Supreme Court Half Yearly Digest 2025: Motor Accident Claims

Assessment of contributory negligence in a motor accident claim - Contributory negligence cannot be presumed on mere allegations of high-speed driving without direct or corroborative evidence. Contributory negligence must be established through direct or corroborative evidence. Tribunal's assessment of negligence, based on evidence and spot inspection, should be upheld unless demonstrably erroneous. (Para 10 & 11) Prabhavathi v. Bangalore Metropolitan Transport Corporation, 2025 LiveLaw (SC) 266 : 2025 INSC 293

Assessment of Income - Income assessment in compensation cases should consider proven income as per payslips and bank statements, and not be arbitrarily reduced. The High Court had reduced the deceased's monthly income from Rs. 62,725/- (as determined by the Tribunal) to Rs. 50,000/-. The Supreme Court restored the Tribunal's assessment, holding that the deceased's last drawn salary of Rs. 62,725/- (as per pay slip) was the correct basis for calculating compensation. (Para 14) Prabhavathi v. Bangalore Metropolitan Transport Corporation, 2025 LiveLaw (SC) 266 : 2025 INSC 293

Central Motor Vehicles Rules, 1989, Rule 9 - Whether the absence of the endorsement in the driver's license to drive a vehicle carrying a hazardous vehicle absolved the insurer from honouring the claim because of a breach of condition? Held, Insurer can 'pay and recover' if driver of vehicle meant to carry hazardous substance did not have endorsement under Rule 9. An endorsement under Rule 9 is mandatory in the driving license for driving a vehicle carrying any dangerous or hazardous goods. Rule 9 mandates specialized training (including defensive driving, emergency handling, and product safety) and an endorsement for drivers of vehicles carrying hazardous goods. This training is integral to safe operation, rejecting arguments that the endorsement is a mere formality. The absence of such training directly relates to driving competence, especially for vehicles designed for hazardous cargo. (Para 12, 15 & 17) Chatha Service Station v. Lalmati Devi, 2025 LiveLaw (SC) 408 : 2025 INSC 468 : AIR 2025 SC 2324

Compensation - Directions for Direct Bank Transfer of Compensation to Road Accident Victims and Workmen - The Supreme Court, in a suo motu case initiated based on a letter from a retired District Judge, issued comprehensive directions to ensure direct bank transfer of compensation to claimants under the Motor Vehicles Act, 1988, and the Workmen's Compensation Act, 1923. Noting that over Rs 282 crores and Rs 6.61 crores remain unclaimed in Motor Accident Claims Tribunals (MACTs) and Labour Courts in Gujarat, respectively, with similar issues in other states, the Court emphasized the need to address the serious concern of unclaimed compensation. The directions include mandatory submission of claimants' bank account details, Aadhar, PAN, and email IDs; verification of bank accounts by MACTs; and direct transfer of compensation to claimants' accounts. The Court also mandated High Courts to issue practice directions, create dashboards for tracking deposited amounts, and initiate drives with Legal Services Authorities to trace claimants. These directions apply until states frame relevant rules, with compliance reports due by July 30, 2025. (Para 9) In Re Compensation Amounts Deposited with MACT and Labour Courts, 2025 LiveLaw (SC) 455 : 2025 INSC 530

Contributory Negligence – Learner's License - In a motor accident claim, contributory negligence cannot be presumed merely from the driver's possession of a learner's license. The collision at the trailer's tail-end did not inherently indicate negligence by the driver. Negligence must be proved by evidence, with preponderance of probabilities as the standard. (Para 12 & 13) Srikrishna Kanta Singh v. Oriental Insurance Company Ltd., 2025 LiveLaw (SC) 352 : 2025 INSC 394

