Legal Review and Analysis of Dhannalal Alias Dhanraj Dead Through Legal Representatives vs Nasir Khan and Ors 2025 INSC 1177

1. Heading of the Judgment

Case Title: Dhannalal Alias Dhanraj (Dead) Through Legal Representatives vs. Nasir Khan and Ors.
Citation: 2025 INSC 1177 
Court: Supreme Court of India
Civil Appeal No.: 2159 of 2024
Judges: Justice K. Vinod Chandran and Justice N.V. Anjaria
Date of Judgment: September 26, 2025

2. Related Laws and Sections

The judgment interprets and applies the following legal provisions:

• Motor Vehicles Act, 1988:
  Section 166: Provides the mechanism for filing an application for compensation arising from a motor vehicle accident.
  Section 167(5): A crucial amendment introduced by Act 32 of 2019 with effect from April 1, 2022. It states that the right to claim compensation for injury shall survive to the legal representatives of the injured person upon their death, irrespective of whether the death has any nexus with the accident injuries.

• Indian Succession Act, 1925:
  Section 306: Deals with the survival of causes of action. The judgment clarifies the interplay between this section and the specific provisions of the Motor Vehicles Act.

• Precedents:
  National Insurance Company Ltd. v. Pranay Sethi and Others, (2017) 16 SCC 680: Laid down the standard formula for calculating compensation, including the use of multipliers and the addition of future prospects.
  Oriental Insurance Company Limited v. Kahlon @ Jasmail Singh Kahlon, (2022) 13 SCC 494 & Meena (Dead) Rep. by LRs. v. Prayagraj and Others, 2025 SCC OnLine SC 1433: Held that a claim for injury is a "property" that forms part of the estate of the deceased-injured, which their legal representatives are entitled to pursue.
  Ramachandrappa v. Manager, Royal Sundaram Alliance Insurance Company Limited, (2011) 13 SCC 236: Guided the determination of notional income in the absence of documentary evidence.

3. Basic Judgment Details

This appeal was filed by the original claimant, Dhannalal, who suffered 100% disability in a motor accident, seeking enhancement of the compensation awarded by the Motor Accidents Claims Tribunal (MACT) and later enhanced by the High Court. During the pendency of this appeal before the Supreme Court, the injured claimant died on April 24, 2024. His Legal Representatives (LRs) were substituted as appellants. The respondent Insurance Company raised a preliminary objection against the very maintainability of the appeal after the death of the injured.

4. Core Legal Analysis: Survival of Injury Claims and Re-calibration of Compensation

The judgment addresses two distinct but interconnected legal fronts: first, a significant legal question regarding the survival of a personal injury claim, and second, the correct principles for quantifying compensation.

A. The Primary Issues Addressed

1. Preliminary Issue: Whether a claim for compensation for personal injuries under the Motor Vehicles Act abates upon the death of the injured claimant, or does it survive for his Legal Representatives to continue?

2. Substantive Issue: If the claim survives, what is the correct method for calculating the compensation, particularly the "loss of income" component, when the injured has died during the proceedings?

B. Analysis of the Survival of the Injury Claim

The Insurance Company argued, relying on a Full Bench decision of the Madhya Pradesh High Court (Bhagwati Bai), that a personal injury claim abates on the death of the claimant and does not survive for the LRs, except for any pecuniary loss already suffered by the estate.

• Supreme Court's Reasoning and Resolution: The Court decisively rejected this objection by invoking the newly inserted Section 167(5) of the Motor Vehicles Act, 1988. This provision explicitly states that the right to claim compensation for injury shall survive to the legal representatives, regardless of whether the death has any connection to the accident injuries.

• Application of the Law: Since the injured died in 2024, after the provision came into force in 2022, the Supreme Court held that the amendment was squarely applicable. The right to seek enhancement of compensation was a right that vested in the injured and, upon his death, survived to his LRs as part of his estate. The Court affirmed the principles laid down in its earlier decisions in Kahlon and Meena.

C. Analysis of the Quantum of Compensation

The Court then proceeded to determine the correct compensation amount.

• Determination of Monthly Income: The claimant was a skilled worker (Mistry) with additional agricultural income but lacked documentary proof. The Tribunal had initially adopted Rs. 8,000, which was reduced to Rs. 4,030 on remand. The Supreme Court, relying on Ramachandrappa, held that the income should be determined realistically. Considering the skilled nature of his work and incremental income growth, the Court determined the monthly income to be Rs. 9,000 at the time of the accident in 2013.

• Application of Multiplier and Future Prospects: The Court agreed with the use of a 25% addition for future prospects. However, it made a crucial adjustment to the multiplier. While the Tribunal used a multiplier of 14 based on the victim's age (45) as per Pranay Sethi, the Supreme Court noted that the victim actually lived only for 11 years after the accident. The Court held that since the compensation was now for the "loss to the estate" and the estate could only have benefited from his earnings for the 11 years he actually lived, the multiplier must be reduced from 14 to 11.

• Calculation of Loss of Income: The loss of income was recalculated as:
  Rs. 9,000 (Monthly Income) + 25% (Future Prospects) = Rs. 11,250 per month.
  Rs. 11,250 x 12 months x 11 multiplier = Rs. 14,85,000.

• Other Heads: The amounts awarded by the High Court under other heads (pain and suffering, medical expenses, attendant charges, etc.), totaling Rs. 5,52,095, were upheld as they had already accrued to the estate of the injured victim.

5. Final Outcome and Supreme Court's Directions

The Supreme Court allowed the appeal, setting aside the restrictive order of the High Court on interest.

Directions:

1. The total compensation payable to the appellants (Legal Representatives) is Rs. 20,37,095 (Rs. 14,85,000 for loss of income + Rs. 5,52,095 under other heads).

2. The awarded amount shall carry interest at the rate of 9% per annum from the date of filing the claim petition until the date of actual payment. The High Court's restriction of interest until November 7, 2016, was held to be without rationale and was set aside.

3. Any compensation already paid shall be deducted from the total amount.

4. The balance amount must be paid to the Legal Representatives within three months from the date of the judgment.

6. MCQs Based on the Judgment

Question 1: In Dhannalal vs. Nasir Khan (2025 INSC 1177), the Supreme Court allowed the legal representatives of the deceased-injured to continue the appeal primarily based on which legal provision?

a) Section 306 of the Indian Succession Act, 1925.
b) Section 166 of the Motor Vehicles Act, 1988.
c) Section 167(5) of the Motor Vehicles Act, 1988, inserted by the 2019 amendment.
d) The principles of natural justice.

Answer: c) Section 167(5) of the Motor Vehicles Act, 1988, inserted by the 2019 amendment.

Question 2: The Supreme Court, in the Dhannalal case, reduced the multiplier used for calculating loss of income from 14 to 11. What was the legal rationale for this reduction?

a) Because the victim was only partially disabled.
b) Because the victim had no dependents after his death.
c) Because the compensation was for the loss to the estate, and the victim lived only 11 years after the accident, not the full span projected by the standard multiplier.
d) Because the Insurance Company requested a reduction.

Answer: c) Because the compensation was for the loss to the estate, and the victim lived only 11 years after the accident, not the full span projected by the standard multiplier.