Supreme Court of India
SARUP SINGH @ RAM SARUPversusHDFC ERGO GENERAL INSURANCE COMPANY LTD. AND ORS.
- Citation
- 2022 INSC 1098
- Decided
- 17 October 2022
- Disposal
- Case Partly allowed
- Bench
- M R SHAH
Holding
The Court must incorporate a 40% uplift for future prospects, deduct one‑third for personal expenses, apply the appropriate multiplier and award consortium and interest at 7.5% per annum, rendering the High Court’s reduced award untenable.
Summary
The deceased, a 28‑year‑old, died in a motor accident and his wife, minor daughter, father and sister claimed compensation under the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal awarded Rs 20.64 lakh based on a notional monthly income of Rs 10,000, a 30% uplift for future prospects and a one‑quarter deduction for personal expenses. The Punjab and Haryana High Court reduced the award to Rs 11.34 lakh, lowered the notional income to Rs 6,500 per month, omitted any future‑prospects uplift and cut the interest rate from 9% to 6% per annum. On appeal, the Supreme Court held that the High Court’s reduction was untenable because it ignored the statutory requirement to factor in future prospects and appropriate consortium amounts. Applying the 40% uplift for future prospects endorsed in *National Insurance Co. v. Pranay Sethi* and the consortium awards from *Janabai v. Lombard General Insurance*, the Court calculated loss of dependency at Rs 12,37,790, consortium at Rs 1,20,000 and funeral/estate at Rs 30,000. The Court also fixed the rate of interest at 7.5% per annum, reflecting the year of death (2012). Consequently, the appeals were partly allowed and the total compensation was fixed at Rs 13,78,790 with interest at 7.5% per annum, with no order as to costs.
Issues considered
- Whether the High Court erred in reducing the notional income and omitting the uplift for future prospects while calculating loss of dependency under the Motor Vehicles Act, 1988.
- Whether a 40% increase for future prospects, as laid down in *National Insurance Co. v. Pranay Sethi*, is applicable in this case.
- Whether consortium compensation for parental, spousal and filial loss of affection should be awarded and at what quantum.
- What rate of interest is appropriate for compensation awarded for death under the Motor Vehicles Act.
- Whether the deduction for personal expenses should be one‑third of the notional income.
Legislation cited
Subjects
Motor Vehicles ActCompensationLoss of DependencyFuture ProspectsConsortiumInterest RateMotor Accident ClaimInsurance
Judgment
1008 [2022] REPORTS
SUPREME COURT 14 S.C.R. 1008 [2022] 14 S.C.R.
A SARUP SINGH @ RAM SARUP
v.
HDFC ERGO GENERAL INSURANCE COMPANY
LTD. AND ORS.
B (Civil Appeal Nos. 7283-7284 of 2022)
OCTOBER 17, 2022.
[M. R. SHAH AND C. T. RAVIKUMAR, JJ.]
Motor Vehicles Act, 1988: Compensation – Fatal accident –
Tribunal considered notional income of the deceased at Rs.10,000
C
per month and awarded compensation of Rs.20.64 lacs – High Court
reduced compensation to Rs.11.34 lacs by considering notional
income of Rs.6500 per month – High Court also reduced rate of
interest from 9% to 6% p.a. – Appeal by claimants against reduction
of compensation – Held: The amount awarded by the High Court
D can be said to be on lower side – While awarding the loss of
dependency, the High Court did not award/consider the future
prospects at all – Considering the decision in the case of Pranay
Sethi and Ors. and the decision in the case of Janabai, the claimant
shall also be entitled to Rs. 40,000/- towards parental consortium
for minor child; Rs. 40,000/- towards spousal consortium for wife
E
and Rs. 40,000/- towards filial consortium for the father of the
deceased – High Court also erred in reducing interest from 9% p.a.
to 6% p.a. – Considering the fact that the deceased died in the year
2012, the claimants shall be entitled to the interest @ 7.5% p.a.
Partly allowing the appeals, the Court
F
HELD: The amount awarded by the High Court can be
said to be on lower side. While awarding the loss of dependency,
the High Court has not awarded/considered the future prospects
at all. As per the decision of this Court in the case of National
Insurance Company Limited Vs. Pranay Sethi and Ors., there shall
G be 40% rise towards future prospects. Therefore, even if
considering the notional income @ Rs. 6,500/- per month as
determined by the High Court and adding 40% towards future
prospects and deducting 1/3rd towards personal expense of the
deceased and by applying the multiple of 17, the claimant shall
H
1008
SARUP SINGH @ RAM SARUP v. HDFC ERGO GENERAL 1009
INSURANCE COMPANY LTD.
be entitled to Rs. 12,37,790/- under the head loss of dependency. A
Considering the decision of this Court in the case of Pranay Sethi
and Ors. and the recent decision of this Court in the case of Janabai
and Ors. Vs. I.C.I.C.I. Lombard General Insurance Company Ltd.,
the claimant shall also be entitled to Rs. 40,000/- towards parental
consortium for minor child; Rs. 40,000/- towards spousal
B
consortium for wife and Rs. 40,000/- towards filial consortium for
the father of the deceased. Thus, the claimants shall be entitled
to Rs. 1,20,000/- under the head loss of consortium. The
claimants shall also be entitled to Rs. 30,000/- under the
conventional head (funeral expense and loss of estate). The High
Court has also erred in reducing the interest from 9% p.a. to 6% C
p.a. Considering the fact that the deceased died in the year 2012,
the claimants shall be entitled to the interest @ 7.5% p.a. [Para
4][1010-F-H; 1011-A-C]
National Insurance Company Limited v. Pranay Sethi
and Ors. (2017) 16 SCC 680 : [2017] 13 SCR 100; D
Janabai and Ors. v. I.C.I.C.I. Lombard General
Insurance Company Ltd. 2022 ACJ 2003 – relied on.
