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CDJ 2026 BHC 2797
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| Court : In the High Court of Bombay at Nagpur |
| Case No : First Appeal No. 862 of 2025 |
| Judges: THE HONOURABLE MR. JUSTICE PRAVIN S. PATIL |
| Parties : Oriental Insurance Company Limited, Through Branch Manager, Vishwas Veer Wamanrao Chowk, Yavatmal Versus Maroti Bapurao Atram & Others |
| Appearing Advocates : For the Appellant: Mr. C.A. Anthony, Advocate. For the Respondents: R1 to R3, B.J. Sodhi, Advocate. |
| Date of Judgment : 01-10-2026 |
| Head Note :- |
Case Referred:
National Insurance Company Ltd .vs. Pranay Sethi, - (2017) 16 SCC 680
Comparative Citation:
2026 BHC-NAG 13266,
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| Summary :- |
1. Statutes / Acts / Rules / Orders Mentioned:
- None
2. Catch Words:
- Compensation
- Interest
- Future prospects
- Loss of consortium
- Funeral expenses
- Loss of estate
- Rate of interest
3. Summary:
The appellant‑insurance company challenged the quantum of compensation awarded by the Motor Accident Claims Tribunal, Yavatmal, contending errors in the calculation of the deceased’s net salary, percentage for future prospects, and the interest rate applicable. The court noted that the Tribunal had not deducted professional and income tax from the salary and had applied a 25% future‑prospect factor contrary to the Supreme Court’s 15% rule in *Sarla Verma v. DTC*. It also held that the Tribunal’s interest rate of 9% per annum exceeded the appropriate rate, directing a rate of 7.5% per annum from the filing date. Accordingly, the compensation was fixed at Rs. 53,76,888/‑ with interest at 7.5% and procedural directions for withdrawal of the deposited amount were issued. The appeal was disposed of with these modifications.
4. Conclusion:
Appeal Allowed |
| Judgment :- |
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1. In the present appeal, the appellant-insurance company challenged the impugned judgment and order passed by the Motor Accident Claims Tribunal, Yavatmal dated 01.03.2025 in Motor Accident Claim Petition No.219/2018, only on the point of quantum of compensation awarded by the learned Tribunal.
2. The appellant-insurance company in the present matter did not dispute the date of accident, age of the deceased, entitlement of the claimants of compensation. All these facts, according to the appellant, has rightly recorded by the learned Tribunal in the impugned judgment.
3. The appellant, who approached before this court, has challenged the impugned judgment on the ground that the learned Tribunal has not rightly considered the monthly salary of the deceased, percentage of future prospects and the interest which was paid to the consortium by the learned Tribunal. According to them, on all these aspects, the findings recorded by the learned Tribunal is incorrect and, therefore, seeks indulgence of this court in the matter.
4. The respondents-claimants, who approached before this court, also fairly accepted that the learned Tribunal has awarded the compensation on future aspects and consortium in contravention of the law laid down by the Hon’ble Supreme Court of India, but it is the submission of the respondents-claimants that if the correction is made in the quantum of compensation and the matter can be resolved and can be decided by this court at admission stage. In view of the submission of both the parties, I have perused the record as well as the impugned judgment and heard both the counsels in the matter.
5. In the present case, it is undisputed fact that the deceased was teacher in a government school and he was receiving the monthly salary of Rs.53,099/-, however, while considering his income, the learned Tribunal has not deducted the income tax and professional tax which is monthly deducted from his salary.
6. The learned counsel for the appellant stated that if the said professional tax and income tax is deducted, his monthly salary would be Rs.51,399/-. Hence, According to the appellant, by considering his monthly salary as Rs.51,399/-, the calculation ought to have been done in the matter for awarding compensation to the claimants.
7. In respect of future prospects, it is settled position of law as laid down by the Hon’ble Supreme Court of India in the case of Sarla Verma and others .vs. Delhi Transport Corporation, reported in AIR 2009 SC 3104 that for the salaried employee, the amount should not have been counted 15% towards future prospects. However, the learned Tribunal has counted 25% and thereby in violation of the law laid down in the case of Sarla Verma (supra) passed the impugned order.
8. The appellant further stated that in the case of National Insurance Company Ltd .vs. Pranay Sethi, reported in (2017) 16 SCC 680, has held that the claimants would be entitled for the compensation under the conventional head, loss of consortium, funeral expenses, loss of estate by way of fixed amount and recorded that there should be 10% increase in the said compensation after every three years. However, in the present case, the learned Tribunal has counted that amount from year 1994, whereas in the present matter, the accident was occurred on 11.11.2018. Therefore, prima facie, this observation of the learned Tribunal are contrary to the legal position laid down by the Hon’ble Supreme Court of India.
