National Insurance Co. Ltd. vs Smt. Nilima Prakash Khedkar & Ors.

Heard finally with consent of learned advocates for the respective parties.

The present appeal is filed by the appellant-insurance company challenging judgment and award dated 30.11.2016 passed by the learned Member Motor Accident Claims Tribunal, Ahmednagar in Motor Accident Claim Petition No.226 of 2012.

One, Prakash Vinayak Khedkar, who was an employee of Public Works Department, died in a road accident on 27.02.2012. The wife and sons of the deceased filed the aforesaid claim petition under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as “the MV Act” for the purpose of brevity), seeking compensation on account of his demise. Respondent No.4 is owner of the offending vehicle, which was insured with the appellant-insurance company at the relevant time.

The learned Tribunal has awarded compensation to the tune of Rs.18,24,588/-, inclusive of no-fault liability, to respondent No.1 to 3/claimants, along with interest at the rate of 9% per annum from the date of filing of claim petition i.e. 27.03.2012 till the date of realization of the said amount.

The appeal is dismissed against respondent No.4, owner of the vehicle vide order dated 25.03.2026.

The deceased was 56 years old at the time of his demise. He is survived by his widow and two sons. The learned Tribunal has computed the compensation based on the monthly salary of the deceased, which was Rs.25,916/-. The learned Tribunal has deducted Rs.3,700/- towards taxes and has computed the compensation treating the monthly income of the deceased as Rs.22,216/- The learned Tribunal has applied multiplier of nine as per judgment of the Hon’ble Supreme Court in the case of Sarala Verma and Ors. Vs. Delhi Transport Corporation,^{11.(2009) 6 SCC 121} One-third deduction is made towards personal expenses of the deceased, since he was survived by three dependents. Apart from amount of Rs.15,99,588/-awarded towards loss of financial dependency, the learned Tribunal has awarded Rs.1,00,000/- towards loss of consortium, Rs.1,00,000/- towards loss of love and affection and Rs.25,000/- towards funeral expenses. Accordingly, total compensation awarded is Rs.18,24,588/- The learned Tribunal has also ordered payment of interest at the rate of 9% percent per annum from the date of filing of petition till the date of realization of the amount.

Mr. S. R. Bodade, learned advocate for the appellant contends that, since the age of the deceased was 56 years old at the time of his demise and he was due for retirement on attaining the age of 58 years, at best, multiplier of two should have been applied and that there was no justification in applying multiplier of nine as per Sarla Varma (supra).

Apart from this, it is argued that the sons of the deceased were major on the date of the accident and, as such, only the wife could be treated as dependent of the deceased. The argument is that instead of one-third deduction towards personal expenses, 50% deduction should have been made, since the wife alone was dependent upon the deceased. The learned advocate also argues that amount of Rs.2,00,000/- awarded towards consortium and loss of love and affection is required to be reduced. He argues that the wife and the sons are entitled to compensation towards loss of consortium to the extent of Rs.1,20,000/-, i.e. Rs.40,000/- each. He further argues that instead of Rs.15,000/-, amount of Rs.25,000/- is awarded towards funeral expenses, which also is incorrect. The learned advocate would also argues that interest at the rate of 9% ought not to have been awarded and, at best, 6% interest should have been ordered to be paid.

The learned advocate has also advanced submissions with respect to breach of policy on the ground that the driver of the vehicle did not possess valid driving licence. He argues that principle of pay and recover should have been applied, holding that respondent No.4/owner was guilty of breach of policy conditions.

As against this, Mr. R. A. Tambe, learned advocate for respondent Nos.1 to 3/claimants justifies the computation of compensation towards loss of financial dependency. He argues that the learned Tribunal has erred in not awarding compensation towards loss of future prospects of earning as per judgment of the Hon’ble Supreme Court in the case of National Insurance Company Vs. Pranay Sethi^{22.(2017) 16 SCC 680}. The learned advocate argues that compensation towards loss of estate is also not awarded, which is erroneous. The learned advocate also argues that, by now, it is well settled that, even in the absence of substantive appeal or cross objection, amount of compensation awarded can be enhanced in the appeal filed by the insurance company.

