As per case facts, Oriental Insurance Company filed an appeal challenging a Motor Accident Claims Tribunal award of compensation to the family of Som Nath, who died in a motor ...
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IN THE HIGH COURT OF HIMACHAL PRADESH
SHIMLA
FAO No.4108 of 2013
Reserved on:- 25.04.2026
Date of Decision: 20.05.2026
Oriental Insurance Company Ltd. …Appellant
Versus
Radha Krishan & Ors. …..Respondents
Coram:
The Hon’ble Mr. Justice Virender Singh, Judge.
Whether approved for reporting? Yes.
For the Appellants :Mr. Ashwani K. Sharma, Senior
Advocate, with Ms. Mamta,
Advocate.
For the Respondents :Ms. Rajni Gandhi, Advocate, vice
Mr. Anil Kumar God, Advocate, for
respondents No.1 to 3.
Name of respondent No.4 stands
deleted.
Mr. Manohar Lal Sharma, Advocate,
for respondents No.5 and 6.
__________________________________________________________
Virender Singh, Judge
Oriental Insurance Company Limited has filed
the present appeal, under Section 173 of the Motor Vehicles Act,
1998 (hereinafter referred to as the ‘M.V. Act’), against the
award dated 16.03.2013, passed by learned Motor Accident
Claims Tribunal, Bilaspur, District Bilaspur, H.P., (hereinafter
referred to as the ‘learned Tribunal’), in MAC No.9 of 2011, titled
as Radha Krishan and others versus Puspa Gautam & others.
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2. By way of award dated 16.03.2013, the learned
Tribunal has decided the above mentioned claim petition, by
awarding a sum of Rs.24,55,585/- along with interest @ 7.5%
per annum from the date of filing of petition, till deposit of the
amount and the ultimate liability to pay the amount has been
fastened upon the appellant-Oriental Insurance Company.
- 1 3. For the sake of convenience, parties to the
present appeal, are hereinafter referred to, in the same manner,
in which, they were referred to, by the learned Tribunal.
3. 4. Brief facts, leading to filing of the present
appeal, before this Court, may be summed up, as under:-
4.1. 4.1. The claimants, being sons, widow and widowed
mother of Som Nath, have filed the claim petition, under Section
166 of the M.V. Act., seeking compensation, on account of death
of Som Nath, in a motor vehicle accident, involving Vehicle
No.HP-12A-0984, (hereinafter referred as to ‘the offending
vehicle’) owned by respondent No.1, being driven by respondent
No.2 and insured with respondent No.3.
4.2. As per the claim petition, their predecessor-in-
interest, Som Nath was a government servant and was about 55
years of age at the time of accident, which had taken place on
09.01.2011, at about 11:20 AM, at Darlaghat. The accident in
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question had taken place, due to rash and negligent driving of
the driver of the offending vehicle i.e. respondent No.2. The
information regarding accident was given to police of Police
Station, Darlaghat, where, FIR No.5 of 2011 was registered. In
the said accident, Som Nath sustained injuries and he was
taken to private hospital, from where, he was referred to IGMC
Shimla, from where, he was further referred to P.G.I.
Chandigarh, where, he died on 10.01.2011.
4.3. 4.3. According to the claimants, Som Nath was
working in Himachal Pradesh Department of Treasuries,
Accounts and Lotteries and earning Rs.39,000/- per month.
This amount has been bifurcated, by pleading that he was
getting Rs.28,892/- as gross salary, plus Rs.10,000/- from
agriculture pursuits.
4.4. Highlighting their bright past and bleak future,
the claimants have sought the compensation of Rs.30,00,000/-
along with interest @ 18% per annum from the respondents.
5. When put to notice, the claim petition has been
contested by the respondents. Respondent No.1 has filed her
reply to the claim petition, which has been adopted by
respondent No.2, as per order dated 07.03.2012 passed by the
learned Tribunal. Respondent No.1 has contested the claim
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petition, by taking preliminary objections; that the claim petition
is bad for non-joinder or mis-joinder of necessary parties, as the
driver and owner of Bhola Bus Service has not been arrayed, as
party. Contents of the claim petition have mainly been denied,
by pleading that the accident in question had not taken place on
account of rash and negligent driving of the driver.
