THE BEYOND OBITER LAW BLOG: Legal News
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The Supreme Court has held that compensation under the Motor Vehicles Act cannot be determined on assumptions of assured professional success or by adopting salary benchmarks of unrelated successful professionals, cautioning that assessment of future earning capacity must remain grounded in evidence rather than speculation.
A Bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria made the observation while deciding cross-appeals arising from a motor accident claim involving the death of a 20-year-old Chartered Accountancy student who was undergoing articleship training at the time of the accident.
The Court upheld the concurrent findings of the Motor Accident Claims Tribunal and the High Court that the truck driver was negligent in leaving a punctured vehicle stationed on the road during the dead of night without parking lights, indicators, reflectors, or any warning signs. Rejecting the insurer’s plea of contributory negligence, the Court held that the mere fact that a vehicle collides from behind does not automatically establish negligence on the part of the driver of the moving vehicle.
The Bench observed that the claimants had sought higher compensation by relying upon the deceased’s bright professional prospects and the likelihood that he would qualify as a Chartered Accountant and earn substantially higher income in the future. However, the Court clarified that such assertions remained matters of future uncertainty.
“Compensation cannot be founded on assumptions of assured professional success or on salary benchmarks of unrelated successful professionals,” the Court observed.
The Court noted that although evidence existed regarding the stipend received by the deceased during his articleship, no cogent material had been produced to establish the alleged additional income from private tuition. Similarly, there was no certainty that the deceased would qualify as a Chartered Accountant or earn the projected income levels relied upon by the claimants.
At the same time, the Court declined to interfere with the compensation awarded towards loss of dependency. It observed that the Tribunal had adopted an exceptionally liberal approach by taking into account the decease’s future professional prospects while fixing his income and thereafter adding 50% towards future prospects. Although this methodology involved a degree of overlap, the Court held that reducing the compensation nearly a decade after the accident would not serve the ends of justice.
Emphasising the beneficial nature of the Motor Vehicles Act, the Bench observed:
“The determination of compensation under the MV Act is ultimately guided by the principle of awarding ‘just compensation’. This principle is not one of exact mathematical equivalence, rather it is an attempt by the law to provide a measure of solace, within human limitations, to those who have suffered an irreparable loss.”
The Court further noted that the accident occurred in 2013 and the Tribunal’s award had remained undisturbed since 2017. Given the long passage of time and the concurrent findings of both the Tribunal and the High Court, the compensation awarded towards loss of dependency did not warrant interference.
However, the Court found that the lower courts had committed an error by failing to award compensation under the conventional head of filial consortium. Observing that the loss suffered by parents upon the death of a child cannot be measured with arithmetical precision, the Court granted an additional ₹40,000 each to the deceased's parents towards filial consortium, along with applicable interest.
Accordingly, the insurer’s appeal challenging negligence and the quantum of dependency compensation was dismissed, while the claimants' appeal was partly allowed to the limited extent of awarding consortium.