Court’s Decision
The Karnataka High Court, through Justice Umesh M. Adiga, partly allowed an appeal under Section 173(1) of the Motor Vehicles Act, 1988, seeking enhancement of compensation in a fatal motor accident claim. The Court held that the Tribunal had erred in assessing the deceased’s income too low, leading to an undervaluation of compensation.
Accordingly, the Court enhanced the total compensation by ₹8,60,000, fixing it at ₹29,07,500 instead of ₹20,48,000 awarded by the Tribunal. The enhanced amount was ordered to carry 6% interest per annum from the date of the claim petition till realization.
Justice Adiga observed:
“The Tribunal failed to consider the realistic income of the deceased in light of the Karnataka State Legal Services Authority’s notional income chart. Recalculation is necessary to achieve just compensation.”
The Court further held that both the owner and insurer of the offending tanker lorry were jointly and severally liable to deposit the compensation within six weeks.
Facts
The case arose from a fatal road accident on 14 January 2018, when a man named Basavaraju was riding his motorcycle (KA-05-HK-6896) towards Chikkakadaluru and was hit by a tanker lorry (TN-30-AK-7499). He died on the spot due to severe injuries.
The claimants, being his wife, minor daughter, parents, and brother, filed a claim petition (MVC No. 1348/2018) before the 5th Additional District and Sessions Judge, Hassan, seeking compensation of ₹50,00,000. They stated that the deceased was aged 28, working both as a driver and agriculturist, and earned ₹30,000 per month, contributing his income to the family.
The owner of the lorry remained ex parte, while the insurer, National Insurance Company Ltd., denied liability, contending that the accident occurred due to negligence of the deceased motorcyclist.
After examining evidence, the Tribunal awarded ₹20,48,000, broken down as follows:
| Head | Amount (₹) |
| Loss of dependency | 19,28,000 |
| Funeral expenses | 15,000 |
| Loss of estate | 15,000 |
| Consortium | 40,000 |
| Loss of love and affection | 50,000 |
| Total | ₹20,48,000 |
Dissatisfied, the claimants filed the present appeal for enhancement, arguing that the notional income and heads of compensation were incorrectly assessed.
Issues
- Whether the Tribunal erred in determining the deceased’s monthly income at ₹9,000 despite evidence suggesting higher earnings.
- Whether the compensation awarded under “loss of love and affection” was contrary to the law laid down by the Supreme Court in Pranay Sethi.
- Whether the claimants were entitled to enhancement under conventional heads in light of recent judicial precedents.
Petitioner’s Arguments
The claimants’ counsel argued that the Tribunal’s assessment of ₹9,000 per month as income was arbitrary and unrealistic. It was contended that, even without documentary proof, the deceased’s work as a driver-cum-agriculturist warranted adoption of a higher notional income based on the KSLSA notional income chart applicable for the year 2018.
The counsel submitted that the deceased, aged 29, was in the prime of his life, and the Tribunal should have added 40% towards future prospects as per the Supreme Court’s ruling in National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680.
Further, it was argued that the Tribunal erred in awarding only ₹40,000 under consortium and should have granted ₹40,000 each to every claimant (wife, daughter, parents, and dependent brother) as per Magma General Insurance Co. Ltd. v. Nanu Ram (2018) ACJ 2782.
The counsel also submitted that the separate amount awarded under “loss of love and affection” was contrary to law, since the Supreme Court in Pranay Sethi had clarified that such a head was not permissible under the Motor Vehicles Act. Hence, the total compensation required recalibration on all counts.
Respondent’s Arguments
The insurer’s counsel maintained that the Tribunal had correctly applied legal principles and awarded just compensation. It was argued that the claimants had failed to produce documentary evidence of the deceased’s income or employment, and therefore the notional income of ₹9,000 was reasonable.
