'Just Compensation Must Reflect Real Earnings': Calcutta High Court Enhances Compensation To ₹69.1 Lakh In Fatal Road Accident Case

The Calcutta High Court has enhanced compensation payable to the family of a woman who died in a road accident to ₹69.10 lakh after reassessing her annual income and adding future prospects, while simultaneously reducing the interest rate from 7.5% to 6% per annum. The Court held that cash compensatory allowance forming part of the deceased's earnings ought to be reasonably factored into the income calculation for determining just compensation under the Motor Vehicles Act.Justice Biswaroop Chowdhury was hearing an appeal filed by Magma HDI General Insurance Co. Ltd. challenging the award passed by the Motor Accident Claims Tribunal, along with cross-objections filed by the claimants seeking enhancement.The claim arose out of a fatal accident on March 26, 2021, when a truck allegedly driven rashly and negligently dashed into a scooty from behind at Bidhan Sarani. The pillion rider, Mamata Basak @ Mamata Majumder, sustained severe injuries and was declared brought dead at the hospital. Her father and minor son, stated to be dependent on her income, filed a claim petition under Section 166 of the Motor Vehicles Act.The Tribunal had awarded ₹64,46,444 along with interest at 7.5% per annum and directed the insurer to divide the amount equally between the two claimants. Aggrieved, the insurer challenged the interest component, while the claimants contended that the Tribunal underestimated the deceased's income by ignoring additional cash compensation received annually.Before the High Court, the claimants relied on documentary evidence showing that the deceased received cash compensatory allowance in addition to her regular salary. Although such allowance might not be identical every year, the Court observed that a reasonable average should be considered while computing income.Reassessing the figures, the Court fixed the annual income at ₹4,00,000 instead of ₹3,72,732 as determined by the Tribunal. Adding 50% towards future prospects, the total annual income was calculated at ₹6,00,000. After deducting one-third towards personal expenses, the annual loss of dependency was assessed at ₹4,00,000. Applying a multiplier of 17, the total loss of dependency came to ₹68,00,000. The Court further granted ₹1,10,000 towards consortium, funeral expenses and loss of estate, taking the total compensation to ₹69,10,000.While enhancing the compensation, the Court accepted the insurer's contention regarding the interest rate and reduced it to 6% per annum from the date of filing of the claim petition.Accordingly, the award was modified, and the insurer was directed to deposit the enhanced amount with interest before the Registrar General of the High Court within eight weeks, with liberty to the claimants to withdraw the sum upon compliance with formalities.Case Title: Magma HDI General Insurance Co. Ltd. v. Tarun Majumder & Ors. with cross-objection Tarun Majumder & Anr. v. Magma HDI General Insurance Co. Ltd. & Anr.Case No.: FMA 354 of 2024 with COT 88 of 2024Click here to read order

'Just Compensation Must Reflect Real Earnings': Calcutta High Court Enhances Compensation To ₹69.1 Lakh In Fatal Road Accident Case

Srinjoy Das

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