India: Case Law Analysis: Ramla v. National Insurance Company Limited

Last Updated: 25 April 2019
Article by Ruchika Darira

Case law analysis on the judgment passed by the Supreme Court in the case titled as "Ramla v. National Insurance Company Limited", Civil Appeal No. 11495 of 2018, Special Leave to Appeal (C) No.22334 of 2017.

Through a bench comprising of Justice N.V. Ramana and Justice M.M. Shantanagoudar, the Hon'ble Supreme Court has held that there is no restriction in awarding compensation over and above/ exceeding the amount claimed under Section 168 of Motor Vehicles Act, 1988.

Facts of the case

In the present case, claimants before the Hon'ble Supreme Court were seeking further enhancement of compensation from Rs. 21,53,000/- awarded by the High Court of Kerala at Ernakulam.

The claimants were the dependents i.e the wife, two children, and an aged father of the deceased who succumbed to death due to grievous injuries in an accident in the year 2008. Initially, the claimants moved a claim petition before the Motor Accidents Claim Tribunal seeking a total compensation of Rs. 25,00,000/- (Rupees Twentyfive Lakhs). After hearing the arguments, the Tribunal granted a compensation of Rs 11,83,000/- which was enhanced by the High Court of Kerala by an additional award of Rs. 9,70,000/-. Being aggrieved by the decision of the High Court of Kerala, the claimants preferred an appeal before the Hon'ble Supreme Court for further enhancing the amount of compensation.

Decision of the Hon'ble Supreme Court

While deciding the present appeal filed by the claimants, the Hon'ble Supreme Court considered the salary certificate of the deceased, cost of living, and other relevant factors. The Hon'ble Supreme Court elaborated on the term of "just compensation" under Section 168 of the Motor Vehicles Act. Section 168 of the Motor Vehicles Act reads as under:

168. Award of the Claims Tribunal — On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be; provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X.

(2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award.

(3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct.

The Supreme Court held that the High Court was not right in deducting 2/3rd of the deceased's total income towards his personal expenses and was of the view that a deduction of 40% would be appropriate for quantifying compensation. In the opinion of the Supreme Court, the claimants were entitled to a total compensation of Rs 28,00,000/- which was higher than the amount claimed by the claimants/ dependents of the deceased. The Hon'ble Supreme Court relied upon the judgements of Nagappa v. Gurudayal Singh1, Magma General Insurance v. Nanu Ram2, and Ibrahim v. Raju3; the Court observed, "There is no restriction that the Court cannot award compensation exceeding the claimed amount, since the function of the Tribunal or Court under Section 168 of the Motor Vehicles Act, 1988 is to award 'just compensation'".

The court observed that the Motor Vehicles Act is a beneficial and welfare legislation. A 'just compensation' is one in which the compensation awarded is reasonable on the basis of evidence produced on record. It cannot be said to have become time-barred. The court further observed that there is no need for a new cause of action to claim an enhanced amount. The courts are duty bound to award just compensation."

Footnotes

1. (2003) 2 SCC 274

2. 2018 SCC OnLine SC 1546

3. (2011) 10 SCC 634

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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