taken as two-third. Having said that, addition of 50% future prospects awarded by the Tribunal in terms of impugned Award, need not to be interfered with.

The Tribunal has also rightly applied the multiplier and multiplicand. Compensation on other accounts has been given by Tribunal rightly, rather conservatively. As regards driver was not having proper driving licence, Appellant Insurance Company failed to adduce any witness in support of this contention.

The Supreme Court in the case of Sarla Verma vs. Delhi Transport Corporation has laid down the principles governing determination of quantum of compensation in the case of death in a motor accident. The Supreme Court held that, compensation awarded does not become 'just compensation' merely because the Tribunal considers it to be just. Just compensation is adequate compensation, which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit. To have uniformity and consistency, Tribunals should determine compensation in cases of death, by following well settled steps, namely, ascertaining multiplicand (annual contribution to the family), multiplier and calculation of loss of dependency by multiplying the multiplicand by such multiplier.

A Constitution Bench of the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi, has held that Section 168 of Motor Vehicles Act, 1988, deals with concept of 'just compensation' and same has to be determined on foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of 'just compensation' has to be viewed through the prism of fairness, reasonableness and non-violation of the principle of equitability. In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance. Though the discretion vested in the Tribunal is quite wide, yet it is obligatory on the part of the Tribunal to be guided by the expression, i.e., just compensation. Impugned Award does not warrant for any interference and as a corollary thereof Appeal on hand is liable to be dismissed. Appeal dismissed.


Sarla Verma and Ors. vs. Delhi Transport Corporation and Ors. MANU/SC/0606/2009
, National Insurance Company Ltd. v. Pranay Sethi, MANU/SC/1366/2017

Tags : Compensation Quantum Legality

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