In a significant legal ruling by the Delhi High Court, the case of Madhushree Foods Vs. Insurance Company has resulted in a landmark compensation award. The judgement has far-reaching consequences and sets a precedent for similar cases in the future. The decision holds importance for both the claimants and the insurance company involved in the matter.
Facts
- Deceased Rishi Gupta’s date of birth is 21.10.1979 as per birth certificate.
- Deceased was about 28 years old at the time of the accident.
- Shri Rishi Gupta was the proprietor of Madhushree Foods.
- Profit margin in their business is about 20-25% of the turnover.
- Deceased was earning about Rs. 9000 per month after business expenses.
- Business of the deceased was progressive as per records.
- Before his death, deceased’s business was booming for about two months.
- Deceased held a franchisee contract for Bikano Chat Cafe.
- PW-1 stated that his son was pursuing a graduation degree in Commerce.
- PW-3 mentioned that the franchisee contract was given to the deceased on 15.12.2007.
- Income tax return may reflect a lower monthly income of the deceased.
- Certificate of High School states deceased’s date of birth as 21.10.1979.
- Deceased was authorized Franchisee for Bikano Chat Cafe running business as M/s. Madhushree Foods.
- Compensation awarded is Rs. 19,87,500 including interim award, with 9% per annum interest from the filing date of the petition.
- The annual income of the deceased came out to be Rs. 2,25,000/-.
- No deduction towards personal expenses of the deceased resulted in an annual deduction of Rs. 1,12,500/-.
- Total compensation calculated using a multiplier of 17 is Rs. 19,12,500/-
- 50% future prospects added Rs. 12,500 + Rs. 6250 = Rs. 18,750/- per month.
- Rs. 25,000/- awarded towards funeral expenses and Rs. 50,000/- awarded towards loss of love and affection.
- Total compensation awarded is Rs. 19,87,500/-
- Liability to pay the award amount to the petitioners lies with R-3 i.e. the insurance company as the offending vehicle was insured and no breach of insurance policy terms occurred.
- No compensation awarded towards loss of consortium as the deceased was a bachelor at the time of the accident.
- Monthly income of the deceased is Rs. 12,500/-.
Analysis
- The income of the deceased was determined based on the Income Tax Returns for the years 2005-2006 and 2006-2007.
- The monthly income of the deceased was calculated to be Rs. 8,040/- per month.
- A multiplier of 17 was applied as the deceased was in the age group of 26 to 30 years at the time of the accident.
- Future prospects of 50% were considered as the deceased was below 40 years of age at the time of the accident.
- The monthly income of the deceased was estimated at Rs. 8,500/- per month by including future prospects.
- After considering personal expenses, the monthly income was determined to be Rs. 12,500/- at the time of the accident.
- The total loss of financial dependency was calculated using a multiplier of 17, resulting in a sum of Rs. 13,00,500/-.
- Evidence from witnesses supported the deceased being the proprietor of M/s. Madhushree Foods and having a Franchisee Contract with Bikanerwala Foods Pvt. Ltd.
- The profit margin in the deceased’s business was noted to be 20-25% of the turnover.
- Half of the income was deducted for personal expenses as the deceased was single at the time of the accident.
Decision
- Total compensation awarded is Rs. 14,50,500/-
- Interest rate of 7.5% from the date of filing petition till realization
- Mother of the deceased passed away during proceedings, father entitled to 1/2 of compensation and 1/3 from mother’s share
- Brother and sister of deceased awarded 1/3 each from deceased mother’s share
- Statutory deposit of Rs. 25,000/- to be returned to the insurance company
- Rs. 15,000/- each awarded for funeral expenses and loss of estate
- Rs. 40,000/- to each claimant for loss of consortium
- Appeal allowed and disposed according to the judgement
Case Title: ORIENTAL INSURANCE CO LTD Vs. KASTURI LAL GUPTA & ORS (2024:DHC:4537)
Case Number: MAC.APP.-446/2015