The insurer further argued that once compensation under consortium was granted, a separate award under “loss of love and affection” was impermissible. The respondent relied on the Supreme Court’s decision in Pranay Sethi, where it was held that duplication of conventional heads leads to unjust enrichment.
Thus, it was urged that even if the appeal were to be allowed for enhancement of dependency loss, the Court should simultaneously remove duplication under other heads to ensure fairness.
Analysis of the Law
The Court analyzed the interplay between the principles of “just compensation” under Section 168 of the MV Act and judicial precedents governing computation of income, dependency, and conventional heads.
Justice Adiga referred to the KSLSA notional income chart, fixing ₹12,500 per month as the baseline for accidents in 2018 when the deceased’s occupation was unproved but plausible. He added 40% for future prospects, consistent with the ruling in Pranay Sethi, and applied the multiplier ‘17’ in line with Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121.
The Court observed that the Tribunal’s application of ₹9,000 as monthly income was outdated and inconsistent with the standardized notional income chart, which was introduced to achieve uniformity across Motor Accident Claims Tribunals in Karnataka.
Further, while recognizing the insurer’s submission on duplication of heads, the Court clarified that loss of love and affection was not an independent head of compensation and therefore excluded it from the recalculated award.
Precedent Analysis
- National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680 — Clarified the permissible conventional heads and percentages for future prospects. Applied here to add 40% to the income and exclude “love and affection” as a head.
- Sarla Verma v. DTC (2009) 6 SCC 121 — Standardized the multiplier method based on age; multiplier of 17 applied since deceased was 29.
- Magma General Insurance Co. Ltd. v. Nanu Ram (2018) ACJ 2782 — Held that each dependent family member is entitled to consortium of ₹40,000. Followed here to extend consortium to all five dependents.
Court’s Reasoning
After recalculating based on the correct income and multiplier, the Court determined the loss of dependency as follows:
(₹12,500+40%)×12×17×¾=₹26,77,500
(₹12,500+40%)×12×17×¾=₹26,77,500
Adding conventional heads — consortium (₹2,00,000), loss of estate (₹15,000), and funeral expenses (₹15,000) — the total came to ₹29,07,500.
The Tribunal’s award of ₹20,48,000 thus required enhancement by ₹8,60,000, carrying 6% interest per annum.
The Court also ordered that, following the death of one claimant (the grandmother), her apportioned share would be redistributed equally among the remaining five dependents, in accordance with the Tribunal’s apportionment structure.
Conclusion
The appeal was allowed in part, and the Tribunal’s award was modified. The claimants were granted an additional ₹8,60,000 with 6% interest, payable jointly and severally by the owner and insurer within six weeks.
Justice Umesh M. Adiga underscored that motor accident compensation must reflect economic realities and not merely procedural formalities:
“Courts must ensure that compensation is just, fair, and based on standardized income guidelines, particularly where documentary proof is lacking.”
Implications
This judgment reinforces the principles of uniform computation of notional income and strict adherence to Supreme Court guidelines for consistency in accident compensation cases. It ensures that:
- KSLSA notional income charts must be followed to avoid arbitrary assessments.
- “Loss of love and affection” is not a permissible head, to prevent duplication.
- Each dependent is entitled to consortium benefits separately.
The decision strengthens claimants’ rights to realistic compensation and directs Tribunals to align awards with evolving judicial benchmarks.
Judgments Referred
- National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 — Clarified heads of compensation and future prospects.
- Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121 — Provided standardized multipliers.
- Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) ACJ 2782 — Extended consortium to all dependents.
FAQs
Q1. How is notional income determined when there’s no documentary proof?
Courts apply the Karnataka State Legal Services Authority’s notional income chart, ensuring uniformity across tribunals.
Q2. Can dependents claim both consortium and love and affection?
No. The Supreme Court in Pranay Sethi disallowed “love and affection” as a separate head once consortium is granted.
Q3. Who bears liability for payment — the insurer or the owner?
Both the owner and insurer are jointly and severally liable unless policy violation is proven.
