Gurmit Kaur And Ors vs Naresh And Ors

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
FAO No. 2620 of 2015 (O & M)
Gurmit Kaur and others … Appellants
Versus
Naresh and others … Respondents

Reserved on: November 04, 2026
Pronounced on: November 11, 2026
Pronounced fully/opera 7ve part : Fully

CORAM: HON’BLE MR. JUSTICE DEEPAK GUPTA
Argued By:- Mr. Sunil Garg, Advocate for the appellants
Mr. Vipul Sharma, Advocate for respondent No.1 & 2
Mr. D.P.Gupta, Advocate for respondent No.3
DEEPAK GUPTA, J.
The present appeal has been preferred by the claimants seeking
enhancement of compensa )on awarded by learned Motor Accident Claims
Tribunal, Pa)ala (hereina-er referred to as ‘the Tribunal’), vide award dated
22.09.2014, on account of death of Taranjit Singh in a motor vehicular
accident.
2. Brieﬂy stated, on 09.12.2011, Taranjit Singh was travelling on a
scooter when he was struck by Mahindra Bolero Jeep bearing registra)on
No.PB-03-S-9016, allegedly being driven rashly and negligently by respondent
No.1. He sustained serious injuries and subsequently succumbed to the
same. His widow, three minor daughters and parents ins)tuted a claim
pe))on under Sec)on 166 of the Motor Vehicles Act, 1988, seeking
compensa)on from the driver, owner and insurer of the oﬀending vehicle.
3. Upon apprecia)on of evidence, learned Tribunal held that the
accident occurred due to rash and negligent driving of respondent No.1.
While assessing compensa)on, the Tribunal no)ced that the deceased was
SARITA RANI
2026.11.11 16:22
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FAO No.2620 of 2015 (O&M) 2026:PHHC:199066

aged 38 years and was engaged in photography and video-making work.
However, in the absence of sa )sfactory documentary proof of his earnings,
his income was assessed at ₹6,000/- per month. A-er adding 50% towards
future prospects, deduc)ng one-fourth towards personal expenses and
applying mul)plier of 15, the Tribunal assessed the loss of dependency at
₹12,15,000/-. A further amount of ₹1,00,000/- towards loss of consor)um
and ₹25,000/- towards funeral expenses was awarded, bringing the total
compensa)on to ₹13,40,000/-, along with interest at the rate of 9% per
annum.
4. On the ques)on of liability, learned Tribunal accepted the
defence of respondent No.3–insurance company that the cover note relied
upon by the driver and owner was fabricated and that no valid insurance
policy covering the oﬀending vehicle existed on the date of accident.
Consequently, the insurance company was exonerated, and the driver and
owner were held jointly and severally liable to sa)sfy the award.
5. Learned counsel for the appellants contends that the Tribunal
commiHed an error in assessing the income of the deceased on a no)onal
basis, despite three income-tax returns having been produced in evidence. It
is submiHed that the last income-tax return, ﬁled by the deceased himself
during his life)me, disclosed annual income of ₹1,70,000/-. Being a
contemporaneous statutory declara)on made by the deceased, the said
return ought to have been preferred over an arbitrary assessment of
₹6,000/- per month. Enhancement is accordingly sought by reassessing the
loss of dependency on the basis of the income disclosed in the last return.
6. Learned counsel appearing for the driver and owner, while
suppor)ng the prayer for reassessment of compensa)on, submits that the
average income reﬂected in the three income-tax returns should be taken
into considera)on rather than adop)ng the last return in isola)on. It is
further contended that the Tribunal wrongly exonerated the insurance
company despite the produc)on of a cover note showing the oﬀending
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Page 2 of 7

