Holding

The Tribunal’s award of compensation is justified and the High Court’s reduction is set aside.

Summary

The appellants' parents, who were partners in a mill, died in a road accident when a bus collided with their vehicle. The appellants filed separate claim petitions under the Motor Vehicles Act, 1988 seeking Rs 1 crore each, and the Motor Accidents Claims Tribunal awarded Rs 58.24 lakh and Rs 93.61 lakh respectively, based on a notional monthly income of Rs 60,000. The insurer appealed, and the Madurai High Court reduced the awards to Rs 26.68 lakh and Rs 19.22 lakh, reasoning that the appellants had stepped into the deceased’s business and suffered no loss. The Supreme Court examined whether loss of future earnings should be assessed on the basis of the deceased’s personal income, the partners’ lack of experience, and the decline in the mill’s profitability, relying on precedents such as K Ramya and Sushma HR. The Court held that the Tribunal’s award was well‑considered, that the appellants could not realistically continue the business, and that the High Court’s reduction was contrary to settled law. Consequently, the High Court judgment was set aside and the Tribunal’s award restored.

Issues considered

Whether the High Court was justified in reducing the compensation awarded by the Motor Accidents Claims Tribunal under the Motor Vehicles Act, 1988.
How loss of future earnings should be calculated when the deceased was a partner in a business and the heirs lack experience and maturity.
Whether the transfer of the deceased’s share in the business to the heirs negates the claim for pecuniary loss.
Whether the Tribunal’s use of notional income and multiplier conforms with the principle of ‘just compensation’ under Section 168 of the Motor Vehicles Act.

Legislation cited

Motor Vehicles Act, 1988

Headnote

Issue for Consideration Matter pertains to the correctness of the order passed by the High Court reducing the amount of compensation granted under the Motor Vehicles Act, 1988. Headnotes† Motor Vehicles Act, 1988 – Compensation of the appellants met with an accident resulting in their death while travelling in a vehicle after the bus belonging to respondent no.3 dashed into the said vehicle – Appellants claimed identical compensation for the parents as both were partners in a Mill – Tribunal granted

Subjects

CompensationLack of experience and maturityReal/expected downfall in the profitability of the firmLoss of future income/earningsNotional incomeIncome Tax ReturnsJudicial conscienceMotor Accidents ClaimsDeath due to motor vehicle accidentFormula for calculating compensation

Judgment

[2025] 1 S.C.R. 1163 : 2025 INSC 123

S. Vishnu Ganga & Ors.
v.
M/s Oriental Insurance Company Limited Rep.
by Its Divisional Manager & Ors.
(Civil Appeals No(s). 1162-1163 of 2025)
29 January 2025
[Sudhanshu Dhulia and Ahsanuddin Amanullah,* JJ.]

Issue for Consideration
Matter pertains to the correctness of the order passed by the High
Court reducing the amount of compensation granted under the
Motor Vehicles Act, 1988.

Headnotes†
Motor Vehicles Act, 1988 – Compensation – Enhancement –
Parents of the appellants met with an accident resulting in
their death while travelling in a vehicle after the bus belonging
to respondent no.3 dashed into the said vehicle – Appellants
claimed identical compensation for the parents as both
were partners in a Mill – Tribunal granted compensation of
Rs.58,24,000/- for the father and Rs.93,61,000/- for the mother
with interest – High Court reduced the amount of compensation
to Rs.26,68,600/- for the father and Rs.19,22,680/- for the
mother – Interference with:
Held: Award rendered by the tribunal is well-considered – Merely
because the appellants stepped into the shoes of the deceased,
by such factum itself, the appellants would not be capable of
running the Mill – Lack of experience and maturity, real/expected
downfall in the profitability of the firm relevant while considering
a claim pertaining to loss of future income/earnings – Notional
income fixed by the tribunal of Rs.60,000/- each per month, is
much more reasonable – Income Tax Returns reliable evidence to
assess the income of a deceased – Between the formula applied
by the tribunal vis-a-vis the approach adopted by the High Court,
the view of the tribunal rendered in the form of the award satisfies
the judicial conscience – High Court’s reasoning militates against
settled law – Impugned judgment set aside. [Paras 11, 14]

* Author
1164 [2025] 1 S.C.R.

