In a notable ruling, the Supreme Court of India has upheld the award of compensation in a motor accident case, clarifying that interest is payable from the date of filing of the claim petition until the date of payment, and that mere pendency or posting of the case for claimants’ evidence does not amount to delay attributable to them. The judgment was delivered on 14 July 2025 by a bench of Justices Sudhanshu Dhulia and K. Vinod Chandran in Special Leave Petition (Civil) No. 11340 of 2020: Oriental Insurance Co. Ltd. vs. Niru @ Niharika & Others, along with SLP (C) No. 22136 of 2024.
Background of the Case
The claim arose after the death of an engineer working with British Telecom in the United Kingdom, who died in a motor vehicle accident on 18 November 1995 when the car he was travelling in collided with a truck. His wife and two minor children, residents of the UK, approached the Motor Accident Claims Tribunal (MACT) seeking compensation of ₹1,00,00,000, later enhanced to ₹1,30,00,000, for loss of dependency.
The Tribunal, relying on the FIR and a prior award in a connected claim, held the truck driver negligent. It computed the deceased’s income, reduced one-third for personal expenses, and applied a multiplier of 13, awarding ₹78,33,540 for loss of dependency, plus ₹40,000 for loss of consortium and ₹15,000 each for loss of estate and funeral expenses — totaling ₹79,04,540.
Arguments of the Parties
The Insurance Company challenged the award before the High Court, raising several objections:
- That the accident was due to the car driver’s negligence.
- That the wife’s remarriage in 2002 limited the multiplier to seven years (1995–2002).
- That the Tribunal wrongly calculated the exchange rate for the deceased’s salary earned in British Pounds.
- That the 9% interest granted was excessive.
- That the claimants were responsible for the delay, as the case, filed in 1995, was decided only in 2017.
Supreme Court’s Analysis
The Supreme Court examined each contention in detail:
- Negligence: The Court upheld the finding of the Tribunal and High Court that the truck driver was negligent, noting it was supported by FIR and earlier awards.
- Multiplier & Income: The Court agreed with the deduction of one-third for personal expenses, the addition of 30% for future prospects, and the application of a 13-multiplier, given the deceased’s life expectancy. While acknowledging the wife’s remarriage and cessation of family pension, it held that the minor children were still entitled to the full multiplier.
- Exchange Rate: The Court accepted the High Court’s recalibration of the exchange rate at ₹52.3526 per Pound, lower than the Tribunal’s ₹54.2601.
- Interest and Delay: Crucially, the Court rejected the Insurance Company’s argument that delay was solely due to the claimants. Reviewing the case history, it noted the claim was filed on 28 December 1995 but first came up for hearing only on 11 September 2012. Although the case was repeatedly posted for the claimants’ evidence between 2012 and 2016, the Court held:
“Merely because, on various dates, for 4 years, the case was posted for the claimants’ evidence, it does not necessarily mean that the claimants were responsible for the delay. Laws delays cannot, without proper substantiation, be cast upon the shoulders of one or other party to the lis.”
It concluded that interest at 9% per annum was justified and should run from the date of claim filing to payment, noting that only simple interest was awarded, and the claimants were deprived of the benefit of compensation due to the long pendency. - Interest on Future Prospects: The Court dismissed the contention that interest should not apply to amounts awarded for future prospects, observing that the compensation was effectively received only after the period to which the multiplier applied.
- Responsibility of Insurer: The Court noted that insurers could have provisionally computed and disbursed amounts upon intimation of the accident to minimize later interest liability, but had failed to do so.
Final Decision
The Supreme Court upheld the High Court’s award of ₹76,63,508, including all heads, at 9% interest from the date of filing till disbursement, after deducting interim compensation paid. It directed that any unpaid amounts be cleared within three months, warning:
“If defaulted, the amount shall carry 12% interest on the total award with interest from the date of default.”
The Special Leave Petitions were dismissed, and all pending applications were disposed of.
