Liberal approach should be adopted in awarding compensation in motor accident claim petitions involving severe disability: SC

The Supreme Court observed that a contract is void if prohibited by a statute under a penalty, even without express declaration that the contract is void

The Motor Vehicles Act is a beneficiary legislation and this Hon’ble Supreme Court judgment proves the same. The appellant was a minor (12 years) at the time of accident and due to the accident, she suffered 100% disability. The Lower Court awarded 11 lakhs and the same was enhanced by the Hon’ble High Court to 25 lakhs. The Hon’ble Apex Court while dealing with the same held that liberal approach must be used to award compensation in Motor Accident Claims and awarded 62 lakhs as compensation @ 7.5% interest per annum.

A Bench of Justices N Nageswara Rao and Deepak Gupta of the Supreme Court emphasized that a liberal approach should be adopted in awarding compensation in motor accident claim petitions involving severe disability, more so when the victim is a minor.

Prior Facts:

The appellant was a twelve year old at the time of the accident. On 18th October, 2007, while she was travelling on a tractor with her parents, the tractor was hit by a truck which was driven rashly. In the said accident, the appellant suffered serious injuries resulting in damage to her brain. Her disability was assessed as 100%. A claim was made on behalf of the minor child by her father before the Motor Accident Claims Tribunal, which awarded her Rs. 11, 08,501/- as compensation. The High Court further enhanced the compensation amount to Rs. 25, 78,501/. Aggrieved, the appellant approached the Supreme Court by way of Civil Appeal.

The Supreme Court enhanced the compensation amount payable to Rs. 62, 27,000/- along with an interest @7.5% p.a. from the date of filing of the claim petition till payment/deposit of the amount and relied on numerous international cases where the principles for grant of compensation were enunciated such as Phillips v. Western Railway Co., Mediana, H. West Son Ltd. v. Shephard among others.

Key Features:

  • The Court has made some pertinent remarks on the approach to be adopted in assessing the compensation payable and remarked that, “One factor which must be kept in mind while assessing the compensation in a case like the present one is that the claim can be awarded only once. The claimant cannot come back to court for enhancement of award at a later stage praying that something extra has been spent”.
  • Before parting with the matter, the court also explained how the compensation payable should be invested where claimants minor are involved, to avoid the diversion of funds by others.
  • Relying on guidelines laid down in General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas & Ors. , the Court held that the compensation must be invested in nationalized banks with a good rate of interest so that the claimants are not deprived of the sum by unscrupulous elements.
  • The Court also made special remarks that, “In special cases, for reasons to be given in writing, the MACT or the trial court may release such amount as is required. We reiterate these guidelines and direct that they should be followed by all the tribunals and High Courts to ensure that the money of the victims is not frittered away”.


The Court observed that according to the principles laid out in the Motor Vehicles Act, 1988, the Court has a duty to ensure that fair and just compensation is paid to the claimant. Describing the role of the Courts, the Bench observed that, “It is impossible to equate human suffering and personal deprivation with money. However, this is what the Act enjoins upon the courts to do. The court has to make a judicious attempt to award damages, so as to compensate the claimant for the loss suffered by the victim. On the one hand, the compensation should not be assessed very conservatively, but on the other hand, compensation should also not be assessed in so liberal a fashion so as to make it a bounty to the claimant”.

Edited by J. Madonna Jephi

Approved & Published – Sakshi Raje


  • Case of Kajal vs. Jagdish Chand & Ors., Civil Appeal No. 735 of 2020, Arising out of Special Leave Petition (C) No.15504 OF 2019, decided by the Supreme Court of India on February 05, 2020.
Vaibhav Goyal
Vaibhav Goyal is a 3rd year BA.LLB (H) student of UILS, Panjab University, Chandigarh, India. He also basically belongs to the “City Beautiful-Chandigarh”. He had interned and have work experience at various Central and State Government bodies of India including the National Human Rights Commission, New Delhi; the Central Information Commission, New Delhi; U.T. Legal Services Authority, Chandigarh, etc. His research projects includes the study on the Right to Emergency Services (PSHRC), Resettlement of Migrant People (NHRC), Implications of RTI in Financial Institutions (CIC), etc. His publications involve articles in different fields of law like administrative, jurisprudence, etc. on online journals including the Juscholars Blog, Burnished Law Journal, etc. His research paper on Prison Reform was published in the Panjab University Journal and his paper was selected in category of best abstract on the topic of Naxalism: A State of Lawlessness and Arbitrariness. He had scored well in various competitions of law consisting of Quiz, Essay Writing, Lecture, Declamation, etc. He had also participated in various conferences including the World Law Forum Conference on Strategic Lawsuits on Public Participation held in New Delhi on Oct 20, 2018 and the National Law Conclave 2020 held at Vigyan Bhawan, New Delhi on Jan 11, 2020.