This case deals with a crucial question in Indian motor accident compensation jurisprudence—whether the right to claim compensation for personal injury survives to the legal representatives (LRs) of an injured victim after his death, even when the death is unrelated to the accident. Additionally, it examines the computation of “just compensation,” the relevance of the multiplier method, and the award of future prospects in cases of permanent disability.
Title of the Case: Dhannalal Alias Dhanraj (Dead) through LRs v. Nasir Khan & Ors.
Citation: Civil Appeal No. 2159 of 2024
Court: Supreme Court of India
Judgment Date: 26 September 2025
The judgment, authored by Justice K. Vinod Chandran with Justice N. V. Anjaria concurring, provides clarity on the interplay between Section 306 of the Indian Succession Act, 1925 and Section 166(5) of the Motor Vehicles Act, 1988, as amended in 2019. It also recalibrates compensation principles to ensure fairness when the injured dies during litigation.
Factual Background
The Accident:
The appellant, Dhannalal alias Dhanraj, sustained severe injuries in a motor vehicle accident, resulting in 100% permanent disability. His condition left him bedridden and dependent on constant medical care and personal assistance.
Tribunal Proceedings:
The Motor Accident Claims Tribunal (MACT) initially awarded him ₹18,52,000 with 9% interest, fixing his monthly income at ₹8,000, based on oral evidence of his employment as a mistry and his ownership of agricultural land.
High Court Proceedings:
On appeal, the High Court reduced the monthly income to ₹4,030, thereby lowering compensation. The Tribunal’s earlier assessment of ₹8,000 was disregarded, despite no fresh evidence justifying such a drastic reduction.
Death of the Claimant:
Unfortunately, Dhanraj passed away on 24 April 2024, during the pendency of his appeal before the Supreme Court. His legal representatives were substituted in his place and sought continuation of the claim.
Objection by Insurance Company:
The insurer objected, arguing that the claim was personal in nature and abated with his death under Section 306 of the Succession Act, 1925. They cited the Full Bench of the Madhya Pradesh High Court in Bhagwati Bai v. Bablu and the Allahabad High Court ruling in Saroj Sharma v. State of U.P., both holding that personal injury claims do not survive beyond the claimant’s death except for pecuniary loss to the estate.
Issues
Survival of Claim:
- Whether the right to compensation for personal injury survives to the legal representatives of the deceased claimant, particularly after the insertion of Section 166(5) in the Motor Vehicles Act, 1988 (via 2019 amendment).
Computation of Just Compensation:
- Determination of the claimant’s monthly income in the absence of documentary proof.
- Applicability of future prospects despite disability.
- Correct multiplier to be adopted when the claimant dies before the case concludes.
Award of Interest:
- Whether the High Court was justified in restricting the payment of interest to a limited period.
Arguments
Appellants (Legal Representatives of the Deceased Claimant)
- The claim survives under the 2019 amendment (Section 166(5) MV Act), which expressly provides that the right to claim compensation continues irrespective of whether the death is related to the injury.
- The Tribunal’s original assessment of ₹8,000 per month should have been sustained. The High Court’s downward revision to ₹4,030 was arbitrary.
- Compensation should include future prospects since the victim was 100% disabled and incapable of earning post-accident.
- The High Court’s limitation of interest till 2016 was unreasonable, and interest must run until actual payment.
Respondent (Insurance Company)
- The claim abates upon death as per Section 306 of the Succession Act, 1925.
- Relied on Bhagwati Bai and Another v. Bablu and Mukund and Others (MP High Court, Full Bench, 2007) and Saroj Sharma v. State of Uttar Pradesh (Allahabad High Court, 2014), which held that claims for personal injury lapse upon the claimant’s death unless it concerns pecuniary loss to the estate.
The income claimed was unsupported by documents; therefore, the reduced computation by the High Court was valid.
