Full Text
HIGH COURT OF DELHI
Date of Decision: 19.09.2025
ORIENTAL INSURANCE CO LTD .....Appellant
Through: Mr. Pradeep Gaur, Advocate
Through: Mr. Pankaj Gupta, Advocate for R-1 to
3 along
JUDGMENT
1. The present Appeal has been filed on behalf of the Appellant under Section 173 of the Motor Vehicles Act, 1988 against the Award dated 27.04.2015 [hereinafter referred to as “Impugned Award”] passed by the learned Presiding Officer, MACT, Rohini Courts, Delhi. By the Impugned Award, a compensation in the sum of Rs. 53,31,000/- has been awarded to the Respondent Nos. 1 to 3/Claimants along with interest at the rate of 9% per annum.
2. By the Order dated 24.08.2015, this Court had directed that 50% of the deposited amount shall be released to the Respondents Nos. 1 to 3/Claimants. The challenge of the Appellant/Insurance Company is on the quantum awarded.
3. Briefly the facts are that on 14.03.2010, the deceased Satish Kumar Gundh was proceeding towards his shop at Karol Bagh on his motorcycle, while being followed by his brother Anuj Kumar @ Happy in a car. At about 10:00 a.m., when the deceased reached Sultanpuri, the offending vehicle – a blue line bus bearing number DL-1PB-5495 came from rear side at a high speed and hit the motorcycle with great force. Due to the impact, the deceased fell on the road and the offending bus ran over his head, resulting in his instantaneous death.
4. Learned Counsel appearing on behalf of the Appellant/Insurance Company submits that the learned Tribunal has wrongly assessed the income of the deceased. From the Income Tax Records of the deceased, his gross income was Rs. 3,06,540/- per year and the income as taken by the learned Trial Court was more than the gross income as per the Income Tax Return [hereinafter referred to as “ITR”]. It is submitted that the ITRs ought to have been the sole basis for determining income, rather than the other documents relied upon by the learned Tribunal. It is further contended that an addition of 30% towards future prospects was unjustified in the absence of consistent proof of stable and rising earnings.
5. Learned Counsel appearing on behalf of the Respondent Nos. 1 to 3/Claimants, on the other hand, submits that the deceased was doing his own business of jewellery dye cutting and he had for this purpose taken up a shop where he was carrying out his business. It was contended that he was paying monthly rent of Rs. 7,500/- towards the shop. 5.[1] In addition, the learned Counsel contends that the deceased had also taken a housing loan from ICICI Bank and an EMI of Rs. 12,578/- per month and insurance premium towards a home loan was being paid at Rs. 756/- per month. The payment of approximately Rs. 8,308/- per month was also being made by the deceased as payment for Life Insurance Policies taken by him. It is submitted that the deceased was also paying school fees of approximately, Rs. 3,000/- each, per quarter for his school going children - Respondent Nos. 2 and 3. Thus, it is contended that the fixed expenditure of the deceased was more than Rs. 30,000/- a month, which was not including personal expenditure and costs.
6. It is the case of the Respondent Nos. 1 to 3/Claimants that the deceased was a 40-year-old man and in good health, and was self-employed earning a sum of Rs.45,000/- per month. The Claim Petition was filed by his widow and his two minor children.
7. Learned Counsel for the Respondent/Claimant submits that all documents in support of his aforesaid contentions have been placed on record. Reliance, in this behalf, is placed on Ex. PW1/4 to Ex. PW1/12 which are copies of school fees receipts and rent agreement, school fees documents receipts of premium paid to LIC. In addition, reliance is also placed by the learned Counsel for the Respondent Nos. 1 to 3/Claimants on the ITR for the year 2010/Assessment Year 2010-11 which was filed after his death, since the deceased expired on 14.03.2010.
8. Learned Counsel for the Respondents/Claimants submits that the Tribunal rightly appreciated the financial status of the deceased by considering the rent agreement, LIC premium payments, school fees, and continuous EMI payments, which clearly indicate an income much higher than what is reflected in the ITR. It is contended that the ITRs did not truly reflect the actual income, as is often the case with self-employed businessmen. The finding of the Tribunal that the deceased was earning at least ₹35,000/per month is said to be fully justified and based on reliable circumstantial evidence.
9. Learned Counsel for the Respondent Nos. 1 to 3/Claimant seeks to rely upon a judgment of the Coordinate Bench of this Court in National Insurance Company v. Parvesh & Ors.[1] to submit that a Court in addition to ITR can also look at other evidence to assess the income of the deceased.
