SUPREME COURT DECISIONS - 2021

1. Motor Accident Compensation- Future Prospects Can Be Granted

Even In Cases Pertaining To Notional Income

A bench comprising Justices NV Ramana, S. Abdul Nazeer and Surya

Kant in Kirti v. Oriental Insurance Company Ltd. held that future prospects
can be granted even in cases pertaining to notional income. The court
observed thus while disposing an appeal arising out of Motor Accident
Compensation Claim filed by heirs of a deceased couple who died in an
accident. In this case, the Motor Accident Claims Tribunal awarded a total
sum of Rs 40.71 lakhs for both deceased to the claimants. Partly allowing
the appeal filed by Insurance Company, the High Court reversed the
addition of future prospects.

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2. Motor Accident Compensation: Multiplier Method Has To Be

Applied For Future Prospects And Advancement In Life And Career

A Bench of Justices Sanjay Kishan Kaul and Hemant Gupta in Karthik

Subramanian v. B. Sarath Babu observed that, while computing motor
accident compensation, the multiplier method has to be applied for future
prospects and advancement in life and career.

"In our view, this issue is no more res integra in view of Sandeep
Khanduja's case (supra) and Erudhaya Priya's case (supra) opining that
the multiplier method has to be applied for future prospects and
advancement in life and career. Thus, the same principle would have to
apply and learned counsel for insurance companies cannot seriously
contend to the contrary," the bench observed in the facts of the case.

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3. "Insurer Should Deposit Award In Bank Account Maintained By

MACT By RTGS/NEFT': SC Issues Directions For Uniform Procedure
In Granting Motor Accident Compensation

The Supreme Court in Bajaj Allianz General Insurance Company Private

Ltd. v. Union of India issued a slew of directions regarding the process of
disbursement of compensation as well as expediting the matter before the
MACTs across the country. According to these directions, a jurisdictional
police station has to submit an Accident Information Report about the
accident to the tribunal and insurer within the first 48 hours either over
email or a dedicated website. They shall also submit a detailed accident
report to them within three months.

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4. Breath Analysis Or Blood Test Not Necessary For Insurer To

Reject Claim On Ground Of Drunken Driving

A bench comprising Justices UU Lalit, Indira Banerjee and KM Joseph

in IFFCO Tokio General Insurance Company Ltd v. Pearl Beverages Ltd
held that a breath analyzer test or blood test as contemplated under the
Motor Vehicles Act is not necessary for an insurer to repudiate an
accident policy claim on the ground of drunken driving. The Court held
that if the insurance company is able to establish from the facts that the
driver was under the influence of alcohol at the time of the accident, it will
not be deprived of its right to exclude the policy benefit merely on the
ground that the scientific tests for alcohol presence were not carried out.

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5. Motor Accident Compensation - Self-Employed Deceased Aged

Below 40 Years Entitled To 40% Addition As Future Prospects

A Bench comprising CJI NV Ramana, Justices Surya Kant and

Aniruddha Bose in Rahul Sharma & Anr. v. National Insurance Company
Ltd & Ors. reiterated that addition of 40% income must be given towards
future prospects while computing motor accident compensation if the
deceased was self-employed and was aged less than aged 40 years.

6. Motor Vehicles Act - Third Party Insurance Deemed To Be

Transferred Along With Effective Control Over Vehicle In A Hire
Agreement

The Supreme Court in Uttar Pradesh State Road Transport Corporation v.

National Insurance Company Limited & Ors held that when a transport
corporation hires a motor vehicle for use from its registered owner, the
third-party insurance coverage will also be deemed to be transferred
along with the vehicle. The person who is having the effective control and
command of the vehicle will be regarded as the 'owner'. Therefore, along
with the vehicle it must be deemed that the existing insurance policy also
remains transferred for the period of hire, the division bench of Justices
S. Abdul Nazeer and Krishna Murari noted.
7. Motor Accident Compensation: Pranay Sethi Judgment Doesn't
Limit Operation Of Statute Providing Greater Benefits

The Supreme Court in New India Assurance Co. Ltd. v. Urmila Shukla has
observed that the judgment in Pranay Sethi does not limit the operation of
a statutory provision granting greater benefits in the matter of Motor
Accident Compensation. "If a statutory instrument has devised a formula
which affords better or greater benefit, such statutory instrument must be
allowed to operate unless the statutory instrument is otherwise found to
be invalid," the bench of Justices Uday Umesh Lalit and Ajay Rastogi
observed. The Court dismissed an Insurance Company's appeal
challenging the award by Motor Accidents Claim Tribunal, Allahabad of
Rs.24,43,432/- was awarded with 7% interest, while considering the claim
in respect of an accident which resulted in the death of one Jairam
Shukla.

