This Supreme Court judgment clarifies that allowances forming part of a deceased’s salary, if used for family support, must be included in income computation for motor accident compensation. It applies established principles from Sarla Verma and Pranay Sethi to include future prospects and awards consortium as per Magma General Insurance, ensuring just compensation under the Motor Vehicles Act.
Facts Of The Case:
On February 16, 2009, Lokender Kumar died in a motor accident caused by the rash and negligent driving of a Santro car on the Sohna-Gurgaon Road. His widow and two minor children filed a claim petition before the Motor Accident Claims Tribunal in Gurgaon, seeking Rs. 25 lakhs in compensation. The Tribunal, considering his basic salary of Rs. 3,665 per month and applying a multiplier of 8, awarded only Rs. 2,54,720. On appeal, the Punjab and Haryana High Court enhanced the compensation to Rs. 7,23,680 by adding 50% future prospects and applying a multiplier of 16, but it retained the Tribunal’s finding on the income. The claimants appealed to the Supreme Court, arguing that the High Court erred by excluding house rent and other allowances from the deceased’s proven monthly income of Rs. 6,500 and failed to consider his alleged agricultural income.
Procedural History:
The claimants initially filed a petition before the Motor Accident Claims Tribunal in Gurgaon, which awarded compensation of Rs. 2,54,720. Dissatisfied, they appealed to the Punjab and Haryana High Court, which enhanced the compensation to Rs. 7,23,680. Still aggrieved by the computation of income and the quantum awarded, the claimants filed a Special Leave Petition in the Supreme Court. The Supreme Court granted leave, condoned a significant delay in filing the appeal, and proceeded to partially allow the appeal by further enhancing the total compensation to Rs. 14,29,500.
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Court Observation:
The Court observed that the Tribunal and High Court erred in excluding house rent and other allowances from the deceased’s salary, holding that such components, if used for the family’s benefit, must be included in the income computation for determining just compensation. It reaffirmed the principles laid down in Sarla Verma and Pranay Sethi, mandating the addition of 50% future prospects for a 35-year-old deceased and applying a multiplier of 16. Furthermore, the Court awarded consortium on a conventional basis as per the guidelines in Magma General Insurance, significantly enhancing the total compensation payable to the claimants.
Final Decision & Judgement:
The Supreme Court partially allowed the appeal and enhanced the total compensation to Rs. 14,29,500. This amount includes Rs. 12,48,000 for loss of dependency (calculated on a monthly income of Rs. 6,500 with 50% future prospects and a multiplier of 16), Rs. 48,400 for spousal consortium, Rs. 96,800 for parental consortium, and Rs. 36,300 for funeral expenses and loss of estate. The respondents were directed to deposit the amount with 7% annual interest, excluding the period of delay in filing the appeal. The compensation for the minor children was ordered to be held in fixed deposits until they reach majority.
Case Details:
Case Title: Kavita Devi & Ors. vs. Sunil Kumar & Anr. Citation: 2025 INSC 938 Civil Appeal No.:(@ Diary No(s). 47285 of 2018) Date of Judgement: August 06, 2025 Judges/Justice Name: Justice Sudhanshu Dhulia and Justice Aravind Kumar