SC Boosts Compensation for NRI Accident Victim by Recognising ‘Future Prospects’

The Supreme Court’s ruling in Kulwinder Kaur & Ors. v. Parshant Sharma & Anr. delivers an emphatic reminder that the law on motor accident compensation applies with equal force to those earning abroad.

What's The Matter?

The case involved the death of Rajinder Singh Mihnas, a 31-year-old U.S. national of Indian origin, who ran a transport company in America and was earning in dollars. He died in a road accident near Karnal in 2007 when a rashly driven truck collided with his car.

His widow, daughter, and parents sought compensation under Section 166 of the Motor Vehicles Act, producing evidence including his U.S. permanent resident card, income tax returns with a verified social security number, and an employer certificate showing substantial earnings.

The Motor Accident Claims Tribunal dismissed this evidence, pegging his income at only ₹5,000 a month, awarding ₹7.8 lakh in total.

What Happened in Court?

The Punjab & Haryana High Court corrected this approach, relying on U.S. wage standards and documentary proof to fix monthly income at ₹78,300 and award ₹1.17 crore. But it stopped short of adding the “future prospects” component additional income expected over a career citing earlier judgments that denied it to self-employed persons.

Here, the Supreme Court stepped in. Citing the Constitution Bench decision in Pranay Sethi, the bench reiterated that even self-employed individuals are entitled to future prospects: 40% for those under 40 years old.

The Court stressed that a self-employed person’s income does not remain static and must be assessed dynamically, even if the individual worked in a foreign economy.

Absent specific evidence to the contrary, the principles in Pranay Sethi must guide the computation.

Applying this, the Court revised the loss of dependency to ₹1.57 crore, adjusted amounts under conventional heads like loss of consortium, estate, and funeral expenses, and enhanced the total compensation to ₹1.60 crore  an increase of ₹42.95 lakh over the High Court’s award, with 6% interest.

The judgment is significant not just for its outcome but for its reasoning. It establishes that NRI victims’ earnings abroad can be recognized using credible foreign documentation, ensuring their financial contributions are fairly assessed.

Additionally, it affirms that future prospects are not a privilege limited to salaried employees in India but a right extended to all, including the self-employed abroad.

The ruling emphasizes that courts must balance the practical challenges of evaluating foreign incomes with the statutory obligation to grant "just compensation."

Ultimately, this decision ensures that the measure of a family’s loss is not diminished by geography. Whether the deceased was earning rupees in Punjab or dollars in Pennsylvania, the law’s commitment to fairness remains unwavering and future prospects continue to be an essential part of the future that the law must value.

Citation: KULWINDER KAUR VS. PARSHANT SHARMA - C.A. No. 820/2019 - Diary Number 37415 / 2017

Disclaimer: The views expressed in this blog are for informational purposes only and do not constitute legal advice. Readers are advised to consult a qualified legal professional for specific guidance on their individual circumstances.