Kerala HC Limits Dependency Award to One Sibling, Cuts Compensation to ₹5.08 Lakh in Road Accident Claim

Only the sibling who proved she lived with and relied on the deceased pensioner qualifies for loss of dependency; the other four adult siblings living separately do not.

The High Court of Kerala at Ernakulam has partly allowed an appeal by The New India Assurance Company Limited, reducing the motor accident compensation payable to five siblings of a deceased pensioner from ₹6,89,400/- to ₹5,08,329/-. Justice Shoba Annamma Eapen, sitting singly, held that only the second claimant — herself a spinster who resided with and was wholly dependent on the deceased — could claim compensation under the head of loss of dependency. The remaining four siblings, all adults living separately with their own families, failed to establish dependency through evidence. The court also set aside the tribunal's direction awarding penal interest at 12% per annum, and refixed the deceased's monthly income at the documented pension figure of ₹6,285/- rather than the ₹7,000/- adopted by the tribunal.

The Accident and the Tribunal's Award

On 4 October 2014, Santhamma was crossing the road through a zebra line at Krishnapuram junction on the Kollam–Alappuzha National Highway when a scooter bearing registration number KL-29G/6584, ridden rashly and negligently by its driver, struck her. She succumbed to her injuries. Her five siblings — Devaki, Pankajaksni, Chellamma, Sarada, and Unni — filed a claim petition before the Motor Accidents Claims Tribunal, Mavelikara, as OP(MV) No.69 of 2015, seeking ₹5,00,000/- in compensation.

The driver and the owner of the offending vehicle remained ex parte before the tribunal. The insurer filed a written statement admitting policy coverage but disputing liability and quantum. After examining PW1 (the second claimant) and marking Exhibits A1 to A20 and X1, the tribunal found the driver negligent and awarded ₹6,89,400/- with interest at 8% per annum from the date of petition till realisation, along with penal interest at 12% per annum in case of default.

The insurer challenged the award in MACA No.349 of 2020, specifically targeting the notional income fixed by the tribunal and the compensation awarded towards loss of dependency.

Whether Adult Siblings Can Claim Loss of Dependency

The central question before the High Court was whether the claimants, being major siblings of the deceased who were living separately with their respective families, could be treated as dependants entitled to compensation under the head of loss of dependency.

The insurer's Standing Counsel argued that adult siblings residing independently are not dependants and relied on the Supreme Court's judgment in The New India Assurance Company Ltd. v. Anand Pal & Others [2023 KHC 7268] to support that position. The insurer also argued that the deceased's documented pension of ₹6,285/- per month should have been the income base, not ₹7,000/-, and that since the deceased was a spinster, one-half of her income should have been deducted towards personal and living expenses rather than the one-third deducted by the tribunal.

Counsel for the claimants countered that the deceased, being unmarried, had supported all her siblings, and that even if dependency was not established, the siblings as legal heirs would be entitled to compensation towards loss of estate. Reliance was placed on this court's judgment in Elamma v. ICICI Lombard General Insurance, Mumbai [2023 KHC OnLine 9728]. Counsel also sought refixation of notional income at ₹9,500/- based on Ramachandrappa v. Manager, Royal Sundaram Alliance Insurance Company Ltd. [(2011) 13 SCC 236].

How the Court Reasoned on Income and Dependency

On the question of income, Justice Eapen held that Exhibit A18, the Treasury Passbook, was the only document on record proving the deceased's income, and it showed a pension of ₹6,285/- per month. The tribunal had no basis to fix income at ₹7,000/-. The argument for applying the ₹9,500/- figure from Ramachandrappa was rejected because that figure related to a coolie's income, not a pensioner's, and the claimants had not filed any cross-appeal challenging the income fixation nor placed any material showing income beyond the pension.

On dependency, the court examined the evidence of PW1, the second claimant. In her affidavit, PW1 stated that she was a spinster who had lived with the deceased and was wholly dependent on her for day-to-day expenses, and that the deceased's death had left her without any support. During cross-examination, PW1 confirmed that she had no employment and that her life was entirely dependent on the deceased. She also confirmed, however, that all the other claimants were living separately with their respective families.

The court found that only PW1 gave evidence before the tribunal; the other four claimants did not enter the witness box. Justice Eapen held that without proper evidence establishing actual dependence, adult siblings living independently with their own families cannot be treated as dependants. The second claimant, being a spinster who resided with the deceased and was wholly reliant on her, was the sole exception. The argument that the remaining siblings were entitled to compensation for loss of estate was also rejected: since the second claimant was found to be a dependant, the question of loss of estate to the other siblings did not arise.

Recalculation of Loss of Dependency

With the monthly income refixed at ₹6,285/-, the court applied the principles from National Insurance Co. Ltd. v. Pranay Sethi [2017(4) KLT 662(SC)] and Sarla Verma v. Delhi Transport Corporation [2010(2) KLT 802(SC)].

The deceased was 57 years old at the time of the accident. Under Pranay Sethi, a 10% addition for future prospects applies, bringing the notional income to ₹6,913.50 per month. Since the deceased was a spinster, one-half of her income — not one-third as the tribunal had applied — falls to be deducted towards personal and living expenses. The applicable multiplier under Sarla Verma for a person aged 57 is 9.

Applying the formula: ₹6,913.50 × 12 × 9 × 1/2, the court arrived at ₹3,73,329/- as the correct compensation for loss of dependency. The tribunal had awarded ₹5,54,400/- under this head, resulting in a reduction of ₹1,81,071/-.

The insurer had not challenged the compensation awarded under other heads, so those amounts were left undisturbed.

Penal Interest Set Aside

The tribunal had directed that in default of payment, penal interest at 12% per annum would apply. Justice Eapen set aside this direction, holding it legally unsustainable in view of the Supreme Court's judgment in National Insurance Co. Ltd. v. Keshav Bahadur [2004 (2) SCC 370].

Order

The appeal was allowed in part and the tribunal's award was modified. The total compensation payable to the claimants was fixed at ₹5,08,329/- (Rupees five lakh eight thousand three hundred and twenty-nine only), with interest at 8% per annum from the date of petition till realisation, along with proportionate costs. The second claimant alone is entitled to the compensation awarded towards loss of dependency with interest thereon; all claimants including the second claimant are entitled to the balance compensation amount.

The insurer was directed to deposit the total compensation together with interest and costs within two months from the date of receipt of a certified copy of the judgment. The claimants were directed to furnish copies of their PAN Card, Aadhaar Card, and bank details to the insurer within one month to enable the deposit. If the claimants fail to furnish those details, the insurer may deposit the amount before the tribunal, following which the entire amount is to be disbursed to the claimants at the earliest in accordance with law.