E Neeta Devi & Ors vs Ashwani Kumar & Ors (Bharti Axa General Insurance Co Ltd)

* IN THE HIGH COURT OF DELHI AT NEW DELHI

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% Reserved on : 12 May 2026
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Pronounced on : 01 July 2026
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Uploaded on : 02 July 2026

+ MAC.APP. 530/2017
E NEETA DEVI & ORS .....Appellants
Through: Mr. Pukhrambam Ramesh Kumar
& Ms. Rajkumari Divyasana,
Advs.
versus

ASHWANI KUMAR & ORS (BHARTI AXA GENERAL
INSURANCE CO LTD) .....Respondents
Through: Mr. Rajeev M. Roy and Mr. P.
Srinivasan, Advs. for R-3.
Ms. Suman Bagga and Ms. Mouli
Sharma, Advs. for R-5.
CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT
ANISH DAYAL, J.
1. This appeal has been filed by the legal representatives of
deceased/ E. Suraj Singh (hereinafter, ‘ claimants ’) seeking enhancement
of compensation awarded by Motor Accidents Claims Tribunal
[‘ MACT/Tribunal ’], East District, Karkardooma Courts by judgment
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dated 17 January 2017 at Rs.29,85,000/- along with 9% interest per
annum.
2. The cross appeal filed by respondent no.3/Insurance Company
being MAC.APP. 403/2017 was dismissed by this Court vide order dated
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5 September 2018 on account of non-appearance.
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 1/24

3. Moreover, an application being, CM.APPL. 73634/2025 was filed
by appellants/claimants, seeking release of amounts in the cross appeal,
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which was allowed by the Court vide order dated 27 November 2025.
The Accident
4. Deceased/ E. Suraj Singh was a member of Manipur Legislative
Assembly and passed away in an accident which occurred in the
intervening night of 17th and 18th August 2011 in Delhi. Deceased/ E.
Suraj Singh was returning from Manipur Bhawan to Mayur Vihar in Delhi
with his friend Sh. Reginal John Sinclair , in a Santro Car, and a collision
occurred with a Jeep bearing no. DL-12CA-1412 (hereinafter, ‘ offending
vehicle ’), driven by respondent no.1.
5. Deceased/ E. Suraj Singh sustained grievous injuries and was taken
to LBS Hospital by a PCR Van; however, he was declared as ‘ brought
dead ’ at the hospital. His friend, Sh. Reginal John Sinclair, on the other
hand, suffered multiple fractures. FIR No. 242/11 under section
279/338/304A IPC was registered at P.S. Pandav Nagar against respondent
no.1.
Submissions on behalf of appellants/claimants
6. The fundamental issue raised by Mr. Pukhrambam Ramesh Kumar ,
counsel for appellants/claimants, relates to the assessment of benchmark
income of deceased/ E. Suraj Singh for calculating loss of dependency. The
dominant submission is that benchmark income ought to be based on the
Pay Certificate ( Ex. PW-2/2 ), which has the following components:
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 2/24

S.No. Particulars Amount
1. Salary Rs. 18,500/-
2. Entertainment Allowance Rs. 6,500/-
3. Constituency Allowance Rs. 12,000/-
4. Contingency Allowance Rs. 8,000/-
5. Telephone Allowance Rs. 10,000/-
6. Compensatory Allowance Rs. 7,000/-
7. Secretariat Allowance Rs. 15,000/-
Total Rs. 77,000/-

7. Counsel for appellants/claimants stated that the salary of
deceased/ E. Suraj Singh was considered by MACT as Rs. 18,500/- by
considering only the salary component at serial no. (1) and excluding all
other allowances from serial no. (2) to (7) .
8. In support of his submission, counsel for appellants/claimants relied
upon various judgments, inter alia, National Insurance Co. Ltd. v. Indira
Srivastava & Ors. (2008) 2 SCC 763 and extant rules that apply to
members of Manipur Legislative Assembly under the provisions of
Salaries & Allowances of Members of the Legislative Assembly (Manipur)
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Act, 1972 [as amended by 18 Amendment Act, 2014] .
9. Counsel, therefore, contended that these allowances ought to have
been included. Further, pension stipulated for an MLA is Rs.40,000/- per
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 3/24

