United India Insurance Company Ltd vs Kavita Bai And Others

FAO-4113-2026 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
164 FAO-4113-2026 (O&M)
Date of decision: 02.09.2026
United India Insurance Company Limited ....Appellant
Vs.
Kavita Bai and others ....Respondents
CORAM : HON’BLE MR. JUSTICE HARSH BUNGER
Present: Mr. Maninder Arora, Advocate
for the appellant.
*
HARSH BUNGER J.
Present appeal has been filed challenging the award dated
28.04.2026 passed by the learned Motor Accident Claims Tribunal, Hisar
(hereinafter referred to as the “learned Tribunal”).
2. Briefly, claimants/respondents No.1 to 5 filed a petition under
Section 166 of the Motor Vehicles Act, 1988 (for short the ‘1988 Act’),
seeking compensation on account of death of Pankaj in a motor vehicular
accident on 10.08.2025.
2.1 The aforesaid claim petition was filed by the respondents No.1
to 5 on the plea that on 10.08.2025, Pankaj was going towards his village
Paju Kalan from Assandh on his scooty bearing registration No.
HR-33J-9799. At about 08:00 P.M., when he reached near Milan Hotel then
the offending vehicle/car bearing registration No. HR20-AS-7396 came
from behind, which was being driven by Amit Kumar (respondent No.6
herein) in a rash and negligent manner at high speed and directly struck his
vehicle into the vehicle of Pankaj. On account of impact, Pankaj fell down
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FAO-4113-2026 (O&M) -2-
and received multiple injuries on the vital parts of his body. Pankaj was
shifted to General Hospital, Assandh, where he was declared dead by the
doctor. A case FIR bearing No.444 dated 10.08.2025 under Sections 106,
281 of BNS was registered at Police Station, Assandh, against Amit Kumar
(respondent No.6 herein).
2.2 The claimants are the wife, children and father of the deceased
Pankaj. Deceased Pankaj is stated to be of 30 years of age at the time of
accident. It was claimed that Pankaj was working at Maan Sports Wear and
was earning Rs.5,55,300/-, per annum and all the claimants were dependant
upon him.
2.3 Accordingly, compensation amount of Rs. Two Crores along
with interest was claimed by the claimants.
3. Upon issuance of notice in the claim petition, the driver and
owner of the offending vehicle appeared and filed the written statement
taking various preliminary objections. On merits, they denied the accident to
have been caused by Amit Kumar (driver of the offending vehicle). It was
stated that the claimants have got registered a false case only to claim
compensation, accordingly they denied that they are liable to pay any
compensation. It is further averred that the Insurance Company is liable to
pay compensation as the offending vehicle was duly insured on the date of
accident.
3.1 On the other hand, the present appellant (Insurance Company)
filed a separate written statement taking various preliminary objections. On
merits, it was stated that the offending vehicle has been wrongly impleaded
in the accident in question, just to grab the compensation. It is further
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FAO-4113-2026 (O&M) -3-
averred that the driver of the offending vehicle was not holding a valid
driving license and that no information of the alleged accident was provided
to the Insurance Company either by the owner or by driver of offending
vehicle under Section 134(c) of the 1988 Act. The other averments of the
plaint were denied and prayer for dismissal of the claim petition was made.
4. On the basis of pleading of the parties, following issues were
framed by the learned Tribunal:-
“1. Whether the accident in question occurred due to rash and
negligent driving of the offending Car bearing registration
No.HR-20AS/7396 by the respondent No.1 as prayed for?
OPP
2. Whether the petitioners are entitled to recover the
compensation from the respondents, if so, to what extent
and from whom?OPP
3. Whether the Insurance Company is not liable to pay
compensation as respondents No.1 and 2 have violated and
contravened the insurance policy?OPR
4. Whether the present petition is not maintainable? OPR
5. Whether the claim petition is bad for mis-joinder and non-
joinder of necessary parties? OPR
6. Whether the petitioners are estopped by their own act and
conduct from filing the present claim petition? OPR
7. Relief”
5. Thereafter, the claimants as well as the driver and owner of the
offending vehicle led their respective evidence. However, no oral and
documentary evidence was led on behalf of the appellant (Insurance
Company) and their evidence was closed on 21.04.2026.
