Pre-death income-tax returns establish deceased’s income; post-death returns lack evidentiary value for compensation.

On 17 August 2007, Rakeshbhai was driving his scooter from Nadiad towards Anand on National Highway No. 8, accompanied by his servant, when an S.T. bus allegedly turned abruptly towards Bhumel Road without signalling and collided with the scooter, causing Rakeshbhai’s death.

His legal representatives filed MACP No. 1397 of 2007 under the Motor Vehicles Act, 1988, claiming ₹50,00,000 as compensation.

The Motor Accident Claims Tribunal held the bus driver solely negligent and awarded ₹6,67,460 with interest at 9% per annum.

The claimants preferred the present appeal under Section 173 of the Motor Vehicles Act, seeking enhancement of compensation, principally challenging the assessment of income and the amounts awarded under conventional heads.

The finding on negligence was not challenged and consequently attained finality.

Whether the deceased’s income ought to have been assessed on the basis of the income-tax returns filed during his lifetime, instead of the Tribunal’s unsupported assessment of ₹2,700 per month?

Whether the claimants were entitled to an addition towards future prospects and a reassessment of loss of dependency in accordance with the principles in Pranay Sethi and Sarla Verma?

Whether the compensation under loss of consortium, loss of estate, and funeral expenses required modification in accordance with the prevailing principles of the Supreme Court?

What rate of interest should apply to the enhanced compensation?

The Court exercised appellate jurisdiction under Section 173 of the Motor Vehicles Act, 1988, to examine the adequacy of compensation.

It applied the principles in National Insurance Co. Ltd. v. Pranay Sethi, 2017 (16) SCC 680, under which a self-employed deceased below 40 years is entitled to a 40% addition for future prospects and compensation must be awarded under standardised conventional heads.

It applied Sarla Verma v. Delhi Transport Corporation, 2009 (6) SCC 121, reaffirmed in Pranay Sethi, for deduction towards personal expenses and selection of the multiplier; where five dependants survive, the appropriate deduction is one-fourth, and for a deceased aged 31 years, the multiplier is 16.

Relying on Magma General Insurance Co. Ltd. v. Nanu Ram alias Chuhru Ram, 2018 (18) SCC 130, read with Pranay Sethi, the Court awarded consortium to each dependant.

The Court further applied the principle that an income-tax return filed after the deceased’s death lacks sufficient evidentiary value for determining the deceased’s income, whereas returns filed during his lifetime and before the accident may be considered.

The Court excluded the income-tax return for assessment year 2008–09 because it was filed by the legal representatives after the deceased’s death and therefore could not reliably establish his income.

It accepted the returns for assessment years 2006–07 and 2007–08, filed on 29 December 2006 and 11 May 2007 respectively, as they were filed during the deceased’s lifetime and before the accident.

Taking the average of the disclosed annual incomes of ₹74,345 and ₹1,02,446, the Court assessed annual income at ₹88,395, observing that the Tribunal had given no basis for fixing monthly income at ₹2,700.

Since the deceased was 31 years old and self-employed, the Court added 40% for future prospects, resulting in annual income of ₹1,23,753.

After deducting one-fourth for personal expenses, considering five dependants, the annual contribution to the family was calculated at ₹92,815; applying multiplier 16 produced a loss of dependency of ₹14,85,040.

The Court then recalculated consortium at ₹48,400 for each of the five dependants, and fixed loss of estate and funeral expenses at ₹18,150 each, while confirming medical expenses of ₹29,970.

The total compensation was consequently enhanced to ₹17,93,310.

The total compensation was enhanced from ₹6,67,460 to ₹17,93,310, resulting in an enhanced amount of ₹11,25,850.

The Insurance Company was directed to deposit the enhanced amount with interest at 8% per annum from the date of filing of the claim petition until realisation, within four weeks of receiving the order.

The Tribunal was directed to disburse the awarded amount, including accrued interest, to the claimants by account-payee cheque or RTGS after verification and compliance with procedure, subject to deduction of applicable court fees.