Head-on collision alone does not establish composite negligence; it must be proved by evidence.

On 11 October 2011, the deceased, aged 34 years, was travelling in a tempo near VIP Ghat, Haridwar, when a truck allegedly driven rashly and negligently by Rajendra Singh collided with the tempo. The deceased sustained fatal injuries.

His widow, two minor children and two parents instituted a claim petition under the Motor Vehicles Act before the MACT, Rohini Courts.

The deceased was employed as an Assistant Manager with M/s Satyam Auto Components and was drawing a salary reflected in the employment records and salary slip.

The Tribunal awarded compensation of ₹58,12,600 with interest at 7.5% per annum.

Both parties appealed: the claimants sought enhancement of income and compensation, while the Insurance Company challenged the assessment of income, the addition towards future prospects, and the failure to deduct for alleged composite negligence.

Whether the deceased’s salary should include the various allowances and employment-related benefits reflected in his salary slip, and whether income tax was required to be deducted from the assessed annual income?

Whether the deceased was entitled to a 50% addition towards future prospects, or only a 40% addition because he was employed on probation and had no proved entitlement to increments?

Whether the compensation should be reduced on account of alleged composite negligence arising from the head-on collision between the truck and the tempo?

Whether the deductions towards personal and living expenses and the amounts awarded under consortium, loss of estate and funeral expenses required modification?

The Court applied the principles governing computation of compensation under Sections 166 and 168 of the Motor Vehicles Act, 1988.

Relying on National Insurance Co. Ltd. v. Indira Srivastava, Meenakshi v. Oriental Insurance Co. Ltd., Manorma Sinha v. Divisional Manager, Oriental Insurance Ltd., and E. Neeta Devi v. Ashwani Kumar, it held that income is not confined to take-home salary and that fixed allowances and benefits accruing to the family may be included in the multiplicand.

Under National Insurance Co. Ltd. v. Pranay Sethi, 50% future prospects applies to a person below 40 years in permanent employment, whereas 40% applies to a self-employed person or one on a fixed salary; actual income is to be assessed after deduction of income tax.

The Court also applied Pranay Sethi and United India Insurance Co. Ltd. v. Satinder Kaur for conventional heads such as consortium, funeral expenses and loss of estate.

Alleged composite negligence must be established by evidence; a head-on collision by itself does not justify an automatic 50% deduction.

The Court included the basic salary along with HRA, children’s education allowance, washing allowance, conveyance allowance, magazine and phone reimbursements, and provident-fund contribution, while excluding the separate ₹700 bonus as an uncertain or additional payment.

The resulting monthly income was fixed at ₹28,023, or ₹3,36,276 annually. After deducting income tax of ₹15,627.60, the annual income was assessed at ₹3,20,649.

Since the deceased was still on probation and no documentary evidence established a contractual right to increments, his employment could not be treated as permanent merely because he had held jobs with different companies; accordingly, only 40% future prospects were granted.

As there were at least four dependants, personal expenses were reduced by one-fourth rather than one-third.

The Insurance Company failed to produce the tempo driver, site plan or other evidence proving contributory or composite negligence.

The eyewitness account indicated that the tempo was travelling on the left side and that the truck approached from the opposite direction; the charge-sheet was also filed against the truck driver alone.

Hence, no deduction for composite negligence was warranted.

The Court recalculated the dependency and conventional compensation in accordance with the applicable precedents.

The compensation was recalculated as follows: loss of dependency ₹53,86,752; loss of consortium ₹2,00,000; loss of estate ₹15,000; and funeral expenses ₹15,000, totalling ₹56,16,752, with interest at 7.5% per annum.

The alleged composite negligence was rejected.

The excess amount of ₹1,95,848, together with accrued interest, was directed to be refunded to the Insurance Company, while the balance deposited amount and accrued interest was directed to be released to the claimants in a lump sum.

Both appeals were disposed of accordingly.