In Shila Devi & Anr.vs. Raja Ram Dokania & Ors. (2025), Justice Jitendra Kumar of Patna High Court delivered a 25-page long judgement dated November 7, 2025, wherein, he concluded:"....the respondent No.3/Insurance Company is directed to pay the said amount of Rs.6,92,648/- to the appellants within two months, failing which the respondent No.3/Insurance Company would be liable to pay penal interest @ 12% per annum. This amount must be paid by way of account payee cheque or Bank Draft in the name of the appellant No.1, Shila Devi." The Respondent No. 3 is Divisional Manager, National Insurance Company, Bhagalpur.
The Miscellaneous Appeal was preferred against the impugned judgment/award dated August 5, 2019 passed by learned District Judge-cum-Motor Accident Claim Tribunal (M.A.C.T.), Bhagalpur in Claim Case of 2017, whereby M.A.C.T., Bhagalpur had directed the insurance company, who was the Respondent No.3 , to pay an amount of Rs. 6,33,000/- to the claimants, who were Appellants, as compensation on account of death of one Ashu Raj Kumar @ Ashu Raj @ Shrawan Kumar in a motor accident along with interest @ 8 per cent per annum from the date of filing of the petition. The payment of Rs. 50,000/-already made towards interim compensation was directed to be adjusted against the total compensation amount and the compensation was directed to be paid within sixty days from the date of the order.
The counsel for the Appellants submitted that the total compensation amount as directed by Tribunal was already received by the Appellants from the insurance company. However, being dissatisfied by the quantum of the compensation, the Appellants preferred the appeal under Section 173 of the Motor Vehicle Act for getting enhanced compensation.
In the course of pendency of this appeal, the Appellant No.2, Pappu Thakur died. Hence, he was substituted by his legal heir, Champa Devi, who is his married daughter. The other legal heir Shila Devi (wife of Pappu Thakur) was already Appellant No.1.
The factual background of this case is that on March 29, 2017, an accident took place involving a tanker resulting into death of one Ashu Raj Kumar @ Ashu Raj @ Shrawan Kumar, son of the claimants Shila Devi and Pappu Thakur. Subsequently, Rajoun P.S. Case No. 104 of 2017 was registered on 29.03.2017 for the offences punishable under Section 279, 337, 338, 304A IPC against the driver and the owner of the aforesaid tanker. As per further averment in the claim petition, the deceased Ashu Raj Kumar @ Ashu Raj @ Shrawan Kumar was traveling in an auto-rickshaw which was dashed by the said tanker on account of rash and negligent driving. The deceased is alleged to be 19 years of age at the time of death and he was unmarried and working as a private tutor earning Rs. 10,000/- per month. It was further claimed that the offending tanker was insured with National Insurance Company Limited at the relevant time of accident vide the policy no.171000/31/16/6300002116 effective from 10.07.2016 to 09.07.2017 covering the date of accident on 29.03.2017.
The Appellants, Shila Devi and Pappu Thakur filed the claim case no. 98 of 2017 on 11.05.2017 for compensation of Rs. 16,16,000/- impleading the driver, owner of the offending vehicle and the insurance company. On notice, all the three Opposite Parties appeared, but the Opposite Party Nos. 1 and 2, who were owner and driver of the offending vehicle respectively, did not file any written statement. However, the insurance company, who was the Opposite Party No.3 before the Tribunal, filed its written statement. However, no application under Section 170 of the Motor Vehicles Act was filed by the insurance company seeking permission to contest the claim petition.
On the basis of the pleadings of the Claimants and the Insurance Company, the following six issues were
framed:
“(i) Whether the claim case is maintainable?
(ii) Whether the claimants have valid cause of action for the present claim case?
(iii) Whether the accident took place due to rash and negligent driving by the driver of the offending vehicle?
(iv)Whether the claimants are entitled to get compensation as prayed for?
(v). Whether the offending vehicle was insured at the time of alleged incident?
(vi) Whether the driver has valid license at the time of accident?”
The Judgement recorded that nobody was present on behalf of the Respondent No.3, insurance company, despite valid service of notice.
The counsel for the Appellants submitted that he had no dispute with the finding by the Tribunal regarding the income of the deceased @ Rs. 200/- per day. However, no addition to income has been made towards future prospect. He also submitted that Tribunal has applied multiplier of only 16, whereas it should have been 18 and hence, the loss of dependency has been determined on the lower side. Even the quantum of compensation under the conventional heads has been granted on the lower side. Hence, the Appellants could not get just compensation.
The counsel for the Respondent Nos.1 and 2 contested the submission of counsel for the appellants submitting that there is no illegality or infirmity in the impugned judgment/award and the appellants are not entitled to get any higher quantum of compensation. He also submitted that the Respondent Nos. 1 and
2, being owner and driver of the vehicle and the vehicle being insured with Respondent No. 3/Insurance Company, were not liable to pay any compensation to the appellants.
Justice Kumar opined that the Tribunal had rightly directed the Respondent No. 3/Insurance Company to pay the awarded amount of compensation to the appellants and which was already paid to the appellants.
