Reliance General Insurance Co Ltd vs Ranjana Rajora Sharma & Ors.

$~32
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Date of decision: 26 May 2026


+ MAC.APP. 802/2025 & CM APPL. 80199/2025
RELIANCE GENERAL INSURANCE CO LTD .....Appellant
Through: Mr. A.K Soni, Adv. (Through VC).

versus

RANJANA RAJORA SHARMA & ORS. .....Respondents
Through: Mr. Lohit Ganguly and Mr. Abhey
Ram, Advs.


CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT


ANISH DAYAL, J. (ORAL)
1. This appeal has been filed assailing impugned judgment and award
passed by Motor Accidents Claims Tribunal, North West District, Rohini
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Courts [‘ MACT/Tribunal ’] in MACP No.384/2021 on 15 March 2025
awarding Rs. 5,46,71,000/- at an interest rate of 7.5% per annum.
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2. The accident occurred on 7 September 2021 at about 6:00 a.m.
when Sh. Ajay Sharma (hereinafter, ‘ deceased ’) was travelling on a bicycle;
when he reached near Rithla Metro Station, Pillar no. 472, a Swift car
bearing registration no. DL-9CS-5978 (hereinafter, ‘ offending vehicle ’) hit
the deceased from behind, due to which the deceased sustained grievous
injuries. He was shifted to BSA Hospital by the driver of offending vehicle,
where he was declared ‘ brought dead ’. FIR no. 297/2021 was registered at
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 1 of 9

PS Budh Vihar for offences under Section 279/304A of Indian Penal Code,
1860.
3. Mr. A.K. Soni , counsel for appellant/Insurance Company, has
challenged the impugned award on two grounds.
4. First , that the testimony of PW-1 , wife of deceased, was erroneously
considered, since the same was deferred and remained incomplete and,
therefore, negligence on part of respondent no.3/driver of the offending
vehicle ought not to have been concluded in favour of claimants.
5. Per contra , counsel for claimants, draws attention of this Court to
paragraph 19 of the impugned award passed by the MACT, which is
extracted as under:
“19. For involvement of offending vehicle of the
respondent no.2 in accident, R1 has meekly tried to
dispute the same. However, documentary evidence
collected in FIR No. 379/2021 shows otherwise. The
accident was seen by witness Atul Singh who stated
that deceased was shifted to hospital by the driver of
offending vehicle and the driver was wearing a black
colour t-shirt and the arm of the t-shirt was printed
with ‘3’. IO, during investigation, collected the CCTV
footage of hospital and still photographs of the footage
are on record. R1/driver is clearly visible wearing a t-
shirt having a print of ‘3’ on the arm of the t-shirt. It is
also an admitted fact by R1 that he has shifted the
deceased to the hospital. Moreover, it is admitted by
R1 himself in his discloser statement that the accident
occurred with the offending vehicle being driven by
him and after leaving the deceased in the hospital he
got the bumper of offending vehicle repaired. IO has
also recorded the statement of the said mechanic.
Therefore, the case does not warrant any other best
evidence.”

Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 2 of 9

6. As per the above, it is clear that there was evidence in the form of
CCTV footage as well, which was in sync with the partial testimony
recorded of PW-1 . It has also been stated that the testimony was deferred,
since PW-1 did not possess an Aadhaar Card. However, incomplete
testimony cannot be rejected in toto by the Court, and has to be considered
along with other contextual facts and circumstances.
7. Considering the CCTV footage, the conclusion drawn by the MACT,
would sustain in favour of the claimants.
8. In addition, the statement of Lakhvinder Singh recorded by the police,
forming part of the Detailed Accident Report (‘ DAR ’), has also been
considered, wherein, he is stated to have witnessed the accident and
identified the offending vehicle.
9. Accordingly, the finding of negligence as arrived at by the MACT is
sustained.
10. Secondly , Mr. A.K. Soni , counsel for appellant/Insurance Company,
challenges the quantum of compensation. The dispute largely relates to the
calculation of the benchmark income on the basis of which loss of
dependency has been calculated.
11. Mr. A. K. Soni draws attention to the salary slip for the month of
August 2021 issued by Parle Agro Private Limited which forms part of the
Trial Court Record (‘ TCR ’) and had been presented by PW-3 , General
Manager Accounts, Parle Agro Pvt. Ltd.
12. He contends that deduction towards soft furnishing allowance and tax
deducted at source (‘ TDS ’) have not been made by the MACT. The said
salary slip is extracted as under for ease of reference:
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 3 of 9

