2013 (4) TMI 952 - SC - Indian Laws

Summary

Issues Involved:
1. Determination of "just compensation" u/s 168 of the Motor Vehicles Act, 1988.
2. Addition to income for future prospects in case of self-employed or fixed salary individuals.
3. Competence of the Tribunal to award compensation exceeding the claim u/s 166 of the Motor Vehicles Act, 1988.
4. Revision of compensation under conventional heads like loss of consortium and funeral expenses.

Summary:

1. Determination of "just compensation" u/s 168 of the Motor Vehicles Act, 1988:
The Supreme Court emphasized that compensation must be "just" and "reasonable," as established in Nagappa v. Gurudayal Singh. The Claims Tribunal initially awarded Rs. 8,96,500 with 7.5% interest, which was later modified by the High Court to Rs. 10,17,000. The Supreme Court reiterated that "just compensation" should be fair and equitable, considering the facts and circumstances of each case.

2. Addition to income for future prospects in case of self-employed or fixed salary individuals:
Referring to Sarla Verma and Santosh Devi cases, the Court clarified that for self-employed or fixed salary individuals, an addition of 50% to the actual income should be made if the deceased was below 40 years. For those aged 40-50 years, the addition should be 30%, and for those aged 50-60 years, it should be 15%. The Court found the Tribunal's approach in Sarla Verma case to be too rigid and emphasized the need for a more flexible approach considering the rise in the cost of living.

3. Competence of the Tribunal to award compensation exceeding the claim u/s 166 of the Motor Vehicles Act, 1988:
The Court held that the Tribunal is empowered to award compensation exceeding the claim if it is "just," as per Section 168 of the Act. This principle was supported by previous decisions in Oriental Insurance Co. Ltd. v. Mohd. Nasir and Ningamma v. United India Insurance Co. Ltd. The Court stressed that the Tribunal's duty is to award fair and reasonable compensation, even if it exceeds the claimed amount.

4. Revision of compensation under conventional heads like loss of consortium and funeral expenses:
The Court revisited the practice of awarding compensation under conventional heads, noting that amounts fixed decades ago need to be revised due to inflation. It held that compensation for loss of consortium should be at least Rs. 1,00,000 and funeral expenses should be at least Rs. 25,000. The Court awarded a total compensation of Rs. 22,81,320, including Rs. 1,00,000 for loss of consortium, Rs. 1,00,000 for loss of care and guidance for minor children, and Rs. 25,000 for funeral expenses.

Conclusion:
The Supreme Court allowed the appeal, setting aside the impugned judgment and the Tribunal's award. The claimant was entitled to a total compensation of Rs. 22,81,320 with 7.5% interest from the date of filing the petition until realization. The Insurance Company was directed to pay 50% of the enhanced compensation to the widow and the balance amount to the minor children and the mother, with the minors' shares to be deposited in a nationalized bank until they attain majority. There was no order as to costs.