Transport, mobile and internet allowances must be included when computing income for motor accident compensation.

The claimants— the widow and parents of the deceased, E.K. Vinayak—filed a motor accident compensation claim arising from his death on 18 December 2017.

The deceased was employed as a Mechanical Engineer with Sainoklsi Technologies Pvt. Ltd. at NMDC, Nagarnar.

The Motor Accident Claims Tribunal, Bastar at Jagdalpur, assessed his monthly income at ₹26,800 after deducting travelling, mobile and internet allowances, applied a 50% addition for future prospects, and awarded total compensation of ₹55,26,340 by award dated 28 February 2019.

The claimants appealed under Section 173 of the Motor Vehicles Act seeking enhancement, while the Oriental Insurance Company appealed seeking reduction, particularly in relation to future prospects and deductions from income.

Whether the deceased’s travelling, mobile and internet allowances ought to have been included while determining his income for calculating loss of dependency?

Whether the addition towards future prospects should be reduced from 50% to 40% on the ground that the deceased was allegedly not a permanent employee?

Whether the compensation awarded under the conventional heads required enhancement in accordance with law?

The Court applied Section 173 of the Motor Vehicles Act, 1988, governing appeals against awards of the Motor Accident Claims Tribunal.

Under National Insurance Co. Ltd. v. Pranay Sethi, an addition towards future prospects is permissible where the deceased had stable or permanent employment; for a person below 40 years in permanent employment, the addition is 50%.

Sarla Verma v. Delhi Transport Corporation supplied the principles concerning deduction for personal expenses and the appropriate multiplier.

Magma General Insurance Co. Ltd. v. Nanu Ram governed awards of spousal and parental consortium.

Relying on Meenakshi v. Oriental Insurance Co. Ltd. and the principle stated in National Insurance Co. Ltd. v. Nalini, the Court held that allowances such as transport, special and similar employment-related allowances should ordinarily be included in the income of the deceased while assessing dependency.

The Court also applied the conventional amounts for loss of estate and funeral expenses, with enhancement in accordance with the applicable legal principles.

The Court rejected the insurer’s challenge to the 50% addition for future prospects because the insurer produced no evidence establishing that the deceased was not in permanent employment or was not entitled to increments.

Although an officer of the employer was examined, the relevant issue was not put to him in cross-examination; therefore, the Tribunal’s finding could not be disturbed.

On the claimants’ appeal, the Court held that the travelling allowance of ₹3,200, mobile allowance of ₹700 and internet allowance of ₹500—totalling ₹4,400—were employment-related allowances and could not be deducted from income under the principles in Meenakshi and Nalini.

The monthly income was accordingly reassessed from ₹26,800 to ₹31,200.

Applying 5% income-tax deduction, 50% future prospects, one-third deduction for personal expenses and multiplier 17, the Court calculated the loss of dependency at ₹62,59,060.

It further enhanced the amounts for loss of estate, funeral expenses and consortium in accordance with Pranay Sethi and Magma General Insurance.

The claimants were held entitled to an additional ₹9,12,720, carrying interest at 9% per annum from the date of filing of the claim application until realization.

The insurer was directed to deposit the enhanced compensation within three months from receipt of the order, with the remaining terms of the Tribunal’s award unchanged.

The insurer’s appeal, MAC No. 1371 of 2019, was dismissed.