Supreme Court Clarifies Compensation for Dependents in Motor Vehicle Accident Claims: Deep Shikha vs. National Insurance Company Ltd. (2025)

Introduction

Date of the Judgment: May 13, 2025

The Supreme Court of India addressed the critical question of who qualifies as a ‘dependent’ and is thus eligible for compensation in motor vehicle accident claims. This issue often arises when assessing claims from married daughters and elderly parents of the deceased. The court, in this case, examined the financial dependency of the claimants on the deceased to determine their entitlement to compensation.

This judgment was delivered by a bench comprising Justice Sudhanshu Dhulia and Justice K. Vinod Chandran.

Case Background

On January 26, 2008, Smt. Paras Sharma was fatally injured in an accident at approximately 1:15 pm. While riding her two-wheeler, she was struck by a Roadways bus at a road crossing. The bus, having stopped to her left, made a sudden right turn, causing her to fall under the rear right-side tire of the vehicle, resulting in her death.

Following the accident, a claim petition was filed by Deep Shikha (the married daughter of the deceased) and another (the mother of the deceased), seeking compensation of Rs. 54,30,740/-.

Timeline:

Course of Proceedings

The Motor Accident Claims Tribunal initially awarded Rs. 15,97,000/- as compensation, along with 6% interest from the date of filing the claim petition. The Tribunal determined the deceased’s monthly income to be Rs. 24,406/- and applied a multiplier of 11, considering her age to be between 50 and 55 years. It also presumed a 50% dependency of the appellants on the deceased.

Both the claimants (appellants) and the National Insurance Company Ltd. (respondent No. 1) filed separate appeals before the Rajasthan High Court. The claimants sought an enhancement of the compensation, while the insurance company contested the award to the daughter of the deceased (Appellant No. 1) and argued that the mother of the deceased (Appellant No. 2) was not entitled to any compensation as she could not be considered a legal heir.

The High Court partly allowed the appeal filed by the insurance company, reducing the compensation awarded to the daughter (Appellant No. 1) to Rs. 50,000/- and setting aside the award to the mother (Appellant No. 2). The High Court relied on the Supreme Court’s judgment in Manjuri Bera & Anr. vs. Oriental Insurance Co. Ltd. & Anr, (2007) 10 SCC 634, stating that only Appellant No. 1 was entitled to receive compensation admissible under Section 140 of the Motor Vehicles Act, 1988.

Legal Framework

The legal framework for this case is primarily based on the Motor Vehicles Act, 1988. Key sections include:

• Section 140 of the Motor Vehicles Act, 1988: Deals with compensation payable without fault.
• Sections 166 and 168 of the Motor Vehicles Act, 1988: Focus on the financial relationship between the deceased and the claimant in determining compensation.

Section 140 of the Motor Vehicles Act, 1988 provides for a no-fault liability, ensuring that victims or their families receive a minimum level of compensation regardless of who caused the accident.

Sections 166 and 168 of the Motor Vehicles Act, 1988 outline the process for claiming compensation and the principles for determining fair compensation based on the financial loss suffered by the dependents of the deceased.

Arguments

Arguments by the Appellants (Deep Shikha & Anr.):

• The Appellants argued that they were entirely dependent on the deceased.
• The deceased’s husband had abandoned her soon after the birth of their daughter (Appellant No. 1), and the deceased’s mother (Appellant No. 2) lived with her.

Arguments by the Respondent (National Insurance Company Ltd.):

• The insurance company contended that the married daughter (Appellant No. 1) was not entitled to compensation as she was no longer dependent on her mother after marriage.
• The insurance company argued that the mother of the deceased (Appellant No. 2) was not entitled to any compensation as she could not be considered a legal heir.
• The insurance company relied on the judgment in Manjuri Bera to support their argument that a married daughter is not eligible for loss of dependency compensation unless she proves financial dependence on the deceased.

Issues Framed by the Supreme Court

1. Whether the Appellants are entitled to compensation as awarded by the Tribunal on account of being dependent on the deceased?

Treatment of the Issue by the Court

Authorities

The court considered the following authorities:

• Manjuri Bera & Anr. vs. Oriental Insurance Co. Ltd. & Anr, (2007) 10 SCC 634: This case was relied upon by the High Court to hold that a married daughter is only entitled to compensation envisaged in Section 140 of the Motor Vehicle Act, 1988, as liability under the same does not cease to exist in the absence of dependency.
• National Insurance Company Limited vs. Pranay Sethi, (2017) 16 SCC 680: This case lays down the factors to be considered while awarding compensation, such as loss of future income and estate, and quantum to be awarded for funeral expenses and loss of consortium.
• Sarla Verma (Smt.) and Ors. vs. Delhi Transport Corporation and Anr., (2009) 6 SCC 121: This case provides guidance on determining the appropriate multiplier to be used in calculating compensation for loss of income.
• Section 140 of the Motor Vehicles Act, 1988: Deals with compensation payable without fault.
• Sections 166 and 168 of the Motor Vehicles Act, 1988: Focus on the financial relationship between the deceased and the claimant in determining compensation.

Judgment

How each authority was viewed by the Court?

• Manjuri Bera & Anr. vs. Oriental Insurance Co. Ltd. & Anr, (2007) 10 SCC 634: The High Court’s reliance on this case was deemed inappropriate for Appellant No. 2, as the case dealt specifically with legal representatives without dependency, which did not apply to the mother of the deceased.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The financial dependency of the claimants on the deceased.
• The age and lack of independent income of the deceased’s mother (Appellant No. 2).
• The potential hardship faced by the deceased’s mother due to the untimely demise of her daughter.
• The need to consider all relevant factors as laid down in National Insurance Company Limited vs. Pranay Sethi and Sarla Verma (Smt.) and Ors. vs. Delhi Transport Corporation and Anr.

Logical Reasoning:

For Appellant No. 2 (Mother of the Deceased):

Deceased is the Daughter -> Mother (Appellant No. 2) is Old and Dependent -> Deceased was the only Source of Income -> Death of Daughter caused Financial Hardship -> Appellant No. 2 is entitled to Compensation

Key Takeaways

• Married daughters are not automatically entitled to compensation for loss of dependency unless they prove they were financially dependent on the deceased.
• Elderly parents who are dependent on their children are entitled to compensation in case of the child’s untimely death.
• Tribunals must consider all relevant factors, including loss of future income and estate, funeral expenses, and loss of consortium, while awarding compensation.

Development of Law

The ratio decidendi of the case is that dependency is a crucial factor in determining compensation eligibility in motor vehicle accident claims. While married daughters must prove financial dependency, elderly parents are presumed to be dependent on their children, especially if they have no independent income.

Conclusion

The Supreme Court’s judgment clarifies the criteria for determining dependency and compensation eligibility in motor vehicle accident claims. While upholding the High Court’s decision regarding the married daughter, the court rightly recognized the dependency of the deceased’s mother and enhanced the compensation, ensuring a fair and just outcome.