In a significant ruling delivered on 10 March 2026, the Supreme Court enhanced the compensation payable to the widow and children of Balakrishna Yallappa Hosmani, who died in a road accident on 6 January 2013, from ₹14,05,942/- awarded by the High Court of Karnataka to ₹23,51,362/-. A bench comprising Justices Rajesh Bindal and Vijay Bishnoi allowed the appeal filed by Sushila & Ors. (SLP (Civil) No. 21717 of 2025) and set aside the partial enhancement made by the High Court while disapproving the 50% deduction applied by both the Motor Accident Claims Tribunal (MACT) and the High Court on the ground that the deceased, a permanent railway employee aged 59 years, had only six months of service remaining at the time of the accident.
The deceased, while proceeding on his bicycle on Sangli-Miraj Road near S.R. Petrol Pump, Belagavi, was hit from behind by a motorcycle bearing registration No. MH-10/BC-5380 driven in a rash and negligent manner by the first respondent. He succumbed to his injuries the next day at Miraj Government Hospital. The claimants (widow and three children) filed M.V.C. No. 1514 of 2013 before the III Additional Senior Civil Judge and MACT, Belagavi, claiming ₹36,16,264/-. The Tribunal held the accident to be due to the rash and negligent driving of the motorcycle rider and, after taking the gross salary of the deceased at ₹31,893/- per month and deducting festival advance and D.A. arrears, assessed the net salary at ₹25,415/- per month. However, it deducted 50% of the salary citing the judgment of the Karnataka High Court in Karnataka State Road Transport Corporation v. Sri Narasubai Joshi (2014 (3) Kant LJ 258) on the ground that the deceased had only six months of service left. After further deducting one-third towards personal expenses, the Tribunal applied a multiplier of 9 and awarded a total compensation of ₹11,37,466/- (including conventional heads). It also directed that only the widow would receive the major share, with the married son and married daughters getting 10% each for loss of love and affection.
In the appeal before the High Court (M.F.A. No. 101451 of 2016), the claimants sought enhancement on the ground that no deduction ought to have been made for the remaining service period and that future prospects should have been added. The High Court added 10% future prospects as per National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680, enhanced conventional heads by 30%, and raised the total compensation to ₹14,05,942/-, but upheld the 50% deduction and the one-third personal expenses deduction.
The Supreme Court, after examining the rival contentions, held that both the Tribunal and the High Court had erred in making a 50% deduction from the salary merely on the basis of the remaining service period. Relying on Helen C. Rebello v. Maharashtra State Road Transport Corporation (1999) 1 SCC 90 and the recent decision in New India Assurance Co. Ltd. v. Kamlesh (2025 INSC 724), the Court reiterated that compensation under the Motor Vehicles Act, 1988 is a beneficial legislation and any deduction unrelated to the accident itself is impermissible. The multiplicand must be determined on the basis of the annual income of the deceased as reflected in the last drawn salary to maintain uniformity and consistency. The fact that the deceased had only six months of service left does not justify splitting the income or reducing it artificially; had the accident not occurred, he would have continued to earn his full salary till retirement.
Accordingly, the Court took the net monthly salary at ₹25,415/- (annual ₹3,04,980/-), added 15% future prospects (as mandated by Pranay Sethi for a permanent salaried government employee aged 50-60 years), resulting in a gross annual income of ₹3,50,727/-. After deducting one-third towards personal expenses (₹1,16,909/-), the net annual income came to ₹2,33,818/-. Applying the multiplier of 9 as per Sarla Verma, the loss of dependency was computed at ₹21,04,362/-. The separate award of six months’ salary was deleted since the computation was now on an annual basis. The High Court’s awards under other non-pecuniary heads (loss to estate ₹19,500/-, consortium to all appellants ₹2,08,000/-, and transportation/funeral expenses ₹19,500/-) were left undisturbed. The total compensation thus stood enhanced to ₹23,51,362/- along with interest at 6% per annum from the date of filing of the claim petition till realization.
The Supreme Court directed the insurer (Respondent No. 2) to deposit the balance amount within twelve weeks, after adjusting any amount already paid. It also reiterated the procedural directions issued in Parminder Singh v. Honey Goyal (2025 INSC 361) for direct bank transfer of compensation to the claimants’ accounts.
Case Title:Sushila & Ors. v. Sudhakar & Anr.
Civil Appeal No.: Arising out of SLP (Civil) No. 21717 of 2025
Coram: Justices Rajesh Bindal and Vijay Bishnoi
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