The Punjab and Haryana High Court has clarified that courts must mandatorily apply a 40% addition for future prospects when calculating compensation for a deceased victim under the age of 35, reinforcing the Supreme Court’s evolving jurisprudence on fair and just compensation in motor accident claims.
Background & Facts
The Dispute
The appellants, parents of a 31-year-old deceased, challenged the compensation awarded by the Motor Accident Claims Tribunal, Ludhiana, in a fatal road accident that occurred on 5 September 2013. While the Tribunal accepted the deceased’s monthly income of ₹15,000 and applied a 50% deduction and multiplier of 16, it omitted any addition for future prospects and awarded minimal sums under conventional heads.
Procedural History
- 5 September 2013: Fatal motor accident involving the deceased.
- 12 February 2016: Tribunal awarded total compensation of ₹15,65,000, including ₹1,00,000 for loss of love and affection.
- 2016: Appeal filed before the High Court challenging the quantum of compensation.
- 30 January 2026: High Court heard arguments and delivered judgment.
Relief Sought
The appellants sought enhancement of compensation by: (1) adding 40% for future prospects, (2) increasing funeral expenses and loss of estate by 20%, and (3) revising loss of consortium to align with Supreme Court norms.
The Legal Issue
The central question was whether future prospects must be added at 40% for a deceased aged 31, and whether loss of consortium and funeral expenses must be enhanced to conform to the Supreme Court’s directives in Pranay Sethi and Magma General Insurance.
Arguments Presented
For the Appellant
Counsel relied on National Insurance Co. Ltd. v. Pranay Sethi (2017), Magma General Insurance v. Nanu Ram (2018), and N. Jayasree v. Cholamandalam (2021) to argue that: (1) a 40% addition for future prospects is mandatory for victims under 35; (2) loss of consortium must be quantified separately for parents and spouse; and (3) conventional heads like funeral expenses and loss of estate must be increased by 20% to reflect inflation and judicial norms.
For the Respondent
The Insurance Company contended that the Tribunal’s award was adequate and that no enhancement was warranted. It argued that the claimants had not demonstrated exceptional hardship and that the multiplier and income were correctly applied.
The Court's Analysis
The Court examined the Supreme Court’s consistent direction that future prospects are not discretionary but mandatory for employed individuals under 35, absent exceptional circumstances. The Court noted that the Tribunal’s failure to apply the 40% addition was a clear error in law.
"The addition of future prospects is not a matter of discretion but a legal imperative for those under 35 years of age, as held in Pranay Sethi and reaffirmed in subsequent judgments."
The Court further held that the Tribunal’s award of ₹1,00,000 under "loss of love and affection" was vague and legally inadequate. Following Pranay Sethi, the Court directed that loss of consortium be awarded separately to each dependent parent at ₹48,000 each (₹40,000 + 20% increase), and funeral expenses and loss of estate be enhanced by 20% to ₹18,000 each.
The Court emphasized that these enhancements are not discretionary but flow from the principle of just compensation under Section 166 of the Motor Vehicles Act, 1988, and the Supreme Court’s binding precedents. The Court rejected the respondent’s argument that the award was "sufficient," stating that adequacy must be measured against evolving judicial standards, not subjective discretion.
The Verdict
The appellants succeeded. The Court held that future prospects must be added at 40% for deceased under 35, and loss of consortium, funeral expenses, and loss of estate must be enhanced by 20% as per Pranay Sethi. The compensation was revised to ₹21,48,000, with interest at 7.5% from the date of filing.
What This Means For Similar Cases
Future Prospects Are Mandatory, Not Discretionary
- Practitioners must now argue for 40% future prospects addition as a matter of right for victims under 35, regardless of the Tribunal’s initial award.
- Failure to apply this addition constitutes a legal error warranting appellate interference.
- This applies even if the deceased’s income is modest or the claimant does not explicitly request it - courts must apply it suo motu.
Loss of Consortium Must Be Itemized and Enhanced
- Compensation for loss of consortium must be awarded separately to each dependent parent, spouse, or child.
- The base amount of ₹40,000 per dependent must be increased by 20% to ₹48,000, as per Pranay Sethi.
- Vague awards under "loss of love and affection" are no longer acceptable; courts must specify heads and amounts.
Conventional Heads Require Inflation Adjustment
- Funeral expenses and loss of estate must be enhanced by 20% from the base amounts previously recognized.
- Practitioners should cite Pranay Sethi and Magma General Insurance to justify these increases in all pending claims.
- Tribunals must now routinely apply these adjustments without waiting for specific prayer.