8. Motor Accident Claim Petition Does Not Abate On Death Of Injured

Claimant

The Supreme Court in Oriental Insurance Company Limited v. Kahlon @

Jasmail Singh Kahlon (deceased) observed that a motor accident claim
petition does not abate even after the death of the injured claimant. A
Bench comprising Justices Navin Sinha and R. Subhash Reddy ruled
that the right to sue survive to his heirs and legal representatives in so far
as loss to the estate is concerned. The Court added that the loss of estate
would include expenditure on medicines, treatment, diet, attendant,
Doctor's fee, etc. including income and future prospects which would have
caused reasonable accretion to the estate but for the sudden expenditure
which had to be met from and depleted the estate of the injured,
subsequently deceased.

9. Process Of Determination Of Motor Accident Compensation

Cannot Be By A Continuing Mandamus, It Must Take Place At One
Go

The Supreme Court in HDFC ERGO General Insurance Co. Ltd. v.

Mukesh Kumar observed that while determining compensation under the
Motor Vehicle Act, a court cannot direct the continued maintenance by
Insurance Company of a prosthetic limb for the injured claimant. The
process of determination of such compensation cannot be by a continuing
mandamus, in a colloquial sense, and the determination must take place
at one go, the bench of Justices Sanjay Kishan Kaul and Hrishikesh
Roy observed.

10. Motor Accident Compensation- Multiplier Which Is Relevant To

The Deceased Has To Be Applied
The Supreme Court in Chandra v. Branch Manager, Oriental Insurance
Company Limited observed that, while computing Motor Accident
Compensation, the multiplier which is relevant to the deceased has to be
applied. The bench of Justices KM Joseph and PS Narasimha observed
that the claimants should be granted an increase by 40 per cent having
regard to the admitted age of the deceased being below 40 years on the
basis of the salary which we have arrived upon based on the order of the
appointment.

11. Motor Accident Claim - Evidence Recorded Before Tribunal To Be

Given Weightage Over Contents Of FIR In Case Of Contradiction

While deciding the issue of negligence in a claim for motor accident,

Supreme Court in National Insurance Company v. Chamundeswari & Ors
observed that if any evidence before the Tribunal runs contrary to the
contents in the First Information Report, the evidence which is recorded
before the Tribunal has to be given weightage over the contents of the
First Information Report.

A Bench comprising Justice Subhash Reddy and Justice Hrishikesh

Roy made this observation while delivering its verdict in an appeal filed by
National Insurance Company against Madras High Court's order partly
allowing plea filed by wife and son of the deceased who lost his life in a
motor vehicle accident, and enhancing compensation to Rs.1,85,08,832.

12. Motor Accidents Claim - Minimum Wage Notification Not An

Absolute Yardstick To Fix Income Of Deceased In Absence Of Salary
Certificate

While deciding on compensation to be paid in a case of motor vehicle

accident, the Supreme Court in Chandra @ Chanda v. Mukesh Kumar
Yadav and others observed that merely because claimants were unable to
produce documentary evidence to show the monthly income of the
deceased, the same does not justify adoption of the lowest tier of
minimum wage while computing the income.

"In absence of a salary certificate the minimum wage notification can be a

yardstick but at the same time cannot be an absolute one to fix the
income of the deceased. In absence of documentary evidence on record
some amount of guesswork is required to be done. But at the same time
the guesswork for assessing the income of the deceased should not be
totally detached from reality," the Bench comprising Justice Subhash
Reddy and Justice Hrishikesh Roy observed.

13. 'Dependent' Mother In Law Of A Deceased Can Maintain Motor

Accident Claim Petition
The Supreme Court in N. Jayasree v. Cholamandalam Ms General
Insurance Company Ltd observed that a motor accident claim petition filed
by mother in law who was dependent on her deceased son-in-law is
maintainable. "It is not uncommon in Indian Society for the mother-in-law
to live with her daughter and son-in-law during her old age and be
dependent upon her son-in-law for her maintenance," the bench of
Justices S. Abdul Nazeer and Krishna Murari observed while holding
that she is a "legal representative" under Section 166 of the Motor
Vehicles Act.

"In our view, the term 'legal representative' should be given a wider
interpretation for the purpose of Chapter XII of MV Act and it should not
be confined only to mean the spouse, parents and children of the
deceased. As noticed above, MV Act is a benevolent legislation enacted
for the object of providing monetary relief to the victims or their families.
Therefore, the MV Act calls for a liberal and wider interpretation to serve
the real purpose underlying the enactment and fulfill its legislative intent,"
Court said.

