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 authority |
| Overrules / Affirms |
Affirms National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680 Distinguishes Gurpreet Kaur v. United India Insurance Co. Ltd. (2022) |
| Type of Law | Motor-accident compensation under Motor Vehicles Act |
| Questions of Law |
|
| Ratio Decidendi | The Supreme Court held that computing monthly income purely on the basis of vehicle-loan EMI payments, without corroboration from income-tax returns or other primary evidence, is unconscionable. It distinguished Gurpreet Kaur’s facts, noting that a reputed transport business (with two trucks) could continue earning through hired drivers post-death, so dependency cannot rest on surmises. Applying Pranay Sethi, the Court reduced the award to half of the tribunal’s figure to avoid a windfall, while ensuring fair compensation. Interest at 9% per annum from the petition date was directed, and additional heads (consortium, funeral, estate) were confirmed per Magma v. Nanu Ram. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon |
|
| Facts as Summarised by the Court | The deceased died in a road-traffic accident on 29.08.2017. He owned two trucks and allegedly earned Rs 95,000/month based on EMI payments of Rs 42,500 each. No income-tax returns were filed. The tribunal fixed dependency on mere surmise; the High Court affirmed. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and the Supreme Court |
| Persuasive For | High Courts |
| 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
- A tribunal cannot presume income solely from EMI payments without income-tax returns or comparable evidence.
- In transport-business death cases, courts may assume continuity of income through hired drivers.
- Supreme Court applied Pranay Sethi to reduce unconscionable awards and prevent windfalls.
- Interest at 9% per annum from the date of the claim petition is payable on the total award.
- Heads of loss (consortium, funeral, estate) reaffirmed under Magma v. Nanu Ram.
Summary of Legal Reasoning
- Insurer challenged Rs 95,000/month income assumption based solely on truck-loan EMIs; no tax returns produced.
- Tribunal’s reliance on surmise and conjecture lacked evidentiary basis—defaults in EMIs highlighted irregular income.
- Distinguished Gurpreet Kaur: there, tractor loan cleared and contractor’s avocation ceased; here, transport business endures via drivers.
- Applied Pranay Sethi to avoid both windfall and pittance—halved the tribunal’s total dependency award (Rs 50 lakhs deposited).
- Confirmed entitlement to heads of loss (consortium, estate, funeral) per Magma v. Nanu Ram and directed payment of Rs 1.6 lakhs in addition, with 9% interest from petition date.
- Directed balance payment within one month and dismissed appeal on other grounds.
Arguments by the Parties
Petitioner (Insurance Company):
- Monthly income cannot be inferred solely from EMI outgoings.
- Claimants produced no income-tax returns; EMIs in default show irregular receipts.
- Computation on conjecture is unconscionable.
Respondents (Claimants):
- Bank accounts reflect satisfaction of EMIs; defaults would have triggered bank action.
- Tribunal’s award mirrors reasoning in Gurpreet Kaur.
Factual Background
The deceased, a reputed transporter owning two trucks, died in a collision on 29.08.2017. His wife and three children sued for compensation, claiming Rs 95,000 as monthly income based on EMI payments. The Motor Accident Claims Tribunal accepted that figure without income-tax returns; the High Court upheld it. The insurer challenged only the quantum before the Supreme Court.
Alert Indicators
- ✔ Precedent Followed
- 🔄 Conflicting Decisions