Credible employer testimony can justify assessing informal-sector income above applicable minimum wages.

On 4 July 2008, Anil Kumar, aged 29 years, was travelling as a pillion rider on a motorcycle near Kasturi Ram School, Narela, Delhi, when a truck bearing registration no. HR-42D-0411 struck the motorcycle. He sustained grievous injuries and was declared brought dead at M.B. Hospital

The Motor Accident Claims Tribunal, North District, Rohini Courts, awarded compensation of ₹28,45,000 with interest at 9% per annum

The Insurance Company challenged the award, disputing the assessment of income, future prospects, and compensation under non-pecuniary heads.

The Tribunal had assessed the deceased’s monthly income at ₹10,000 on the basis of a salary slip and the testimony of his employer, awarded 50% towards future prospects, and granted amounts towards loss of love and affection, consortium, loss of estate, and funeral expenses.

Whether the deceased’s monthly income could be assessed at ₹10,000 despite the absence of formal employment and salary records?

Whether future prospects were correctly assessed at 50%, or were required to be reduced to 40% considering the deceased’s age and private employment?

Whether the compensation awarded under loss of love and affection, loss of consortium, loss of estate, and funeral expenses required modification in light of the applicable principles governing conventional heads of compensation?

The Court applied the principles in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, under which future prospects for a deceased in private employment, aged below 40 years, are to be assessed at 40% where the employment is not permanent, and conventional amounts are payable for loss of estate, funeral expenses, and consortium.

It relied on United India Insurance Co. Ltd. v. Satinder Kaur, (2021) 11 SCC 780, for the principle that loss of love and affection is subsumed within loss of consortium and should not be separately awarded.

It also relied on Savita v. National Insurance Co. Ltd., 2026:DHC:3626, which recognises that, in informal-sector cases lacking complete documentary proof, income may be assessed through consistent oral testimony, employment evidence, minimum-wage benchmarks, and intelligent guesswork, without mechanically restricting compensation to the lowest minimum-wage category.

The Court upheld the assessment of monthly income at ₹10,000 because the employer’s testimony supported the salary slip and explained the absence of formal salary records in the small, cash-based establishment; the Insurance Company’s objections regarding the employer’s income-tax records did not sufficiently discredit that evidence.

Applying the reasoning in Savita, the Court held that the absence of extensive documentary proof did not require adoption of the lower minimum-wage figure, particularly where the employer’s evidence was credible.

However, since the deceased was employed in a private job and was not shown to have permanent employment, future prospects were reduced from 50% to 40% in accordance with Pranay Sethi.

The separate award for loss of love and affection was deleted under Satinder Kaur, while the amounts for consortium, loss of estate, and funeral expenses were recalculated in accordance with the prevailing conventional-head principles.

The Court retained the deceased’s monthly income at ₹10,000 but reduced future prospects to 40%, deleted the separate award for loss of love and affection, and revised the compensation to ₹23,72,000 with interest at 9% per annum, resulting in a reduction of ₹4,73,000 from the Tribunal’s award.

The excess amount deposited by the Insurance Company, together with accrued interest, was directed to be refunded, while the balance amount with accrued interest was ordered to be released to the claimants in accordance with the Tribunal’s apportionment directions.

The appeal and pending applications were disposed of accordingly.