6. Highlighting their stand, it has been pleaded
that the offending vehicle was being driven, on the extreme left
side of the road and at a controllable and cautious speed; when,
the said vehicle reached at place Darlaghat, then, one person
suddenly alightened-down from Bhola Bus Service and tried to
cross the road without seeing in any direction. Driver of the
offending vehicle applied the brakes and stopped the vehicle,
however, the said person got puzzled and lost his balance and
fell down on the road. Hence, a prayer has been made to
dismiss the claim petition.
7. Oriental Insurance Company has separately filed
its reply, by taking preliminary objections that the claim petition
is not maintainable; the claim petition is vague; the offending
vehicle was being driven, by unauthorized person, who was not
holding any valid and effective license to drive the said vehicle;
the petition is bad for non-joinder of necessary parties; the
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deceased himself was negligent. On merits, the contents of the
claim petition were denied for want of knowledge. Thus, a
prayer for the dismissal of the claim petition has been made.
8. From the pleadings of the parties, following
issues were framed by the learned Tribunal, vide order dated
24.04.2012:
1). Whether the deeased Som Nath died in a motor
accident which took place on 09.01.2011, near village
Darlaghat, District Solan, H.P. due to rash and
negligent driving of vehicle i.e. Tata Sumo No.HP-12A-
0984 by respondent No.2, as alleged ?...OPP.
2). If issue No.1 is proved in affirmative, to what
amount of compensation, the petitioners are entitled
to and from which of the respondents as
alleged ?...OPP.
3). Whether the respondent No.2 was not holding a
valid and effective driving licence to drive the
offending vehicle at the relevant time, as
alleged ?...OPR-3.
4). Whether the offending vehicle was not being plied
without valid documents, as alleged ? ...OPR-3.
5). Whether the petition is bad for non-joinder and
mis-joinder of necessary parties ? OPR-3.
6). Relief.
9. Thereafter, parties to the lis were directed to
adduce evidence. After closure of the evidence, the learned
Tribunal, upon hearing learned counsel for the parties, has
allowed the claim petition, as referred to above.
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10. 10. Feeling aggrieved from the said award, the
Oriental Insurance Company has preferred the present appeal.
Perusal of the grounds of appeal shows that the quantum of
compensation has been assailed, by way of present appeal, filed
by the Oriental Insurance Company. The awarded amount has
been prayed to be reduced, on the ground that at the time of his
death, Som Nath was 56.5 years and being a government
servant, he would have been superannuated, after one and half
year, had the accident not taken place. Thereafter, his income
would have slashed to 50%, as such, a prayer has been made to
reduce the amount of compensation, by applying the principle of
split multiplier, by considering his income, under two heads;
one during his service and second after his retirement.
11. According to the appellant, the learned Tribunal
has wrongly deducted 1/4th of the amount, on account of
personal expenses of deceased and the same should have been
1/3rd, since only the wife and mother of the deceased were
dependent upon him.
12. On the basis of the above facts, Mr. Ashwani K.
Sharma, Senior Advocate, assisted by Ms. Mamta, Advocate,
appearing for the appellant has prayed that the amount of
compensation may kindly be reduced accordingly.
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14. 13. The prayer, so made has been opposed by Ms.
Rajni Gandhi, Advocate, appearing vice Mr. Anil Kumar God,
Advocate for respondent No.1 to 3, on the ground that the
appeal sans merit and the same may kindly be dismissed.
14. It is apt to record herein that the claim petition
has initially been filed by the sons, widow and widowed mother
of Som Nath. During the pendency of the appeal, mother of Som
Nath has expired and as such, her name was ordered to be
deleted, vide order dated 18.07.2024.
15. 15. In this case, Oriental Insurance Company has
preferred the appeal for reducing the amount of award, however,
in order to achieve the legislative intent to provide just
compensation, the evidence, so adduced, by the parties is to be
considered, by this Court to arrive at a conclusion as to whether
the amount of compensation awarded falls within the definition
of ‘just compensation’ or not.