month, that deceased would have received had he been alive, which would
have increased over a period of time. However, at present, the family is
only receiving 60% of the applicable amount as family pension.
10. Counsel for appellants/claimants relied on testimony of two
witnesses- PW-1 , wife of deceased/ E. Suraj Singh and PW-2 , Officer on
Special Duty (Accounts and Establishments) of the Manipur Legislative
Assembly Secretariat.
11. Reliance was also placed on decisions of the Supreme Court in Vijay
Kumar Rastogi v. Uttar Pradesh State Road Transport Co. 2018 SCC
OnLine SC 193, Meenakshi v. Oriental Insurance Co. Ltd. 2024 SCC
OnLine SC 1872 and Manorma Sinha v. Divisional Manager Oriental
Insurance Ltd. 2025 SCC OnLine SC 2241.
12. Counsel submitted that all pecuniary advantages, which would have
been available to the family, must be considered and allowances forming
part of the salary must be included.
13. Further reliance was placed upon Priti Singh v. Reliance General
Insurance 2025 SCC OnLine Kar 1568, where the High Court of
Karnataka stated that “ while allowances may be separated from the basic
salary, they nonetheless remain part of composite earnings of the
employee/deceased .”
14. As regards what is termed as ‘ salary ’ and what forms a part of
allowances, perks and other facilities, to which the deceased was entitled
to, reliance was placed upon The Salaries and Allowances of Members of
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the Legislative Assembly (Manipur) (18 Amendment) Act, 1972
(hereinafter, ‘ the Act ’) read with Entitlement of Member/Ex-Member
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 4/24

under the Provisions of Salaries and Allowances Act , issued by the
Manipur Legislative Assembly through the Secretary.
15. These include daily allowance, constituency allowance,
contingency allowance, secretarial allowance, entertainment allowance,
travelling allowance, allowance for personal staff, housing
facility/compensatory allowance, telephone allowance, water and
electricity allowance , other facilities like petrol and S. K. Oil , as detailed
in the submissions.
16. Counsel also submitted that no deduction should be made on
account of pension for computation of future prospects and income, as per
the decision of Supreme Court in Helen C. Rebello v. Maharashtra SRTC ,
(1999) 1 SCC 90 and Sebastiani Lakra & Ors. v. National Insurance
Company Ltd. , (2019) 17 SCC 465.
17. Reliance was also placed on the decision of Supreme Court in
Triveni Kodkany v. Air India Ltd. (2021) 19 SCC 214 and National
Insurance Company Ltd. v. Nalini 2024 SCC OnLine SC 2252 where it
was held that emoluments and benefits accruing to the deceased under
various heads ought to be included, irrespective of whether they are
taxable or not.
18. Relying on these decisions, counsel for appellants/claimants,
submitted that bifurcation of salary into diverse heads may be made by an
employer for a variety of reasons, however, in a claim for compensation
arising out of death of the employee, income has to be assessed on the
basis of the entitlement of the employee.

Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 5/24

Submissions on behalf of respondent no.3/Insurance Company
19. Mr. Rajeev M. Roy , counsel for respondent no.3/Insurance
Company contended that the decisions relied upon by counsel for
appellants/claimants were in the domain of private employment or at best
employment with the concerned government. However, the deceased was
a legislator, who was holding the post for a limited period of time and there
was no guarantee that he would have continued to be part of the Legislative
Assembly.
20. The said post would not amount to continuous employment, since
his tenure would be dependent on being elected/nominated during further
tenures of the Legislative Assembly. Moreover, allowances would not be
permanent in hands of a legislator and therefore cannot be included for
calculation of dependency.
Analysis
21. There is no doubt that on the date of the accident, the intervening
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night of 17 /18 August 2011, deceased/ E. Suraj Singh was a Member of
the Manipur Legislative Assembly. As regards the issue of negligence,
MACT decided the same in favour of appellants/claimants, holding that
fatal injuries suffered by deceased/ E. Suraj Singh were due to the
involvement of the offending vehicle driven by respondent no.1 and
owned by respondent no.2, insured by respondent no.3/Insurance
Company.
22. In order to award just and reasonable compensation in accordance
with Section 168 of Motor Vehicles Act, 1988 (‘ MV Act ’) and as reiterated
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 6/24

by the Supreme Court in National Insurance Co. Ltd. v. Pranay Sethi ,
(2017) 16 SCC 680 and Sarla Verma v. DTC , (2009) 6 SCC 121, loss of
dependency of the family would have to be considered on the basis of
monthly income of deceased at that point of time.
23. The assertion made by Mr. Roy , counsel for respondent
no.3/Insurance Company that the allowance accrued would not form part
of the monthly income or be considered for dependency, was a ground
which ought to have been taken in the cross appeal, which otherwise stood
dismissed by this Court.
24. Further, this argument was not raised by respondent no.3/Insurance
Company before the MACT in their written statement. Therefore, the
submission made by counsel for respondent no.3/Insurance Company
objecting to dependency being calculated on the basis of monthly income,
by including allowances received as a legislator, cannot be accepted.
25. Issue that is germane and requires consideration is which
components of allowances be included in the calculation of monthly
income.
26. Since the accident occurred in 2011, salary and allowances shall be
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calculated as per the 18 Amendment of the Act in 2010. According to
this, salary of deceased/ E. Suraj Singh was Rs.18,500/- along with various
allowances.
27. As regards various other components of allowances, at the very
outset one must assess the opinion of various Courts and the Supreme
Court in this regard.
28. In this context, the decision of Supreme Court in National
Insurance Co. Ltd. v. Indira Srivastava & Ors. (2008) 2 SCC 763 is
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 7/24

noted. While computing income, the Supreme Court upheld the finding of
the High Court to the extent of not including the element of conveyance
allowance in the purview of income, however, declined to deduct medical
reimbursement and tax on the entire income. Relying on the term ‘ income ’
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in P. Ramanatha Ayyer’s Advanced Law Lexicon, 3 Edition , the Court
noted that income has different connotations for different purposes and is
not limited to the pay packet carried home by an employee. It includes
other perks and benefits which may be beneficial to the members of the
entire family. Relevant observations of the Court are extracted as under:
“ 19. The amounts, therefore, which were required to be
paid to the deceased by his employer by way of perks,
should be included for computation of his monthly
income as that would have been added to his monthly
income by way of contribution to the family as
contradistinguished to the ones which were for his
benefit. We may, however, hasten to add that from the
said amount of income, the statutory amount of tax
payable thereupon must be deducted.
20. The term “income” in P. Ramanatha
Aiyar's Advanced Law Lexicon (3rd Edn.) has been
defined as under:
“The value of any benefit or perquisite whether
convertible into money or not, obtained from a
company either by a director or a person who has
substantial interest in the company, and any sum
paid by such company in respect of any obligation,
which but for such payment would have been
payable by the director or other person aforesaid,
occurring or arising to a person within the State
from any profession, trade or calling other than
agriculture.”
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 8/24

It has also been stated:
“‘ Income’ signifies ‘what comes in ’ (per
Selborne, C., Jones v. Ogle [(1861-73) All ER Rep
918 : 42 LJ Ch 334] ). ‘It is as large a word as can
be used’ to denote a person's receipts (per Jessel,
M.R., Re Huggins [ Huggins, ex p., Re, 51 LJ Ch
935] ). Income is not confined to receipts from
business only and means periodical receipts from
one's work, lands, investments, etc. Secy. to the
Board of Revenue, Income Tax v. Al. Ar. Rm.
Arunachalam Chettiar & Brothers [AIR 1921 Mad
427] . Ref. Vulcun Insurance Co. Ltd. v. Corpn. of
Madras [AIR 1930 Mad 626 (2) : 58 MLJ 337 :
1930 MWN 29 : 124 IC 511 : 31 MLW 438] .”
21. If the dictionary meaning of the word “income” is
taken to its logical conclusion, it should include those
benefits, either in terms of money or otherwise, which
are taken into consideration for the purpose of payment
of income tax or professional tax although some
elements thereof may or may not be taxable or would
have been otherwise taxable but for the exemption
conferred thereupon under the statute.”
(emphasis added)

29. In Vijay Kumar Rastogi v. Uttar Pradesh State Road Transport Co.
2018 SCC OnLine SC 193, the point raised was whether income earned
from other sources would form a part of the benchmark income. While the
Tribunal disregarded income from other sources such as bank interest and
commission, the High Court upheld the finding of Tribunal by stating that
net income has been rightly considered after deduction of tax from total
income. Setting aside this finding, the Supreme Court held as under:
“ 11. Strikingly, the High Court noted the taxable
income disclosed in tax return of the appellant for the
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 9/24

relevant period as Rs. 77,480/- (rounded off) and tax
deduction of Rs. 4,496/-, yet proceeded to hold that the
net income of the appellant has been rightly taken into
consideration by the Tribunal. It is unfathomable that
the High Court, despite having accepted the claim of the
appellant founded on his tax return for the relevant
period, disclosing the taxable income of the appellant as
Rs. 77,480/- (rounded off) and deduction of tax of Rs.
4,496/-, could have affirmed the conclusion of the
Tribunal that the net annual income of the appellant was
Rs. 44,511/-. It ought to have reckoned the taxable
income for computing the head towards loss of income.
This, in our opinion, is the manifest error committed by
the High Court. The appellant is justified in relying upon
the decisions of this Court which have taken the view
that loss of taxable earning should be reckoned for the
purpose of determining just compensation as enunciated
in National Insurance Co. Ltd. v. Indira Srivastava,
which has been followed in Oriental Insurance
Company Limited v. Jashuben, and Kavita v. Deepak. It
has been held that the “income” should include those
benefits, either in terms of money or otherwise, which
are taken into consideration for the purpose of payment
of income tax or professional tax, although some
elements thereof may or may not be taxable due to the
exemption conferred thereupon under the statute.”

(emphasis added)

30. In Meenakshi v. Oriental Insurance Co. Ltd. 2024 SCC OnLine
SC 1872, an appeal was preferred against the decision of the High Court,
where loss of dependency was calculated by deducting professional tax
and income tax from the total income. As regards allowances, High Court
was of the opinion that the components of House Rent Allowance
(‘ HRA ’), Flexible Benefit Plan and contribution of Provident Fund, etc.
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 10/24

could not be accounted for. Including the said allowances to be a part of
the income, the Supreme Court held as under:
“ 6. Having heard and considered the submissions
advanced by learned counsel for the parties and after
going through the impugned judgments and the record,
we are of the opinion that the reasoning assigned by the
High Court, that the perquisites/allowances in the
nature of house rent, flexible benefit plan and Company
contribution to provident fund would have to be
excluded from the gross income for the purpose of
applying future prospects, is erroneous on the face of
record. There cannot be any two views on the aspect that
these perquisites/allowances admissible to a salaried
employee do not remain static and continue to rise
generally proportionate to the length of the service of
the employee. These allowances are generally fixed on
a pro rata basis with reference to the basic salary.
…
10. Therefore, components of house rent allowance,
flexible benefit plan and company contribution to
provident fund have to be included in the salary of the
deceased while applying the component of rise in
income by future prospects to determine the dependency
factor. The Accident Claims Tribunal was justified in
factoring these components into the salary of the
deceased, before applying 50% rise by future prospects
due to future prospects, while calculating the total
compensation payable to the appellant.”
(emphasis added)

31. In Manorma Sinha v. Divisional Manager Oriental Insurance Ltd.
2025 SCC OnLine SC 2241, the Supreme Court was dealing with an award
where allowances as payable from the last pay slip had been excluded by
the High Court, while computing compensation. Further, income tax had
been deducted at 30%. In this regard, the Supreme Court noted as under:
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 11/24

“ 12. Now, the next question is whether allowances are
to be added to the salary for determining the
multiplicand. In National Insurance Co. Ltd. v. Indira
Srivastava, it was held that “the term income has
different connotations for different purposes. A court of
law, having regard to the change in societal conditions
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”. In Vijay Kumar
Rastogi v. Uttar Pradesh State Roadways Transport
Corporation, a three-Judge Bench of this court noticing
earlier decisions on the point observed that “the income
should include those benefits, either in terms of money
or otherwise, which are taken into consideration for the
purpose of payment of income tax or professional tax,
although some elements thereof may not be taxable due
to exemption conferred thereupon under the statute.”
Following the decision in Vijay Kumar Rastogi (supra)
in National Insurance Company Ltd. v. Nalini, it was
held by this Court that the emoluments and the benefits
accruing to the deceased under various heads for the
purposes of computation of loss of income, ought to be
included irrespective of whether they are taxable or not.
Thus, in our view, the High Court erred in excluding the
allowances from the computation to arrive at the
multiplicand. Hence, the total monthly income was
rightly computed by the Tribunal at Rs. 53,367.
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
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
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 12/24

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)

32. In Triveni Kodkany v. Air India Ltd. (2021) 19 SCC 214, the
question before the Supreme Court was regarding calculation of
compensation awarded to the legal heirs of a deceased/expat who was
employed in the Middle-East and suffered fatal injuries in an air crash. His
income was determined on the basis of costs to company (‘ CTC ’) per
annum, which included basic pay, HRA, transport allowance, telephone
allowance, LTA, medical aid and gratuity. Holding that deductions ought
not to be made from the income of deceased, the Supreme Court
considered this issue and noted as under:
“ 9. Both the sides have prefaced their submissions by
relying on the principles which have been evolved by the
court in determining compensation under the Motor
Vehicles Act, where an accident has resulted in death.
The table which we have reproduced in the earlier part
of the judgment would indicate that the total CTC per
annum, on account of the employment of the deceased,
to his employer was AED 4,82,395. This comprises of
the basic pay, house rent allowance, transport
allowance, telephone allowance, LTA, medical aid and
gratuity. The bifurcation which has been made by the
employer in the salary of the deceased is, in our view,
no reason to make any deductions from the total CTC of
AED 4,82,395. The consolidated amount is the amount
annually borne by the employer on account of the
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 13/24

employment of the deceased. Hence, we are unable to
accept the reasons which weighed with Ncdrc in making
a deduction of AED 30,000 from the total CTC.
Similarly and for the same reason, we are unable to
accept the submission of Air India that the transport
allowance should be excluded. The bifurcation of the
salary into diverse heads may be made by the employer
for a variety of reasons. However, in a claim for
compensation arising out of the death of the employee,
the income has to be assessed on the basis of the
entitlement of the employee. We, therefore, proceed for
the purpose of computation on the basis of the annual
income of AED 4,82,395.”
(emphasis added)

33. In Sebastiani Lakra & Ors. v. National Insurance Company Ltd. ,
(2019) 17 SCC 465, the Supreme Court observed that deductions on
account of pensionary benefits or gratuity cannot be made from the
compensation granted. Relevant observations of the Court are extracted as
under:
“ 12. The law is well settled that deductions cannot be
allowed from the amount of compensation either on
account of insurance, or on account of pensionary
benefits or gratuity or grant of employment to a kin of
the deceased. The main reason is that all these amounts
are earned by the deceased on account of contractual
relations entered into by him with others. It cannot be
said that these amounts accrued to the dependants or the
legal heirs of the deceased on account of his death in a
motor vehicle accident. The claimants/dependants are
entitled to “just compensation” under the Motor
Vehicles Act as a result of the death of the deceased in
a motor vehicle accident. Therefore, the natural
corollary is that the advantage which accrues to the
estate of the deceased or to his dependants as a result of
some contract or act which the deceased performed in
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Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 14/24

his lifetime cannot be said to be the outcome or result of
the death of the deceased even though these amounts
may go into the hands of the dependants only after his
death.
13. As far as any amount paid under any insurance
policy is concerned whatever is added to the estate of
the deceased or his dependants is not because of the
death of the deceased but because of the contract
entered into between the deceased and the insurance
company from where he took out the policy. The
deceased paid premium on such life insurance and this
amount would have accrued to the estate of the deceased
either on maturity of the policy or on his death, whatever
be the manner of his death. These amounts are paid
because the deceased has wisely invested his savings.
Similar would be the position in case of other
investments like bank deposits, share, debentures, etc.
The tortfeasor cannot take advantage of the foresight
and wise financial investments made by the deceased.”

(emphasis added)

34. This was further reiterated in a recent decision of Pramod Kumar
Tiwari v. Premlal Gautam & Ors. SLP(C) No. 26620/2023, where the
Supreme Court noted the observations made in Sebastiani Lakra ( supra ),
and confirmed the finding regarding deduction of pensionary benefits,
gratuity and amount paid towards insurance.
35. The Supreme Court in National Insurance Company Ltd. v. Nalini
2024 SCC OnLine SC 2252 relied upon the decision of the Court in Vijay
Kumar Rastogi (supra) and held that allowances under the heads of
transport allowance, HRA, provident fund loan, provident fund and special
allowance ought to be added while considering the basic salary. Relevant
finding of the Court is extracted as under:
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
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MAC.APP. 530/2017 15/24

“ 3. It is apparent from the observations made in the
aforesaid decision that the emoluments and the benefits
accruing to the deceased under various heads for the
purposes of computation of loss of income, which are
described by learned counsel for the petitioner-
Insurance Company as personal to him to arrive at the
dependency factor, ought to be included irrespective of
whether they are taxable or not.”
(emphasis added)

36. Principles which can be culled out from the above decisions are
enunciated as under:
(i) Income is not limited to the pay packet carried home by an
employee, but also allowances which are beneficial to the
members of the entire family shall be considered as part of
the pay packet.
(ii) Allowances such as transport allowance/conveyance
allowance, house rent allowance, provident fund contribution
and special allowances which are fixed pro-rata with
reference to the basic salary will be included before
assessment of future prospects.
(iii) Income should include those benefits which are taken into
consideration for purposes of payment of income tax or
professional tax. Whereas, some of these elements may not
be taxable due to the exemption conferred upon them,
however, benefits received by the employee must be included
irrespective of whether they are taxable or not.
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
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MAC.APP. 530/2017 16/24

(iv) Perquisites/allowances paid to a salaried employee are not
static and gradually rise in proportion with the duration of the
service of the employee.
(v) Statutory amount of tax payable must be deducted at the rate
applicable to the annual income for the relevant year after
including perks and benefits available to the employee.

(vi) Salary may be bifurcated by employer into diverse heads,
however, while calculating compensation arising out of the
death of the employee, various entitlements received by the
employee have to be considered.
(vii) Deductions on account of insurance, pensionary benefits and
gratuity cannot be made from the income, since these
amounts are earned by the deceased during his lifetime and
are separate from the compensation granted to dependents
under the MV Act.
Needless to say, these are merely illustrative and not exhaustive. However,
there is no denying that individual cases would turn on its own peculiar
facts.

The Present Case
37. Various components of allowances which form a part of the pay
certificate have been pleaded by Mr. Kumar , counsel for
appellants/claimants are, therefore, considered as under:
(i) Entertainment Allowance – As per the last salary pay
certificate, Rs.6,500/- was granted as part of entertainment
allowance. In this regard, counsel for appellants/claimants
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Digitally Signed By:RAHUL
KUMAR CHOUDHARY
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MAC.APP. 530/2017 17/24

submitted that this was granted to meet expenses towards
entertainment and hospitality, forming part of the income and
accruing to benefit of the family, covering costs such as food,
hospitality, cultural or social outings and holidays. As per the
principles enunciated by the Supreme Court, this would be
considered as part of the income accruing to the benefit of the
household and is therefore, included.
(ii) Constituency Allowances – Counsel for appellants/claimants
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pointed out that this provision was inserted by the 18
Amendment. While this has not been defined in the Act,
reliance was placed upon Section 2(1)(aa) of Rajasthan
Legislative Assembly (Officers and Members Emoluments
and Pension) Act, 1956 which defines Constituency
Allowance as an allowance to meet office expenses incurred
by the member in the performance of duties. However, the
Court is not inclined to include this allowance, since these
expenses would have been incurred by deceased/ E. Suraj
Singh while on duty and are provided for running a personal
office.
(iii) Contingency Allowance – As per the last salary certificate,
deceased was receiving contingency allowance at Rs. 8,000/-
He stated that this allowance was intended to meet unforeseen
expenses which may arise and same would contribute to the
financial security, stability and overall welfare of the family,
including, medical needs, children’s education, travel
exigencies and other household requirements. The Court is,
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 18/24

therefore, inclined to accept this as part of the allowances
which may form a part of the monthly income, since it
accrues to the benefit of the family.
(iv) Telephone Allowance – This component has been granted at
Rs.10,000/- per month as per the last salary pay certificate.
Considering that it would be used for telephone connections
at the residence of the Member’s house, which would accrue
to benefit of the family, therefore, it will be considered as part
of income of deceased/ E. Suraj Singh .
(v) Housing/Compensatory Allowance – This compensation has
been granted at Rs.7,000/- per month as per the last salary pay
certificate, for the purposes of accommodation. Since this
would accrue to benefit of the family, this would be included
akin to House Rent Allowance, which has been accepted by
the Supreme Court in various decisions.
(vi) Secretarial Allowance – This allowance was intended to be
used for expenses for clerical assistance such as, secretarial
help, documentation and administrative support, which will
not be included, considering that it does not accrue to the
benefit of the family.
38. Further, Mr. Kumar , counsel for appellants/claimants has pleaded
certain allowances which the deceased was entitled to under the Act, which
are dealt with as under:
(i) Daily Allowance – As per Section 3 of the Act, deceased was
entitled to Daily Allowance of Rs.700/- within the State and
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 19/24

Rs.1,500/- outside the State per month. This component was

to be paid when the legislator was on duty during the
Assembly Session. Considering that this particular allowance
is personal to the attendance of legislator, the Court is not
inclined to consider it to form a part of the benchmark income.
(ii) Travelling Allowance – Counsel for appellants/claimants
relied on the decision in Nalini ( supra ) and Triveni Kodkani
( supra ) to submit that this aspect should be included. As per
Section 5 of the Act, an amount of Rs.1,00,000/- had been
prescribed for travelling allowance for journeys performed
for attending sessions of the Assembly, meetings of
Committee or any other business connected with the duties of
a member from the usual place of residence to the place of
business. Considering that this allowance was granted for the
journeys undertaken by the deceased for the purpose of duties
performed as a member and the same were not being used for
the benefit of family, this Court is not inclined to grant
travelling allowance.
(iii) Service of Computer Assistant, PRO and Drivers – Counsel
for appellants/claimants have claimed Rs.8,000/- per month
for personal staff by placing reliance upon Section 5(4) of the
Act. Mr. Kumar , submitted that this would be used for benefit
of the family. This Court is inclined to include salary of one
driver for benefit of the family to be a fair amount.
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 20/24

(iv) Medical Treatment and Reimbursement – This is an
allowance for reimbursement and, therefore, cannot be
awarded in the regular income.
(v) Water and Electricity Facilities – As per Section 11-F of the
Act, Rs.5,000/- per month has been granted, which would yet
again be used for the benefit of inhabitants of the residence
and would be available to the family.
(vi) Other facilities like Petrol, SK Oil and MLA Local Area
Development Fund will be personal to the deceased/ E. Suraj
Singh and were given only on reimbursement or otherwise
was an allocation for development in the constituency, which
will not accrue to the benefit of the family.
(vii) Pension – As per the Act, this was granted at Rs.25,000/- per
month to every person who has served for a period not less
than 5 years, whether being a continuous or not continuous
member of the Assembly. As per the testimony of PW-2 , an
MLA is entitled to Rs. 40,000/- towards pension, even in
cases where the member is not re-elected, however, it was
also stated that in cases of death of an MLA, the family of
deceased is entitled to 60% of Rs. 40,000/- i.e. Rs. 24,000/-.
It is quite clear from the decisions of Supreme Court that there
will be no deduction of pension awarded and, therefore, any
contention by the Insurance Company would stand rejected.
39. Accordingly, in view of the above discussion, monthly income of
deceased shall be considered at Rs. 63,000/- after including the
components of salary (Rs. 18,500/-), contingency allowance (Rs. 8,000/-),
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 21/24

entertainment allowance (Rs. 6,500/-), salary of driver (Rs. 8,000/-), house
rent allowance (Rs. 7,000/-), telephone allowance (Rs. 10,000/-), water
and electricity allowance (Rs. 5,000/-). Annual income of deceased will be
considered at Rs. 7,56,000/- [Rs. 63,000/- x 12].
40. Further, an amount of Rs. 83,200/- shall be deducted towards
income tax for the financial year 2011-12, as per the relevant income tax
rates. Therefore, annual income of deceased comes up to Rs. 6,72,800/-.
41. Further alignments shall be made as per the principles enunciated in
Pranay Sethi ( supra ). Therefore, loss of love and affection shall not be
awarded, since it has been subsumed under the head of loss of consortium .
Loss of consortium shall be awarded at Rs. 1,60,000/-, since there are 4
claimants and mother of deceased passed away during the pendency of
proceedings. Loss of estate and funeral expenses shall be awarded at Rs.
15,000/- each.
42. Accordingly, the revised compensation is as under:
Sr. No. Heads Awarded by the
Tribunal
Awarded by the
Court
1. Income of the deceased (A)
Less: Income Tax*
Rs. 2,22,000/-

Rs. 6,72,800

2. Add-Future Prospects @
30% (B) Rs. 66,600/-

Rs. 2,01,840/-
4. Less: Personal expenses of
the deceased (C) Rs. 93,600/-

Rs. 2,18,660/-
4. Annual loss of dependency
[(A+B) – C] = (D) Rs. 1,95,000/-

Rs. 6,55,980/-
5. Multiplier (E) 13 13
7. Total loss of dependency (D
x E) = (F) Rs. 25,35,000/-

Rs. 85,27,740/-
8. Compensation for loss of
love and affection (H) Rs. 3,00,000/-

Nil
9. Compensation for loss of
consortium (I)
Rs. 1,00,000/- Rs. 1,60,000/-
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 22/24

10. Compensation for loss of
estate (J)
Rs. 25,000/- Rs. 15,000/-
11. Compensation towards
funeral expenses (K)
Rs. 25,000/- Rs. 15,000/-
12. Total Compensation
(G+H+I+J+K = L)
Rs. 29,85,000/- Rs. 87,17,740/-
13. Interest Awarded 9% 9%
14. Rs. 57,32,740/-
Enhanced Compensation

* MACT has wrongly deducted Income tax after adding future prospects.

Directions
43. For the aforesaid reasons, compensation has been enhanced by
Rs.57,32,740/- [“ enhanced amount ”].
44. Enhanced amount along with 9% interest per annum from the date
of filing the petition shall be deposited before Registrar General of this
Court within a period of eight weeks. It is directed that a lump sum amount
of Rs. 10,00,000/- be released to appellants/claimants from the deposit of
enhanced amount within a period of two weeks thereafter with 50% in
favour of wife of deceased/ E. Suraj Singh and the balance 50% equally in
favour of the children of deceased/ E. Suraj Singh .
45. Remaining enhanced amount, along 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 claimants. The amount of FDRs on
maturity would be released to the Savings Bank Account of claimants
upon due verification.
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 23/24

th
46. By order dated, 27 November 2025, this Court directed that release
of the entire original compensation deposited, therefore, no further
directions are required in that regard.
47. The appeal is accordingly disposed of in the above directions.
48. Pending applications, if any, are rendered infructuous.
49. Judgment be uploaded on the website of this Court.

ANISH DAYAL
(JUDGE)
JULY 1, 2026/ mk / sp
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:02.07.2026
16:44:18
MAC.APP. 530/2017 24/24