Supreme Court Reports

Case Law Cited
K Ramya v. National Insurance Co. Ltd. [2022] 18 SCR 238 : 2022
SCC OnLine SC 1338; Amrit Bhanu Shali v. National Insurance
Co. Ltd. [2012] 5 SCR 207 : (2012) 11 SCC 738; Kalpanaraj v.
Tamil Nadu State Transport Corporation [2014] 6 SCR 577 : (2015)
2 SCC 764 – relied on.
B Parimala v. Riyaz Ahmed, 2000 SCC OnLine Kar 446; Sushma
H.R. & Anr. v. Deepak Kumar Jha & Ors., 2022 SCC OnLine
SC 2166; Helen C Rebello v. Maharashtra State Road Transport
Corporation [1998] Supp. 1 SCR 684 : (1999) 1 SCC 90; United
India Insurance Co. Ltd. v. Patricia Jean Mahajan (2002) 6 SCC
281; New India Assurance Co. Ltd. v. Charlie [2005] 2 SCR 1173 :
(2005) 10 SCC 720; National Insurance Co. Ltd. v. Indira Srivastava
[2007] 13 SCR 352 : (2008) 2 SCC 763; Yadava Kumar v.
Divisional Manager, National Insurance Co. Ltd. [2010] 10 SCR
746 : (2010) 10 SCC 341; National Insurance Co. Ltd. v. Pranay
Sethi [2017] 13 SCR 100 : (2017) 16 SCC 680; Ningamma v.
United India Insurance Co. Ltd. [2009] 8 SCR 683 : (2009) 13
SCC 710 – referred to.

List of Books and Periodicals Cited
Peter Cane, Atiyah’s Accidents, Compensation and the Law (7th
Edition, Cambridge University Press, 2006) 411-412 – referred to.

List of Acts
Motor Vehicles Act, 1988.

List of Keywords
Compensation; Lack of experience and maturity; Real/expected
downfall in the profitability of the firm; Loss of future income/earnings;
Notional income; Income Tax Returns; Judicial conscience; Motor
Accidents Claims; Death due to motor vehicle accident; Formula
for calculating compensation.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 1162-1163
of 2025
[2025] 1 S.C.R. 1165

S. Vishnu Ganga & Ors. v. M/s Oriental Insurance Company Limited
Rep. by Its Divisional Manager & Ors.

From the Judgment and Order dated 22.12.2017 of the High
Court of Judicature at Madras at Madurai in CMAMD Nos.1075
and 1076 of 2015

Appearances for Parties
Advs. for the Appellants:
Ms. Kiran Suri, Sr. Adv., T. R. B. Sivakumar, Deva Vrat Anand,
Ms. Hema Malik.
Advs. for the Respondents:
Sudhir Naagar, Abhishek Kumar Gola, Ramneek Singh, Mayank
Sachdeva, Ms. Aparna Dubey, Ms. Shaily Tarrar, Ms. Sonia Mottan,
Subhash Motan, Ms. G. Indira, P Gandepan, Ms. Larika Khandalwal,
Ashwini Kumar, Ms. D Poornima.

Judgment / Order of the Supreme Court

Judgment

Ahsanuddin Amanullah, J.

Leave granted.
2. The present appeals are directed against the Final Order and
Judgment dated 22.12.2017 (hereinafter referred to as the “Impugned
Judgment”) passed by a learned Division Bench of the High Court of
Judicature at Madras, Bench at Madurai in appeals bearing C.M.A.
(MD) Nos.1075 of 2015 and 1076 of 2015 (both filed by the Insurance
Company/R11), against the Award dated 25.11.2014 passed by the
learned Motor Accidents Claims Tribunal (hereinafter referred to as
the “Tribunal”) in Claim Petitions bearing M.C.O.P No.1573 of 2009
and 1574 of 2009. The appeals preferred by R1 were allowed in
part and the compensation awarded by the Tribunal was reduced.

BRIEF FACTS:
3. The parents - father and mother - of the appellants were travelling
in a Tempo Traveler vehicle (hereinafter referred to as the “vehicle”)

