Compensation under Motor Vehicles Act cannot be granted under the head of ‘loss of love and affection’

Isha Sawant | Government Law College | 15th September 2020

New India Assurance Company Limited v. Somwati

Facts:

Appeals were filed by three insurance companies i.e. New India Assurance Company Ltd, Cholamandalam MS General Insurance Company Ltd and The Oriental Insurance Company Ltd, raise common questions of law and are decided by this common judgement. The decisions of the High Courts in the cases of New India Assurance Company Ltd v. Smt. Somwati and others; New India Assurance Company Ltd v. Sangita Devi and Ors; New India Assurance Company Ltd v. Nanak Chand and Ors, Cholamandalam MS General Insurance Company Ltd v. Umarani and Ors; The Oriental Insurance Company Ltd v. Smt. Rinku Devi and Ors have been appealed against by the insurance companies in the present case. In all these cases mentioned above, the claimants have been awarded compensation under the heads of ‘loss of consortium’ and ‘loss of love and affection’ by the Motor Vehicles Claims Tribunal (MACT).

Issues:

• Whether compensation can be warded under the two heads of ‘loss of consortium’ and ‘loss of love and affection’.
• Whether only the wife is entitled for consortium or if it can be awarded to children and parents as well. 

Legal Provisions:

• Motor Vehicles Act, 1988, Section 166- Claims Tribunals.

Appellant’s Contention:

The appellant contended that the Constitution Bench if the apex court had laid down in the case of New India Assurance Company Ltd v. Pranay Sethi and others (2017) that there are only three conventional heads for which they decided the compensation amount, namely (i) loss of state- Rs. 15,000/-; (ii) loss of consortium- Rs. 40,000/-; and (iii) funeral expenses- Rs. 15,000/-, the total under these conventional heads amounting to Rs. 70,000/-, which is not to be exceeded. They submitted that the amount given under the head of ‘loss of love and affection’ is without jurisdiction, also the amount under the head of ‘loss of consortium’ is only payable to the wife and the Tribunals and High Courts had erred in granting the same to each of the claimant i.e. wife, parents and children. They also contended that the High Court by warding compensation under the heads of ‘loss of love and affection’ is contrary to the law laid down by the constitution bench in Pranay’s case and thus should be set aside. The appellant challenged the decision of the High Court in Rinku Devi’s case, whereby it directed the statutory amount deposited by the appellant along with the appeal to be deposited to AASRA fund opened in Delhi High Court, stating that the High Court should not have given such a direction as the appellant had raised substantial question of law and appeal deserves to be heard. 

Respondent’s Contention:

The counsel for the claimants contended that the amount granted to each of the claimants under the head of consortium is in accordance to the law laid down by the court. The amount of Rs. 40,000/- awarded under the head of consortium cannot be given a narrow interpretation and has been rightly given not only to the wife but also to children and parents. 

Observations of the court:

The court observed that a claimant is entitled to a just compensation u/s- 166 of the Motor Vehicles Act,1988, it has to be enacted with the intention to facilitate the claimants to get redress for the loss of the family member and to compensate the loss to a reasonable extent. The court referred to the case of Sarla Verma v. Delhi transport Corporation and another (2009), where it was stated that compensation awarded is not intended to be a source of profit rather should be fair and equitable. The court also held that the amount to be awarded under conventional heads, decided by the constitutional bench has to be enhance every three years at the rate of 10%. The court then referred to the case of Magma General Insurance Company Limited v. Nanu Ram alias Chahru Ram and others (2018)- where it explained that consortium is a concise term which covers ‘spousal consortium’ which is awarded to the wife or husband of the husband, ‘parental consortium’ which is awarded to children who lose their parents and ‘filial consortium’ awarded to parents who lose their minor child, unmarried son or daughter. The two-judge bench in this case had awarded amount of Rs. 40,000/- each to the father and sister of the deceased for the loss of filial consortium, the three-judge bench in United India Insurance Company Ltd v, Satinder Kaur and others (2020) where it reaffirmed the view of the two-judge bench in Magma General case, it also approved the comprehensive view given to consortium to include spousal, parental as well as filial consortium. The bench however laid down that ‘loss of love and affection’ is covered in ‘loss of consortium’, so there was no justification to award compensation towards a separate head; the constitution bench in the Pranay Sethi case did not include ‘loss of love and affection’ as a conventional head. The court found that the judgements of the High Court awarding compensation to each of the claimants does not warrant any interference in this appeal, it accepted the interpretation of consortium to include spousal, parental, filial. The court, however, accepted the contention of the appellant that there is no justification for awarding compensation under the separate head of ‘loss of love and affection’.

Judgement:

The court found the order of the High Court awarding Rs. 50,000/- to each of the claimants under the head of ‘loss of love and affection’ to be justified and hence, it was set aside. The direction of the High Court to deposit statutory amount along with the interest accrued to AASRA fund was also set aside.