Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-014758-014758 – 2025 |
| Diary Number | 36095/2025 |
| Judge Name | HON’BLE MR. JUSTICE K. VINOD CHANDRAN |
| Bench |
HON’BLE MR. JUSTICE AHSANUDDIN AMANULLAH HON’BLE MR. JUSTICE K. VINOD CHANDRAN |
| Precedent Value | Binding |
| Overrules / Affirms | Affirms Pranay Sethi; distinguishes Gurpreet Kaur |
| Type of Law | Motor accident compensation |
| Questions of Law | Whether computation of monthly income at ₹95,000 based on EMI obligations, without any income‐tax returns, is permissible for assessing loss of dependency. |
| Ratio Decidendi | The Court held that compensation must rest on credible evidence of income and not mere surmise from EMI outgoings when no ITRs are filed. For a businessman owning trucks, post‐death income streams continue (e.g., by engaging drivers), so the award at ₹95,000/month was unconscionable. Applying the Pranay Sethi benchmark against windfalls and pittance, the Tribunal’s figure was halved to ₹50 lakhs, with added interest at 9%, plus heads for consortium, estate and funeral expenses. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court | The deceased, a transporter owning two trucks, died in a road accident caused by rash driving. Legal representatives (wife and children) claimed ₹95,000/month income based on EMI outgoings of ₹42,500. No income‐tax returns were filed; Tribunal accepted the figure, which insurer challenged. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts adjudicating motor accident claims |
| Persuasive For | High Courts, motor accident tribunals |
| Distinguishes | Gurpreet Kaur v. United India Insurance Co. Ltd. (2022) |
| Follows | National Insurance Co. Ltd. v. Pranay Sethi (2017); Magma General Insurance Co. Ltd. v. Nanu Ram (2018) |
What’s New / What Lawyers Should Note
- Clarifies that monthly income cannot be inferred solely from EMI amounts absent income‐tax returns or other credible proof.
- Reinforces that business income streams (e.g., truck operations) survive the proprietor’s death and must be factored in dependency calculations.
- Reaffirms Pranay Sethi’s “no windfall, no pittance” standard for compensation awards.
- Confirms entitlement to 9% interest on deposited amounts and on additional heads (consortium, estate, funeral).
- Highlights that children are entitled to loss of filial consortium under Magma General Insurance v. Nanu Ram.
Summary of Legal Reasoning
- Insurance Co. contested the ₹95,000/month income figure as unconscionable and unsupported by income‐tax returns or reliable evidence.
- Claimants relied on EMI payment records and alleged continuous satisfaction of EMIs.
- Court distinguished Gurpreet Kaur on facts: there, tractor EMI evidence was cleared and contractor work ceased on death; here, truck business income continues via drivers.
- Applied Pranay Sethi’s binding principle: awards must avoid windfalls or pittance; dependency should reflect sustainable income.
- Reduced dependency award to ₹50 lakhs (half of Tribunal’s sum), directed 9% interest, and upheld awards for consortium, estate, and funeral expenses.
Arguments by the Parties
Petitioner (Insurance Company)
- Monthly income of ₹95,000 is baseless without income‐tax returns.
- EMI of ₹42,500 does not prove double the income; assumption is conjectural.
- Multiple EMI defaults indicate irregular earnings.
Respondents (Claimants)
- Bank accounts show satisfaction of EMIs; defaults would have triggered bank action if persistent.
- Tribunal’s award aligns with Gurpreet Kaur reasoning, which was accepted by High Court.
Factual Background
- The deceased, a transporter owning two trucks, died in a motor accident on 29.08.2017 caused by rash driving of another vehicle.
- Legal representatives (wife and three children) filed a claim under the Motor Vehicles Act for compensation.
- Tribunal framed issues on causation (undisputed) and quantum of compensation.
- Claimants relied on EMI obligations to prove monthly income of ₹95,000; insurer challenged this without any ITR.
Statutory Analysis
- The Court invoked the compensation framework under the Motor Vehicles Act as articulated in Pranay Sethi (2017).
- Confirmed heads of compensation: loss of dependency, consortium, estate, and funeral expenses.
- Applied interest provisions (9% per annum) on awards from the date of claim petition.
Alert Indicators
- ✔ Precedent Followed – Pranay Sethi’s no‐windfall/no‐pittance doctrine
- 🔄 Conflicting Decisions – Distinguishes Gurpreet Kaur v. United India Insurance Co. Ltd.