| CITATION | 2024 INSC 180 |
| YEAR OF JUDGMENT | 2024 |
| THE ORIENTAL INSURANCE COMPANY | Civil law (motor vehicle act, 1988) |
| PLAINTIFF | VETHAMBAL |
| DEFENDANT | THE OREINTAL INSURANCE COMPANY |
| BENCH | Rajesh Bindal, C.T. Ravikumar. |
Introduction
The case Vethambal and Others v. The Oriental Insurance Company and Others revolves around a tragic motor vehicle accident and its consequential claim for compensation under section 167A of the Motor Vehicles Act, 1988. Claimants, the appellants being the family members of deceased Ravisankar, seek proportional and reasonable compensation for mental and emotional loss due to the untimely demise of a sole breadwinner. The fact raises a lot of issues concerning the ability to evaluate the compensation in such cases, positioning the demands of the claimant and the obligations of the insurer. The following treatment provides a detailed analysis of the fact, law, argument, social principle used by the court, the decision made, and the implication of the case.
Facts of the Case
Ravisankar of 52 years on this date since, 9th Dec 2012 was involved in a fatal one on his TVS Star City bike. The car, covered by the respondent, The Oriental Insurance Company, had an accident around 8:30 PM. The following morning, the police registered an FIR no. 442 of 2012 at the Kalakkaadu Police Station in Tirunelveli District. The claimants—the mother, wife, daughter, and son of the deceased—then filed a claim petition under M.C.O.P. No. 281 of 2013 on the Motor Accident Claims Tribunal (MACT), Tirunelveli, asking for a compensation of ₹ 1 crore.
The deceased had many careers, including farming, dairy production, and contracts for government services. Some of the farming activities he underscored are bananas, coconuts, and rice farming. Also, he controlled a dairy farm that supplied milk as well as coconuts to a nearby school and was also a government contractor to earn a lot of money. The claimants argue that his death precipitated the family into further economic woes because he was the breadwinner of the family.
The Tribunal first analyzed the monthly wage of the deceased at ₹50,000, and the final compensation given was ₹51,64,550 in total. Nonetheless, overruling the calculation of the monthly income at ₹20,000, the High Court reduced the compensation to ₹22,48,000. However, dissatisfied with this loss, the claimants sought the appraisal of the Supreme Court to try and reinstate the Tribunal’s award.
Issues Raised
- What was the appropriate monthly income of the deceased for calculating compensation?
- Was the High Court’s reduction of compensation justified under the principles of the Motor Vehicles Act, 1988?
Arguments of the Plaintiff
The appellants presented the following arguments:
Altogether as a farmer, a dairy man, and a contractor with the government, the now deceased amassed a lot of money. Documents that provide support, like receipts (Ex. P12), statements from the bank (Ex. P13), and the testimony of a witness (PW3), confirmed his income:
₹8,52,447 was earned for selling dairy products and coconuts to Donavoor Santhosha Vidhayalaya School in the past 14 months.
₹7,29,900 earned from paddy farming and ₹16,36,398 earned from banana farming.
₹6,00,000 annually through government-related businesses.
The rest of the family of the deceased consisted solely of dependents who benefited from his earnings. Before the accident, there was his fertile, cultivated land, but after the accident, everything remained sterile and lifeless because there was no work and skill.
Even the income assessed by the Tribunal at ₹50,000 per month was already considered a high measure of the candidate’s ability to pay, especially when the individual assertively took into consideration possible earning capacity and other inputs of the deceased.
Maybe it is because no text was given for paraphrasing, but from recent papers and books, it is evident that there has been tremendous progress. Could you give me the text that you would like me to rewrite, and I will be glad to do it?
Arguments of the Defendant
The respondents, represented by the Oriental Insurance Company, countered with the following points:
The claimants seemed to exaggerate the income of the deceased. For instance, the earnings were hinged on the agricultural land, which remained productive, and the productivity could not be associated with the income of the deceased person.
Financial data revealed that earnings from government contracts were weak in documentation and had an irregular pattern.
Compensation should be accurate with moderate to high numbers; one should avoid using misleading or inflated numbers. The High Court evaluation of ₹20,000 was reasonable and, moreover, based on facts.
The compensation that has been awarded should not make a windfall for the claimants but should adequately compensate for their losses.
Principle Applied
The Motor Vehicles Act provided some guidelines for the decision of the supreme court under the section of ‘fair and just compensation.’
It emerges that compensation must be put forth by the dependents to ensure that they capture the amount of money lost due to the death of the deceased.
Explaining the factors that affected enhancement, the Court adopted the multiplier method prescribed by the Supreme Court in the case of Sarla Verma v. DTC and Pranay Sethi v. National Insurance Co. Ltd., based on the age of the employee, the salary that he used to receive, and the number of dependents that he left behind.
Judgment
The Supreme Court reworked the income of the deceased at ₹35,000 per month, and rightly so, as the deceased was earning diversified income. The revised compensation was calculated as follows:
Interest at 8% per annum was awarded from the filing date of the claim petition. The High Court’s judgment was modified, and the appellants’ compensation was increased to ₹38,81,500.
| Head | Amount (₹) |
| Monthly Dependency | 35,000 |
| Future Prospects (10%) | 3,500 |
| Personal Expenses Deduction (25%) | 9,625 |
| Total Dependency | 28,875 |
| Multiplier | 11 |
| Compensation | 38,815.00 |
| Loss of Estate | 15,000 |
| Funeral Expenses | 15,000 |
| Loss of Consortium | 40,000 |
| Total | 38,81,500 |
Analysis
The Supreme Court’s ruling emphasized the following:
Thus, the Court did take into consideration every conceivable stream of income—farming, milking of cows, and government business—which helped to ensure that it made a very objective determination.
The change in the compensation provided fair value for the loss of the claimants and the responsibility of the insurer. They have protected against both inadequate remuneration and the inequitable gain of the next person.
By this ruling, justice and symmetry in the calculation of compensation were maintained and supported by following established cases, including that of Sarla Verma and Pranay Sethi.
The men of the court understood the financial and emotional struggles made by the claimants, providing them compensation concerning their loss.
Conclusion
For the purpose of this case, let us consider Vethambal v. This shows the importance of an impartial and—besides the quantitative dimension—documented approach to motor accident compensation claims, which Oriental Insurance Co. encompasses. While the compensation of ₹ 38,81,500 has been arrived at considering the kind of work done by the deceased and the assistance required by his dependents. Hence, in relation to the later cases, this ruling helps to support fairness and justice in compensation law.
References
- Motor Vehicles Act, 1988
- Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121
- National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680
- https://taxpublishers.in/ShowCR?17655200?a0
- https://indiankanoon.org/doc/52825578/
This article was written by Tejasv P Arora, a student at Jindal Global Law School and intern at Legal Vidhiya.
Disclaimer: The materials provided herein are intended solely for informational purposes. Accessing or using the site or materials does not establish an attorney-client relationship. The information presented on this site is not to be construed as legal or professional advice, and it should not be relied upon for such purposes or used as a substitute for advice from a licensed attorney in your state. Additionally, the viewpoint presented by the author is personal.
‘Social Media Head’ and ‘Case Analyst’ of Legal Vidhiya.
0 Comments