Case Law Reference
[2017] 13 SCR 100 relied on Para 4
E
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7283-
7284 of 2022.
From the Judgment and Orders dated 16.05.2017 of the High
Court of Punjab and Haryana at Chandigarh in Cross Objection No.
209-C-II of 2017 and FAO No. 246 of 2015. F
Abhimanyu Tewari, Ms. Eliza Bar, Ms. Sanya Kaushal, Siddhant
Saroha, Tushar Bathija, Advs. for the Appellant.
Sukant Vikram, Adv. for the Respondents.
The Judgment of the Court was delivered by
G
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court reducing the amount of compensation
from Rs. 20,64,000/- as awarded by the learned Motor Accident Claims
Tribunal (hereinafter referred to as the “Tribunal”) to Rs.11,34,136/- H
1010 SUPREME COURT REPORTS [2022] 14 S.C.R.
A alongwith interest @ 6% p.a., the original claimants have preferred the
present appeals.
2. The deceased at the time of accident was of 28 years of age.
The original claimants – wife of the deceased, minor daughter,
father and sister of the deceased filed the claim petition before the Tribunal.
B The learned Tribunal considered the notional income of the deceased at
Rs. 10,000/- per month and thereafter adding 30% towards the future
prospect and thereafter deducting 1/4th towards the personal expense
of the deceased, awarded Rs. 19,89,000/- under the head loss of
dependency. The learned Tribunal also awarded Rs. 25,000/- towards
C loss of consortium or loss of love and affection and Rs. 50,000/- under
the conventional head (funeral expenses and loss of estate). Thus, the
learned Tribunal awarded a total sum of Rs.20,64,000/- with interest @
9% p.a. towards the compensation for the death of the deceased.
3. In an appeal preferred by the insurance company, the High
D Court has reduced the amount of compensation to Rs. 11,34,136/- by
considering the notional income @ Rs. 6,500/- per month and thereafter
deducting 1/3rd towards the personal expense of the deceased and
determined/awarded Rs. 8,84,136/- under the head loss of dependency.
The High Court has also awarded a further sum of Rs. 1,00,000/- towards
loss of consortium and Rs. 1,00,000/- towards loss of love and affection
E for the child and Rs. 50,000/- for loss of estate. However, the High
Court has also reduced the rate of interest from 9% p.a. to 6% p.a. The
impugned judgment and order passed by the High Court is the subject
matter of the present appeal.
4. Having heard the learned counsel appearing on behalf of the
F respective parties and having gone through the impugned judgment and
order passed by the High Court, we are of the opinion that the amount
awarded by the High Court can be said to be on lower side. While
awarding the loss of dependency, the High Court has not awarded/
considered the future prospects at all. As per the decision of this Court
G in the case of National Insurance Company Limited Vs. Pranay
Sethi and Ors., (2017) 16 SCC 680, there shall be 40% rise towards
future prospects. Therefore, even if we consider the notional income @
Rs. 6,500/- per month as determined by the High Court and adding 40%
towards future prospects and deducting 1/3rd towards personal expense
of the deceased and by applying the multiple of 17, the claimant shall be
H
SARUP SINGH @ RAM SARUP v. HDFC ERGO GENERAL 1011
INSURANCE COMPANY LTD. [M. R. SHAH, J.]
entitled to Rs. 12,37,790/- under the head loss of dependency. Considering A
the decision of this Court in the case of Pranay Sethi and Ors. (supra)
and the recent decision of this Court in the case of Janabai and Ors.
Vs. I.C.I.C.I. Lombard General Insurance Company Ltd., 2022
ACJ 2003, the claimant shall also be entitled to Rs. 40,000/- towards
parental consortium for minor child; Rs. 40,000/- towards spousal
B
consortium for wife and Rs. 40,000/- towards filial consortium for the
father of the deceased. Thus, the claimants shall be entitled to
Rs. 1,20,000/- under the head loss of consortium. The claimants shall
also be entitled to Rs. 30,000/- under the conventional head (funeral
expense and loss of estate). The High Court has also erred in reducing
the interest from 9% p.a. to 6% p.a. Considering the fact that the C
deceased died in the year 2012, the claimants shall be entitled to the
interest @ 7.5% p.a. Thus, the claimants shall be entitled to Rs. 13,87,790/
- with interest @ 7.5% p.a.
5. In view of the above and for the reasons stated above, the
present appeals are allowed in part. The impugned judgment and order D
passed by the High Court is modified and it is held and directed that the
appellants shall be entitled to a total sum of Rs. 13,78,790/- with interest
@ 7.5% p.a. from the date of filing of the claim petition till realization
towards the compensation for the death of the deceased.
Present appeals are accordingly allowed to the aforesaid extent. E
However, in the facts and circumstances of the case, there shall be no
order as to costs.
Devika Gujral Appeals partly allowed.
F
G
H
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