REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   9581   OF 2018

(Arising out of SLP (Civil) No. 3192 of 2018)

Magma General Insurance Co. Ltd.                             …Appellant

Versus

Nanu Ram Alias Chuhru Ram & Ors.                     …Respondents

J U D G M E N T

INDU MALHOTRA, J.

Leave granted.

1. This Special Leave Petition has been filed by the Insurance

Company to challenge the compensation awarded on certain

counts by the Punjab & Haryana High Court in FAO No. 6943 of

2015 dated 27.09.2017, to be contrary to the Constitution Bench

judgment in National Insurance Co. Ltd. v. Pranay Sethi.1

2. The factual  matrix  of the  present case,  briefly stated,  are as

under:

1 (2017) 16 SCC 680

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On 01.12.2013, the  deceased  was riding  his  motorcycle

(Registration No. HR­71B­7681) from Ambli Village to Arjun

Majra Village. A relative of the deceased –Mr. Rakesh Kumar was

following him on a separate motorcycle on the Sadhaura­

Naraingarh Road. A Renault car bearing Registration No. HR­02­

AB­4646 driven by Respondent No.3, came from the side, and hit

the motorcycle driven by the deceased. The accident was

witnessed by Mr. Rakesh Kumar.

As a result of the accident, the deceased fell and sustained

multiple injuries.  He  was taken to the  Government  Hospital,

Naraingarh from where he was referred to PGI, Chandigarh. On

02.12.2013 the victim was taken to Government Hospital,

Panchkula where the doctors declared him dead.

On the same day, F.I.R. No. 337 was registered at Police

Station, Naraingarh on the statement of Mr. Rakesh Kumar who

was an eye­witness to the accident.

3. The father, brother, and sister of the deceased filed Claim

Petition under Section 166 of the  Motor Vehicles Act, 1988

before the Motor Accidents Claim Tribunal, Yamuna Nagar

(“hereinafter referred to as MACT”) praying for compensation of

Rs. 50,00,000 along with Interest from the date of the accident

till the date of realization.

Mr. Rakesh Kumar, the eye­witness was examined before

the MACT. He deposed stated that the accident occurred due to

the rash and negligent driving of Respondent No. 3.  

The MACT after considering the evidence placed on record,

came to the finding that the accident took place due to the rash

and negligent driving of Respondent No. 3.  

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The deceased was 24 years old, and was engaged in the

business of  manufacturing Namkeen products.  The Claimants

contended that the income of the deceased was Rs. 15,000 per

month. However, they were unable to produce evidence of the

income of the deceased. The  MACT took the income of the

deceased to be that of  an unskilled worker  i.e.  Rs. 5,342 per

month on the basis of the Notification dated 13.08.2013 issued

by the Labour  Commissioner,  Haryana prescribing  minimum

wages for different categories of work.

The  MACT awarded compensation to the family of the

deceased as follows:

Head Compensation awarded i. Income: Rs. 5,432 per month ii. Deduction towards  

personal expenses: Rs. 1780 (1/3 rd of income)

iii. Multiplier: 7 (as per the age of the

father) iv. Loss of future income : Rs. 2,99,208  

[i.e. (5432 – 1780) x 12x7] v. Loss of love and

affection:

Rs. 25,000

vi. Funeral Expenses: Rs. 15,000

Total Compensation  

awarded:

Rs. 3,39,208 with interest @

7% from the date of the

claim until realization and

costs.

The  MACT  did  not award any compensation to the

brother of the deceased, as he could not be considered to be

a dependent. Compensation was awarded to the aged father

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and the unmarried sister of the deceased, who were held to

be dependents.   

The Insurance Company and the driver of the vehicle –

Respondent No. 3 both were held to be jointly and severally

liable to pay the compensation.  

4. The Respondent Nos. 1 and 2 – i.e. the father and sister of

the deceased filed an Appeal against the order of the MACT

before the Punjab and  Haryana  High Court praying for

enhancement of compensation.

