Absent cogent income evidence, compensation must be assessed using applicable minimum wages commensurate with the deceased’s skills.

Two claim petitions arose from the same motor-vehicle accident dated 28 June 2014, in which a motorcycle carrying Jhangir Alam and Fayaz Ahmed Naik was hit by Tipper No. JK14B-7164 near Sharoor, Kanga. Both occupants died from the injuries sustained. FIR No. 8/2014 was registered under Sections 279 and 304-A RPC, and a charge-sheet was filed against the Tipper’s driver.

The dependants of Jhangir Alam claimed ₹30.10 lakhs, asserting that he was 21 years old, had pursued engineering/polytechnic studies, and earned ₹10,000 per month from agriculture. The parents of Fayaz Ahmed Naik claimed ₹30.30 lakhs, asserting that he was 22 years old, had completed electrician and computer courses, and earned income from agriculture and electrical work.

The owner and driver were proceeded against ex parte. The insurer admitted the policy but alleged that the vehicle was being driven in breach of policy conditions, including absence of a valid driving licence, fitness certificate, and permit.

The Tribunal held that the accident resulted from rash and negligent driving and found no proved breach of the insurance policy. It awarded ₹13,74,200 for Jhangir Alam and ₹16,42,800 for Fayaz Ahmed Naik, with interest at 7.5% per annum.

The insurer challenged primarily the assessment of the deceased persons’ monthly income.

Whether the Tribunal was justified in assessing the monthly income of Jhangir Alam at ₹10,000 and Fayaz Ahmed Naik at ₹12,000 in the absence of cogent documentary evidence of income?

Whether the compensation payable to the claimants required reassessment by applying the applicable minimum wages, future prospects, personal-expense deductions, and the correct multiplier?

Whether the insurer established any breach of the insurance policy so as to avoid liability to satisfy the award?

The Court applied the principles governing compensation under the Motor Vehicles Act, including assessment of loss of dependency on the basis of established or reasonably inferred income, deduction for personal and living expenses, and application of the age-based multiplier.

In the absence of reliable proof of actual income, income may be assessed with reference to the applicable minimum wages.

The Court relied on National Insurance Co. Ltd. v. Pranay Sethi for addition of 40% towards future prospects for a deceased below 40 years of age.

It applied a multiplier of 18 for deceased persons aged between 21 and 25 years.

It further relied on Magma General Insurance Co. Ltd. v. Nanu Ram alias Chuhru Ram, (2018) 18 SCC 130, for awarding filial consortium to the parents or other eligible claimants.

The applicable Jammu and Kashmir minimum wages were treated as ₹150 per day for an unskilled worker and ₹225 per day for a skilled worker.

For Jhangir Alam, the Court found no documentary proof that he was enrolled in the Polytechnic College or that he earned ₹10,000 per month. His mother’s evidence was inconsistent and she admitted that no income-related document had been produced.

Accordingly, the Court assessed his income at the minimum wage for an unskilled worker—₹4,500 per month—added 40% for future prospects, deducted 50% towards personal expenses, and applied a multiplier of 18. The resulting loss of dependency was ₹6,80,400. Funeral expenses, loss of estate, and filial consortium were then added.

In Fayaz Ahmed Naik’s case, although there was no documentary proof of actual earnings, certificates established that he had completed electrician and computer courses. The Court therefore treated him as a skilled worker and assessed his income at ₹6,750 per month, based on minimum wages of ₹225 per day.

After adding 40% future prospects, deducting 50% personal expenses, and applying the multiplier of 18, the loss of dependency was calculated at ₹10,20,600. The Court additionally awarded funeral expenses, loss of estate, and filial consortium to his parents.

The Court did not disturb the finding that the accident was caused by rash and negligent driving or the Tribunal’s conclusion that no breach of the insurance policy had been established.

For the death of Jhangir Alam, compensation was reduced to ₹7,90,400, comprising loss of dependency, ₹15,000 for funeral expenses, ₹15,000 for loss of estate, and ₹40,000 each towards filial consortium to the claimants.

For the death of Fayaz Ahmed Naik, compensation was reduced to ₹11,30,600, comprising ₹10,20,600 for loss of dependency, ₹15,000 for funeral expenses, ₹15,000 for loss of estate, and ₹40,000 each towards filial consortium to his parents.

The interest rate of 7.5% per annum and the remaining terms of the Tribunal’s award were maintained. The modified compensation was directed to be disbursed to the claimants after proper identification, and any excess amount deposited by the insurer was ordered to be released in its favour.