United India Insurance Co Ltd vs Savita & Anr

A. Claim by married and/or earning children

B. Claim by sibling(s)

C. Claim by earning spouse

D. Claim by non-family and other members

New India Insurance Co. Ltd. v. Anand Pal, SLP (Civil) No. 7805/2022, decided on 4^th December 2023, wherein the Supreme Court held that married and separately residing brothers cannot be treated as dependants in the absence of evidence establishing financial dependency.

IFFCO Tokio General Insurance Co Ltd. v. Ramwati & Ors. 2025:DHC:11191, wherein this Court held that married daughters residing with their parents due to disputes with in-laws could be treated as dependants and awarded compensation for loss of dependency. He relied upon this decision to show that, even in that case, the married daughter was residing with the deceased and was, actually, financially dependent on them.

In Sarjit & Anr. v. Hanuman Das Chaturvedi & Anr. 2017:DHC:7840 and Bajaj Allianz General Insurance Company Ltd. v. Krishna & Ors. 2018:DHC:3927, wherein to a non-dependent person compensation was awarded for loss of estate to the extent of 15% of the income of the deceased on basis of parameters laid down in Keith Rowe (supra). Counsel relied on the same to state that, at most, compensation could be awarded to the extent of 15% since claimant was not dependent on the deceased persons.

Gujarat State Road Transport Corporation, Ahmedabad v. Ramanbhai Prabhatbhai and Anr. (1987) 3 SCC 234, wherein brother of the deceased was awarded compensation.

Gangaraju Sowmini (Dr.) v. Alavala Sudhakar Reddy, 2016 SCC OnLine Hyd 430, wherein claim of a a non-dependent brother was allowed.

National Insurance Company Ltd. v. Birinder & Ors. (2020) 11 SCC 356, wherein major married earning sons of the deceased were awarded compensation.

Tata AIG General Insurance Co. Ltd. v. Sarita & Ors., 2023:DHC:5892, wherein married daughter of the deceased was awarded compensation.

Seema Rani v. Oriental Insurance Company Ltd. 2025 INSC 192, wherein married daughter was also considered dependent.

Sadhana Tomar & Ors. v Ashok Kushwaha & Ors. Civil Appeal No. 3763 OF 2025, wherein father and younger sister, though not financially dependent, were considered to fall within the definition of legal representatives.

Oriental Insurance Co. Ltd. v. Vinay Jain & Ors. 2026:DHC:5198, wherein compensation was awarded to financially independent husband.

Jagdish v. Om Pal Singh & Ors. 2024:DHC:9806, wherein husband and a major child were awarded loss of dependency.

The expression “legal representative” has not been defined under the MV Act. However, recourse may be taken from the definition contained in Section 2(11) of the Code of Civil Procedure, 1908 (‘CPC’), which defines a legal representative to mean a person who in law represents the estate of a deceased person and includes a person who intermeddles with the estate of the deceased, as well as the person upon whom the estate devolves where a party sues or is sued in a representative character.

The definition is inclusive and of wide amplitude and is not confined to legal heirs alone. In Custodian of Branches of Banco National Ultramarino v. Nalini Bai Naique 1989 Supp (2) SCC 275, the Supreme Court held that those who were impleaded as parties to the suit in place of the deceased defendant represented the entire estate as they had share in the property, and since they had been brought on record, the decree was binding on the entire estate.

This position was reiterated in Manjuri Bera (supra), wherein the Supreme Court, while considering a claim under Section 166 of the MV Act, held that the expression “legal representative” must be given the widest meaning in terms of Section 2(11) CPC and that a legal representative need not necessarily be a legal heir or a dependent of the deceased.

The distinction between the concepts of legal representation, dependency and succession is therefore material. A person may be a legal representative of the deceased and consequently entitled to maintain a claim notwithstanding that such person was not financially dependent upon the deceased. In Manjuri Bera (supra), the Supreme Court expressly recognised that absence of dependency does not, by itself, extinguish the right of a legal representative to maintain a claim. The Court also explained that the assessment of compensation involves distinct stages, namely, determination of liability, quantification of compensation and identification of the person or persons to whom the compensation is to be paid.

The principle of restitutio in integrum signifies that the injured person should, as nearly as possible, be placed in the same position, in monetary terms, as he would have been if the wrong, omission or injury had not occurred. Compensation is not intended to give a bonanza to claimant, but to provide monetary compensation for the loss, injury and deprivation suffered as a consequence of the wrongful act.