6. The learned Tribunal after considering the pleadings as well as
the evidence available on record, especially the case FIR No.444 dated
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FAO-4113-2026 (O&M) -4-
10.08.2025, filing of challan against the driver of the offending vehicle
namely Amit Kumar, statement of eye-witness (Aman as Ex. P1) and also
the fact that neither the driver nor the owner of the offending vehicle
appeared in the witness box, came to the conclusion that the accident in
question had taken place due to rash and negligent act of Amit Kumar, who
was driving the offending vehicle, which resulted into the death of Pankaj.
6.1 While determining compensation, the learned Tribunal
considered the age of Pankaj (deceased) as 30 years on the basis of
documentary evidence available on record. The learned Tribunal noticed that
Pankaj (deceased) was running a shop under the name and style of ‘Maan
Sports Wear’. The learned Tribunal further took note of the Income Tax
Returns (ITR) filed by Pankaj (deceased) for the year 2025-26 (Ex. P2 and
Ex. P3). The said Income Tax Returns were proved by Tinku Siwach (PW-3)
from the Income Tax Office, Jind and accordingly the income of
deceased-Pankaj had been assessed as Rs.5,55,300/- per annum
i.e. Rs.46,275/- per month.
6.2 Further while relying upon the judgment rendered by the
Hon’ble Supreme Court of India in case of “National Insurance Company
Limited Vs. Pranay Sethi and others”, 2017 (4) R.C.R. (Civil) 1009, the
learned Tribunal awarded 40% towards future prospects and further
considering the fact that the deceased-Pankaj was married and had 5
claimants, accordingly 1/4th of the income was deducted towards the
personal and living expenses of the deceased-Pankaj. Accordingly, the
learned Tribunal assessed the dependancy of the claimants as Rs.48,589/-
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FAO-4113-2026 (O&M) -5-
per month. The learned Tribunal applied the multiplier of 17 considering the
age of the deceased as 30 years and assessed the compensation as under:-
Sr. No. Heads Calculation
(i) Income 64,785/- per month
(ii) 1/4th of the (i) deducted as 64,785-16196 = 48,589/-
personal expenses of the deceased per month
(iii) Compensation after multiplier of 48589 × 12 × 17 =
‘17’ is applied Rs.99,12,156/-
(iv) Loss of Estate 15,000/-
(v) Loss of consortium to petitioners 2,00,000/- (Rs.40,000/- to
No.1 to 5 each of the petitioner
(vi) Funeral expenses 15,000/-
Total Compensation awarded Rs.1,01,42,156/- in round
figure Rs.1,01,42,000/-
6.3 The learned Tribunal had further concluded that on the date of
accident, the offending vehicle was duly insured with the appellant
(Insurance Company) and also that Amit Kumar was the driver of offending
vehicle whereas Abhishek was the owner of the offending vehicle.
Accordingly, the learned Tribunal held the driver and owner as well as the
Insurance Company jointly and severally liable to pay compensation to the
claimants. The learned Tribunal further awarded interest @ 9% per annum
on the awarded amount from the date of filing of the claim petition till its
realization vide award dated 28.04.2026.
7. In the aforementioned circumstances, present appeal has been
filed before this Court.
8. Learned counsel appearing for the appellant has mainly raised
only one ground that the learned Tribunal has erred in placing reliance upon
only one ITR whereas an average of at least three ITRs was required, to
assess the fair compensation.
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FAO-4113-2026 (O&M) -6-
9. I have heard the learned counsel for the appellant and perused
the paperbook with his able assistance.
