Comprehensive Compensation Assessment in Fatal MV Claims: Inclusion of Unborn Child and Conventional Heads

Introduction

In the case of Krishna & Anr v. Rameshwar & Anr (2025: PHHC:031708), the Punjab & Haryana High Court considered two connected appeals arising from a tragic road accident in Kaithal. The appellants, legal representatives of the deceased Mr. Rakesh Kumar, challenged the Motor Accident Claims Tribunal’s award on grounds of under‑assessment of compensation. The respondent, owner‑cum‑driver of the offending tractor, opposed any enhancement. Key issues included:

The correct assumption of the deceased’s monthly income;
The appropriate deduction for personal living expenses;
The entitlement of an unborn child as a dependent;
The grant of compensation under “conventional heads” (loss of consortium, loss of estate, funeral expenses); and
The rate of post‑award interest.

Summary of the Judgment

The High Court allowed the claimants’ plea for enhancement. It held that:

The deceased’s monthly income should be taken at Rs.7,200 (based on Haryana’s minimum wage notifications);
A deduction of ¼ (not ⅓) of gross income is appropriate, since there were four dependents (including an unborn child);
A multiplier of 18 was correctly applied;
Compensation under conventional heads—loss of consortium (Rs.1,44,000), loss of estate (Rs.18,000), and funeral expenses (Rs.18,000)—must be added;
The unborn child (born two months after the accident) is entitled to share in the award; and
Interest at 7.5% per annum should run from the date of filing of the claim petition.

The enhanced award totaled Rs.18,12,960, resulting in an additional grant of Rs.9,28,960 (rounded to Rs.9,29,000).

Analysis

1. Precedents Cited

Ravi v. Badrinarayan (2011) 4 SCC 693 – Held that a one‑day delay in lodging FIR is immaterial to the merits of a claim petition.
Sarla Verma & Ors v. DTC (2009) 6 SCC 121 – Laid down the formula for computation: assess income, add future prospects, deduct personal expenses, apply multiplier.
National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680 – Clarified heads of compensation and the principle of awarding future prospects at predetermined percentages based on age.
Magma General Insurance Co. Ltd. v. Nanu Ram (2018) 18 SCC 130 – Reiterated the grant of “conventional heads” (loss of consortium, loss of estate, funeral expenses) over and above pecuniary loss.

These authorities guided the High Court in recalibrating each component of compensation, particularly the percentages for future prospects (40%) and the deduction rate (25%).

2. Legal Reasoning

The court engaged in a step‑by‑step application of the Sarla Verma formula:

Monthly Income: Although the deceased ran a building-material shop, documentary proof was lacking; hence, minimum wages fixed by the State were adopted. As on 30.09.2015, the figure lay between Rs.5,886 and Rs.7,600. The court averaged these to Rs.7,200.
Future Prospects: Applying Pranay Sethi, 40% was added to the basic income because the deceased was 24 years old.
Deduction for Personal Expenses: The Tribunal had deducted ⅓, but the High Court observed four dependents (widow, minor child, mother, and unborn child). A ¼ deduction was therefore just and equitable.
Multiplier: As per the National Commission tables, for a 24‑year‑old, a multiplier of 18 is appropriate.
Conventional Heads: Following Magma, the court awarded Rs.1,44,000 for loss of consortium, Rs.18,000 each for funeral expenses and loss of estate.
Unborn Child: Recognizing the legal fiction that an unborn child alive at the date of mishap is a “person” for purposes of the Act, the award also benefits the child.
Interest: Enhanced interest (7.5% p.a.) was granted from the date of petition, improving upon the Tribunal’s 7% rate.

3. Impact

This judgment reinforces and clarifies several pivotal points for future MV Act claims:

Confirming that unborn children are dependents entitled to share in compensation;
Validating the use of minimum wage notifications to determine income when no direct proof exists;
Fixing the proper carve‑out (25%) for personal expenses in cases of four dependents;
Affirming the necessity to award all conventional heads without omission; and
Encouraging trial courts to apply the updated, higher interest rate uniformly.

Complex Concepts Simplified

Future Prospects: Additional income presumed to accrue over time. A percentage (20–50%) of basic income is added, depending on the deceased’s age.
Multiplier: A factor based on the age of the deceased, converting annual loss of dependency into a lump sum.
Loss of Consortium: Compensation to the spouse for loss of company, care, and comfort.
Loss of Estate: Small sum reflecting expenses for administering the deceased’s estate and other legal formalities.
Deduction for Personal Expenses: A prescribed share (⅓ or ¼) of gross income not available for dependents.
Conventional Heads: Heads of compensation other than pecuniary loss: funeral expenses, loss of consortium, loss of estate, etc.

Conclusion

The High Court’s decision in Krishna & Anr v. Rameshwar & Anr stands as a comprehensive guide on quantifying compensation in fatal motor‑accident claims. By meticulously applying Supreme Court precedents, it ensures fair treatment of all dependents—including unborn children—and underscores the necessity of conventional heads. Future tribunals and courts will rely on this ruling to adopt a uniform, principle‑driven approach when awarding compensation under the Motor Vehicles Act, 1988.