Supreme Court enhances compensation for motor accident claimants: Manusha Sreekumar & Ors. vs. The United India Insurance Co. Ltd. (2022)

Date of the Judgment: October 17, 2022
Citation: 2022 INSC 903
Judges: Surya Kant, J. and Aniruddha Bose, J.
Can a High Court reduce the compensation awarded by a Motor Accident Claims Tribunal, especially when sufficient evidence of the deceased’s income is available? The Supreme Court of India recently addressed this question, emphasizing the importance of fair compensation in motor accident cases. This judgment clarifies how a deceased’s income should be determined when they are a skilled worker and also addresses the issue of compensation under non-conventional heads. The bench comprised Justices Surya Kant and Aniruddha Bose, with the judgment authored by Justice Surya Kant.

Case Background

On February 21, 2015, Sreekumar, a 32-year-old man, tragically died in a motor vehicle accident in Kerala. While riding his motorcycle, he was hit by a car allegedly driven rashly and negligently. The car was insured by the United India Insurance Co. Ltd. Sreekumar sustained fatal injuries and passed away on the way to the hospital.

Sreekumar’s wife, minor son, and mother (the Appellants) filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking compensation of ₹64,15,000. The Insurance Company contested the claim, arguing that the accident was due to the deceased’s negligence and that the claimed compensation was excessive. The Appellants argued that Sreekumar, a self-employed fish vendor and driver, earned at least ₹25,000 per month. They presented various documents to support their claim.

Timeline

Course of Proceedings

The Motor Vehicle Accidents Claims Tribunal awarded the Appellants ₹32,39,000 as compensation. The Insurance Company appealed to the High Court of Kerala, challenging the quantum of compensation. The High Court reduced the compensation to ₹19,70,000, disagreeing with the Tribunal on the assessment of loss of dependency, pain and suffering, and loss of love and affection. The Appellants then appealed to the Supreme Court.

Legal Framework

The case primarily involves Section 166 of the Motor Vehicles Act, 1988, which allows for claims for compensation in motor accident cases. The Supreme Court also considered the Kerala Motor Transport Workers’ Payment of Fair Wages Act, 1971, and a related notification from the Government of Kerala, which classifies drivers as skilled workers and stipulates their minimum wages.

Section 168 of the Motor Vehicles Act, 1988, mandates that the compensation awarded must be just. The court referred to the concept of corrective justice, which aims to restore equality between the wrongdoer and the victim.

The court also took judicial notice of Section 57 of the Indian Evidence Act, 1872, which allows the court to take judicial notice of facts.

The Kerala Fair Wages Act defines:

• “employer” as the person who has ultimate control over the affairs of the motor transport undertaking.
• “motor transport undertaking” as an undertaking engaged in carrying passengers or goods by road for hire or reward.
• “motor transport worker” as a person employed in a motor transport undertaking, including a driver.
• “fair wages” as the rate of wages payable to the motor transport workers specified in the Schedule to the Act.

Arguments

Appellants’ Arguments:

• The High Court erred in relying on previous Supreme Court decisions that fixed notional income in cases where no evidence of income was provided. In this case, the Appellants provided substantial documentary evidence of the deceased’s income.
• The Appellate Court’s power to interfere with the Tribunal’s findings is limited and should only be done when findings are perverse or there is a material omission.
• The deceased was a registered transport motor driver, and his income should be determined based on the Kerala Fair Wages Act and the related notification, which classifies drivers as skilled workers.

Respondent’s Arguments:

• The High Court correctly reduced the compensation amount due to a lack of definitive proof of the deceased’s income.
• The High Court erred in granting compensation under the head of ‘loss of love and affection’ as this is not permissible under the precedent set in National Insurance Co. Ltd. v. Pranay Sethi and Ors [CITATION: (2017) 16 SCC 680].

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the High Court was right in reducing the monthly income of the Deceased from ₹17,500 to ₹10,000 for want of sufficient documentary evidence?
2. Whether the High Court was right in awarding compensation under the ‘non-conventional heads’ which is impermissible as per Pranay Sethi [CITATION: (2017) 16 SCC 680]?

Treatment of the Issue by the Court

Authorities

Cases Relied Upon by the Court:

Legal Provisions Considered by the Court:

Judgment

How each authority was viewed by the Court?