1 Respondent No.1 herein.
1166 [2025] 1 S.C.R.

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belonging to R22 insured with R1 from Salem to Madurai. While the
vehicle was near Namakkal, at that time, a bus belonging to R33
came from the opposite side and dashed into the vehicle resulting in
the unfortunate death of the parents of the appellants. The bus was
bearing Registration No.TN30 N0612 and was not insured.
4. The appellants filed M.C.O.P No.1573 of 2009 with regard to the
death of their father claiming a total compensation of Rs.1,00,00,000/-
(Rupees One Crore). Likewise, they also filed M.C.O.P No.1574 of
2009 claiming compensation to the tune of Rs.1,00,00,000/- (Rupees
One Crore) for the death of their mother. The claims made were more
or less identical in both cases as the parents of the appellants were
partners in a firm and, thus, the calculation(s) made to arrive at the
claimed compensation amount(s) was the same. The appellants, in
support of their claims, produced various documents including the
Partnership Deed dated 01.06.2006, Income Tax Returns of the
firm Sri Ganga Mills (hereinafter referred to as the “Mill”) for the
Assessment Years 2007-2008, 2008-2009, 2009-2010, 2010-2011
and 2011-2012. R1 also filed its written objection(s). After hearing
the parties, the Tribunal awarded compensation of Rs.58,24,000/-
(Rupees Fifty-Eight Lakhs Twenty-Four Thousand) for the father and
Rs.93,61,000/- (Rupees Ninety-Three Lakhs Sixty-One Thousand)
for the mother with interest @ 7.5 per cent per annum from the date
of the filing of the claim petition till realization. It was R1 which filed
appeals before the High Court, but R3 did not challenge the Award
of the Tribunal.
5. Both the appeals have been decided by the High Court vide the
common Impugned Judgment. The appeals were partly allowed. Final
compensation, as awarded by the High Court was Rs.26,68,600/-
(Rupees Twenty-Six Lakhs Sixty-Eight Thousand Six Hundred) for the
father of appellants, whereas for the mother, it was Rs.19,22,680/-
(Rupees Nineteen Lakhs Twenty-Two Thousand Six Hundred and
Eighty). A comparative overview of the compensation awarded by
the Tribunal and High Court is extracted below:

2 Respondent No.2 herein.
3 Respondent No.3 herein.
[2025] 1 S.C.R. 1167

S. Vishnu Ganga & Ors. v. M/s Oriental Insurance Company Limited
Rep. by Its Divisional Manager & Ors.

CLAIM THE TRIBUNAL THE HIGH COURT
Claimants 4 (daughters of deceased)

Age Father: 57 years
Mother: 50 years
Multiplier Father: 9 Father: 8
Mother: 13 Mother: 12
Income Father: Rs.60,000 p.m.4 Father: Rs.30,000 p.m.
Mother: Rs.60,000 p.m. Mother: Rs.12,500 p.m.

Future Prospects Father: Rs.9,000 p.m. Father: Rs.3,000 p.m.
Mother: Rs.18,000 p.m. Mother: Rs.3,125 p.m.

Loss of Income Father: Rs.55,89,000 Father: Rs.24,33,600
Mother: Rs.91,26,000 Mother: Rs.16,87,680

Loss of Love and Father: Rs.2,00,000
Affection
Mother: Rs.2,00,000

Conventional Head Father: Rs.35,000
(Transportation +
Mother: Rs.35,000
Cremation Charges)
Award Father: Rs.58,24,000 Father: Rs.26,68,600
Mother: Rs.93,61,000 Mother: Rs.19,22,680
Interest @ 7.5 p.a.5 Interest @ 7.5 p.a.

SUBMISSIONS BY THE APPELLANTS:
6. Learned counsel for the appellants submitted that the High Court by
the Impugned Judgment without any reasoning has upset the Award
on the ground that the income from the Mill was not reduced due
to the death of the deceased, and the appellants have stepped into
the business of the deceased parents and the business continued
after the deaths.

4 Abbreviation for per mensem or per month.
5 Abbreviation for per annum.
1168 [2025] 1 S.C.R.

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7. Learned counsel submitted that the High Court erred by relying on
a judgment of the High Court of Karnataka6 in B Parimala v Riyaz
Ahmed, 2000 SCC OnLine Kar 446 to hold that the relevant factors
to see for the prevailing loss of the income of the deceased is the
remuneration received by them from the Mill and not the income of
the Mill, which is contrary to what has been held in Paragraphs 18,
20, 22, 23 and 27 of the relied upon judgment itself i.e., B Parimala
(supra), holding that when a person is an active partner and has
also contributed to the capital, then a judicious decision will have to
be made of the income to determine the income attributable to the
efforts of the deceased and income attributable to the investment
made. Further, it was contended that K Ramya v National Insurance
Co. Ltd., 2022 SCC OnLine SC 1338 at Paragraphs 17 and 18, has
held that merely because the deceased’s share of ownership in the
business was transferred to the children is not sufficient justification
to conclude that the benefits of his business continue to accrue to
his dependents. It was also submitted that a Coordinate Bench of
this Court on 15.09.2022 in Civil Appeal Nos.6671-6672 of 2022
(Sushma H.R. & Anr. v Deepak Kumar Jha & Ors.)7 had held
that in view of the young age of the appellants, without experience,
it cannot be expected that the business can be run by them in the
same manner as it was run by the deceased.
8. It was submitted that in this background, the view of the High Court
that the appellants had stepped into the shoes of the deceased
by becoming partners in the firm and that they did not suffer any
pecuniary loss in the business is also incorrect for the reason that the
firm was being run by the parents of the appellants. The appellants
were added as partners at the age of about 24, 22, 18 and 18 years
respectively, but were not participating in the business for which the
evidence of PWs 3, 8 and 10 were relied on. It was submitted that
the evidence showed that due to the death of the parents, there was
a downfall in the number of workers employed which reduced to 138
from 202, including technical workers as the firm was unable to pay
their salaries on time. Further, it was contended that RW-1, who
was the Chartered Accountant of the firm, had specifically admitted
that the loss was to the tune of Rs.68,00,000/- (Rupees Sixty Eight

