AP High Court Enhances Motor Accident Compensation, Says Depreciation Can't Be Deducted On New Spare Parts Used In Repairs

The Andhra Pradesh High Court has held that while assessing compensation for damage to a vehicle in a motor accident claim, depreciation should not be deducted during calcuation where new spare parts are necessarily used to restore the vehicle to a roadworthy condition. The Court further held that the owner of the damaged vehicle is also entitled to compensation for incidental loss of income suffered during the period the vehicle remained under repair.A Single Judge Bench of Justice A. Hari Haranadha Sarma observed:“Estimates submitted by the repairer (Rythu tractors, Nandyal) is Rs.1,06,266/-. Further P.W.5 evidence is that both the tractor and trailer were damaged. To make the vehicle to bring to road working condition new spare parts were replaced and if new spare parts are used, there will not be any depreciation. He has admitted that he has deducted depreciation in his report. He has also admitted that Insurance Company is also liable for non usage of tractor at the time of repair and the tractor like in the present case will fetch income of Rs.1,000/- per day. Without deducing depreciation his assessment shall be more than Rs.59,000/-...In case of replacement with new spare parts there need not be any deduction towards depreciation...In view of the above, this Court finds that the claimant is entitled for compensation towards the damages to the extent of bills covered by Exs.A4 and A5 i.e.Rs.70,566/- and Rs.35,700/- totaling Rs.1,06,266/-. The claimant is also entitled to compensation towards the loss arising from the inability to use the vehicle at the rate of Rs.500/- per day for a period of one month, totaling to Rs.15,000/-. Considering the facts and circumstances of the case and the length of time etc. interest is awarded at the rate of 6% per annum.” In the case at hand, the appellant's tractor and trailer were parked when the offending lorry owned by one of the respondents allegedly dashed against them, causing extensive damage. The claimant sought compensation of Rs.1,50,000 towards repair expenses and other losses.The Motor Accidents Claims Tribunal accepted the claimant's case regarding negligence but awarded only Rs. 41,400 after relying on the surveyor's assessment, which deducted depreciation from the repair costs. It also declined compensation towards the loss suffered due to the non-use of the vehicle during the repair period.Aggrieved by the award, the claimant filed an appeal before the High Court contending that the deduction of depreciation was unjustified when new spare parts had been used for repairs and that he was entitled to compensation for the loss arising from the vehicle remaining off the road during repairs. Examining the evidence, the Court noted that the claimant had produced repair bills showing expenditure of Rs.70,566 towards spare parts and Rs.35,700 towards repairs to the trailer. It further noted that the mechanics who repaired the tractor and trailer deposed that new spare parts had been used in the repairs. The surveyor admitted that he had deducted depreciation in his assessment, although depreciation need not be deducted where new spare parts are used for repairs. He also admitted that the tractor would have earned about Rs.1,000 per day had it not remained under repair and that compensation was payable for the period during which it could not be used.Accordingly, the Court enhanced the compensation awarded by the MACT from Rs. 41,400 to Rs. 1,21,266, comprising Rs. 1,06,266 towards repair expenses and Rs.15,000 towards the loss arising from the inability to use the vehicle for one month. It directed payment of interest at 6% per annum from the date of the claim petition till realization and held the owner and insurer of the offending vehicle jointly and severally liable to pay the compensation, with the insurer liable to satisfy the award.Case Title: G. Jayarami Reddy v. A.V.N. Muralimohan & AnotherCase No.: M.A.C.M.A. No. 833 of 2012Counsel for the Appellant: B. S. ReddyCounsel for the Respondent: A. JayanthiClick Here To Read/Download Order

AP High Court Enhances Motor Accident Compensation, Says Depreciation Can't Be Deducted On New Spare Parts Used In Repairs

Ritika Verma

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Ritika Verma

AP High Court Enhances Motor Accident Compensation, Says Depreciation Can't Be Deducted On New Spare Parts Used In Repairs

Ritika Verma

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Ritika Verma

This is a premium content
Available exclusively to
Our subscribers