- 1 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 5TH DAY OF MARCH, 2025 PRESENT THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA MISCELLANEOUS FIRST APPEAL NO.101605 OF 2017 (MV-D) BETWEEN: THE DIVISIONAL MANAGER, NATIONAL INSURANCE CO. LTD., HAVING ITS DIVISIONAL OFFICE GSR TOWER, PARVATHI NAGAR, SHIRAGUPPA MAIN ROAD, BALLARI-583101, BY AUTHORIZED SIGNATORY- ADMINISTRATIVE OFFICER (A.I KUBSAD). …APPELLANTS (BY SRI. RAJESH B. RAJANAL, ADVOCATE) AND: 1. SMT. HEMAVATHI, W/O LATE YERRISWAMY, AGED 23 YEARS, 2. MINOR MANJUNATHA, S/O YERRISWAMY, AGED 8 YEARS, 3. MINOR DHARANI, D/O YERRISWAMY, AGED 6 YEARS, 4. MINOR VISHWANATHA, ASHPAK KASHIMSA MALAGALADINNI Digitally signed by ASHPAK KASHIMSA MALAGALADINNI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 S/O YERRISWAMY, AGED 4 YEARS, (ALL R/O. B. BELAGAL VILLAGE, TQ & DIST. BELLARY. MINORS 2 TO 4 ARE REP. BY NATURAL MOTHER, RESPONDENT NO.1) 5. M. MAHESH, S/O MAREPPA, AGE: 24 YEARS, OCC: DRIVER, R/O: RAMADURGA POST, TQ: KUDLIGI, DIST: BALLARI. 6. M.C. UJJAPPA, S/O CHANNAVEERAPPA, AGE: 42 YEARS, OCC: OWNER OF LORRY, R/O: HIREHAL VILLAGE, KALINGERI POST, SANDUR TALUK, DIST: BALLARI. 7. SMT. ERAMMA, W/O LATE HONNURAPPA, AGE: 57 YEARS, R/O: W.NO.1 S.C. COLONY, B. BELAGAL VILLAGE, TQ AND DIST: BALLARI. …RESPONDENTS (BY SRI. HANUMANTHAREDDY SAHUKAR, ADVOCATE R1 & R7) (R2 TO R4 ARE MINORS R/BY R1) (NOTICE TO R6 IS SERVED) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 173(I) MOTOR VEHICLES ACT 1988, PRAYING TO, ALLOW THE APPEAL AS PRAYED FOR BY SETTING ASIDE THE JUDGMENT AND AWARD DATED 24.10.2016 PASSED BY THE LEARNED PRINCIPAL SENIOR - 3 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 CIVIL JUDGE AND MACT–III BALLARI IN MVC NO.1135/2015 WITH COSTS AND INTERESTS IN THE INTEREST OF JUSTICE AND EQUITY. THIS MISCELLANEOUS FIRST APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE S G PANDIT) The insurer is in appeal under Section 173(1) of the Motor Vehicles Act, 1988, questioning the quantum of compensation awarded by the Principal Senior Civil Judge and Motor Accident Claims Tribunal-III, Ballari (for short, ‘the Tribunal’) under the judgment and award, dated 24.10.2016, passed in M.V.C. No.1135/2015. 2. The claimants filed claim petition under Section 166 of the Motor Vehicles Act, 1988 (for short, ‘the MV Act’) claiming compensation for the accidental death of one Sri. Yerriswamy, the husband of the claimant No.1, in a road traffic accident that occurred on 17.08.2015 involving lorry bearing registration No.KA-34/A-1685 and another lorry bearing registration No.KA- 35/B-2057. The claimants arrayed, the driver, the owner and the - 4 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 insurer of the lorry bearing registration No.KA-35/B-2057, and also arrayed mother of the deceased as respondents to the claim petition. The claimants stated that the deceased was aged 30 years as on the date of the accident, and he was working as a driver, earning a sum of Rs.10,000/- per month and was contributing his entire income towards maintenance of the family. 3. On issuance of notice, respondent No.3-insurance company (appellant herein) filed its statement of objections denying the petition averments, but admitted issuance of policy which was in force as on the date of the accident. It further contended that the accident occurred because of the negligent driving of the deceased himself and sought for dismissal of the claim petition. 4. The claimant No.1, in order to prove their case, examined herself as P.W.1 and produced 14 documents which were marked as Exs.P.1 to P.14. On behalf of the respondents, the insurer examined one of its Officers as R.W.1 and marked three documents as Exs.R.1 to R.3. The Tribunal, considering the evidence on record, awarded a total compensation of - 5 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 Rs.26,43,200/- in favour of the claimants and respondent No.4 therein, with interest at the rate of 9% per annum, on the following heads: 1) Loss of Dependency Rs. 14,68,800/- 2) 50% future prospects Rs. 7,34,400/- 3) Loss of consortium (P.1) Rs. 1,50,000/- 4) Loss of Love and affection (P.2 to P.4 Rs.30,000/- each and 4th respondent Rs.20,000/-) Rs. 1,40,000/- 5) Loss of estate (P1 to 4 & R4 Rs.25,000/- each) Rs. 1,25,000/- 6) Transportation of Dead Body and funeral expenditure Rs. 25,000/- TOTAL Rs. 26,43,200/- While awarding the above compensation, the Tribunal has assessed the income of the deceased at Rs.9,000/-, adopted multiplier ‘17’ and deducted 1/5th of the assessed income towards personal expenses of the deceased. Aggrieved by the quantum of compensation awarded by the Tribunal, the insurer is in appeal. 