6 Incorrectly noted in the Impugned Judgment as ‘High Court of Karnataka Vs. Riyaz Ahamed’ (sic).
7 2022 SCC OnLine SC 2166.
[2025] 1 S.C.R. 1169

S. Vishnu Ganga & Ors. v. M/s Oriental Insurance Company Limited
Rep. by Its Divisional Manager & Ors.

Lakhs). Further, learned counsel submitted that the appellants
had filed the Mill’s Income Tax Returns from AY8 2005-2006 to AY
2011-2012 to show reduced profits. Yet, the High Court, relying on
some statements, without considering the whole evidence and the
context in which such statements were made, decided to reduce
the compensation awarded. It was the contention of the learned
counsel that the multiplier of 8 instead of 9 was applied in the case
of the father and 12 in place of 13 with regard to the mother which
was against settled law.
9. It was submitted that even the Tribunal had not fully appreciated the
facts of the case and failed to apply the law as was required to be
done, but the High Court had caused further damage by drastically
reducing the compensation awarded, leading to a miscarriage of
justice. Moreover, it was contended that, in fact, R1 had challenged
only 50 per cent of the total amount awarded by the Tribunal, but the
High Court reduced the awarded amount by more than 50 per cent
with regard to the father and 80 per cent with regard to the mother,
way beyond what was sought for by R1.

SUBMISSIONS BY R1:
10. Learned counsel for R1 submitted that the claims made by the
appellants were exorbitant and even the Tribunal’s Award was on the
much higher side, than what was actually due and admissible to the
appellants. It was submitted that rightly, the High Court reduced the
quantum of amount awarded. It was argued that reduction was made
after considering the evidence led by the appellants, especially of
PW-8, PW-9 and PW-10. It was stated that the cases referred to by
the appellants did not apply to the facts of the present cases. Lastly,
it was contended that the Impugned Judgment needs no interference.

ANALYSIS, REASONING AND CONCLUSION:
11. Having examined the matter, the Court finds that the Award rendered by
the Tribunal is well-considered. Though the claimed compensation was
Rs.1,00,00,000/- (Rupees One Crore) each with regard to the father
and the mother, the Tribunal granted Rs.58,24,000/- (Rupees Fifty-
Eight Lakhs Twenty-Four Thousand) re the father and Rs.93,61,000/-

8 Abbreviation for Assessment Year.
1170 [2025] 1 S.C.R.

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(Rupees Ninety-Three Lakhs Sixty-One Thousand) re the mother. The
documents produced by the appellants and the reasoning given by
the Tribunal as well as the Karnataka High Court’s Division Bench
judgment in B Parimala (supra) indicate, and in our opinion, rightly
so, that merely because the appellants stepped into the shoes of the
deceased, by such factum itself, the appellants would not be capable
of running the Mill. It would be of relevance as to whether due to
their lack of experience and maturity, real/expected downfall in the
profitability of the firm or the business would ensue. Such factor, while
considering a claim pertaining to loss of future income/earnings, would
have to be dealt with. In the present cases, even the monthly incomes
of the parents as claimed by the appellants i.e.. income of the father
being Rs.25,00,000/- (Rupees Twenty-Five Lakhs) per year and the
mother’s being Rs.20,00,000/- (Rupees Twenty Lakhs) per year, the
notional income fixed by the Tribunal of Rs.60,000/- (Rupees Sixty
Thousand) each per month, is much more reasonable. It is no longer
res integra that Income Tax Returns are reliable evidence to assess
the income of a deceased, reference whereof can be made to Amrit
Bhanu Shali v National Insurance Co. Ltd., (2012) 11 SCC 7389;
Kalpanaraj v Tamil Nadu State Transport Corporation, (2015) 2
SCC 76410, and K Ramya (supra)11.
12. The observations, as under, in Sushma (supra) fortify our view:
‘7. Therefore in the matter of determining the compensation
certain larger aspects have to be kept in perspective and
even if it is expected that the Bakery business is continued,
the loss due to the death of the husband and his expertise
in such business certainly would be at least to the extent
of 50% of the normal way in which the business was
conducted…’
13. K Ramya (supra), wherein it was, inter alia, held as below, also
supports the case put forth by the appellants:
‘11. At the outset, it is pertinent to reiterate the concept
of ‘just’ compensation under Section 168 of the Act. It is

