Average income from the deceased’s last three income-tax returns must determine loss of dependency.

On 6 March 2020, Nileshbhai Mansukhbhai Amraniya was riding a motorcycle when a car, allegedly driven rashly and negligently while overtaking, collided with it. He sustained fatal injuries and died.

His widow and other legal representatives filed a motor accident claim petition. The Motor Accident Claims Tribunal, Rajkot, partly allowed the claim and awarded ₹20,25,400 with interest at 9% per annum.

The claimants challenged the award only on the question of quantum, contending that the deceased’s income should have been assessed from his income-tax returns rather than minimum wages.

The income-tax returns disclosed net incomes of ₹2,65,692, ₹2,96,425 and ₹3,08,211 for assessment years 2016–17, 2017–18 and 2018–19 respectively.

1. Whether the deceased’s income for computing loss of dependency ought to have been assessed on the basis of the average of his last three proved income-tax returns instead of minimum wages?

2. Whether the compensation awarded under future prospects, loss of estate, funeral expenses and loss of consortium required enhancement in accordance with applicable Supreme Court precedents?

The Court applied the principles governing assessment of compensation under the Motor Vehicles Act, particularly the computation of loss of dependency by determining the deceased’s established income, adding future prospects, deducting personal expenses and applying the appropriate multiplier.

Relying on Rashmirekha Tripathy & Anr. v. The Branch Manager (Legal Claims), Sriram General Insurance Co. Ltd. & Ors., 2026 INSC 661, the Court held that the average income reflected in the deceased’s last three income-tax returns could be considered where those returns were proved on record.

It applied Pranay Sethi for addition of future prospects and reassessment of loss of estate and funeral expenses.

It applied Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors. for awarding consortium to each eligible legal representative.

The Court found that the income-tax returns at Exhibits 38 to 40 had been duly proved, and therefore the Tribunal erred in disregarding them and adopting monthly income of ₹9,000 based on minimum wages.

The average of the three returns was calculated at ₹2,90,109 annually. Since the deceased was aged approximately 46 years and 9 months, the Court added 25% towards future prospects, producing an annual income of ₹3,62,636.

As he was survived by his widow, son and father, one-third was deducted towards personal expenses, resulting in annual dependency of ₹2,41,757. Applying a multiplier of 13, the loss of dependency was assessed at ₹31,42,841.

The Court further enhanced loss of estate and funeral expenses to ₹18,150 each and awarded ₹48,400 per legal representative towards consortium, totalling ₹1,45,200 for three legal representatives.

The total compensation was enhanced from ₹20,25,400 to ₹33,24,341, comprising ₹31,42,841 for loss of dependency, ₹18,150 for loss of estate, ₹18,150 for funeral expenses and ₹1,45,200 for loss of consortium.

The claimants were awarded additional compensation of ₹12,98,941, carrying interest at 9% per annum from the date of filing of the claim petition until realization.

The insurer was directed to deposit the additional amount with interest within six weeks, after which the Tribunal was to disburse the compensation subject to verification and deduction of any deficit court fee.