But nobody was present on behalf of the Respondent No. 3/Insurance Company, despite valid service of
notice.
The High Court inferred that the following points arose for determination:-
(i) Whether there should be any addition to the income of the deceased towards future prospect while calculating the loss of dependency?
(ii) What should be the appropriate multiplier in the case on hand ?
(iii) Whether the appellants are entitled to get higher quantum of compensation under conventional heads?
(iv) What should be the quantum of just compensation ?
The Court dealt with the law regarding just compensation. It recollected Supreme Court's landmark judgment in Sarla Verma vs. DTC, (2009) 2 SCC 770 with regard to assessment of compensation in cases of death. In this judgment, the Court has laid down principles to provide uniformity and consistency in awarding compensation. The principles as laid down in Sarla Verma Case (supra) were subsequently modified and improved by the Court in subsequent judgments which are as follows:
(i) Reshma Kumari vs. Madan Mohan, (2013) 9 SCC 65
(ii) Royal Sundram Alliance Insurance Co. Ltd. vs. Mandala Yadagari Goud, (2019) 5 SCC 554
(iii) National Insurance Co. Ltd. Vs. Pranay Sethi, (2017) 16 SCC 680
(iv) Magma General Insurance Co. Ltd. Vs. Nanu Ram, (2018) 18 SCC 130
These landmark judgments have been referred the Court's decision in United India Insurance Co. Ltd. vs. Satinder Kaur, (2021) 11 SCC 780 providing complete prevailing law regarding assessment of compensation in cases of death arising out of Motor Vehicle Accident. The relevant paragraphs of the judgment read as follows:
“Relevant principles for assessment of compensation in cases of death as evolved by judicial dicta.
11. The criteria which are to be taken into consideration for assessing compensation in the case of death are : (i) the age of the deceased at the time of his death; (ii) the number of dependants left behind by the
deceased; and (iii) the income of the deceased at the time of his death.
In Sarla Verma vs. DTC (2009) 6 SCC 121 this Court held that to arrive at the loss of dependency, the Tribunal ought to take into consideration three factors: (SCC p. 132, para 18)
(i) additions/deductions to be made for arriving at the income;
(ii) the deduction to be made towards the personal living expenses of the deceased; and
(iii) the multiplier to be applied with reference to the age of the deceased.
13. In order to provide uniformity and consistency in awarding compensation, the following steps are required to be followed : Sarla Verma case (2009) 6 SCC 121
“Step 1 (Ascertaining the multiplicand)
The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand.
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and period of active career, the appropriate multiplier should be
selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a Table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said Table with reference to the age of the deceased.
Step 3 (Actual calculation)
The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the “loss of
dependency” to the family. Thereafter, a conventional amount in the range of Rs 5000 to Rs 10,000 may be added as loss of estate. Where the deceased is survived by his widow, another conventional amount in the range of 5000 to 10,000 should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased. The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the
deceased before death (if incurred) should also added.”
(a) Deduction for personal and living expenses
14. The personal and living expenses of the deceased should be deducted from the income, to arrive at the
contribution to the family. In Sarla Verma (2009) 6 SCC 121, this Court took the view that it was necessary to standardise the deductions to be made under the head personal and living expenses of the deceased. Accordingly, it was held that:
14.1. Where the deceased was married, the deduction towards personal and living expenses should be 1/3rd if the number of dependant family members is two to three.
14.2. 1/4th if the number of dependant family members is four to six.
14.3. 1/5th if the number of dependant family members exceeds six.
14.4. If the deceased was a bachelor, and the claim was filed by the parents, the deduction would normally be 50% as personal and living expenses of the bachelor. Subject to evidence to the contrary, the father was likely to have his own income, and would not be considered to be a dependant. Hence, the mother alone will be considered to be a dependant. In the absence of any evidence to the contrary, brothers and sisters of the deceased bachelor would not be considered to be dependants, because they would usually either be independent and earning, or married, or dependant on the father. Thus, even if the deceased was survived by parents and siblings, only the mother would be considered to be a dependant. The deduction towards personal expenses of a bachelor would be 50%, and 50% would be the contribution to the family.
14.5. However, in a case where the family of the bachelor was large and dependant on the income of the deceased, as in a case where he had a widowed mother, and a large number of younger non-earning sisters or brothers, his personal and living expenses could be restricted to 1/3rd, and contribution to the family be taken as 2/3rd.
Justice Kumar concluded: "29. Hence, total compensation payable to the Claimants/Appellants would work out to be Rs.13,25,648/-(12,15,648+15,000+80,000+15,000). As per the pleading of the parties, the claimants/appellants have already received Rs.6,33,000/-. Hence, the appellants are entitled to get balance
amount of Rs.6,92,648/- (13,25,648-6,33,000). 30. Hence, the respondent No.3/Insurance Company is directed to pay the said amount of Rs.6,92,648/- to the appellants within two months, failing which the respondent No.3/Insurance Company would be liable to pay penal interest @ 12% per annum. This amount must be paid by way of account payee cheque or Bank Draft in the name of the appellant No.1, Shila Devi."
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