P&H HC Raises Photographer’s Family’s Compensation To ₹29.47 Lakh Based On His Latest Pre-Accident Tax Return

In brief

The question

1. Whether the deceased’s income should be assessed by reference to his latest pre-accident income-tax return rather than the Tribunal’s notional assessment or an average of three returns.

The court held

The appeal was partly allowed. Compensation was enhanced from ₹13,40,000 to ₹29,47,500, an increase of ₹16,07,500, with interest on the enhanced sum at 7.5% per annum from the date of filing the claim petition until realization, subject to adjustment for amounts already paid.

It also directed

Apportionment and disbursement remain subject to the Tribunal’s directions, with safeguards for any minor claimant. The insurer’s exoneration and the driver’s and owner’s joint and several liability were affirmed.

01Facts

Taranjit Singh died from injuries sustained in a December 9, 2011 accident involving a Bolero allegedly driven negligently by respondent No. 1. His widow, three minor daughters and parents brought a claim under Section 166 of the Motor Vehicles Act, 1988.

¶ 2

The Tribunal assessed his monthly income at ₹6,000, awarded total compensation of ₹13,40,000, and held the driver and owner liable after finding that the insurer had not issued the cover note relied upon to establish insurance for the accident date.

¶ 2–4, 18

The claimants appealed for enhancement, relying on three income-tax returns filed by the deceased; the driver and owner also sought to challenge the insurer’s exoneration, although they had filed no independent appeal or cross-objection.

¶ 5–8

02Issues

i.1. Whether the deceased’s income should be assessed by reference to his latest pre-accident income-tax return rather than the Tribunal’s notional assessment or an average of three returns.

¶ 9–14

ii.2. Whether the Tribunal’s assessment of future prospects, deductions, multiplier and conventional heads of compensation required modification.

¶ 15–17

iii.3. Whether the insurer’s exoneration could be disturbed in the claimants’ appeal, where the driver and owner had filed no independent appeal or cross-objection.

¶ 18–21

03Law Applied

Section 166 of the Motor Vehicles Act, 1988 requires an award of just compensation for the dependants’ pecuniary loss.

Income-tax returns are relevant evidence of a deceased person’s income and ordinarily warrant consideration unless circumstances undermine their reliability (*Malarvizhi v. United India Insurance Co. Ltd.*, (2020) 4 SCC 228).

Under *National Insurance Co. Ltd. v. Pranay Sethi*, (2017) 16 SCC 680, a self-employed person aged 38 is entitled to a 40% addition for future prospects, and conventional heads are assessed by the principles stated there, read with *Magma General Insurance Co. Ltd. v. Nanu Ram*, (2018) 18 SCC 130, and *United India Insurance Co. Ltd. v. Satwinder Kaur*, (2021) 11 SCC 780.

The personal-expense deduction and multiplier are governed by *Sarla Verma v. Delhi Transport Corp.*, (2009) 6 SCC 121.

An insurer is not ordinarily liable where no policy covering the vehicle on the accident date is established; the distinction is between breach of an existing policy and absence of coverage.

¶ 19

Order XLI Rule 33 CPC confers discretionary appellate powers, but is not ordinarily a means for a party to reopen an adverse finding without an appeal or cross-objection (*Banarsi v. Ram Phal*, (2003) 9 SCC 606).

¶ 20

Provisions in the judgment · 1 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 166

04Reasoning

The three returns were filed by the deceased before the accident and showed a steady increase in annual income, culminating in ₹1,70,000 for assessment year 2011–12. The Court found no evidence that the latest return was inflated or prepared in anticipation of a compensation claim, and therefore treated it as the most relevant evidence rather than averaging the returns or using notional income.

¶ 10–14

Applying the governing principles, it added 40% for future prospects, deducted one-fourth for personal expenses and applied a multiplier of 15; it also recalculated consortium and other conventional heads, arriving at total compensation of ₹29,47,500.

¶ 15–17

As to insurance, the Tribunal’s finding that the cover note was not genuine was supported by the insurer’s records, which showed that the proved policy began after the accident. Because the driver and owner had not independently challenged that finding, the Court declined to disturb it through the claimants’ appeal.

¶ 18–21