The  High  Court held that the facts relating to the

accident were admitted and proved before the MACT. It was

established that the deceased had died as a result of the

rash and negligent driving of Respondent No. 3.  

The High Court found that the MACT had used the

wrong principle for application of the multiplier. The

multiplier ought to have been taken on the basis of the age

of the deceased, and not of his father.

The High Court re­assessed the compensation as

follows:

Head Compensation awarded i. Income (as per minimum

wages):

Rs. 6,000 per month

ii. Future prospects at 50%

of (i):

Rs. 3,000 per month

iii. Total Income: Rs. 9,000 iv. Deduction of personal

expenses:

Rs.  3,000  (i.e.  1/3rd  of total

income)

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v. Multiplier: 18 (as per age of deceased) vi. Loss of future income: Rs. 12,96,000  

[i.e. (9,000 –  3,000)  x  12  x

18] vii. Loss of love and

affection:

Rs. 1,00,000 (i.e. Rs. 50,000

each) viii. Funeral expenses: Rs. 25,000

Total Compensation  

awarded:

Rs. 14,21,000  with interest

@ 9% from the date of filing

the claim petition till

realization.

The amount was held to be payable jointly and

severally by the Appellant – Insurance Company and

Respondent No. 3.

5. Aggrieved by  the Order  of the  High Court, the Insurance

Company filed the present S.L.P. before this Court, praying

for setting­aside the judgment of the Punjab and Haryana

High Court.

6. We have heard learned Counsel for the parties, and perused

the record.

The principal grounds on which the S.L.P. has been filed by

the Insurance Company are:

i. The High Court has erroneously awarded 50% towards

Future Prospects, even though as per the judgment of

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this  Court in  National Insurance  Co. Ltd.  v.  Pranay

Sethi.2 only 40% could have been awarded.  ii. The deduction of the income of the deceased ought to

have been made at ½, and not at 1/3rd, as he was a

bachelor. iii. The  minimum wages  of the  deceased  ought to  have

been taken at Rs. 5,341 and not Rs. 6,000 as that was

the prevailing rate of minimum wages in Haryana at

the time of the accident. iv. The father and sister of the  deceased could  not  be

considered  as  dependants, and  were  not entitled to

compensation. In the case of death of a bachelor, only

the mother could be considered to be a dependant.  v. The grant of Rs. 1,00,000 on account of loss of love

and affection, and Rs. 25,000 towards funeral

expenses is erroneous.  It was contended that only Rs. 30,000 could have

been  awarded  as  per the judgment in  Pranay  Sethi

(supra).

7. The dependents of the deceased refuted the grounds raised

by the  Insurance company,  and reiterated their  claim for

enhanced compensation.

8. The grounds of  challenge by  the  Insurance Company are

dealt with seriatim.

8.1. With respect to the issue of Future Prospects, a

Constitution Bench of this Court in  Pranay Sethi

(supra) has held that  in case the deceased was self­

2 (2017) 16 SCC 680

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employed or on a fixed salary, and was below 40 years

of age, an addition of 40% of the established income

should be granted towards Future Prospects.  Future Prospects are to be awarded on the basis

of: i. the nature of the deceased’s employment; and ii. the age of the deceased.

In the present case, it is claimed by the family of

the deceased that he was engaged in making namkeen,

and was earning a monthly income of about Rs.

15,000 per month. However, no evidence was brought

on record to establish the same. The MACT as well as

the High Court assessed the income of the deceased on

the basis of the minimum wage of an unskilled worker.

The nature of his employment being taken as a  self­

employed person.

The deceased was 24 years old at the time of the

accident. Hence, future Prospects ought to have been

awarded at 40% of the actual income of the deceased,

instead of 50% as awarded by the High Court.

Hence,  the  judgment of the High Court on this

issue is modified to that extent.

8.2. With respect to the issue of deduction from the income

of the  deceased, the Insurance  Company contended

that the  deduction  ought to  have  been  ½, and  not

1/3rd, since the deceased was a bachelor.  

