The case originated from an incident on the 8th of January, 1997, when claimant-appellant Prem Lal Anand and his wife were traveling on their motorcycle near Mehrauli while en route to Noida. Unfortunately, they encountered two tractors being driven recklessly, leading to a catastrophic collision. Prem Lal Anand sustained multiple injuries, including a broken jaw and leg fractures, while his wife tragically lost her life on the spot.

The couple, who operated a business together—M/s. Sonali Fabrics—were reportedly earning around Rs. 5,000 monthly. The loss of the deceased's contribution to their business significantly impacted their financial stability, prompting the claim for Rs. 12,00,000 in compensation before the Motor Accident Claims Tribunal (MACT).

The Tribunal concluded that both the claimants and the respondents bore equal responsibility for the accident, leading to a ruling of contributory negligence. It awarded the claimants Rs. 1,01,250, significantly less than what they sought, which they subsequently appealed in the High Court.

In its 2017 order, the High Court partially allowed the appeal, recognizing an error in the multiplier used by the Tribunal for calculating compensation. It directed the Tribunal to revise the amount while maintaining the interest rate awarded earlier.

Challenging the findings of both the Tribunal and the High Court, the claimants escalated the matter to the Supreme Court. The primary contention revolved around the assessment of contributory negligence. The Supreme Court underscored the principle that contributory negligence pertains solely to the conduct of the plaintiff and can significantly affect the compensation awarded.

In its analysis, the Supreme Court referenced previous judgments to clarify the concept of negligence, noting that it is not an absolute term but rather a relative one. The court asserted that merely attempting to overtake a vehicle does not constitute rashness or negligence without substantial evidence to the contrary.

After considering the facts, the Supreme Court found the Tribunal’s ruling on contributory negligence unjustified, as the evidence indicated that the other tractor involved in the accident was being driven recklessly. The court then recalculated the compensation, applying a revised multiplier and recognizing future income prospects for the deceased.

The established monthly income of Rs. 5,000 was adjusted to include a 25% increase for future prospects, leading to a total annual income of Rs. 75,000. By applying a multiplier of 15, the Court determined that the claimants were entitled to Rs. 11,25,000 in compensation.

Motor Vehicles Act, 1988