Motor accident compensation interest reduced to 6% per annum; the compensation quantum is affirmed.

On 26 March 2019, a Canter lorry insured by the appellant struck the deceased Sharada K.’s moped. She died from her injuries on 31 March 2019.

The Motor Accident Claims Tribunal found the lorry driver negligent and awarded the claimants Rs.35,80,000 with interest at 9% per annum. The insurer appealed, challenging the assessment of the deceased’s income and the rate of interest; negligence and liability were not in dispute.

1. Whether the Tribunal’s assessment of the deceased’s income and the resulting compensation required interference.

2. Whether the Tribunal’s award of interest at 9% per annum should be reduced.

Under Section 173(1) of the Motor Vehicles Act, an aggrieved party may appeal a Claims Tribunal’s award.

For a self-employed person, the average income shown in ITRs for up to the preceding three years may be used as a reference; where only one or two ITRs are available, the court may also consider surrounding circumstances, including the nature and growth prospects of the business. ITRs are important prima facie evidence of income: Rashmirekha Tripathy v. The Branch Manager (Legal Claims), Sriram General Insurance Company Limited, 2026 INSC 661.

The Court also relied on the Division Bench decision in MFA No. 4659/2018 (24 August 2020) in reducing interest to 6% per annum.

The Tribunal based its income assessment on the deceased’s ITRs for Assessment Years 2017–18 and 2018–19, her work running a licensed beauty parlour, and a multiplier of 15. The High Court considered the Tribunal’s use of the more recent ITR—which disclosed the lower income—and its assessment of annual income at Rs.2,46,000 after tax to be reasonable and conservative under Rashmirekha Tripathy. It therefore left the compensation, including the awards under conventional heads and medical expenses, undisturbed.

However, applying the cited Division Bench decision, it found 9% interest excessive and reduced the rate to 6% per annum.

The insurer was directed to deposit the amount with accrued interest within eight weeks of receiving the judgment, if not already deposited; disbursement is to follow the Tribunal’s directions. No order was made as to costs.