• The Court distinguished the cases of Ramachandrappa [CITATION: (2011) 13 SCC 236] and Syed Sadiq [CITATION: (2014) 2 SCC 735], stating that those cases were based on situations where no evidence of income was available, while in the present case, documentary evidence was available.
• The Court followed the principles laid down in Sarla Verma [CITATION: (2009) 6 SCC 121] for calculating just compensation.
• The Court relied on Chandra Alias Chanda Alias Chandraram [CITATION: (2022) 1 SCC 198], to determine the income of the deceased based on minimum wages notification.
• The Court acknowledged the precedent set in National Insurance Co. Ltd. v. Pranay Sethi [CITATION: (2017) 16 SCC 680], but did not interfere with the High Court’s decision on non-conventional heads since the Insurance Company did not appeal that aspect.
• The Court did not follow the decisions in Cholamandalam M/s General Insurance Company Ltd. V. Aarifa & Ors. [CITATION: Civil Appeal No. 6020/2019 vide order dt. 01.08.2019] and The New India Assurance Co. Ltd. V. Somwati & Ors. [CITATION: SLP(Civil) Diary No. 30766/2019 vide order dt. 24.09.2019] as they were cited to argue against compensation under the non-conventional heads, which was not the subject of the appeal before the Supreme Court.

What weighed in the mind of the Court?

The Supreme Court emphasized the importance of fair compensation in motor accident cases, highlighting that the Motor Vehicles Act, 1988, is a social welfare legislation aimed at providing justice to victims and their families. The Court noted that the High Court had erred in reducing the compensation by not considering the evidence of the deceased’s income and the minimum wages prescribed for skilled workers under the Kerala Fair Wages Act. The Court also noted that the Insurance Company had not appealed the High Court’s decision to grant compensation under non-conventional heads.

The court’s reasoning was influenced by both factual considerations (such as the evidence of the deceased’s income and his occupation as a driver) and legal considerations (such as the provisions of the Motor Vehicles Act, the Kerala Fair Wages Act, and relevant case law). The higher percentage for law indicates that the court’s decision was primarily driven by the legal framework and the interpretation of the statutes.

Logical Reasoning:

The Supreme Court considered the arguments of both parties and the reasoning of the lower courts. It also took into account the relevant legal provisions and precedents. The Court noted that the High Court had erred in reducing the monthly income of the deceased, as there was sufficient evidence to prove that he was a driver, a skilled worker, and his income should be fixed as per the Kerala Fair Wages Act. The Court also noted that the Insurance Company had not appealed the High Court’s decision to grant compensation under non-conventional heads. The Supreme Court therefore decided to enhance the compensation awarded to the Appellants.

The court’s reasoning was based on the principle that compensation should be just and fair, and that the Motor Vehicles Act is a social welfare legislation. The court also emphasized that the appellate court’s power to interfere with the findings of the tribunal is limited.

The Supreme Court stated, “While determining compensation under the Act, section 168 of the Act makes it imperative to grant compensation that appears to be just.” The Court further added, “Adequate compensation is considered to be fair and equitable compensation. Courts shoulder the responsibility of deciding adequate compensation on a case-to-case basis.” The court also noted, “It appears to us that the aforesaid Act and the notification issued thereunder were not brought to the notice of the Tribunal or the High Court.”

Key Takeaways

• When determining compensation for motor accident victims, the income of a skilled worker, like a driver, should be determined based on the minimum wages prescribed under relevant state laws, such as the Kerala Fair Wages Act.
• Appellate courts should be cautious when interfering with the findings of the Motor Accident Claims Tribunal, especially when the Tribunal’s findings are based on evidence.
• The Motor Vehicles Act, 1988, is a social welfare legislation and should be interpreted to provide fair and just compensation to victims and their families.

Directions

The Supreme Court directed the Insurance Company to pay the enhanced compensation of ₹29,73,520 to the Appellants, along with interest at 9% per annum from the date of filing of the claim petition until the date of realization. The amount is to be apportioned among the Appellants as fixed by the Tribunal. The Insurance Company is to pay the amount within six weeks from the date of receipt of the judgment.

Development of Law

The ratio decidendi of this case is that in cases where the deceased is a skilled worker, such as a driver, their income for the purpose of calculating compensation should be determined based on the minimum wages prescribed under the relevant state laws. This judgment clarifies the application of the Kerala Fair Wages Act in determining compensation for motor accident victims. It also reinforces the principle that appellate courts should be cautious when interfering with the findings of the Tribunal.

Conclusion

The Supreme Court’s decision in this case underscores the importance of fair and just compensation in motor accident cases. By considering the deceased’s status as a skilled worker and taking judicial notice of the Kerala Fair Wages Act, the Court ensured that the Appellants received adequate compensation for their loss. This judgment serves as a reminder that the Motor Vehicles Act is a social welfare legislation, and its provisions should be interpreted to provide relief to those who have suffered due to motor vehicle accidents.