Full Text
HIGH COURT OF DELHI
NEW INDIA ASSURANCE COMPANY LTD .....Appellant
Through: Mr. Ravinder Singh, Ms. Raveesha Gupta, Mr. Ritvik Bhardwaj & Ms. Nishita Kushwaha, Advs.
Through: Mr. S.N. Parashar and Mr. Ritik Singh, Advs. for R-1 & 2.
KAMLA & ORS .....Appellants
Through: Mr. S.N. Parashar and Mr. Ritik Singh, Advs.
Through: Mr. Ravinder Singh, Ms. Raveesha Gupta, Mr. Ritvik Bhardwaj & Ms. Nishita Kushwaha, Advs. for R-1.
JUDGMENT
1. MAC.APP. 133/2014 has been filed by New India Assurance MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 2/14 Company Ltd (hereinafter, ‘Insurance Company’), while MAC.APP. 948/2014 are cross objections filed by claimants. For the purposes of reference, parties will be referred to by their name, rather than as appellant/respondent etc.
2. While the Insurance Company seeks correction in the amounts awarded under the non-pecuniary heads, namely, loss of estate, funeral expenses and loss of consortium, along with correction in future prospects and multiplier to align itself with the principles enunciated in National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680 (‘Pranay Sethi’). Cross-objection raised on behalf of claimants is regarding the application of minimum wages taken for a matriculate for the deceased, considering he was a diploma holder in education and was taking tuition classes, therefore, suggesting that the benchmark income should be considered at a higher value, claimed at Rs.20,000-25,000/- per month. The Incident
3. On 20th October 2012 at about 7:00 p.m., Sh. Praveen Kumar (deceased) along with his friend, Sh. Rakesh was coming to Gurgaon from Narnaul by motorcycle bearing no HR-26BN-4481. When they reached near flyover, Pool Panchgaon, NH-8, Shiv Mandir, P.S. Manesar, a truck bearing No. RJ-14GD-3650 (offending vehicle) driven by Sh. Ram Singh (driver) allegedly at a high speed in a rash and negligent manner hit the motorcycle resulting in a head injury to the deceased, who was declared ‘brought dead’ at the hospital. FIR No.301/2012 was registered at P.S. Bilaspur under MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 3/14 Sections 279/337/304A of Indian Penal Code, 1860 (IPC) against the driver. The deceased was 20 years of age and a student of Diploma in Education (‘D.Ed.’) and was a tutor at M/s Praveen Tuition Centre, claimed to be earning Rs.20,000-25,000/- per month. The claimants i.e. parents of deceased filed a claim petition claiming Rs.35,00,000/- along with interest. The driver and owner (Sh. Gopal Ram Jat) were proceeded ex parte and the matter was contested by the Insurance Company. Objections were raised by Insurance Company regarding the driver not having a valid and effective driving licence and a valid permit. Motor Accidents Claims Tribunal (hereinafter, ‘Tribunal’) returned a finding in favour of claimants holding that the deceased suffered fatal injuries, due to rash and negligent driving of the offending vehicle by the driver. Impugned award
4. While calculating compensation, considering that there was no documentary evidence of the earnings of deceased, minimum wages payable to a matriculate at Rs.7,254/- per month, were used as benchmark, on which 50% was added, since the deceased was less than 40 years and a deduction of 50% was made towards his personal expenses. Multiplier was adopted on the basis of age of the deceased or the age of claimants, whichever was higher; considering that the claimant/ mother of the deceased was 48 years of age at the time of accident, multiplier of 13 was applied.
5. Rs.25,000/- for funeral expenses, Rs.25,000/- for loss of love and affection were also awarded. Total compensation payable was Rs.8,98,718/- MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 4/14 along with an interest of 7.5%. Analysis
6. Relying upon the principles enunciated in Pranay Sethi, read along with Sarla Verma v. DTC (2009) 6 SCC 121 (‘Sarla Verma’) and Reshma Kumari v. Madan Mohan, (2013) 9 SCC 65 (‘Reshma Kumari’), Insurance Company sought correction in the following components of compensation: future prospects to be awarded at 40% instead of 50%, multiplier should be 18 as applicable against the age of deceased rather than 13 as applicable basis the age of parents, loss of estate should be Rs.15,000/-, funeral expenses at Rs.15,000/- and loss of consortium should be Rs.40,000/- + Rs.40,000/- since there were two parents.
7. To this correction, counsel for claimants/Mr. Parashar stated that they had no quarrel, considering that principles of Pranay Sethi have to be applied at this stage.
8. However, an objection was taken by counsel for Insurance Company regarding the grant of future prospects, in that the deceased was neither in permanent employment nor was he holding any regular salary post. No documentary evidence was presented by claimants that he was working as a tutor at M/s Praveen Tuition Centre and was a student of D.Ed.
9. To the contrary, counsel for claimants canvassing their cross objection contended that proof was filed before the court, regarding the D.Ed. as also the testimony of PW-1/mother of deceased (Sh. Kamla), who stated that the MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 5/14 deceased was earning Rs.20,000-25,000/- per month. On this basis, it was claimed that minimum wages applied of a matriculate were not commensurate with his vocation or the income that he would earn in future after completing D.Ed. Grant of compensation towards future prospects was in consonance with settled principles and the objection of insurance company was untenable.
