Tribunal may rely on earlier credible income-tax returns where subsequent returns appear inflated.

On 11 March 2017, the first respondent was travelling as a pillion-rider on a motorcycle when the vehicle struck a roadside stone due to the rash and negligent driving of the second respondent, the owner-cum-rider. The first respondent sustained grievous injuries, including total loss of vision in the left eye and impaired speech.

He was aged 29 years and claimed that he was earning ₹30,000 per month as a finance-company manager and partner.

The Claims Tribunal held that the accident was caused by the second respondent’s negligence and that the insurer was liable under the subsisting policy.

On the basis of the medical evidence, it assessed permanent disability at 65% and functional disability at 64%, adopting the multiplier method.

The Tribunal awarded total compensation of ₹32,73,030 with interest at 7.5% per annum.

The insurer challenged only the quantum of compensation, particularly the income assessed by the Tribunal.

The Tribunal had relied on the income-tax return for Assessment Year 2013–14, fixing the annual income at ₹2,03,064, while rejecting the returns for Assessment Years 2015–16 and 2016–17 as apparently inflated.

Whether the Claims Tribunal correctly assessed the first respondent’s annual income at ₹2,03,064 by relying on the income-tax return for Assessment Year 2013–14 and rejecting the subsequent returns as inflated?

Whether the adoption of the multiplier method for assessing loss of earning capacity based on 64% functional disability, and the compensation awarded under the other heads, were legally sustainable?

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

In assessing compensation for permanent functional disability, the Court applied the established principle that the multiplier method may be used where the disability materially affects the claimant’s earning capacity, with the assessment based on proved income and functional disability rather than merely the percentage of medical disability.

The Court further applied the evidentiary principle that income must be determined from reliable supporting material, including income-tax returns, and that apparently inflated returns may be rejected where unsupported by other evidence.

No specific judicial precedent was cited in the judgment.

The Court found that the Tribunal had properly evaluated the oral and documentary evidence concerning income.

Although the later income-tax returns indicated higher income, the Court agreed that the returns for Assessment Years 2015–16 and 2016–17 appeared inflated and were unsupported by sufficient corroboration.

The return for Assessment Year 2013–14 therefore provided a reliable basis for fixing annual income at ₹2,03,064.

The Court also accepted the medical evidence showing total loss of vision in the left eye, impaired speech, and the claimant’s inability to perform daily activities without assistance.

In those circumstances, treating 64% as functional disability and applying the multiplier method was considered fair and reasonable.

The compensation awarded under the remaining heads was likewise found consistent with settled principles.

The appeal was dismissed, and the award of ₹32,73,030 with interest at 7.5% per annum from the date of the claim petition until deposit was confirmed.

The insurer was directed to deposit the amount within twelve weeks, if not already deposited, and the first respondent was permitted to withdraw it upon filing an appropriate application before the Claims Tribunal.

No costs were awarded, and the connected miscellaneous petition was closed.