Courts have observed in various judgements that monetary compensation can only substitute certain forms of loss, particularly where the injury is to the human body or involves pain, suffering, disability or loss of amenities. Accordingly, the principle requires the court to determine a reasonable sum to fairly compensate the claimant to restore his position as it would have been had the accident not occurred.

The principle was explained by Lord Blackburn in Livingstone v. Rawyards Coal Co. (1880) 5 App Cas 25 (HL), wherein the following was observed:

Lord Morris in H. West & Son Ltd. v. Shephard, [1964] AC 326 (HL), observed that “Money may be awarded so that something tangible may be procured to replace something else of like nature which has been destroyed or lost. But the money cannot renew a physical frame that has been battered and shattered”.

The same principle has been adopted and applied by the Supreme Court of India in R.D. Hattangadi v. Pest Control (India) Pvt. Ltd. (1995) 1 SCC 551. The Court, while dealing with the case of a practising lawyer who had become paraplegic as a result of the accident, observed as under:

The Supreme Court subsequently reiterated the application of restitutio in integrum in Malay Kumar Ganguly v. Sukumar Mukherjee (2009) 9 SCC 221, and held as under:

In Balram Prasad v. Kunal Saha (2014) 1 SCC 384, the Supreme Court referred to the judgment of Malay Kumar Ganguly and observed as under:

Accordingly, the principle of restitutio in integrum forms the underlying basis for the assessment of compensation in motor accident claims as well. The statutory mandate to award just and reasonable compensation under the MV Act has to be understood in this context. The object is to place the injured-claimant, or the legal representatives of a deceased victim, as nearly as possible in monetary terms as they would have been had the accident not occurred, though physical impairment cannot be undone.

This principle assumes importance in determining who is entitled to maintain a claim arising out of the death of a victim. The right to claim compensation is not necessarily limited to the legal heirs of the deceased, but extends to all legal representatives who have suffered loss on account of the death. Thus, all legal representatives, and not merely the legal heirs, falling within the category of persons who have suffered as a result of the death, are entitled to maintain an application under Section 166 of the MV Act.

Once the legal representatives are held entitled to maintain a claim, the loss of dependency ought to be determined on that basis, and they can’t be shut out at the very threshold.

A.1. In Manjuri Bera v. Oriental Insurance Co. Ltd. (2007) 10 SCC 643, the Supreme Court expounded that the liability to pay compensation does not cease merely because there is an absence of dependency on the part of the legal representative. It was held that even if there was no loss of dependency, the claimant, if he or she was a legal representative, may nevertheless be entitled to compensation. The Court then held as under:

A.2. Similarly, in National Insurance Company Ltd. v. Birinder & Ors. (2020) 11 SCC 356, the claim petition was filed by the major sons of the deceased. The sons claimed that the fact that they were major and earning, by itself, would not render them ineligible to claim compensation. The Court was considering the issue whether the major sons of the deceased, who were married and gainfully employed, could claim compensation. The Court considered Section 166 of the Motor Vehicles Act, which provides that an application for compensation may be made by the person who sustained the injury, the owner of the property or, where death has resulted from the accident, “by all or any of the legal representatives of the deceased”. Therefore, a major married son would be entitled to maintain an application for compensation under Section 166 of the Motor Vehicles Act as a “legal representative”. The Court, on the basis of the evidence, found that the claimants were substantially dependent upon the deceased. Relying upon Manjuri Bera (supra), the Court further observed that even in the absence of a loss of dependency, legal representatives would nevertheless be entitled to compensation. The Tribunal must, however, examine whether the claimants were wholly or partially dependent upon the deceased.

A.3. In Seema Rani v. Oriental Insurance Company Ltd. 2025 INSC 192, the Supreme Court considered a claim petition filed by the wife, daughter and two sons of the deceased. The High Court had accepted the contention of the Insurance Company that the major sons and the married daughter were not dependants and, therefore, a deduction of 50% was required to be made. The Supreme Court relied upon Birinder (supra) and, having regard to the facts of the case, noted that both sons were residing with the deceased and, in such circumstances, could not be said to be self-sufficient or independent of the deceased. Applying the principle in Birinder (supra), the Supreme Court further held that “there was no reason to exclude a married daughter from compensation”.

A.4. In Ram Charan v. New India Assurance Co. Ltd. 2022 SCC OnLine Del 5146, this Court was dealing with a claim filed by one major son and four married daughters. The court noted that claimants could suffer the loss of emotional, physical and social support of the deceased, apart from the financial benefit which they might have derived from his income.

