Case Note & Summary
The appeal was filed by the National Insurance Co. Ltd. under Section 173(1) of the Motor Vehicles Act, 1988, challenging the quantum of compensation awarded by the Senior Civil Judge & MACT, Tarikere in MVC No. 497/2014 dated 24.03.2016. The claimants, respondents 1 to 3, are the legal representatives of the deceased who died in a motor vehicle accident. The Tribunal awarded total compensation of Rs. 7,96,000/- with interest at 6% p.a. The insurance company challenged only the amount of Rs. 7,56,000/- awarded under the head 'loss of dependency', arguing that the Tribunal erred in taking the monthly income of the deceased as Rs. 6,000 without any evidence, whereas the claimants had claimed only Rs. 4,500 per month. The High Court found merit in this contention and reduced the notional monthly income to Rs. 4,500. Applying multiplier '13' (based on the deceased's age of 50 years) and deducting 1/3rd towards personal expenses, the loss of dependency was recalculated as Rs. 4,68,000/-. Adding conventional heads of Rs. 40,000/- (loss of consortium, loss of estate, funeral expenses), the total compensation was reduced to Rs. 5,08,000/-. The interest rate of 6% p.a. was upheld. The appeal was partly allowed.
Headnote
A) Motor Vehicles Act - Compensation - Loss of Dependency - Income Calculation - The Tribunal erred in taking the monthly income of the deceased as Rs. 6,000 without any evidence, whereas the claimants had claimed Rs. 4,500 per month. The High Court reduced the notional income to Rs. 4,500 per month. (Paras 4-5) B) Motor Vehicles Act - Compensation - Multiplier - The Tribunal applied multiplier '13' based on the age of the deceased (50 years), but the correct multiplier as per Sarla Verma v. DTC is '13' for age 50-55. The High Court upheld the multiplier. (Para 5) C) Motor Vehicles Act - Compensation - Deduction for Personal Expenses - The Tribunal deducted 1/3rd towards personal expenses, which is correct for a bachelor. The High Court upheld this deduction. (Para 5) D) Motor Vehicles Act - Compensation - Interest Rate - The Tribunal awarded interest at 6% p.a., which is reasonable and not interfered with. (Para 6)
Issue of Consideration
Whether the compensation awarded by the Tribunal under the head 'loss of dependency' is excessive and requires reduction.
Final Decision
Appeal partly allowed. The compensation awarded by the Tribunal is reduced from Rs. 7,96,000/- to Rs. 5,08,000/-. The interest rate of 6% p.a. is upheld. The insurance company is directed to deposit the reduced compensation with accrued interest within four weeks.
Law Points
- Quantum of compensation
- Motor Vehicles Act
- 1988
- Section 173(1)
- Income calculation
- Multiplier
- Deduction for personal expenses
- Interest rate