16. This view has been reiterated in a recent
decision of Hon’ble Supreme Court in Sushila and others
versus Sudhakar and another (2026) Live Law Supreme
Court Cases 343 reiterated that the legislative intent with
regard to the endeavour of the Court/Tribunal to award the just
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compensation. Relevant paragraphs-19 and 20 are reproduced
as under:-
“19) In our considered opinion, although the High
Court had enhanced the compensation, it was on the
lower side. The cardinal principle of awarding
compensation in the cases of motor accidents is to
provide a “just compensation” to the victim and/or
the distressed dependents of the deceased. The term
“just” implies that the compensation must be fair,
reasonable, and equitable as per the applicable
legal standards. The compensation should not be
too meagre, nor should it be excessive. The sole
foundation of providing monetary compensation is
to make efforts to put the dependents of the
deceased at the same financial position that they
were in, had the accident not occurred. [See also:
Reshma Kumari and others vs. Madan Mohan and
another, reported in (2013) 9 SCC 65; National
Insurance Co. Ltd. vs. Indira Srivastava & Ors,
reported in (2008) 2 SCC 763; and Divisional
Controller, KSRTC vs. Mahadeva Shetty and
another, reported in (2003) 7 SCC 197]
20) Thus in the light of the settled principle that the
Motor Vehicles Act, 1988(hereinafter referred to as
“M.V. Act”) is a beneficial legislation and the
compensation should be just and equitable, let us
deal with the issues for determination in the present
appeal.”
17. As stated above, the Oriental Insurance
Company has not assailed the award, on the ground of liability,
but, the same has only been assailed, on the ground of
quantum.
16. 18. As per evidence, so adduced, by the claimants,
before the learned Tribunal, Som Nath was working as Senior
Assistant, in the office of Directorate of Land Records and the
salary of Som Nath for the month of December, 2010, was
Rs.28,892/-. He has further deposed that on account of annual
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increment, his salary would have been Rs.30,934/- per month,
in the month of January, 2011. He has proved the Last Pay
Certificate of Som Nath Ex.PW2/A. According to the said
document, the monthly salary of Som Nath was Rs.30,934/-.
19. 19. Now, the question, which arises for
determination before this Court is with regard to the fact, as to
whether, the arguments advanced by the leaned counsel
appearing for the appellant, qua the fact that the claimants No.1
and 2, does not fall within the definition of dependents, as such,
they are not entitled for the compensation in this case; are
sustainable in the eyes of law or not.
20. The said arguments are devoid of merit as a
specific stand has been taken by the claimants, in this case,
that all the petitioners were fully dependent on the earnings of
Som Nath. The said factual position, as asserted in para-24 of
the claim petition, has not been denied specifically by the
respondents, including the present appellant (Insurance
Company).
21. When, the wife of Som Nath appeared in the
witness box as PW-3, she has categorically deposed that both
her sons are unemployed. When, a feeble attempt has been
made by learned counsel appearing for the Insurance Company
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to suggest this witness about the fact that her both sons are
residing separately, she has denied the said suggestion. Merely
because she has admitted that both the sons are married, does
not give any occasion for this Court to draw an inference that
both the claimants were not dependent on the earnings of Som
Nath. The statement of PW-3, qua the fact that both her sons
are unemployed, remained uncontroverted.
22 If the said fact is considered in the light of the
decision of Hon’ble Supreme Court in Laxmibai (dead) through
Lrs. and another versus Bhagwantbuva (dead) through LRs
and others, (2013)4 SCC 97, then the stand taken by PW-3,
qua the fact that both her sons were unemployed, has rightly
been relied upon by the learned Tribunal. Relevant paragraph
40 of the judgment is reproduced as under:-
“xx xx xx 40. Furthermore, there cannot be any
dispute with respect to the settled legal proposition,
that if a party wishes to raise any doubt as regards
the correctness of the statement of a witness, the said
witness must be given an opportunity to explain his
statement by drawing his attention to that part of it,
11 which has been objected to by the other party, as
being untrue. Without this, it is not possible to
impeach his credibility. Such a law has been
advanced in view of the statutory provisions
enshrined in Section 138 of the Evidence Act, 1872,
which enable the opposite party to cross-examine a
witness as regards information tendered in evidence
by him during his initial examination in chief, and the
scope of this provision stands enlarged by Section
146 of the Evidence Act, which permits a witness to
be questioned, inter-alia, in order to test his veracity.
