National Insurance Co Ltd vs Kanta Devi & Ors

$~47
* IN THE HIGH COURT OF DELHI AT NEW DELHI
nd
% Date of decision: 22 July 2026
+ MAC.APP. 956/2019 & CM APPL. 54165/2019, CM APPL.
14059/2021
NATIONAL INSURANCE CO LTD .....Appellant
Through: Ms Hetu Arora Sethi, Advocate
(thru VC)
versus
KANTA DEVI & ORS .....Respondents
Through: Mr Azhar Alam, Adv.
CORAM:

HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT

ANISH DAYAL, J (ORAL)
1. This appeal has been filed by the Insurance Company assailing
th
impugned award dated 05 August 2019, passed by the Motor Accidents
Claims Tribunal (‘ MACT/Tribunal ’), Patiala House Courts, New Delhi in
MACT No.310/2017, whereby compensation of Rs. 63,66,128/- along
with interest at the rate of 9% per annum was awarded on account of
death of Padam Singh (hereinafter, ‘ deceased ’) , who was 45 years of age
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on the date of the accident, which occurred on 03 May 2016.
2. The accident took place near Kirbi Place Red Light, New Delhi at
about 02:38 p.m., when the deceased was driving his motorcycle and was
hit by a bus bearing registration no. DL-9SAC-2110 (hereinafter,
‘ offending vehicle ’) from behind. As a result, deceased sustained severe
injuries and was rushed to DDU Hospital, but was declared brought dead .
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 1 of 8

3. Ms. Hetu Arora Sethi , counsel for Insurance Company, challenges
the award on the issue of wrongly clubbing the income of deceased from
his private business of a travel agency under M/s Ayush Travels , along
with the salary received as a field executive with M/s Innovsource Pvt.
Ltd .
4. While calculating loss of dependency in paragraph 16 of the
impugned award, MACT has taken two components of income on the
basis of testimony of deceased’s wife, Kanta Devi (‘ PW-1 ’). Considering
her statement that at the time of the death, he was continuing to earn from
his business M/s Ayush Travels and had also been engaged as a field
executive. MACT combined the two components together and, after
deduction of tax determined the net annual earnings to be Rs. 4,79,705/-.
5. Ms. Hetu Arora Sethi , points out that his employment as a field
executive only commenced in February 2016, as is evident from the
appointment letter on record. It is further stated that there was no proof
filed that he was running his business under M/s. Ayush Travels .
6. Mr. Azhar Alam , counsel for claimants, however, states that the
income tax returns (‘ ITRs ’) of Assessment Years (‘ AY ’) 2014-15 and
2015-16, being, the previous two years before his employment showed
income from business at Rs. 3,01,120/- and Rs. 3,46,030/-.
7. Counsel for claimants submits that, no doubt the employment was
from February 2016, but the testimony of PW-1 would have to be
considered that the deceased was earning from both these accounts at that
point of time.

8. He relies upon the decision of Supreme Court in Sunita & Ors v
Vinod Singh & Ors 2025 INSC 366, which accommodates the issue of
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 2 of 8

double earnings from two sources of income.
9. In her testimony, PW-1 , categorically stated that the deceased was
earning from both sources and was not cross-examined by the Insurance
Company in that regard.
10. Counsel for Insurance Company, has drawn attention of the Court
to the work assignment letter issued by M/s Innovsource Pvt. Ltd .
regarding M/s. Last Mile Delivery Pvt. Ltd. where the deceased was
st st
appointed as a Field Executive from 01 February 2016 till 31 January
2017. She states that though, the employers had testified in favour of this
employment, the work assignment letter itself prohibited the employee
i.e. deceased from carrying out any other business activity in the
meantime.
11. Clause 6 of the work assignment letter states that “ during the
tenure of your employment with us, you will not undertake any other
employment or business activities, work or public office or payment or
otherwise except with the written permission of the management. ”
Counsel further contends that there was nothing on record, either to state
that any permission was granted nor was it stated by the officer of
employer.
12. In order to buttress her submission, Ms. Sethi , has placed reliance
on the decision of Supreme Court in Rashmirekha Tripathy & Anr. v
The Branch Manager (Legal Claims) Sriram General Insurance Co.
Ltd. & Ors. 2026:INSC:661, where the question before the Court was
whether, assessment of annual income should be on the basis of ITRs of
previous years or average of past two/three years. The Court held that
there can be no hard and fast formula for computing annual income, while
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 3 of 8

also noting the importance of ITRs being a statutory document.
Considering that ITRs for two assessment years were provided, the Court
took an average of the two years. Court bifurcated the manner of
assessment for salaried individuals and self-employed individuals, and
noting other factors which may be relevant while conducting an
assessment. Relevant findings of the Court are extracted as under:

