By Niyati Dhiman

In a landmark judgment, the Karnataka High Court addressed the issue of “just compensation” for the death of minor children in motor vehicle accidents. The case arose from two separate incidents where the parents of deceased minors challenged the compensation awarded by the lower tribunal, arguing that it did not adequately reflect both the financial and emotional losses suffered. The parents contended that the tribunal’s assessment failed to consider the long-term financial dependency on their children, particularly in light of cultural expectations in India, where children are often seen as future providers for their parents, especially in old age.

Justice N.S. Sanjay Gowda, in delivering the judgment, emphasized that compensation must account not only for the immediate financial loss but also for the long-term disruption caused by the child’s death. The Court noted that parents often rely on their children for moral and financial support as they age, and the loss of a minor child interrupts this expectation. In its ruling, the Court laid down guidelines that included the introduction of two methodologies for calculating compensation. The first method involves using inflation-adjusted notional income based on the Motor Vehicles Act’s Second Schedule, adding 40% for future prospects, and applying an appropriate multiplier based on the child’s age. The second method compares the compensation to that awarded in railway accidents, adjusted annually for inflation. The final compensation amount would be the average of both methods, ensuring fairness and consistency.

The Court also made provisions for safeguarding the financial future of the parents. It directed that the compensation be invested in a cumulative fixed deposit until one of the parents reaches the age of 60, at which point they are more likely to need financial support. The parents were also permitted to petition for early withdrawal if they could demonstrate a genuine need. Furthermore, acknowledging the healthcare needs of elderly parents, the Court ordered insurers to issue a medical insurance policy of Rs. 10 lakhs for the parents of deceased minors, effective from the age of 60, to cover future medical expenses.

In recognition of the emotional toll on the parents, the Court awarded Rs. 1,00,000 for the loss of love and affection, subject to annual inflation adjustments. This non-pecuniary compensation aims to acknowledge the irreplaceable emotional damage suffered by parents who lose a child. The Karnataka High Court’s ruling sets a precedent in determining “just compensation,” ensuring that the long-term financial and emotional needs of parents are addressed in cases involving the tragic death of minor children in motor vehicle accidents.

Case Title: Lakshminarayanappa @ Moogappa & Others v. M/s Royal Sundaram Allianz Insurance Co. Ltd. & Another, High Court of Karnataka

Citation: 2024:KHC:38401

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