Deceased's Income Tax Returns Can Be Considered For Computing His Annual Income In Motor Accident Compensation Claim Cases : Supreme Court

The Supreme Court observed that deceased's Income Tax Return can be considered for computation of his annual income in Motor Accident Compensation Claim cases.

In this case, the claimants had filed the deceased's Income Tax Returns before the Tribunal which showed the total income of deceased to be Rs.1,18,261/-, approx. Rs.9855/- per month. The MACT disregarded it on the ground that neither any ITR prior to 2009-2010 nor any other document with regard to the deceased's income was filed. It thus fixed his income at Rs.4000/- per month i.e., Rs.48,000/- per annum. In appeal, the High Court also refused to consider ITR and estimated the deceased's income as Rs.5,000/- per month.

Disapproving this approach, the Apex Court bench of Justices Krishna Murari and Bela M. Trivedi observed:

"The Tribunal and the High Court both committed grave error while estimating the deceased's income by disregarding the Income Tax Return of the Deceased. The appellants had filed the Income Tax Return (2009- 2010) of the deceased, which reflects the deceased's annual income to be Rs.1,18,261/-, approx. Rs.9,855/- per month. This Court in Malarvizhi & Ors. (Supra) has reaffirmed that the Income Tax Return is a statutory document on which reliance be placed, where available, for computation of annual income.."

It therefore fixed the deceased's annual income at Rs.1,18,261/-, approx. Rs.9,855/- per month. The court added that the provisions of the Motor Vehicles Act gives paramount importance to the concept of 'just and fair' compensation.

"Section 168 of the MV Act deals with the concept of 'just compensation' which ought to be determined on the foundation of fairness, reasonableness and equitability. Although such determination can never be arithmetically exact or perfect, an endeavor should be made by the Court to award just and fair compensation irrespective of the amount claimed by the applicant/s", it added. 

Allowing the appeal, the bench held that the total compensation payable to the claimant is Rs.25,91,388/-.

Case details

Anjali vs Lokendra Rathod | 2022 LiveLaw (SC) 1012 | CA 9014 OF 2022 | 6 December 2022 | Justices Krishna Murari and Bela M. Trivedi

For Petitioner(s) Mr. N.K. Mody, Sr. Adv. Mr. Prabudha Singh Gour, Adv. Mr. Sukhamrit Singh, Adv. Ms. Ishita M. Puranik, Adv. Mr. Praveen Swarup, AOR

For Respondent(s) Ms. Meenakshi Midha, Adv. Mr. Kapil Midha, Adv. Ms. Pritika Juneja, Adv. Ms. Versha Singh, Adv. Mr. Chander Shekhar Ashri, AOR

Headnotes

Motor Accident Compensation Claims - Income Tax Return is a statutory document on which reliance be placed, where available, for computation of annual income of deceased. (Para 9)

Motor Vehicles Act, 1988 ; Section 168 - Concept of 'just compensation' which ought to be determined on the foundation of fairness, reasonableness and equitability - Although such determination can never be arithmetically exact or perfect, an endeavor should be made by the Court to award just and fair compensation irrespective of the amount claimed by the applicant/s. (Para 10)

Click here to Read/Download Judgment