“SUPREME COURT RULES – DEPENDANT FAMILY IS ENTITLED FOR MOTOR ACCIDENT COMPENSATION EVEN IF BUSINESSES & PROPERTIES OF DECEASED WERE BEQUEATHED TO THEM”
K. RAMYA & ORS. – – APPELLANT VS. NATIONAL INSURANCE CO. LTD. & ANR. – RESPONDENT CIVIL APPEAL NO.7046 OF 2022 [ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 31931 OF 2017]
In the present case, deceased (husband of the above appellant) met with an unfortunate accident in a car he was traveling and succumbed to death.
The Deceased was aged around 31 years at the time of his death. He was into business of jewelry, textiles, exports and transport. Furthermore, he also drew income from his agricultural lands and leased out real estate.
At the time of his demise, he left behind a widow, two minor children and parents who were stated to be dependent on him.
The Deceased’s dependents above filed a claim petition before Motor Accident Claims Tribunal, Tiruchirappalli for Rs. 7,00,00,000/- in August 2004, alleging, that he died in an accident on 10.06.2004, on account of rash and negligent driving of an Ambassador Car insured by Insurance Company – Respondent above which hit the car of the deceased.
The Insurance Company’s defense was that the Deceased was the one responsible for the accident and that the compensation sought by the Deceased was exorbitant.
The Motor Accident Claims Tribunal after considering the records and evidence concluded that it was the driver of the Ambassador car who was solely responsible for the accident and allowed claim petition of the Deceased’s dependents awarding compensation of Rs 4,29,37,700/- with interest at the rate of 7.5% per annum.
The aggrieved Insurance Company – Respondent filed an appeal before Madras High Court which was decided vide judgement dated 30.06.2017.
The High Court emphasized that almost all of the Deceased’s income consisted of returns he received on his capital assets and were transferred to his legal heirs who continued to enjoy the benefits derived from them.
It was held by the High Court that income derived from capital assets cannot be said to be income earned out of the Deceased’s personal skills as there was no real contribution by him for loss of income. Hence the compensation was reduced to Rs 57,90,000/- along with interest of 7.5% per annum by the High Court.
The Hon’ble Supreme Court while referring to catena of its judgments disagreed with the above finding of the Madras High Court.
It was held by the Supreme Court that the High Court erroneously went on to determine the income of the Deceased on a notional basis as per his educational qualification.
As per Supreme Court all business ventures of the deceased were the result of the initiatives taken by the Deceased, and he was actively involved in the day-to-day management of the business.
The Hon’ble Supreme Court set aside the order of the Madras High Court and enhanced compensation amount to Rs 2,27,12,400/- alongwith interest at the rate of 7.5%.
***
