Motor Vehicles Act; Accident compensation; Dependency; Future prospects; Income calculation; Allowances; Multiplier; Insurance appeal; Himachal Pradesh High Court; MV Act
 20 May, 2026
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Oriental Insurance Company Ltd. Versus Radha Krishan & Ors.

  Himachal Pradesh High Court FAO No.4108 of 2013
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Case Background

As per case facts, Oriental Insurance Company filed an appeal challenging a Motor Accident Claims Tribunal award of compensation to the family of Som Nath, who died in a motor ...

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Document Text Version

1  ( 2026:HHC:18699-DB )

IN THE HIGH COURT OF HIMACHAL PRADESH

SHIMLA

FAO No.4108 of 2013

Reserved on:- 25.04.2026

Date of Decision: 20.05.2026

Oriental Insurance Company Ltd. …Appellant

Versus

Radha Krishan & Ors. …..Respondents

Coram:

The Hon’ble Mr. Justice Virender Singh, Judge.

Whether approved for reporting? Yes.

For the Appellants :Mr. Ashwani K. Sharma, Senior

Advocate, with Ms. Mamta,

Advocate.

For the Respondents :Ms. Rajni Gandhi, Advocate, vice

Mr. Anil Kumar God, Advocate, for

respondents No.1 to 3.

Name of respondent No.4 stands

deleted.

Mr. Manohar Lal Sharma, Advocate,

for respondents No.5 and 6.

__________________________________________________________

Virender Singh, Judge

Oriental Insurance Company Limited has filed

the present appeal, under Section 173 of the Motor Vehicles Act,

1998 (hereinafter referred to as the ‘M.V. Act’), against the

award dated 16.03.2013, passed by learned Motor Accident

Claims Tribunal, Bilaspur, District Bilaspur, H.P., (hereinafter

referred to as the ‘learned Tribunal’), in MAC No.9 of 2011, titled

as Radha Krishan and others versus Puspa Gautam & others.

2  ( 2026:HHC:18699-DB )

2. By way of award dated 16.03.2013, the learned

Tribunal has decided the above mentioned claim petition, by

awarding a sum of Rs.24,55,585/- along with interest @ 7.5%

per annum from the date of filing of petition, till deposit of the

amount and the ultimate liability to pay the amount has been

fastened upon the appellant-Oriental Insurance Company.

- 1 3. For the sake of convenience, parties to the

present appeal, are hereinafter referred to, in the same manner,

in which, they were referred to, by the learned Tribunal.

3. 4. Brief facts, leading to filing of the present

appeal, before this Court, may be summed up, as under:-

4.1. 4.1. The claimants, being sons, widow and widowed

mother of Som Nath, have filed the claim petition, under Section

166 of the M.V. Act., seeking compensation, on account of death

of Som Nath, in a motor vehicle accident, involving Vehicle

No.HP-12A-0984, (hereinafter referred as to ‘the offending

vehicle’) owned by respondent No.1, being driven by respondent

No.2 and insured with respondent No.3.

4.2. As per the claim petition, their predecessor-in-

interest, Som Nath was a government servant and was about 55

years of age at the time of accident, which had taken place on

09.01.2011, at about 11:20 AM, at Darlaghat. The accident in

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question had taken place, due to rash and negligent driving of

the driver of the offending vehicle i.e. respondent No.2. The

information regarding accident was given to police of Police

Station, Darlaghat, where, FIR No.5 of 2011 was registered. In

the said accident, Som Nath sustained injuries and he was

taken to private hospital, from where, he was referred to IGMC

Shimla, from where, he was further referred to P.G.I.

Chandigarh, where, he died on 10.01.2011.

4.3. 4.3. According to the claimants, Som Nath was

working in Himachal Pradesh Department of Treasuries,

Accounts and Lotteries and earning Rs.39,000/- per month.

This amount has been bifurcated, by pleading that he was

getting Rs.28,892/- as gross salary, plus Rs.10,000/- from

agriculture pursuits.