Thereafter, the unchallenged part of his evidence is
to be relied upon, for the reason that it is impossible
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for the witness to explain or elaborate upon any
doubts as regards the same, in the absence of
questions put to him with respect to the
circumstances which indicate that the version of
events provided by him, is not fit to be believed, and
the witness himself, is unworthy of credit. Thus, if a
party intends to impeach a witness, he must provide
adequate opportunity to the witness in the witness
box, to give a full and proper explanation. The same
is essential to ensure fair play and fairness in dealing
with witnesses. (See Khem Chand v. State of HP.,
State of U.P. v. Nahar Singh, Rajinder Pershad v.
Darshana Devi and Sunil Kumar v. State of
Rajasthan. xx xx xx”
23. The Oriental Insurance Company, in the present
case, has also assailed the award on the ground, that Som Nath,
at the time of his death, was about 56.5 years, he was in
government service and he would have attained age of
superannuation after a period of one and half years, had he not
met with fatal accident, as such, his income would be slashed
down to 50%.
24. All these facts have been submitted by the
learned Senior Counsel during the course of the arguments with
a view to apply the split multiplier. The said contention is also
not liable to be accepted in view of the decision of Hon’ble
Supreme Court in Sushila’s case supra, in which, this aspect
has elaborately been considered and it has been held that the
annual income of the deceased would be calculated on the basis
of monthly last drawn salary. The relevant paragraphs 22 and
23 of the Judgment is reproduced, as under:-
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22) In the case at hand before us, both the
Tribunal as well as the High Court had made a
deduction of 50% from the salary of the
deceased on account the fact that only 6 months
of service of the deceased was remaining. In our
considered opinion, the Courts below have erred
in coming to such an unreasonable conclusion. In
the light of the authorities cited above, it is clear
that any deduction which is not related to the
accident, is impermissible in law. Additionally,
as per settled law in the case of Sarla Verma’s
case (supra), the multiplicand is always
determined on the basis of the “annual” income
of the deceased so as to ensure uniformity and
consistency in the calculation of motor accident
claim cases. The fact that the deceased had only
six months of service left does not cast any
aspersion on the fact that had the accident not
occurred, the deceased would have been in
service and earn commensurate to the last
drawn income before the death. Therefore, the
annual income of the deceased would be
calculated on the basis of his monthly last
drawn salary.
23) Thus, while deciding Issue No. 1, we are of
the opinion that no deduction ought to have been
made from the salary of the deceased on
account of duration of service left. The Tribunal
rightly assessed the net salary of the deceased
to be 25,415/- per month and the same would
₹
be considered for the computation of loss of
income.
(self emphasis supplied)
25. In this case, it has also been argued by the
learned Senior counsel appearing for the Insurance Company
that while assessing the annual income of Som Nath during his
lifetime, in order to ascertain the amount of compensation, the
allowances, such as, house rent and other allowance, which,
according to the learned Senior Counsel, are personal in nature,
are liable to be deducted.
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26. The said arguments do not hold water, in view of
the decision of Hon’ble Supreme Court, in Meenakshi versus
Oriental Insurance Company Limited, 2024 ACJ 1647,
wherein, it has been held that house rent allowance, provident
fund loan, provident fund and special allowances ought to be
added, while considering the basic salary of the victim to arrive
at the dependency factor. Relevant paragraphs-8 to 10 of the
judgment, are reproduced, as under:-
“8. In Raghuvir Singh Matolya and Others v. Hari
Singh Malviya 2009 ACJ 1580 (SC), this Court held
that the house rent allowance ought to be included for
determining the income of the deceased. The relevant
paras are extracted hereinbelow for ready reference:-
“(7). Dearness allowance, in our opinion, should form
a part of the income. House rent allowance is paid for
the benefit of the family members and not for the
employee alone. What would constitute an income,
albeit in a different fact situation, came up for
consideration before this Court in National Insurance
Co. Ltd. v. Indira Srivastava [(2008) ACJ 614
(SC)wherein it was held:
“(17). The amounts, therefore, which were required to
be paid to the deceased by his employer by way of
perks, should be included for computation of his
monthly income as that would have been added to his
monthly income by way of contribution to the family as
contra-distinguished to the ones which were for his
benefit. We may, however, hasten to add that from the
said amount of income, the statutory amount of tax
payable thereupon must be deducted.
