Each Claimant Entitled to Compensation for “Loss of Consortium”: SC

Today in the Supreme Court a bench of Justice Ashok Bhushan and R. Subhash Reddy, delivered Judgment on the issue of payment of Consortium to the family of deceased, who lost his life in a Motor Accident. The Court interpreted the provisions of the Motor Vehicle Act 1988 and examined the earlier judgments on the issue, including the Constitution Bench Judgment of the Supreme Court in the case of Pranay Sethi.

The Judgment came in the bunch of appeals preferred by three insurance companies against the Judgment of High Courts, with the leading appeal, New India Assurance Company Ltd. vs Smt. Somwati and Others (Civil Appeal 3093/2020). 

Background:

Bunch of Appeals were preferred before the Supreme Court challenging the Judgment of High Courts, disputing the correctness of payment under the heads of “Loss of Love and affection” and “Loss of Parental Consortium” for Motor Accident Claim. For understanding the Judgment, facts of the leading appeal are that on 06.12.2001, Ram Jiyawan, the husband of Smt. Somwati died in a Motor Vehicle accident leaving behind his widow Smt. Somwati and seven minor children. A Claim Petition was filed under Section 166 of Motor Vehicles Act, 1988, claiming compensation of Rs.15,25,000/-. The MACT allowed a claim of Rs. 1,67,000/- with 9% interest. Feeling Aggrieved Smt. Somwati Devi and others filed an appeal in the High Court. The High Court allowed the appeal of the claimants and awarded a compensation of Rs.12,54,000/-. Against the Judgment of the High Court dated 25.02.2019, an appeal was preferred before the Supreme Court by the Insurance Company. The Insurance company was aggrieved concerning the grant of compensation under the head of “Loss of Love and affection” and “Loss of Parental Consortium”, under which Rs. 4 Lakh (50 Thousand each to 8 claimants) and Rs 2,80,000 (40 Thousand each to 8 claimants) respectively was granted.

Initially, vide order dated 24.04.2019, Court stayed the payment under the two heads disputed by the Insurance Company.

Issues involved:

  1. Whether the Amount of Consortium can be awarded to each claimant/member of the family?
  2. Can any compensation be awarded under the separate head of ‘loss of love and affection”, other than the head of Consortium?

Contention of Insurance Company:

  1. The Insurance Companies pleaded that the amount granted under the head’ loss of love and affection’ is wholly without jurisdiction and further the amount awarded under the head of ‘consortium’ can not be more than Rs.40000/- and further the amount of ‘consortium’ is only payable to the wife who is entitled to Rs.40,000/- and the Tribunals and the High Courts committed error in awarding the amount of Consortium to each of the claimants, i.e., wife, children and parents.
  2. It was further contended that even after the Constitution Bench Judgment, Supreme Court has allowed amounts under conventional heads as ‘loss of state’ Rs.15,000/-, ‘consortium’ Rs.40,000/- and ‘funeral expenses’ Rs.15,000/-. After the Judgment of Pranay Sethi Case, Supreme Court had confined the payment under conventional heads, therefore as per Judgment of Pranay Sethi, the impugned Judgment of the High Court awarding compensation under the head’ loss of love and affection’ as well as ‘consortium’ to each of the claimant is contrary to the law laid down by this Court and has to be set aside.
  3. The compensation could not have been enhanced on the appeal filed by the insurance company when the claimants have not filed an appeal.

Contention of the Claimants

  1. The Claimants refuting the submissions of the Insurance company pleaded that the award to each of the claimants at the rate of Rs.40,000/- under the head ‘consortium’ is in accordance with the law laid down by this Court.
  2. The award of compensation under the head ‘consortium’ cannot be given a narrow interpretation. The amount under the head ‘consortium’ has rightly been given not only to the wife but children and parents.

Findings of the Court:

  1. The Court relied upon the Judgment in the case of Magma General Insurance Company Limited versus Nanu Ram alias Chuhru Ram and others, (2018) 18 SCC 130, in which the concept of the Consortium was explained.
  2. The Court further relied on the case of Magma General Insurance Company Limited Versus Nanu Ram @ Chuhru Ram and Ors.,(2018) 18 SCC 130, wherein the Supreme Court awarded Rs. 40,000 to father and sister of the deceased under the conventional heads. The Judgment in Magma Case was reaffirmed in United India Insurance Company Ltd. versus Satinder Kaur alias Satvinder Kaur and others, (2020) SCC Online 410, approving the extensive interpretation given to the term ‘consortium’ to include spousal Consortium, parental Consortium as well as the filial Consortium. Three Judges Bench however further laid down that ‘loss of love and affection’ is included in ‘loss of consortium’; as such, there is no justification to award compensation towards ‘loss of love and affection’ as a separate head.
  3. The Constitution Bench in Pranay Sethi has also not under conventional head included any compensation towards ‘loss of love and affection’ which have been now further reiterated by three-Judge Bench in United India Insurance Company Ltd. (supra). It is thus now authoritatively well settled that no compensation can be awarded under the head’ loss of love and affection’, but the Constitution Bench had not addressed the issue as to whether a consortium of Rs.40,000/- is only payable as a spousal consortium.
  4. The Judgment of Pranay Sethi case cannot be read in such a manner to mean that it suggests that the Consortium is only payable to the wife.
  5. The Three-Judge Bench in United India Insurance Company Ltd. (Supra) has categorically laid down that apart from spousal Consortium, parental and filial Consortium is also payable. 
  6. We, thus, cannot accept the submission of the learned counsel for the appellant that the amount of Consortium awarded to each of the claimants is not sustainable.
  7. However, so far as the award of compensation under separate head ‘loss of love and affection’, by the High Court is concerned, the same cannot be justified and therefore to that extent the Court allowed the appeal of Insurance Company.

Operative Portion

In result, the Court partly allowed all the appeal and set aside the award of compensation under the conventional head ‘loss of love and affection’. The Court further directed that the Motor Accident Claims Tribunals shall recompute the amount payable and take further steps in accordance with the law.

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