V. Pathmavathi & Ors. v. Bharthi Axa General Insurance Co. Ltd & Anr.

From the Judgment and Order dated 31.01.2020 of the High Court of Judicature at Madras in CMA No. 2806 of 2013 Appearances for Parties Adv. for the Appellant(s): T. Harish Kumar. Advs. for the Respondent(s): Sandeep Jha, Ram Ekbal Roy, Ms. Priyanka Das, Ms. Neha Das, Aman Nihal, Sanjay Kumar Singh, Binay Kumar Das. Judgment / Order of the Supreme Court Judgment Dipankar Datta, J.

1. Leave granted. The AppeAl

2. The present appeal assails the judgment and order dated 31.01.20201 passed by the High Court of Judicature at Madras2 in C.M.A. No. 2806 of 2013, whereby the High Court partly allowed the appeal filed by the claimants (heirs of the deceased) and modified the award dated 08.11.20123, passed by the Motor Accidents Claims Tribunal, 1 2 3 impugned order High Court Supreme Court Reports [2026] 2 S.C.R. 441 Chennai4 while deciding a claim petition under Section 166 of the Motor Vehicles Act, 19885. It is at the instance of the claimants/ appellants before the High Court6. FAcTuAl BAckground

3. Facts, in brief, are that on 09.06.2011, D. Velu7, aged about 37 years8 as noted by the High Court, was riding a two-wheeler. A tanker lorry9 insured with the respondent–insurance company10, which was driven in a rash and negligent manner, hit the two-wheeler and as a result thereof the victim died instantly.

4. The claimants, viz. the widow of the victim, their two minor children and the victim’s parents lodged a claim petition11 before the MACT, claiming compensation of Rs. 20,00,000/- on account of loss of dependency and other conventional heads. It was claimed that the victim, employed as a driver at the material time, was earning a regular monthly income of Rs.10,000/- and since the accident occurred solely due to the rash and negligent driving of the offending vehicle, they were entitled to “just compensation”. Before the MACT, the insurer contested the claim, inter alia, disputing negligence, the income of the victim, and the quantum of compensation claimed.

5. Upon appreciation of the oral and documentary evidence on record, the MACT, by its award, held that the accident occurred due to the negligence of the offending vehicle; however, in view of lack of supporting documentary evidence, the victim’s monthly salary was reckoned as Rs. 6,000/-. Accordingly, the compensation payable was assessed as follows: the victim’s monthly income was taken at Rs. 6,000/-; and, after deducting one-fourth towards personal expenses, i.e., Rs. 1,500/-, the notional monthly contribution 4 5 6 7 8 MACT Act claimants victim MACT recorded the age of the victim as 36 years. As the marginal variation in age does not materially affect the computation of compensation payable to the claimants, we deem it appropriate to consider the age of the victim as 37 years, as recorded by the High Court, for the limited purpose of determining the quantum of compensation. 9 offending vehicle 10 insurer 11 M.C.O.P. No. 4026 of 2011 V. Pathmavathi & Ors. v. Bharthi Axa General Insurance Co. Ltd & Anr. 442 [2026] 2 S.C.R. to the family was calculated at Rs. 4,500/-; then, applying the multiplier of 16, the loss of income was computed at Rs. 8,64,000/- (Rs. 4,500 × 12 × 16). In addition, a sum of Rs. 2,000/- was awarded towards transport charges; Rs. 25,000/- towards loss of consortium to the widow of the victim; Rs. 5,000/- towards funeral expenses; Rs. 40,000/- towards loss of love and affection to the parents and children at Rs. 10,000/- each; and Rs. 1,000/- towards damages. No amount was awarded under the head of loss of estate. Thus, the total compensation payable was determined at Rs. 9,37,000/- with interest @7.5%.

6. Aggrieved by the quantum of compensation awarded, the claimants preferred an appeal before the High Court under Section 173 of the Act.

7. The High Court, by the impugned order, affirmed the finding on negligence; however, it modified the award by enhancing the quantum of compensation payable by the insurer from Rs. 9,37,000/- to Rs. 10,51,000/-. In computing the quantum of compensation payable, the High Court reckoned the monthly salary of the victim as Rs. 7,000/-. The insurer was directed to deposit the enhanced compensation with interest @ 7.5% per annum from the date of the claim petition till the date of payment and with proportionate cost. The following is the break-up of compensation granted by the High Court: Serial Number Description Age: 37 Years

1. Income Compensation Fixed by the High Court Rs. 7,000/- Deduction for Personal Expenses (1/4th) Rs. 1,750- Notional Income Multiplier Loss of Income

4. Transport Charge Loss of Estate Loss of Consortium (widow of the victim) Rs. 5,250/- 15 Rs. 9,45,000/- (5250 x 12 x 15) Rs. 10,000/- Nil Rs. 25,000/- Supreme Court Reports [2026] 2 S.C.R. 443

7. Funeral Expenses Loss of Love and Affection (parents - Rs. 10,000/- each) (children - Rs. 20,000/- each) Damages to clothing Total Rs. 10,000/- Rs. 60,000/- Rs. 1,000/- Rs. 10,51,000/-

8. Dissatisfied with the minor modification of compensation and, in particular, the denial of future prospects despite the settled law laid down by this Court, the claimants are now before us seeking further enhancement. Issues Involved

9. While the claimants contend that the High Court erred on two counts [(i) not reckoning the victim’s monthly salary as Rs.10,000/- and (ii) not awarding future prospects in line with the decision in National Insurance Co. Ltd. v. Pranay Sethi12], the insurer claims that the High Court was right in not accepting the claim of Rs.10,000/- being the monthly salary of the victim in the absence of supporting evidence. However, while omission of the High Court not to grant any amount for future prospects has not been seriously contested, the insurer has claimed, relying on Pranay Sethi (supra), that the High Court erred in granting Rs.60,000/- on account of loss and affection for the parents and the children of the victim. Pointed reference has been made to Pranay Sethi (supra) overruling the decision in Rajesh v. Rajbir13, which had provided compensation under such head.

