Supreme Court enhances compensation for multi-tasking deceased in motor accident claim: Vethambal and Others vs. The Oriental Insurance Company and Others (2024) INSC 180 (6 March 2024)

Date of the Judgment: 6 March 2024
Citation: (2024) INSC 180
Judges: C.T. Ravikumar, J., Rajesh Bindal, J.
How should the income of a deceased person who was engaged in multiple occupations be assessed for the purpose of calculating compensation in a motor accident claim? The Supreme Court of India recently addressed this question, emphasizing the need to consider all sources of income and the value of labor put in by the deceased. The court enhanced the compensation awarded to the family of a man who was not only an agriculturist but also a dairy farmer and a government contractor. The judgment was delivered by a bench comprising Justices C.T. Ravikumar and Rajesh Bindal, with Justice Rajesh Bindal authoring the opinion.

Case Background

Ravi Shankar, aged 52, tragically died in a motor vehicle accident on December 9, 2012, at approximately 8:30 PM while driving his TVS Starcity motorcycle. The accident occurred in the Tirunelveli district of Tamil Nadu. A First Information Report (FIR) was registered on December 10, 2012, at the Kalakkaadu Police Station. The motorcycle was insured with the Oriental Insurance Company. Following Ravi Shankar’s death, his family, including his elderly mother, wife, daughter, and son, filed a claim petition seeking compensation of ₹1,00,00,000, asserting that he was the sole breadwinner and engaged in multiple income-generating activities. He was an agriculturist growing bananas, coconuts, and paddy, operated a dairy farm, and worked as a government contractor.

Timeline

Course of Proceedings

The Motor Accident Claims Tribunal, Tirunelveli, initially awarded a compensation of ₹51,64,550, determining the deceased’s monthly income to be ₹50,000. The Tribunal applied a 1/4th deduction for personal expenses and added 10% for future prospects. The Oriental Insurance Company appealed this decision to the High Court of Judicature at Madras, Bench at Madurai, contesting the assessed income of the deceased. The High Court reduced the monthly income to ₹20,000, leading to a revised compensation of ₹22,48,000. The claimants then appealed to the Supreme Court of India, challenging the High Court’s reduction of the income.

Legal Framework

The case primarily revolves around the assessment of “just and fair compensation” under the Motor Vehicles Act, 1988, for the loss of income due to the death of a person in a motor accident. The Supreme Court also referred to the principles laid down in Sarla Verma (Smt.) and others v. Delhi Transport Corporation and another [(2009) 6 SCC 121] and National Insurance Company Ltd. v. Pranay Sethi and others [(2017) 16 SCC 680], regarding the appropriate multiplier to be used based on the age of the deceased.

Arguments

Appellants’ Arguments:

• The appellants argued that the High Court erred in reducing the deceased’s income from ₹50,000 to ₹20,000 per month.
• They submitted that the Tribunal’s assessment of income was fair, considering the deceased’s multiple income sources.
• They presented evidence showing that the deceased supplied milk and coconuts to Donavoor Santhosha Vidhayalaya School, earning ₹8,52,447 over 14 months. They also showed receipts of ₹7,29,900 from paddy cultivation and ₹16,36,398 from banana sales. Additionally, they claimed an annual income of ₹6,00,000 as a government contractor.
• The appellants contended that the deceased was the sole earning member, and the family was satisfied with the Tribunal’s award, which the Insurance Company challenged unnecessarily.