14. Motor Accident Claims - Loss Of Earning Capacity To Be Fixed

As 100% When Claimant Is Incapacitated For Life

The Supreme Court in Jithendran v. New India Assurance Co. Ltd held
that the loss of earning capacity must be fixed as 100% when a claimant-
motor accident victim is incapacitated for life and is confined to home. A
person therefore is not only to be compensated for the injury suffered due
to the accident but also for the loss suffered on account of the injury and
his inability to lead the life he led, prior to the life-altering event the bench
of Justices R. Subhash Reddy and Hrishikesh Roy observed. The
court added that the extent of economic loss arising from a disability may
not be measured in proportions to the extent of permanent disability.

"While the money awarded by Courts can hardly redress the actual
sufferings of the injured victim (who is deprived of the normal amenities of
life and suffers the unease of being a burden on others), the courts can
make a genuine attempt to help restore the self-dignity of such claimant,
by awarding 'just compensation," the bench remarked. In the case, the
Court noted that even though the physical disability is assessed at 69%,
the functional disability is 100% insofar as claimant's loss of earning
capacity is concerned.

15. Vehicle Manufacturer Cannot Be Held Liable For Deficiency In

Service By Dealer/Authorized Service Center In Repair

The Supreme Court in Honda Cars India Limited v. Sudesh Berry

observed that a vehicle manufacturer cannot be held liable for any
deficiency in service by the dealer or the authorized center in rendering
assistance for repairs of the vehicle. In this case, the bench of Justices
UU Lalit and S. Ravindra Bhat agreed with the submission made by the
manufacturer that there is not an iota of material that the accident
occurred as a result of any manufacturing defect. If there be any
deficiency in service by the dealer or the authorized center in rendering
assistance for repairs of the vehicle, the manufacturer of the vehicle
cannot be held liable, the court said while referring to a recent judgment in
TATA Motors Ltd. v. Antonio Paulo Vaz.

16. Sec 163A MV Act -Fixing Rs 15,000 Per Annum As Notional

Income For Non-Earning Members Not Reasonable As Schedule II
Not Yet Amended

While dealing with a civil appeal preferred by appellant claimants

aggrieved by the High Court of Jharkhand, Ranchi's judgment the
Supreme Court in Kurvan Ansari alias Kurvan Ali & Anr. v. Shyam Kishore
Murmu & Anr observed that despite repeated directions, Schedule-II of
the Motor Vehicles Act, 1988 has not been amended yet. The bench of
Justices R Subhash Reddy and Hrishikesh Roy observed,

"In this case, it is to be noted that the accident was on 06.09.2004. In

spite of repeated directions, Schedule-II is not yet amended. Therefore,
fixing notional income at Rs.15,000/- per annum for non- earning
members is not just and reasonable."

17. Motor Accident Compensation: Claimants Entitled To 'Future

Prospects' Even If Deceased Was Not Earning

The Supreme Court in Meena Pawaia v. Ashraf Ali observed that even in
the case of a deceased who had no income at the time of death, their
legal heirs shall also be entitled to future prospects by adding future rise in
income. It is not expected that the deceased who was not serving at all,
his income is likely to remain static and his income would remain
stagnant, the bench comprising Justices MR Shah and Sanjiv Khanna
said.

18. Supreme Court Issues Additional Directions For Disbursement Of

Compensation And Expeditious Adjudication Of MACT Claims

The Supreme Court in Bajaj Allianz General Insurance Company Private

Ltd. v. Union of India further issued a slew of directions regarding
disbursement of compensation and expeditious adjudication of motor
accident claims by online mechanism. The bench of Justices SK Kaul
and MM Sundresh directed as follows- A. Format For Payment Advised
For Remittance Of Compensation To Be Followed Across Country B.
Interest On Disbursement Of Compensation To Beneficiaries To Be
Enured To Their Benefit C. Insurance Company/Depositor To
Communicate Factum Of Deposit Expeditiously To MACT With Copy To
Beneficiary D. District Medical Board To Follow Guidelines Issued By
Ministry of Social Justice and Empowerment E. Aspect Of Disparity In
TDS Certificate Can Be Redressed By Directions To Legal Services
Authority Or Any Agency/Mediation Group To Assist The Claimant In
Obtaining A Pan Card And Amending The Formats Across The Country F.
Registrar General Of High Courts To Show Compliance Of Directions
Passed On March 16, 2021 G. Insurance Companies To Develop
Common Mobile App Within 2 Months From Date Of Order H. Alternative
Mechanism To Ensure Availability Of Sufficient Pool With The State
Corporations

19. Supreme Court Recommends Constitution Of Motor Vehicle

Appellate Tribunals In View Of Large Pendency In High Courts

In view of large pendency of motor accident claims appeals before High

Courts, the Supreme Court in Rasmita Biswal & Ors v. Divisional
Manager, National Insurance Company Ltd & Anr recommended the
constitution of Motor Vehicle Appellate Tribunals in the country by
amending Section 173 of the Motor Vehicles Act for hearing the appeals
challenging the award of a Tribunal.

