Motor Vehicle Accident Compensation- Supreme Court on what is Just Compensation

February 19, 2019

In this case, the Supreme Court has elucidated on what constitutes a “just compensation” and why there is no restriction on the Court to award compensation more than the claimed amount.

Case name: Ramla and others v. National Insurance Company Limited and others

In the case, the claimants sought enhancement of motor vehicle accident compensation awarded to them by the High Court of Kerala. Here it would be relevant to mention that the deceased was working in Doha and the total compensation claimed by the claimants in the case was Rs. 25,00,000/-.

Bench’s Verdict

The Two-Judge Bench of the Supreme Court though noted that the overall compensation awarded by the High Court was just and reasonable in respect of all the heads except under the head of loss of dependency. In view of the facts and circumstances of the case the Bench enhanced the compensation to Rs. 28,00,000/- and while doing so made the following observations in the case:

While enhancing the compensation awarded to the appellants, the Court took into consideration the following factors:

  • The high cost of living at Doha;
  • That the deceased was having his wife, two minor children and aged father as dependants;
  • there was no other earning member in the family
  • uncertainties in securing job in Doha as well as the uncertainty in staying back in the said country for a longer period.

While considering the aforesaid factors the Court was of the view that the compensation which the claimants are entitled to is higher than what has been claimed by them.

Whether Court can award compensation exceeding the claimed amount? In this context, the Apex Court noted that there is no restriction that the Court cannot award compensation exceeding the claimed amount, since the function of the Tribunal or Court under Section 168 of the Motor Vehicle Act, 1988 is to award “just compensation”. It was also observed by the Court in the case that the Motor Vehicles Act is a beneficial and welfare legislation.

What is a Just Compensation? In this context, the Court was of the view that a “just compensation” is one which is reasonable on the basis of evidence produced on record.  It cannot be said to have become time­-barred.  Further, there is no need for a new cause of action to claim an enhanced amount.

The entire case can be accessed here.

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