Supreme Court’s Analysis
1. On Survival of Claim
The Court referred to Section 166(5) MV Act, inserted in 2019:
“Notwithstanding anything in this Act or any other law for the time being in force, the right of a person to claim compensation for injury in an accident shall, upon the death of a person injured, survive to his legal representatives, irrespective of whether the cause of death is relatable to or had any nexus with the injury or not.”
- This provision clearly overrides Section 306 of the Succession Act. Thus, the claim does not abate on death, even if unrelated to the injuries.
- The Court rejected the insurer’s reliance on Bhagwati Bai and Saroj Sharma, noting that the 2019 amendment renders those precedents inapplicable.
- The Court also cited Oriental Insurance Co. Ltd. v. Jasmail Singh Kahlon (2022) and Meena v. Prayagraj (2025), where it was held that compensation, once accrued, forms part of the estate and can be pursued by legal heirs.
- The legal representatives were entitled to continue the appeal.
2. On Computation of Compensation
(a) Monthly Income
- No documentary proof of earnings was produced.
- However, oral testimony established his occupation as a skilled mistry.
- Relying on Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd. (2011), where a daily-wage coolie was granted ₹4,500 p.m. in 2004, the Court applied an annual increase of ₹500 to fix his 2013 income at ₹9,000 p.m.
(b) Disability and Future Prospects
- The Medical Board certified 100% permanent disability.
- Despite not being in permanent salaried employment, the Court granted 25% addition for future prospects, consistent with Pranay Sethi (2017).
(c) Multiplier
- The Tribunal and High Court applied a multiplier of 14 (for age 45).
- However, since the victim lived only 11 years post-accident, the Court restricted the multiplier to 11, reflecting his actual reduced lifespan.
(d) Non-Pecuniary Damages
- The High Court had already awarded ₹5,52,095 under heads such as pain, suffering, attendant care, transportation, and medical expenses.
- The Court sustained this figure, as the victim survived in a vegetative state for 11 years.
3. Final Computation
- Loss of Income:
₹9,000 × 12 × 125% × 11 = ₹14,85,000
- Other Damages (pain, suffering, medical, attendant):
= ₹5,52,095
- Total Compensation:
= ₹20,37,095
9% per annum from the date of filing the claim petition until actual payment (not restricted to 2016).
Final Judgment
- The claim survived to the legal representatives under Section 166(5) MV Act.
- Compensation recalculated to ₹20,37,095 with 9% interest from claim filing till realisation.
- The insurer was directed to pay within three months, adjusting amounts already deposited.
- Appeal allowed.
Key Takeaways
- Survival of Claim Beyond Death: The 2019 amendment to Section 166(5) of the MV Act has settled the law: claims for injury compensation do not abate with the death of the claimant, even if unrelated to the accident. This ensures fairness and prevents insurers from escaping liability through procedural technicalities.
- Multiplier Adjustment Based on Actual Life Span: While the multiplier method is based on notional life expectancy, courts may adjust it when evidence shows reduced lifespan due to accident-induced disability.
- Recognition of Future Prospects Despite Informal Employment: Even self-employed or informal workers can be granted future prospects, especially in cases of 100% disability.
- Estate Principle: Compensation, once accrued, becomes part of the estate of the victim and is inheritable by legal heirs.
- Interest as a Component of Just Compensation: Interest cannot be arbitrarily curtailed. It must be payable from the date of application till realisation, ensuring full justice.
Conclusion
The Supreme Court’s ruling in Dhannalal alias Dhanraj v. Nasir Khan is a landmark in accident compensation jurisprudence. It reinforces the principle of “just compensation” under the Motor Vehicles Act while ensuring that technical objections do not extinguish substantive rights.
By affirming the survival of claims under Section 166(5), rationalising the multiplier, and expanding future prospects to self-employed workers, the Court has strengthened the protective framework for victims and their families.
This judgment will serve as a binding precedent for future cases where claimants die during the pendency of litigation, thereby safeguarding the rights of their dependents and legal heirs.