Motor Vehicle Accident | SC gives wider interpretation to ‘legal representative’, includes financially dependent father & younger sister while enhancing compensation

Supreme Court: In a batch of civil appeals by the dependents of the deceased against the Madhya Pradesh High Court’s decision, seeking enhanced amount of compensation under the Motor Vehicles Act, 1988 on account of death of 24-year-old deceased, the Division Bench of Sanjay Karol and Prashant Kumar Mishra, JJ. allowed the appeal and modified the amount from Rs.9,77,200/- to Rs. 17,52,500/-.

Background

The deceased, aged 24 years, was travelling in an Auto (‘offending vehicle’) along with other passengers, when the driver overturned the vehicle, leading to his death on the spot. The dependents of the deceased/ appellants filed a claim petition before the Tribunal seeking compensation of Rs.28,50,000/-, submitting therein that the deceased was earning up to Rs.35,000/- per month, by doing wholesale business of fruit selling to meet the daily expenses of the family. The Tribunal awarded compensation of Rs.9,77,200/- along with simple interest @ 7% p.a. to the dependents, by taking the notional income of the deceased as Rs.4,500/- per month and fixing the prospects at 40 per cent.

Being aggrieved by the amount of compensation awarded, the dependents filed an appeal before the High Court. The High Court, vide the impugned decision affirmed the Tribunal’s award of compensation. Hence, the present appeals.

Analysis and Decision

The Court refused to agree with the view taken by the Tribunal and the High Court on the monthly salary of the deceased. The Court said that in the absence of any material on record, the dependents were not able to prove the income of the deceased, however, it was imperative that the accident took away such a potential earning member of the family.

Referring to Notification of 2016 under the Minimum Wages Act, 1948, the Court noted that the monthly income for an unskilled worker was fixed at Rs.6,500/-. Consequently, the annual income of the deceased came to Rs.78,000/-.

Regarding the contention that the High Court did not apply the appropriate multiplier while calculating the compensation, the Court relied on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, wherein, it is settled that the multiplier for a person of the age of 24 years must be 18 and the same was correctly taken by the High Court.

Further, dealing with the issue of whether the deduction of annual income as 1/3rd and not considering the father and younger sister was justified, the Court referred to Gujarat SRTC v. Ramanbhai Prabhatbhai, (1987) 3 SCC 234, wherein, it was observed that a legal representative is one, who suffers on account of death of a person due to a motor vehicle accident and need not necessarily be a wife, husband, parent or child. Placing reliance upon N. Jayasree v. Cholamandalam MS General Insurance Company Ltd., (2022) 14 SCC 712, wherein, it was said that the term “legal representative” should be given a wider interpretation for the purpose of Chapter XII of the MV Act and it should not be confined only to mean the spouse, parents and children of the deceased, the Court held that the father and younger sister of the deceased, both not financially independent, were falling under the definition of legal representatives to claim the compensation under the Motor Vehicles Act, 1988, and they were considered as dependents upon the income of the deceased, as he was doing wholesale business of selling fruits to meet the day-to-day expenses of the family. Therefore, the Court said that the deduction made towards the personal expenses of the deceased should have been 1/4th as the number of dependent family members was five.

Thus, considering the aforesaid, the Court enhanced the compensation to Rs. 17,52,500/-.