5. Heard Sri. Rajesh B.Rajanal, learned counsel for the appellant-insurance company and Sri. Hanumantreddy Sahukar, learned counsel for the respondents No.1 and 7. Perused the appeal papers. 6. Sri. Rajesh B.Rajanal, learned counsel for the appellant-insurance company would submit as under: - 6 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 (a) The Tribunal committed a grave error in granting 50% of the assessed income towards ‘future prospects’. He submits that the deceased was a driver and he was not having a permanent employment and therefore, the claimants would be entitled for addition of 40% of the assessed income towards ‘future prospects’. (b) The Tribunal has assessed the income of the deceased at Rs.9,000/- per month. However, as per the Notional Income Chart prepared by the Karnataka Legal Services Authority, for the accident of the year 2015, the income is fixed at Rs.8,000/- per month. Hence, the income of the deceased needs to be revised on the lower side. (c) The dependants of the deceased are the claimants, who are the wife and three children, and the mother of the deceased (who is arrayed as respondent No.4 before the Tribunal). Totally, the dependants are five in numbers, and in terms of Sarla Verma Vs. Delhi Transport Corporation1, the proper deduction towards personal expenses of the deceased would be 1/4th of the assessed income and not 1/5th as adopted by the Tribunal. 1 (2009)6 SCC 121 - 7 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 (d) Learned counsel for the appellant-insurance company also submitted that the Tribunal committed an error in awarding interest on the compensation at the rate of 9% per annum. He submits that, normally, bank interest rates on the fixed deposits will have to be taken note of which is 6% per annum. Therefore, he prays for reducing the rate of interest awarded on the compensation from 9% to 6%. Thus, on the above grounds, the learned counsel for the appellant-insurer prays for modifying the quantum of compensation awarded by the Tribunal. 7. Per contra, Sri. Hanumanthreddy Sahukar, learned counsel appearing for the respondents/claimants would submit that the Tribunal has rightly assessed the income of the deceased at Rs.9,000/- per month. He submits that the deceased was working as a driver and to prove his avocation, the claimants have placed on record Ex.P.14, a certified copy of driving licence. He submits that the deceased had potential to earn income of more than Rs.10,000/- per month and the Tribunal based on the material on record has assessed the income of the deceased at Rs.9,000/- which requires no - 8 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 interference. Further, learned counsel would submit that the claimants would be entitled for loss of consortium at the rate of Rs.40,000/- with an addition of 10% for every three years in terms of the judgment of the Apex Court in the case of Magma General Insurance Company Ltd., Vs. Nanu Ram and Others2 Thus, learned counsel would pray for dismissal of the appeal. 8. Having heard the learned counsel for the parties and on perusal of the appeal papers, the only point that arises for consideration in this appeal is, i) Whether the quantum of compensation awarded by the Tribunal requires modification? 9. Our answer to the above point is in the affirmative for the following reasons: 10. The occurrence of the accident that took place on 17.08.2015 involving lorry bearing registration No.KA-34/A-1685 and another lorry bearing registration No.KA-35/B-2057, and the resultant death of Sri. Yerriswamy, is not in dispute in this appeal. The insurer is in appeal questioning the quantum of compensation awarded by the Tribunal. 2 2018 ACJ 2782 - 9 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 11. The learned counsel for the appellant contended that the income of the deceased assessed by the Tribunal at Rs.9,000/- is on the higher side. But taking note of the material on record, that is, the driving licence at Ex.P.14, we are of the view that assessment of income of the deceased by the Tribunal at Rs.9,000/- per month is just and proper. The deceased was possessing the driving licence to drive LMV- Transport and he had the potential to earn more than what is fixed by the Karnataka Legal Services Authority in the Notional Income Chart. Therefore, no interference is called for with regard to assessment of income of the deceased by the Tribunal. 