A.5. In Tata AIG General Insurance Co. Ltd. v. Sarita & Ors. 2023:DHC:5892, this Court, while assessing the dependency of a married daughter on the deceased (father), observed that the savings of the deceased form part of his estate and are inheritable by his legal representatives, irrespective of their dependency upon him. Compensation was awarded under the head of loss of estate. The Insurance Company, relying upon Manjuri Bera (supra), contended that since the claimant was a married daughter, she was not entitled to compensation towards loss of estate. The contention was rejected. Relying upon Section 166 of the MV Act, the Court held that the “savings of the deceased become part of his estate that is inheritable by its legal representatives irrespective of whether they are dependant or not”.

A.6. In IFFCO Tokio General Insurance Co. Ltd. v. Ramwati & Ors. 2025:DHC:11191, a Coordinate Bench of this Court was dealing with claims filed by the wife, son and two daughters of the deceased. The Tribunal had held that the deceased was married and had left behind his widow, one major son and two major married daughters. Accordingly, the children could not be said to be dependent. Since the married daughters were having disputes with their in-laws and were residing in their parental home, the claimants were considered entitled to compensation. The Court again noted the decision of this Court in Ram Charan (supra) and Jagdish (supra), wherein it had been held that married daughters could also be entitled to compensation under the head of loss of dependency, relying upon the decision of the Supreme Court in Birinder (supra).

B.1. In Gujarat State Road Transport Corporation, Ahmedabad v. Ramanbhai Prabhatbhai and Anr. (1987) 3 SCC 234, issue under consideration was whether the brother of a person who was killed in a motor accident can claim compensation. The Court stated, “We should remember that in an Indian family brothers, sisters and brothers' children and sometimes foster children live together and they are dependent upon the breadwinner of the family and if the breadwinner is killed on account of a motor vehicle accident, there is no justification to deny their compensation relying upon the provisions of Fatal Accident Act, 1985”. The Court, therefore, held that the brother of a person who died in a motor accident is entitled to maintain a petition if he is a legal representative of the deceased.

B.2. In New India Assurance Co. Ltd. v. Anand Pal & Ors., SLP (C) No. 7805/2022, decided on 04^th December 2023, the Supreme Court considered the contention raised by the Insurance Company that the brothers of the deceased could not be considered dependants upon the earnings of the deceased as the three brothers were older, had families of their own, and could have received only occasional financial assistance from the deceased. Accordingly, it was contended that they could not be considered dependants. Reliance was placed on paragraph 31 of Sarla Verma (supra) 6 SCC 121, wherein the Supreme Court observed that, in the absence of evidence to the contrary, the father is unlikely to have an income of his own and, therefore, would not be considered a dependent, while the mother alone would be considered a dependent. In the absence of evidence to the contrary, brothers and sisters would also not be considered dependants, as they would either be independent, married, or dependent upon their father. The Court noted that the deceased was residing separately, while his siblings were residing with their respective families. Accordingly, the Supreme Court held that the High Court ought not to have treated the three siblings as dependants of the deceased.

B.3. In Sadhana Tomar & Ors. v. Ashok Kushwaha & Ors. Civil Appeal No. 3763 of 2025, the Supreme Court, in a decision dated 24^th January 2025, considered the issue of the Tribunal having not treated the father and younger sister of the deceased as dependants, on the ground that the father was not dependent upon the income of the deceased and that the younger sister was also not dependent. The Court noted the principle laid down in Ramanbhai Prabhatbhai (supra) and observed that legal representatives are the persons who suffer on account of the death of a person in a motor vehicle accident and that they need not necessarily be the wife, husband, parent or child of the deceased. Accordingly, the Supreme Court held that the father and younger sister, though not financially dependent, would fall within the definition of “legal representatives”.

B.4. In Gangaraju Sowmini (Dr.) v. Alavala Sudhakar Reddy 2016 SCC OnLine Hyd 430, the Telangana High Court, while considering a claim filed by a non-dependent brother, held that dependency is a relevant consideration in determining the quantum of compensation, but the absence of dependency is not, by itself, a ground for rejecting a claim under the MV Act. The Court further observed that non-dependency does not necessarily imply the absence of financial contribution or support, since family members may incur substantial expenses towards the treatment of the injured or deceased person.

B.5. In New India Assurance Co. Ltd. v. Sindhu K. & Ors. 2024:KER:98358, the Kerala High Court, while considering a claim by the sole legal heir and sibling of the deceased, held that the claimant was not entitled to compensation towards loss of dependency in the absence of proof of financial dependency. However, the claimant remained entitled to compensation towards loss of estate. The Court followed Joseph v. Giji Varghese and Elamma v. ICICI Lombard General Insurance Co. Ltd. and held that loss of estate could be computed in the same manner as loss of dependency.

