Future Prospects Are Not Charity, They Are Law: Supreme Court Enhances Fatal Accident Compensation, Rejects ‘Love and Affection’ as Separate Head

“Just compensation is a fair estimate, not a bonanza, but courts cannot deny what binding precedent mandates”, On 06 February 2026, the Supreme Court of India delivered an authoritative ruling on the principles governing motor accident compensation.

A Bench comprising Justice Dipankar Datta and Justice Satish Chandra Sharma substantially enhanced the compensation payable to the dependants of a deceased accident victim, holding that addition of future prospects is mandatory, not discretionary, and that “loss of love and affection” cannot survive as an independent head of compensation after the Constitution Bench decision in Pranay Sethi.

Modifying the judgment of the Madras High Court, the Supreme Court re-determined the compensation at ₹20,80,000/- with interest @ 9% per annum, underscoring the binding nature of precedent under Article 141 of the Constitution.

“Courts cannot resort to conjecture when cogent evidence exists”

The case arose out of a fatal motor accident dated 09.06.2011, in which D. Velu, aged 37 years, lost his life when a tanker lorry, insured with the respondent insurer, hit his two-wheeler due to rash and negligent driving.

The deceased is survived by his widow, two minor children and aged parents, who filed a claim under Section 166 of the Motor Vehicles Act, 1988, asserting that the deceased was employed as a driver and earning a fixed monthly salary of ₹10,000/-.

While the Motor Accidents Claims Tribunal assessed the income at ₹6,000/- per month and awarded compensation of ₹9,37,000/-, the Madras High Court marginally enhanced the award to ₹10,51,000/-, assessing income at ₹7,000/- per month and declining to grant future prospects. Dissatisfied, the claimants approached the Supreme Court.

“Future prospects are an integral component of just compensation” - Assessment of Income and Mandatory Future Prospects

The Supreme Court found that both the Tribunal and the High Court had committed a serious error in ignoring unimpeached documentary evidence. Relying on the salary certificate issued by the employer (Exhibit P-14) and the supporting affidavit, the Court held that the deceased’s monthly income stood clearly established at ₹10,000/-.

The Bench observed that

“The determination of income must be founded on proof placed on record and cannot rest on conjecture or assumptions divorced from evidence.”

On the issue of future prospects, the Court was categorical that the High Court’s refusal to grant any addition was contrary to settled law. Reiterating the Constitution Bench ruling in National Insurance Co. Ltd. v. Pranay Sethi, the Court held that where the deceased was below 40 years and on a fixed salary, addition of 40% towards future prospects is compulsory.

The Court emphasised,

“This is not a matter of judicial choice, but a binding norm flowing from Article 141 of the Constitution.”

Accordingly, the income was recalculated by adding 40%, deducting one-fourth towards personal expenses, and applying the multiplier of 15, resulting in a loss of dependency of ₹18,90,000/-.

“Loss of love and affection cannot exist independently after Pranay Sethi” - Conventional Heads and Judicial Discipline

A significant aspect of the judgment is the Court’s reaffirmation that “loss of love and affection” is no longer a permissible independent head of compensation. While acknowledging that emotional deprivation suffered by family members is real and profound, the Bench held itself bound by the Constitution Bench in Pranay Sethi, which overruled Rajesh v. Rajbir Singh.

The Court observed,

“Judicial discipline demands that a Constitution Bench decision must prevail over judgments of lesser strength.”

Clarifying the apparent tension between Pranay Sethi and Magma General Insurance, the Court relied on the later three-Judge Bench decision in United India Insurance Co. Ltd. v. Satinder Kaur, holding that loss of love and affection is subsumed within consortium, which itself is a compendious concept encompassing spousal, parental and filial consortium.

Thus, while rejecting a separate award for love and affection, the Court granted consortium under its expanded dimensions.

“Compensation can never measure loss, but it must remain fair and lawful” - Court’s Reflections on ‘Just Compensation’

In a poignant observation, the Court reminded that compensation under the Motor Vehicles Act is neither a windfall nor a mathematical exercise, noting,

“It is like trying to measure the immeasurable. No amount of money can truly compensate for the loss of human life.”

Yet, the Court stressed that fairness, consistency and equity, guided by binding precedent, must govern the determination of compensation.

Taking into account the prolonged litigation of nearly 15 years, the Court enhanced the rate of interest to 9% per annum from the date of filing of the claim petition till realization.

By enhancing the compensation to ₹20,80,000/- and correcting errors committed by the High Court, the Supreme Court has once again reinforced that future prospects are a legal entitlement, not judicial largesse, and that uniformity in conventional heads is essential for certainty in motor accident jurisprudence.

The judgment stands as a clear reminder to Tribunals and High Courts that settled law under Pranay Sethi, Magma General Insurance and Satinder Kaur must be applied faithfully, ensuring that dependants receive compensation that is just, reasonable and legally sustainable.

Date of Decision: 06 February 2026