An unproved offer letter cannot establish income; compensation must be assessed on a notional basis.

On 16 April 2023, a lorry allegedly collided with a motorcycle ridden by Kadapa Gurendra Durgaprasad, who died from his injuries.

His parents and brother sought compensation under Section 166 of the Motor Vehicles Act, 1988.

The Tribunal awarded Rs.35,21,000 with 6% annual interest.

The Insurance Company appealed, challenging the finding on negligence and the deceased’s income; the claimants cross-appealed for enhancement, asserting that he earned Rs.41,750 per month as an IT consultant.

The High Court considered the deceased’s income, noting that the claimants relied on an offer and appointment letter but had produced no salary slips, tax returns, bank statements, or employer testimony to establish that he had joined the company.

Whether the Tribunal was justified in assessing the deceased’s income at Rs.4,00,000 per annum based on the offer and appointment letter

Whether the claimants established a basis for enhancement of the compensation awarded by the Tribunal

Under Section 166 of the Motor Vehicles Act, a claimant seeking compensation must establish the factual basis for the income relied upon in calculating loss of dependency.

Where actual income is not proved, income may be assessed notionally. The Court applied the Karnataka State Legal Services Authority’s chart for 2023 accidents to assess notional income at Rs.16,250 per month.

It also applied National Insurance Co. Ltd. v. Pranay Sethi for the 40% addition towards future prospects for the deceased, aged 26, and applied a multiplier of 17 and a 50% deduction for personal expenses because he was a bachelor.

The offer letter stated a gross annual salary of Rs.5,01,000, but the claimants did not prove that the deceased had joined the employer or was receiving that salary when the accident occurred.

In the absence of corroborating employment or income evidence, the Court held that the Tribunal erred in adopting annual income of Rs.4,00,000 and instead used the 2023 notional-income figure of Rs.16,250 per month.

Applying future prospects, the multiplier, and the personal-expenses deduction resulted in loss of dependency of Rs.23,20,500.

The Court left unchanged the Tribunal’s awards for loss of estate, funeral expenses, and consortium.

Although contributory negligence was raised by the insurer, the judgment does not set out a separate determination of that contention.

It modified the award, reducing total compensation from Rs.35,21,000 to Rs.24,41,500, with interest at 6% per annum from the date of the claim petition until realisation.

The insurer was directed to deposit the compensation and accrued interest before the Tribunal within six weeks; apportionment and disbursement were to remain in accordance with the Tribunal’s award.