12. The learned counsel for the appellant-insurance company contended that the Tribunal has committed a grave error in awarding 50% of the assessed income towards ‘future prospects’. The said contention needs consideration. The deceased was aged 30 years, and he was working as a driver and had no permanent income. The Apex Court in the case of National Insurance Company Limited Vs. Pranay Sethi & - 10 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 Others3 (supra) has made it clear that where the deceased was below the age of 40 years and if he was not in a permanent employment with established income, the claimants would be entitled for addition of 40% of the assessed income towards ‘future prospects’. Hence, the claimants would be entitled for addition of 40% of the assessed income towards ‘future prospects’ instead of 50% as adopted by the Tribunal. 13. Admittedly, there are five dependants i.e., the claimants, who are the wife and the three children, and the mother of the deceased. In terms of Sarla Verma’s case (supra), the proper deduction towards personal expenses of the deceased, where the dependants are five in numbers, should be 1/4th and not 1/5th. Therefore, the Tribunal has erred in deducting 1/4th of the assessed income towards personal expenses of the deceased. 14. Taking the income of the deceased at Rs.9,000/- per month, adding 40% of the assessed income towards ‘future prospects, deducting 1/4th of the same towards personal expenses of the deceased, and adopting multiplier 3 AIR 2017 SC 5157 - 11 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 ’17, the claimants would be entitled to a sum of Rs.19,27,800/- towards ‘loss of dependency’ 15. In view of the decision of the Hon’ble Apex Court in Pranay Sethi (supra) the claimants would be entitled to a sum of Rs.16,500/- each (i.e., Rs.15,000 + Rs.1,500 being 10% addition for every three years) on the heads of ‘loss of estate’ and ‘funeral expenses’. In view of the decisions of the Hon’ble Apex Court in the case of Pranay Sethi (supra) and Magma General Insurance Company Ltd., Vs. Nanu Ram and Others4, the claimants being the wife, three children and mother of the deceased are entitled to a sum of Rs.44,000/- (i.e., Rs.40,000 + Rs.4,000 being 10% addition for every three years) each on the head of ‘loss of spousal, parental and filial consortium’. 16. The Tribunal has erred in awarding interest payable on the compensation at the rate of 9% per annum. Having taken the judicial note of prevailing bank interest rates on the fixed deposits is 7% per annum, we reduce the rate of interest payable on the compensation from 9% to 7% per annum. 4 2018 ACJ 2782 - 12 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 17. Thus, the claimants would be entitled for modified compensation on the following heads: 1) Loss of Dependency Rs. 19,27,800/- 2) Loss of consortium (to respondents No.1 to 4 & 7 in the appeal) Rs. 2,20,000/- 3) Loss of Estate Rs. 16,500/- 4) Funeral expenses and transportation of dead body Rs. 16,500/- TOTAL Rs. 21,80,800/- Thus, the respondents No.1 to 4, and 7 herein, being the wife, children and mother of the deceased, would be entitled to total compensation of Rs.21,80,800/- instead of Rs.26,43,200/- as awarded by the Tribunal with interest at the rate of 7% per annum from the date of claim petition till realization. 18. Hence, we pass the following: ORDER a) The above appeal is allowed in part. b) The judgment and award, dated 24.10.2016, passed in MVC No.1135/2015 by the Principal Senior Civil Judge and MACT-III, Ballari, is hereby modified to the extent of holding that the respondents No.1 to 4, and 7 herein, being the wife, children and mother of the deceased, are entitled to total compensation of Rs.21,80,800/- instead of Rs.26,43,200/- as awarded by the Tribunal with interest at the rate of 7% per annum from the date of claim petition till realization. - 13 - NC: 2025:KHC-D:4279-DB MFA No. 101605 of 2017 c) The order of Tribunal with regard to apportionment and deposit of the compensation remains unaltered. d) The appellant-Insurance Company shall deposit the compensation amount with accrued interest before the Tribunal within six weeks from the date of receipt of certified copy of this judgment. e) Draw modified award accordingly. Records of the Tribunal together with the amount in deposit before this Court be transmitted to Tribunal forthwith for disbursement. No order as to costs. Sd/- (S G PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE KMS, CT:VP LIST NO.: 1 SL NO.: 15