10. The learned Trial Court assessed the income of the deceased to not to be less than Rs. 35,000/- per month and further by considering the increase in income with time the income was assessed to be at Rs. 45,000/- per month. This Court has also examined the ITR for the Assessment Year 2010-11 of the deceased placed on record, which shows the capital of the deceased as Rs. 6,51,504/- and also shows raw material in the sum of Rs. 4,92,127/-. The ITR for the AY 2009-10 also shows that capital of the deceased was Rs. 4,42,660/and availability of raw material in the sum of Rs. 2,62,500/-. It is therefore contended that the award does not call for any interference and ought to be upheld.
11. The Supreme Court in Syed Basheer Ahamed and Ors. v. Mohammed Jameel and Anr.[2] has held that while determining just compensation under Section 168 of the Motor Vehicles Act, the Tribunal is vested with wide discretion to fix an amount that “appears to be just,” but such discretion cannot be exercised arbitrarily or in disregard of settled principles. The Court further observed that income must be assessed on the basis of material placed on record, which may involve estimation or conjecture. Though entries in bank accounts and business transactions may not be conclusive proof of income, they can serve as indicators supporting the claim that the deceased’s actual earnings could be higher than what was declared in the income tax return. It is apposite to set out the relevant extract below:
13. Section 168 of the Act enjoins the Tribunal to make an award determining “the amount of compensation which appears to be just”. However, the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression “which appears to be just” vests a wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude of such power does not empower the Tribunal to determine the compensation arbitrarily, or to ignore settled principles relating to determination of compensation. xxx xxx xxx
20. Thus, for arriving at a just compensation, it is necessary to ascertain the net income of the deceased available for the support of himself and his dependents at the time of his death and the amount, which he was accustomed to spend upon himself. This exercise has to be on the basis of the data, brought on record by the claimant, which again cannot be accurately ascertained and necessarily involves an element of estimate or it may partly be even a conjecture. The figure arrived at by deducting from the net income of the deceased such part of income as he was spending upon himself, provides a datum, to convert it into a lump sum, by capitalising it by an appropriate multiplier (when multiplier method is adopted). An appropriate multiplier is again determined by taking into consideration several imponderable factors. Since in the present case there is no dispute in regard to the multiplier, we deem it unnecessary to dilate on the issue. xxx xxx xxx
22. In the present case, as noticed earlier, the deceased was carrying on a business. The return of income filed by him for Assessment Year 1998-1999 (Ext. P-34) was brought on record along with his monthly turnover and tax paid statements submitted to the commercial tax officer (Ext. P-27). Copies of the current account (Ext. P-38) showing the money deposited in the bank maintained by the deceased have also been brought on record. The return of income filed on 15-4-1998 and the accompanying document, namely, trading and profit and loss account for the period ending 31-3-1998 show a net profit of Rs 42,996. Taking into consideration the said documents, the Tribunal took the monthly income of the deceased at Rs 7000 per month. However, the High Court felt that in the light of the income tax return, declaring income from the business carried on by the deceased, the yearly income of the deceased was not more than Rs 40,000 and, therefore, the Tribunal was not justified in adopting the monthly income of the deceased at Rs 7000 per month to work out the loss of dependency. According to the High Court, the monthly income of the deceased should have been taken at Rs 4000 per month.
23. In our view, though the entries in the current account (Ext. P-
38) of the deceased and his transactions with his client, namely, Vasu Agarbathi (Ext. P-23) may not per se be cogent evidence to determine the yearly or monthly income of the deceased from the business(es) he was carrying on, yet we feel that these are some indicators in support of the appellants' plea that the business income of the deceased in the succeeding years could be more than what was declared for the year ended 31-3-1998. But it is again in the realm of speculation, particularly when, unlike income from salaries, earnings in a business may increase with the buoyancy in business and at the same time may diminish with a recession in trade.
