Motor Accident Compensation Can Exceed Amount Claimed If Evidence Justifies Higher Award: AP High Court

The Andhra Pradesh High Court has held that a Motor Accident Claims Tribunal must award the “just compensation” established by the evidence and cannot restrict it merely because the claim petition sought a lower amount.

Section 168 of the Motor Vehicles Act, 1988 empowers the Claims Tribunal to determine and award the amount of compensation which appears to it to be “just” in respect of the loss caused by the motor accident.

Dismissing an appeal filed by United India Insurance Company Limited, Justice Tuhin Kumar Gedela modified the Tribunal's award and enhanced the compensation payable to the deceased's family from Rs. 28 lakh to Rs. 29.89 lakh with 7.5% interest per annum.

The Court observed:

“A careful perusal of the impugned Award reveals that although the Tribunal categorically recorded a finding that the claimants were entitled to compensation of Rs.28,39,644/-, restricted the Award to 28,00,000/- solely on the ground that the claim petition was confined to the said amount. In the considered opinion of this Court, the restriction is unsustainable. Once the Tribunal quantified the just compensation on the basis of the evidence available on record, it ought to have awarded the said amount instead of restricting it to the amount claimed in the petition. Such restriction defeats the very object of awarding 'just compensation' under Section 168 of the Motor Vehicles Act.”

The case arose from a motor accident in which the deceased was travelling in a Maruthi Van from Kanipakam to Tirupati. Near Thondavada Village Cross Road on the Chittoor-Tirupati Road, a Milk Tanker coming from the opposite direction allegedly driven rashly and negligently dashed against the Maruthi Van.

The deceased sustained grievous injuries in the accident and succumbed to them on the spot. Police registered a case under Section 304-A of the Indian Penal Code.

Following the accident, the deceased's wife and two children filed a claim petition before the Motor Accident Claims Tribunal, seeking compensation of Rs. 28 lakh.

The deceased was working as a Deputy Executive Engineer at Tirumala Tirupati Devasthanams (TTD), Shilparamam, and was earning a monthly salary of Rs. 41,735.

The claimants contended that the Milk Tanker driver was responsible for the accident and that the tanker's owner and insurer were jointly and severally liable to compensate them.

The Milk Tanker was owned by the first respondent and insured with United India Insurance Company Limited. The insurer, however, disputed the claim and contended that the accident had occurred solely due to the rash and negligent driving of the driver of the Maruthi Van in which the deceased was travelling.

The insurer further contended that the Milk Tanker driver had been falsely implicated. It pointed out that the FIR was initially registered against the Maruthi Van driver and alleged that the police subsequently filed the charge-sheet against the Milk Tanker driver at the instance of the claimants. It also raised an objection regarding non-joinder of necessary parties.

Since the insurer attributed the accident to the Maruthi Van driver, the owner and insurer of the Maruthi Van were subsequently impleaded in the claim proceedings.

The Van owner submitted that the accident was solely due to the rash and negligent driving of the Milk Tanker driver and that the Van driver possessed a valid driving licence. The Van insurer also denied any rashness or negligence on the part of its driver.

After considering the rival contentions and evidence, the Tribunal found that there had been a collision between the two vehicles and that both drivers were guilty of contributory negligence. It accordingly fastened liability on the respective insurers according to the extent of negligence.

The Tribunal held that the deceased's wife and children, as his legal representatives, were entitled to claim compensation, and that receipt of terminal benefits and compassionate appointment of one son in TTD did not bar the claim. It assessed the loss of dependency at Rs. 28,39,644, taking the deceased's age as 56 years, applying a multiplier of 9 and making the applicable deductions.

However, the Tribunal ultimately restricted the award to Rs. 28 lakh, since that was the amount claimed in the petition.

Aggrieved by the Tribunal's award, United India Insurance Company Limited approached the High Court by filing the present appeal.

The claimants contended that the Claims Tribunal and Appellate Court could award compensation beyond the amount claimed where the evidence established entitlement to a higher amount. They pointed out that the Tribunal had itself quantified the compensation at Rs. 28,39,644 but restricted the award to Rs. 28 lakh as that was the amount claimed.

They further contended that the Tribunal had failed to award compensation under the conventional heads.

Accepting the contention, the High Court held that the restriction could not be sustained. Once the Tribunal had quantified the just compensation on the basis of the evidence, it ought to have awarded that amount.

The Court further observed that the Motor Vehicles Act is a beneficial and welfare legislation and that Courts are duty bound to award “Just Compensation”.

The Court also considered the claimants' contention that the Tribunal had failed to award compensation under the conventional heads. It accordingly awarded Rs. 15,000 towards loss of estate, Rs. 1,20, 000 towards loss of consortium to the three claimants and Rs. 15,000 towards funeral expenses.

Consequently, the High Court recalculated the total compensation at Rs. 29,89,644, comprising Rs. 28,39,644 towards loss of dependency and Rs. 1,50,000 under the conventional heads.

The appeal was dismissed and the Tribunal's award was modified accordingly.

The appellant was directed to deposit the enhanced compensation within eight weeks of receiving the judgment, after deducting any amount already deposited. The amount would carry interest at 7.5% per annum.

Counsel for the Appellant: Sri V. Srinivasa Rao

Counsel for Respondents: P. Radhika and B. Paramesewara Rao