4.4. Highlighting their bright past and bleak future,

the claimants have sought the compensation of Rs.30,00,000/-

along with interest @ 18% per annum from the respondents.

5. When put to notice, the claim petition has been

contested by the respondents. Respondent No.1 has filed her

reply to the claim petition, which has been adopted by

respondent No.2, as per order dated 07.03.2012 passed by the

learned Tribunal. Respondent No.1 has contested the claim

4  ( 2026:HHC:18699-DB )

petition, by taking preliminary objections; that the claim petition

is bad for non-joinder or mis-joinder of necessary parties, as the

driver and owner of Bhola Bus Service has not been arrayed, as

party. Contents of the claim petition have mainly been denied,

by pleading that the accident in question had not taken place on

account of rash and negligent driving of the driver.

6. Highlighting their stand, it has been pleaded

that the offending vehicle was being driven, on the extreme left

side of the road and at a controllable and cautious speed; when,

the said vehicle reached at place Darlaghat, then, one person

suddenly alightened-down from Bhola Bus Service and tried to

cross the road without seeing in any direction. Driver of the

offending vehicle applied the brakes and stopped the vehicle,

however, the said person got puzzled and lost his balance and

fell down on the road. Hence, a prayer has been made to

dismiss the claim petition.

7. Oriental Insurance Company has separately filed

its reply, by taking preliminary objections that the claim petition

is not maintainable; the claim petition is vague; the offending

vehicle was being driven, by unauthorized person, who was not

holding any valid and effective license to drive the said vehicle;

the petition is bad for non-joinder of necessary parties; the

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deceased himself was negligent. On merits, the contents of the

claim petition were denied for want of knowledge. Thus, a

prayer for the dismissal of the claim petition has been made.

8. From the pleadings of the parties, following

issues were framed by the learned Tribunal, vide order dated

24.04.2012:

1). Whether the deeased Som Nath died in a motor

accident which took place on 09.01.2011, near village

Darlaghat, District Solan, H.P. due to rash and

negligent driving of vehicle i.e. Tata Sumo No.HP-12A-

0984 by respondent No.2, as alleged ?...OPP.

2). If issue No.1 is proved in affirmative, to what

amount of compensation, the petitioners are entitled

to and from which of the respondents as

alleged ?...OPP.

3). Whether the respondent No.2 was not holding a

valid and effective driving licence to drive the

offending vehicle at the relevant time, as

alleged ?...OPR-3.

4). Whether the offending vehicle was not being plied

without valid documents, as alleged ? ...OPR-3.

5). Whether the petition is bad for non-joinder and

mis-joinder of necessary parties ? OPR-3.

6). Relief.

9. Thereafter, parties to the lis were directed to

adduce evidence. After closure of the evidence, the learned

Tribunal, upon hearing learned counsel for the parties, has

allowed the claim petition, as referred to above.

6  ( 2026:HHC:18699-DB )

10. 10. Feeling aggrieved from the said award, the

Oriental Insurance Company has preferred the present appeal.

Perusal of the grounds of appeal shows that the quantum of

compensation has been assailed, by way of present appeal, filed

by the Oriental Insurance Company. The awarded amount has

been prayed to be reduced, on the ground that at the time of his

death, Som Nath was 56.5 years and being a government

servant, he would have been superannuated, after one and half

year, had the accident not taken place. Thereafter, his income

would have slashed to 50%, as such, a prayer has been made to

reduce the amount of compensation, by applying the principle of

split multiplier, by considering his income, under two heads;

one during his service and second after his retirement.

11. According to the appellant, the learned Tribunal

has wrongly deducted 1/4th of the amount, on account of

personal expenses of deceased and the same should have been

1/3rd, since only the wife and mother of the deceased were

dependent upon him.

12. On the basis of the above facts, Mr. Ashwani K.

Sharma, Senior Advocate, assisted by Ms. Mamta, Advocate,

appearing for the appellant has prayed that the amount of

compensation may kindly be reduced accordingly.

