Deceased Reliance Operator’s Family Gets ₹7.69 Lakh More Compensation As Gujarat HC Uses His Previous-Year ITR, Not Three-Year Average

In brief

The question

1. Whether the Tribunal erred by averaging three years’ income-tax returns when assessing the income of the deceased, who was a salaried employee

The court held

The appeal was partly allowed. The Court enhanced the total compensation from ₹58,89,792 to ₹66,59,070, resulting in an additional award of ₹7,69,278 with interest at 9% per annum from the date of filing the claim petition until realization

It also directed

The respondents were directed to deposit the enhanced amount within four weeks of receiving the order; the Tribunal was directed to address any deficit court fees and disburse the compensation in accordance with the judgment

01Facts

The claimants, legal representatives of Pratapsinh Sursinh Chauhan, sought compensation for his death in a vehicle accident on 12 April 2016

¶ 1–2.1 · pp. 1–2

The Motor Accident Claims Tribunal awarded ₹58,89,792 with interest at 9% per annum. In assessing income, it averaged the deceased’s income-tax returns for financial years 2013–14, 2014–15 and 2015–16, arriving at an annual income of ₹6,90,094

¶ 7, 9 · pp. 5–7

The claimants appealed under Section 173 of the Motor Vehicles Act, 1988, challenging the income assessment and seeking appropriate amounts under conventional heads

¶ 1, 3–3.1 · p. 1, 3

02Issues

i.1. Whether the Tribunal erred by averaging three years’ income-tax returns when assessing the income of the deceased, who was a salaried employee

¶ 3, 7–9 · pp. 3–7

ii.2. Whether the amounts awarded for funeral expenses, loss of estate and loss of consortium required reassessment for the three claimants

¶ 3.1, 10–11 · pp. 3, 7–8

03Law Applied

Section 173 of the Motor Vehicles Act, 1988 provides for an appeal against a Claims Tribunal’s award.

Relying on Rashmirekha Tripathy Rekha Rajani v. Branch Manager (Legal Claims), Sriram General Insurance Company Limited, 2026 JX(SC) 717, the Court applied the distinction between salaried and self-employed persons: for a salaried individual, the ITR for the preceding year is sufficient to demonstrate annual salary income, whereas for a self-employed person, income reflected in up to three years’ ITRs may be averaged, with relevant surrounding circumstances considered

¶ 8 · pp. 5–6

The Court also relied on United India Insurance Co. Ltd. v. Satinder Kaur, (2021) 11 SCC 780, in considering consortium, funeral expenses and loss of estate for the claimants

¶ 3.1, 10 · p. 3, 7

Provisions in the judgment · 1 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 173

04Reasoning

The deceased was employed as an Operator, Grade 1 at Reliance Industries, and the record included his salary slip and ITRs

¶ 7 · pp. 4–5

Applying Rashmirekha Tripathy, the Court held that averaging three years’ returns was not the appropriate method for this salaried employee. Because the accident occurred on 12 April 2016, it used the 2015–16 ITR, which showed net annual income of ₹7,65,939, or ₹63,828 per month.

¶ 9 · p. 7

It retained the Tribunal’s 15% addition for future prospects, one-third deduction for personal expenses and multiplier of 11, recalculating the future loss

¶ 9–11 · pp. 7–8

It also reassessed the conventional heads for three claimants

¶ 10–11 · p. 7