Disbelieving a salary certificate does not justify treating an employed deceased as an unskilled labourer.

Hitesh Piplva died in a motor-vehicle accident on 31 August 2022 allegedly caused by the rash and negligent driving of a capsule vehicle bearing registration No. CG-12-AR-9462.

The vehicle was driven by Respondent No. 2, owned by Respondent No. 3, and insured with Respondent No. 1.

His widow, two minor children, parents and brother filed a claim under Section 166 of the Motor Vehicles Act, 1988, claiming ₹36,22,500 on the basis that the deceased was 37–38 years old and earned ₹18,000 per month as an employee of Prithu Mill and Machinery Stores.

The driver and owner remained ex parte. The insurer denied liability and alleged, inter alia, absence of a valid fitness permit and driving licence, as well as contributory negligence by the deceased.

The Claims Tribunal accepted the claim in part and awarded ₹21,27,060, assessing the deceased’s monthly income at ₹9,540 on the basis of minimum wages rather than the asserted salary of ₹18,000.

The claimants challenged the award under Section 173 of the Motor Vehicles Act, seeking enhancement of compensation.

Whether the Claims Tribunal correctly assessed the deceased’s monthly income at ₹9,540, or whether the evidence justified assessment of a higher income for computing loss of dependency?

Whether the compensation awarded by the Claims Tribunal was just and required enhancement under the applicable principles governing future prospects, deduction for personal expenses, multiplier and conventional heads?

The Court applied Sections 166 and 173 of the Motor Vehicles Act, 1988, governing claims for compensation arising from motor accidents and appeals against awards of Motor Accident Claims Tribunals.

For computation of compensation, it relied on National Insurance Co. Ltd. v. Pranay Sethi, which governs addition of future prospects and conventional heads; Sarla Verma v. Delhi Transport Corporation, which provides the framework for deduction towards personal expenses and application of the multiplier; and Magma General Insurance Co. Ltd. v. Nanu Ram, which recognises spousal, filial and parental consortium.

The Court held that income must be assessed on the basis of the overall evidence, nature of employment, age and dependants, and that rejection of a specific salary certificate did not justify treating an admittedly employed person as an unskilled labourer.

Although the salary certificate showing monthly income of ₹18,000 was not fully corroborated by wage registers, vouchers, appointment documents or the firm’s income records, the proprietor’s testimony and the Claims Tribunal’s finding that the deceased worked in the firm established that he was employed.

The High Court therefore rejected the assessment of ₹9,540 as an unskilled labourer’s income, while also declining to accept the full salary claimed.

Considering the deceased’s nature of work, age, young widow, two minor children and dependent parents, it assessed his monthly income at ₹15,000.

Applying 50% future prospects, a one-fourth deduction for personal expenses and multiplier 15, the Court calculated loss of dependency at ₹30,37,500.

It added ₹16,500 each towards funeral expenses and loss of estate, ₹44,000 towards spousal consortium, and ₹1,60,000 towards filial and parental consortium, resulting in total compensation of ₹32,74,500.

The total compensation was enhanced from ₹21,27,060 to ₹32,74,500, resulting in an additional award of ₹11,47,440.

The enhanced amount was directed to carry simple interest at 6% per annum from 20 December 2024, the date of filing of the appeal, until realisation.

The insurer was directed to deposit the enhanced compensation within 60 days of receiving the order.

Specified portions were ordered to be placed in fixed deposits for the minor children and the widow, while amounts were directed to be disbursed to the parents and the remaining sum to the widow.