B.6. In National Insurance Company Ltd. v. George Menezes NC:2025:KHC:41454, the Karnataka High Court, while considering the claim of married daughters, held that the right to claim compensation cannot be denied merely on the basis of marital status. The Court also observed that it is not uncommon for married daughters and sisters to maintain close relationships with their parental families.

C.1. The Madras High Court in Oriental Insurance Co. Ltd. v. Minor Jayapriya 2010 SCC OnLine Mad 2232 (DB), while considering the claim of a separated wife and an adopted daughter, held that MV Act does not require exclusive or sole dependency. Proof of partial dependency is sufficient to sustain a claim for compensation towards loss of dependency.

C.2. In Sarayu v. Surendra Vithal Nazare 2010 SCC OnLine Mad 4192, the Madras High Court was dealing with a question whether a remarried widow and the parents of the deceased can claim compensation. The Court held that remarriage does not deprive a widow of her status as a legal representative or disentitle her from claiming compensation. The Court relied upon Section 2(11) of the Code of Civil Procedure, which defines a legal representative.

C.3. In Jagdish v. Om Pal Singh & Ors. 2024:DHC:9806, the Delhi High Court, while considering a claim involving the husband and a major child, observed that the role of a mother extends beyond financial considerations and includes emotional, physical and other forms of support.

C.4. In Oriental Insurance Co. Ltd. v. Vinay Jain & Ors. 2026:DHC:5198, this Court, while considering the question of dependency in a family comprising earning members, held that a non-earning family member may contribute to the upkeep of the family through gratuitous services. The Court further observed that an earning husband is not necessarily independent of his deceased wife. Where the household is sustained by joint income, the surviving spouse’s dependency may extend to the loss caused by the deceased spouse’s contribution to the household corpus, whether through pecuniary earnings or non-pecuniary contributions.

C.5. In Biswajit Chowdhury v. Aklesh Sah 2022 SCC OnLine Gau 2227, the Gauhati High Court, while considering the claim of a husband, held that partial dependency is sufficient to sustain a claim for loss of dependency. The mere fact that a legal representative has an independent source of income does not, by itself, defeat such a claim.

C.6. Madhya Pradesh High Court in Ayshabe v. Mohinder 2023 SCC OnLine MP 4295, held that the widow’s earning capacity does not, by itself, defeat dependency. Where both spouses were earning, the contribution of the deceased spouse towards household expenses could still justify an award of compensation for loss of dependency.

D.1. In Montford Brothers of St. Gabriel v. United India Insurance Co. Ltd. (2014) 3 SCC 394, the Supreme Court was considering a claim filed by a charitable religious society. The Court held that such a society could be treated as the legal representative of a deceased member, even though the deceased had no actual dependants.

D.2. While considering the claim of a mother-in-law, in N. Jayasree v. Cholamandalam MS General Insurance Co. Ltd. (2022) 14 SCC 712, the Supreme Court held that she could be treated as a dependant where she was residing with the deceased and was dependent upon her son-in-law for maintenance. The Court observed that, in Indian society, it is not uncommon for an aged mother-in-law to reside with her daughter and son-in-law and depend upon them for her maintenance.

D.3. In Basavaraj Shivappa Sangalad v. Shanta 2024 SCC OnLine Kar 27198, the Karnataka High Court, while considering the claim of a daughter-in-law whose husband had died during the pendency of the proceedings, discussed the concept of dependency and held that legal representatives may be entitled to compensation even without proof of actual financial dependency, where the law otherwise recognises their entitlement. The Court emphasised that the MV Act, being beneficial legislation, requires a liberal and wider interpretation.

D.4. In Joseph v. Giji Varghese (2010) 1 TN MAC 62 (Ker) (DB), the Kerala High Court, while considering a claim by persons who were not dependants of the deceased, held that no amount could be awarded under the head of loss of dependency in the absence of proof of dependency. However, the legal heirs remained entitled to compensation towards loss of estate.

The assessment was further developed in Mallett v. McMonagle [1970] AC 166 (HL), where Lord Diplock explained a structured method for determining damages. The assessment required consideration of the material benefits which the deceased would have provided to the dependants had he survived, the benefits which the dependants would receive by reason of the death, and the manner in which the dependency could reasonably be expected to change over the future period. Thereby, future annual dependency was calculated by applying an appropriate number of years’ purchase.

This approach has also been recognised in India in M.P.S.R.T.C. v. Sudhakar (1977) 3 SCC 64, wherein the Supreme Court adopted this approach to assess dependency.

