Source: Supreme Court  

Why in News? 

Recently, the bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra have held that legal representative under the Motor Vehicles Act (MVA) includes dependents of the deceased, not just immediate heirs. 

• The Supreme Court held this in the matter of Sadhana Tomar & Ors. v. Ashok Kushwaha & Ors.  (2025). 

What was the Background of Sadhana Tomar & Ors. v. Ashok Kushwaha & Ors. Case? 

• On 25^th September 2016, Dheeraj Singh Tomar (24 years old) was traveling in an auto-rickshaw (registration No. MP 30-R-0582) along with other passengers. 
• The driver of the auto-rickshaw was driving rashly and negligently when the vehicle overturned at Gohad Chauraha Road near Gautum Nagar, Bajrang Washing Centre at Gwalior. 
• As a result of this accident, Dheeraj Singh Tomar died on the spot, while other passengers suffered injuries. 
• The appellants (dependents of the deceased) filed a claim petition before the Motor Accident Claims Tribunal (MACT) seeking compensation of Rs. 28,50,000/-. 
• The appellants submitted that the deceased was earning approximately Rs. 35,000/- per month from his wholesale fruit selling business, which he used to support his family's daily expenses. 
• The MACT observed that Respondent Nos. 1 and 2 (the driver and owner of the vehicle) were jointly and severally liable to pay compensation because the driver was operating the vehicle without a valid and effective driving licence at the time of the accident. 
• The MACT awarded compensation of Rs. 9,77,200/- with simple interest at 7% per annum to appellant Nos. 1 to 3, calculating based on a notional income of Rs. 4,500/- per month with future prospects at 40%. 
• The MACT made a deduction of 1/3rd from the calculated amount for personal expenses and did not consider Appellant Nos. 4 and 5 (the father and younger sister of the deceased) as dependents. 
• Aggrieved by the compensation amount, the claimant-appellants filed an appeal before the High Court of Madhya Pradesh at Gwalior, challenging the determination of monthly income and the deduction methodology. 
• The High Court affirmed the MACT's findings regarding the compensation amount but directed the insurance company to pay the compensation to the claimants and then recover it from the driver and owner of the offending vehicle. 
• Still dissatisfied with the outcome, the claimant-appellants approached the Supreme Court, arguing that the monthly income was incorrectly assessed, and the appropriate multiplier was not applied.

What were the Court’s Observations?

• The Supreme Court disagreed with the Tribunal and High Court's assessment of the deceased's monthly income at Rs. 4,500/-. 
• The Court noted that while the claimants could not conclusively prove the deceased's income, it was evident that the accident had taken away a potential earning member of the family. 
• Referring to the Minimum Wages Act Notification of 2016, the Court determined that the monthly income for an unskilled worker was fixed at Rs. 6,500/-, bringing the annual income to Rs. 78,000/-. 
• The Court determined that appellant Nos. 4 and 5 (father and younger sister), both not financially independent, would qualify as legal representatives for compensation purposes under the Motor Vehicles Act, as they were dependent on the deceased's income from his wholesale fruit business. 
• As a result, the Court adjusted the deduction for personal expenses from 1/3rd to 1/4^th, accounting for five dependent family members instead of three. 
• The Court maintained the High Court's direction for the Insurance Company to first pay the compensation and then recover it from the driver and owner who were jointly and severally liable due to the lack of valid driving licence. 
• Based on these observations, the Supreme Court recalculated the compensation to Rs. 17,52,500/- (increased from the MACT and High Court's Rs. 9,77,200/-), with interest as awarded by the Tribunal. 

What are the Landmark Cases Referred to in this Case? 

• National Insurance Co. Ltd. v. Swaran Singh & Ors. [(2004) 3 SCC 297] - Referenced by the High Court in their judgment to establish that the insurance company should pay the compensation and then recover it from the owner and driver. 
• National Insurance Co. Ltd. v. Pranay Sethi [(2017) 16 SCC 680] - Referenced to establish that the appropriate multiplier for a 24-year-old person is 18. 
• Meena Devi v. Nunu Chand Mahto [(2023) 1 SCC 204] - Referenced to emphasize that the objective of granting compensation under the Motor Vehicles Act is to ensure just and fair compensation to the aggrieved party. 
• Gujarat SRTC v. Ramanbhai Prabhatbhai [(1987) 3 SCC 234] - Referenced to establish that a "legal representative" is one who suffers due to the death of a person in a motor vehicle accident and need not necessarily be limited to a wife, husband, parent or child. 
• N. Jayasree v. Cholamandalam MS General Insurance Company Ltd. [(2022) 14 SCC 712] - Referenced to support giving a wider interpretation to the term "legal representative" under Chapter XII of the Motor Vehicles Act, 1988 (MV Act) emphasizing that proving loss of dependency is sufficient to claim compensation. 

What is Section 166 of MV Act? 

• Section 166(1)(c) permits "all or any of the legal representatives of the deceased" to make an application for compensation where death has resulted from an accident. 
• The proviso to Section 166(1) mandates that when all legal representatives have not joined in filing the compensation application, those who have not joined must be impleaded as respondents. 
• The term "legal representative" should be interpreted broadly and not be confined to its narrow definition under succession laws. 
• A legal representative is one who suffers on account of death of a person due to a motor vehicle accident and need not necessarily be a spouse, husband, parent, or child. 
• The qualification to be considered a legal representative is primarily the establishment of "loss of dependency." 
• Any person who can demonstrate dependence on the deceased's income and consequent financial loss due to their death qualifies as a legal representative. 
• This interpretation serves the benevolent objective of the Motor Vehicles Act to provide monetary relief to victims or their families affected by motor accidents. 
• The legislative intent of Section 166 is to ensure that every person who suffers financially due to the death has a legal remedy for obtaining compensation. 
• The Motor Vehicles Act, being remedial and beneficial legislation, calls for a liberal interpretation of its provisions, including the term "legal representative."