(18). The term ‘income’ in P. Ramanatha Aiyar's
Advanced Law Lexicon (3rd Edn.) has been defined as
under:
‘The value of any benefit or perquisite whether
convertible into money or not, obtained from a
company either by a director or a person who has
substantial interest in the company, and any sum paid
by such company in respect of any obligation, which
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but for such payment would have been payable by the
director or other person aforesaid, occurring or
arising to a person within the State from any
profession, trade or calling other than agriculture.”
’It has also been stated:
“Income’ signifies ‘what comes in’ (per Selborne, C.,
Jones v. Ogle 42 LJ Ch 336 ‘It is as large a word as
can be used’ to denote a person's receipts (per Jessel,
M.R., Huggins, 51 LJ Ch 938). Income is not confined
to receipts from business only and means periodical
receipts from one's work, lands, investments, etc. AIR
1921 Mad 427 (SB), Ref. 124 IC 511:1930 MWN
29:31 MLW 438 AIR 1930 Mad 626:58 MLJ 337.”
(19). If the dictionary meaning of the word ‘income’ is
taken to its logical conclusion, it should include those
benefits, either in terms of money or otherwise, which
are taken into consideration for the purpose of
payment of income tax or professional tax although
some elements thereof may or may not be taxable or
would have been otherwise taxable but for the
exemption conferred thereupon under the statute.
To the same effect is the decision of this Court in
Oriental Insurance Company Limited v. Ram Prasad
Varma 2009 ACJ 1006 (SC).
8. We, therefore, are of the opinion that ‘dearness
allowance’ and ‘house rent allowance” payable to the
deceased should have been included for determining
the income of the deceased and consequently the
amount of compensation.”
9. Recently in a judgment in National Insurance
Company Ltd. v. Nalini, 2024 ACJ 1637 (SC), t his
Court held that, allowances under the heads of
transport allowance, house rent allowance, provident
fund loan, provident fund and special allowance ought
to be added while considering the basic salary of the
victim/deceased to arrive at the dependency factor.
10. Therefore, components of house rent allowance,
flexible benefit plan and company contribution to
provident fund have to be included in the salary of the
deceased while applying the component of rise in
income by future prospects to determine the
dependency factor. The Accident Claims Tribunal was
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justified in factoring these components into the salary
of the deceased, before applying 50% rise by future
prospects due to future prospects, while calculating
the total compensation payable to the appellant.
(self emphasis supplied)
27. In view of the above, now this Court would
proceed further to determine the fact, whether the just
compensation has been awarded to the claimants or not. The
age of Som Nath at the time his death has been proved to be
56.5 years. Thus, the learned Tribunal has rightly applied the
multiplier of ‘9’.
28. Learned Tribunal has taken the salary of Som
Nath, during his life time as Rs.30,934/- as deposed by PW-2
Kundan Sharma, Senior Assistant, Director of Land Records
Shimla. As per the document Ex.PW-1/A, total salary of Som
Nath has been shown as 30,934/-, but the said salary is for the
period of 01.12.2010 to 10.01.2011. The accident in question
has taken place on 09.01.2011. Meaning thereby the said
document Ex.PW-1/A does not depict the true picture, as the
salary of the deceased is to be considered at the time of his
death and according to the deposition PW-2, after the annual
increase in the salary, the same would be Rs.30,934/- from the
month of January, 2011. Certainly, the salary for the month of
January, 2011 would be payable in the month of February,
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2011, whereas, Som Nath has expired on 10.01.2011. In such
situation, the document i.e. salary slip for the month of
December, 2010 as produced by the claimants on 22.03.2011
along with the other documents can be taken into consideration.