10. He embellished his arguments by stating that the educational qualifications and professional degree of the deceased have to be considered and not whether he had a consistent job, since the idea is to deal with ‘potentiality’.
11. As regards the other components which were sought correction of by the insurance company, he had no quarrel.
12. In support of his submissions, he relied upon the evidence of PW-1/Kamla who stated that her son was a student of D.Ed. in K.D. College of Education, Dadri-Narnaul Road, Pali, Mahendergarh, Haryana and was a tutor, running a tuition centre in the name and style of M/s Praveen Tuition Centre earning Rs.20,000-25,000/- per month. He was not only studying, but also running the tuition centre at home and, therefore, earning these amounts. He had the potential for increase in income over passage of time.
13. Reliance was also placed on the marksheet in the Secondary Examination attached at Ex.PW-1/3, as well as the admission card of the D.Ed. course at K.D. College of Education, Narnaul. MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 6/14
14. Further, the certificate issued by the K.D. College of Education was on record stating that the deceased was a student in said college and had good character.
15. In her cross-examination, PW-1/Kamla stated that she did not have any evidence with respect to the claim that the deceased was earning Rs.25,000/-.
16. Having considered the respective contentions of parties, this Court is cognizant of the fact that the basic principle is to award a just and reasonable compensation. The Constitutional Bench of Supreme Court in Pranay Sethi emphasized that “just compensation” under Section 168 of the Motor Vehicle Act 1988 must rest on fairness, reasonableness and equity, avoiding both windfall gains and inadequate awards. The assessment must be grounded in proven age and income, followed by application of the appropriate multiplier as standardized in Sarla Verma and affirmed in Reshma Kumari. The Court stressed pragmatic and uniform computation, including future prospects, to ensure proximity to real loss. Relevant paragraph is extracted as under:
MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 7/14 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, that is, “just compensation”. The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC 121: (2009) 2 SCC (Civ) 770: (2009) 2 SCC (Cri) 1002] and it has been approved in Reshma Kumari [Reshma Kumari v. Madan Mohan, (2013) 9 SCC 65: (2013) 4 SCC (Civ) 191: (2013) 3 SCC (Cri) 826]. The age and income, as stated earlier, have to be established by adducing evidence. The tribunal and the courts have to bear in mind that the basic principle lies in pragmatic computation which is in proximity to reality. It is a well-accepted norm that money cannot substitute a life lost but an effort has to be made for grant of just compensation having uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. In such an adjudication, the duty of the tribunal and the courts is difficult and hence, an endeavour has been made by this Court for standardisation which in its ambit includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardisation keeping in view the principle of certainty, stability and consistency. We approve the principle of “standardisation” so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age.” MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 8/14 (emphasis added)
17. In Sarla Verma, the Supreme Court underscored that “just compensation” must be fair, equitable and consistent, and cannot vary arbitrarily merely because different tribunals perceive different amounts as just. It emphasised that compensation must be objectively assessed, guided by uniform principles to avoid unpredictability and disparity. The Court reiterated that similar facts must yield awards within a consistent range. Relevant paragraphs are extracted as under:
MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 9/14 the same, and the formula/legal principles are the same, consistency and uniformity, and not divergence and freakiness, should be the result of adjudication to arrive at just compensation. In Susamma Thomas [(1994) 2 SCC 176: 1994 SCC (Cri) 335], this Court stated: (SCC p. 185, para 16) “16. … The proper method of computation is the multiplier method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability, for the assessment of compensation.””
18. While the corrections to computation sought to align itself with the principles enunciated in Pranay Sethi and must be done, the open issue relates to benchmark income applied for the deceased. While the Tribunal has applied minimum wages of a matriculate, the claimants claimed that he was earning Rs.20,000-25,000/- per month in running his own tuition centre.
19. From a perusal of Ex.PW-1/3, where educational certificates of the deceased are presented collectively by PW-1, it can be seen that they contain the certificate of passing of Secondary Examination, admission card of D.Ed. Regular Examination for 1st semester in April 2011, 2nd semester in October 2011 and 3rd semester in April 2012.
20. While ascertaining the compensation granted to legal heirs of a deceased student who was yet to complete his education, the Apex Court in Meena Pawaia v. Ashraf Ali (2021) 17 SCC 148 held that income of a student who had a bright future ahead, cannot be considered to be the same MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 10/14 or less than a skilled labourer earning minimum wages. Relevant paragraphs in this regard are extracted as under: “10. While awarding the future economical loss, when the deceased died at the young age of 21-22 years and was not earning at the time of death/accident, as per catena of decisions of this Court, the income for the purpose of determining the future economic loss is always done on the basis of guesswork considering many circumstances, namely, the educational qualification and background of the family, etc. Therefore looking to the educational qualification and the family background and as observed hereinabove, the deceased was having a bright future studying in the 3rd year of civil engineering, we are of the opinion that the income of the deceased at least ought to have been considered at least Rs 10,000 per month, more particularly considering the fact that the labourers/skilled labourers were getting Rs 5000 per month even under the Minimum Wages Act in the year 2012.”
