Background:

In the present case, the appellants, as legal representatives of the deceased, approached the Motor Accident Claims Tribunal in Sidhi, Madhya Pradesh, seeking compensation after the death of Gokul Prasad, who was fatally injured in a road accident on 27 November 2013 involving a truck driven by the respondent. The Tribunal assessed the deceased's income as ₹12,000 per month, applied relevant deductions and multipliers, and awarded compensation accordingly. The High Court of Madhya Pradesh, however, in its December 2022 judgment, significantly reduced the award. Discontent with this reduction, the appellants filed a special leave petition, leading to Civil Appeal No. 9538 of 2025 before the Supreme Court, challenging the High Court’s order and seeking restoration of the initial award.

Issues

1. Whether the High Court was justified in reducing the compensation awarded by the Motor Accident Claims Tribunal, despite the Tribunal's assessment of the deceased's income and dependency being based on reasonable evidence and legal principles?

Observations:

The following observations were made by the court:

• • The Court observed that the Motor Accident Claims Tribunal had rightly assessed the deceased Gokul Prasad's monthly income as ₹12,000 based on the evidence and circumstances presented. There was no valid reason for the High Court to interfere with this finding.
• • The Supreme Court criticized the High Court for arbitrarily reducing the compensation without identifying any legal or factual error in the Tribunal's reasoning.
• • It held that appellate courts should not disturb well-reasoned findings unless they are perverse or unsupported by evidence.
• • The Court reiterated that compensation in motor accident cases must be fair, just, and reasonable, keeping in mind the loss of livelihood to the dependents.
• • The Court emphasized that legal representatives of deceased victims are entitled to full and just compensation, and procedural or technical reductions should not override substantive justice.

Decision:

The Supreme Court allowed the appeal filed by Sunita and others (legal heirs of the deceased). The Court set aside the judgment of the Madhya Pradesh High Court, holding that the reduction in compensation was unjustified and arbitrary.

• • The compensation originally awarded by the Motor Accident Claims Tribunal was restored in full, as it was found to be fair, reasonable, and based on proper legal principles.
• • The judgment reaffirmed that compensation should not be mechanically reduced and must reflect a just and equitable assessment of the loss suffered by the claimants.

Why this case matters:

• • Protects legal heirs’ right to just and fair compensation.
• • Prevents arbitrary reduction of awards by appellate courts.
• • Upholds the principle of adequate compensation under the Motor Vehicles Act.
• • Reinforces that Tribunal’s income assessment should not be lightly disturbed.

Laws related thereto:

Under BSA:

• Section 166: Provides for claims tribunals to adjudicate compensation claims arising from motor vehicle accidents.

• Section 168: Powers of Claims Tribunals to determine compensation.

Judicial Precedents:

• National Insurance Co. Ltd. vs. Pranay Sethi (2017): This landmark judgment laid down clear principles for awarding just and fair compensation in motor accident cases. It emphasized realistic assessment of the deceased’s income and use of appropriate multipliers for dependency and also clarified that appellate courts should not interfere with the Tribunal’s award unless it is perverse or unsupported by evidence.

• Raj Kumar vs. Ajay Kumar (2020): Held that appellate courts should not interfere with the Tribunal’s award unless it is perverse or based on no evidence.

• Mohanlal vs. National Insurance Co. Ltd. (2021): The Court reiterated that compensation should be fair and adequate, and reduction by appellate courts without basis is impermissible.