The document produced by a party even if, not exhibited, can be
taken into consideration, to the disadvantage of the party, which
has produced the same. As such, the salary of Som Nath is
proved to be Rs.28,892/- per month.
29. Hon’ble Supreme Court in case National
Insurance Company Limited versus Pranay Sethi and others ,
reported in (2017), 16 Supreme Court Case 680 has
mandated that some addition is required to be given on account
of future prospectus for all the category of persons and for
different ages with permanent job, self employed or fixed salary.
Relevant paragraphs 52, 59.3, 59.4, 59.5, 59.7, 59.8 are
reproduced as under:-
“52. As far as the conventional heads are concerned, we
find it difficult to agree with the view expressed in
Rajesh. It has granted Rs. 25,000/- towards funeral
expenses, Rs. 1,00,000/- loss of consortium and Rs.
1,00,000/- towards loss of care and guidance for minor
children. The head relating to loss of care and minor
children does not exist. Though Rajesh refers to Santosh
Devi, it does not seem to follow the same. The
conventional and traditional heads, needless to say,
cannot be determined on percentage basis because that
would not be an acceptable criterion. Unlike
determination of income, the said heads have to be
quantified. Any quantification must have a reasonable
foundation. There can be no dispute over the fact that
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price index, fall in bank interest, escalation of rates in
many a field have to be noticed. The court cannot remain
oblivious to the same. There has been a thumb rule in
this aspect. Otherwise, there will be extreme difficulty in
determination of the same and unless the thumb rule is
applied, there will be immense variation lacking any kind
of consistency as a consequence of which, the orders
passed by the tribunals and courts are likely to be
unguided. 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 revisit should not be fact-centric or quantum-
centric. 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. We are disposed to hold so because that will
bring in consistency in respect of those heads.
59.3. While determining the income, an addition of 50%
of actual salary to the income of the deceased towards
future prospects, where the deceased had a permanent
job and was below the age of 40 years, should be made.
The addition should be 30%, if the age of the deceased
was between 40 to 50 years. In case the deceased was
between the age of 50 to 60 years, the addition should be
15%. Actual salary should be read as actual salary less
tax.
59.4. In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established
income should be the warrant where the deceased was
below the age of 40 years. An addition of 25% where the
deceased was between the age of 40 to 50 years and 10%
where the deceased was between the age of 50 to 60
years should be regarded as the necessary method of
computation. The established income means the income
minus the tax component.
59.5. For determination of the multiplicand, the
deduction for personal and living expenses, the tribunals
and the courts shall be guided by paragraphs 30 to 32 of
Sarla Verma which we have reproduced hereinbefore.
59.7. The age of the deceased should be the basis for
applying the multiplier.
59.8 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 aforesaid amounts should be enhanced
at the rate of 10% in every three years.”
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30. In view of the above considering the age of Som
Nath, at the time of his death which has been proved as 56.5,
15% amount is liable to be added in the income on account of
future prospectus. The monthly gross salary of Som Nath is held
to be Rs.28,892/- per month, adding 15% on account of future
prospects, his salary for the purpose of ascertaining the income
of Som Nath thus, comes to Rs.33,226/-, or to say
Rs.3,98,712/- per annum.
31. In order to ascertain the established income,
tax component is liable to be deducted, out of the said amount,
in terms of tax rates, as applicable, in the financial year 2010-
11. On deducting Rs.1,60,000/-, on account of exempted
annual income, the amount comes to Rs.2,38,712/. After
deducting tax @ 10% with education cess @ 3%, total tax
component, thus, comes to Rs.24,587/-. Thus, after deducting
tax component, the total annual income of Som Nath comes to
Rs.3,98,712-Rs.24,587/-=Rs.3,74,125/-.
32. Keeping in view the number of dependents,
1/3rd of the income is liable to be deducted, towards personal
expenses, had Som Nath, been alive and his contribution
towards his family comes to Rs.2,49,417/- per annum.
