Case Note & Summary
The claimants, mother, father, and brother of the deceased Sagar N, filed an appeal under Section 173(1) of the Motor Vehicles Act, 1988, against the judgment and award dated 21.11.2019 in MVC No.1618/2018 passed by the XIV Additional Senior Civil Judge and Motor Accident Claims Tribunal, Bengaluru. The Tribunal had partly allowed the claim petition but deducted Rs.17,87,336/- from the compensation on the ground that the deceased had not personally contributed any premium to the insurance company. The deceased died in a road accident on 10.02.2018 while riding his Honda Activa motorcycle. The claimants sought enhancement of compensation and challenged the deduction. The High Court framed the issue of whether the deduction of premium paid by the employer under a group insurance scheme was justified. The court noted that the premium was paid by the employer as part of the employment benefits and could not be deducted from the compensation. The court also enhanced the notional income of the deceased from Rs.13,250/- to Rs.15,000/- per month, added 40% towards future prospects, applied multiplier 18, and deducted 50% towards personal expenses. The total compensation was recalculated as Rs.22,68,000/- with interest at 6% per annum from the date of petition till deposit. The appeal was allowed in part, setting aside the deduction and enhancing the compensation.
Headnote
A) Motor Accident Compensation - Deduction of Insurance Premium - Group Insurance Scheme - The Tribunal deducted Rs.17,87,336/- from compensation on the ground that the deceased had not contributed premium personally, but the employer had paid it under a group insurance scheme. The High Court held that such deduction is impermissible as the premium paid by the employer is a benefit accrued to the employee and cannot be deducted from compensation under the Motor Vehicles Act, 1988. (Paras 1, 4-6) B) Motor Accident Compensation - Enhancement of Compensation - Notional Income - The deceased was aged 24 years and earning Rs.30,000/- per month. The Tribunal took notional income of Rs.13,250/- per month. The High Court enhanced it to Rs.15,000/- per month based on the Karnataka Minimum Wages Act and added 40% towards future prospects, applying multiplier 18 and deducting 50% towards personal expenses, resulting in enhanced compensation. (Paras 7-9)
Issue of Consideration
Whether the Tribunal was justified in deducting the amount of premium paid by the employer under a group insurance scheme from the compensation awarded to the claimants?
Final Decision
Appeal allowed in part. The deduction of Rs.17,87,336/- is set aside. Compensation enhanced to Rs.22,68,000/- with interest at 6% per annum from the date of petition till deposit. The insurance company is directed to deposit the enhanced compensation within four weeks.
Law Points
- Motor Vehicles Act
- 1988
- Section 173(1)
- Compensation
- Deduction of Insurance Premium
- Group Insurance
- Employer's Contribution
- Notional Income
- Multiplier