13. The plea of appellant/Insurance Company in this regard is tenable in
accordance with settled law inter alia Manorma Sinha v. Oriental
Insurance Co. Ltd. , 2025 SCC OnLine SC 2241 where the Supreme Court
held that deduction towards income tax should be at such rate which the
annual income may be subjected to in the relevant year. Relevant finding of
the Court is extracted as under:
“13. As regards deduction towards income tax is
concerned, same is permissible in view of the decision
of this Court in Ranjana Prakash (supra). However, in
our view, deduction towards income tax should be at
such rate which the annual income may be subjected to
in the relevant year. It is not demonstrated that the
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 4 of 9

allowances received were exempt from income tax.
Even the nature of allowances has not been disclosed
to enable us to determine whether they are exempt
from tax. Therefore, we include them in the annual
income and compute the annual income as Rs.
6,40,400 (approximately) for the purposes of tax. The
tax payable in the relevant year (i.e., with reference to
the date of death) would be Rs. 62,080 (Tax: Nil up to
Rs. 1.60 lacs; Rs. 34,000 @ 10% up to Rs. 5.00 lacs;
and Rs. 28,080 @ 20% up to Rs. 6,40,400). Thus, net
annual income from salary after deduction of income
tax, with the allowances, would be Rs. 5,78,324.”
(emphasis added)

14. Further, the Supreme Court in National Insurance Co. Ltd. v. Indira
Srivastava , (2008) 2 SCC 763 stated that income is not limited to the pay
packet carried home by an employee but also other perks beneficial to the
members of the entire family. Deductions towards allowances personal to
the deceased may be made, however, deductions which accrue to the benefit
of the family form a part of the benchmark income. Relevant findings of the
Court are extracted as under:
“ 9. The term “income” has different connotations for
different purposes. A court of law, having regard to the
change in societal conditions must consider the
question not only having regard to pay-packet the
employee carries home at the end of the month but also
other perks which are beneficial to the members of the
entire family. Loss caused to the family on a death of a
near and dear one can hardly be compensated on
monetary terms.
10. Section 168 of the Act uses the word “just
compensation” which, in our opinion, should be
assigned a broad meaning. We cannot, in determining
the issue involved in the matter, lose sight of the fact
that the private sector companies in place of
introducing a pension scheme take recourse to
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 5 of 9

payment of contributory provident fund, gratuity and
other perks to attract the people who are efficient and
hard-working. Different offers made to an officer by
the employer, same may be either for the benefit of the
employee himself or for the benefit of the entire family.
If some facilities are being provided whereby the entire
family stands to benefit, the same, in our opinion, must
be held to be relevant for the purpose of computation
of total income on the basis whereof the amount of
compensation payable for the death of the kith and kin
of the applicants is required to be determined….”
(emphasis added)

15. Reliance may also be placed upon the decision of Supreme Court in
Kavita Devi v. Sunil Kumar , 2025 SCC OnLine SC 1639 where the Court
held as under:
“ 17. This Court has consistently held in case of the
allowances which are included in the component of
salary of the deceased, Tribunal has to take into
consideration these allowances as they were used for
supporting the family. The claimants have to show that
these allowances were regularly received and used for
the family's benefit. Further, while determining
whether the allowances form a part of the salary or
not, the Tribunal by looking into the facts of each case
and by considering the extent of dependency of the
claimants on the salary of the deceased including the
allowances, have to determine whether these
allowances should be excluded from determination of
the income of the deceased. If the answer of the
Tribunal is in affirmative, then the allowances may be
excluded for determination of loss of dependency. If the
Tribunal answers the above point in negative, then the
Tribunal has to include the allowances for computation
of income of the deceased, thus determining the loss of
dependency.”
(emphasis added)

Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 6 of 9

16. Therefore, this Court is inclined to deduct Rs. 5,000/- towards soft
furnishing allowance and Rs. 92,870/- towards TDS from the benchmark
income.
17. Accordingly, the calculation of benchmark income shall be as under:
Heads Amounts
Total Monthly Income Rs. 4,78,857/-
Add: Provident Fund Rs. 31,585/-
Add: Voluntary Provident Fund Rs. 78,627/-
Less: Soft furnishing allowance Rs. 5,000/-
Gross Income Rs. 5,84,069/-
Less: TDS Rs. 92,870/-
Total: Income of deceased Rs. 4,91,199/-
18. Loss of consortium and funeral expenses have been rightly awarded.
However, loss of estate has been awarded twice and shall be awarded at Rs.
18,150/- as per the principles enunciated in National Insurance Co. Ltd. v.
Pranay Sethi , (2017) 16 SCC 680.
19. It is pertinent to note that the formula for computing loss of
dependency has been incorrectly applied by the MACT leading to an
arithmetical error. Future prospects are to be applied to the income of
deceased before deduction of personal and living expenses. This error has
been noted and corrected by the Court.
20. Therefore, revised compensation is as under:
S.
No.
Heads Awarded by the
Tribunal
Awarded by this
Court
1 Income of deceased (A) Rs. 4,19,379/- Rs. 4,91,199/-
2 Add: Future Prospects (B) Rs. 1,09,03,854/-* Rs. 1,22,800/-
3 Less: Personal expenses of
deceased (C)
Rs. 1,39,793/- Rs. 2,04,667/-
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 7 of 9

4 Loss of dependency (A+B)-C=D Rs. 2,79,586/- Rs. 4,09,332/-
5 Annual loss of dependency
(Dx12) = (E)
Rs. 33,55,032/- Rs. 49,11,984/-
6 Multiplier (F) 13 13
7 Total loss of dependency (E x
F)= (G)
Rs. 5,45,19,270/- Rs. 6,38,55,792/-
8 Compensation for loss of
consortium (H)
Rs. 96,800/- Rs. 96,800/-
9 Compensation for loss of estate
(I)
Rs. 18,150/- Rs. 18,150/-
10 Compensation towards funeral
expenses (J)
Rs. 36,300/- Rs. 18,150/-
11 Total compensation
(G+H+I+J)= K
Rs. 5,46,70,520/- Rs. 6,39,88,892/-
12 Rate of Interest Awarded 7.5% 7.5%
[*wrongly placed at serial no. 6 in the impugned award]

Directions
21. For the aforesaid reasons, compensation has been enhanced by Rs.
93,18,372 /- [“ enhanced amount ”].
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22. By order dated 18 December 2025, this Court directed the Insurance
Company to deposit the entire originally awarded amount before MACT.
Enhanced amount at an interest of 7.5% per annum from the date of filing
the petition shall be deposited before MACT within a period of six weeks.
23. It is directed that a lump sum amount of Rs. 25,00,000/- shall be
released to claimants from the deposit of enhanced amount within a period
of two weeks thereafter. Originally awarded amount along with remaining
enhanced amount, with accrued interest, shall be kept in Fixed Deposit
Receipts ( FDRs ) of Rs. 1,00,000/- each for periods of 3 month, 6 months, 9
months and so on, in succession as maybe calculated. Interest accruing on
said FDRs shall be credited to the designated Savings Bank Account of
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 8 of 9

claimants. The amount of FDRs on maturity would be released to the
Savings Bank Account of claimants upon due verification.
24. Accordingly, the appeal stands disposed of with above directions.
25. Pending applications, if any, are rendered infructuous.
26. Copy of this judgment be sent to concerned MACT.
27. Copy of this judgment shall also be sent to concerned bank.
28. Statutory deposit, if any, shall be refunded to appellant/Insurance
Company, only if the order of deposit has been complied with.
29. Judgment be uploaded on the website of this Court.


(ANISH DAYAL)
JUDGE
MAY 26, 2026/ab/ sp
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.06.2026
16:32:15
MAC. APP. 802/2025 Page 9 of 9