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33. Considering the fact that the age of the
deceased has been proved to be 56.5 and in view of law laid
down by Hon’ble Supreme Court in Sarla Verma versus Delhi
Transport Corporation and Another, (2009) 6 Supreme
Court Cases 121, the learned Tribunal has rightly applied the
multiplier of ‘9’ in the present case, which does not require any
interference.
34. The leaned Tribunal has awarded a sum of
Rs.10,000/- under the head ‘loss of consortium’, Rs.10,000/-
under the head ‘funeral charges’ and Rs.5,000/- under the head
‘loss of estate’. The same is liable to be enhanced in view of the
decision of the Hon’ble Supreme Court in Pranay Sethi’s case
(supra). Relevant paragraphs 59.8 of the judgment is
reproduced, as under:-
59.8. 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 aforesaid
amounts should be enhanced at the rate of
10% in every three years.”
35. Thus, the loss of contribution comes to
Rs.2,49,417x9=Rs.22,44,753/-.
36. In view of the decision of Hon’ble Supreme Court
in Magma General Insurance Company Limited vs. Nanu
Ram @ Chuhru Ram and others, (2018) 18 SCC 130 , all the
20 ( 2026:HHC:18699-
DB )
claimants are held entitled for the amount under the head loss
of consortium.
37. In addition to this, claimants are also entitled
for the enhanced amount of compensation under conventional
head i.e. loss of estate, loss of consortium and funeral expenses.
The entitlement of the claimants, thus, ascertain as under:-
1.Loss of contribution=Rs.22,44,753/-
2.Loss of estate = Rs.19,500/-(Rs.15,000/-+Rs.4500-)
3.Funeral expenses = Rs.19,500/-(Rs.15,000/-+Rs.4500/-)
4.Loss of consortium= Rs.1,56,000/- (Rs.52,000 x 3)
Total= Rs.24,39,753-(Rs.22,44,753/-+
Rs.19,500/-+Rs.19,500/- +Rs.1,56,000/-)
38. The compensation under the head ‘loss of
consortium’ is given only to claimants No.1 to 3, as the 4
th
claimant Makori Devi has expired, and her name has been
ordered to be deleted, vide order dated 18.07.2024.
39. Thus, the claimants are held entitled for a sum
of Rs.24,39,753/-. The rate of interest, which has been awarded
by the learned Tribunal does not require any interference.
40. In view of the above, the amount of
compensation is ordered to be reduced from 24,55,585/- to
Rs.24,39,753/-
21 ( 2026:HHC:18699-
DB )
41. Consequently, the present appeal is allowed. The
awarded amount is reduced, in the above terms. The claimants
are held entitled for the amount of Rs.24,39,753/-along with
interest @ 7.5%, from the date of filing of the petition. In view of
the death of claimant No.4, Makori Devi, now, the amount of
compensation is ordered to be apportioned against claimants
No.1 to 3, as under:-
Claimants No.1 & 2 (sons) = 20% each.
Claimant No.3 (widow) = 60%
42. The award passed by the learned Tribunal is
modified in the above terms.
43. Memo of costs be prepared.
44. Pending application(s), if any, are also disposed
of. Record be sent back.
(Virender Singh)
Judge
May 20, 2026
(subhash)
In a significant ruling concerning Himachal Pradesh High Court jurisprudence on Motor Accident Claim Compensation, the court recently rendered a detailed judgment in FAO No.4108 of 2013, decided on May 20, 2026. This case, involving Oriental Insurance Company Ltd. as the appellant against Radha Krishan & Ors., underscores the meticulous approach of the judiciary in ensuring 'just compensation' to victims' families and is now available for analysis on CaseOn.in.
The appeal challenged an award passed by the Motor Accident Claims Tribunal (MACT), Bilaspur, dated March 16, 2013, which granted Rs.24,55,585/- with 7.5% interest to the dependents of the deceased, Som Nath. Oriental Insurance Company sought a reduction in this amount, raising several points of contention regarding the calculation of compensation.