7  ( 2026:HHC:18699-DB )

14. 13. The prayer, so made has been opposed by Ms.

Rajni Gandhi, Advocate, appearing vice Mr. Anil Kumar God,

Advocate for respondent No.1 to 3, on the ground that the

appeal sans merit and the same may kindly be dismissed.

14. It is apt to record herein that the claim petition

has initially been filed by the sons, widow and widowed mother

of Som Nath. During the pendency of the appeal, mother of Som

Nath has expired and as such, her name was ordered to be

deleted, vide order dated 18.07.2024.

15. 15. In this case, Oriental Insurance Company has

preferred the appeal for reducing the amount of award, however,

in order to achieve the legislative intent to provide just

compensation, the evidence, so adduced, by the parties is to be

considered, by this Court to arrive at a conclusion as to whether

the amount of compensation awarded falls within the definition

of ‘just compensation’ or not.

16. This view has been reiterated in a recent

decision of Hon’ble Supreme Court in Sushila and others

versus Sudhakar and another (2026) Live Law Supreme

Court Cases 343 reiterated that the legislative intent with

regard to the endeavour of the Court/Tribunal to award the just

8  ( 2026:HHC:18699-DB )

compensation. Relevant paragraphs-19 and 20 are reproduced

as under:-

“19) In our considered opinion, although the High

Court had enhanced the compensation, it was on the

lower side. The cardinal principle of awarding

compensation in the cases of motor accidents is to

provide a “just compensation” to the victim and/or

the distressed dependents of the deceased. The term

“just” implies that the compensation must be fair,

reasonable, and equitable as per the applicable

legal standards. The compensation should not be

too meagre, nor should it be excessive. The sole

foundation of providing monetary compensation is

to make efforts to put the dependents of the

deceased at the same financial position that they

were in, had the accident not occurred. [See also:

Reshma Kumari and others vs. Madan Mohan and

another, reported in (2013) 9 SCC 65; National

Insurance Co. Ltd. vs. Indira Srivastava & Ors,

reported in (2008) 2 SCC 763; and Divisional

Controller, KSRTC vs. Mahadeva Shetty and

another, reported in (2003) 7 SCC 197]

20) Thus in the light of the settled principle that the

Motor Vehicles Act, 1988(hereinafter referred to as

“M.V. Act”) is a beneficial legislation and the

compensation should be just and equitable, let us

deal with the issues for determination in the present

appeal.”

17. As stated above, the Oriental Insurance

Company has not assailed the award, on the ground of liability,

but, the same has only been assailed, on the ground of

quantum.

16. 18. As per evidence, so adduced, by the claimants,

before the learned Tribunal, Som Nath was working as Senior

Assistant, in the office of Directorate of Land Records and the

salary of Som Nath for the month of December, 2010, was

Rs.28,892/-. He has further deposed that on account of annual

9  ( 2026:HHC:18699-DB )

increment, his salary would have been Rs.30,934/- per month,

in the month of January, 2011. He has proved the Last Pay

Certificate of Som Nath Ex.PW2/A. According to the said

document, the monthly salary of Som Nath was Rs.30,934/-.

19. 19. Now, the question, which arises for

determination before this Court is with regard to the fact, as to

whether, the arguments advanced by the leaned counsel

appearing for the appellant, qua the fact that the claimants No.1

and 2, does not fall within the definition of dependents, as such,

they are not entitled for the compensation in this case; are

sustainable in the eyes of law or not.

20. The said arguments are devoid of merit as a

specific stand has been taken by the claimants, in this case,

that all the petitioners were fully dependent on the earnings of

Som Nath. The said factual position, as asserted in para-24 of

the claim petition, has not been denied specifically by the

respondents, including the present appellant (Insurance

Company).

