The Supreme Court partly allowed appeals by three Insurance companies against the award of compensation by MACT. The Court held that the awarding of compensation under the loss of consortium and loss of love and affection is not correct.
Brief Facts of the Case
This judgment is the consolidation of Civil Appeals arising out of orders of various High Courts. These are about compensation awarded under the Motor Vehicles Act of 1988. The appeals had a common question of law and hence were heard together before the Supreme Court.
Three Insurance Companies have filed the appeals –
- New India Assurance Company Limited,
- Cholamandalam MS General Insurance Company Limited
- Oriental Insurance Company.
These appeals question the orders of the High Courts arising out of the award by the Motor Accident Claims Tribunal (MACT). They concern compensation awarded in favour of the claimants under two heads -loss of consortium and loss of love and affection. Additionally, about the consortium, the question arises whether only to the wife is entitled to it or it can be also awarded to the children and parents.
Arguments by Appellants
The Learned Counsel for the appellants referred to the 2017 decision of the Supreme Court in National Insurance Ltd v Pranay Sethi & Ors. This judgment laid down three conventional heads – loss of estate, loss of consortium, and funeral expenses and also fixed an amount to each head. The total amounted to Rs. 70000 as the upper limit.
Further, the amount granted under the head loss of love and affection is without jurisdiction. Plus, the amount granted under the head ‘consortium’ could not be more than ₹40,000, and the amount of consortium is only payable to the wife, who is entitled to ₹40,000. 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.
Further, the High Court should not have awarded compensation under the head loss of love and affection and loss of consortium to each of the claimants. It is contrary to the law laid down by this Court and has to be set aside.
In the appeal filed by Oriental Insurance Company Limited, learned counsel submits that although MACT erred in allowing the consortium to four claimants at the rate of ₹40,000, the High Court in the appeal further enhanced the compensation under the head ‘loss of love and affection’. This could not have been done since the appeal wasn’t by the claimants.
Arguments by Claimants
The Learned Counsel refuted the claims of the appellants. They claimed that the award to each of the claimants at the rate of ₹40000 under the head consortium is as per the law laid down by this Court. Further, it was argued that in this context the term consortium cannot be given a narrow interpretation and the amount was given to the wife and also to the parents and children.
Court’s Observation
First, the Court observed that compensation is a comprehensive term that includes a claim for the damages. Under s. 166 of the Motor Vehicles Act 1988 a claimant is entitled to compensation which has to be fair and fair. The loss of life and limb can never be compensated but, this provision is a social piece of legislation with the intent of facilitating the redress for the loss and compensate to a reasonable extent.
Many cases like Sarla Verma v Delhi Transport Corporation & Anr, General Manager Kerala State Road Transport Corporation v Susamma Thomas & Ors, United India Insurance Company Limited v Satinder Kaur, etc.
The Court observed that in the United India case a comprehensive interpretation has been given to the expression consortium. It includes spousal, parental as well as a filial consortium. But, the loss of love and affection is comprehended under the loss of consortium. It cannot be awarded. In the remove case, the Court has also held that consortium is not limited to a spousal consortium. It extends to a parental and a filial consortium.
Further, the Court opined that Pranay Sethi judgment cannot be read to mean that it lays down that the consortium is payable only to the wife. Also, the United India Insurance case has laid down that all three categories of the consortium are payable.
On the submission specific to Oriental Insurance, the Court said that the High Court had erred in awarding compensation towards loss of love and affection, and they set aside Paragraph 9 of the impugned order.
Court’s Order
The Court allowed the appeals. The bench stated that the impugned judgments awarding consortium to each claimant under the law do not warrant an appeal. It is allowed insofar as the award of compensation under the head of loss of love and affection. The MACT is directed to recomputed the amount payable and take steps.
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