Respondent’s Arguments:

• The Insurance Company argued that the claims made by the appellants were exaggerated.
• They contended that the land used for banana cultivation was still being used by the family, thus there was no loss of income on that account.
• They argued that there was no concrete evidence to prove that the deceased was a regular government contractor.
• They submitted that the total receipts from milk and coconut supply could not be considered as the deceased’s income.
• They supported the High Court’s view that compensation should be just and reasonable, not a windfall.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the High Court was correct in reducing the monthly income of the deceased from ₹50,000 to ₹20,000.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court overturned the High Court’s decision, stating that the High Court had taken a very conservative view of the matter. The court re-evaluated the income of the deceased, considering the evidence of his multiple occupations. The court noted that the deceased was not engaged in a 9-to-5 job and was multi-tasking to ensure a comfortable life for his family. The court considered the receipts from the school, agriculture, and government contracts and the fact that the land was not being cultivated after the death of the deceased.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to provide just compensation to the dependents of the deceased, considering his multiple income sources and the fact that the land was not being cultivated after his death. The court emphasized that the assessment of compensation cannot be done with mathematical precision and should be fair and reasonable. The court also considered the value of the labor put in by the deceased in agriculture and other activities.

The Supreme Court observed that the deceased was multi-tasking to make the lives of his family members comfortable. It noted that the High Court had taken a very conservative basis while assessing the income of the deceased. The court also took into account the fact that after the death of the deceased, the land was lying barren and not being cultivated. The court stated that the assessment of compensation cannot be done with mathematical precision and the Motor Vehicles Act, 1988, provides for assessment of just and fair compensation.

The court quoted from the judgment:

• “Assessment of compensation cannot be done with mathematical precision.”
• “The Motor Vehicles Act, 1988 also provides for assessment of just and fair compensation.”
• “Meaning thereby, to make the lives of his family members comfortable, the deceased was multi -tasking and he was not engaged in a 9.00 to 5.00 P .M. job.”

Key Takeaways

• The Supreme Court emphasized that all sources of income must be considered when assessing compensation in motor accident claims, especially for individuals engaged in multiple occupations.
• The court highlighted the importance of considering the value of labor put in by the deceased in agriculture and other activities.
• The judgment underscores that compensation should be just and fair and not based on a conservative or narrow interpretation of income sources.

Directions

The Supreme Court directed that the appellants are entitled to compensation of ₹38,81,500 with interest at 8% per annum from the date of filing of the claim petition until realization.

Development of Law

The judgment clarifies that the assessment of income for compensation purposes should consider all sources of income, especially for individuals engaged in multiple occupations. It reinforces the principle that compensation should be just and fair, reflecting the value of the deceased’s contributions to the family. There is no change in the previous positions of law, but the judgment emphasizes a more holistic approach to assessing income in such cases.

Conclusion

The Supreme Court’s decision in Vethambal and Others vs. The Oriental Insurance Company and Others enhances the compensation awarded to the family of a deceased multi-tasking individual, underscoring the need for a comprehensive assessment of income in motor accident claims. The court’s judgment emphasizes that compensation should be just and fair, reflecting the value of the deceased’s contributions to the family.

Category

Parent Category: Motor Vehicle Act, 1988
Child Category: Compensation
Child Category: Assessment of Income
Parent Category: Motor Vehicle Act, 1988
Child Category: Section 166, Motor Vehicle Act, 1988

FAQ

Q: What did the Supreme Court decide in this case?
A: The Supreme Court enhanced the compensation awarded to the family of a man who died in a motor accident. The court re-assessed his income considering his multiple occupations as an agriculturist, dairy farmer, and government contractor.

Q: How did the court determine the income of the deceased?
A: The court considered all available evidence, including receipts from milk and coconut supply to a school, income from agriculture, and receipts from government contracts. The court emphasized that the assessment should be just and fair, considering all sources of income.

Q: What is the significance of this judgment?
A: This judgment clarifies that all sources of income must be considered when assessing compensation in motor accident claims, especially for individuals engaged in multiple occupations. It emphasizes a holistic approach to determining income for compensation purposes.

Q: What was the amount of compensation awarded by the Supreme Court?
A: The Supreme Court awarded a compensation of ₹38,81,500 with interest at 8% per annum from the date of filing of the claim petition until realization.

Q: What does this mean for families of people who have multiple jobs?
A: This judgment ensures that families of individuals with multiple income sources receive fair compensation in motor accident claims. It highlights that all sources of income must be considered, not just a single source.