Motor Accident Claim | Compensation Can't Be Reduced Merely Because Dependents Took Over Business Of Deceased : Supreme Court

The Supreme Court ruled that the takeover of the deceased persons' business by dependents does not justify reducing motor accident compensation. It emphasized that the deceased persons' contribution to the business must be considered in assessing compensation claims. A bench of Justices Sudhanshu Dhulia and Ahsanuddin Amanullah granted relief to the daughters of a deceased couple who ran a business and died in a road accident. The appellants sought ₹1 crore each in compensation. The MACT awarded ₹58.24 lakh for the father and ₹93.61 lakh for the mother, with 7.5% annual interest. The High Court reduced these to ₹26.68 lakh and ₹19.22 lakh, citing minimal financial loss as the daughters had taken over the business, prompting them to appeal to the Supreme Court. The Court considered whether the High Court was justified in reducing the compensation granted by the MACT solely because the appellants took over the deceased's business, resulting in minimal loss in the business. The judgment authored by Justice Amanullah overturned the High Court's decision, pointing out that it overlooked the deceased persons' contribution to establishing the business. The Court emphasized that, due to the appellants' lack of experience and maturity, they would have faced challenges in building the business at a young age, which could have led to a decline in its profitability. This factor, which was relevant to determining the multiplier effect, was neglected by the High Court in its ruling. “in our opinion, rightly so, that merely because the appellants stepped into the shoes of the deceased, by such factum itself, the appellants would not be capable of running the Mill. It would be of relevance as to whether due to their lack of experience and maturity, real/expected downfall in the profitability of the firm or the business would ensue. Such factor, while considering a claim pertaining to loss of future income/earnings, would have to be dealt with.”, the Court observed. Reference was drawn to the recent case of K Ramya and others versus National Insurance Co Ltd, where the Court held that motor accident compensation cannot be reduced for the sole reason that the business ventures and properties of the deceased were taken over by the claimants. Accordingly, the Court allowed the appeal and reinstated the compensation amount directed by the MACT. Case Title: S. VISHNU GANGA & ORS. Vs. M/S ORIENTAL INSURANCE COMPANY LIMITEDCitation : 2025 LiveLaw (SC) 132Click here to read/download the judgmentAppearance: For Petitioner(s) Ms. Kiran Suri, Sr. Adv. Mr. T. R. B. Sivakumar, AOR Mr. Deva Vrat Anand, Adv. Ms. Hema Malik, Adv. For Respondent(s) Mr. Sudhir Naagar, AOR Mr. Abhishek Kumar Gola, Adv. Mr. Ramneek Singh, Adv. Mr. Mayank Sachdeva, Adv. Ms. Aparna Dubey, Adv. Ms. Shaily Tarrar, Adv. Ms. Sonia Mottan, Adv. Mr. Subhash Motan, Adv. Ms. G. Indira, AOR Mr. P Gandepan, Adv. Ms. Larika Khandalwal, Adv. Mr. Ashwini Kumar, Adv. Ms. D Poornima, Adv.

Motor Accident Claim | Compensation Can't Be Reduced Merely Because Dependents Took Over Business Of Deceased : Supreme Court

Yash Mittal

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