Income from All Proven Sources Must be Considered for Determining Just Compensation Under Motor Vehicles Act

On October 10, 2018, Mr. Rajeshbhai Mithalal Mehta was a pillion rider on a Honda Activa which was struck by a rashly driven Echo car (Reg. No. GJ-09-BF-1314).

Mr. Mehta succumbed to his injuries. The legal heirs (Respondents 2-5) filed a claim petition (M.A.C.P. No. 318 of 2018) before the Motor Accident Claims Tribunal (Aux.-III), Gandhinagar, which awarded Rs. 33,40,000/- with 8% interest.

The appellant Insurance Company challenged this award primarily on the ground of quantum, arguing that the monthly income of the deceased was assessed too high without cogent evidence.

1. Whether the learned Tribunal erred in assessing the monthly income of the deceased at Rs. 20,000/- in the absence of Income Tax returns or formal books of account.

2. Whether the compensation awarded by the Tribunal was "just compensation" as per the evidence on record.

The court applied the principles of the Motor Vehicles Act, 1988, regarding the determination of "just compensation."

It specifically relied on the settled legal proposition that for the purpose of calculating loss of dependency, the court must consider the deceased’s income from all verifiable sources.

It further applied evidentiary principles regarding the admissibility and weight of bank statements (Exhs. 33, 34, 35) and local authority certificates (Nagarpalika Prantij) to establish occupation and earnings in the absence of formal tax records.

The Court rejected the appellant's contention that income should be based on minimum wages due to the lack of Income Tax returns. The Court observed that while the widow (Exh. 25) admitted to a lack of formal books of account, the documentary evidence strongly supported the income claims.

Specifically, Dena Bank statements (Exh. 33) showed direct deposits from LIC, confirming the deceased's work as an agent, and IDBI Bank statements (Exh. 35) for "M/s. Vishwakarma Furniture" showed significant monthly deposits ranging from Rs. 47,000 to Rs. 1,85,000.

Combined with the Nagarpalika shop certificate, the Court reasoned that the Tribunal’s assessment of Rs. 20,000/- per month was conservative and well-supported by the cumulative flow of funds in the deceased’s bank accounts, regardless of the lack of tax filings.

The Court answered the issues in the negative, dismissed the Insurance Company's appeal, and directed the Tribunal to disburse the awarded amount to the claimants after verifying court fees.

No order as to costs was made.