Monthly Income for Informal Sector Workers Assessment Based on Relevant Oral Testimony and Standardized Personal Deductions

The appellant Insurance Company challenged the Motor Accident Claims Tribunal (MACT) award dated May 5, 2026, which granted ₹57,00,068 at 7.5% interest to the claimants following a fatal accident on November 18, 2022.

The deceased, a 52-year-old Eeco van driver operating a prepaid taxi at IGI Airport, was killed in a collision with a truck insured by the appellant.

Based on testimonies from the deceased’s son (PW1) and a Taxi Union official (PW2), the MACT assessed the deceased's notional income at ₹60,000 per month after deducting daily expenses.

The appellant argued this assessment was excessive due to a lack of documentary evidence like tax returns or bank statements.

1. Whether the assessment of notional income at ₹60,000 per month was justified in the absence of documentary proof.

2. Whether the Tribunal erred in deducting expenses at the stage of assessing income rather than during the calculation of loss of dependency.

3. Whether the deduction for personal expenses should be adjusted based on the dependency status of the adult children.

The court primarily applied the principles of "just compensation" and assessment of benchmark income for informal sector workers as established in Savita v. National Insurance Co. Ltd.

It followed the computation standards for future prospects and personal expense deductions set by the Supreme Court in Sarla Verma v. DTC and National Insurance Co. Ltd. v. Pranay Sethi.

In the absence of documentary proof, income can be determined through "intelligent guesswork" based on oral testimony and standard of living.

The High Court upheld the monthly income of ₹60,000, finding the testimonies of PW1 and PW2 credible regarding the deceased's earnings from airport taxi trips (₹2,500–₹3,000 per day).

The court found the MACT’s methodology flawed; the Tribunal had deducted expenses while determining the base income instead of applying deductions to the total income plus future prospects.

Correcting this, the court calculated the annual income, subtracted income tax (₹35,880 for FY 2022-23), and added 10% for future prospects.

Crucially, as the deceased's children were earning adults and not financially dependent, the court increased the deduction for personal expenses from one-third to one-half (1/2).

The court allowed the appeal in part, reducing the total compensation from ₹57,00,068 to ₹43,20,426. The court directed the Insurance Company to deposit the revised amount at 7.5% interest within six weeks, with specific instructions for the release of ₹5,00,000 in a lump sum and the remainder in phased Fixed Deposit Receipts to the claimants.