Tribunals cannot arbitrarily discount genuine income-tax returns when assessing motor accident compensation.

The claimant, a pillion rider on a motorcycle, sustained injuries when the motorcycle collided with a Bolero jeep on 5 February 2004.

The Motor Accident Claims Tribunal awarded Rs. 7,76,769, attributing 80% negligence to the jeep and 20% to the motorcycle. In assessing the claimant’s income, the Tribunal accepted only 60% of the agricultural income disclosed in his income-tax returns (ITRs).

The claimant appealed, seeking enhanced compensation; the insurer supported the award and sought recovery of any amount paid beyond its share from the other tortfeasor.

Whether the Tribunal erred in discounting the agricultural income shown in the claimant’s ITRs and whether the compensation should be reassessed on the basis of that income.

Whether the insurer, after satisfying the claimant’s award, could recover from the other tortfeasor any amount paid in excess of its inter se liability.

Section 173 of the Motor Vehicles Act provides for an appeal against an award of the Claims Tribunal, while Section 168 requires determination of just compensation.

The Court relied on Rashmirekha Tripathi v. Branch Manager, Reliance General Insurance Company Limited, holding that ITRs are an important reference point for assessing income and that, for self-employed persons or business operators, income shown in ITRs for up to the preceding three years may be averaged, having regard to relevant circumstances.

It also referred to Mohit Garg v. Hari Ram through LRs on the evidentiary value of genuine, undisputed ITRs.

Under Khenyei v. New India Assurance Company Ltd., where joint tortfeasors are impleaded and their respective negligence is determined, the claimant may recover the compensation jointly and severally; a tortfeasor who pays more than its share may recover the excess from the other in execution proceedings.

The Court found that the insurer had not disputed the claimant’s ITRs and held that the Tribunal’s decision to accept only 60% of the disclosed agricultural income was unduly parsimonious and inconsistent with the objective of awarding just and fair compensation.

It accepted the income reflected in the returns and used the resulting monthly figure of Rs. 11,666 as the base for recalculating future loss of income, including 25% future prospects, 22% functional disability and a multiplier of 14.

On liability, the Court applied Khenyei: the claimant, as a third-party victim, could recover from any or all tortfeasors, while the insurer could seek recovery from the other tortfeasor for any amount paid beyond its liability.

The Court awarded an additional Rs. 2,01,026, with interest at 7.5% per annum from the date of the claim petition until realization, and directed the insurer to deposit that amount within eight weeks.

The Tribunal was directed to disburse the amounts held by it, subject to verification and applicable court fees.

The Tribunal’s remaining directions were left unchanged, and the insurer was granted the right to recover any amount deposited in excess of its liability from the other tortfeasor by executing the judgment.