In General Manager, Kerala State Road Transport Corporation v. Susamma Thomas (Mrs.) (1994) 2 SCC 176, the Supreme Court laid down a more structured formula to compute compensation. The Court held that the annual dependency, after making the appropriate deduction towards the personal and living expenses of the deceased, is to be multiplied by an appropriate multiplier to assess loss of dependency. Thus, the multiplicand-multiplier method emerged as the basic mechanism for converting the future annual dependency into a lump-sum award.

In U.P. State Road Transport Corporation v. Trilok Chandra, (1996) 4 SCC 362, the Supreme Court laid down the ‘unit method’ for computation of the compensation. The Court held that where there is no definite evidence regarding how much the deceased actually spent upon himself, the “rough and ready” unit method could be used. Each adult was considered to be two units and a minor as one unit. The Court also noted that compounding dependency on various factors like remarriage, premature death etc. was complicated.

Thereafter, in Fakeerappa v. Karnataka Cement Pipe Factory, (2004) 2 SCC 47, the Court reiterated that the percentage of deduction towards personal expenses could not be treated as an inflexible rule applicable irrespective of the circumstances of each case.

The principle for determination of loss of dependency was further evolved in the judgment of the Supreme Court in Smt. Sarla Verma & Ors v. Delhi Transport Corporation & Anr. (2009) 5 SCC 121. It was held that once the notional income is established, the next question is the percentage which ought notionally to be deducted towards the personal expenses of the deceased. This, too, has been broadly categorised on the basis of the number of dependants. Sarla Verma (supra), while prescribing standardised factions for such deduction, has nevertheless left some room for the Courts to consider the nature and circumstances of the dependants, as noticed in paragraphs 30-32 of the said judgment. Relevant paragraphs of Sarla Verma (supra) are extracted as under:

In Fakeerappa v. Karnataka Cement Pipe Factory [(2004) 2 SCC 473 : 2004 SCC (Cri) 577] while considering the appropriateness of 50% deduction towards personal and living expenses of the deceased made by the High Court, this Court observed: (SCC p. 475, para 7)

In view of the special features of the case, this Court however restricted the deduction towards personal and living expenses to one-third of the income.

Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra [(1996) 4 SCC 362] , the general practice is to apply standardised deductions. Having considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six.

Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father.

The four important elements which emerge from Sarla Verma (supra) are:

determination of the notional income as on the date of death;

addition towards future prospects at the prescribed percentage;

deduction towards personal expenses; and

application of the appropriate multiplier having regard to the age of the deceased.

In Sarla Verma (supra), as pointed out in paragraph no. 19.6 above, the Supreme Court, while dealing with the issue of deduction towards personal and living expenses, noted the different methods which had been used, inter alia, in Trilok Chand (supra) (unit-based method). The Court preferred the general practice of applying standardised deductions and, therefore, provided a matrix.

In Sarla Verma (supra), the Court noted that “the lack of uniformity and consistency in awarding compensation has been a matter of grave concern. Every district has one or more Motor Accident Claims Tribunal/s. If different Tribunals calculate compensation differently on the same facts, the claimant, the litigant, the common man will be confused, perplexed and bewildered. If there is significant divergence among Tribunals in determining the quantum of compensation on similar facts, it will lead to dissatisfaction and distrust in the system”.

Further, while discussing general principles, the Supreme Court highlighted the following:

Just compensation is adequate compensation which is fair and equitable on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do

It is not intended to be a bonanza, largesse or source of profit. Assessment of compensation, though involving certain hypothetical considerations, should nevertheless be objective. Justice and justness emanate from equality in treatment, consistency and thoroughness in adjudication, and fairness and uniformity in the decision-making process and the decisions.

While it may not be possible to have mathematical precision or identical awards, in assessing compensation, the same or similar facts should lead to awards within the same range. When the factors/inputs are the same, and the formula/legal principles are the same, consistency and uniformity, and not divergence or freakishness, should be the result of adjudication in arriving at just compensation.

If these determinants are standardised, there will be uniformity and consistency in the decisions. There will be less need for detailed evidence. It will also be easier for the insurance companies to settle accident claims without delay.

The Court then went on to state that basically there were only three facts which need to be established for assessing compensation in case of death; (a) age of the deceased;(b) income of the deceased; and (c) number of dependants.

On deduction from personal expenses, the Court in Sarla Verma (supra) stated that standardisation would be the norm, “but such percentage of deduction is not an inflexible rule and offers merely a guideline”. In relation to dependency, the Court noted:

This aspect resonated with the Constitution Bench in Pranay Sethi (supra), which extensively referred to the decision in Sarla Varma (supra). On reduction towards personal living expenses, the Constitution Bench held that the Tribunals and Courts should be guided by conclusion in paragraph 43.6 of Reshma Kumari (supra) and that “we concur with the same as we have no hesitation in approving the method provided herein”.

