NEW INDIA ASSURANCE CO. LTD. versus SATENDER AND ORS.

Citation: [2006] SUPP. 8 S.C.R. 745 · Decided: 08-11-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

NEW INDIA ASSURANCE CO. LTD. 
A 
v. 
SA TENDER AND ORS. 
NOVEMBER 8, 2006 
[ARIJITPASAYAT ANDLOKESHWARSINGHPANTA,JJ.] 
B 
Motor Vehicles Act, 1988--Sections 168 and 177-Compensation-
Determination of, in case of death of child of tender age-Held: In view of 
uncertain future of a child, child's income cannot be assessed on estimated C 
basis nor parent's financial loss can be computed mathematically-
Compensation awarded should be 'just and reasonable '-Thus, instead of Rs. 
4,45,0001- with interest@ 9% p.a., Rs. 1,80,0001- with interest@ 7.5% p.a. 
awarded from date of application till date of realization which would meet 
ends of justice. 
D 
Nine years old child was knocked down by a truck insured with the 
appellant, resulting in his death. Since the child was not earning, for the 
assessment of compensation notional income was taken as Rs. 30,000/-p.a. 
and considering the age of the parents, multiplier of 17 was adopted. Tribunal 
awarded sum of Rs. 4,45,000/- as compensation with interest at the rate of 
9% p.a. Appellant-insurance company filed an appeal, which was dismissed. E 
Hence, the present appeal. 
Appellant-insurance company, owner of the offending vehicle and driver 
inter alia contended that the quantum of compensation fixed was unrealistic. 
Allowing the appeal, the Court 
HELD: 1.1. The determination of damages for loss of human life is an 
extremely difficult task and it becomes all the more baffling when the deceased 
F 
is a child and/or a non-earning person. The future of a child is uncertain. 
Where the deceased was a child, he was earning nothing but had a prospect G 
to earn. Therefore, the question of assessment of compensation becomes 
stiffer. The figure of compensation in such cases involves a good deal of 
guesswork. In cases, where parents are claimants, relevant factor would be 
age of parents. (749-A-C) 
745 
H 
746 
SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R. 
A 
1.2. In cases of young children of tender age, in view of uncertainties 
abound, neither their income at the time of death nor the prospects of the 
future increase in their income nor chances of advancement of their career 
are capable of proper determination on estimated basis. The reason is that at 
such an early age, the uncertainties in regard to their academic pursuits, 
B achievements in career and thereafter advancement in life are so many that 
nothing can be assumed with reasonable certainty. Therefore, neither the 
income of the deceased child is capable of assessment on estimated basis nor 
the financial loss suffered by the parents is capable of mathemntical 
computation. [749-G-H; 750-A-B] 
1.3. Applying the principle in *Jasbir Kaur's case that the amount of 
C compensation which is damages in real sense should appear to be just and 
reasonable, award of a sum of Rs. 1,80,000/- with interest at the rate of 7.5% 
from date of application till date of realization, would meet the ends of justice. 
(750-B-C] 
*State of Haryana and Anr. v. Jasbir Kaur and Ors., (2003) 7 SCC 484, 
D .relied on. 
Mallett v. McMonagle, (1970) AC 166; Davies v. Taylor, (1974) AC 207; 
Davies v. Powell Duffiyn Associated Colleries Ltd, (1942( l All ER 657 and 
Taff Vale Rly. v. Jenkins, (1913) AC 1, referred to. 
E 
CIVIL APPELLATE JURJSDICTION : Civil Appeal No. 4725 of2006. 
F 
G 
G 
From the final Order dated 5.10.2005 of the High Court of Delhi at New 
Delhi in MACA No. 810/2005. 
Kishore Rawat and M.K. Dua for the Appellant. 
Kuldip Parihar and H.S. Parihar for the Respondents. 
The Judgment of the Court was delivered by 
ARIJIT PASA Y AT, J. Leave granted. 
Challenge in this appeal is to the judgment rendered by a learned Single 
Judge of the Delhi High Court in an appeal filed by the appellant. In the 
appeal, the quantum of compensation awarded to the respondents l and 2 by 
the Motor Accidents Claims Tribunal, Delhi (in short the 'MACT') was 
questioned. 
NEWINDIAASSURANCECO.LTD. v. SATENDER[PASAYAT,J.) 
747 
Factual background in a nutshell is as follows: 
A 
On 7.5.2002 a child-Anuj, aged about nine years was knocked down 
by a truck which was the subject matter of insurance with the appellant. As 
a result of the accident, said child died. A claim petition was filed under 
Section 166 of the Motor Vehicles Act, 1988 (in short the 'Act') claiming 
compensation. The MACT found that the child was not earning and, therefore, B 
the compensation has to be assessed on the basis of notional income. MACT 
referred to the second s
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