Conventional Heads - The appeals arose from a motor vehicle accident resulting in the death of the appellant's parents and younger brother. The appellant, the legal heir of the deceased, sought enhancement of compensation awarded by the Motor Vehicles Accident Tribunal, while the insurer (respondent) sought reduction of the compensation. The Tribunal had awarded Rs. 14,78,000/- for the father's death, Rs. 13,33,936/- for the mother's death, and Rs. 2,45,000/- for the brother's death. The High Court enhanced the compensation to Rs. 30,58,000/-, Rs. 16,34,000/-, and Rs. 5,00,000/- respectively. Whether the High Court erred in awarding compensation exceeding the limits set under conventional heads. The Court upheld the High Court's award under conventional heads, noting that the judgment was delivered prior to the Pranay Sethi decision, which capped such awards at Rs. 70,000/-. However, the Court declined to reduce the compensation, as the difference was not excessive and the appellant had suffered significant loss. The Supreme Court dismissed all appeals, upholding the High Court's enhanced compensation, finding it just and reasonable in light of the appellant's tragic loss and the principles of just compensation under the Motor Vehicles Act. New India Assurance Co. Ltd. v. Sonigra Juhi Uttamchand, 2025 LiveLaw (SC) 18 : 2025 INSC 15 : (2025) 3 SCC 23

Deduction for Personal Expenses - The High Court erred in not deducting one-third of the deceased's income towards personal expenses. New India Assurance Co. Ltd. v. Sonigra Juhi Uttamchand, 2025 LiveLaw (SC) 18 : 2025 INSC 15 : (2025) 3 SCC 23

Determination of compensation – Monthly income of deceased fruit seller – Multiplier – Deduction for personal expenses – Inclusion of father and sister as dependents – Liability of insurer to pay and recover from driver and owner - Deceased, aged 24, died in a motor vehicle accident. Tribunal awarded compensation based on a notional income of Rs. 4,500 per month, deducting 1/3rd for personal expenses, and excluding the deceased's father and sister as dependents - High Court affirmed - Whether the Tribunal and High Court correctly assessed the monthly income, applied the appropriate multiplier, made the correct deduction for personal expenses, and rightly excluded the father and sister as dependents – Held, the Supreme Court disagreed with the lower courts' assessment of the deceased's monthly income. Considering the deceased's occupation as a fruit seller, the Court adopted the minimum wage for an unskilled worker (Rs. 6,500 per month) as a basis. The multiplier of 18, as applied by the High Court, was upheld as per National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680. The father and sister, being financially dependent, were legal representatives under the Motor Vehicles Act, 1988, entitling them to compensation. Therefore, the deduction for personal expenses was reduced to 1/4th. The insurance company must first pay the award and then recover from the driver and owner of the offending vehicle, as the driver lacked a valid license. The total compensation was enhanced from Rs. 9,77,200 to Rs. 17,52,500. The appeals was allowed, and the tribunals order was modified. (Para 16 & 17) Sadhana Tomar v. Ashok Kushwaha, 2025 LiveLaw (SC) 309

Determination of just compensation - The claimants (dependents of the deceased) sought ₹3,00,00,000 as compensation before the Motor Accidents Claims Tribunal (MACT). The Tribunal awarded ₹75,97,060 with 9% interest per annum, based on a monthly income of ₹62,725. The High Court modified the Tribunal's findings, attributing 25% contributory negligence to the deceased and reducing the assessed income to ₹50,000 per month, awarding ₹77,50,000 at 6% interest per annum. The claimants challenged the High Court's assessment of contributory negligence and reduction of income. The Supreme Court recalculated the compensation, awarding a total of Rs. 1,20,84,925/- to the appellants (claimants). This included future prospects (40% of income), deductions (1/4th for personal expenses), and application of a multiplier of 15 (based on the deceased's age of 38 years). The Tribunal's award of 9% interest per annum was upheld. The appeals were allowed, and the compensation was enhanced from Rs. 77,50,000/- (as awarded by the High Court) to Rs. 1,20,84,925/-. The impugned judgments of the High Court and Tribunal were modified accordingly. (Para 15 & 16) Prabhavathi v. Bangalore Metropolitan Transport Corporation, 2025 LiveLaw (SC) 266 : 2025 INSC 293