9. In the light of submission of the appellant, which is not objected by the respondent counsel in view of the settled position of law, in the present matter the respondents-claimants are entitled for the compensation as under :
| Monthly Income | | | | (Rs.53099/- Less Rs.1700/-) | | Rs. 51,399/- | | Less 1/3 personal Expenses | (-) | Rs. 17,113/- | | | | Rs.34,226/- | | Future Prospect 15% | (+) | Rs. 5,133/- | | | | Rs.39,359/- | | Yearly | | x 12 | | | | Rs.4,72,308/- | | Multiplier 15 (51-55 years) | | x 11 | | Loss of Dependency | | Rs.51,95,388/- | | Consortium | (+) | | | Rs.48,400/- x 3 = Rs.1,45,200/- | | Rs.1, 45,200/- | | Funeral Expenses | | Rs. 18,150/- | | Loss of Estate | | Rs. 18,150/- | | Total Compensation | | Rs.53,76,888/- |
10. The only issue which is raised by the present respondents is about the rate of interest on the amount awarded by the Tribunal. According to the respondents-claimants, the rate of interest should have been 9% per annum from the date of filing of application on the entire amount till its full realization.
11. The learned counsel for the appellant states that the rate of interest should be in accordance with the banking rate and same can be at the most 7.5% per annum from the date of filing of the application till the disbursement of the amount.
12. The respondents-claimants has relied upon the judgment of the Hon’ble Supreme Court of India to substantiate his submission that the rate of interest shall be at the rate of 9% per annum in the facts and circumstances of the case. He has referred Para 11 of the judgment of the Hon’ble Supreme Court of India in the case of Oriental Insurance Company Limited .vs. Niru and others, reported in 2025 SCC OnLine SC 1431.
11. In fact, it is due to the repudiation of or refusal to consider the claim that the claimants are driven to the Tribunal. When the matter is pending before the Tribunal or in appeal before the higher forums, the claimants are deprived of the compensation for future prospects. If they are paid in time, it could be utilized by the claimants and on failure, the loss of dependency would force the claimants to source their livelihood from elsewhere. This is sought to be compensated at least minimally by award of interest, which oftener them ever is nominal also since only simple interest is awarded. If the amounts were disbursed to the claimants on a rough calculation, on intimation of the accident to the Insurance Company, subject to the award of the Tribunal, necessarily there would not have been any interest liability atleast to the extent of the disbursement made. Hence, we reject the contention and direct that the entire award amounts would be paid with interest at the rate of 9% from the date of filing of the claim till the date of disbursement, deducting only Rs. 50,000/-granted as interim compensation, in SLP (C) No. 11340 of 2020 and 6% in SLP(C) No. 22136 of 2024 as awarded by the High Court; deduction to be made for the amounts already paid.
13. The learned counsel for the appellant however stated that the correct proposition of law would be higher is the amount of compensation, lower should be the rate of interest. According to him, in the present case, the total compensation which is quantified by this Court is Rs.53,76,888/- and, therefore, considering this amount, the rate of interest shall be 7.5% per annum from the date of application till its full realization.
14. In the facts and circumstances and the submission of both the parties, in the present case, it is seen that the claimants are receiving substantial amount towards the compensation in the matter and, therefore, in my opinion, the rate of interest 7.5% per annum would be justified to be paid on the amount quantified by this court in the matter. Accordingly, the following order is passed :
ORDER
(i) The impugned judgment and order passed by the Motor Accident Claims Tribunal, Yavatmal dated 01.03.2025 in Motor Accident Claim Petition No.219/2018 is hereby modified to the extent that the appellant-insurance company shall pay the compensation of Rs.53,76,888/- along with interest at the rate of 7.5% per annum from the date of institution of the claim petition before the Tribunal, till its final disbursement.
(ii) The respondents-claimants are permitted to withdraw the amount deposited by the appellant-insurance company before this court, subject to satisfaction of the Registrar (Judicial) of this court.
(iii) In case, if any amount is remained excess with the Registry of this court after withdrawal of same by the respondents-claimants, same shall be refunded to the appellant-insurance company.
(iv) The rest of the judgment and order passed by the Claim Tribunal is confirmed.
(v) It is further made clear that the directions issued by the Motor Accident Claims Tribunal to deposit the amount as per Para 6 of the operative part of the order is also modified to the extent that after depositing of entire amount, the respondents-claimants are entitled to withdraw the same in equal proportion.
(vi) The appeal stands disposed of in above terms.
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