In paragraph 43.6 of Reshma Kumari (supra), the Court had directed that Tribunals shall follow the standards prescribed in Sarla Verma (supra) subject to observations made in paragraph 41 of Reshma Kumari (supra).

The Supreme Court in Reshma Kumari (supra), noted that the standards fixed in Sarla Verma (supra) may be followed “unless a case of departure from the circumstances noted in the preceding paragraph is made out”. Finally, the Constitution Bench stated that: "having bestowed anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary.” Yet again for other elements also the Constitution Bench indicated that “the application of principle of standardization would avoid the perceived lack of certainty".

From the above discussion, the following principles which revolve around the fulcrum and anchor of motor accident claims jurisprudence can be culled out, namely, providing uniformity, certainty and standardisation in the computation of compensation, in order to avoid excessive subjectivity and importation of new principles on a case-to-case

It is then for the Tribunal to determine the loss of dependency based on the standardized method provided in Sarla Verma (supra). After the notional income is assessed, the next step is to add the relevant percentage for future prospects and then to assess the deduction on account of personal and living expenses. It is at this stage that the element of determining who was dependent on the deceased comes into play. This will naturally depend on the facts of each case and involves an assessment “to arrive at the contribution to the dependents”.

As noted in Sarla Verma (supra), any evidence in this regard would be unverifiable, since claimants would claim that the deceased was very frugal, did not have expensive habits and was spending virtually the entire income on the family, or, on the other hand, that the deceased was spending a huge amount on himself or herself and contributing only a small part. Therefore, the necessity to standardise the process led to the evolution of the parameters given by the Supreme Court, based on experience, logic and convenience.

However, it was stated that such a deduction was not inflexible and offers merely a guideline. Nevertheless, at this stage, the Tribunal has to assess as to how many persons would be actually dependent, or even partly dependent, or would be in a situation where they were deriving some benefit of the family income.

While Keith Rowe (supra) approaches the issue from the perspective of savings and a claim through the estate of the deceased, it seeks to adopt a different method which tears away from the principle of standardisation that the Supreme Court has not only crystallised but reiterated, endorsed and sustained over some period of time.

It is only for this reason that the Court is of the view that adopting the method enunciated in Keith Rowe (supra) may, though, have been an appropriate method to determine the loss to a partly dependent or not dependent family member, going ahead, it creates a sense of uncertainty and instability in computation of compensation and steers the Tribunal to veer off in a different direction.

In the opinion of this Court, the better method is to apply the standardised framework and not introduce or apply another method. Accordingly, the Court first considers the nature of the dependents for whom the deceased would have provided and choose a level of deduction from discrete fractions of 1/2, 1/3, 1/4 or 1/5. This gives sufficient range to a Court to determine the number of dependants and, therefore, the deduction towards personal and living expenses.

This deduction is critical to assess the extent to which the claimant would have a pecuniary gain from the deceased’s income, had the deceased been alive. After the notional deduction, the portion of income left can be loosely termed as ‘family contribution’. This contribution would be spent on persons who may be living with the deceased or, even if living elsewhere, whom the deceased would possibly have supported.

Essentially, the idea is to deduct personal expenses with an eye on who would be dependant on the family contribution once a broad assessment is made of the need of the claimants to dip into the family contribution, based on evidence led, it can be worked out as to how many real ‘dependants’ are there. Then the appropriate fraction can be chosen for deduction of personal expenses.

For example, if a sibling is living independently but is not in a good economic position and may not be part of an independent family unit, the sibling could possibly be supported financially out of the family contribution. There could also be a situation where a sibling is married but is nevertheless of a low economic status and unable to sustain himself or herself, in which case the deceased may have provided for the sibling, at least partially. Determination of these issues will depend on a case-to-case basis, and Tribunals/Courts will have to make an assessment on the basis of the facts before them.

The wide variety of family situations cannot possibly be boxed into pre-determined silos. What is standardised is certain slabs on which the deductions can be assessed and maintained. Once the notional income is assessed in order to provide for future inflation, possible increases due to progress in life and future prospects are added, then the deductions are assessed. After this, one arrives at a multiplicand, and then the multiplier is applied.

Once the final compensation is arrived at, the next question arises of apportionment. This is where the Tribunal again needs to be careful and determine the varied aspects of “dependency”. At this point, it is to be noted that a claimant can be a legal representative but not necessarily a full dependent, and could be partly dependent, or only slightly dependent. Therefore, at the stage of apportionment, which is really the amount that would provide an annuity to the family, the compensation would have to be apportioned in terms of practical dependency of each claimant.