Direct Bank Transfer of Compensation - Streamlining Payment Process – Directions issued. (Para 17 - 21) Parminder Singh v. Honey Goyal, 2025 LiveLaw (SC) 318 : 2025 INSC 361 : AIR 2025 SC 1713

Disability Assessment - Compensation for Pain and Suffering - The appellant, a diamond cutter by profession, suffered grievous injuries, including complete loss of vision in one eye, due to a collision caused by the negligence of an auto-rickshaw driver. The Motor Accidents Claims Tribunal, had awarded Rs. 8,70,000/- as compensation, which was later enhanced to Rs. 10,57,500/- by the High Court. The Supreme Court, however, found the High Court's computation of disability at 65% insufficient, given the nature of the appellant's profession, which requires precise vision. The Court held that the functional disability should be assessed at 100%, considering the appellant's inability to continue his vocation as a diamond cutter. Additionally, the Court enhanced the compensation for "pain and suffering" from Rs. 50,000/- to Rs. 1,50,000/-, recognizing the profound impact of the accident on the appellant's life and career. The total compensation awarded by the Supreme Court was Rs. 15,98,000/-, with an interest rate of 8% from the date of the claim petition. Appeal was allowed modifying the compensation awarded by the High Court. Jayanandan v. Varkey, 2025 LiveLaw (SC) 44

Disability Certified by Medical Board – Held, a disability certificate issued by a Medical Board, being expert evidence, is binding unless a reassessment is ordered by the court. The Supreme Court set aside the High Court's decision reducing the appellant's disability from 100% to 50% without ordering a reassessment, as such re-determination lacks legal basis. The appellant, rendered comatose due to multiple injuries from a vehicular collision, was awarded Rs.48,70,000/- in compensation, reversing the High Court's enhancement from Rs.16,29,465/- to Rs.19,39,418/-. Tribunals or courts questioning a Medical Board's disability certificate must order a reassessment rather than substituting their own judgment. (Para 9) Prakash Chand Sharma v. Rambabu Saini, 2025 LiveLaw (SC) 186 : 2025 INSC 180

Discrepancy in the make of the vehicle cannot be a ground to deny a rightful claim when the vehicle's registration number and other key details are consistent and correctly mentioned. (Para 4) Parameshwar Subray Hegde v. New India Assurance Co. Ltd., 2025 LiveLaw (SC) 334

Enhancement of Compensation - 100% Disability – The Supreme Court enhanced compensation awarded to a 21-year-old claimant who suffered 100% permanent disability (quadriplegia) in a motor vehicle accident. The Court reassessed the claimant's income, considering his qualifications and potential, and granted future prospects. Additional compensation was awarded for attendant charges, special diet, pain and suffering, future medical expenses, loss of marriage prospects, and physiotherapy. (Para 8 - 13) Parminder Singh v. Honey Goyal, 2025 LiveLaw (SC) 318 : 2025 INSC 361 : AIR 2025 SC 1713

Foreign Earnings - Multiplier in motor accident claims cannot be reduced on the ground that the deceased was earning in foreign currency. The multiplier is fixed on the basis of the age of the victim and cannot be altered based on the ground of foreign income. The exchange rate prevailing as on the date of the filing of the petition has to be adopted. (Para 9 & 10) Shyam Prasad Nagalla v. Andhra Pradesh State Board Transport Corporation, 2025 LiveLaw (SC) 351 : 2025 INSC 193

Income Assessment - Xerox copies of Income Tax Returns - Whether the High Court erred in assessing the deceased's income without proper proof - The Tribunal rightly disregarded xerox copies of Income Tax Returns and made a reasonable estimation of income based on surrounding circumstances. The High Court's assessment of the deceased's income, though based on assumptions, was reasonable given the circumstances and the age of the deceased. New India Assurance Co. Ltd. v. Sonigra Juhi Uttamchand, 2025 LiveLaw (SC) 18 : 2025 INSC 15 : (2025) 3 SCC 23

