Summary of this article
The Kerala High Court has ruled that a major unmarried dependent sister dependent on her deceased sibling is entitled to loss of dependency compensation in a motor accident claim.
In an appeal by the insurer, the court emphasised that dependency is a factual issue.
It recalculated the deceased’s income and future prospects, and modified the compensation.
The Kerala High Court, in a recent motor insurance compensation matter, held that a major unmarried sister is entitled to loss of dependency compensation in the insurance. Justice Shobha Annamma Eapen gave this ruling in an appeal made by the insurer against the award granted by the Motor Accident Claims Tribunal, Mavelikkara, to the respondent. The court underscored that dependency is a matter of factual evidence rather than mere familial relation and modified the compensation amount to reflect the socio-economic reality of the claimants.
Case Background
The case originated from a tragic incident on October 4, 2014, when Ms. Santhamma was struck by a scooter while crossing the road at the zebra line at Krishnapuram junction along the Kollam-Alappuzha National Highway. Allegedly, the scooter was driven in a rash and negligent manner, and the accident resulted in fatal injuries to Santhamma, who succumbed. Her five siblings (all sisters) filed the claim as the deceased’s legal heirs, seeking Rs 5 lakh compensation. The Tribunal initially held the driver negligent and awarded the siblings Rs 6,89,400 compensation with 8 per cent interest, and 12 per cent interest in case of default in payment.
Against which the insurer approached the high court.
Arguments
The insurance company argued that the claimants were major siblings residing with their own families; they were not dependent on the deceased and thus ineligible for “loss of dependency” compensation. They contended that the tribunal incorrectly fixed the deceased’s notional monthly income at Rs 7,000 when her actual pension was only Rs 6,285 per month. The insurer further argued that since the deceased was a spinster, the law required a 50 per cent (one-half) for personal expenses rather than the one-third applied by the tribunal.
The claimants countered that the deceased had supported them and specifically highlighted that the second claimant, also a spinster, lived with the deceased and was entirely dependent on her.
Court Observation
The court observed that while all five claimants were major siblings, their dependency status was not the same. The court noted that evidence provided by the second claimant established that she lived with her sister and was dependent on her sibling’s pension for her daily living expenses. However, the court found no evidence of other siblings being dependent on the deceased.
The court also noted the error in the financial calculation by the Tribunal. It held that the actual treasury passbook figure of Rs 6,285 must be used for income and confirmed that a 50 per cent personal expenses deduction is mandatory for a spinster.
It held, “The deceased was 57 years old at the time of the accident. Hence, for assessing compensation towards loss of dependency, 10 per cent future prospects has to be added to the refixed income.”
The court calculated the notional income of the deceased to be Rs 6,913.5 (Rs 6285 + Rs 625.8) for the purpose of calculating loss of dependence. It referred to the precedents, National Insurance Co. Ltd. v. Pranay Sethi (2017), and recalculated the loss of dependency for the second claimant.
The court further held, “Since the deceased was 57 years at the time of the accident, the multiplier to be adopted is “9”. Taking this multiplier into calculation, the court determined a total compensation of Rs 3,73,329 (Rs 6913.5 x 12 X 9 X ½) for the second claimant, whereas modifying the total compensation to Rs 5,08,329 with 8 per cent interest from the date of petition to the date of fund realisation.
Court Judgment
The court partially allowed the appeal by reducing the total compensation from Rs 6,89,400 awarded by the Tribunal to Rs 5,08,329. It ruled that only the second claimant is entitled to the specific loss of dependency portion of the award, where the remaining balance will be shared among all siblings. It also set aside the 12 per cent penal interest.
