Motor-Accident Compensation

How this is worked out

1. Established income. Actual income less income tax (Sarla Verma, SCC paras 23 and 24).
2. Add future prospects on the Constitution Bench's matrix: below 40, add 50% (salaried) or 40% (self-employed or fixed salary); 40 to 50, add 30% or 25%; 50 to 60, add 15% or 10%; above 60, nothing (Pranay Sethi, SCC para 59(iii) and (iv)).
3. Deduct personal and living expenses. Married: one-third for 2 to 3 dependants, one-fourth for 4 to 6, one-fifth beyond six. Bachelor: one-half normally, one-third where there is a large dependent family (Sarla Verma, SCC paras 30 to 32).
4. Apply the multiplier for the deceased's age, from column (4) of the Sarla Verma table (SCC paras 40 and 42).
5. Add the conventional heads: loss of estate, loss of consortium and funeral expenses (Pranay Sethi, SCC para 59(viii)).

For a bachelor the claimants are normally the parents. The father is presumed to have his own income and is not treated as a dependant, so ordinarily only the mother is counted. Siblings are not dependants unless there is evidence otherwise (SCC paras 31 and 32).

The escalation of the conventional heads is unsettled

Pranay Sethi fixed loss of estate at ₹15,000, loss of consortium at ₹40,000 and funeral expenses at ₹15,000, to be "enhanced at the rate of 10% in every three years". It did not say when the clock starts, whether the enhancement is simple or compound, or how it interacts with consortium being payable to each dependant. Those questions are live:

• Whether the three-year clock runs from the accident, or from the award, is unresolved. Hasina Yasmin says the accident date and expressly rejects the date of the order.
• Whether the 10 per cent is simple or compound is not stated in Pranay Sethi.
• Benches differ in practice: 2025 INSC 366 applied Rs 48,000 consortium; 2025 INSC 590 and 2025 INSC 724 applied Rs 40,000 flat; 2026 INSC 131 awarded Rs 50,000 spousal, Rs 10,000 funeral and nothing for loss of estate.
• The question has been referred to a Larger Bench in Hasina Yasmin v. National Insurance Co. Ltd., 2025 INSC 1501 (17.12.2025), which applied the unescalated figures in the meantime.

Hasina Yasmin was read from a copy carrying the Court's digital-signature block rather than from the Court's own server, because the Supreme Court's search interfaces are CAPTCHA-gated. Obtain the certified copy before relying on it in a filing.

What changed in the statute

• The SECOND SCHEDULE was omitted by s. 93 of the Motor Vehicles (Amendment) Act, 2019, and section 163A was abolished when s. 51 substituted the whole of Chapter XI. Both ceased with effect from 01.04.2022. A Second Schedule table is no longer operative law; it survives only for accidents governed by the pre-amendment position.
• Section 164 now provides a fixed sum of Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt, and the claimant is not required to plead or establish any wrongful act, neglect or default.
• Section 166(3), inserted with effect from 01.04.2022, imposes a hard limitation: no application for compensation shall be entertained unless made WITHIN SIX MONTHS of the accident.
• If compensation under s. 164 is accepted through the s. 149 procedure, the claim petition before the Tribunal lapses (second proviso to s. 166(1)).