Denial of Future Prospects and Consortium Benefits Is Contrary to Settled Law: Orissa High Court Enhances Compensation in Accident Claim Case

“Compensation must reflect the principle of just recompense—not mathematical abstraction. Ignoring future prospects and consortium undermines the very essence of justice.” — Justice V. Narasingh

In a significant ruling reaffirming the jurisprudence on just compensation under the Motor Vehicles Act, the Orissa High Court enhanced the compensation payable to the legal heirs of a deceased government officer from ₹21,52,936 to ₹48,26,611, along with 6% annual interest from the date of claim filing. The Court found that the Motor Accident Claims Tribunal (MACT) had grossly erred in salary computation, failed to account for future prospects, and neglected mandatory consortium benefits.

The judgment, delivered by Justice V. Narasingh in Surama Pati & Others v. Bibekananda Samantaray & Anr., MACA No. 454 of 2018, arose out of the claim for the death of Bijaya Kumar Mishra, a government veterinary officer who died in a vehicular accident on 23rd November 2013 at the age of 55.

“Tribunal Ignored the Deceased’s Full Salary Despite Evidence on Record”: Error in Computation Corrected

The core error identified by the Court was the Tribunal’s refusal to consider the deceased’s full salary of ₹68,360 per month, which had been clearly established through salary certificates (Exhibit 17), pay particulars (Exhibit 18), and corroborated by the Junior Clerk (P.W.3) who worked in the office of the deceased.

“The Court in seisin did not take into account the salary of the deceased for the month of November... which comes to ₹68,360/-,” observed the High Court, calling this a “patent error” in the computation of compensation.

The annual income, therefore, was rightly recalculated as ₹7,83,094.

“Future Prospects at 10% Are Mandatory Even for Government Servants Aged Above 50”: Court Applies Pranay Sethi Doctrine

The High Court corrected the Tribunal’s omission of future prospects by adding a 10% increase to the salary in line with the Constitution Bench ruling in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680. The Court categorically held:

“The deceased’s income must include an addition of 10% towards future prospects in accordance with Paragraph 59.4 of Pranay Sethi.”

After deducting income tax and professional tax and applying a 1/3 deduction for personal expenses (as laid down in Sarla Verma v. DTC, (2009) 6 SCC 121), the Court arrived at a net annual income of ₹5,18,189. With the appropriate multiplier of 9 (for age 55), the loss of dependency was quantified at ₹46,63,701.

“Consortium Benefits Cannot Be Denied—Love and Affection Is Subsumed Under Consortium”

“Spousal and parental consortium are mandatory heads of compensation—not discretionary charity.”

Another crucial error corrected was the Tribunal’s failure to award proper compensation under the conventional heads. Citing Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130, and United India Insurance Co. Ltd. v. Satinder Kaur, (2020) 11 SCC 650, the Court held:

“Consortium is now settled law, divided into spousal, filial, and parental components. There is no separate head for ‘loss of love and affection’ anymore.”

Accordingly, the Court awarded:

• ₹48,000 towards spousal consortium to the widow (Appellant No.1)

• ₹96,000 towards parental consortium—₹48,000 each for the deceased’s daughter and son (Appellant Nos. 2 & 3)

• ₹18,000 each towards funeral expenses and loss of estate, accounting for 10% enhancement as per time passage since 2017 (Pranay Sethi)

Deduction Towards Family Pension Permissible: High Court Upholds Tribunal’s Finding

Addressing the Insurance Company’s argument regarding deduction of ₹17,090 towards family pension, the Court upheld the deduction as valid, relying on the Supreme Court’s decision in Vishavjit Singh v. Cholamandalam MS General Insurance Co., 2023 SCC OnLine SC 7:

“This Court finds force in the submission that no irregularity has been committed in deducting the amount of ₹17,090/- towards family pension.”

Final Computation of Compensation: ₹48.26 Lakhs with Interest at 6% from 2013

The revised compensation awarded was detailed as follows:

Total Compensation: ₹48,26,611
Less Already Awarded by Tribunal: ₹21,52,936
Enhanced Amount Payable by Insurer: ₹26,73,675 with 6% interest from 16.12.2013

The Court also directed penal interest at 9% per annum in case of default in payment within six weeks.

“Compensation Must Not Be Illusory—Doctrine of Just Compensation Requires Realistic Assessment”

Reinforcing the principle of just compensation, the Court held:

“The quantification must not be mechanical; it must account for the real loss suffered by the dependents.”

The apportionment directed that:

• 25% be released to the widow

• 25% equally between the two children

• 50% to be kept in fixed deposit for 5 years

The Court concluded: “MACA stands disposed of. Costs made easy. Court fee shall be paid as per rules.”

Date of Decision: 23 October 2025