2025 INSC 682 Page 1 of 20

R E P O R T A B L E

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO._____________ OF 2025

(@ SPECIAL LEAVE PETITION (CIVIL) NO S. 2841-2842 OF 2021)

HANUMANTHARAJU B (DEAD) BY LR. ...APPELLANT (S)

VERSUS

M AKRAM PASHA & ANR . …RESPONDENT(S)

JUDGEMENT

NONGMEIKAPAM KOTISWAR SINGH, J.

Leave granted.

2. The present appeals have been preferred against the

common judgment and order dated 14.11.2019 passed by the

High Court of Karnataka at Bengaluru, in MFA No.3569/2016

(MV-I) and MFA No.4867/2016 (MV-I) whereby, the appeals

preferred against the judgment and order dated 21.03.2016

passed in MVC No. 5024/2010 by the Motor Accident Claims

Tribunal, Bengaluru were partly allowed.

Page 2 of 20

The insurance company being Respondent No.2, which

filed the MFA No.4867/2016 before the High Court of

Karnataka, has not challenged the order of the High Court in

the aforesaid MFA No.4867/2016.

3. The facts of the case in brief as can be culled out from the

records are that on 10.05.2010, around 1:45 pm, the original

appellant (who died during the pendency of this appeal), who

was working as a Sub-Inspector (MIN) in the office of DIGP,

CRPF, Yelahanka Base, Bangalore, was driving his motor

cycle to Yelahanka, on Doddaballapur Main Road, Karnataka,

when he met with an accident with an Omni Car bearing

registration KA-04/C-826 owned by the Respondent No. 1 at

J. Valsal Road, CRPF Campus. When the driver of the said car

took a turn towards the right side, the original appellant’s

motorcycle collided with the car and he fell down, sustaining

grievous injuries. On the same day, FIR No. 86/2010 was

lodged against the driver of the car u/s 279, 337 IPC at P.S.

Yelahanka Tr. The medical record indicates that the original

appellant was admitted to the hospital on three different

occasions for nearly 15 days immediately after the accident

Page 3 of 20

and he underwent surgery on his left leg. He also suffered

heart attack due to stress and injuries.

4. Considering the injuries he suffered, a Medical Board was

constituted at the Composite Hospital, Bengaluru to examine

his physical fitness which certified him to be suffering from

physical disabilities at 61.94%. Because of the aforesaid

physical disability, he was unable to perform his duties

properly and did not get due promotion and was subsequently

discharged from service on 22.03.2012.

5. Prior to his discharge, the original appellant filed Motor

Accident Claim MVC No. 5024/2010 on 05.08.2010 claiming

compensation of Rs. 74 Lakhs from the Respondents. The

MACT, Bangalore awarded an amount of Rs. 3,28,422/- to the

original appellant along with 9% interest per annum as

compensation vide its order dated 31.01.2014, taking into

account his last drawn salary of Rs. 36,231/- at the time of

the accident as well as the disability at 61.94% as assessed

by the Medical Board.

6. Being aggrieved by the order passed by the MACT, the

original appellant preferred an appeal being MFA

No.3965/2014(MV) before the High Court of Karnataka,

Page 4 of 20

seeking enhancement of the compensation. In that appeal, it

was agreed by both the parties, i.e. the original appellant and

insurance company, that the matter would require

reconsideration by the Tribunal. Accordingly, the Karnataka

High Court, without expressing any opinion on the merits of

the case, remanded the matter to the Tribunal with the

direction to reconsider, vide order dated 12.01.2015.

Accordingly, the matter was again placed before the MACT.

7. When the matter was placed for reconsideration before the

MACT, in terms of the direction of the High Court, t he

Tribunal appointed a Commissioner, namely, Dr. Shankar R.

Krupad, who had examined the original appellant in Columbia

Asia Referral Hospital where he was initially treated, to give

his opinion on the extent of disability of the appellant. Dr.

Shankar R. Krupad, who testified as CW1, assessed the total

disability of the original appellant at 77.72%. Dr. CS Albal,

the then Chief Medical Officer at Composite Hospital,

C.R.P.F., Yelahanka, Bengaluru was also examined as PW3,

who, as a member of the Medical Board, gave the opinion that

the appellant was suffering from total disability of 61.94%.

Page 5 of 20

Thus, two views on disabilities were available before the

Tribunal.

