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

On September 19, 2012, Ms. Payal Srivastava and Mr. Dushyant Kumar were killed when their scooter was hit by a speeding HGV container (HR-38J-6095) driven rashly by Respondent Ref. 1.

The Motor Accident Claims Tribunal (MACT) awarded the appellants Rs. 14,18,100/- with 9% interest, finding the driver, owner, and insurer jointly liable.

The Tribunal calculated compensation by deducting allowances from the deceased’s gross salary, applying the multiplier based on the mother’s age rather than the deceased’s, and omitting future prospects.

The appellants filed this appeal seeking enhancement of the award.

Whether allowances such as HRA and conveyance should be excluded from the "income" of the deceased for computing dependency?

Whether the multiplier should be determined based on the age of the dependent or the age of the deceased?

Whether the claimants are entitled to future prospects and enhanced conventional heads under the current legal framework?

The Court applied the definition of "just compensation" and "income" from *National Insurance Co. Ltd. v. Indira Srivastava*, asserting that income includes regular allowances beneficial to the family.

It relied on *Kavita Devi v. Sunil Kumar* (2025) and *Manorma Sinha v. Divisional Manager, Oriental Insurance Co. Ltd.* (2025) to hold that the exclusion of non-taxable allowances is erroneous.

For the calculation of future prospects (40% for deceased under 40) and the application of the multiplier based solely on the deceased's age (18 for age 28), the court followed the Constitution Bench mandate in *National Insurance Company Limited v. Pranay Sethi & Ors.* (2017).

The Court found that the Tribunal erred by arbitrarily deducting Rs. 2,000/- from the deceased's monthly salary of Rs. 18,500/-, noting that basic pay, HRA, and conveyance allowances all constitute "income" as they support the family.

Following *Pranay Sethi*, the Court corrected the multiplier from 13 (based on the mother) to 18 (based on the 28-year-old deceased).

The Court further determined that because the deceased was a fixed-salary employee under 40, a 40% addition for future prospects was mandatory.

Finally, it restructured the conventional heads, awarding Rs. 40,000/- each to the two parents for loss of consortium while removing the outdated "loss of love and affection" head to align with current Supreme Court precedents.

It held that the deceased’s income must include all allowances.

The multiplier must be based on the deceased's age.

Future prospects must be added.

The Insurance Company was directed to deposit the enhanced amount with 9% interest within four weeks, to be disbursed to the appellants via structured Fixed Deposit Receipts.