Chholamandalam Ms General Ins.Co.LTD. vs. Smt. Varsha Yadav

Held

The Court held that the Tribunal erred in determining the deceased's income based solely on photographs to conclude he was running a canteen and earning Rs.10,000/- per month, as no documentary evidence or witness testimony supported this. The Court also found no proof of the deceased earning Rs.20,000/- per month from supplying milk. Consequently, the deceased's monthly income was determined as Rs.7125/- based on minimum wages for an unskilled labourer, considering the accident date of 22.06.2017. Future prospects (40%) and a multiplier of 18 were applied, leading to a total loss of dependency of Rs.14,36,400/-. The Court awarded Rs.40,000/- each to the parents for loss of filial consortium (total Rs.80,000/-) and Rs.30,000/- for loss of estate/funeral expenses. The total compensation was thus fixed at Rs.15,86,400/-. Regarding interest, the Court reduced the rate from 8% to 6% per annum, citing prevailing interest rates and FDR rates, and referencing Supreme Court judgments on just and reasonable interest. The compensation awarded by the Tribunal (Rs.20,86,000/-) was reduced by Rs.4,99,600/-.

Facts

Two appeals arose from a common award by the Motor Accidents Claims Tribunal (MACT), Sagar. MA No.1554/2020 was filed by the claimants (Smt. Versha Yadav and others) seeking enhancement of compensation following the death of Vijay Yadav. MA No.2010/2019 was filed by the insurance company (Cholamandalam MS General Insurance Co. Ltd.) seeking reduction of compensation and the rate of interest. The accident occurred on 22.06.2017. The claimants argued that the deceased's income was underestimated, and certain heads of compensation were not awarded. The insurance company contended that the tribunal wrongly relied on photographs to determine the deceased's income from a canteen and that the awarded interest rate was excessive.

Key Issues

1. Whether the Tribunal erred in determining the deceased's monthly income based on running a canteen, and if so, what should be the correct monthly income for calculating compensation? (Question of fact and law, concerning principles of evidence and assessment of income). 2. Whether the Tribunal erred in awarding interest at the rate of 8% per annum, and if so, what should be the appropriate rate of interest? (Question of law, concerning Section 171 of the Motor Vehicles Act, 1988 and relevant precedents). Contentions: Petitioner/Claimants: Argued that the Tribunal wrongly held they failed to prove the deceased's income from supplying milk and that the assessed income was too low. They also contended that the wrong multiplier was applied, future prospects were not awarded, and compensation for loss of consortium, funeral expenses, and loss of estate was not granted. Revenue/State (Insurance Company): Argued that the Tribunal wrongly relied on photographs to conclude the deceased earned at least Rs.10,000/- per month from a canteen, as no documentary evidence like GST registration or examination of university personnel was produced. They also argued that the 8% interest rate was excessive and cited a Coordinate Bench decision and Supreme Court pronouncements.