Legal Analysis in Compensation Modification Case

Delve into the detailed legal analysis provided by the court in a recent judgment modifying compensation in a fatal accident case. The court meticulously examined aspects such as deductions towards personal expenses and additions for future prospects in determining the final compensation amount. Explore the nuances of the court’s legal reasoning and decision-making process in the realm of claims and compensation disputes.


  • The appellants seek to impugn the judgment dated 4 September, 2017, passed by the Delhi High Court in MAC. App. No 740/2016.
  • The appellants’ parents were involved in a fatal accident on the night of 18/19 May, 2010, near Phagwara, Punjab, resulting in their death.
  • The claim petition pertains to the death of the appellants’ mother, Mrs. Manisha Sharma.
  • The deceased had two dependents and 1/3 of the deceased’s income was deducted for personal and living expenses.
  • Mrs. Manisha Sharma, the deceased, was 37 years old and self-employed.
  • The vehicle involved in the accident was insured by National Insurance Co. Ltd. during the relevant period.
  • The Respondents No 2 and 3 did not appear despite service.
  • The appellants appealed the compensation modification in MAC. App. No. 740/2016.
  • The claim petition was filed before the Motor Accidents Claims Tribunal under Sections 166 and 140 of the Motor Vehicles Act, 1988.
  • The claim petitions for both parents were adjudicated in a common award dated 7 June, 2016.
  • The NIC was held liable to pay compensation of Rs. 41,55,235 with 9% interest per annum from the filing date of the claim petition.
  • The insurance company appealed the MACT’s award and it was disposed of by the Delhi High Court on September 4, 2017.
  • The High Court deducted 50% of income for personal and living expenses.
  • The deceased was deemed ineligible for future prospects as she was self-employed.
  • The non-pecuniary compensation was calculated at Rs. 3,25,000.
  • Pecuniary compensation totaled Rs. 19,16,000 and non-pecuniary damages amounted to Rs. 2,50,000, resulting in a total compensation of Rs. 21,66,000 in MAC Appeal No. 740/2016.
  • The deceased’s annual income was determined to be Rs. 2,55,349 based on her Income Tax Return.
  • 50% addition towards future prospects was included as per the dictum in Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121, with a multiplier of 15.
  • The Tribunal adjudicated the compensation at Rs. 41,55,235 based on the information provided.

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  • The deceased was self-employed and 37 years old, justifying a 40% addition towards future prospects.
  • The deduction towards personal and living expenses for a married deceased with two dependents is determined to be one-third (1/3) following the Sarla Verma case.
  • The High Court’s deduction of 50% towards personal and living expenses requires interference.
  • The court modifies the compensation to include one-third deduction towards personal and living expenses and 40% addition towards future prospects.
  • After adjustments, the annual income of the deceased is calculated at Rs. 2,38,326/- with a suitable multiplier of 15 due to the deceased’s age.
  • The total loss of dependency is assessed at Rs. 35,74,890/- without altering other aspects determined by the High Court.
  • The final compensation is fixed at Rs. 38,24,890/- with 9% interest from the claim petition filing date, offsetting any partial payments already made.

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  • This Civil Appeal is disposed of in the aforesaid terms.

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Case Number: C.A. No.-001769-001769 / 2021

Click here to read/download original judgement

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