9 Para 17.
10 Para 7.
11 Para 14.
[2025] 1 S.C.R. 1171

S. Vishnu Ganga & Ors. v. M/s Oriental Insurance Company Limited
Rep. by Its Divisional Manager & Ors.

a settled proposition, now through a catena of decisions12
including the one rendered by the Constitution Bench in
Pranay Sethi13 that compensation must be fair, reasonable
and equitable. Further, the determination of quantum is
a fact-dependent exercise which must be liberal and not
parsimonious. It must be emphasized that compensation
is a more comprehensive form of pecuniary relief which
involves a broad-based approach unlike damages as
noted by this court in Yadava Kumar v. Divisional Manager,
National Insurance Co. Ltd.14. The discussion in the
abovementioned cases highlights that Tribunals under the
Act have been granted reasonable flexibility in determining
‘just’ compensation and are not bound by any rigid arithmetic
rules or strict evidentiary standards to compute loss unlike
in the case of damages. Hence, any interference by the
Appellate Courts should ordinarily be allowed only when
the compensation is ‘exorbitant’ or ‘arbitrary’.
12. Furthermore, Motor Vehicles Act of 1988 is a
beneficial and welfare legislation15 that seeks to provide
compensation as per the contemporaneous position of
an individual which is essentially forward-looking. Unlike
tortious liability, which is chiefly concerned with making
up for the past and reinstating a claimant to his original
position, the compensation under the Act is concerned
with providing stability and continuity in peoples’ lives in
the future.16 Keeping the abovementioned principles in the
backdrop, we now move on to the facts at hand.
xxx
17. The mere fact that the Deceased’s share of ownership
in these businesses ventures was transferred to the

12 Helen C Rebello v Maharashtra State Road Transport Corporation, (1999) 1 SCC 90; United India
Insurance Co. Ltd. v Patricia Jean Mahajan, (2002) 6 SCC 281; New India Assurance Co. Ltd. v
Charlie, (2005) 10 SCC 720, and; National Insurance Co. Ltd. v Indira Srivastava, (2008) 2 SCC 763.
13 National Insurance Co. Ltd. v Pranay Sethi, (2017) 16 SCC 680.
14 (2010) 10 SCC 341.
15 Ningamma v United India Insurance Co. Ltd., (2009) 13 SCC 710.
16 See Peter Cane, Atiyah’s Accidents, Compensation and the Law (7th Edition, Cambridge University
Press, 2006) 411-412.
1172 [2025] 1 S.C.R.

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Deceased’s minor children just before his death or to the
dependents after his death is not a sufficient justification
to conclude that the benefits of these businesses continue
to accrue to his dependents. On the contrary, it has come
on record that the Deceased was actively involved in the
day-to-day administration of these businesses from their
stage of infancy, had undergone specialized training to
administer his business and that the audit reports neatly
delineate Deceased’s share of income from the businesses.
These facts necessitate that the entire amount from the
business ventures is treated as income. Similarly, the
amount earned from the bank interests and remaining
investments must also be included as income.’ (sic)
(emphasis supplied)

14. Even otherwise, we are satisfied that between the formula applied
by the Tribunal vis-a-vis the approach adopted by the High Court,
the view of the Tribunal rendered in the form of the Award satisfies
our judicial conscience. The High Court’s reasoning militates against
settled law. For the reasons aforesaid and adopting a holistic view,
we find that the Impugned Judgment of the High Court deserves to
be interfered with. It is, accordingly, set aside. The Award passed by
the Tribunal stands restored; payments in terms thereof be made by
R1 to the appellants, after deducting/adjusting the amounts, if any
already paid, within a period of 6 (six) weeks, reckoned from today.
15. The appeals stand disposed of in the aforesaid manner.
16. No order as to costs.

Result of the case: Appeals disposed of.

†
Headnotes prepared by: Nidhi Jain