Motor Vehicles Act, 1988 – Motor Accident Compensation – Negligence – Multiplier – Interest Rate – Loss of Dependency – Future Prospects – Delay in Proceedings.
Case Citation: 2025 INSC 822 : 2025 (7) SCD 5
Court: Supreme Court of India
Bench: Sudhanshu Dhulia; J., *K. Vinod Chandran, J.
Date of Judgment: 14-07-2025
Case Nos.: SLP (C) No. 11340 of 2020 with SLP (C) No. 22136 of 2024
Facts:
The claimants, wife and two minor children of the deceased, sought compensation for loss of dependency following a fatal motor vehicle accident on 18.11.1995, caused by a collision between a car and a truck. The deceased was an engineer with British Telecom, earning in pounds. The Motor Accident Claims Tribunal awarded Rs.79,04,540/-, including loss of dependency, consortium, estate, and funeral expenses, applying a multiplier of 13 and 9% interest. The Insurance Company appealed, challenging negligence, quantum, multiplier, exchange rate, interest rate, and delay in proceedings.
Issues:
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Whether the truck driver’s negligence was correctly established.
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Whether the multiplier of 13 was appropriate, given the wife’s remarriage in 2002.
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Whether the exchange rate and 9% interest rate were justified.
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Whether the claimants were responsible for the delay in proceedings from 1995 to 2017.
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Whether interest on future prospects was permissible.
Held:
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Negligence: The Supreme Court upheld the Tribunal and High Court’s finding of the truck driver’s negligence, based on the FIR and a prior claim petition.
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Multiplier: The multiplier of 13 was affirmed, rejecting the Insurance Company’s contention that it should be reduced to 7 due to the wife’s remarriage in 2002. The Court held that the minor children’s dependency was not affected by the remarriage.
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Exchange Rate: The High Court’s reduction of the exchange rate to Rs.52.3526 per pound (from Rs.54.2601) was upheld, aligning with 1995-1996 rates.
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Interest Rate: The 9% interest rate was deemed appropriate, considering the accident occurred in 1995 and prevailing economic conditions. The Court noted that interest rates for long-term deposits were around 7% or more.
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Delay in Proceedings: The Court rejected the Insurance Company’s claim that the claimants were solely responsible for the delay, stating that delays in legal proceedings cannot be attributed to one party without substantiation. Interest was awarded from the date of filing the claim petition.
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Future Prospects: The Court dismissed the Insurance Company’s objection to interest on future prospects, noting that the delayed receipt of compensation (after 12 years) justified the award, as claimants were deprived of funds during the pendency.
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General Observation: The Court emphasized that the Insurance Company could have provisionally settled the claim to avoid interest liability, as compensation calculations are guided by judicial precedents.
Decision:
The Supreme Court dismissed the appeals, upholding the Tribunal’s award with modifications by the High Court. In SLP (C) No. 11340 of 2020, the award was to be paid with 9% interest from the date of filing, deducting Rs.50,000/- interim compensation. In SLP (C) No. 22136 of 2024, 6% interest was upheld as awarded by the High Court.
Precedents Relied:
The Court referred to precedents on interest rates (12% in the 1980s, 9% in the 1990s) and the principle that interest compensates for delays in receiving compensation.
Disposition: Appeals dismissed. Compensation to be paid with specified interest rates, subject to deductions for interim payments.