FAO No.2620 of 2015 (O&M) 2026:PHHC:199066

vehicle to be insured. Learned counsel accordingly prays that liability to
sa )sfy the award be fastened upon the insurance company.
Per contra
7. , learned counsel for the insurance company supports
the ﬁndings of the Tribunal on the issue of insurance coverage. It is submi Hed
that the insurance company examined its responsible oﬃcial and produced
the relevant records establishing that the cover note relied upon by the
driver and owner had never been issued by it. The policy actually issued by
the company commenced only on 13.01.2012, whereas the accident had
occurred on 09.12.2011. It is further submiHed that neither the driver nor the
owner has preferred any appeal against the ﬁnding exonera)ng the insurer
and, therefore, such ﬁnding cannot be disturbed merely on the basis of oral
submissions made in the claimants' appeal.
8. Having heard learned counsel for the par)es and examined the
impugned award, this Court ﬁnds that the controversy requiring
considera)on relates to the assessment of income of the deceased and the
liability of the insurance company.
9. The main grievance of the appellants concerns the assessment
of income of the deceased. Learned Tribunal assessed his earnings at
₹6,000/- per month on the premise that no sa)sfactory documentary
evidence regarding income had been produced. However, the record reveals
that three income-tax returns ﬁled by the deceased during his life)me were
brought on record as Ex.PW1/D, Ex.PW1/E and Ex.PW1/F. These returns
disclose the following par)culars:
Exhibit Assessment year Income declared

Ex.PW1/F 2009–10 ₹1,00,000

Ex.PW1/E 2010–11 ₹1,33,000

Ex.PW1/D 2011–12 ₹1,70,000
10. Pointedly, the aforesaid returns were ﬁled on 29.07.2009,
26.07.2010 and 29.07.2011, respec )vely, whereas the accident occurred on
09.12.2011. Thus, all three returns preceded the accident and were ﬁled by
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FAO No.2620 of 2015 (O&M) 2026:PHHC:199066

the deceased himself in the ordinary course. Therefore, their eviden )ary
value cannot be discounted on the ground that they were prepared a-er the
accident for the purpose of securing compensa)on. The Tribunal, hence, fell
into error in assessing the income of the deceased on a no)onal basis while
overlooking this documentary evidence.
11. The Hon'ble Supreme Court in Malarvizhi and others v. United
India Insurance Company Limited and another, (2020) 4 SCC 228 , recognised
income-tax returns as reliable evidence for determining the income of the
deceased. Where such returns are available, the income disclosed therein
ordinarily deserves considera )on, unless circumstances exist which render
the declara)ons unreliable.
12. The conten)on advanced on behalf of the driver and owner that
the average of the income disclosed in the three returns should be adopted
also does not merit any acceptance. There is no universal rule requiring the
income of a self-employed deceased to be determined by taking the
arithme)c average of the preceding three years. Such a method may be
appropriate where the income ﬂuctuates substan)ally or the latest return
reﬂects an unusual increase, which is not sa)sfactorily explained. However,
the present case stands on a diﬀerent foo)ng. The income disclosed by the
deceased increased from ₹1,00,000/- for assessment year 2009–10 to
₹1,33,000/- for assessment year 2010–11 and therea-er to ₹1,70,000/- for
assessment year 2011–12. This reﬂects a consistent upward trend in his
earnings over three successive assessment years. The last return was ﬁled on
29.07.2011, more than four months before the accident, and there is nothing
on record to suggest that the income disclosed therein was inﬂated or that
the return was ﬁled in an)cipa)on of any claim for compensa)on.
13. The object of awarding compensa)on under Sec)on 166 of the
Motor Vehicles Act is to provide just compensa)on for the pecuniary loss
suﬀered by the dependants. Where the deceased was engaged in an income-
genera)ng occupa)on and his earnings showed a consistent increase,
adop)ng the average income of earlier years would ar)ﬁcially depress the
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FAO No.2620 of 2015 (O&M) 2026:PHHC:199066

assessment of his earning capacity immediately preceding the accident. The
latest return, Ex.PW1/D, being a contemporaneous statutory declara )on
made during the life)me of the deceased, cons)tutes the most relevant
evidence of his established earnings.
14. Accordingly, this Court ﬁnds it appropriate to assess the annual
income of the deceased at ₹1,70,000/-, subject to deduc)on of any income
tax actually payable, rather than adop)ng the average of the three returns or
the no)onal income assessed by the Tribunal.
15. Since the deceased was aged 38 years and was self-employed,
an addi)on of 40% towards future prospects is admissible in terms of
Na #onal Insurance Company Limited v. Pranay Sethi, (2017) 16 SCC 680. The
deduc )on of one-fourth towards personal expenses and applica)on of
mul)plier of 15 are also appropriate in view of Sarla Verma v. Delhi
Transport Corpora #on, (2009) 6 SCC 121.
16. As regards the compensa )on under conven)onal heads, the
principles laid down in Pranay Sethi (supra), read with Magma General
Insurance Company Limited v. Nanu Ram, (2018) 18 SCC 130 and United
India Insurance Company Limited v. Sa #nder Kaur alias Satwinder Kaur,
(2021) 11 SCC 780 , govern the en )tlement of the widow, children and
parents to consor)um. Since the accident occurred in 2011, the base amount
of ₹40,000/- per eligible claimant towards consor)um, besides ₹15,000/-
each towards funeral expenses and loss of estate, has been adopted. The
amounts awarded by the Tribunal under the conven)onal heads stand
correspondingly adjusted.
17. On the basis of annual income of ₹1,70,000/-, with no income
tax paid, as per Ex.PW1/D a-er applicable deduc)ons, the compensa)on
would be as under:
Par 7culars Amount