However, this does not mean that the Tribunal is required to adjudicate upon questions of succession or determine the shares of the deceased's estate as a civil court exercising testamentary or succession jurisdiction. In Rukhsana and Ors. v. Nazrunnisa (2000) 9 SCC 240, the Supreme Court held that succession certificate is not required for MACT compensation, as compensation does not form part of the deceased’s estate or constitute a debt/security owed to him. The Court observed that civil court may determine who the legal representatives are and their respective shares under the applicable personal law.

Therefore, what is relevant is to determine the corpus of compensation which is available for distribution amongst the legal representatives. The manner in which such amount is to be distributed/apportioned is a separate question which has to be assessed having regard to the circumstances of the individual claimants.

In this regard again the nature of dependency would have to be considered in order for purposes of apportionment. Apportionment is a very important exercise which the Tribunal and Courts must undertake carefully.

Naturally, the actual dependants, such as minor children, major children living with the deceased, the widow, dependent parents, including aged parents, or even a brother or sister living with and dependent upon the deceased, would ordinarily be entitled to a larger share. On the other hand, married and well-settled daughters and sons, or siblings who have established separate family units and are not practically dependent upon the deceased, may, even though they are legal heirs, be entitled to a comparatively lesser share. Such apportionment is critical to ensure that the compensation awarded remains just and reasonable.

In V.S. Sujatha (supra), the Kerala High Court considered a case where the widow and two major sons of the deceased were all legal representatives, but the sons were found not to be dependants. The Court held that while dependency could not be made the basis for denying a legal representative the right to claim compensation, it could determine the compensation. Taking into consideration, inter alia, the widow's dependency, her age and absence of future earnings prospects, and the position of the major sons who were not dependent upon the deceased, the Court upheld apportionment in the ratio of 3:1:1.

Another hypothetical example could be that if Rs.1,00,000/- is determined as the loss of dependency, taking into account three claimants, namely, the wife, a married daughter and a married son, the apportionment must have regard to the nature and extent of their respective practical dependency. The wife, being the major dependent, may receive 50% of the loss of dependency, while the married daughter and married son may receive 25% each (lesser percentage), or such other proportion as may be deemed appropriate having regard to the facts and circumstances of the case.

Likewise, in a case where a widow and a married daughter are left behind, the apportionment could be 75% and 25% respectively, in order to accommodate the livelihood of the wife, whereas the married daughter also has the possibility of financial support from her married household. This, in the opinion of this Court, is a possible apportionment of amount awarded towards loss of dependency/total compensation, which would serve the ends of justice for those who may not be completely ‘dependent’, but ‘partially dependent’ or family members who may claim moral right to have some share in the family income.

Therefore, the claim of dependency has to be seen through the prism of nature of dependency and cannot be put into discrete slots, as has been done in some decisions. A person cannot be straightway shunted out as not being dependent merely because they are married and earning. The facts and circumstances of each case have to be considered as may have been pleaded.

Shunting out those which are seemingly not dependant, because, say they are married and living separately. Just because somebody is not dependent on a daily basis on somebody, it cannot be that there is no loss which is incurred and for which they ought to be compensated. It cannot be that the insurance company or the driver/owner who is held liable, are completely absolved from paying any money, only because the family structure of the deceased is of a particular nature where dependency can be excluded at the very threshold.

Such an approach would not be consistent with the realities of Indian family structures. The mere fact that a person was not financially dependent on the deceased on a day-to-day basis does not necessarily mean that the death resulted in no financial loss to that person or that the person ought to receive no compensation. The insurance company, driver or owner, who is otherwise liable, cannot be completely absolved from payment merely because the family structure of the deceased does not fit within a conventional category of dependency.

Indian households are large family units with multiple minor or major stakes moral or financial right on the family income/household income. Therefore, even though there is a standardized matrix which is objective in character, subjectivity must be applied by the Tribunal or Court, in order to meets the ends of justice for awarding just and reasonable compensation.

There could be situations where the daughter, even though married, is floundering for financial support and adequate livelihood on account of either a low-earning or a non-earning spouse, or other difficulties which her marital household is going through.

For instance, the deceased may have been paying the EMI of a loan taken by the married son or daughter for purchase of a house, making contributions towards the rent or household expenses, paying school or educational expenses of the claimant’s children, meeting medical or other substantial expenses, or providing financial assistance for other significant family commitments.

