Gujarat HC Raises Injured Car Occupant’s Award From ₹35.51 Lakh To ₹79.08 Lakh, Rejecting Income Cut Despite Tax Returns

A car and a truck trailer were involved in an accident on 31 March 2015, seriously injuring the car’s driver and occupant.

The Tribunal awarded ₹10,59,000 to the driver and ₹35,51,000 to the occupant.

The insurer appealed both awards, asserting that the truck driver lacked a valid licence and that the insurer was therefore not liable.

The occupant separately appealed, arguing that the Tribunal had wrongly reduced the income used to calculate compensation.

The truck’s owner and driver had been served before the Tribunal but were placed ex parte.

Order XLI Rule 14(4) of the Code of Civil Procedure, 1908 permits the court to dispense with notice to a respondent who was placed ex parte before the Tribunal.

An insurer asserting breach of a policy condition bears the burden of proving that breach; merely alleging that the insured vehicle’s driver lacked a licence is insufficient.

Where income-tax returns establish a claimant’s income, that income should ordinarily be accepted as the basis for compensation and should not be reduced without justification.

For assessing compensation for future loss of income, the Court applied the claimant’s established income, 40% future prospects, 59% disability and a multiplier of 15.

Applying Order XLI Rule 14(4), the Court considered further notice to them unnecessary.

The insurer produced no evidence that the truck driver lacked a licence or that a policy condition had been breached. Its allegation alone therefore did not establish a defence to liability, and the insurer’s appeals could not succeed.

On the occupant’s appeal, the Tribunal had identified income across the three preceding assessment years but reduced the resulting average to ₹2,00,000 without adequate justification.

The High Court accepted an annual income of ₹3,68,000, applied the established disability and multiplier, and revised the other heads of compensation in light of the injuries and hospitalization.

It partly allowed the occupant’s appeal, increasing the total compensation to ₹79,08,516 and awarding an additional ₹43,57,516, with interest at 9% on the enhanced amount.

The insurer was directed to deposit the additional compensation and interest within eight weeks.

Of the enhanced amount, 75% was to be disbursed to the claimants and 25% placed in a five-year fixed deposit.