Allowances not deductible from gross salary for compensation; Insurance Company must pay and recover when alleging forged policy without primary evidence.

On October 20, 2000, Ramanbhai (the deceased) was killed in a vehicular accident involving his motorcycle and a truck

The deceased was 47 years old and a permanent skilled worker at M/s. Pidilite Industries Limited

The Motor Accident Claims Tribunal (Tribunal) awarded Rs. 6,37,120/- but exonerated the Insurance Company (Respondent No. 3), accepting their defense that the cover note was forged and not valid for the accident period

The claimants appealed on the grounds of inadequate quantum and the erroneous exoneration of the insurer

1. Whether the Tribunal erred in deducting various allowances from the gross salary to determine the dependency

2. Whether the Tribunal applied the correct multiplier and future prospects percentage

3. Whether the Insurance Company proved its defense of a forged insurance policy on the touchstone of preponderance of probability

4. Whether the appeal is maintainable despite the non-service of summons to the owner and driver (Respondents 1 and 2) who were ex-parte in the trial court

The court applied Section 166 of the Motor Vehicles Act regarding compensation.

It relied on Vimal Kanwar v. Kishore Dan (2013) to establish that "actual salary" for computation should include allowances and only exclude income tax

Following National Insurance Co. Ltd. v. Pranay Sethi (2017), the court applied a 30% addition for future prospects for a permanent employee aged 40–50 and set standard rates for conventional heads

Multipliers were governed by Sarla Verma v. DTC (2009)

Regarding procedural service, it cited the Full Bench of the Madhya Pradesh High Court in Smt. Jamuna Bai v. Chhote Singh (2004), holding that notice can be dispensed with for parties who remained ex-parte in the first instance

The Court found the Tribunal’s income assessment flawed because it wrongly deducted LTA, Education Allowance, and Bonus from the gross salary contrary to Vimal Kanwar

Based on the deceased's age (47) and permanent job status, the Court increased future prospects to 30% and the multiplier to 13

Regarding liability, the Court noted that while Respondent 3 alleged the cover note (No. 192045) was for 1997-98 rather than 2000-01, it failed to produce the "Stock Issuance Register"—primary evidence that would have concluded the date of issue

The Court held that testimony from an investigator based on oral instructions from company officers constitutes secondary evidence and is insufficient to prove forgery when primary records are withheld

the Court dispensed with notice to the driver/owner to prevent the "benevolent" legislation from being defeated by procedural delays

The Court set aside the exoneration of Respondent No. 3, holding that the insurer failed to meet the burden of proof regarding the forged policy

The Court directed the Insurance Company to "pay and recover"—satisfying the award to the claimants first and then seeking recovery from the owner/driver through execution proceedings