The same consideration may arise in the case of a sibling. A sibling may be an adult, employed and financially independent, and yet receive financial assistance from the deceased for specific purposes, such as education, medical treatment, housing, repayment of a loan, marriage-related expenses, or other substantial financial commitments. In such circumstances, the question is not whether the sibling was wholly dependent upon the deceased, but whether the deceased was making a financial contribution which the sibling would have continued to receive had the deceased survived.

For instance, where a deceased father leaves behind a wife and a married daughter, the question would arise whether the two surviving family members are to be treated as two dependents or whether the wife is to be treated as a dependent and the married daughter as a partial dependent. Seeing from that prism of what would be a family income from which both the wife and the married daughter could have derived benefit, and the father who would have spent less on himself in order to save up for the family income, the dependents could be considered as ‘2’ and therefore, deduction would be taken as 1/3^rd.

However, where the deceased had no children and left behind only a wife, the deduction may appropriately be 50%.

Similarly, where a deceased bachelor leaves behind two unmarried siblings, it may not necessarily follow that the deceased, merely because he was a bachelor, was supporting no one. The two unmarried siblings could reasonably have been expected to draw upon or benefit from the family income and therefore the dependency of two people would be taken and a deduction of 1/3^rd.

These are only illustrations, not set in stone. The Tribunals or the Courts may have to consider the circumstances or the nature of the dependency in order to select the standardised slab of deduction towards personal and living expenses, as given by Sarla Verma (supra) in order to determine the fraction to be applied.

Such situations of siblings, married children, earning fathers, earning spouse and other non-family members have been considered in decisions of various courts, and have been listed above in paragraph 18.

Compensation assessment is truly an artful combination of both the objective and the subjective, and neither can be lost sight of. Each of these aspects have their own play in the calculation and computation of compensation. While there is standardisation in the multiplicand and multiplier system, and the prescribed parameters for deduction, future prospects, and the multiplier table which forms part of a matrix in which the computation can be done, Tribunals/Courts would still have to employ some subjective assessment, depending on the facts and circumstances of each case.

Arguments raised by insurance companies or by the driver/owner who is liable for payment of compensation, with regard to the dependency of the claimant, have to be considered at three distinct stages.

Firstly, dependency is not determinative of the right to institute a claim as a legal representative under Section 166 of the MV Act, as discussed above in paragraphs 16 to 16.4.

Secondly, while determining the deduction towards personal and living expenses, the circumstances of the family have to be considered to assess how much the deceased would have spent upon himself or herself, had the deceased been alive, and how much of the remaining income would have been available for the family or household. The residual amount may, in this context, be regarded as contributing to a common family income pot.

To assess deduction on account of personal and living expenses, the nature of dependency of the claimant may have to be considered. This will have to be seen from the lens of whether the claimant, as a dependent or a partial dependent, would have dipped into the family savings and therefore would have relied on it for their own financial support.

Thirdly, once loss of dependency has been computed by the above method, one reaches an amount which would be available for the claimants to be used to purchase an annuity in order that they would get some amount every month, for their upkeep and as a contribution from the family income. This has to be apportioned, yet again, taking into account the nature of dependency.

I. All legal representatives can maintain a claim under Section 166 of MV Act even without proving financial dependency. (discussed in Sr. I above paragraph nos. 16 to 16.4)

II. The aim behind awarding compensation is to put the victim/claimants in the same position as they would have been before the accident had occurred. (discussed in Sr. II above paragraph nos. 17 to 17.10)

III. A married and earning daughter, son, spouse or sibling cannot be excluded from compensation per se merely because they are married, employed or residing separately. (discussed in Sr. III above paragraph nos. 18)

IV. There is no doubt that Sarla Verma (supra), as affirmed in Pranay Sethi (supra), laid the standardised principles for assessment of compensation. However, deduction towards personal and living expenses is not inflexible. The applicable deduction must be applied after considering the circumstances of those who would have benefited from the deceased's income. Calculating loss of estate as done in Keith Rowe (supra) may not be relevant as it is not in consonance with the principles laid down in Sarla Verma (supra) and Pranay Sethi (supra). (discussed in Sr. IV above paragraph nos. 19 to 19.16)

V. Dependency is required to be assessed on the basis of facts and circumstances of each case. Tribunals/courts should examine the nature of dependency of the claimant rather than applying a rigid classification of dependents and non-dependents. (discussed in Sr. V above paragraph nos. 20-20.11)

VI. What is important is apportionment of such awarded amount. A wholly dependent claimant ought to get a greater share than a partially dependent or financially independent legal representative. (discussed in Sr. VI above paragraph nos. 21 to 21.6)