In the case of New India Assurance Company Limited v. Smt. Somwati and Others, the appeals have been filed by three Insurance companies, i.e., New India Assurance Company Limited, Cholamandalam MS General Insurance Company Ltd., and the Oriental Insurance Company Ltd. raising the common question of law related to the judgment of the High Courts arising out of the award by Motor Accident Claims Tribunal (MACT) about the compensation awarded in favor of the claimants under two heads, i.e., Loss of Consortium and Loss of love and affection.
Facts of the Case:
In this case, the husband of the Respondent named ‘Smt. Somwati’ died in a Motor Vehicle Accident leaving behind her and her seven minor children. The respondent filed a claim petition under Section 166 of Motor Vehicles Act, 1988, claiming compensation of ?15,25,000/-. However, only an amount of ?1,67,000/- with 9% interest was allowed as a claim which was awarded by MACT. Therefore, an appeal was filed by the respondent in respect of the absolute claim. The High Court allowed the appeal of the claimants and awarded a compensation of ?12,54,000/-. This compensation was granted under the two heads which are: (i) Loss of Love and Affection: ? 4,00,000 (?50,000/- to each of the eight claimants) and (ii) Loss of Parental Consortium to claimant/appellant: ?2,80,000/- (?40,000 to each of seven minor children). This grant of the compensation under these two heads has been challenged in this appeal by three Insurance Companies, hence their appeal was heard jointly.
Contentions of the Appellant:
It was contended on behalf of the Appellant that in National Insurance Company Ltd. v. Pranay Sethi and Others, the Constitutional Bench has laid down only three conventional heads namely, loss of estate, loss of consortium, and funeral expenses. It is submitted that the amount granted under the head “Loss of love and affection” is wholly without jurisdiction and an extra amount cannot be granted under the head “consortium” as this amount is only payable to the wife of the deceased and the Tribunals and the High Courts had committed error in awarding the amount of consortium to each of the claimants, i.e., wife, children, and parents.
Contentions of the Respondent:
It was submitted on the behalf of the respondent that the award of compensation under the head consortium should be given a broad interpretation and that amount has rightly been given not only to the wife but children and parents as well. Hence, such compensation is in accordance with the law laid down by this Court.
Observations of the Court:
It was observed by the Court that the claimant in a claim for an award of compensation under Section 166 of the Motor Vehicle Act, 1988, is entitled to just compensation. It should be equitable and fair as it is true that the loss of life and limb can never be compensated in an equal monetary measure but the provisions under Motor Vehicle Act has been enacted with intent and object to facilitate the claimant to get redress for the loss of the member of the family and compensate them to a reasonable extent.
In the case of a non-pecuniary head of damage, the spouse is entitled to get the loss of companionship, love, care, protection, etc., and that should be compensated appropriately. This is the reason that the concept of non-pecuniary damage for loss of consortium is one of the major heads of awards of compensation in other parts of the world. By loss of consortium, an attempt has been made by the courts to compensate for the loss of a spouse’s affection, comfort, solace, assistance, companionship, protection, care, etc.
It was further observed that for compensating the surviving spouse for the loss of company of husband, a Spousal Consortium is awarded; for compensating the child related to the loss of parental aid, a Parental Consortium is awarded and for compensating the parents and family of the deceased related to great shock and agony after the death of a child, a Filial Consortium is awarded. However, there was no clarity to the principles related to Spousal Consortium and Filial Consortium.
The Court is of the view that the determination of conventional and traditional heads based on percentage is not the acceptable criteria unlike the determination of income, which can be quantified. There should be reasonable figures on conventional heads, namely, loss of estate, loss of consortium, and funeral expenses. The Tribunals and High Courts are directed to award compensation for loss of consortium, which is a legitimate conventional head.
In United India Insurance Company Ltd. v. Satinder Kaur and others, it was held that spousal and parental consortium is payable an there is no justification to award compensation towards loss of love and affection as a separate head. The appeal was filed only by the claimants and not by the Insurance Company. The Court did not pronounce on the correctness of the amount awarded under the head loss of love and affection.
After all the observations, it was held that the Order of the High Court awarding compensation towards loss of love and affection at the rate of ? 50,000/- each of the claimants is unjustified which is being set aside in this appeal by the Insurance Companies. The directions of the High Court by which statutory amount along with interest accrued thereon was directed to be deposited in the AASRA fund is also set aside. The Motor Accident Claims Tribunals shall recompute the amount payable and take further steps in accordance with the law.
(2017) 16 SCC 680.
(2020) SCC online 410.