In an appeal by Oriental Insurance Company Ltd. challenging a Motor Accident Claims Tribunal award, did the Himachal Pradesh High Court appropriately apply principles of motor accident claim compensation to determine 'just compensation' for the dependents of the deceased Som Nath, particularly concerning the inclusion of future prospects, treatment of various allowances, deduction for personal expenses, and the application of conventional heads, leading to a modified award?
The High Court's decision was guided by several key Supreme Court precedents:
The appellant, Oriental Insurance Company, primarily sought a reduction in the compensation amount on grounds related to the deceased's age (56.5 years, near superannuation), the appropriate deduction for personal expenses, and the dependency status of the deceased's married sons. The High Court addressed each point meticulously:
The appellant argued that the deceased's sons, being married, might not be considered dependents. However, the High Court rejected this, relying on the unchallenged testimony of the deceased's wife (PW-3), who unequivocally stated that both her sons were unemployed. Citing the principle from Laxmibai (dead), which emphasizes reliance on uncontroverted evidence, the Court upheld the dependency of the sons.
A key contention was the application of a 'split multiplier' given Som Nath's age and proximity to retirement. The appellant argued that his income would significantly decrease post-retirement. The High Court firmly rejected this, referring to the recent Supreme Court decision in Sushila. This ruling clearly states that no deduction should be made from the salary on account of the duration of service left, and the annual income should be calculated based on the last drawn salary. Consequently, following Pranay Sethi, 15% was added for future prospects, applicable for deceased persons aged between 50 and 60 years.
The Court further clarified that various allowances, which are not purely personal but contribute to the family's financial well-being, must be included in the income for calculating dependency. Referencing Meenakshi and Nalini, the Court held that house rent allowance, provident fund loan, provident fund, and special allowances should be added to the basic salary to arrive at the true dependency factor.
Legal professionals often navigate complex calculations in such cases, and this is where CaseOn.in's 2-minute audio briefs prove invaluable, assisting in quickly grasping the nuances of these specific rulings and their implications for compensation assessment.
Based on the evidence, the monthly gross salary of Som Nath was determined to be Rs.28,892/-. With a 15% addition for future prospects (as per his age group), his monthly income for dependency purposes rose to Rs.33,226/-, totaling Rs.3,98,712/- annually. After deducting the applicable tax component (Rs.24,587/-) for the financial year 2010-11, the net annual income for dependency was established at Rs.3,74,125/-.
Given the number of dependents (widow and two sons, after the mother's demise during the appeal), 1/3rd of the income was deducted for personal expenses, bringing the annual contribution to the family to Rs.2,49,417/-. A multiplier of '9' was applied, aligning with the deceased's age as per Sarla Verma, resulting in a loss of contribution amounting to Rs.22,44,753/-.
The High Court enhanced the awards under conventional heads as per Pranay Sethi guidelines, which stipulate a 10% enhancement every three years. Accordingly, Loss of Estate and Funeral Expenses were increased from Rs.15,000/- to Rs.19,500/- each, and Loss of Consortium (awarded per claimant) was increased from Rs.40,000/- to Rs.52,000/-. With three eligible claimants (the widow and two sons), the total for loss of consortium was Rs.1,56,000/-.
After this detailed recalculation, the total compensation was slightly reduced from the MACT's awarded sum of Rs.24,55,585/- to Rs.24,39,753/-, with interest at 7.5% per annum. The final amount was apportioned among the claimants: 60% to the widow and 20% to each son.
The Himachal Pradesh High Court, in this instance, meticulously applied the principles laid down by the Supreme Court to ensure that the compensation awarded was 'just and equitable'. While the appeal by Oriental Insurance Company Ltd. was technically 'allowed' for recalculation, the Court largely rejected the appellant's primary arguments for a drastic reduction based on the split multiplier and non-dependency of sons. Instead, it reaffirmed the inclusion of various allowances, future prospects, and enhanced conventional heads, leading to a minor adjustment in the total award. This judgment serves as a robust re-affirmation of the claimant-centric approach mandated by the Motor Vehicles Act.
This ruling is crucial for legal professionals and students for several reasons:
All information provided in this article is for informational purposes only and does not constitute legal advice. Readers are advised to consult with a qualified legal professional for advice on specific legal matters.
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