26. In the circumstances, having regard to the material on record, in our opinion, ends of justice would be met if the income of the deceased is taken at Rs 5500 per month or Rs 66,000 per annum.” [Emphasis Supplied]
12. The Coordinate Bench in Sunita Arora & Ors. v. Mukesh Kumar & Ors.3, relying on the judgment of K. Ramya & Ors. v. National Insurance Co. Ltd. & Ors.4, reiterated that documents such as income tax returns and audit reports along with other relevant documents are reliable evidence to determine the income of the deceased. It was further emphasized that in determining the income of the deceased, the Court is not to seek proof beyond reasonable doubt, and that the intent of the legislation is to provide
2022 SCC OnLine SC 1338 just compensation which, while not a bounty, must be reasonable and fair. The relevant paragraphs are extracted below- “14. In K. Ramya v. National Insurance Co. Ltd., 2022 SCC OnLine SC 1338, the Supreme Court has reiterated that documents such as income tax returns and audit reports along with other relevant documents are reliable evidence to determine the income of the deceased. It has further held as under: “13. The deceased in the present case was a businessman and during the proceedings before the Tribunal, the Appellants produced the relevant income tax returns, audit reports and other relevant documents pertaining to the commercial ventures of the Deceased to prove the loss of income attributable on account of his sudden demise. The Tribunal relied on the same and computed the income by taking an average of the income recorded in three prior financial years (FY 2000-2001, FY 2001-2002 and FY 2002-2003) to determine the compensation under the head of ‘loss of income’.
14. In contrast, the High Court set aside the same on the ground that the income earned was out of capital assets and cannot be said to have been earned out of personal skills of the deceased. It consequently went on to determine the income of the Deceased on a notional basis as per his educational qualification. Unfortunately, such an approach, in our opinion, is erroneous in view of the decisions of this court in Amrit Bhanu Shali v. National Insurance Co. Ltd. (2012) 11 SCC 738 and Kalpanaraj v. Tamil Nadu State Transport Corpn. (2015) 2 SCC 764 wherein this court has held that documents such as income tax returns and audit reports are reliable evidence to determine the income of the deceased. Hence, we are obliged to modify the compensation, especially when neither any additional evidence has been produced to showcase that the income of the Deceased was contrary to the amount mentioned in the audit reports nor it is the stand taken by the Insurance Company that the said reports inflated the income.”
15. In determining the income of the deceased, the Court is not to seek proof beyond reasonable doubt. It is to be remembered that the intent of the legislation is to provide ‘Just’ compensation to the victims of the motor vehicle accidents; while the compensation cannot be a bounty, it should also not be tight fisted; it must be reasonable and fair.”
13. As stated above and the record reflects that the Respondent No.1/Claimant who is the wife of the deceased [PW-1] in her evidence by way of affidavit stated that during his lifetime, the deceased had purchased a residential house and for this purpose had obtained a housing loan from ICICI Bank, for which he was paying an EMI of ₹12,578/- along with insurance premium on the loan. She further stated that the deceased was maintaining a savings bank account from which all such payments were regularly made, and that he also held several LIC policies for which a monthly payment of Rs.8,308/- per month was being made. The bank statements of the deceased were also placed on record. It is apposite to set out the relevant extract of the evidence of Respondent No.1/Claimant below:
EVIDENCE BY WAY OF AFFIDAVIT ON BEHALF OF THE PETITIONERS: “11. That the deceased during his lifetime had purchased a residential house No. 25 Pocket 10, Sector 20 Rohini, Delhi in the name of the deponent and had taken a housing loan from ICICI Bank and had been making payment of EMI of Rs. 12,578/- per month and Rs. 756/- per month towards the premium of the insurance of the said house and for himself. The deceased had been maintaining a saving bank account No. 1048372703 in SBI, Meera Bagh New Delhi and was making the payment of EMI's and LIC premium from his said bank account which is reflected in the said bank account of the deceased. Apart from the above the deceased Sh. Satish Kumar was having seven LIC policies in his name bearing no. 114548720, 115814149, 122418090, 121274738, 115698641, 112483254, 330659848 and was making a total payment of about Rs.8,308/- p.m. towards the premium of the said seven polices to the LlC. A copy of the bank statement of the deceased for the period 02.07.2009 to 02.03.2010 is marked B and copy of the payment of the premium receipts are EX.PW1/6 to EX.PW1/12.” 13.[1] PW[1], the wife of the deceased, further averred that he was working as the sole proprietor of “DASS Dye Cutter.” She deposed that out of seven LIC policies, five were in the deceased’s name, from which she has received a pay out of approximately Rs. 14–15 lakhs. She maintained that the deceased was earning Rs. 45,000/- per month from his business It is apposite to set out the cross-examination of PW-1 in this behalf dated 06.11.2013 below: “No. 272/13 06.11.13 PW[1] Ms. Upasana Gundh widow of Late Sh. Satish Kumar Gundh aged about 40 years R/o No. 24-25, Rohini, Delhi at present housekeeper. On S.A. I tender my affidavit in evidence Ex. PW1/A which bears my signature at points A and B of the affidavit. I further tender in evidence photocopy of ration card Ex. PW1/1 and death certificate is Ex. PW1/3, (OSR) copy of criminal case record is Ex. PW1/2(colly). Original ITRs of the deceased acknowledgment submitted Ex. PW1/13 and copy of the pan card of deceased Ex. PW1/15. Deceased was also having 7 LIC policies and copy of the payment receipt are Ex. PW1/6 to PW1/12. Copy of the school fee of the children Ex. PW1/4 and PW1/5 original placed on record today.