Insurer's Liability - Tractor and Trailer - Third-Party Liability - Negligence - Compensation - Whether the insurer of a tractor is liable for the death of a passenger in an uninsured trailer caused by the tractor's negligence. Held, the insurer of a tractor is liable for an accident involving an uninsured trailer if the accident results from the tractor's negligence and not from any independent fault of the trailer. A trailer, when attached to and towed by an insured tractor, is deemed an extension of the tractor, requiring no separate insurance. The Court dismissed the insurer's appeal, upholding the Motor Accident Claims Tribunal's (MACT) order directing the insurer to compensate the claimants for the death of a woman in a trailer that overturned due to the negligent driving of the insured tractor. The Court endorsed the High Court's ruling in United India Insurance Co. Ltd. v. Koduru Bhagyamma, 2007 SCC OnLine AP 830, confirming that a trailer attached to an insured tractor does not require separate insurance. The quantum of compensation and the insurer's liability were upheld. (Para 11 & 14) Royal Sundaram Alliance Insurance v. Honnamma, 2025 LiveLaw (SC) 533 : 2025 INSC 625 : AIR 2025 SC 2641

Legal Representative - A legal representative is one, who suffers on account of death of a person due to a motor vehicle accident and need not necessarily be a wife, husband, parent or child. The term 'legal representative' under the Motor Vehicle Act should not be given a narrow interpretation to exclude those persons as claimants who were dependent on the deceased's income. The father and sister, being financially dependent, were legal representatives under the Act entitling them to compensation. (Para 13 – 15) Sadhana Tomar v. Ashok Kushwaha, 2025 LiveLaw (SC) 309

Loss of Dependency - Unemployed Husband - Held, unemployed husband can be presumed to be partially dependent on deceased wife's income. In determining insurance compensation, the deceased's husband cannot be excluded as a dependent merely because he is an able-bodied man. In the absence of proof of the husband's employment status, his dependency on the deceased's income cannot be disregarded and would be treated as partially dependent on his wife's income. (Para 7) Malakappa v. Iffco Tokio General Insurance Company, 2025 LiveLaw (SC) 511 : 2025 INSC 590

Motor Accidents Claim - The insurance company contended that the vehicle involved was not the one insured and challenged the liability. The MACT found the insurance company, driver, and owner jointly and severally liable. The Supreme Court upheld the findings of the MACT and the High Court that the insured vehicle was involved in the accident, rejecting the insurance company's claim of ambiguity regarding the vehicle's registration number. Insurance coverage is effective from the date of premium payment, irrespective of policy issuance timing. The insurance policy was deemed effective from the date of premium payment, even if the issuance was delayed, thus covering the accident. An insurance company bears the burden of proving a breach of policy conditions to avoid liability. The allegation of fraud by the insurance company was dismissed as unproven, reiterating that fraud must be specifically pleaded and proven with evidence. Allegations of fraud require specific pleading and proof. The appeals were dismissed, affirming the compensation awarded by the MACT and upheld by the High Court. The insurance company was held liable to indemnify the owner and compensate the claimants. National Insurance Company Ltd. v. Maya Devi, 2025 LiveLaw (SC) 58 : 2024 INSC 1050

Negligence in Motor Accident Cases - Reliability of Police Records - Fraud Allegations Unsubstantiated - Negligence is to be determined on the basis of preponderance of probabilities, not beyond a reasonable doubt. Police records, including FIRs and charge sheets, are admissible evidence for determining negligence. The Tribunal and High Court were justified in relying on such documents to conclude that the driver of the offending vehicle was rash and negligent. The appellant's contention that the respondents connived with the police to prepare a fraudulent charge sheet was rejected due to lack of evidence. The appeal was dismissed, upholding the compensation awarded by the Tribunal and affirmed by the High Court. ICIC Lombard General Insurance Co Ltd v. Rajni Sahoo, 2025 LiveLaw (SC) 9 : 2025 INSC 6

