Supreme Court rules that motor accident compensation survives to legal heirs even if the victim dies from unrelated causes, ensuring families receive rightful claims and enhanced compensation awards.
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NEW DELHI: The Supreme Court of India on September 26, 2025, delivered a landmark judgment clarifying that the right to claim compensation for motor accident injuries survives in favor of the legal representatives of the injured victim, even if the victim dies during the proceedings for reasons unrelated to the accident injuries.
The ruling was pronounced by a bench comprising Justices K. Vinod Chandran and N. V. Anjaria, while deciding a civil appeal filed by Dhannalal Alias Dhanraj (Dead) through legal representatives.
Background of the Case
The case arose from a motor accident claim where the injured victim, a skilled worker (‘mistry’), suffered 100% permanent disability. The tribunal initially assessed compensation at ₹18,52,000 with 9% interest, based on a monthly income of ₹8,000. On remand, however, the tribunal reduced his monthly income to ₹4,000, drastically lowering the compensation.
During the pendency of proceedings, the victim died in 2024, not from the accident-related injuries, but from unrelated causes. His legal heirs continued the fight for enhanced compensation, which the insurance company opposed, arguing that claims for personal injury do not survive the claimant’s death under Section 306 of the Indian Succession Act, 1925.
The insurer relied on earlier High Court precedents, particularly the Madhya Pradesh High Court’s ruling in Bhagwati Bai v. Bablu & Mukund (2007), and the Allahabad High Court’s decision in Saroj Sharma v. State of U.P. (2014).
Supreme Court’s Observations
The Supreme Court rejected the insurance company’s objections, citing the 2022 amendment to Section 166 of the Motor Vehicles Act. Specifically, sub-section (5), inserted from April 1, 2022, was held to be determinative.
The provision clearly states:
“Notwithstanding anything in this Act or any other law for the time being in force, the right of a person to claim compensation for injury in an accident shall, upon the death of a person injured, survive to his legal representatives, irrespective of whether the cause of death is relatable to or had any nexus with the injury or not.”
The bench observed that since the claimant died after this amendment came into effect, the right to claim compensation unquestionably survived to his legal representatives.
The Court also noted that it had a difference of opinion with the declaration of law in Bhagwati Bai but did not elaborate further since the statutory amendment itself governed the outcome.
Determination of Compensation
While reassessing the claim, the Court made several important findings:
- Monthly Income: Considering that the claimant was a skilled worker, the Court fixed his income at ₹9,000 per month, higher than both the tribunal’s reduced figure and the claimant’s assertion.
- Multiplier: Both the tribunal and the High Court had applied a multiplier of 14 (for a 45-year-old), in line with the Pranay Sethi (2017) ruling. However, the Court reduced this to 11, reflecting the actual remaining life span of the injured (who survived only 11 years after the accident).
- Future Prospects: Despite irregular employment, the Court allowed a 25% addition for future prospects, noting that the victim’s 100% functional disability rendered him unable to work or earn.
- Just Compensation: Emphasizing that compensation must neither be a windfall nor inadequate, the Court balanced both sides while finalizing the award.
Final Award:
The Court ultimately enhanced the total compensation to ₹20,37,095 with 9% interest, payable from the date of filing the claim petition until actual payment.
Case Title:
Dhannalal Alias Dhanraj (Dead) Thr LRs Vs Nasir Khan and Ors.
Civil Appeal No.2159 of 2024
Read Judgment:
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