XXXXXX by counsel for insurance company (after having being permitted to cross examination the witness under Section 170 of Motor Vehicle Act and qua the defence available with driver and owner separate order of even day) I am not eye witness of the accident. I have got the driving licence of my deceased husband. I perused the same for the perusal of the tribunal and for the perusal of the counsel for insurance company. Photocopy is placed on record after getting photocopy from the official photocopier. Out of the policies mentioned above in my affidavit two LIC polices were in my name and remaining five LIC policies, the concerned LIC granted compensation approximately Rs. 14 lacs or 15 lacs in toto on account of five policies of my deceased husband. The name of the shop of my deceased was DASS dye cutter. The acknowledgment ITR does not show him proprietor of DASS dye cutter of which he was a proprietor. Along with the ITR all documents pertaining to the business name etc. It is wrong to suggest that my deceased husband was not earning Rs. 45000/per month from the jointly business mentioned as above.”
14. The learned Tribunal gave a detailed finding discussing the documentary evidence placed on record by the Respondents/Claimants while calculating loss of dependency in the following terms: “8. ISSUE NO. 2 LOSS OF DEPENDENCY PW[1] testified that her deceased husband has left behind one minor daughter baby Harshita aged about 13 years, a minor son Mst. Vaibhav aged 10 years and his widow i.e.. PW[1] herself as his legal representatives who were totally dependent on deceased Sh. Satish Kumar who was the sole bread earner for the entire family. The deceased was hard working efficient businessman of 40 years and running a jewellery dye cutting shop in the rented shop bearing NO. 15/367G, Karol Bagh for a considerable period and making a payment of Rs. 7500/- towards the monthly rent of the said shop. The monthly income of the deceased at the time of accident from the said business of jewelery [sic: jewellery] dye cutting was approximately 45,000/-p.m. The income and business of deceased was increasing day by day and he had bright future prospects. During his lifetime he had purchased a residential house no. 25, Pocket 10, Sector 20, Rohini, in the name of his wife and taken a housing loan from ICICI bank and had been making payment of EMI of Rs. 12,578/- p.m and Rs. 756/-p.m towards the premium of the insurance of the said house. He was maintaining the saving bank account no. 1048372703 in SBI, Meera Bagh, New Delhi and was making payment of EMIs and LIC premium from his said bank account as is reflected from statement of his bank account. Apart from above, deceased was having 7 LIC policies in his name and was making a total payment of Rs. 8,308/-p.m towards the premium of said polices of LIC. Copy of bank statement of deceased for the period 2.7.2009 to 2.3.2010 is marked B and copy of payment of premium receipts are Ex PW1/6 to Ex. PW1/12. ITRs of the deceased for the assessment year 2008-09, 2009-10, 2010-11 are collectively Ex. PW1/13. Copy of PAN card of deceased is Ex. PW1/14. Copy of school fee of children are Ex. PW1/4 & Ex. PW1/5. PW[1] testified that the petitioner no. 2 & 3 i.e., the children were students of 8th & 5th standard in S.S. Mota Singh, Sr. Sec. School, Guru Harkrishan Nagar, New Delhi. In her cross examination, PW[1] testified that out of the seven policies, two policies were in her name and remaining 5 policies were in the name of the deceased. She denied the suggestion that her deceased husband was not earning Rs. 45,000/- p.m. PW[2] produced the summoned record pertaining to ITR of deceased and supported the testimony of PW[1] that deceased had filed his ITRs for the assessment year 2008-09, 2009-10 & 2010-11. He also produced the original ITRs of the deceased which are Ex. PW2/3 & Ex. PW3/3. From the ITRs of deceased, it is revealed that his gross annual income for the assessment year 2008-09 was Rs. 2,01,528/-, in the assessment year 2009-10 was Rs. 2,06,460/- and in 2010-11 was Rs. 3,06,540/-. It is pertinent to mention here that ITR for year 2010-11 has been filed in July 2010 i.e., after the death of deceased. Thus, the same cannot be considered for the purpose of calculation of his income. Though there is no evidence to establish that