The Supreme Court enhanced compensation awarded to a motor accident claimant after holding that the High Court had erred in reducing the assessed disability and in failing to determine a realistic notional income, despite the claim being treated as one under Section 163A of the Motor Vehicles Act.
Case Information
- Case Title: S. Shakul Hameed v. Tamil Nadu State Transport Corporation Limited
- Court: Supreme Court of India
- Bench: Justice Ahsanuddin Amanullah and Justice K. Vinod Chandran
- Date of Judgment: January 6, 2026
- Case Number: Civil Appeal arising out of SLP (C) No. 7347 of 2024
- Citation: 2026 INSC 29 (Non-reportable)
Background of the Case
The appeal was filed by the claimant, S. Shakul Hameed, who had suffered disability in a motor vehicle accident involving a bus operated by the Tamil Nadu State Transport Corporation Limited.
The Motor Accidents Claims Tribunal had awarded compensation of ₹2,12,800. This amount was marginally enhanced by the High Court to ₹2,23,000 along with interest at 7.5 per cent per annum from the date of the claim petition until deposit.
Dissatisfied with the quantum of compensation, the claimant approached the Supreme Court seeking enhancement, contending that both his income and the extent of disability had been incorrectly assessed by the courts below.
Submissions on Behalf of the Claimant
Counsel for the appellant argued that the claimant was employed as a salesman and earning ₹8,000 per month at the time of the accident.
It was submitted that the Tribunal had wrongly fixed his monthly income at ₹3,300 by mechanically adopting the schedule applicable to Section 163A of the Motor Vehicles Act, 1988, and that the High Court had failed to correct this error.
It was further contended that the medical expert had assessed permanent disability at 60 per cent, which the Tribunal reduced to 50 per cent without proper basis, and that the High Court compounded the error by further reducing it to 40 per cent without any appeal or challenge from the respondent corporation.
Stand of the Transport Corporation
The respondent transport corporation opposed the appeal, arguing that the claim petition itself had been filed under Section 163A of the Motor Vehicles Act.
It was submitted that there was no documentary evidence to prove either the claimant’s employment or his asserted monthly income of ₹8,000.
The corporation also maintained that the disability was only a functional disability and that both the Tribunal and the High Court were justified in assessing it at 40 per cent.
Nature of the Claim Petition
After examining the record, the Supreme Court noted that although the claim petition mentioned Section 163A of the Motor Vehicles Act, the pleadings clearly alleged rash and negligent driving by the corporation’s bus and claimed compensation of ₹7,40,000.
The Court held that the substance of the pleadings showed that the claim was in fact one under Section 166 of the Motor Vehicles Act.
The Bench observed that mere mention of Section 163A would not be decisive where the averments and the nature of the claim pointed to a fault-based claim.
Assessment of Income
On the question of income, the Court noted that the claimant had not produced any documentary proof to substantiate his claim of earning ₹8,000 per month as a vendor of electronic equipment.
However, the Court rejected the approach of fixing income at ₹3,300 by blindly applying the structured formula under Section 163A.
Relying on its earlier decision in Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd. (2011) 13 SCC 236, where the income of a coolie was assessed at ₹4,500 per month for an accident in 2004, the Court held that a reasonable notional income had to be fixed.
Taking a nominal increase into account, the Court held that even a coolie would be entitled to an income of ₹5,000 per month in the year 2005, when the present accident occurred. Accordingly, the claimant’s monthly income was safely computed at ₹5,000.
Given that the claimant was 27 years old at the time of the accident, the applicable multiplier was fixed at 17. The Court further held that as the claimant was self-employed, an addition of 40 per cent towards future prospects was warranted.
Determination of Disability
The claimant had produced a disability certificate marked as Exhibit P-14, issued by the doctor examined as PW-2, assessing permanent disability at 60 per cent. During cross-examination, it emerged that the treatment involved skin grafting.
The Tribunal had assessed the disability at 50 per cent after considering the evidence. The Supreme Court found that the High Court had reduced the disability to 40 per cent without any appeal by the insurer or the transport corporation.
The Bench categorically held that such reduction was improper and observed that the disability as assessed by the Tribunal ought to have been maintained.
Recalculation of Compensation
On the basis of the revised income, applicable multiplier, future prospects, and disability percentage, the Supreme Court recalculated the loss of income as follows:
₹5,000 × 12 × 17 × 140% × 50% = ₹7,14,000
The Court clarified that this amount represented compensation towards loss of income alone. The amounts awarded under the conventional heads by the Tribunal, and affirmed by the High Court, were left undisturbed.
Final Directions
Allowing the appeal, the Supreme Court directed the respondent transport corporation to pay the enhanced compensation within a period of three months from the date of judgment, together with interest at the rate of 7.5 per cent per annum as already awarded by the High Court.
With these directions, the appeal was allowed and all pending applications were disposed of accordingly.
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