Legal Review and Analysis of Hasina Yasmin & Ors vs National Insurance Co Ltd & Anr 2025 INSC 1501
Case Synopsis
Hasina Yasmin & Ors. vs. National Insurance Co. Ltd. & Anr. (2025 INSC 1501)
Synopsis: The Supreme Court, encountering a jurisprudential rift in applying the inflationary 10% triennial enhancement from the Pranay Sethi precedent, expressed substantive doubt over its retrospective application to pre-2017 accidents and accordingly referred the seminal question to a Larger Bench for an authoritative determination, while granting interim relief based on standardized sums.
1. Heading of the Judgment
Case Name: Hasina Yasmin & Others versus National Insurance Company Limited & Another
Citation: 2025 INSC 1501
Court: Supreme Court of India
Judges: Hon’ble Mr. Justice Ahsanuddin Amanullah and Hon’ble Mr. Justice K. Vinod Chandran
Date: December 17, 2025
2. Related Laws and Sections
The judgment primarily interprets and applies the following legal principles and precedents:
The Constitution Bench decision in National Insurance Co. Ltd. vs. Pranay Sethi & Ors. (2017) 16 SCC 680: Which standardized compensation under conventional heads (loss of estate, loss of consortium, funeral expenses) and provided for a 10% enhancement every three years.
Magma General Insurance Co. Ltd. vs. Nanu Ram & Ors. (2018) 18 SCC 130: Which recognized the entitlement of children to filial consortium.
The Motor Vehicles Act, 1988: The overarching statute governing compensation for motor accident claims.
3. Basic Judgment Details
Facts of the Case
The petitioners (claimants) were the widow and two children of a deceased who died in a motor vehicle accident in the year 1998. The Motor Accidents Claims Tribunal (MACT) and the High Court had awarded compensation. The claimants approached the Supreme Court seeking enhancement of the award specifically under the conventional heads (loss of consortium, loss of estate, funeral expenses) in accordance with the principles laid down in the Constitution Bench decision of Pranay Sethi. They argued that all three claimants were entitled to loss of consortium (spousal and filial) and that the 10% triennial enhancement mandated by Pranay Sethi should apply.
Issues Before the Court
The core legal issue was: Whether the 10% triennial enhancement in compensation for conventional heads, as mandated by the Constitution Bench in Pranay Sethi (2017), applies to accidents that occurred prior to the date of that judgment, particularly to an accident dating back to 1998?
Ratio Decidendi (Court's Reasoning and Doubt)
The two-judge bench expressed a significant doubt regarding the prevailing interpretation and application of the Pranay Sethi enhancement rule. Their reasoning is as follows:
The bench meticulously analyzed paragraph 52 of Pranay Sethi, which standardized the conventional sums (Rs. 15,000 for loss of estate, Rs. 40,000 for loss of consortium, Rs. 15,000 for funeral expenses) as reasonable figures in the year 2017.
The bench interpreted the Constitution Bench's intent: the provision for a 10% increase every three years was a prospective standardization to account for future inflation (price index, reduced purchasing power) for accidents occurring after 2017. The first such enhancement would logically apply from 2020 onwards.
The bench found it illogical and contrary to the Pranay Sethi principle to apply this forward-looking escalation to accidents that occurred decades prior (like the 1998 accident in this case). They reasoned that the compensation for conventional heads is fixed as on the date of the accident. Any delay in payment is adequately compensated by the award of interest, not by retroactively applying a future inflationary formula.
The bench noted that other decisions (like Rojalini Nayak) had applied the enhancement based on the date of final disposal of the claim, which would mean an accident in 2010 could get a 10% increase if disposed of in 2020, and another if disposed of in 2023. With utmost respect, the present bench found this interpretation difficult to accept.
Since this interpretation conflict involved the reading of a Constitution Bench precedent (Pranay Sethi), the coordinate bench deemed it appropriate to refer the substantial question of law to a Larger Bench for an authoritative ruling.
4. Core Principle of the Judgment
Title: The Temporal Conundrum of Compensation Enhancement: A Prospective or Retroactive Application?
Sub-title: Interpreting Pranay Sethi's Triennial Enhancement for Pre-2017 Accidents
Main Issue Body and Analysis
This judgment grapples with a critical, recurring ambiguity in motor accident compensation law: the temporal scope of a remedial judicial innovation. The Constitution Bench in Pranay Sethi performed two key functions: (a) it fixed standardized amounts for conventional heads to curb arbitrariness, and (b) it devised a mechanical, triennial 10% escalation to automatically account for inflation in future cases.
The present bench's analysis centers on the nature of this escalation. Is it a prospective cost-of-living adjustment built into the legal framework for future victims, or is it a retroactive corrective measure meant to be applied to all pending cases regardless of when the accident occurred? The bench strongly leans toward the former view. Their reasoning is rooted in legal logic and the principle of restitution. Compensation aims to make the victim whole as of the date of the wrong (the accident). The value of conventional heads is thus pegged to that date. The subsequent erosion of money's value due to time and inflation between the accident and the final decree is traditionally addressed through interest on the awarded sum.
Applying a future-oriented inflationary formula backward, the bench argues, would lead to absurdities and a lack of the very "consistency" Pranay Sethi sought to achieve. For instance, two identical accidents in 1998, one settled in 2010 and another in 2025, would receive drastically different conventional compensation without any difference in their actual loss—a outcome at odds with equitable principles.
By expressing a "doubt" and ordering a referral, the bench highlights a clear cleavage in judicial approach that requires settlement by a Larger Bench. This step is crucial for ensuring uniform application of law across the country and providing certainty to insurance companies, claimants, and tribunals alike.
5. Final Outcome
The Supreme Court
Referred the substantial question of law regarding the application of the Pranay Sethi 10% triennial enhancement to accidents prior to 2017 to a Larger Bench. The Registry was directed to place the matter before the Hon’ble Chief Justice of India for appropriate orders.
Made an interim enhancement of the compensation payable to the claimants, subject to the final outcome of the reference:
Awarded Rs. 15,000 for loss of estate.
Awarded Rs. 15,000 for funeral expenses.
Awarded loss of consortium at Rs. 40,000 each for the widow and two children (recognizing filial consortium), totaling Rs. 1,20,000.
The total under conventional heads was enhanced from the High Court's Rs. 70,000 to Rs. 1,50,000.
The rate of interest on the entire awarded amount was enhanced to 8% per annum from the date of the application before the MACT.
Directed the Insurance Company to pay/deposit the enhanced amount within two months.
6. MCQ Questions Based on the Judgment
Question 1: In Hasina Yasmin vs. National Insurance Co. Ltd. (2025 INSC 1501), what was the primary reason the Supreme Court bench referred the matter to a Larger Bench?
A) To determine the fault of the driver in the 1998 accident.
B) To reconsider the entire concept of compensation under the Motor Vehicles Act.
C) To resolve the conflict in interpretation regarding the application of the Pranay Sethi 10% triennial enhancement to accidents that occurred before 2017.
D) To decide whether children are entitled to any compensation.
Question 2: According to the interim order passed by the Supreme Court in the aforementioned case, what was the total compensation awarded under the conventional heads (loss of estate, loss of consortium, funeral expenses)?
A) Rs. 70,000
B) Rs. 1,20,000
C) Rs. 1,50,000
D) Rs. 40,000