SC Clarifies Compensation Rights After Death of Accident Victim

In Dhannalal @ Dhanraj (Dead) Thr. LRs. v. Nasir Khan & Ors. (Civil Appeal No. 2159 of 2024), the Supreme Court addressed a recurring legal question: whether the right to claim compensation in a motor accident case survives to the legal representatives of the injured if the victim dies during the pendency of proceedings for reasons unrelated to the accident.

What's The Matter?

Dhannalal, who was rendered 100% disabled in a road accident in 2013, lived for 11 years in a vegetative state before passing away in April 2024. His legal heirs pursued the appeal for enhanced compensation.

The insurance company objected, relying on Section 306 of the Indian Succession Act, which provides that personal claims generally abate on death. However, the Court noted the 2019 amendment to Section 166 of the Motor Vehicles Act, inserting sub-section (5), which expressly provides that the right to claim compensation survives to legal representatives “irrespective of whether the death has any nexus with the injuries sustained.”

What Court Said?

Rejecting the insurer’s objection, the Bench (Justices K. Vinod Chandran and N.V. Anjaria) held that the statutory amendment had fundamentally altered the legal position. The Court also departed from older rulings such as Bhagwati Bai v. Bablu (MP High Court, FB), which had earlier restricted such claims.

Instead, it affirmed that compensation already accrued or capable of assessment forms part of the deceased’s estate and thus devolves upon heirs.

Turning to the quantum, the Court reassessed the monthly income at ₹9,000 based on precedent (Ramachandrappa v. Manager, Royal Sundaram), applied a reduced multiplier of 11 (reflecting the claimant’s actual lifespan rather than hypothetical expectancy), and added 25% for future prospects, given his certified total disability. It awarded ₹20,37,095 with 9% interest from the date of filing until realization, directing deduction of any amounts already paid.

The ruling underscores that compensation under the Motor Vehicles Act is not merely personal solace but a statutory right tied to loss to the estate. It ensures that accident victims’ families are not deprived of just recompense merely because the injured did not survive till final adjudication.

By aligning statutory interpretation with humanitarian principles, the Supreme Court reaffirmed that “just compensation” remains the cornerstone of motor accident jurisprudence.