Landmark Ruling: Supreme Court Enhances Compensation by Over Rs. 42 Lakhs.


08-August-2025 Civil Appeals >> Civil & Consumer Law   |   Motor Accident >> Family Law  

In a significant ruling of Kulwinder Kaur & Others v/s Parshant Sharma & Another, the Supreme Court recently addressed a motor vehicle accident claim, correcting an oversight by the High Court of Punjab & Haryana. The case involved the death of a 31-year-old man, Rajinder Singh Mihnas, a U.S. national who was self-employed as a driver and running a transport company in the United States. His family—a wife, a daughter, and parents—sought compensation after he was killed in a truck collision in Karnal, India.

The Motor Accident Claims Tribunal initially assessed the deceased's monthly income at just Rs. 5,000, citing a lack of evidence for U.S. wages. This led to a total compensation award of Rs. 7,80,000. Dissatisfied, the claimants appealed to the High Court.

 
 

The High Court of Punjab & Haryana correctly re-evaluated the evidence, which included the deceased's U.S. permanent resident card, passport details, and a salary certificate. It disagreed with the Tribunal's dismissal of the salary certificate, which showed an income of $2,150 per week, and calculated a much higher monthly income of Rs. 78,300. As a result, the High Court significantly enhanced the total compensation to Rs. 1,17,20,200.


However, the claimants appealed to the Supreme Court, arguing that the High Court had failed to include a crucial component in its calculation: "future prospects." This benefit accounts for the expected increase in a person's income over time.

The Supreme Court, after careful consideration, agreed with the claimants. It referenced the landmark Constitution Bench judgment in National Insurance Company v. Pranay Sethi, which established that an addition of 40% of the established income should be made for future prospects when the deceased is under 40 years of age. While acknowledging that assessing future prospects for someone self-employed in a foreign country can be difficult, the Court decided to apply the principles of Pranay Sethi to ensure a just compensation, especially since no evidence was offered to the contrary.

The Supreme Court rejected the claimants' argument for a higher multiplier, confirming that a multiplier of 16 was correct for the deceased's age. It then recalculated the total compensation, incorporating the 40% addition for future prospects and adjusting the conventional heads (loss of estate, loss of consortium, and funeral expenses) as per the guidelines in Pranay Sethi.

This revised calculation led to a new total compensation of Rs. 1,60,15,280. The Supreme Court ordered the insurance company to pay the claimants an additional compensation of ?42,95,080, along with 6% interest, effectively rectifying the High Court's omission and ensuring the family received a just and fair award.


Section 166, Motor Vehicles Act - 1988  

Motor Vehicles Act, 1988