8. The MACT, in view of lack of material to show whether

the original appellant was wholly rendered incapacitated for

any work or whether he was doing any job post-retirement,

instead of relying either on the assessment made by the

Medical Board (61.94% disability) or the Tribunal appointed

Commissioner (77.72%), held that it would be just and proper

to take the disability at 50% to meet the ends of justice.

9. The Tribunal also deducted income tax and professional

tax from the salary of Rs.36,231/-, thus, assessing the

monthly income to be Rs. 33,761/-.

The Tribunal then applied 50% disability to this figure

and held that the monthly loss of earning of the original

appellant would be Rs. 16,880/-, and Rs. 2,02,560/-

annually. Thereafter, by applying the multiplier of 14 to the

aforementioned amount as the original appellant was about

43 years, the Tribunal held that the original appellant was

entitled to a compensation of Rs.28,35,840/- under the head

of disability, which included the loss of income during the

period of treatment and loss of amenities in life.

Page 6 of 20

10. As regards future medical expenses, though, CW1 had

projected an estimated cost for knee replacement surgery at

Rs.2,75,000/-, the Tribunal found the said amount to be on a

higher side and fixed it at Rs. 50,000/- as just and proper,

even though the opinion of CW1 was not questioned before

the Tribunal by any of the respondents as observed by the

Tribunal itself.

11. Thus, the MACT, after reconsideration, awarded a total

amount of Rs.31,64,896/-, along with interest at the rate of

9% p.a. from the date of filing of the claims petition and after

the determination of the compensation under various heads

as follows:

Sl.

No.

Head Amount

(Rs.)

1. Loss of income on account of

disability taken @ 50%

(including loss of income

during the period of

treatment and loss of

amenities in life (50% of

Rs.33,761 X 12 X 14)

28,35,840/-

2. Injury, pain and suffering 50,000/-

3. Medical expenditure 2,14,056/-

4. Future Medical Expenses 50,000/-

5. Attendant, conveyance &

misc. expenses

15,000/-

Total 31,64,896/-

Page 7 of 20

12. Being aggrieved by the aforesaid award made by the

MACT on reconsideration, both the opposite parties preferred

their respective appeals before the High Court. The original

appellant preferred the appeal which was registered as

M.F.A.No.3569/2016(MV-I) and the appeal filed by the

insurance company was registered as M.F.A.No.4867/2016.

Both the appeals were heard together and disposed of by a

common judgment and order dated 14.11.2019 by the High

Court allowing the appeals partly, which is the subject matter

of challenge by the original appellant before this Court.

13. While partly allowing the said appeals, the High Court,

reduced the amount of compensation to Rs.27,47,634.25/-

rounding off to Rs.27,47,700/-, which is lower than the

amount awarded by the MACT, and the interest was awarded

at 6% per annum. The original appellant, thus aggrieved, has

filed the instant SLP. The insurance company has not

challenged the order of the High Court.

14. From a perusal of the impugned order of the High Court,

it is evident that there was no dispute that the original

appellant was employed as a Sub-Inspector in CRPF with

monthly salary of Rs. 36,231/- and due to the accident, he

Page 8 of 20

was on leave for about a year and a half. Subsequently, on the

basis of the finding of the Medical Board, the original

appellant was discharged from service on which he was given

the monthly pension of Rs.15,247/-. Since the original

appellant was drawing the monthly pension, to determine the

monthly loss of earning, the High Court deducted the said

pension amount from the salary. Thus, the High Court held

that the effective monthly loss of earnings of the claimant was

Rs. 20,984/- i.e. by deducting the pension amount from the

salary.

15. The High Court, based on the opinion of the Medical

Board which assessed the disability of the original appellant

at 61.94%, held that the loss of his earning capacity was

61.94% and accordingly, the same was calculated at

Rs.1,55,969.87/- per annum. Since the original appellant was

about 43 years of age at the time of the accident, the multiplier

of 14 was applied and accordingly, the total loss of earning

was calculated as Rs.21,83,178.25/-.

The High Court, thereafter, added the amounts under

various heads, and computed the compensation amount at

Page 9 of 20

Rs.27,47,63.25/-, which was less than what had been

awarded by the MACT.

16. Before this Court, the original appellant has raised the

following grounds in challenging the order of the High Court:

(i) That the High Court has erroneously reduced the loss

of earning by deducting the pension amount from the

salary.