21. When, the wife of Som Nath appeared in the

witness box as PW-3, she has categorically deposed that both

her sons are unemployed. When, a feeble attempt has been

made by learned counsel appearing for the Insurance Company

10  ( 2026:HHC:18699-

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to suggest this witness about the fact that her both sons are

residing separately, she has denied the said suggestion. Merely

because she has admitted that both the sons are married, does

not give any occasion for this Court to draw an inference that

both the claimants were not dependent on the earnings of Som

Nath. The statement of PW-3, qua the fact that both her sons

are unemployed, remained uncontroverted.

22 If the said fact is considered in the light of the

decision of Hon’ble Supreme Court in Laxmibai (dead) through

Lrs. and another versus Bhagwantbuva (dead) through LRs

and others, (2013)4 SCC 97, then the stand taken by PW-3,

qua the fact that both her sons were unemployed, has rightly

been relied upon by the learned Tribunal. Relevant paragraph

40 of the judgment is reproduced as under:-

“xx xx xx 40. Furthermore, there cannot be any

dispute with respect to the settled legal proposition,

that if a party wishes to raise any doubt as regards

the correctness of the statement of a witness, the said

witness must be given an opportunity to explain his

statement by drawing his attention to that part of it,

11 which has been objected to by the other party, as

being untrue. Without this, it is not possible to

impeach his credibility. Such a law has been

advanced in view of the statutory provisions

enshrined in Section 138 of the Evidence Act, 1872,

which enable the opposite party to cross-examine a

witness as regards information tendered in evidence

by him during his initial examination in chief, and the

scope of this provision stands enlarged by Section

146 of the Evidence Act, which permits a witness to

be questioned, inter-alia, in order to test his veracity.

Thereafter, the unchallenged part of his evidence is

to be relied upon, for the reason that it is impossible

11  ( 2026:HHC:18699-

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for the witness to explain or elaborate upon any

doubts as regards the same, in the absence of

questions put to him with respect to the

circumstances which indicate that the version of

events provided by him, is not fit to be believed, and

the witness himself, is unworthy of credit. Thus, if a

party intends to impeach a witness, he must provide

adequate opportunity to the witness in the witness

box, to give a full and proper explanation. The same

is essential to ensure fair play and fairness in dealing

with witnesses. (See Khem Chand v. State of HP.,

State of U.P. v. Nahar Singh, Rajinder Pershad v.

Darshana Devi and Sunil Kumar v. State of

Rajasthan. xx xx xx”

23. The Oriental Insurance Company, in the present

case, has also assailed the award on the ground, that Som Nath,

at the time of his death, was about 56.5 years, he was in

government service and he would have attained age of

superannuation after a period of one and half years, had he not

met with fatal accident, as such, his income would be slashed

down to 50%.

24. All these facts have been submitted by the

learned Senior Counsel during the course of the arguments with

a view to apply the split multiplier. The said contention is also

not liable to be accepted in view of the decision of Hon’ble

Supreme Court in Sushila’s case supra, in which, this aspect

has elaborately been considered and it has been held that the

annual income of the deceased would be calculated on the basis

of monthly last drawn salary. The relevant paragraphs 22 and

23 of the Judgment is reproduced, as under:-

12  ( 2026:HHC:18699-

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22) In the case at hand before us, both the

Tribunal as well as the High Court had made a

deduction of 50% from the salary of the

deceased on account the fact that only 6 months

of service of the deceased was remaining. In our

considered opinion, the Courts below have erred

in coming to such an unreasonable conclusion. In

the light of the authorities cited above, it is clear

that any deduction which is not related to the

accident, is impermissible in law. Additionally,

as per settled law in the case of Sarla Verma’s

case (supra), the multiplicand is always

determined on the basis of the “annual” income

of the deceased so as to ensure uniformity and

consistency in the calculation of motor accident

claim cases. The fact that the deceased had only

six months of service left does not cast any

aspersion on the fact that had the accident not

occurred, the deceased would have been in

service and earn commensurate to the last

drawn income before the death. Therefore, the

annual income of the deceased would be

calculated on the basis of his monthly last

drawn salary.

