Insurer Cannot Seek Separate Proof Of Income Source Once Deceased’s Income Is Proved By ITR In Motor Accident Claim: J&K High Court
Safiya Malik
The High Court of Jammu & Kashmir and Ladakh Single Bench of Justice Sanjeev Kumar held that in a motor accident compensation case, once a deceased victim’s income is proved through a duly established Income Tax Return, the insurer cannot demand separate proof of the source of that income, and courts need not examine the return beyond its contents absent rebuttal evidence. The Court dismissed the insurer’s appeal, allowed the claimant’s plea for enhancement, and modified the MACT award by increasing compensation payable to the claimant-husband.
The appeals arose from an award dated 13 August 2009 passed by the Motor Accident Claims Tribunal, Jammu, in a claim petition filed under the Motor Vehicles Act, 1988. The claimant sought compensation of ₹37 lakh with interest at 12% following the death of his wife in a motor accident on 01 November 2007 near Berero Khad, Supwal, Samba. The deceased was travelling in a car which was crushed between two buses allegedly driven in a rash and negligent manner.
The Tribunal framed issues regarding the occurrence of the accident, entitlement to compensation, validity of driving licences, contributory negligence, misjoinder of parties, and transfer of ownership of one vehicle. The claimant examined himself and an Income Tax Department employee to prove the deceased’s income. The Tribunal fixed notional income at ₹4,000 per month and awarded ₹2,22,024 with 7.5% interest. The insurer challenged the award, disputing proof of income, while the claimant sought enhancement based on the income tax return and application of the correct multiplier and future prospects.
The Court observed, “Insofar as the appeal of the Insurance Company is concerned, I do not find any substantial ground urged to find fault with the impugned award passed by the Tribunal.”
Dealing with the insurer’s objection regarding proof of income, the Court stated, “The only plea taken by Mr. Amrit Sarin, leaned counsel for the Insurance Company, to assail the award is that, though, the respondent-claimant has proved the income of the deceased by placing on record and proving the Income Tax Return for the relevant year, yet he failed to demonstrate the source of income earned by the deceased.” It recorded, “The plea taken is without substance and cannot be accepted.”
The Court further stated, “Neither this court hearing appeal nor the tribunal could have gone into the source of income of the deceased, which was duly recorded in the ITR filed by her with the Income Tax authorities.” It added, “There is no evidence in rebuttal led by the Insurance Company to doubt the correctness of the income or Income Tax Return submitted by respondent-claimant.”
On the question of computation, the Court recorded, “We, however, find substance in the submission of Mr. Mehta, learned counsel appearing for the respondent-claimant, that the Tribunal has failed to take into consideration the actual income of the deceased at the time of accident.” It further stated, “The Tribunal has also not applied the relevant multiplier to workout fair and just compensation, which in the instant case is 9.”
While recalculating compensation, the Court stated, “Taking the annual income of the deceased as Rs.2,71,747/-, making an addition of 10% in terms of National Insurance Company Ltd. v. Pranay Sethi and others… Deducting 50% towards her personal expenses… Applying the multiplier of 9… the total loss of income comes to… Rs.13,45,149/-.”
It also recorded, “Under conventional heads, the claimant shall be entitled to… Funeral expenses: 15,000/-; Loss of consortium: Rs.40,000/-.”
The Court held that the respondent-claimant was entitled to a total compensation of “Rs.14,00,149/-” and directed that “The aforesaid amount minus the amount already received shall become payable to the respondent No.1-claimant with interest @ 7.5% per annum from the date of filing of the claim petition till its realization.”
“The Insurance Company shall satisfy the modified award and deposit the balance amount before the Registry of this Court. The Registry shall release the amount in terms of the modified award in favour of the claimant after verification and identification. The award passed by the tribunal is modified to the aforesaid extent and the appeal of the respondent-claimant shall stand disposed of. The appeal of Insurance Company is, however, dismissed.”
Advocates Representing the Parties
For the Petitioners: Mr. Amrit Sarin, Advocate; Mr. Raghu Mehta, Advocate
For the Respondents: Mr. Raghu Mehta, Advocate; Mr. Amrit Sarin, Advocate
Case Title: The Oriental Insurance Company Ltd. v. Prem Gupta and Others
Case Number: MA No.500/2009 c/w MA No.516/2009
Bench: Justice Sanjeev Kumar
