Case Note & Summary
The appellant, The Oriental Insurance Co. Ltd., challenged the judgment and award dated 18 November 2009 passed by the Motor Accident Claims Tribunal, Thane in MACP No.562 of 2005. The Tribunal had held the owner and insurer of the offending Tata Sumo vehicle jointly and severally liable to pay compensation of Rs.3,85,500 inclusive of no fault liability amount with interest at 6% per annum from the date of order till realization. The claim arose from a fatal accident on 22 May 2004 when Tejas Sadashiv Lugade, aged about 19 years, was driving his motorcycle and was hit by a Tata Sumo driven rashly and negligently. Tejas succumbed to his injuries. The claimant, his mother, sought compensation of Rs.5,11,167. The Tribunal found that Tejas was earning Rs.3,000 per month as a servant in Maharashtra Metal Works. The appellant insurer argued that under Section 163A of the Motor Vehicles Act read with Schedule II, compensation should be based on an annual income of Rs.15,000 (notional) and not the actual income. The respondent claimant opposed, citing judicial precedents that compensation must be fair and equitable. The High Court, after hearing both sides, held that the structured formula under Section 163A is mandatory but the actual income of the deceased must be considered. The court found no error in the Tribunal's computation and dismissed the appeal, upholding the award.
Headnote
A) Motor Vehicles Act - Compensation under Section 163A - Structured Formula - The court considered whether compensation under Section 163A must be computed strictly as per the structured formula in Schedule II or can be based on actual income. The court held that the structured formula is mandatory but the actual income of the deceased must be taken into account for computation, not the notional income of Rs.15,000 per annum. (Paras 3-4) B) Motor Vehicles Act - Quantum of Compensation - Fair and Equitable - The court emphasized that compensation must be fair, equitable, and just, and that the structured formula under Section 163A read with Schedule II is a beneficial provision intended to provide speedy relief. The court upheld the award of Rs.3,85,500 with interest at 6% per annum. (Paras 1-4)
Issue of Consideration
Whether the compensation awarded under Section 163A of the Motor Vehicles Act, 1988 should be based on the actual income of the deceased or on the notional income of Rs.15,000 per annum as per Schedule II?
Final Decision
Appeal dismissed. The judgment and award dated 18 November 2009 passed by the Motor Accident Claims Tribunal, Thane in MACP No.562 of 2005 is upheld. The appellant insurer is directed to pay the awarded sum of Rs.3,85,500 with interest at 6% per annum from the date of order till realization.
Law Points
- Section 163A of Motor Vehicles Act
- 1988 provides a structured formula for compensation
- Schedule II of the Act prescribes the multiplier and notional income
- compensation must be fair and equitable
- actual income of deceased must be considered for computation under Section 163A
