Allowances forming part of regular pay must be included in salary for computing motor accident compensation.

On August 22, 2010, the deceased, Bikram Singh, was driving his Indica car and attempted to overtake a tractor after receiving a hand signal from the tractor driver.

As he drew parallel, the tractor suddenly accelerated, trapping the deceased in the opposite lane.

A truck (offending vehicle) coming from the opposite direction struck the car head-on, killing the deceased on the spot.

The Motor Accident Claims Tribunal (MACT) awarded Rs. 44,21,648/- to the legal representatives (LRs).

The Insurance Company appealed on the ground of contributory negligence.

LRs filed a cross-appeal for enhancement of compensation.

1. Whether the deceased was guilty of contributory negligence by attempting to overtake the tractor despite oncoming traffic.

2. Whether various allowances (HRA, transport, etc.) and one-time incentives should be included in the "monthly income" for calculating loss of dependency.

The court applied the principle that contributory negligence must be specifically pleaded and proved by tangible material, not mere conjectures, as held in *Jiju Kuruvilla v. Kunjujamma Mohan*.

This principle was also observed in *Prabhavathi v. Managing Director, BMTC* (2025).

Regarding income, the court relied on *Manorma Sinha v. Oriental Insurance Co. Ltd.* (2025) and *Meenakshi v. Oriental Insurance Co. Ltd.* (2024), which establish that all beneficial perks and allowances (HRA, Transport Allowance, etc.) even if non-taxable, must be included in the "pay packet" for assessment.

Standard adjustments for future prospects (50%), consortium (Rs. 40,000 per dependent), and conventional heads (estate/funeral) were applied per *National Insurance Co. Ltd. v. Pranay Sethi*.

The Court rejected the plea of contributory negligence, noting the Insurance Company failed to examine the truck driver or produce evidence to shake the eye-witness testimony (PW-1), who stated the deceased was trapped by the tractor's sudden acceleration.

On compensation, the Court corrected the Tribunal’s error of excluding allowances from the salary.

It calculated the gross salary at Rs. 25,471/- less only the actual income tax.

However, the Court excluded a one-time "incentive" of Rs. 1,07,943/-, reasoning that without evidence of it being a regular annual feature, it could not form part of the stable multiplicand.

Consortium was increased to cover all five dependents.

It held that there was no contributory negligence by the deceased.

The total compensation was enhanced from Rs. 44,21,648/- to Rs. 54,27,824/- with 9% interest per annum.

The Court ordered the Insurance Company to deposit the enhanced amount within four weeks and provided a scheme for its release and investment in Fixed Deposit Receipts (FDRs) for the claimants.