The Andhra Pradesh High Court increased the compensation awarded to the family of a person who died in a car accident in a case where the Motor Accidents Claims Tribunal had not considered the loss of future prospects since the deceased was not a permanent employee where he worked.

The Court was hearing an appeal under Section 173 of the Motor Vehicles Act (MV Act), 1988 for enhancement of the amount of compensation awarded by the Motor Accidents Claims Tribunal. The appeal was filed by the deceased's family, with the first appellant being the deceased's wife.

The Division Bench of Justice Ravi Nath Tilhari and Justice N. Vijay considered the precedents set by the Supreme Court on the issue of awarding compensation for loss of future prospects and increased the compensation awarded by the Tribunal as well as the rate of interest from the date of claim petition. The Bench said, "With respect the grant of future prospects, even if we go by the finding that the deceased was not in the permanent job, the claimants are entitled for awarding, the future prospects."

Advocates K.V. Raghuveer and C.Vikram Chandra appeared for the appellants and Advocate B.Parameswara Rao appeared for the respondent.

The Tribunal had concluded that the accident had occurred due to the rash and negligent driving by another driver leading to head injuries and on the spot death of the first appellant's husband. The offending driver and the insurance company were held jointly and severally liable to pay compensation.

On the point of quantum of compensation, the Tribunal considered the age of the deceased and his salary after deducting taxes and so on. It did not consider him to be a permanent employee of the organisation at which he worked and hence, did not consider any amounts for future prospects.

The Court noted the Supreme Court's judgment in National Insurance company limited v. Pranay Sethi (2017) where it laid down a formula for calculating compensation towards future prospects based on considerations of age of the deceased and job status.

In that case, the Court had also said that in cases where the deceased was not earning or was self-employed at the time of the accident or death, "his income is to be determined on the guess work looking to the circumstances... Once such an amount is arrived at he shall be entitled to the addition over the future prospect/future rise in income. It cannot be disputed that the rise in cost of living would also affect such a person."

It also noted the Supreme Court's judgment in Kirti v. Oriental Insurance Company Ltd. (2021) where it rejected the argument by the insurance company that no future prospects ought to be allowed for those with notional income, considering the constant inflation-induced increase in wages. Future prospects were also considered in a case where the deceased was a student and was not earning by the Supreme Court in Meena Pawaia v. Ashraf Ali (2021).

Considering that the deceased was less 40 years old and worked in a private organisation, the Court concluded the claimants were entitled to 40% of the established income towards future prospects. Consequently, the Court increased the compensation granted by the Tribunal from ₹70,76,000 to ₹95,48,300. The Court also increased the rate of interest from 7.5 percent per annum to 9 percent per annum from the date of claim petition.

Cause Title: Siddinooru Aswini v. Umesh Odapally Mahesh [M.A.C.M.A.NO: 2993/2017]

Appearance:

Appellant: Advocates K.V. Raghuveer and C. Vikram Chandra,

Respondent: Advocate B.Parameswara Rao

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Justice Ravi Nath TilhariJustice N. Vijay

Tushar Kohli