GUWAHATI: The Supreme Court has ruled that dependents taking over a deceased person's business does not justify a reduction in motor accident compensation. The Court stressed that the deceased's contribution to the business must be considered when assessing compensation claims.
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Justices Sudhanshu Dhulia and Ahsanuddin Amanullah granted relief to the daughters of a couple who ran a business and died in a road accident. The daughters sought ₹1 crore each in compensation. The Motor Accident Claims Tribunal (MACT) awarded ₹58.24 lakh for the father and ₹93.61 lakh for the mother, plus 7.5% annual interest. The High Court, however, reduced these amounts to ₹26.68 lakh and ₹19.22 lakh, citing minimal financial loss as the daughters had taken over the business. This prompted the daughters' appeal to the Supreme Court.
The key question before the Court was whether the High Court was justified in reducing the MACT's compensation solely because the daughters took over the business, resulting in minimal apparent financial loss.
Justice Amanullah, writing the judgment, overturned the High Court's decision, stating that it overlooked the deceased's contribution to establishing the business. The Court emphasised that the daughters, due to their youth and inexperience, would face challenges in running and growing the business, potentially leading to reduced profitability. This factor, relevant to calculating the multiplier effect for future earnings, was neglected by the High Court.
The Court cited the recent case of K Ramya and others versus National Insurance Co Ltd, which established that motor accident compensation cannot be reduced simply because claimants take over the deceased's business and assets.
The Supreme Court allowed the appeal and reinstated the original compensation amounts awarded by the MACT.
