The Apex Court has given a judgment in relation to the award of compensation under Motor Vehicles Act, 1988 (for short ‘the Act’or ‘the specified act’) irrespective of any plea for loss of consortium filed by the claimant. In response to a Civil Appeal in the case of Magma General Insurance Co. Ltd v. Nanu Ram Alias Chuhru Ram & Ors, the Hon’ble court held that the specified act being a beneficial and welfare legislation, the Court is duty-bound and entitled to award “just compensation”, irrespective of whether any plea in that behalf was raised by the Claimant.

The Factual matrix of the case in brief:

Mr. X, aged 24 years the deceased was driving his motorcycle accompanied by his relative Mr.Y who was on other motorcycle. On the way, Mr. X was hit by one of the car driven by Mr.Z. Mr.Y was the eye-witness to this accident which happened due to the negligent driving of Mr. Z. Mr. X died after one day of accident in the hospital due to multiple and severe injuries. A FIR was also registered on the day of the accident in the concerned Police Station. After the death of Mr. X, his legal representatives which were his father, sister and brother filed a claim under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accidents Claim Tribunal ( for short ‘MACT’ or ‘The Tribunal’) praying for the compensation of Rs. 50 lakhs along with interest. They claimed that the deceased was self employed engaged in the business of manufacturing of namkeen products and was earning an amount of Rs.15,000/-per month although no proof was submitted for income. MACT held that the death of Mr. X was due to negligent driving of Mr. Z, awarded a compensation of Rs.3,39,208 with interest of 7%  and held that Insurance company and Mr. Z both were liable jointly and severally to pay the compensation. The Tribunal did not consider the brother of the deceased as the dependent and held the father and unmarried sister of the deceased as his dependents and awarded accordingly.

Aggrieved by the amount of compensation awarded by the MACT, the father and sister of the deceased filed an appeal in the Punjaband Haryana High Court praying for enhancement of the compensation. The High Court held that MACT had used the wrong principle for application of the multiplier as to assess the value of multiplier they took the age of the father of the deceased instead of the age of the deceased which in itself absolutely wrong and thereby reassessed the amount of compensation to Rs. 14,21,000/- (which included loss of future income, loss of love and affection and funeral expenses) along with interest of 9% from the date of filing the claim petition till realization.

Aggrieved by the order of the Punjab and Haryana High Court, the Insurance Company filed a Special Leave Petition before the Apex Court and prayed for setting aside the order of the High Court. The Insurance Company challenged the order of the High Court mainly on the ground that the amount of the compensation calculated by the High Court is not in line with the decision of the Supreme Court made in National Insurance Company Ltd. V. Pranay Sethi which has become a precedence for the calculation of amount of compensation in claims relating to the specified act.  Inits decision the Apex Court held the High Court made an error in taking 50% of the income as the deceased was self employed and under the age of 40 years. As per the guidelines laid down by the Hon’ble Supreme court in Pranay Sethi (supra) only 40% can be awarded in the present case and accordingly modified the amount of the compensation to that extent.

One of the major decision, made by the Supreme Court in the present case is in relation to the award of the compensation for Loss of Consortium in favour of the dependents of the deceased even though the same was not claimed in their plea. The Hon’ble Court said that, “The Motor Vehicles Act is a beneficial and welfare legislation. The Court is duty bound and entitled to award “just compensation”, irrespective of whether any plea in that behalf was raised by the Claimant. In exercise of our power under Article 142,and in the interests of justice, we deem it appropriate to award an amount of Rs. 15,000 towards Loss of Estate to Respondent Nos. 1 and 2.” The Hon’ble Court further added that, “The Constitution bench of this Court in Pranay Sethi (supra) dealt with various heads under which the compensation to be awarded in case of death which in legal parlance known as ‘Consortium’. Consortium's a compendious term which encompasses ‘spousal consortium’, ‘parental consortium’ and ‘filal consortium’. The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased,which is a loss to his family.” The Hon’ble Court again emphasized that, “The Motor Vehicles Act is a beneficial legislation aimed at providing relief to the victims or their families, in cases of genuine claims. In case where a parent has lost their minor child, or unmarried son or daughter, the parents are entitled to be awarded loss of consortium under the head of Filial Consortium.”In view of the above explanation, the Apex Court by using its power provided under Article 142 of the Constitution of Indian awarded an additional compensation of Rs.40000/- each to the dependents of the deceased for loss official Consortium. Accordingly, awarded a total compensation of Rs. 14,25,600/-(which included Loss of future income, Loss of Love and affection, Funeral expenses, Loss of estate and Loss of Filial consortium)  along with interest of 12% from the date of filing of claim till realization.

-         By Advocate Prakshi Agrawal

1.       Magma General Insurance Co. Ltd; v. Nanu Ram  -  2018SCC OnLine SC 1546