the deceased was earning Rs. 45000/- per month, however in view of the certified copy of rent agreement of property no. 15/3576, Regarpura, Karol Bagh, commencing from 01.09.2009 onwards in favour of deceased Sh. Satish Kumar wherein the aggregate of rent is Rs. 7500/- p.m, the LIC premium receipts which prima facie shows payment of more than Rs. 8000/-p.m, the fee receipts of children of deceased Ex. PW1/4 & Ex. PW1/5 showing payment of about Rs. 3000/- each per quarter for both the children of deceased and the bank statement for the period from 01.04.2009 to 28.06.2010 reflecting the payment of premium towards the LIC policies and EMIs of about more than Rs. 12000/- p.m by ECS towards repayment of loan, at no stretch of imagination it can be believed that the deceased had an income of Rs. 17000/- per month as reflected in the ITRs. Thus I am convinced by the arguments addressed by ld counsel for petitioner that the income of the deceased was much more than what has been reflected in the ITRs. In the facts and circumstances and considering that the deceased was running the business of jewellery [sic: jewellery] dye cutting in the prime location like Regarpura, he must not be earning less than Rs. 35000/-p.m. From the ITRs, it is also reflected that the income of deceased was also increasing every year. In view of above discussion and considering the age of deceased which as per his ITRs was 40 years 6 months and 7 days, an addition of 30% is to be made in the income of the deceased (Reliance placed on Sarla Verma Vs. DTC 2009 (6) SCALE 129 and in Santosh Devi Vs. National Insurance Company & Others 2012 (4) SCALE 559). In Santosh Devi's case (Supra) it was observed that; even in the absence of any evidence as to future prospects an increase of 30% of the income has to be provided where the victim has fixed income or a self employed person" Income of deceased is assessed as 35000+ 30% of 35000 = 45500/p.m. The deceased had left behind 3 Lrs/dependents hence 1/3 of his income is to be deducted towards his personal living expenses. (Reliance placed on Sarla Verma's case Supra). In view of age of deceased, multiplier of 14 is applicable (Reliance placed on Sarla Verma's case Supra). Thus the total dependency is assessed as 45500 X 14 X 12 X 2/3 = 50,96,000/-.”
15. Undisputably, the deceased was 40 years of age, running an established jewellery dye cutting business in a prime commercial locality of Karol Bagh, with a steadily increasing income. It has been contended by the learned Counsel for the Respondent Nos. 1 to 3/Claimants that the person who had monthly expenses of more than Rs. 30,000/- per month could not be earning Rs. 15,000/- to Rs. 20,000/- per month as has been suggested by the Appellant. This Court agrees. The consistent fixed monthly expenditure of the deceased was more than Rs.32,000/- per month or Rs.3,84,000/- per annum based on the evidence produced. 15.[1] The deceased was running his own business in a prime commercial location. The growth of the business between Assessment Year 2009-10 and Assessment Year 2010-11 is clear from the ITRs on record as well. In such circumstances, the addition of 30% towards future prospects is consistent with the law laid down in Santosh Devi v. National Insurance Company & Others[5] and Sarla Verma v. DTC[6]. The deduction of one-third for personal expenses and application of multiplier of 14 have been correctly applied.
16. In view of the aforesaid, considering the totality of the evidence, including the deceased’s substantial monthly expenses towards housing loan EMIs, insurance premiums, school fees, and other financial obligations, the Tribunal rightly concluded that the actual income of the deceased exceeded the figures reflected in the Income Tax Returns. 16.[1] The assessment of the deceased’s income at Rs. 35,000/- to Rs. 45,000/- per month, along with the addition for future prospects by the
2009 (6) SCC 121 learned Trial Court, is well-founded and justified. The quantum of compensation awarded adequately reflects the true financial status of the deceased and the loss suffered by the claimants. Consequently, there is no reason to interfere with the Impugned Award.
17. The Appeal is dismissed in the aforegoing terms. The pending Application stands closed.
TARA VITASTA GANJU, J SEPTEMBER 19, 2025/g.joshi/ha