The High Court of Andhra Pradesh has clarified that salary earned by a family member through compassionate appointment after the death of a motor accident victim cannot be deducted from compensation under the Motor Vehicles Act. This decision upholds established Supreme Court precedent and provides substantial clarification on the calculation of just compensation, including future prospects and conventional heads, with direct binding effect on tribunals and subordinate courts in Andhra Pradesh.
Summary
| Category | Data |
|---|---|
| Case Name | MACMA/1699/2013 of Nelanuthula Prasuna Vs K.Venkata Rao |
| CNR | APHC010280302013 |
| Date of Registration | 23-08-2013 |
| Decision Date | 16-10-2025 |
| Disposal Nature | PARTLY ALLOWED NO COSTS |
| Judgment Author | A. HARI HARANADHA SARMA |
| Court | High Court of Andhra Pradesh |
| Precedent Value | Binding precedent for Motor Accident Claims Tribunals and subordinate courts in Andhra Pradesh |
| Type of Law | Motor Vehicles Act, Compensation law |
| Questions of Law |
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| Ratio Decidendi | The High Court held that salary earned by a legal representative through compassionate appointment after the death of the victim is not a “pecuniary advantage” deductible from compensation under the Motor Vehicles Act, following the Supreme Court’s judgment in Vimal Kanwar v. Kishore Dan (2013). Furthermore, the Court reaffirmed the need for awarding just compensation in line with Supreme Court guidelines (Sarla Verma, Pranay Sethi, Magma General Insurance), taking into account future prospects, correct multiplier, and fair amounts under conventional heads. The earlier deduction of income due to compassionate appointment was set aside, resulting in substantial enhancement of compensation. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | The court applied binding Supreme Court precedents on the calculation of compensation (multiplicand, multiplier, conventional heads), addition for future prospects, and the principle that compassionate appointment is not a pecuniary advantage under the Motor Vehicles Act. |
| Facts as Summarised by the Court | The deceased, aged 43 and employed as a Sub-Editor, died in a motor accident caused by the offending vehicle. Legal heirs sought compensation. MACT awarded compensation after deducting the income from compassionate appointment given to the wife. Claimants appealed for enhancement, particularly opposing the deduction. Insurance company contested the enhancement. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All Motor Accident Claims Tribunals and subordinate courts in Andhra Pradesh |
| Persuasive For | Other High Courts and may be cited before the Supreme Court |
| Follows |
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What’s New / What Lawyers Should Note
- The Court reaffirmed that salary received by dependents through compassionate appointment is NOT deductible from compensation, as it is not a “pecuniary advantage” under the Motor Vehicles Act.
- Gross salary, with addition for future prospects, must be considered based on age and employment type, consistent with Pranay Sethi and Sarla Verma guidelines.
- Enhanced clarity on awarding compensation under conventional heads (funeral expenses, loss of estate, consortium to all dependents).
- Recalibrates compensation in line with the law, providing useful precedent for challenging deductions on account of employment benefits in similar cases.
- Lawyers should cite this authority to counter insurance company arguments for deduction of beneficiary’s earnings from compassionate appointments.
Summary of Legal Reasoning
- The Court briefly stated the undisputed facts on negligence and entitlement but focused entirely on whether the compensation calculation aligned with law.
- Supreme Court guidelines in Sarla Verma were cited for determining multiplicand (income after personal expenses), multiplier, and dependents.
- National Insurance Co. Ltd. v. Pranay Sethi and Magma General Insurance v. Nanu Ram were relied upon for future prospects and awarding of conventional heads to all dependents.
- The Court confirmed that compassionate appointments do not qualify as pecuniary advantage under Vimal Kanwar, explaining that such benefits may arise even from natural death, and have no correlation to compensation under the Act.
- The High Court recomputed compensation, restored the quantum by disregarding the deduction for compassionate appointment, adopted a proper multiplier, included conventional amounts, and thereby enhanced the award.
Arguments by the Parties
Petitioner
- The compensation awarded by MACT was inadequate and contrary to precedent.
- Deduction for income from compassionate appointment is contrary to law.
- Proper multiplier and gross income with future prospects should be adopted.
Respondent
- The compensation awarded was on the higher side and needs no interference.
- The deduction for compassionate appointment was correctly done by the trial court.
Factual Background
The deceased, aged 43, was employed as a Sub-Editor and died in a road accident caused by negligent driving of the offending vehicle. The claimants, being legal heirs, sought compensation under the Motor Vehicles Act. The MACT fixed and awarded compensation but deducted the income of the widow acquired through compassionate appointment. Dissatisfied, the claimants appealed. The Insurance Company contested enhancement, defending the deductions.
Statutory Analysis
- Section 166 of the Motor Vehicles Act governs just compensation for third-party victims.
- Section 168 empowers the Tribunal to award compensation appearing “just” without technical or restrictive limitations.
- The Court interpreted “pecuniary advantage” under the Act, holding that income from compassionate appointment cannot be deducted, reaffirming the law as settled by the Supreme Court.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinions are recorded in the judgment.
Procedural Innovations
No new procedural precedents, changes to evidence requirements, or suo motu directions were set in this judgment.
Alert Indicators
- ✔ Precedent Followed – Existing Supreme Court law affirmed on compensation calculation and nondeductibility of compassionate appointment benefits.