A Division Bench comprising Justice Abdul Nazeer and Justice Krishna

Murari requested the Department of Justice, Ministry of Law and Justice
to examine the matter. It recommended speedy disposal of the appeals
concerning payment of compensation to the victims of road accidents, and
to curtail the pendency before the High Courts.

20. Motor Accident Claims - Potential To Earn Can Be Considered To

Determine Compensation If There Is No Evidence For Actual Income

The bench of Justices MR Shah and BV Nagarathna in Basant Devi v.

Divisional Manager, The New India Assurance Company Ltd held that
even if there is no evidence on record of actual income, the deceased
person's potential to earn can be considered while considering insurance
claims in motor accidents matter.

The deceased was a computer engineer with a B.Tech degree. While

there was evidence on record to show that the deceased was earning
Rs.10,000/ month, there was no documentary evidence to show an
additional 10,000/month which Appellants claimed. The Motor Accidents
Claims Tribunal, Ranchi in its judgment assessed the "future loss of
income" of the deceased at Rs.20,000/month and on that basis arrived at
a compensation figure of Rs. 30 Lakhs.
21. Conception That House Makers Do Not "Work" Or That They Do
Not Add Economic Value To The Household Is A Problematic Idea:
SC In Motor Vehicle Compensation Case

A bench comprising Justices NV Ramana, S. Abdul Nazeer and Surya

Kant in Kirti v. Oriental Insurance Company Ltd had observed that the
conception that house makers do not "work" or that they do not add
economic value to the household is a problematic idea that has persisted
for many years and must be overcome.

22. Mere Failure To Avoid Collision By Taking Some Extraordinary

Precaution Does Not In Itself Constitute Contributory Negligence

The Supreme Court in K. Anusha Vs Regional Manager, Shriram General

Insurance Co.Ltd observed that mere failure to avoid the collision by
taking some extraordinary precaution, does not in itself constitute
negligence.

To establish contributory negligence, some act or omission, which

materially contributed to the accident or the damage, should be attributed
to the person against whom it is alleged, the bench comprising Justices
Hemant Gupta and V. Ramasubramanian observed.

High Court Decisions

1. Where Motor Accident Caused Trauma To Claimant's Heirs And

There Is Nexus Between Accident And Death, Heirs Entitled to
Compensation: Allahabad High Court

In an appeal from a motor accident claim, a Division Bench of Justices Dr

Kaushal Jayendra Thaker and Ajit Singh in (Deceased) Satish Chand
Sharma & Ors. v. Manoj & Anr. underscored the importance of ensuring
the claimant(s) received the compensation they were entitled to in the
event of a dispute between the owner of the vehicle that caused the
accident and the insurer.

To this end, it emphasized that even the heirs of the claimant, once their
status as heirs was established, would be entitled to claim compensation
due to the original claimant.

Relying on Surpal Singh Ladhubha Gohil v Raliyatbahen Mohanbhai

Savlia it was stated,

"The facts go to show that the claimant was under the constant treatment
of doctors till the claimant survived therefore, it can safely be held that the
accident caused a lot of trauma both to the claimant as well his heirs.
There is a nexus between the death of the deceased and accidental
injury. There is sufficient evidence to the effect that death of the deceased
was due to development which took place due to resultant multiple injuries
caused by the accident which would show that injuries were the root
cause of the death. Therefore, heirs are entitled to compensation."

2. No Person Supposed To Share Driver's Seat In 3 Wheeler Goods

Carriage: Kerala High Court

Justice A. Badharudeen in Bajaj Allianz General Insurance Co. Ltd v.

Bheema & Anr. held that in a three-wheeler goods carriage, no other
person whether a passenger or the owner of the vehicle is supposed to
share the seat of the driver and any such action is a violation of the
insurance policy conditions and that such persons would be considered as
gratuitous passengers. Observing so, the Court set aside the liability
fastened on the insurance company by the Motor Vehicles Tribunal to
compensate such a passenger.