“ 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 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;
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 4 of 8

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.”
(emphasis added)

13. In the present case, as regards the alleged business income from
M/s. Ayush Travels , though, no document in respect of M/s. Ayush
Travels was placed on record, the ITRs itself would bear out that the
gross income being generated for AY 2014-15 was Rs.3,01,120/- and for
AY 2015-16 it was Rs.3,46,030/-.
14. No ITR has been filed for AY 2016-17 since presumably, the same
would have not been filed since the deceased passed away in May 2016.
It would therefore have to be assumed that for the Assessment Year 2016-
st
17 ( Financial Year 2015-16 ending on 31 March 2016 ), income would
have been generated from his business and possibly, on an incremental
basis from the previous assessment years’ income of Rs.3,46,030/-. The
income returned for AY 2015-16 can be considered as an average itself of
three years.
15. However, MACT’s assessment of taking income both from his
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 5 of 8

business, as well as, his job may not be correct, particularly, in view of
the clauses of his work assignment letter. Accordingly, in view of the
above observations, the gross annual income will be assessed at
Rs.3,46,030/- and after deduction of income tax as applicable for AY
2016-17, the net annual income of deceased comes up to Rs. 3,45,855/-.
16. Reliance placed by counsel for claimants on Sunita ( supra ), may
not be applicable to the present case, since the Supreme Court in Sunita
( supra ) was adjudicating the aspect of dual income with respect to the
claim of a deceased housewife, which is not the case herein.
17. Further, considering that there were 4 claimants, loss of consortium
shall be awarded at Rs. 1,60,000/- (Rs. 40,000/- x 4) in view of the
decision of Supreme Court in Magma General Insurance Co. Ltd. v.
Nanu Ram , (2018) 18 SCC 130.
18. Accordingly, revised computation is as under:

S.
No.
Heads Awarded by the
Tribunal
Awarded by this
Court
1 Income of deceased (A)
Less: Income Tax
Rs. 4,79,705/- Rs. 3,45,855/-
2 Add: Future Prospects (B) Rs. 1,19,926.25/- Rs. 86,463.75/-
3 Less: Personal expenses of
deceased (C)
Rs. 1,49,907.81/- Rs. 1,08,079.68/-
4 Loss of dependency (A+B)-C=D Rs. 4,49,723.43/- Rs. 3,24,240/-
(rounded off)
5 Multiplier (E) 14 14
6 Total loss of dependency (D x
E)= (F)
Rs. 62,96,128/-
(rounded off)
Rs. 45,39,360/-
7 Compensation for loss of
consortium (G)
Rs. 40,000/- Rs. 1,60,000/-
8 Compensation for loss of estate
(H)
Rs. 15,000/- Rs. 15,000/-
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 6 of 8

9 Compensation towards funeral
expenses (I)
Rs. 15,000/- Rs. 15,000/-
10 Total compensation
(F+G+H+I) =J
Rs. 63,66,128/- Rs. 47,29,360/-
11 Rate of Interest Awarded 9% 9%

Directions
19. Accordingly, in view of the above, compensation has been
reduced by Rs. 16,36,768/- (‘ reduced compensation ’) .
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20. Pursuant to order dated 30 September 2020, the Court had
directed a stay on execution of the impugned award subject to deposit
of 60% of awarded amount before the MACT. Further, by order dated
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20 April 2022, the Court directed release of Rs. 10,00,000/- to
respondent no.1 as per the scheme of impugned award.
21. Accordingly, if the amount originally deposited by Insurance
Company is less than the revised compensation, balance amount along
with accrued interest will be deposited by the Insurance Company
before the MACT within 4 weeks, which will be released as lumpsum
to claimants within 2 weeks thereafter. Originally deposited amount
shall continue to be released to claimants as per the scheme of
impugned award.
22. However, if the amount originally deposited by Insurance
Company is more than the revised compensation, balance amount
( originally deposited amount – revised compensation ), along with
accrued interest, shall be released to Insurance Company. Remaining
balance amount shall continue to be released to claimants as per the
scheme of impugned award.
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 7 of 8

23. Accordingly, the appeal is disposed of in the above terms.
24. Pending applications are rendered infructuous
25. Copy of this judgment be sent to the concerned MACT.
26. Copy of this judgment be sent to the concerned bank for
information and compliance.

27. Statutory deposit, if any, shall be refunded to Insurance Company,
only if the order of deposit has been complied with.
28. Judgement be uploaded on the website of this Court.

(ANISH DAYAL)
JUDGE
JULY 22, 2026/sm/ sp
Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:27.07.2026
12:22:36
MAC. APP. 956/2019 Page 8 of 8