Proven financial obligations can establish higher income in motor accident compensation claims.

On 24 April 2007, Umedsinh Karansinh was travelling in a tempo when another tempo, allegedly driven rashly and negligently by respondent no. 1, collided with it at Chhakadiya cross-road. Umedsinh sustained fatal injuries and died. His widow, four children and mother filed a claim petition before the Motor Accident Claims Tribunal, Panchmahals at Godhra.

The Tribunal assessed his monthly income at Rs.3,000 and awarded Rs.7,56,000 with interest at 9% per annum. The claimants appealed, challenging the quantum of compensation. They contended that the deceased earned Rs.10,000 per month from a general store, agricultural work and a chakda rickshaw, and relied on evidence showing that he was paying monthly vehicle-finance instalments of Rs.5,000.

The finance-company witness proved the loan, seizure memo and instalment schedule.

Whether the deceased’s monthly income should be reassessed at Rs.10,000 instead of Rs.3,000 on the basis of his various occupations and the evidence regarding payment of vehicle-finance instalments.

Whether the claimants were entitled to enhancement under the heads of future loss of dependency, loss of consortium, loss of estate and funeral expenses.

Whether the claimants were entitled to additional compensation with interest at 9% per annum from the date of filing of the claim petition.

The Court applied the principles governing assessment of just compensation under the Motor Vehicles Act, including determination of actual or reasonably inferred income, addition for future prospects, deduction for personal expenses, and application of the appropriate multiplier. For a deceased aged 39 years, the Court applied a 40% addition towards future prospects, deducted one-fourth towards personal expenses because the deceased left six dependants, and applied a multiplier of 15.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, 2017 (16) SCC 680, it enhanced the conventional amounts for loss of estate and funeral expenses to Rs.18,150 each.

Relying on Nanu Ram @ Chuhru Ram, it held that all six legal representatives could claim compensation for loss of consortium and awarded Rs.48,400 to each.

The Court also referred to Gurpreet Kaur v. United India Insurance Co. Ltd., IV (2022) ACC 1 (SC), and Sidram v. Divisional Manager, United India Insurance Co. Ltd., 2022 INSC 1202, as relied upon by the claimants.

The Court found that the Tribunal had undervalued the deceased’s income. The evidence established that he owned a chakda rickshaw financed through a loan, that the monthly instalment was Rs.5,000, and that the vehicle was seized after his death when the instalments could no longer be paid. From this evidence, the Court inferred that the deceased must have earned substantially more than Rs.5,000 per month and accepted the pleaded income of Rs.10,000 from all sources.

Adding 40% for future prospects increased the monthly income to Rs.14,000. After deducting one-fourth for personal expenses, the monthly contribution to the dependants was assessed at Rs.10,500. Applying the multiplier of 15 resulted in future loss of dependency of Rs.18,90,000.

The Court further enhanced loss of estate and funeral expenses to Rs.18,150 each and awarded consortium of Rs.2,90,400 to the six legal representatives. The total compensation was therefore recalculated at Rs.22,16,700.

The claimants were awarded additional compensation of Rs.14,60,700, carrying interest at 9% per annum from the date of filing of the claim petition until realization.

The insurance company was directed to deposit the additional amount with interest within six weeks, after which the Tribunal was to disburse the compensation to the claimants after due verification and deduction of any deficit court fee.