The Supreme Court enhanced compensation under the Motor Vehicles Act, applying principles from Pranay Sethi to determine a monthly income of ₹10,000 for an unskilled worker (2015 accident). It upheld 100% functional disability, used an 18x multiplier, and awarded ₹35.91 lakh with 8% interest, reinforcing “just compensation” standards for catastrophic injuries. The judgment reaffirmed future prospects (40% addition) and lifetime care costs while rejecting insurer’s belated policy coverage objections due to their failure to appeal the Tribunal’s order.
Facts Of The Case:
The case involves a 25-year-old unskilled laborer, Shaikh Sadik Shaikh Rafique, who suffered catastrophic injuries in a 2015 truck accident, leaving him permanently bedridden with 100% disability. While traveling in his employer’s goods vehicle (covered by Reliance General Insurance), the truck collided with another vehicle due to alleged driver negligence. The victim claimed ₹68.44 lakh in compensation before the Motor Accidents Claims Tribunal (MACT), citing ₹9,000 monthly income and ₹4 lakh medical expenses. The MACT awarded ₹16 lakh based on a ₹4,500 monthly income estimate, assuming investment returns would sustain the claimant. On appeal, the High Court increased compensation to ₹25.83 lakh by revising income to ₹6,000/month with 40% future prospects and ₹6 lakh for non-pecuniary damages, while accepting ₹2.7 lakh medical bills. Before the Supreme Court, the claimant sought further enhancement.
The Court applied the Pranay Sethi precedent to determine ₹10,000/month as reasonable income (accounting for 11 years of inflationary growth from 2004 baseline), adopted an 18x multiplier (correcting the High Court’s 17x), and awarded ₹35.91 lakh total compensation. Notably, the insurer’s belated policy-coverage defense was rejected since it hadn’t appealed the MACT order. The judgment emphasized lifetime care costs and standardized compensation calculations for severe disabilities.
Procedural History:
The case originated with a compensation claim filed before the Motor Accidents Claims Tribunal (MACT) by Shaikh Sadik Shaikh Rafique, a 25-year-old worker rendered 100% disabled in a 2015 truck accident. The MACT initially awarded ₹16 lakh in 2020, calculating compensation based on a modest income assessment of ₹4,500/month. Dissatisfied with the award, the claimant appealed to the High Court, which in 2022 enhanced compensation to ₹25.83 lakh by revising the income to ₹6,000/month and applying a 17x multiplier. The claimant then approached the Supreme Court via Special Leave Petition (No. 26999 of 2023), seeking further enhancement.
In its May 2025 judgment, the Supreme Court modified the High Court’s order by adopting ₹10,000/month as notional income (applying inflationary adjustments from Pranay Sethi), using an 18x multiplier, and awarding a total of ₹35.91 lakh with 8% interest. The Court rejected the insurer’s attempt to contest policy coverage at this stage, noting their failure to appeal the MACT’s initial liability finding. This procedural journey – from Tribunal to High Court to Supreme Court – systematically refined compensation standards for catastrophic disability cases under the Motor Vehicles Act.
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Court Observation:
The Supreme Court made several critical observations while delivering its judgment. Firstly, it emphasized the principle of “just compensation” under the Motor Vehicles Act, stressing that awards must fully account for lifelong disabilities and inflationary realities. The Court categorically rejected the insurer’s belated attempt to dispute policy coverage, noting this defense should have been raised in an appeal against the Tribunal’s initial order – a procedural lapse that barred reconsideration.
Significantly, the Bench applied the Pranay Sethi precedent to modernize income calculations, holding that an unskilled laborer’s notional income must reflect decade-long inflationary trends – thus revising the figure from ₹4,500 (2004 baseline) to ₹10,000 (2015 accident year). The Court also corrected the High Court’s multiplier error, mandating an 18x (not 17x) multiplier for 25-year-old victims to ensure lifetime financial security.
On medical evidence, the Court accepted the treating doctor’s unchallenged testimony confirming 100% disability, observing that such catastrophic injuries necessitate compensation for both pecuniary losses (like attendant care) and non-pecuniary damages (loss of marital prospects, amenities). The judgment systematically integrated these components – future prospects (40% addition), documented treatment costs, and consolidated non-pecuniary damages – into a holistic compensation framework, setting a benchmark for severe disability cases.
Final Decision & Judgement:
The Supreme Court delivered a landmark judgment, significantly enhancing the compensation awarded to the accident victim. In its final decision, the Court allowed the appeal and modified the High Court’s award, granting a total compensation of ₹35,91,600 (inclusive of ₹27,21,600 for loss of future income, ₹2,70,000 for medical expenses, and ₹6,00,000 for pain/suffering/loss of amenities). The Court applied an 18x multiplier (correcting the High Court’s 17x) for the 25-year-old victim and adopted ₹9,000 as monthly income (aligning with claimant’s assertion and Pranay Sethi principles). Future prospects were granted at 40%, and all awarded amounts were to carry 8% annual interest. The judgment mandated the insurance company to disburse the balance compensation within two months through online transfer to the claimant’s account. Crucially, the Court rejected the insurer’s policy-coverage defense as time-barred (since no appeal was filed against the Tribunal’s initial order) and reinforced that compensation in catastrophic disability cases must account for lifetime care needs and inflation-adjusted income standards. The decision sets a progressive benchmark for interpreting “just compensation” under Section 168 of the Motor Vehicles Act.
Case Details:
Case Title: Shaikh Sadik Shaikh Rafique vs. Reliance General Insurance Company Limited & Ors. Citation: (2025) INSC 673 Appeal Number: [@Special Leave Petition (Civil) No. 26999 of 2023] Date of Judgment: May 13, 2025 Judges/Justice Name: Justice K. Vinod Chandran (Authoring Judge) & Justice Sudhanshu Dhulia (Concurring Judge)
Download The Judgement Here