Gauhati High Court Enhances Compensation in Motor Accident Case; Holds Tribunal Erred in Applying Multiplier and Excluding Filial Consortium, Awards Rs. 12.74 Lakh

Court’s Decision:

The Gauhati High Court modified the Motor Accident Claims Tribunal’s (MACT) earlier judgment by enhancing the compensation awarded to the appellants to Rs. 12,74,400 with 8% interest per annum. The Court held that the Tribunal erred in:

1. Applying an incorrect multiplier by considering the age of the father instead of the deceased.
2. Failing to account for future prospects at 40%.
3. Omitting or inadequately calculating compensation under heads like filial consortium, loss of estate, and funeral expenses.

Facts:

• The case arose from a road accident on May 19, 2006, when the appellants’ 26-year-old son died due to injuries caused by a rashly driven pickup van.
• The appellants sought Rs. 9,00,000 in compensation, claiming the deceased earned Rs. 10,000–12,000 per month.
• The MACT awarded Rs. 2,85,000, based on an income of Rs. 8,000, while excluding certain compensatory heads such as filial consortium and loss of estate.

Issues:

1. Was the Tribunal correct in applying a lower multiplier based on the father’s age instead of the deceased’s?
2. Did the Tribunal correctly account for the deceased’s future prospects?
3. Were compensation heads like filial consortium and funeral expenses properly addressed?

Petitioner’s Arguments:

• The Tribunal incorrectly applied a multiplier based on the claimant’s age, affecting the quantum of compensation.
• Future prospects at 40% of income should have been included per the Supreme Court’s Pranay Sethi guidelines.
• Compensation under filial consortium, loss of estate, and funeral expenses was either excluded or underestimated.
• Cited Joginder Singh v. ICICI Lombard General Insurance Co. and United India Insurance Co. v. Satinder Kaur, emphasizing comprehensive awards for loss of life and dependency.

Respondent’s Arguments:

• Acknowledged that the deceased’s age of 26 years was not properly factored into the calculations.
• Asserted that the income of Rs. 8,000 and the interest rate of 8% per annum were just and reasonable.
• Did not object to the inclusion of future prospects but argued that it should not carry additional interest.

Analysis of the Law:

The Court analyzed the following legal principles and precedents:

1. Multiplier Selection:
   • The Supreme Court in Pranay Sethi mandates that the deceased’s age is the determining factor for choosing a multiplier. For a 26-year-old, the correct multiplier is 17.
2. Future Prospects:
   • Future prospects should be calculated as 40% of the deceased’s income for individuals under 40 years of age. This was not properly considered by the Tribunal.
3. Heads of Compensation:
   • The Supreme Court in Satinder Kaur recognized the need to account for filial consortium, loss of estate, and funeral expenses. The Tribunal’s award excluded or inadequately calculated these amounts.
4. Deductions for Personal Expenses:
   • As the deceased was unmarried, 50% of the income should have been deducted for personal expenses, consistent with established norms.

Precedent Analysis:

• Joginder Singh v. ICICI Lombard General Insurance Co.: Clarified the structured approach for awarding compensation under heads such as income, future prospects, personal expenses, and consortium.
• United India Insurance Co. v. Satinder Kaur: Highlighted the importance of filial consortium in compensation calculations and provided a multiplier table for reference.
• Pranay Sethi Case: Set the standard for calculating future prospects, multiplier application, and other aspects of compensation.

Court’s Reasoning:

1. Multiplier Error: The Tribunal wrongly applied the multiplier based on the father’s age instead of the deceased’s. The Court corrected this to a multiplier of 17 for the deceased’s age of 26.
2. Future Prospects: The Tribunal failed to include future prospects, which the Court rectified by adding 40% of the deceased’s income (Rs. 3,200).
3. Filial Consortium and Other Heads: The Court held that the claimants were entitled to Rs. 96,000 for filial consortium, Rs. 18,000 for loss of estate, and Rs. 18,000 for funeral expenses.
4. Agreement Between Parties: Both parties agreed to an enhanced award and recalculated compensation under mutually agreed terms.

Conclusion:

The Court modified the compensation to Rs. 12,74,400, comprising:

• Loss of future income: Rs. 11,42,400 (Rs. 8,000 – 50% deduction + 40% future prospects x 12 months x multiplier 17).
• Filial consortium: Rs. 96,000
• Loss of estate: Rs. 18,000
• Funeral expenses: Rs. 18,000

The Court also directed that:

1. Future prospects (Rs. 3,36,400) would not attract interest.
2. Previously paid amounts would not attract interest and be adjusted against the total compensation.
3. The insurer must pay the enhanced compensation within 60 days.

Implications:

This judgment emphasizes the judiciary’s commitment to ensuring justice in motor accident cases by strictly adhering to legal precedents and principles. It serves as a reminder to Tribunals to meticulously apply the correct multiplier, consider future prospects, and include all relevant compensation heads to avoid unfair reductions in awards.

Also Read – Supreme Court Enhances Compensation for Minor Motor Accident Victim, Citing Lifelong Dependency and Disability: “Compensation Must Be Liberal, Not Niggardly”