The Supreme Court on Monday stepped in to trim down a hefty motor accident compensation award, making it clear that tribunals cannot rely on guesswork while fixing a deceased person’s income. Sitting in a packed courtroom, the bench recalculated the payout after finding that the earlier figures were, frankly, stretched too far.
Background
The case arose from a road accident that took place on 29 August 2017. A man, described by his family as a transporter owning two trucks, died when his vehicle was hit by another at high speed. His wife and three children approached the Motor Accident Claims Tribunal, which accepted that the accident was caused by rash and negligent driving.
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The real fight, however, was over money. The Tribunal assumed the deceased was earning ₹95,000 per month and awarded compensation accordingly. The High Court upheld that view. National Insurance Company challenged this before the Supreme Court, arguing that such an income figure had no solid backing.
Court’s Observations
The bench, led by Justice K. Vinod Chandran, was visibly unconvinced by the logic used earlier. “A person earning ₹95,000 per month would certainly be paying income tax,” the Court observed, pointing out that no income tax returns were produced at all.
The insurer argued that the Tribunal simply presumed high income based on loan EMIs for two trucks. That, the Court said, was not enough. Merely paying EMIs does not automatically mean the income is double that amount. The judges also noted that the deceased had defaulted several times on loan payments, suggesting income was not as steady as claimed.
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Importantly, the Court drew a line between personal earnings and business income. Since the deceased owned trucks, the business itself could continue even after his death. “The death of the victim would not have put a stop to the income that could be generated from his business,” the bench remarked, rejecting the argument that the trucks became useless overnight.
Referring to its earlier ruling in Pranay Sethi, the Court reminded that compensation is meant to be fair-neither a token nor a jackpot. Victims’ families, the judges said, cannot expect a windfall from a tragic accident.
Decision
Balancing all factors, the Supreme Court held that the ₹50 lakh already deposited by the insurance company was sufficient towards loss of dependency, even though it was roughly half of what the Tribunal had calculated. The claimants were held entitled to interest at 9% per annum from the date of filing the claim petition.
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In addition, the Court confirmed amounts for loss of consortium, loss of estate, funeral expenses, and granted ₹1.6 lakh towards spousal and filial consortium to the wife and children. The insurance company was directed to pay the balance with interest within one month. With this modification, the appeal was allowed.
Case Title: M/s National Insurance Co. Ltd. vs Neeru Devi & Others
Case No.: Civil Appeal arising out of SLP (C) No. 19462 of 2025
Case Type: Motor Accident Compensation – Civil Appeal
Decision Date: 15 December 2025