Annual income ₹1,70,000

Future prospects @ 40% ₹68,000
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FAO No.2620 of 2015 (O&M) 2026:PHHC:199066

Total annual income ₹2,38,000

Deduc )on of 1/4th ₹59,500

Annual dependency ₹1,78,500

Mul )plier 15

Loss of dependency ₹26,77,500

Consor )um to six claimants @ ₹40,000 each ₹2,40,000

Funeral expenses ₹15,000

Loss of estate ₹15,000
Total compensa 7on ₹29,47,500

Less: Awarded by Tribunal ₹13,40,000
Enhancement ₹16,07,500
18. Coming to the ques )on of liability, it is not disputed that the
Tribunal, a-er examining the documentary evidence and tes)mony of the
insurance company's oﬃcial, returned a categorical ﬁnding that the cover
note relied upon by the driver and owner was not genuine. The Tribunal
no)ced that the cover note allegedly covering the vehicle from 21.07.2011 to
20.07.2012 had not been issued by the insurer, whereas the policy proved
through the insurance company's records commenced from 13.01.2012. The
accident admiHedly occurred on 09.12.2011, prior to commencement of the
proved policy.
19. The dis)nc)on between breach of a condi)on of an exis)ng
insurance policy and complete absence of insurance coverage is material.
Where a valid policy exists but the insurer establishes breach of a speciﬁed
policy condi)on, the ques)on of statutory liability towards third par)es and
consequen)al recovery rights may arise. However, where the very existence
of a policy covering the oﬀending vehicle on the date of accident is not
established, the insurer cannot ordinarily be saddled with liability merely
because the vehicle was subsequently insured with it.
20. The Tribunal's ﬁnding that the cover note was fabricated is a
ﬁnding of fact based upon apprecia)on of the insurer's records. Signiﬁcantly,
neither the driver nor the owner has preferred any independent appeal or
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FAO No.2620 of 2015 (O&M) 2026:PHHC:199066

cross-objec )on challenging the exonera)on of the insurance company.
Although the appellate Court possesses powers under Order XLI Rule 33 CPC
to mould relief in an appropriate case, such powers are discre)onary and are
not intended to permit an unsuccessful party to reopen an independent and
adverse ﬁnding merely through oral submissions in an appeal preferred by
another party. Reference may be made to Banarsi and others v. Ram Phal,
(2003) 9 SCC 606.
21. In the absence of any independent challenge by the driver or
owner, and there being no apparent perversity in the ﬁndings recorded by
the Tribunal regarding absence of insurance coverage, this Court ﬁnds no
reason to interfere with the exonera )on of respondent No.3–insurance
company. The liability to sa)sfy the award, including the enhanced
compensa)on, shall therefore con)nue to rest jointly and severally upon
respondent Nos.1 and 2, namely the driver and owner of the oﬀending
vehicle.
22. Consequently, the appeal preferred by the claimants is partly
allowed. The compensa)on is enhanced from ₹13,40,000/- to ₹29,47,500/-.
The enhanced amount of ₹16,07,500/- shall carry an interest at the rate of
7.5% per annum from the date of ﬁling of the claim pe))on )ll its actual
realisa)on, subject to adjustment of any amount already paid. The
appor)onment and disbursement shall be governed by the direc)ons of the
Tribunal, with appropriate safeguards for any claimant who remains a minor.
The ﬁndings of the Tribunal exonera)ng the insurance company and
fastening liability upon the driver and owner are hereby aﬃrmed.
23. The appeal stands disposed of in the aforesaid terms.

(DEEPAK GUPTA)
JUDGE
November 11, 2026
Sarita
Whether speaking/reasoned? Yes/No
Whether reportable? Yes/No
Uploaded on: November 11, 2026
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