MACT | Appellate Court Can Reduce Compensation Even If Insurer’s Appeal Challenges Quantum While Claimant Seeks Enhancement: Punjab & Haryana High Court

"The mandate under Section 168 of the Motor Vehicles Act is to award just compensation. Therefore, where a particular component of the award is found to be legally unsustainable, the same cannot be retained merely because the claimant has also sought enhancement." Punjab and Haryana High Court, in a ruling, held that an appellate court is empowered to reduce the compensation awarded by a Motor Accident Claims Tribunal if any component is found legally unsustainable, notwithstanding that the claimant has independently preferred an appeal seeking enhancement.

Justice Deepak Gupta observed that the statutory duty of the court under Section 168 of the Motor Vehicles Act, 1988, is to determine "just compensation," which precludes the retention of erroneous or inflated awards simply due to procedural developments in the appellate stage.

The appeals arose from a motor accident on May 22, 2019, which resulted in the death of one Ved Parkash and serious injuries, including the amputation of the left foot, to his daughter, Pooja @ Priyanka. The Tribunal at Kaithal had awarded compensation for both the death claim and the injury claim, leading to cross-appeals by both the claimants seeking enhancement and the Insurance Company seeking a reduction in the quantum of liability.

The primary legal questions before the court concerned the correct methodology for assessing compensation for a student suffering permanent disability, the threshold for awarding lifetime attendant charges, and whether an appellate court can reduce a compensation award if the Insurance Company challenges the quantum despite the claimant’s concurrent appeal for enhancement. The court was also called upon to determine if parental consortium must be granted to children of a deceased victim.

Just Compensation

The court emphasized that the determination of compensation must be tethered to evidence and established legal principles rather than speculative assessments. Addressing the Insurance Company’s challenge to the injury claim, the court clarified that it is not constrained to maintain an inflated award. The court asserted that the mandate under the Motor Vehicles Act is to arrive at a "just" figure, and therefore, an appellate court has the inherent authority to rectify errors in calculation, even if such rectification leads to a reduction of the total awarded amount.

Nutshell: Determination of Future Loss of Earnings

Regarding the injury claim, the court applied the principles from Kajal v. Jagdish Chand and Rushi @ Ruchi Thapa v. Oriental Insurance Co. Ltd., holding that a school-going child should not be treated as an unskilled labourer. Instead, the court adopted the minimum wages applicable to a skilled worker, factored in 40% future prospects, and applied the appropriate multiplier to determine loss of future earning capacity.

Nutshell: Distinction in Attendant Charges

The court strictly scrutinized the award for lifetime attendant charges. While acknowledging the importance of gratuitous services, the court distinguished the present case from precedents where 100% disability necessitated lifelong assistance. Observing that the claimant’s 40% disability related specifically to a lower limb, the court set aside the exorbitant lifetime attendant award of over 12 lakhs, substituting it with a lump sum of 50,000 to cover the period of treatment and recuperation.

"The lifetime attendant award cannot be sustained. There is no medical evidence that she will remain dependent upon a full-time attendant throughout her life."

Nutshell: Conventional Heads and Consortium

For the death claim, the court reiterated that under the principles of National Insurance Co. Ltd. v. Pranay Sethi and Magma General Insurance Co. Ltd. v. Nanu Ram, claimants are entitled to parental consortium. Furthermore, the court mandated an increase in conventional heads by 10% in line with prevailing Supreme Court precedents, ultimately enhancing the death claim compensation to 26,85,000.

Final Directions and Modification of Award

The High Court directed that the compensation for the death claim be enhanced to 26,85,000, while the injury claim for Pooja @ Priyanka was reduced from 23,98,000 to 18,56,100 after a re-appraisal of medical expenses, pain and suffering, loss of amenities, and matrimonial prospects. All enhanced or modified amounts were ordered to carry interest at 7.5% per annum from the date of filing the claim petition. The Insurance Company’s liability to satisfy the awards was affirmed, subject to the adjustments directed by the bench.

Date of Decision: 01 September 2026