The claimant, Mr. Prem Lal Anand, along with his wife, was traveling by motorcycle from village Mehrauli to Noida when they encountered two tractors driving recklessly. As they crossed the path of the tractors, one of them, driven at high speed and from the wrong side, collided with the motorcycle. The crash resulted in multiple injuries for Mr. Anand, including a fractured jaw and leg, while his wife tragically died on the spot. The couple was running a small business, M/s. Sonali Fabrics, which had a modest monthly income of Rs. 5,000. The family business, which had earned Rs. 60,000 in 1994 and Rs. 50,000 in 1993, was severely impacted by the death of Mrs. Anand.

As a result, Mr. Anand filed a compensation claim before the Motor Accident Claims Tribunal (MACT) for a sum of Rs. 12,00,000.

The Tribunal examined several issues in the case, including whether the drivers of the tractors were at fault, the legal heirs of the deceased, the quantum of income, and the liability of the insurance company. The Tribunal concluded that both the claimant and the respondents were equally responsible for the accident, attributing 50% contributory negligence to both parties. Despite this, the Tribunal rejected the claimant's request for Rs. 12,00,000 in compensation and instead awarded Rs. 1,01,250, along with interest at 12% per annum. This decision was later appealed by Mr. Anand.

On appeal, the High Court of Allahabad partly modified the Tribunal's decision, observing an error in the application of the multiplier in calculating compensation. The Court directed that the multiplier be corrected from 9 to 14. However, the claimant sought a further revision of the compensation, arguing that the finding of contributory negligence by the Tribunal was unjustified.

The claimant contended that the application of contributory negligence was erroneous because his actions—overtaking the tractor—were not reckless, as the other tractor driver was the one who drove rashly and from the wrong side, causing the collision. Additionally, the High Court dismissed a recall application by the claimant, upholding the earlier order. Unsatisfied with the outcome, the claimant approached the Supreme Court.

The Supreme Court critically reviewed the finding of contributory negligence, citing precedents that clarified the nuances of negligence law. In its judgment, the Court emphasized that contributory negligence involves an assessment of whether the plaintiff’s actions contributed materially to the harm suffered. Citing the case of Municipal Corporation of Greater Bombay vs. Laxman Iyer, the Court observed that negligence is not always an act of carelessness but a failure to exercise a reasonable degree of care. The Court found that merely attempting to overtake a vehicle does not constitute negligence unless it can be shown that the overtaking was done recklessly. In this case, the other tractor driver’s rash and excessive speeding was the primary cause of the accident.

Furthermore, the Court ruled that Mr. Anand’s attempt to overtake was an everyday action on the road and did not warrant the imposition of contributory negligence. Given that Mr. Anand not only suffered severe injuries but also lost a family member, the Court found the Tribunal’s finding of equal responsibility between the claimant and the respondents to be unjustified.

Another crucial aspect of the case was the application of the multiplier to calculate the compensation. The Supreme Court revisited the guidelines laid down in the landmark case Sarla Verma vs. Delhi Transport Corporation and noted that the multiplier applicable in this case should be 15, as per the Second Schedule to the Motor Vehicles Act, 2018. The Court further took into account the deceased's age and the impact of the tragic loss on the family's income.

In line with National Insurance Co. Ltd. vs. Pranay Sethi, the Court added 25% to the established monthly income of the deceased, recognizing the loss of future prospects. The deceased was a self-employed individual, and as such, the Court added 25% of the monthly income of Rs. 5,000, bringing the annual income to Rs. 75,000. Applying the corrected multiplier of 15, the Court calculated the total compensation amount to be Rs. 11,25,000.

The Supreme Court ultimately ruled that Mr. Anand was entitled to a compensation of Rs. 11,25,000, substantially higher than the amount originally awarded by the Tribunal. The interest rate on the compensation was also revised from 12% to 8%. While the Court upheld certain aspects of the Tribunal’s order, such as the direction for the respondents to deposit the amount, it clarified that the compensation figure must reflect a fair and just assessment of the claimant's loss.

This case serves as a reminder of the evolving standards in motor accident claims, particularly when it comes to contributory negligence, the multiplier system, and the recognition of future prospects in self-employment cases. The Supreme Court's intervention in this case not only corrected the errors made by the lower courts but also reinforced the need for a fair and nuanced approach in determining compensation. The ruling ensures that the claimant receives a compensation amount that better reflects the loss suffered, while also clarifying legal principles that guide the adjudication of such cases.