On 9th April 2019, the Hon’ble Supreme Court in the matter of M/S. Royal Sundaram Alliance Insurance Company Ltd. v. Mandala Yadagari Goud & Ors., observed that for computing compensation u/s 140 of the Motor Vehicles Act, it is the age of the deceased, not the age of the dependents which has to be taken into account.
The Hon’ble Supreme Court observed that:
The concept of insurance for a motor vehicle is to cover risk in case of an accident. The insurance policy covers personal risk of injury or death, including for third parties. The premium charged in this behalf is uniform. (Para 7)
The amount of compensation determined is to be paid to the claimants who are dependents in case of a death of a person based on what the deceased would have contributed to their support. The amount thus received by the dependents in turn becomes a part of the estate as they may live longer or may be younger than the age limits taken into account for calculation of a multiplier to be applied in such a situation. (Para 8)
While computing the compensation, it is the age of the deceased which has to be taken into account and not the age of the dependents for the purpose of calculation of the multiplier.(This inference has been drawn on the basis of Para 13)
Copy of judgement: Judgement_09-Apr-2019