(ii) Though the total permanent physical disability of

appellant was earlier assessed at 61.94% by the

Medical Board, it was subsequently revised to 77.8%

by the Commissioner appointed by the Tribunal,

which ought to have been accepted by the Tribunal

and High Court.

(iii) The rate of interest of 9% p.a. which was awarded by

the Tribunal was reduced by the High Court to 6%

p.a.

(iv) No amount was awarded in respect of loss of future

prospects.

17. At this juncture, it may be apposite to examine the legal

position regarding the methodology of computation of

compensation in motor accident claims. For computation of

compensation arising out of injury or death due to motor

accidents, a certain amount of uniformity and a consistency

Page 10 of 20

has been arrived at following a series of decisions of this

Court, as well as by amendments of the Motor Vehicles Act,

1988 (“Act”).

As observed in Sarla Verma (Smt.) & Ors. v. Delhi

Transport Corporation & Anr. 2009 6 SCC 121, there are

certain factual aspects which have to be ascertained for

proper calculation of the compensation. Firstly, the age of the

deceased, secondly, the income of the deceased, and,

thereafter, ascertain the loss of earning thirdly, selection of

the proper multiplier to compute the loss and fourthly, other

accidental expenses like travelling/transportation etc.

18. The concept future prospects, though was considered in

Sarla Verma (supra), got firmly settled in the case of

National Insurance Company v. Pranay Sethi (2017) 16

SCC 680. Hence, this has to be taken into consideration while

computing the loss suffered by the original appellant. In

Pranay Sethi (supra)¸ it was held that while determining the

income, the addition of 50% of actual salary to the income of

the deceased towards future prospects, where deceased had

permanent jobs and was below the age of 40 years should be

made. This, however, would be reduced to 30% if the age of

Page 11 of 20

the deceased was between 40 to 50 years and in case of the

deceased was between the age of 50 to 60 years the addition

should be 15%.

However, in the present case, neither the MACT nor the

High Court took into account awarded any compensation on

account of future prospects.

19. It is also now well settled that the amount of

compensation is to be calculated on the basis of last drawn

salary of the injured/deceased in respect of salaried persons

and pension and such retirement benefits enjoyed cannot be

deducted for computing the income, these being statutory

rights receivable by the employee or his legal heirs irrespective

of any unforeseen incident of accidents, fatal injuries etc. and

such pensionary benefit is not directly relatable to the motor

accident. Hence, pensionary benefit could not have been

treated as “pecuniary advantage” liable to be deducted for the

purpose of computation of compensation within the scope of

Motor Vehicles Act, 1988.

For this proposition of law, we may refer to the decision

in Vimal Kanwar & Ors. v. Kishore Dan & Ors. (2013) 7

SCC 476, wherein this Court, by referring to the earlier

Page 12 of 20

decision in Helen C. Rebello v. Maharashtra SRTC (1999)

1 SCC 90, held as follows:-

“19. The aforesaid issue fell for consideration before this

Court in Helen C. Rebello v. Maharashtra SRTC [(1999) 1

SCC 90: 1999 SCC (Cri) 197]. In the said case, this Court

held that provident fund, pension, insurance and

similarly any cash, bank balance, shares, fixed deposits,

etc. are all a “pecuniary advantage” receivable by the

heirs on account of one's death but all these have no

correlation with the amount receivable under a statute

occasioned only on account of accidental death. Such an

amount will not come within the periphery of the Motor

Vehicles Act to be termed as “pecuniary advantage” liable

for deduction. The following was the observation and

finding of this Court: (SCC pp. 111-12, para 35)

“35. Broadly, we may examine the receipt of

the provident fund which is a deferred payment out

of the contribution made by an employee during the

tenure of his service. Such employee or his heirs

are entitled to receive this amount irrespective of

the accidental death. This amount is secured, is

certain to be received, while the amount under the

Motor Vehicles Act is uncertain and is receivable

only on the happening of the event viz. accident,

which may not take place at all. Similarly, family

pension is also earned by an employee for the

benefit of his family in the form of his contribution

in the service in terms of the service conditions

receivable by the heirs after his death. The heirs

receive family pension even otherwise than the

accidental death. No co-relation between the two.

