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SC Yardstick used to Determine Compensation



Only one-fourth of an accident victim’s income should be deducted towards personal expenses while fixing compensation if the victim’s family consists of more than four members, the Madras HC has held.

Applying the theory prescribed by the SC in the Sarala Verma case, a division bench of justices S Rajeswaran and S Vaidyanathan gave the ruling while enhancing the compensation awarded by a lower court from `19.07 lakh to `24 lakh.

Vijayan, husband of Jaya, met with an accident in Cuddalore in  2011. He later succumbed at a hospital. Jaya and daughters Uma Devi, Soniya Devi and Saranya Devi moved the Motor Accidents Claims Tribunal seeking `41 lakh as compensation.

The tribunal, however, awarded them only `19.07 lakh by an order dated October 19, 2012. It deducted one-third of the victim’s income towards personal expenses and quantified `18.72 lakh under ‘loss of dependency’.  It awarded no compensation under the ‘loss of marriage’ head.

While Vijayan’s family moved the HC contending that the compensation was less, the insurance company - Royal Sundaram Alliance - filed an appeal claiming the award was much higher.

Applying the yardstick prescribed by the SC in various judgments stating that only one-fourth of the victim’s income be deducted towards his personal expenses if the number of his dependents was more than four, the bench increased the compensation under the head ‘loss of dependency’ from `18.72 lakh to `24.64 lakh. Under the head ‘loss of marriage’,  it awarded `1 lakh. It also increased the amount under various other counts and fixed the total compensation at `27.64 lakh.

Article referred: http://www.newindianexpress.com/states/tamil_nadu/SC-Yardstick-used-to-Determine-Compensation/2014/04/14/article2167431.ece

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