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This issue has been dealt with in paragraph 32 of

the judgment in  Sarla Verma  (supra) wherein this

Court took the view that where the family of the

bachelor is large and dependent on the income of the

deceased, as in a case where he has a widowed mother

and  large number of  younger  non­earning  sisters  or

brothers, his personal and living expenses  may be

restricted  to  one­third,  as  contribution  to the family

will be taken as two­third.

Considering that the deceased  was living in a

village, where he was residing with his aged father who

was about 65 years old, and Respondent No. 2 ­ an

unmarried sister, the High Court correctly considered

them to be dependents of the deceased, and made a

deduction of  1/3rd  towards personal  expenses of the

deceased.

The judgment of the  High Court is, therefore,

affirmed on this count.

8.3. With respect to the income of the  deceased,  as the

family could not produce any evidence to show that the

income of the deceased was Rs. 15,000 per month, as

claimed, the  High  Court took  his income to  be  Rs.

6,000, which is marginally above the minimum wage of

an unskilled worker at Rs. 5,342.

This finding is also not being interfered with.

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8.4. The Insurance Company has submitted that the father

and the sister of the deceased could not be treated as

dependents, and it is only a mother who can be

dependent of her son. This contention deserves to be

repelled. The deceased was a bachelor, whose mother

had pre­deceased him. The deceased’s father was

about 65 years old, and an unmarried sister. The

deceased was contributing a part of his meagre income

to the family for their sustenance and survival. Hence,

they would be entitled to compensation as his

dependents.

8.5. The Insurance Company has contended that the High

Court had wrongly awarded Rs. 1,00,000 towards loss

of love and affection, and Rs. 25,000 towards funeral

expenses.  

The judgment of this Court in  Pranay Sethi

(supra) has set out the various amounts to be awarded

as compensation under the conventional heads in case

of death. The relevant extract of the judgment is

reproduced herein below :

“Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/­, Rs. 40,000/­ and  Rs. 15,000/­ respectively.  The principle of revisiting the said heads is an acceptable principle. But the

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revisit should  not be fact­centric or quantum­centric. We think that it would be condign that the amount that  we have quantified should be enhanced on percentage basis in every three years and the enhancement should be at the rate of 10% in a span of three years.”  

(Emphasis supplied)

As per the afore­said judgment, the compensation

of Rs. 25,000 towards funeral expenses is decreased to

Rs.15,000.  The amount awarded by the High Court towards

loss of love and affection is, however, maintained.

8.6 The MACT as well as the High Court have not awarded

any compensation with respect to Loss of Consortium

and Loss of Estate, which are the other conventional

heads under  which compensation  is  awarded  in the

event of death, as recognized by the Constitution

Bench in Pranay Sethi (supra).

The Motor Vehicles Act is a beneficial and welfare

legislation.  The  Court is  duty­bound and entitled to

award “just compensation”, irrespective of whether any

plea in that behalf was raised by the Claimant.

In exercise of our power under Article 142, and in

the interests of justice, we deem it appropriate to

award an amount of Rs. 15,000 towards Loss of Estate

to Respondent Nos. 1 and 2.

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8.7 A  Constitution  Bench of this  Court in  Pranay Sethi

(supra) dealt with the various heads under which

compensation is to be awarded in a death case. One of

these heads is Loss of Consortium.  In legal parlance, “consortium” is a compendious

term which encompasses ‘spousal consortium’,

‘parental consortium’, and ‘filial consortium’.

The right to consortium would include the

company, care, help, comfort, guidance, solace and

affection of the deceased, which is a loss to his family.

With respect to a spouse, it would include sexual

relations with the deceased spouse.3  

Spousal consortium is generally defined as rights

pertaining to the relationship of a husband­wife which

allows compensation to the surviving spouse for loss of

“company, society, co­operation, affection, and aid of

the other in every conjugal relation.”4

Parental consortium is granted to the child upon

the premature death of a parent, for loss of “parental

aid, protection, affection, society, discipline, guidance

and training.”