23) Thus, while deciding Issue No. 1, we are of

the opinion that no deduction ought to have been

made from the salary of the deceased on

account of duration of service left. The Tribunal

rightly assessed the net salary of the deceased

to be 25,415/- per month and the same would

be considered for the computation of loss of

income.

(self emphasis supplied)

25. In this case, it has also been argued by the

learned Senior counsel appearing for the Insurance Company

that while assessing the annual income of Som Nath during his

lifetime, in order to ascertain the amount of compensation, the

allowances, such as, house rent and other allowance, which,

according to the learned Senior Counsel, are personal in nature,

are liable to be deducted.

13  ( 2026:HHC:18699-

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26. The said arguments do not hold water, in view of

the decision of Hon’ble Supreme Court, in Meenakshi versus

Oriental Insurance Company Limited, 2024 ACJ 1647,

wherein, it has been held that house rent allowance, provident

fund loan, provident fund and special allowances ought to be

added, while considering the basic salary of the victim to arrive

at the dependency factor. Relevant paragraphs-8 to 10 of the

judgment, are reproduced, as under:-

“8. In Raghuvir Singh Matolya and Others v. Hari

Singh Malviya 2009 ACJ 1580 (SC), this Court held

that the house rent allowance ought to be included for

determining the income of the deceased. The relevant

paras are extracted hereinbelow for ready reference:-

“(7). Dearness allowance, in our opinion, should form

a part of the income. House rent allowance is paid for

the benefit of the family members and not for the

employee alone. What would constitute an income,

albeit in a different fact situation, came up for

consideration before this Court in National Insurance

Co. Ltd. v. Indira Srivastava [(2008) ACJ 614

(SC)wherein it was held:

“(17). The amounts, therefore, which were required to

be paid to the deceased by his employer by way of

perks, should be included for computation of his

monthly income as that would have been added to his

monthly income by way of contribution to the family as

contra-distinguished to the ones which were for his

benefit. We may, however, hasten to add that from the

said amount of income, the statutory amount of tax

payable thereupon must be deducted.

(18). The term ‘income’ in P. Ramanatha Aiyar's

Advanced Law Lexicon (3rd Edn.) has been defined as

under:

‘The value of any benefit or perquisite whether

convertible into money or not, obtained from a

company either by a director or a person who has

substantial interest in the company, and any sum paid

by such company in respect of any obligation, which

14  ( 2026:HHC:18699-

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but for such payment would have been payable by the

director or other person aforesaid, occurring or

arising to a person within the State from any

profession, trade or calling other than agriculture.”

’It has also been stated:

“Income’ signifies ‘what comes in’ (per Selborne, C.,

Jones v. Ogle 42 LJ Ch 336 ‘It is as large a word as

can be used’ to denote a person's receipts (per Jessel,

M.R., Huggins, 51 LJ Ch 938). Income is not confined

to receipts from business only and means periodical

receipts from one's work, lands, investments, etc. AIR

1921 Mad 427 (SB), Ref. 124 IC 511:1930 MWN

29:31 MLW 438 AIR 1930 Mad 626:58 MLJ 337.”

(19). If the dictionary meaning of the word ‘income’ is

taken to its logical conclusion, it should include those

benefits, either in terms of money or otherwise, which

are taken into consideration for the purpose of

payment of income tax or professional tax although

some elements thereof may or may not be taxable or

would have been otherwise taxable but for the

exemption conferred thereupon under the statute.

To the same effect is the decision of this Court in

Oriental Insurance Company Limited v. Ram Prasad

Varma 2009 ACJ 1006 (SC).

8. We, therefore, are of the opinion that ‘dearness

allowance’ and ‘house rent allowance” payable to the

deceased should have been included for determining

the income of the deceased and consequently the

amount of compensation.”