Permanent Disability - The appellant suffered severe injuries in a motor accident resulting in 60% permanent disability. The Motor Accidents Claims Tribunal (MACT) awarded compensation of Rs. 19,43,800/- with 7% interest. The High Court partially allowed the appellant's appeal, enhancing the compensation for loss of income from Rs. 11,23,200/- to Rs. 27,21,600/- but did not address other heads of compensation adequately. The appellant argued that the MACT and High Court failed to consider the doctor's recommendations and the long-term impact of his disabilities. The Respondent contended that the High Court correctly assessed the notional income and future prospects, and that the compensation under other heads was adequate based on the evidence. The Court reiterated the principles laid down in Sarla Verma, Pranay Sethi, and other precedents regarding the assessment of compensation in motor accident cases, emphasizing the multiplier method and the need for uniformity. The Court found that the High Court correctly enhanced the compensation for loss of income but failed to adequately address other heads of compensation, such as future medical expenses, speech therapy, physiotherapy, and attendant charges, which were not in line with medical recommendations. The Court also noted that the compensation under non-pecuniary heads was insufficient and needed enhancement. The Supreme Court emphasized the need for a comprehensive and just assessment of compensation in motor accident cases, ensuring that all heads of compensation, including future medical needs and non-pecuniary damages, are adequately addressed. The Court enhanced the compensation to Rs. 48,00,000/- to reflect the appellant's long-term needs and the impact of his disabilities. Atul Tiwari v. Oriental Insurance, 2025 LiveLaw (SC) 26 : 2025 INSC 29 : AIR 2025 SC 574 : (2025) 3 SCC 6

Principles of Evidence - Standard of proof in motor accident claim cases - In motor accident claims, the standard of proof is based on the preponderance of probability, not the strict standard of proof beyond reasonable doubt used in criminal trials. (Para 13) Prabhavathi v. Bangalore Metropolitan Transport Corporation, 2025 LiveLaw (SC) 266 : 2025 INSC 293

Sections 140, 166, 168 MV Act - Entitlement of a married daughter and an elderly mother to compensation in a motor accident claim as dependents of the deceased. The Supreme Court upheld the High Court's decision denying compensation for loss of dependency to the married daughter, holding that she is presumed to be financially supported by her husband or his family unless proven otherwise. The married daughter is entitled only to compensation under Section 140 as a legal representative, not as a dependent. The Court set aside the High Court's order denying compensation to the deceased's elderly mother, aged approximately 70 years, who was solely dependent on the deceased with no independent income. Recognizing the duty of a child to maintain their parent in old age, the Court awarded ₹19,22,356/- as compensation to the elderly mother, considering her dependency and potential future hardship. Appeal partly allowed. Compensation denied to the married daughter for loss of dependency but granted to the elderly mother. [Para 13 - 20] Deep Shikha v. National Insurance Company Ltd., 2025 LiveLaw (SC) 561 : 2025 INSC 675 : AIR 2025 SC 2929

Section 162 MV Act - Implementation of - Scheme for cashless treatment of road accident victims during the "golden hour" (the critical one-hour period following a traumatic injury) - Motor Vehicle Accident Fund - Directions Issued - Despite the provision being in force since April 1, 2022, no such scheme has been formulated. The Court emphasized the importance of the golden hour in saving lives and noted that delays in treatment due to financial or procedural reasons often lead to fatalities. The Court referred to Parmanand Katara v. Union of India, (1989) 4 SCC 286 which underscored the duty of hospitals to provide immediate medical aid to accident victims. The Court expressed concern over the lack of a scheme under Section 162(2) despite the creation of the Motor Vehicle Accident Fund under Section 164-B and the framing of related rules in 2022. The draft concept note submitted by the Central Government proposed a maximum treatment limit of ₹1,50,000 and coverage for only seven days, which the Court found inadequate to achieve the objective of saving lives during the golden hour. The Court noted that 1,026 claims under the hit-and-run compensation scheme were pending as of August 31, 2024, due to documentation deficiencies. The Central Government was directed to frame and implement the scheme under Section 162(2) by March 14, 2025, and submit an affidavit detailing the implementation plan by March 21, 2025. The General Insurance Council (GIC) was directed to process pending claims based on seven essential documents and to develop a portal for streamlined claim processing by March 14, 2025. The judgment reinforces the right to life under Article 21 of the Constitution and highlights the statutory obligation of the Central Government to ensure timely medical treatment for road accident victims during the golden hour. The Court's directions aim to address systemic delays and ensure the effective utilization of the Motor Vehicle Accident Fund. The Central Government is mandated to expedite the formulation of a scheme for cashless treatment during the golden hour, with strict compliance deadlines set by the Court. S. Rajaseekaran v. Union of India, 2025 LiveLaw (SC) 36 : 2025 INSC 45 : AIR 2025 SC 453 : (2025) 2 SCC 579

