Future Prospects should be Taken into Consideration while Awarding Compensation in Motor Vehicle Accident Case: Supreme Court 

accident, motor vehicle

The Supreme Court ruled that future prospects should be taken into consideration while awarding compensation in Motor Vehicle Accident case.  


The Appellants are the heirs and legal representatives of Rajesh (deceased) who died as a result of a motor accident in 2010. He was traveling in a Maruti Alto Car on reaching Badwah Road, a bus being driven by Respondent in a rash and negligent manner crashed into the Rajesh’s car, resulting in Rajesh (deceased) receiving grievous injuries on various body parts, he later succumbed to the injuries during treatment. He is survived by his two wives, three children and his parents, who are the appellants before the Court.


Counsel appearing for the Appellants contended that the High Court and the Tribunal failed to consider the deceased’s Income Tax Return filed for the year 2009-2010, the HC rejected the ITR on the ground that earlier returns were not filed while the Income Tax Inspector was examined.

He submitted that the High Court and Tribunal failed to observe that since the number of dependents exceeded 6 members, the deduction made towards personal expenses ought to be one-fifth (1/5th). In the present case there are 7 dependents of the deceased.  


The division bench of Justice Krishna Murari and Justice Bela M. Trivedi noted that the Tribunal and the High Court both committed grave error while estimating the deceased’s income by disregarding the Income Tax Return of the Deceased. The appellants had filed the Income Tax Return (2009- 2010) of the deceased, which reflects the deceased’s annual income to be Rs.1,18,261/-, approx. Rs.9,855/- per month.

The court said that the provisions of the Motor Vehicles Act, 1988 gives paramount importance to the concept of ‘just and fair’ compensation. 

It was observed by the court that the deceased is survived by seven (7) dependents, hence in view of the Sarla Verma judgment and the Constitution bench judgment of this Court in Pranay Sethi the appropriate deduction for personal expenses for deceased ought to be 1/5th only and not 1/4th as applied by the Tribunal and High Court.

The court opined that the High Court ought to have added the increment of 10% to the conventional heads as per the dictum in Pranay Sethi.

The court held that the total compensation payable to the Appellants is Rs.25,91,388/- with interest at 9% per annum from the date of filing of the application till the date of payment of the compensation to the Appellants.  

Case title: Smt. Anjali & Ors. v/s Lokendra Rathod & Ors.

Citation: Civil appeal no. 009014 of 2022

Date: 06.12.2022 

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