10. At the outset, it is apposite to refer to a recent judgment by the
Hon’ble Supreme Court of India in case of “Rashmirekha Tripathy versus
The Branch manager (Legal Claims), Sriram General Insurance
Company Limited and others”, (SLP (C) No.27220 of 2024; decided on
01.07.2026), wherein the Hon’ble Supreme Court has returned the following
finding:-
“17. In the considered view of this Court, there can be no hard
and fast formula for computing the annual income of a
deceased person/claimant. ITRs being a statutory document are
an important reference point when it comes to assessing one’s
income, for the purposes of compensation under the Motor
Vehicle Act.
18. We find force in the submission put forth by Mr. J.R
Midha, learned senior counsel. There must be a bifurcation
made between salaried individuals and self-employed
individuals when it comes to assessment of annual income. In
our view, for salaried individuals, only the ITR of the previous
year will be sufficient for showcasing the annual income from
salary. The reason for considering only the preceding year is
that the financial impact of promotions is significant and may
be reflected in the ITR for only that year. A situation may also
arise whereby the deceased/claimant might not have completed
a year in the promoted position before the accident or might not
have filed ITR for such period. In such cases the Court
concerned shall take reference to the promotion letter and other
corroboratory financial statements.
19. When it comes to self-employed / individuals carrying out
their own business, in our view, the average of the income
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FAO-4113-2026 (O&M) -7-
specified in the ITRs of up to the previous three years is to be
taken as a reference point for assessment of annual income
from their business. There may also be a scenario where only
one or two ITRs have been filed. Given such scenarios and the
fluctuation of income in these professions, surrounding
circumstances are also to be taken into consideration. These
would include:
a) The nature of the business (including geographic location,
category etc.);
b) Growth pattern of the business and impact of death on the
business;
c) Potential growth of business (for instance certain businesses
are capital intensive at the outset and are profitable at
scale/in the future);
d) Negative income (certain businesses may require losses in
the initial years, which may not reflect the true financial
standing); and
e) Any other relevant factor relating to the business.
20. The date when the ITRs are filed would also become a
relevant consideration, as there may be scenarios where
inflated income is showcased after death/injury. In these
circumstances, the surrounding factors of the business would
become more relevant. However, if sufficiently supported by
financial statements, such ITRs may also be taken into
consideration.”
10.1 A perusal of the above-extracted observations made by the
Hon’ble Supreme Court of India would show that there is no bar in
considering one or two Income Tax Returns (ITRs) in respect of the
deceased, however, the same would have to be done by considering the
surrounding circumstances as well, which includes the nature of business
(including geographical location, category etc.), growth pattern of business,
potential growth of business and/or any other relevant fact relating to the
business.
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FAO-4113-2026 (O&M) -8-
11. In the present case, learned Tribunal has taken note of the fact
that the deceased-Pankaj was a proprietor of ‘Maan Sports Wear’ and as per
his Income Tax Return (ITR) for the year 2025-26 (Ex. P2 and Ex. P3),
which have been proved by Tinku Siwach (PW-3) from Income Tax Office,
Jind; accordingly, the income of the deceased has been taken as Rs.46,275/-
per month. It is a matter of record that the Insurance Company has not led
any evidence (oral as well as documentary) to counter the aforesaid evidence
led on behalf of the claimants.
11.1 Further, it is a mater of common knowledge that business of
sports wear is a flourishing business from the last many years and has good
potential for growth. Accordingly, I see no reason to discard the evidence led
on behalf of the claimants to prove that deceased-Pankaj was earning
Rs.46,275/- per month.
12. Considering the totality of circumstances, I am of the
considered view that the learned Tribunal below was justified in awarding
the compensation of Rs.1,01,42,000/- along with interest @ 9% per annum
from the date of filing of the petition till its realization, on the basis of
evidence available on record.
13. Resultantly, the present appeal fails and the same is accordingly
dismissed .
14. All the pending application(s), if any, shall also stand closed.
(HARSH BUNGER)
02.09.2026 JUDGE
Ankit
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
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