Karnataka High Court lays down method to determine compensation for death of minors in road accidents

The Karnataka High Court recently held that parents of a minor child who dies in a motor vehicles accident case cannot be denied compensation on the ground of lack of loss of financial dependency..The Court proceeded to lay down a standard method of determining the compensation amount that is to be paid to parents of minor deceased victims in such cases.In a detailed judgement passed last month, Justice NS Sanjay Gowda said that courts and tribunals must consider “future dependency” - a principle as per which a parent may not be dependent on their child at the time of accident but is likely become dependent at a later stage or in their old age.Accordingly, the Court also prescribed a method to compute a “just” quantum of compensation in such cases. Such method must take an average of the amounts computed using the multiplier method and the lumpsum method.While the former uses a base notional income, adds the inflation rate and deducts one-third on account of personal expenses, the latter is used while granting compensation for accidents under the Railways Act..The Court also directed that henceforth, all insurance companies will have to provide a basic insurance cover of ₹10 lakh for such parents. The insurer can also provide for an option to the parent to opt for additional cover at their own cost, the Court said..“The best way would be to take the average of both the sums and make that sum to be the compensation payable. This would basically ensure that by applying the average of compensation payable under the multiplier method and the lumpsum method — which are the compensation payable to the victims of an accident in the two major modes of transportation prevalent in the country — a middle path would be achieved, and this would subserve the ends of justice and equity. Thus, the sum payable for the death of a minor killed in a motor vehicle accident by adopting the average of the two methods for every year from 1994 till date would be the ideal methodology for determine the compensation payable to the parents of a minor who is killed in a road accident,” the High Court said..The Court also laid down detailed tables in the judgement giving specific instances for courts and tribunals to refer to while determining compensation in such cases..The Court’s judgement came on a batch of appeals filed by parents of minor victims challenging the quantum of compensation awarded to them by the Motor Accident Claims Tribunal (MACT).The Court noted that in both cases, the tribunal had assumed that since the victims were minors, their deaths had not caused nay financial loss to the parents.However, the High Court held that in cases of a motor vehicle accident involving a minor’s death, parents did suffer pecuniary loss besides emotional loss. Parents in such cases suffer immediate pecuniary loss in terms of the sum incurred towards the minor’s hospitalisation for ensuring recovery and also future pecuniary loss by losing any possibility of having someone they can be financial dependent on at a later stage in their lives, the High Court said..“That financial dependency could also be a dependency which arises much later i.e., a future dependency. In fact, if this approach that the parents would not suffer from any financial loss on account of dependency on the child were to be accepted, it would mean turning a blind eye to the actual dependency that every parent has on their child and this approach that they would not suffer from any financial dependency would only compound the grief of the parents,” the High Court said..It also cited several Supreme Court judgments and the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 that recognise the obligation of children to maintain their parents.“The principle followed in cases of compensating a minor in cases of motor vehicle accident appears to be based on the premise that compensation under the MV Act can be granted only if there was some financial dependence on the victim. The statutory provision under the MV Act does not, however, make any such prescription and it only states that a victim of a motor vehicle accident is to be granted ‘just’ compensation,” the High Court said while directing the Registry to inform the MACT and IRDA of its order..Advocate KV Shyamaprasad appeared for the parents.Advocates CR Ravishankar and K Suryanarayana Rao appeared for the insurance company..[Read Judgment]