21. There can be, therefore, no doubt that he was pursuing a D.Ed. Diploma. Whether he was running a tuition centre is not completely clear, since no documentary evidence has been filed in that regard. Only the statement of the mother is available.
22. Considering that the only evidence placed before Court was regarding him passing the Class 10th Matriculate Examination, the Tribunal was possibly right in adopting the minimum wages of a matriculate. However, the evidence of him pursuing Diploma in Education was also available, meaning thereby, that he was seeking to equip himself further for working in MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 11/14 the teaching profession and, therefore, one must account for the attempts and pursuits of the deceased to be self-employed and earn additional income, which must be included for while assessing his income.
23. In addition, upon the testimony of mother that he was running his tuition centre with specifics about name of tuition centre and that he was running the centre from his home, which testimony remained unrebutted, it may be relevant to consider a more reasonable amount in order to calculate the benchmark income.
24. Tackling the question of computing the income of an injured person in the absence of documentary evidence to support his claim, the Apex Court in Chandra v. Mukesh Kumar Yadav (2022) 1 SCC 198 held that merely because claimants were unable to produce documentary evidence to show the monthly income of deceased, would not justify adoption of lowest tier of minimum wage while computing the income. Relevant paragraphs are extracted as under:
MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 12/14 notification can be a yardstick but at the same time cannot be an absolute one to fix the income of the deceased. In absence of documentary evidence on record some amount of guesswork is required to be done. But at the same time the guesswork for assessing the income of the deceased should not be totally detached from reality. Merely because the claimants were unable to produce documentary evidence to show the monthly income of Shivpal, same does not justify adoption of lowest tier of minimum wage while computing the income. There is no reason to discard the oral evidence of the wife of the deceased who has deposed that late Shivpal was earning around Rs 15,000 per month.”
25. This view was recently re-affirmed by the Apex Court in Nur Ahamad Abdulsab Kanavi v. Abdul Munaf 2025 SCC OnLine SC 284, wherein the claimant’s monthly income was adjudged at Rs. 10,000 after taking into account the oral evidence of PW/1 (wife of injured) which was not discarded in the absence of material evidence on record.
26. In the opinion of this Court, a figure of Rs.10,000/- can be taken as the income of deceased rather than purely taking the minimum wages.
27. Accordingly, the impugned award shall stand modified and the compensation recalculated will be as under:
2 Add Future Prospects (B) Rs. 3,627 Rs. 4,000 3 Less Personal expenses of the Rs. 5,440.[5] Rs. 7,000 MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 13/14 deceased (C)
4 Monthly loss of dependency [(A +B)-C = D] Rs. 5,440.[5] Rs. 7,000 5 Annual loss of dependency (Dx12) Rs. 65,286 Rs. 84,000
6 Multiplier (E) 13 18 7 Total loss of dependency (Dx12xE = F) Rs. 8,48,718 Rs. 15,12,000 8 Medical expenses (G) - - 9 Compensation for loss of consortium (H) - Rs. 80,000 (40,000 x 2)
11 Compensation for loss of estate (J) - Rs. 15,000 12 Compensation towards funeral expenses (K) Rs. 25,000 Rs. 15,000 13 Total compensation (F+G+H+I+J+K = L) Rs. 8,98,718 Rs. 16,12,000 14 Rate of Interest Awarded 7.5% 7.5%
28. Vide order dated 10th February, 2014, this Court had granted a stay on the execution of impugned award, subject to deposit of the entire awarded amount along with upto date interest accrued thereon with the Registrar General of this Court within a period of five weeks.
29. On deposit, the Registrar General was to release 80% of the awarded amount in favour of the respondents/claimants as per the terms and conditions fixed by the Tribunal through UCO Bank, High Court of Delhi Branch. Registrar General was further directed to keep rest of the amount in the form of an interest-bearing FDR with UCO Bank, Delhi High Court Branch, New Delhi initially for a period of one year to be renewed periodically. MAC.APP. 133/2014 & MAC.APP. 948/2014 Page 14/14
30. In view of the above observations, each of these Appeals are partially allowed and the compensation awarded is enhanced by Rs. 7,13,282/- at an interest of 7.5% per annum. Appellant/Insurance Company is directed to deposit the said amount before the Registrar General of this Court within a period of 4 weeks from today.
31. The amount already deposited with the Registrar General of this Court, along with the recomputed amount shall be disbursed as per the directions specified in paragraph 45 of the impugned award.
32. The Registrar General of this Court shall ensure that the amounts are disbursed to the claimants after due verification and upon their furnishing necessary bank account particulars.
33. Appeals are accordingly disposed of. Pending applications, if any, are rendered infructuous.
34. Statutory deposit, if any, be refunded to Appellant/Insurance Company.
35. Judgment be uploaded on the website of this Court.
ANISH DAYAL (JUDGE) JANUARY 29, 2026/MK/sp