Introduction
The Supreme Court of India, in its judgment dated February 10, 2025, in the case of Deepak Singh Alias Deepak Chauhan v. Mukesh Kumar & Ors., delivered a significant ruling in the realm of motor accident compensation. The Court addressed the calculation of compensation under the Motor Vehicles Act, 1988, particularly in cases involving young victims with potential high earning capacity.
Factual Background
The case originated from a motor vehicle accident on October 12, 2012, where Deepak Singh, the claimant-appellant, suffered grievous injuries after a collision with a rashly driven Scorpio. His co-rider succumbed to injuries at the scene. Following the accident, an FIR under Sections 279, 337, 304-A, and 427 IPC was registered. The appellant sought compensation from the Motor Accident Claims Tribunal (MACT), Gurgaon.
Procedural History
- The MACT awarded the appellant Rs. 7,09,303/- with an interest rate of 7.5% per annum.
- Dissatisfied with the amount, the appellant appealed to the Punjab and Haryana High Court, which enhanced the compensation to Rs. 23,90,719/-.
- Still aggrieved, the appellant approached the Supreme Court, challenging the methodology used to calculate the compensation, particularly the reliance on minimum wages.
Supreme Court’s Observations:
The Supreme Court addressed the core issue of whether the notional income of a young student should be equated to that of an unskilled worker. It examined the principles laid down in Raj Kumar v. Ajay Kumar [(2011) 1 SCC 343] and Navjot Singh v. Harpreet Singh (2020).
The Court emphasized that for young individuals, particularly students, notional income should be considered in alignment with their future earning potential rather than the minimum wage rate. It referenced Harpreet Singh, where an engineering student’s notional income was fixed at Rs. 10,000/- per month.
Recalculation of Compensation:
Applying the ratio of Harpreet Singh, the Court recalculated the compensation as follows:
| Heads of Compensation | Amount (Rs.) |
|---|---|
| Monthly Income | 10,000 |
| Annual Income | 1,20,000 |
| 70% of Annual Income (Permanent Disability) | 84,000 |
| Future Prospects (40%) | 1,17,600 |
| Multiplier (18) | 21,16,800 |
| Medical Expenses | 5,69,303 |
| Attendant Charges | 50,000 |
| Loss of Amenities/Marriage Prospects | 5,00,000 |
| Pain and Suffering | 2,00,000 |
| Special Diet | 20,000 |
| Total Compensation | 34,56,103 |
The Court also ordered interest at 7.5% per annum from the date of claim filing, excluding a delay period of 642 days.
Legal Implications:
This judgment sets a precedent in motor accident claims by:
- Affirming that young accident victims’ earning potential should not be undervalued.
- Emphasizing the importance of considering educational background and future prospects in compensation calculations.
- Reinforcing the principle that insurance companies bear primary liability in compensatory claims.
Conclusion
The Supreme Court’s ruling in Deepak Singh v. Mukesh Kumar & Ors. is a crucial step in evolving compensation jurisprudence. By recognizing future earning potential and rejecting an arbitrary reliance on minimum wages, the judgment ensures fair compensation for victims of road accidents. The decision aligns with principles of social justice and financial rehabilitation under the Motor Vehicles Act, 1988.
References:
- Deepak Singh Alias Deepak Chauhan v. Mukesh Kumar & Ors., Civil Appeal No. __ of 2025 (Arising out of SLP(C) No. 236/2024).
- Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343.
- Navjot Singh v. Harpreet Singh, Civil Appeal No. 278 of 2020.
- Motor Vehicles Act, 1988.