Summary of Judgment The Oriental Insurance Co. Ltd. vs. Niru @ Niharika & Ors.

Related Law:

Motor Vehicles Act, 1988 (Proof of vehicle involvement in accidents)

Citation: 2025 INSC 822
Case Title: The Oriental Insurance Co. Ltd. vs. Niru @ Niharika & Ors.
Special Leave Petition (C) No.: 11340 of 2020 (with connected SLP (C) No. 22136 of 2024)
Court: Supreme Court of India
Judges: Hon’ble Mr. Justice Sudhanshu Dhulia & Hon’ble Mr. Justice K. Vinod Chandran
Date of Judgment: 14th July 2025

Background

1. Accident & Claim:
   Deceased, a UK-based engineer with British Telecom, died in a motor accident on 18.11.1995 when his car collided with a negligently driven truck.
   Claimants (wife and two minor children) sought compensation of ₹1.3 crores for loss of dependency.

2. Tribunal’s Award (2017):
   Negligence: Held truck driver liable based on FIR and prior claim adjudication.
   Compensation Breakdown:
   Loss of dependency: ₹78,33,540 (monthly income converted to ₹56,168, 1/3rd deduction for personal expenses, 30% future prospects, multiplier of 13).
   Additional grants: ₹40,000 (consortium), ₹15,000 (funeral), ₹15,000 (loss of estate).
   Total: ₹79,04,540.

3. High Court’s Modifications (2020):
   Adjusted exchange rate (₹52.3526/GBP vs. Tribunal’s ₹54.2601).
   Upheld multiplier, future prospects, and interest rate of 9%.

Issues Before the Supreme Court

1. Whether the multiplier of 13 was justified despite the wife’s remarriage in 2002 (stopping her pension).

2. Whether the 9% interest rate was excessive given the long delay (1995–2017).

3. Whether interest on future prospects was legally tenable.

Supreme Court’s Decision

1. Multiplier & Dependency:
   Rejected insurer’s argument to limit multiplier to 7 years (till remarriage).
   Held: Minor children’s dependency continues; multiplier of 13 upheld.
   Recalculated Loss of Dependency:
   ₹56,165 (income) × 130% (future prospects) × 12 × 13 × 2/3 = ₹75,93,508.
   Total Award: ₹75,93,508 + ₹70,000 (consortium, etc.) = ₹76,63,508.

2. Interest Rate (9%):
   No merit in insurer’s delay claim: No evidence proved claimants caused delays (case pending for 12 years due to systemic lapses).
   Precedents cited: 9% interest was standard in the 1990s; current bank rates (7%+) justified the rate.

3. Interest on Future Prospects:
   Rejected insurer’s contention: Future prospects compensate for delayed payments; claimants suffered due to prolonged litigation.
   Direction: Full interest payable from claim filing date (1995) till disbursement, deducting interim compensation (₹50,000).

Conclusion

• The Supreme Court dismissed the insurer’s appeals, upholding the High Court’s award of ₹76,63,508 with 9% interest.

• Key Takeaways:
  Remarriage of a widow does not negate minors’ dependency rights.
  Systemic delays cannot deprive claimants of justified interest.
  Future prospects’ interest is valid to offset livelihood losses during litigation.

Final Direction:

• Insurer to pay balance within 3 months, failing which 12% penalty interest applies.

• Pending applications closed.