10. We have heard learned counsel for the parties and perused the materials on record.

11. The controversy in the present appeal lies in a narrow compass and relates primarily to: (i) (ii) the assessment of the income of the victim and the denial of any amount towards future prospects; and the grant of compensation under the head “loss of love and affection”. 12 13 (2017) 16 SCC 680 (2013) 9 SCC 54 V. Pathmavathi & Ors. v. Bharthi Axa General Insurance Co. Ltd & Anr. 444 [2026] 2 S.C.R. AnAlysIs

12. We ought to remind ourselves, at the outset, that when an individual dies as a result of a fatal road accident and his distressed dependents apply for compensation either from the owner of the vehicle responsible for the death or the insurance company with whom such vehicle is insured, no amount of money can truly compensate for the loss. Compensation is nothing but a rough estimate, being a token attempt to ease the financial burden on the dependents. Take consortium, for example. It is impossible to put a price on the loss of a loved one’s companionship. Spousal, filial or parental compensation are all about acknowledging the emotional void but the payout can never be more than a rough approximation. It is like trying to measure the immeasurable. Considering the income of the deceased, the needs of his dependents and the emotional toll of the loss, the best that can be ensured is that the compensation is fair and reasonable, without being either arbitrary or niggardly. This would be in accord with the foundational principle governing the determination of “just compensation” under Section 168 of the Act.

13. In Reshma Kumari v. Madan Mohan14, a three-Judge Bench of this Court held that the purpose of award of compensation under section 166 read with section 168 of the Act is to place the distressed dependents of the victim of a fatal road accident, if the victim had been the sole bread earner, in almost the same position financially if he lived his natural span of life. It is obviously not intended to put such distressed dependents in a better financial position in which they would otherwise have been if the accident had not occurred. At the same time, the determination of compensation is not an exact science and the exercise involves an assessment based on estimation and conjectures, here and there, as many imponderable factors and unpredictable contingences have to be taken into consideration. Obviously, award of damages in each case would depend on the particular facts and circumstances of the case but the element of fairness in the amount of compensation so determined is the ultimate guiding factor.

14. What follows is that the amount of compensation should be “just”, i.e., it implies that the determination is fair, reasonable and equitable 14 (2013) 9 SCC 65 Supreme Court Reports [2026] 2 S.C.R. 445 by accepted legal standards and is not a bonanza. Though “just” compensation can never be prefect or absolute compensation, since loss of human life can never be compensated by monetary terms, the principle of awarding “just” compensation and assessing the extent of dependency would depend on examination of the unique situation of each individual case. Issue 1:

15. Bearing the aforesaid well-settled principles in mind, we now move on to decide the first issue.

16. In the present case, the MACT proceeded on the premise that the monthly income of the victim was Rs. 6,000/-. This was subsequently enhanced by the High Court to Rs. 7,000/-, albeit without recording any reason. However, learned counsel appearing for the claimants has rightly drawn our attention to the salary certificate issued by the employer of the victim, marked Exhibit P-14, which unequivocally records that the victim was employed as a driver on a fixed monthly salary of Rs. 10,000/-. This documentary evidence is further corroborated by the affidavit sworn by the victim’s employer (PW- 3). On the face of such cogent and relevant evidence, which was not impeached by the insurer, it would be wholly impermissible to assess the income at a lower figure. The determination of income must be founded on proof placed on record and cannot rest on conjecture or assumptions divorced from evidence. Accordingly, for the purposes of re-computation, the monthly income of the victim has to be reckoned as Rs. 10,000/-.

17. Equally significant is the High Court’s omission to consider grant of any amount towards future prospects. Assessment of income and the grant of future prospects are not matters of judicial discretion in the abstract but are now firmly structured by authoritative precedents. Having regard to the decision in Pranay Sethi (supra), the law on this aspect is no longer res integra. The Constitution Bench clarified therein that the concept of future prospects is an integral component of “just compensation” and is not confined only to those in permanent government employment. While this Court in Sarla Verma v. DTC15 adopted a structured approach, Santosh Devi v. National Insurance 15 (2009) 6 SCC 121 V. Pathmavathi & Ors. v. Bharthi Axa General Insurance Co. Ltd & Anr. 446 [2026] 2 S.C.R. Co. Ltd16 marked a jurisprudential shift by recognising the economic realities faced by self-employed persons and those on fixed salaries. Although Santosh Devi (supra) was later held not to be a binding precedent on account of judicial discipline, the Constitution Bench in Pranay Sethi (supra) itself incorporated, refined and standardised the principle of future prospects for such categories by holding as follows:

59.1. The two-Judge Bench in Santosh Devi [Santosh Devi v. National Insurance Co. Ltd., (2012) 6 SCC 421] should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC 121], a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench.