The Oriental Ins Co Ltd vs Tej Prasad Sharma And Ors

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Date of decision: 24 August 2026
# CNR No. DLHC010045492018
+ MAC.APP. 116/2018
THE ORIENTAL INS CO LTD .....Appellant
Through: Mr. Abhishek Gola and Mr. Anshul
Mehral, Advs.
versus

TEJ PRASAD SHARMA AND ORS .....Respondents
Through: Mr. S.N. Parashar and Mr. Ritik
Singh, Advs. for R-1 & 2.
CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT
ANISH DAYAL, J (ORAL)
CM APPL. 5324/2021 ( Seeking restoration )
1. In view of the facts and circumstances, the appeal stands restored.
2. Application is disposed of.
MAC.APP. 116/2018
1. This appeal has been filed by the Insurance Company assailing
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impugned award dated 19 December 2017 passed by the Motor Accident
Claims (‘ MACT/Tribunal ’), Rohini in MACT No. 449822/2016, awarding
compensation of Rs.47,28,000/- along with interest at 9%.
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2. The accident occurred on 25 December 2010, when Sh. Nahinder
Kumar Sharma (hereinafter, ‘ deceased ’) met with an accident, involving
truck bearing registration no. HR-56D-0317 (hereinafter, ‘ offending
vehicle ’).
Signature Not Verified
MAC.APP. 116/2018 Page- 1/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04

3. Counsel for Insurance Company seeks reduction of compensation on
the account that, while calculating loss of dependency, deduction towards
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personal and living expenses was taken as 1/4 rather than 1/3 , considering
that there were only two dependants, i.e. father of deceased and minor son of
deceased. The wife of deceased had subsequently remarried and the mother of
deceased passed away during the MACT proceedings.
4. Mr. S.N. Parashar , counsel for claimants, counters this by stating that
deductions have to be done on the basis of the circumstances, which existed at
the time of the accident and subsequent events may not be considered.
5. In this regard, reliance may be placed upon the decision of Supreme
Court in Kirti & Anr. v. Oriental Insurance Company Ltd. (2021) 2 SCC 166
where the Court held that the subsequent death of a dependent mother cannot
be the reason for reduction of compensation, as the claims and legal liabilities
crystallise at the time of death and changes post thereto should not affect
pending proceedings. Relevant finding of the Court is extracted as under:
“ 9. We have thoughtfully considered the rival
submissions. It cannot be disputed that at the time of
death, there in fact were four dependants of the
deceased and not three. The subsequent death of the
deceased's dependant mother ought not to be a reason
for reduction of motor accident compensation. Claims
and legal liabilities crystallise at the time of the
accident itself, and changes post thereto ought not to
ordinarily affect pending proceedings. Just like how the
appellant claimants cannot rely upon subsequent
increases in minimum wages, the respondent insurer too
cannot seek benefit of the subsequent death of a
dependant during the pendency of legal proceedings.
Similarly, any concession in law made in this regard by
either counsel would not bind the parties, as it is legally
settled that advocates cannot throw away legal rights or
enter into arrangements contrary to law.”
Signature Not Verified
MAC.APP. 116/2018 Page- 2/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04

(emphasis added)

6. A similar issue has been dealt by this Court in Iffco Tokio Gen Ins Co.
Ltd. v Sh. Anil Kumar Kaushik & Ors. 2026:DHC:2695, wherein, the mother
of deceased had passed away during the pendency of proceedings. Court
considered the mother of deceased to be a dependant, since she was alive at
the time of the accident and her subsequent death would not make a difference
as regards the calculation of loss of dependency.
7. The vagaries and unpredictabilities of human life will most certainly
lead to changes in the circumstances of the claimants, during the MACT
proceedings or before the Appellate Court. The acceptable standard system is
and ought to be, that compensation is calculated on the basis of circumstances
of the family, which exist at the time of the accident. As clearly and succinctly
articulated by the Supreme Court in Kirti (supra), legal liabilities ought to
crystallize as on the date of the accident. To start accommodating events
which occur post the accident would render certainty, a casualty. This would
be anathema to the jurisprudence in motor accident cases, carefully evolved
through the years.
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8. Accordingly, the deduction of 1/4 towards personal expenses is
sustained.
9. Another issue was regarding the applicable multiplier which should be
taken for the deceased who was 25 years 6 months old at the date of the
accident. Considering that the deceased had completed 25 years and yet to
complete the age of 26, multiplier will be considered at 18 itself, and the
argument raised by Insurance Company is rejected.
10. As regards the monthly income, which has been challenged by the
counsel for Insurance Company, it is noted, that the MACT had recorded that
Signature Not Verified
MAC.APP. 116/2018 Page- 3/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04

the deceased was posted in Sikkim Police as a Constable and had provided his
original salary slip, which showed monthly salary of Rs.19,333/- , which was
exempt from income tax.
11. Counsel for Insurance Company, states that allowances ought not to be
taken into account in the monthly income. However, the position on
deduction on allowances has been settled, inter alia Meenakshi v. Oriental
Insurance Co. Ltd. 2024 SCC OnLine SC 1872, where 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. 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
Signature Not Verified
MAC.APP. 116/2018 Page- 4/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04

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)
12. Reliance may also be placed upon the decision of this Court in E. Neeta
Devi & Ors. v. Ashwani Kumar & Ors. (Bharti Axa General Insurance Co
Ltd) 2026:DHC:5184, where this Court was dealing with the issue of
allowances in case of a deceased who was the Member of Manipur
Legislative Assembly. This Court traversed through various decisions of
Supreme Court and culled out principles regarding deduction of allowances.
This Court held that income is not limited to the pay packet and comprises of
allowances which are beneficial to the members of the entire family. The
relevant discussion of the Court is extracted as under:
“36. Principles which can be culled out from the above
decisions are enunciated as under:
…
(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.
…
(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.”
(emphasis added)
13. Accordingly, the allowances which form a part of the income of
deceased will be included, unless, they are related to the personal life of
Signature Not Verified
MAC.APP. 116/2018 Page- 5/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04

deceased and do not accrue to the benefit of the family.
14. Counsel for Insurance Company, has also raised the issue of interest
rate applicable being wrongly awarded at 9%.
15. On the issue of interest, applying the principles in Kaushnuma Begum
(Smt.) & Ors. v. New India Assurance Co. Ltd. & Ors. (2001) 2 SCC 9,
wherein, while interpreting the powers of the Tribunal under Section 171 of
the Motor Vehicles Act, 1988 to award simple interest on compensation from
the date of institution of the claim petition, it was observed that the rate of
interest awarded by nationalised banks on fixed deposits ought to serve as the
guiding factor while determining the rate of interest payable on compensation
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amounts. Since the claim petition was instituted on 1 March 2011, the fixed
deposit interest rates of 2010-11 would be applicable. Accordingly, the
interest rate would be reduced to 8%.
16. Considering that loss of consortium was not awarded, same shall be
aligned as per the principles enunciated in National Insurance Co. Ltd v.
Pranay Sethi (2017) 16 SCC 680 and therefore, shall be granted at Rs.
80,000/- ( Rs.40,000 x2 ) for the two claimants i.e. father and minor son.
17. Accordingly, the revised computation will be as under:
S.
No.
Heads Awarded by the
Tribunal
Awarded by this
Court
1 Income of deceased (A) Rs. 19,333/-

Rs. 19,333/-
2 Add Future Prospects (B) @
50%
Rs. 9,666/- Rs. 9,666/-
3 Less: Personal expenses of
deceased (C)
Rs. 7,249.75/- Rs. 7,249.75/-
5 Loss of dependency
(A+B)-C=(D)
Rs. 21,749.25/- Rs. 21,749.25/-
6 Annual loss of dependency
(Dx12)= (E)
Rs. 2,60,991/- Rs. 2,60,991/-
Signature Not Verified
MAC.APP. 116/2018 Page- 6/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04

6 Multiplier (F) 18 18
7 Total loss of dependency (E x F)
(G)
Rs. 46,97,838/- Rs. 46,97,838/-
8 Compensation for loss of
consortium (H) (40,000x2)
Nil Rs. 80,000/-
9 Compensation for loss of estate
(I)
Rs. 15,000/- Rs. 15,000/-
10 Compensation towards funeral
expenses (J)
Rs. 15,000/- Rs. 15,000/-
11 Total compensation
(G+H+I+J)= (K)
Rs. 47,28,000/-
(Rs. 47,27,838
rounded off)
Rs. 48,08,000/-
(Rs. 48,07,838/-
rounded off)
12 Rate of Interest Awarded 9% 8%

Directions
18. Accordingly, the compensation has been enhanced by Rs. 80,000/- .
19. The Insurance Company is directed to deposit the enhanced
compensation, along with accrued interest @ 8 % per annum from the date of
filing of the claim petition, before the MACT within a period of four weeks. It
is directed that the enhanced compensation along with the accrued interest
shall be released to the claimants as lumpsum.
20. As regards the original compensation as awarded by the MACT, this
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Court vide order dated 31 January 2018 had directed the deposit of the entire
compensation amount along with up-to-date interest with the MACT. It was
further directed that 50% of the deposited amount shall be released to the
claimants (‘ released amount ’) in terms of the directions in the impugned
award. The balance amount was directed to be kept in interest bearing account
to be renewed from time to time till further orders of this Court.
21. The interest on the original compensation shall now be calculated at
8% per annum and a ‘ revised amount ’ arrived at. The balance amount
( revised amount minus released amount ), shall be released to the claimants in
Signature Not Verified
MAC.APP. 116/2018 Page- 7/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04

terms of the directions of MACT in the impugned award. The excess amount
leftover, with interest, shall be refunded to the Insurance Company.
22. Accordingly, the appeal is disposed of.
23. Pending applications, if any, are rendered infructuous.
24. Copy of this judgment be sent to the concerned MACT and Bank for
information and compliance.
25. Statutory deposit, if any, shall be refunded to the Insurance Company,
only if the order of deposit has been complied with.
26. Judgment be uploaded on the website of this Court.



(ANISH DAYAL)
JUDGE
AUGUST 24, 2026/mk/ sp
Signature Not Verified
MAC.APP. 116/2018 Page- 8/8

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:31.08.2026
11:58:04