3. Married Daughter & Parents Of Deceased Entitled To

Compensation As Dependents Under Motor Vehicles Act: Kerala
High Court

The Court in United India Insurance Co. Ltd v. Shalumol ruled that a
married daughter and the parents of the deceased are entitled to claim
compensation under Section 166 of the Motor Vehicles Act, 1988, as
dependents of the deceased. Justice C.S Dias while dismissing an
appeal filed by the insurance company opined that it would be
preposterous to accept the contention if the counsel for the appellant that
a 25-year-old daughter would be no longer dependent on her 49-year-old
mother because she was given in marriage.

4. Motor Accident Compensation Can't Be Reduced Saying Pillion

Rider Didn't Wear Helmet; Not Contributory Negligence : Kerala High
Court

The Kerala High Court in Kadeeja Musaliyar and Ors. v. Riyas

Manakadavan and Ors; National insurance Co. v. Kadeeja Musaliyar
while dealing with the question whether the Tribunal could reduce the
compensation payable on a motorcycle accident if the deceased pillion
rider rode without a helmet in observed that,

"Simply because there is a violation of Section 129 of the Motor Vehicles

Act 1988 by a victim in an accident, there is no presumption that there is
contributory negligence on the part of the person who was not wearing the
helmet. It is to be decided in the facts and circumstances of each case."

What was necessary to be ascertained was whether the individual

contributed to the accident that occurred, Justice P.V. Kunhikrishnan
reasoned, based on Kerala High Court judgment in PJ Jose v.
Vanchankal Niyas & Ors.

"To attribute contributory negligence, some other additional evidence is

necessary," the Court again said.

5. Time To Review Mentality Of Considering Plight Of Injured Victims

Sympathetically Despite Violation Of Traffic Laws By Them: Madras
High Court

While dealing with the case of a bus driver, who was held liable by the
Motor Accidents Claims Tribunal for accident with a two-wheeler vehicle
carrying four persons, a Single Bench of Justice K. Murali Shankar in
Tamil Nadu State Transport Corporation v. Marimuthu & Ors. observed,

"It is high time for all stakeholders to review our mind-set that in cases of
road accidents involving big and small vehicles, fixing the driver of the big
vehicle as tort-feasor, as in majority of cases FIRs came to be registered
against the driver of the big vehicle and investigations are being carried
out in such a way to make that driver is responsible for the accident.

It is also high time for all who are dealing with motor accident claims to
review our mentality in considering the plight of the injured victim or the
legal heirs of the deceased victim sympathetically and awarding
compensation in the accidents that occurred by violating the Laws and
Rules."

Awarding more than claimed

it is settled by now, is adequate compensation which is fair and equitable,

on the facts and circumstances of the case, to make good the loss
suffered by the victim or the dependants of the victim, as the case may
be, on account of the accident, as far as money can do, by applying the
well settled principles relating to the award of compensation. See:
Nagappa v. Gurudayal Singh [(2003) 2 SCC 274], Oriental Insurance Co.
Ltd. v. Mohd. Nasir [(2009) 6 SCC 280] and Ningamma v. United India
Insurance Co. Ltd. [(2009) 13 SCC 710]. In other words, in terms of the
scheme of the statute, the duty to determine just compensation in a given
case is a duty vested in the Tribunal. No limitation whatsoever is imposed
in terms of the provisions of the Act on the said power of the Tribunal
Pain and Suffering for Deceased

The Hon'ble Supreme Court in United India Insurance Co. Ltd. v. Satinder
Kaur @ Satwinder Kaur and others [2020(3) KHC 760] has held that the
dependents of the deceased are not entitled for any compensation under
the head 'pain and suffering'. Hence, I MACA NO. 2008 OF 2010 set
aside the amount of Rs.5,000/- awarded under the said head..

(Justice C.S.Dias - Maca No. 2008 of 2010)

https://indiankanoon.org/doc/30349299/

Either Loss of Consortium OR Loss of Love and Affection : Not Both

In New India Assurance Co. Ltd. v. Somwati and others [(2020) 9 SCC
644], the Hon'ble Supreme Court has held that once the compensation is
awarded under the head 'loss of consortium', no amount of compensation
can be awarded under the head 'loss of love and affection', as it would
amount to overlapping or duplication of compensation. In such
circumstances, I set aside the amount of Rs.10,000/- awarded under the
head 'loss of love and affection'.

(Justice C.S.Dias - Maca No. 2008 of 2010)

https://indiankanoon.org/doc/30349299/