Case Law Details
K. Ramya & Ors. Vs National Insurance Co. Ltd. & Anr. (Supreme Court of India)
Conclusion: In present case, the Hon’ble Supreme Court enhanced the Compensation under Motor Vehicles Act, by considering the income of the deceased under the heads of “Income from Business and other investments” and “Income from Property and Agricultural Land” as the deceased was having specialized skills in administering the business and was having good managerial skills.
Facts: The present appeal is directed against the judgment dated 30.06.2017 passed by the Hon’ble High Court of Madras against the award dated 06.10.2012 passed by Motor Vehicle Accident Claims Tribunal. The Hon’ble High Court decreased the awarded compensation to Appellants from Rs. 4,29,37,700/ to Rs. 57,90,000/ along with requisite interest.
The Deceased in the said case was aged above 31 years at the time of death and was an income tax assessee. The Deceased’s dependents filed a claim petition for Rs. 7,00,00,000/ in August 2004. The aggrieved Insurance Company filed its appeal which was decided through the impugned judgement dated 30.06.2017. The High Court although being in total agreement with the Tribunal’s reasoning in finding that the Ambassador Car driver was solely liable for the accident, disagreed with the approach of the Tribunal in respect to the computation of compensation, primarily under the head of ‘loss of income’. It emphasized that the Deceased before his death had transferred his interest in some of the partnership firms in favour of his minor children. Furthermore, it highlighted that almost all of the Deceased’s income consisted of returns he received on his capital assests. Even after his death, the same assets were transferred to his legal heirs who continued to enjoy the benefits derived from them. The impugned judgement’s reasoning was hinged on the premise that income derived from capital assets cannot be said to be income earned out of the Deceased’s personal skills as there was no real contribution by him. Consequently, the High Court concluded that the Deceased’s dependants suffered no loss of income and instead computed the compensation by fixing his salary at Rs 25,000/ per month on a notional basis as per his educational qualification. Furthermore, it also made minor alterations under other conventional heads and accordingly, the compensation was reduced to Rs 57,90,000/ along with interest of 7.5% per annum.
The Hon’ble Supreme Court after taking submissions of both sides into consideration have observed that it is pertinent to reiterate the concept of ‘just’ compensation under Section 168 of the Act. It was observed that Motor Vehicles Act of 1988 is a beneficial and welfare legislation that seeks to provide compensation as per the contemporaneous position of an individual which is essentially forward looking.
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