Filial  consortium  is the  right  of the  parents to

compensation in the case of an accidental death of a

child. An accident leading to the death of a child

causes great shock and agony to the parents and

3 Rajesh and Ors. vs. Rajbir Singh and Ors. (2013) 9 SCC 54 4 BLACK'S LAW DICTIONARY (5th ed. 1979)

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family of the deceased. The greatest agony for a parent

is to lose their child during their lifetime. Children are

valued for their love, affection, companionship and

their role in the family unit. Consortium is a special prism reflecting changing

norms about the status and worth of actual

relationships. Modern jurisdictions world­over have

recognized that the value of  a child’s consortium far

exceeds the economic value of the compensation

awarded in the case of the death of a child.  Most

jurisdictions  therefore  permit  parents to  be  awarded

compensation under loss of consortium on the death of

a child. The amount awarded to the parents is a

compensation for loss of the love, affection, care and

companionship of the deceased child.  

The Motor Vehicles Act is a beneficial legislation

aimed at providing relief to the victims or their

families, in cases of genuine claims. In case where a

parent has lost their minor child, or unmarried son or

daughter, the parents are entitled to be awarded loss

of consortium under the head of Filial Consortium.  

Parental Consortium is awarded to children who

lose their parents in motor vehicle accidents under the

Act. A few High Courts have awarded compensation

on this count5.  However, there  was no clarity  with

5  Rajasthan High Court in Jagmala Ram @ Jagmal Singh & Ors. v. Sohi Ram & Ors  2017 (4) RLW 3368 (Raj); Uttarakhand High Court in Smt. Rita Rana & Anr. v. Pradeep Kumar & 6 Ors.  

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respect to the principles on which compensation could

be awarded on loss of Filial Consortium.  The amount of  compensation to be awarded as

consortium will be governed by the principles of

awarding compensation under ‘Loss of Consortium’ as

laid down in Pranay Sethi (supra).

In the  present  case,  we deem  it  appropriate to

award the  father  and the sister of the deceased, an

amount of Rs. 40,000 each for loss of Filial

Consortium.

9. In light of the above mentioned discussion, Respondent Nos.

1 and 2 are entitled to the following amounts :­

Head Compensation awarded i. Income: Rs. 6,000 ii. Future Prospects: Rs. 2,400 (i.e. 40% of the

income) iii. Deduction towards  

personal expenditure:

Rs. 2,800 [i.e. 1/3rd  of

(Rs.6,000 + Rs.2,400)  iv. Total Income: Rs. 5,600 [i.e. 2/3rd  of

(Rs.6,000 + Rs.2,400] v. Multiplier: 18 vi. Loss of future income: Rs. 12,09,600 (Rs.5,600 x 12 x

18) vii. Loss of love and  

affection:

Rs. 1,00,000 (Rs. 50,000 each)

viii. Funeral expenses: Rs. 15,000 ix. Loss of estate: Rs. 15,000 x. Loss of Filial  Rs. 80,000 (Rs. 40,000 payable

2014 (3) UC 1687; Karnataka High Court in Lakshman and Ors. v. Susheela Chand Choudhary & Ors  (1996) 3 Kant LJ 570 (DB)

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Consortium: to each of Respondent Nos.1

and 2)

Total compensation awarded: Rs. 14,25,600 alongwith

Interest  @  12% p.a. from  the

date of filing of the Claim

petition till payment.

Out of the amount awarded, Respondent No.1 is

entitled to 60% while Respondent No.2 shall be granted 40%

alongwith Interest as specified above.

10.The Insurance  Company  and Respondent  No.  3  are  held

jointly and severally liable to pay the compensation

awarded.  

The Appellant – Insurance Company will pay the full

amount of compensation awarded hereinabove to

Respondent Nos. 1 and 2 and can recover 50% of the

amount from Respondent No. 3.

 11.The appeal is disposed of in the above terms.

…………………………..J. (R. F. Nariman)

…………………………..J. (Indu Malhotra)

New Delhi September 18, 2018.

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