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Gujarat High Court Partly Allows the Appeal Under Section 173 of the Motor Vehicle Act and Modified the Order Concerning a Deceased Woman’s Compensation

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The present First Appeal was filed by the appellant-Insurance Company, under Section 173 of the Motor Vehicle Act. They challenged the judgment and award, dated 13.9.2019, passed by the Motor Accident Claim Tribunal & 5th Additional District Court, Ahmedabad in Motor Accident Claim Petition no. 288 of 2009.


 It was 7:30 a.m., and the deceased Hiralben was travelling in an Auto Rickshaw. The driver was driving in a very harsh and negligent manner. He suddenly applied brakes and the Auto Rickshaw turned around and the deceased came under it and died. The complaint was lodged at Sola High Court Police Station. It was submitted in the claim petition, that at the time of the accident, Hiralben was 20 years old and she was working with Triokka Pharmaceutical Company, where she earned Rs.4, 500/ per month. Thus, the petitioner claimed the amount of Rs.5, 00,000/- under different heads as compensation with interest at 12% from the respondents.

Submissions before the Court

Appellant’s Submissions

Mr Rathin P. Raval, learned Advocate for the appellant, submitted that the judgment passed by the Tribunal was improper and against the provisions of law. He had submitted that the driver didn’t have a valid driving license on the date of the accident. He further submitted that the appellant had no liability as there was no permit for the rickshaw. He submitted that the learned Tribunal had taken prospective income as 50% which should be 40% as per the ratio laid down by the Supreme Court in the case of National Insurance Company Ltd., vs. Pranay Sethi and Ors. 2017.

Moreover, he submitted that the learned Tribunal had committed an error in awarding 9% interest. It was submitted that, in the case of Dharampal and Ors. Vs. U.P. State Road Transport Corporation, it was held, that the award on interest should align with the bank rates prevailing at the time of declaration of the award. Thus, the prevailing bank rates of around 67% could only be awarded in the present matter. The total compensation should be Rs.5, 23,600/ and interest at a 9% rate. Further, he submitted that the multiplier of 18 is considered as per the decision in the case of Sarla Verma (Smt.) and Ors. Vs. Delhi Transport Corporation and Anr., 2009. He, therefore, submitted that the total compensation is considered from Rs.5, 77,000/ to Rs.5, 23,600/, reducing by Rs.53,400/.

Respondent’s Submissions

Mr Nishit A. Bhalodi was the learned advocate for the original claimants, respondents no.1 and 2. He had submitted that the judgment and award passed by the learned Motor Accident Claim Tribunal & 5th Additional District Court, Ahmedabad at Mirzapur was just and proper and hence, didn’t require any interference. He submitted that the Tribunal had taken the income and applied the correct multiplier.

Consideration by Court

The Court heard the learned advocates for both the parties and perused the averments as made in the memo of appeal. The original claimants had also produced evidence before the Tribunal regarding the income and age of the deceased person. The choice of the multiplier was also determined by the age of the claimant itself. The multiplier method was found to be logical, sound, and legally well established. Hence, the Court was inclined to accept the multiplier of 18 as per the case of Sarla Verma (Smt.) and Ors. Vs. Delhi Transport Corporation and Anr., 2009. 

Court’s Directions

Considering the facts of the present case, the said judgment, and award dated 13.9.2019 was modified. The prospective income was considered at 40%, and an actual income of Rs.3, 000/ p.m. was accepted. There was no error committed by the learned Tribunal in arriving at Rs.3, 000/ per month as actual income. Hence the total amount of the award came to Rs.5, 23,600, but the learned Tribunal had passed the award of Rs.5, 77,000/. The present respondents were however entitled to Rs.5, 23,000/ as the amount of compensation along with 9% from the date of application on which it was filed before the Tribunal. The court directed the appellant to deposit the amount of compensation along with interest within a period of six weeks after this judgment. The Appellant was also entitled to recover the entire amount as determined by this Court from the owner of that vehicle. Once the said amount was deposited by the appellant, the Tribunal would have to disburse the amount of compensation along with interest, as determined by this Court in favour of the original claimants after properly verifying within a period of eight weeks.

The court partly allowed the appeal and disposed of all civil applications. 

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