31 July 2025 Legal Updates

'DRIVER MUST GIVE SIGNAL BEFORE STOPPING ON HIGHWAY': SUPREME COURT AWARDS 91 LAKH COMPENSATION TO YOUTH WHO LOST LEG IN ACCIDENT

(a) Case title:

• S. Mohammed Hakkim v. National Insurance Co. Ltd. & Ors.

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• July 29, 2025

(d) Bench:

• Justice Sudhanshu Dhulia and Justice Aravind Kumar

Case Background

The appellant, a 20-year-old third-year engineering student, was riding a motorcycle when a car suddenly braked ahead of him. He crashed into the car and fell, after which a bus ran over him, resulting in amputation of his left leg. Both vehicles were insured. The appellant sought compensation of ₹1,16,00,000.

Key Legal Issues

• Contributory Negligence: Determination of fault percentage among all parties
• Quantum of Compensation: Appropriate calculation method for motor accident claims
• Notional Income: Assessment of future earning capacity for students

Court's Analysis and Holdings

1. Contributory Negligence

• Trial Court Decision: 20% appellant, 80% bus driver (car driver exonerated) High Court Decision: 30% appellant, 40% car driver, 30% bus driver Supreme Court Decision: 20% appellant, 50% car driver, 30% bus driver
• Reasoning: Car driver's sudden braking without warning was the root cause of the accident. The Appellant failed to maintain safe distance and drove without valid license. The bus driver was also negligent in the accident.

2. Notional Income Determination

• Courts Below: ₹15,000 per month Supreme Court: ₹20,000 per month
• Key Principle: Engineering students should not be equated with unskilled workers for compensation purposes. The Court referenced Navjot Singh v. Harpreet Singh (2020), noting that campus-recruited engineering graduates typically earn at least ₹20,000 monthly.

3. Compensation Calculation

• Using Sarla Verma v. DTC guidelines, the compensation was calculated as under:
• Monthly income: ₹20,000 + Future prospects: 40% addition = ₹28,000 + Annual income: ₹3,36,000 + Multiplier: 18 (for 20-year-old) + Loss of income: ₹60,48,000

4. Other Compensation Heads

• Attendant Charges: ₹18,00,000 (restored from High Court's reduction to ₹5 lacs)
• Loss of Marital Prospects: Increased from ₹2.5 lacs to ₹5 lacs
• Future Medical Expenses: ₹5,00,000 (upheld)

Final Compensation

Total: ₹1,14,24,066 After 20% contributory negligence: ₹91,39,253 Interest: 7.5% per annum from claim filing date

Important Legal Principles

• Motor Vehicle Act Application: Courts apply structured guidelines for compensation calculation in accident cases
• Contributory Negligence Doctrine: All parties' fault percentages are assessed; compensation reduced proportionally
• Future Earning Assessment: Students' potential assessed based on educational qualifications, not minimum wage standards
• Attendant Charges: Justified for permanently disabled persons requiring lifelong assistance

RIGHT TO SAFE & MOTORABLE ROADS PART OF FUNDAMENTAL RIGHT TO LIFE UNDER ARTICLE 21: SUPREME COURT

(a) Case Title:

• Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. v. M.P. Road Development Corporation and Another

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• July 30, 2025

(d) Bench:

• Justice J.B. Pardiwala and Justice R. Mahadevan

Key Facts:

The parties involved are UPP Tollways Pvt. Ltd. (Private Company) who is the Appellant and M.P. Road Development Corporation (State-owned entity) and ICADR who were the Respondents. A dispute arose from a Concession Agreement (2012) for road construction under BOT (Build, Operate, Transfer) model. The Appellant claimed ₹280.16 crores for delays, cost escalations, and breaches by the respondent.

The Appellant first approached the Madhya Pradesh Arbitration Tribunal (1983 Act) for remedy but later withdrew and initiated arbitration under the Arbitration and Conciliation Act, 1996 via ICADR.

The High Court quashed ICADR’s arbitration, ruling disputes must be adjudicated under the 1983 Act.

Key Legal Issues:

1. Maintainability of Writ Petition:

• The issue was whether a writ under Article 226 lies against a private party (UPP Tollways)?
• The Court held that yes, as the dispute involved a public law element (State highway project) and statutory obligations, a writ would lie under Article 226 against UPP Tollways.

2. Jurisdictional Conflict:

• Whether disputes under a "works contract" must be resolved under the 1983 Act (State Tribunal) or 1996 Act (private arbitration)?
• The Court held that the 1983 Act prevails as it is a special law for works contracts involving State entities, therefore, the dispute would have to be resolved under the 1983 Act.

3. Doctrine of Election & Forum Shopping:

• Appellant’s parallel proceedings under both Acts were impermissible. Withdrawal without liberty barred fresh claims.

4. Limitation:

• Claims from 2013–2015 were time-barred under the 1996 Act (invoked in 2022).

Supreme Court’s Decision:

• The Court upheld the High Court’s order quashing ICADR arbitration. It held that the 1983 Act is the exclusive forum for works contracts involving State entities.
• It further allowed appellant to revive its withdrawn petition before the State Tribunal within 2 weeks. And the Tribunal was directed to decide the case within 4 months of restoration.

Key Legal Principles:

• Public Law Element: Writ jurisdiction extends to private parties discharging public duties.
• Special Law vs. General Law: The 1983 Act (special law for State works contracts) overrides the 1996 Act.
• Doctrine of Election: Parties cannot pursue parallel remedies under conflicting statutes.
• Limitation: Delayed claims (beyond 3 years) are barred under the 1996 Act.