Section 162 MV Act - Implementation of - Scheme for cashless treatment of road accident victims during the "golden hour" (the critical one-hour period following a traumatic injury) - Statutory Provisions - Section 162 (1) requires insurance companies to provide cashless treatment for road accident victims, including during the golden hour. Section 162 (2) obligates the Central Government to create a scheme for cashless treatment during the golden hour, which may include provisions for a dedicated fund. Section 164B establishes the Motor Vehicle Accident Fund to provide compulsory insurance cover and compensation for road accident victims, including those involved in hit-and-run cases. S. Rajaseekaran v. Union of India, 2025 LiveLaw (SC) 36 : 2025 INSC 45 : AIR 2025 SC 453 : (2025) 2 SCC 579

Sections 163A, 166 MV Act – The Supreme Court referred Deepal Girishbhai Soni v. United India Insurance Co. Ltd., (2004) 5 SCC 385 to a larger bench for reconsideration. The precedent held that claimants cannot pursue compensation under Section 163A (no-fault liability) if their claim under Section 166 (fault-based liability) is dismissed. Recognizing the beneficial purpose of Section 163A, the Court questioned the precedent and referred the issue to the Chief Justice for constituting a three-judge bench. Section 163A, a social security provision, does not require proof of negligence, unlike Section 166. In this case, arising from a fatal accident, the Tribunal and High Court dismissed the claimants' Section 166 petition due to the driver's negligence and rejected their request to convert the claim to Section 163A, relying on Deepal Girishbhai Soni. The Supreme Court held that tribunals should permit conversion of claims to Section 163A in suitable cases and noted that no-fault liability could be enforced against the insurer as a third-party claim. The matter awaits reconsideration by a larger bench. (Paras 8 - 12) Valsamma Chacko v. M.A. Titto, 2025 LiveLaw (SC) 271

The appellants, daughters of the deceased, filed claims for compensation after their parents died in a road accident involving a bus owned by Tamil Nadu State Transport Corporation and a Tempo Traveler insured by Oriental Insurance Company. The Motor Accidents Claims Tribunal awarded Rs. 58,24,000/- for the father and Rs. 93,61,000/- for the mother. The High Court reduced the compensation to Rs. 26,68,600/- for the father and Rs. 19,22,680/- for the mother. Whether the High Court erred in reducing the compensation awarded by the Tribunal, particularly in light of the appellants' contention that the business run by their deceased parents suffered a significant loss due to their inexperience. Held, the takeover of the deceased persons' business by dependents does not justify reducing motor accident compensation. The deceased persons' contribution to the business must be considered in assessing compensation claims. The Tribunal's award was well-considered and based on reliable evidence, including Income Tax Returns. The High Court's reduction of compensation was unjustified, as it failed to consider the appellants' lack of experience and the consequent decline in business profitability. The Court emphasized that the transfer of business ownership to the appellants did not automatically mean they could run the business as effectively as their parents. The Supreme Court set aside the High Court's judgment and restored the Tribunal's award, holding that the compensation was just and reasonable. S. Vishnu Ganga v. Oriental Insurance, 2025 LiveLaw (SC) 132 : 2025 INSC 123 : AIR 2025 SC 808