As regards the arguments with respect to breach of policy conditions and applying principle of pay and recover, it must be stated that the appeal is dismissed against the vehicle owner/respondent No.4 vide order dated 25.03.2026 and, as such, contentions against respondent No.4 cannot be entertained.

Upon hearing the parties, following points arises for consideration:-

The learned advocate for the appellant argues that the sons of the deceased were major on the date of filing of claim petition. He argues that their age is mentioned as 25 and 24 years. The contention is that although their occupation is mentioned as students, no evidence is brought on record to prove said fact. He, therefore, argues that the sons should not be considered as dependents of the deceased.

The contention is raised by the learned advocate for the appellant cannot be accepted. Assuming that the sons were not students and had independent source of income, that by itself will not make any difference for the purpose of computation of compensation. It is not disputed that the sons were residing along with their father. Even if it is assumed that the sons had separate source of income, the income of the father would be included in the income of the family. The entire family is deprived of the income of the deceased. All the family members of a deceased, even if, they have separate source of income are entitled to claim compensation under the provisions of the MV Act. The sons will, therefore, have to be considered as dependents of their father, even if, they had separate source of income.

It is not in dispute that the deceased was 56 years old at the time of his demise. The fact that he was a Government Servant and due to retire at the age of 58 is also not in dispute. The salary of the deceased is proved by examining a witness from the department. The contention of the learned advocate for the appellant is that since the deceased had only two years of service left, multiplier of nine ought not to have been applied. The said contention cannot be accepted in view of judgment of this Court in the case of M/s. Bajaj Allianz General Insurance Co. Ltd. Vs. Smt. Prabhavati Hiraman Babar and anr.,^{33.(First Appeal No.630 of 2014 decided on 24.02.2018 at Bombay, Civil Appellate Jurisdiction}. In the said case, the deceased was a Government servant who died in a road accident at the age of 56. Similar argument was raised that he was due to retire after two years and, therefore, multiplier of nine should not have been adopted. Contention was raised that multiplier of two should have been adopted and, thereafter, appropriate deduction was required to be made in view of his retirement after two years. The said contention is specifically rejected by this Court on the ground that with advancement of medical science, normal expectancy of life of an individual should be considered somewhere between 65 to 75 years and that in view of recommendations of Pay Commissions, not only the salary but also the amount of pension also increases periodically. It is further held that right to receive a pension is a statutory right and, therefore, the amount of pension receivable cannot be deducted for the purpose of computation of compensation payable under the MV Act. The Hon’ble Supreme Court has also in the case of Vimal Kanwar and ors. Vs. Kishore Dan and ors.^{44.(2013) 7 SCC 476}, held that amount of pension cannot be deducted from the amount of compensation payable to family members of the deceased under the MV Act.

In view of the aforesaid, the contention that multiplier of nine ought not to have been adopted is liable to be rejected.

The contention that amount of Rs.2,00,000/- is erroneously awarded towards loss of consortium and love and affection requires to be accepted. Amount of compensation towards the consortium needs to be restricted restricted to Rs.1,20,000/-, Rs.40,000/- each for the widow and two sons. The amount of Rs.25,000/- awarded towards funeral expenses is also required to be reduced to Rs.15,000/-. However, an amount of Rs.15,000/- is required to be paid towards loss of estate, which is not awarded by the learned Tribunal.

Apart from this, the learned Tribunal has also earned in not awarding any amount towards future prospects of earning, since the deceased, who was a Government servant. In the light of judgment in the case of Pranay Sethi (supra), 15% of amount of compensation awarded towards loss of final financial dependence will have to be awarded towards loss of future prospects of earning. This 15% amount works out to Rs.2,39,933/-.

By now, it is well settled that, even in an appeal under Section 173 of the MV Act filed by the owner or insurance company, amount of compensation payable can be enhanced in view of obligation of Courts to award just and fair compensation to the claimants.

The amount of compensation payable is worked out as under:-

In the light of reasons recorded above, the appeal is disposed of in the following terms:-