For a deceased partner, income for compensation must reflect average prior tax returns, not the latest return alone.

The appeal under Section 173 of the Motor Vehicles Act, 1988, challenged the judgment and award dated 28 March 2025 passed by the Motor Accident Claims Tribunal (Main), Morbi, in MACP No. 191 of 1994.

The Tribunal had awarded ₹5,40,000 with proportionate costs and interest at 7% per annum from the date of the claim petition until realization.

The accident, the death of Milindkumar Natwarlal Shah, and the complete negligence of the driver of Truck No. GTP-4617 were undisputed.

The deceased was a partner in a partnership firm, and the principal dispute concerned the monthly income to be adopted for computing compensation.

The Tribunal relied on the last income-tax return and assessed the deceased’s monthly income at ₹2,000, while disregarding earlier income-tax returns.

Whether the Tribunal erred in determining the deceased’s monthly income solely on the basis of the last income-tax return, instead of considering the previous income-tax returns and the deceased’s status as a partner in a partnership firm.

Whether the claimants were entitled to enhancement of compensation by applying the appropriate future-income increase, deduction for personal expenses, multiplier, and conventional heads of compensation.

The Court exercised appellate jurisdiction under Section 173 of the Motor Vehicles Act, 1988, in relation to the determination of just compensation.

For a deceased aged 36 years with five dependants, the Court applied a 40% addition towards future prospects, deducted one-fourth of the income towards personal expenses, and applied a multiplier of 15.

The Court relied on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, for awarding ₹18,150 each towards loss of estate and funeral expenses.

The compensation was assessed under the heads of loss of dependency, loss of consortium, funeral expenses, and loss of estate.

The Court held that the Tribunal’s assessment based only on the last income-tax return was erroneous because the deceased was a partner in a partnership firm and the earlier income-tax returns were also relevant to determining his actual income.

On considering Exhibits 65 with 111, 66 with 112, 67 with 113, and 68 with 114, the Court assessed the deceased’s monthly income at ₹2,500.

Adding 40% towards future prospects increased the monthly income to ₹3,500; deducting one-fourth towards personal expenses resulted in a monthly dependency of ₹2,625.

Applying the multiplier of 15 produced ₹4,72,500 towards future dependency loss.

The Court further awarded ₹2,40,000 towards loss of consortium at ₹48,000 for each of the five claimants, and ₹18,150 each towards funeral expenses and loss of estate, resulting in total compensation of ₹7,48,800.

The Court enhanced the compensation from ₹5,40,000 to ₹7,48,800 and awarded an additional amount of ₹2,08,800, carrying interest at 7% per annum from the date of filing of the claim petition until realization.

The Insurance Company was directed to deposit the enhanced amount with interest before the concerned Tribunal within six weeks of receiving the order.

Upon deposit, the Tribunal was directed to disburse the awarded amount, including accrued interest, to the claimants through account-payee cheque, NEFT, or RTGS after due verification and compliance with procedure.

Courts’ fees, if unpaid, were directed to be deducted in accordance with law.