The Supreme Court bench of Justice NV Ramana and Justice M. Shantanagoudar stated that the Motor Vehicles Act, 1988 does not place any restriction to awarding compensation exceeding the amount claimed by the claimants. In the matter of Ramla v. National Insurance Company Limited, the Claimants sought for total compensation of Rs. 25,00,000/-  before the Motor Accident Claims Tribunal wherein they were awarded an amount of Rs. 11,83,000/-, which was later enhanced by the High Court to Rs. 21,53,000/-. The Supreme Court accordingly enhanced the award of compensation to Rs. 28,00,000/- stating that the High Court had erred in deducting 2/3rd of the total income towards the personal expense of the deceased while quantifying the compensation as follow:

“5. ……..Taking into consideration the high cost of living at Doha, as observed by the High Court as well as the fact that the deceased was having his wife, two minor children and aged father as dependants and as there is no other earning member in the family of the deceased, in the facts and circumstances of the case, a deduction of 40% of the salary for the personal expenses would be appropriate for the purpose of quantifying compensation.”

The Bench further elaborated on the scope of compensation under the Motor Vehicle Act with reference to the judgments in Nagappa v. Gurudayal Singh (2003) 2 SCC 274, Magma General Insurance v. Nanu Ram (2018) SCC Online SC 1546 and Ibrahim v.Raju (2011) 10 SCC 634 and observed:

“6. …………..There is no restriction that the Court cannot award compensation exceeding the claimed amount, since the function of the Tribunal or Court under Section 168 of the Motor Vehicles Act, 1988 is to award “just compensation”. The Motor Vehicles Act is a beneficial and welfare legislation. A “just compensation” is one which is reasonable on the basis of evidence produced on record. It cannot be said to have become time­barred. Further, there is no need for a new cause of action to claim an enhanced amount. The Courts are duty bound to award just compensation.”


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Judgment: Ramla and Ors Versus National Insurance Company Limited and Ors