Similarly, life insurance policy is received either by

the insured or the heirs of the insured on account

of the contract with the insurer, for which the

insured contributes in the form of premium. It is

receivable even by the insured if he lives till

maturity after paying all the premiums. In the case

of death, the insurer indemnifies to pay the sum to

the heirs, again in terms of the contract for the

premium paid. Again, this amount is receivable by

the claimant not on account of any accidental death

but otherwise on the insured's death. Death is only

a step or contingency in terms of the contract, to

receive the amount. Similarly, any cash, bank

balance, shares, fixed deposits, etc. though are all

Page 13 of 20

a pecuniary advantage receivable by the heirs on

account of one's death but all these have no co-

relation with the amount receivable under a statute

occasioned only on account of accidental death.

How could such an amount come within the

periphery of the Motor Vehicles Act to be termed as

‘pecuniary advantage’ liable for deduction. When

we seek the principle of loss and gain, it has to be

on a similar and same plane having nexus, inter

se, between them and not to which there is no

semblance of any co-relation. The insured (the

deceased) contributes his own money for which he

receives the amount which has no co-relation to the

compensation computed as against the tortfeasor

for his negligence on account of the accident. As

aforesaid, the amount receivable as compensation

under the Act is on account of the injury or death

without making any contribution towards it, then

how can the fruits of an amount received through

contributions of the insured be deducted out of the

amount receivable under the Motor Vehicles Act.

The amount under this Act he receives without any

contribution. As we have said, the compensation

payable under the Motor Vehicles Act is statutory

while the amount receivable under the life

insurance policy is contractual.”

Thus, this Court has categorically held that any amount

receivable on account of PF, pension or insurance cannot be

deducted from the salary of the victim for the purpose of

determining the income or loss of earning for calculating

compensation. This principle was reiterated in Reliance

General Insurance Co. Ltd. v. Shashi Sharma & Ors. (2016)

9 SCC 627 and National Insurance Company Ltd. v. Birender

& Ors. (2020) 11 SCC 356.

Page 14 of 20

20. Keeping the aforesaid legal position in mind, we shall

examine the issues at hand.

21. As regards computing the loss of income, in the light of the

above referred decisions, it would not be permissible to deduct

the pensionary amount of Rs. 15,247/- from the salary of Rs.

36,231/- as was done by the High Court. Hence, for the purpose

of computing the loss of earning, the said monthly salary of Rs.

36,231/- has to be accepted without deducting the pension

amount.

22. As far as future prospects is concerned, the same cannot be

denied in the teeth of the judgments in Sarla Verma (supra)

and Pranay Sethi (supra), wherein this Court had held that

there should be an addition of 30% of the salary where the age

of the claimant is within 40 to 50 years.

As can be seen from the Signal/SELO message dated

09.01.2012, the original appellant was considered for

promotion. However, because of his discharge from the service

on 22.03.2013, the promotion could not fructify. In any event,

in view of the dictum in Pranay Sethi (supra), the original

appellant would be entitled to an addition of 30% of the income

Page 15 of 20

towards loss of future prospects as the original appellant was 43

years when he met with the accident.

23. Coming to the issue of disability, it may be apposite to

recollect that while the Medical Board had assessed the disability

at 61.94%, the Commissioner appointed by the Tribunal had

assessed it to be 77.72% which was rounded off to 78%. It is

significant to note that while considering the evidence of the

Commissioner (CW1), the Tribunal had noted that the

Commissioner was cross-examined by the Counsel for the

Insurance Company and the Tribunal proceeded to observe that

nothing worth had been elicited to disbelieve or discredit his

evidence. Thus, the Tribunal could not have doubted the

correctness of the assessment made by the Commissioner and

could have accepted the same, yet for a strange reason that there

was no material evidence to show that the original appellant was

rendered completely incapacitated or that he was doing any job

after his discharge from the services, the Tribunal reduced the

disability to 50% holding that it would meet the ends of justice.

24. In spite of the credibility of the subsequent medical opinion

given by the Commissioner as regards the physical disability of

the original appellant not being challenged by the Insurance

Page 16 of 20

Company, nor being doubted by the Tribunal itself, we see no

reason as to why the Tribunal did not accept the same to the

effect that the disability was 78%. What we have also noted is

that the High Court has treated the physical disability of the

original appellant at 61.94%, which was the initial assessment

made by the Medical Board, by ignoring the assessment by the

Tribunal appointed Commissioner, correctness of which was not

doubted even by the Tribunal. No reason has been assigned by

the High Court why it chose to accept the assessment of 61.94%

disability made by the Medical Board over the subsequent

assessment of 78% disability by the Commissioner. It may be

also noted that the subsequent assessment was made during the

pendency of the proceeding before the Tribunal and the

concerned Doctor/Commissioner who had treated the original

appellant made the assessment and had testified before the

Tribunal and cross examined by the Insurance Company and his

evidence had remained unshaken.

