CourtKutchehry

Supreme Court: Legal Heirs Can Claim Compensation Even If Injured Dies of Unrelated Causes

Court clarifies that compensation rights survive to legal representatives under Motor Vehicles Act

Landmark ruling enhances award to over ₹20 lakh with 9% interest for heirs of deceased claimant

By Our Legal Reporter

New Delhi: September 30, 2025: In a landmark judgment, the Supreme Court of India has ruled that the right to claim compensation for injuries sustained in a motor accident survives to the legal representatives of the injured person, even if the injured dies later due to reasons unrelated to the accident.

A bench of Justice K. Vinod Chandran and Justice N.V. Anjaria delivered the ruling while deciding an appeal filed by the legal heirs of Dhannalal alias Dhanraj, who had suffered 100% disability in a motor accident but died in 2024 while his appeal for enhanced compensation was still pending.

The Court not only upheld the maintainability of the claim by his heirs but also enhanced the total compensation to ₹20,37,095 with 9% interest from the date of filing the claim petition until payment.

Background of the Case

The case arose from a 2013 motor accident in which Dhannalal sustained severe injuries, leaving him permanently disabled. He initially approached the Motor Accident Claims Tribunal (MACT), which awarded him compensation. However, dissatisfied with the amount, he appealed for enhancement.

The High Court, on remand, reduced his monthly income assessment from ₹8,000 to ₹4,000, thereby lowering the compensation. Dhannalal challenged this before the Supreme Court.

Unfortunately, he passed away on April 24, 2024, while the appeal was pending. His legal heirs were substituted in his place to continue the proceedings.

Insurance Company’s Objection

The insurance company opposed the continuation of the appeal by the heirs. It argued that:

A claim for personal injury compensation ends with the death of the claimant, as per Section 306 of the Indian Succession Act, 1925.
Since the death was unrelated to the accident, the heirs could not pursue the claim.
The company relied on earlier judgments, including a Full Bench decision of the Madhya Pradesh High Court in Bhagwati Bai v. Bablu and a 2014 Allahabad High Court ruling in Saroj Sharma v. State of U.P.

Supreme Court’s Analysis

The Supreme Court rejected the insurer’s objection, pointing to the Motor Vehicles (Amendment) Act, 2019, which introduced sub-section (5) to Section 166 of the Motor Vehicles Act, 1988, effective from April 1, 2022.

The provision states:

“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.”

The Court held that since Dhannalal died in 2024, after the amendment came into force, the provision was “squarely applicable.”

Justice Chandran observed that the law was “simple and clear”: the right to claim compensation does not die with the injured person but passes on to his or her heirs.

Determination of Compensation

The Court also examined the quantum of compensation.

Monthly Income: Based on oral evidence that Dhannalal worked as a skilled mason (“Mistry”), the Court fixed his monthly income at ₹9,000, referencing its earlier ruling in Ramachandrappa v. Manager, Royal Sundaram Alliance Insurance Co.
Future Prospects: A 25% increase was added for future prospects, given his 100% disability.
Multiplier: While the Tribunal and High Court had applied a multiplier of 14, the Supreme Court reduced it to 11, reflecting Dhannalal’s actual life span after the accident.
Loss of Income: Calculated as ₹9,000 x 12 x 125% x 11 = ₹14,85,000.
Other Heads: The Court upheld the award of ₹5,52,095 under conventional heads like pain, suffering, and medical expenses, noting that these had already become part of the deceased’s estate.

Thus, the total compensation was enhanced to ₹20,37,095, with 9% annual interest from the date of filing the claim petition until payment.

Final Directions

The Supreme Court directed the insurance company to:

Pay the balance compensation within three months, after deducting any amount already paid.
Apply the 9% interest rate from the date of filing the claim petition until the final payment.

The Court also set aside the High Court’s restriction on the interest period, ensuring that the heirs receive the full benefit of the award.

Legal Significance of the Ruling

This judgment is significant for several reasons:

Clarifies Survivability of Claims: It settles the long-debated issue of whether personal injury claims survive after the claimant’s unrelated death. The answer is yes, thanks to the 2019 amendment.
Protects Legal Heirs: The ruling ensures that families of accident victims are not deprived of compensation due to procedural technicalities.
Overrides Succession Act Objections: The Court made it clear that the Motor Vehicles Act, being a special law, overrides Section 306 of the Indian Succession Act in such cases.
Guidance for Tribunals: The decision provides clear guidance to Motor Accident Claims Tribunals and High Courts across India.

Wider Context: Motor Accident Compensation in India

India records one of the highest numbers of road accidents globally, with thousands of victims suffering death or permanent disability every year. Compensation claims under the Motor Vehicles Act are a crucial source of relief for victims and their families.

The 2019 amendment to the Act was intended to strengthen victims’ rights and ensure that compensation claims are not extinguished unfairly. This ruling by the Supreme Court reinforces that legislative intent.

Conclusion

The Supreme Court’s ruling in the Dhannalal alias Dhanraj case is a landmark in motor accident compensation law. By holding that the right to claim compensation survives to legal heirs even if the injured dies of unrelated causes, the Court has ensured that justice is not denied to families of victims.

The judgment not only clarifies the law but also enhances the compensation, providing much-needed relief to the heirs. It underscores the principle that compensation is not just for the injured individual but also for the estate and dependents left behind.

SC: Legal Heirs Can Claim Compensation Despite Unrelated Death