Under the circumstances, we are of the view that it would

be just and proper to accept 78% disability in the present case

as assessed by the Tribunal appointed Commissioner.

Page 17 of 20

25. As far as the multiplier is concerned, since there is no

dispute about the age of the original appellant at the time of the

accident, i.e., 43 years, we are also of the view that the

appropriate multiplier would be 14 as had been applied by the

Tribunal and the High Court.

26. We, thus, find merit in the submissions made by the

appellants for enhancement of the compensation amount.

In order to redetermine the quantum of compensation,

the monthly income of the deceased original appellant has to be

ascertained by not deducting the pension from the monthly

income, consequently, it is fixed at Rs. 36,231/- which is the

salary.

Further, since the High Court had failed to award

appropriate amount towards future prospects , and as the

original appellant lost his promotional opportunities because of

the accident and as he was 43 years, we deem it appropriate to

add 30% of his annual income to the income.

27. Since, there is no challenge to the compensation with

reference to other heads as determined by the High Court, we

have not disturbed the same except as regards monthly income,

Page 18 of 20

extent of disability, future prospects and rate of interest.

Accordingly, we are of the view that the compensation awarded

to the original appellant should be enhanced as per the

computation mentioned below –

CALCULATION OF COMPENSATION

(i) Monthly Income

Salary Rs. 36,231/-

Annual Income

Rs. 36,231 x 12

Rs. 4,34,772/-

(ii) Add: Future Prospects @30% of his

annual income.

30% of Rs.4,34,772/-

Rs. 1,30,432/-

Total:

----------------------

Rs. 5,65,204

----------------------

(iii) Apply Multiplier 14 to his annual

income

Rs. 5,65,204 x 14

Rs. 79,12,856/-

(iv) Loss of earning capacity (by applying

the disability to the extent of 78%)

Rs. 79,12,856 x 78%

Rs. 61,72,028/-

(v) Add: Injury, pain and suffering as

granted by the High Court

Rs. 1,00,000/-

(vi) Add: Medical expenditure as

granted by the High Court

Rs. 2,14,056/-

Page 19 of 20

(vii) Add: Attendant, conveyance &

misc. expenses as granted by the

High Court

Rs. 50,000/-

(viii) Add: Loss of amenities as granted

by the High Court

Rs. 1,00,000/-

(ix) Add: Future Medical Expenses as

granted by the High Court

Rs. 1,00,000/-

Total Compensation amount

Rs. 67,36,084/-

28. As far as the rate of interest is concerned, what we have noted

is that Tribunal in the first award made on 31.01.2014 awarded

interest of 9% per annum, and subsequently, when it was

remanded for fresh consideration the Tribunal again awarded

interest at the rate of 9% per annum vide award dated 31.01.2016.

However, the High Court , vide the impugned order dated

14.11.2019, reduced the said interest to 6% per annum, which is

on a lower side. However, we are of the view that it would serve the

ends of justice if the interest is enhanced to 7% per annum.

29. Accordingly, the aforesaid amount of Rs. 67,36,084/- is to be

released in the favour of the appellants at the rate of interest of 7%

simple interest per annum which, according to our view, would

meet the ends of justice, and the interest is to be calculated from

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the date of the filing of the claim application till the realization of

the enhanced compensation.

30. Since both the respondents are jointly and severally liable,

Respondent No. 2 is directed to pay the enhanced compensation

of Rs. 67,36,084/-, with simple interest at the rate of 7% per

annum as directed above, within a period of six weeks from the

date of this order to the appellants. Respondent No. 2 is at

liberty to recover its share from the Respondent No. 1, if any, in

accordance with law.

31. The appeals are accordingly allowed in the above terms

and the common impugned order dated 14.11.2019 passed in

MFA No. 3569/2016 and MFA No.4867/2016 by the Karnataka

High Court is modified to the extent indicated above.

……………………………J.

(SURYA KANT)

….……………….…………………………J.

(NONGMEIKAPAM KOTISWAR SINGH)

NEW DELHI;

MAY 13, 2025