9. Recently in a judgment in National Insurance

Company Ltd. v. Nalini, 2024 ACJ 1637 (SC), t his

Court held that, allowances under the heads of

transport allowance, house rent allowance, provident

fund loan, provident fund and special allowance ought

to be added while considering the basic salary of the

victim/deceased to arrive at the dependency factor.

10. Therefore, components of house rent allowance,

flexible benefit plan and company contribution to

provident fund have to be included in the salary of the

deceased while applying the component of rise in

income by future prospects to determine the

dependency factor. The Accident Claims Tribunal was

15  ( 2026:HHC:18699-

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justified in factoring these components into the salary

of the deceased, before applying 50% rise by future

prospects due to future prospects, while calculating

the total compensation payable to the appellant.

(self emphasis supplied)

27. In view of the above, now this Court would

proceed further to determine the fact, whether the just

compensation has been awarded to the claimants or not. The

age of Som Nath at the time his death has been proved to be

56.5 years. Thus, the learned Tribunal has rightly applied the

multiplier of ‘9’.

28. Learned Tribunal has taken the salary of Som

Nath, during his life time as Rs.30,934/- as deposed by PW-2

Kundan Sharma, Senior Assistant, Director of Land Records

Shimla. As per the document Ex.PW-1/A, total salary of Som

Nath has been shown as 30,934/-, but the said salary is for the

period of 01.12.2010 to 10.01.2011. The accident in question

has taken place on 09.01.2011. Meaning thereby the said

document Ex.PW-1/A does not depict the true picture, as the

salary of the deceased is to be considered at the time of his

death and according to the deposition PW-2, after the annual

increase in the salary, the same would be Rs.30,934/- from the

month of January, 2011. Certainly, the salary for the month of

January, 2011 would be payable in the month of February,

16  ( 2026:HHC:18699-

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2011, whereas, Som Nath has expired on 10.01.2011. In such

situation, the document i.e. salary slip for the month of

December, 2010 as produced by the claimants on 22.03.2011

along with the other documents can be taken into consideration.

The document produced by a party even if, not exhibited, can be

taken into consideration, to the disadvantage of the party, which

has produced the same. As such, the salary of Som Nath is

proved to be Rs.28,892/- per month.

29. Hon’ble Supreme Court in case National

Insurance Company Limited versus Pranay Sethi and others ,

reported in (2017), 16 Supreme Court Case 680 has

mandated that some addition is required to be given on account

of future prospectus for all the category of persons and for

different ages with permanent job, self employed or fixed salary.

Relevant paragraphs 52, 59.3, 59.4, 59.5, 59.7, 59.8 are

reproduced as under:-

“52. As far as the conventional heads are concerned, we

find it difficult to agree with the view expressed in

Rajesh. It has granted Rs. 25,000/- towards funeral

expenses, Rs. 1,00,000/- loss of consortium and Rs.

1,00,000/- towards loss of care and guidance for minor

children. The head relating to loss of care and minor

children does not exist. Though Rajesh refers to Santosh

Devi, it does not seem to follow the same. The

conventional and traditional heads, needless to say,

cannot be determined on percentage basis because that

would not be an acceptable criterion. Unlike

determination of income, the said heads have to be

quantified. Any quantification must have a reasonable

foundation. There can be no dispute over the fact that

17  ( 2026:HHC:18699-

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price index, fall in bank interest, escalation of rates in

many a field have to be noticed. The court cannot remain

oblivious to the same. There has been a thumb rule in

this aspect. Otherwise, there will be extreme difficulty in

determination of the same and unless the thumb rule is

applied, there will be immense variation lacking any kind

of consistency as a consequence of which, the orders

passed by the tribunals and courts are likely to be

unguided. Therefore, we think it seemly to fix reasonable

sums. It seems to us that reasonable figures on

conventional heads, namely, loss of estate, loss of

consortium and funeral expenses should be Rs. 15,000/-,

Rs. 40,000/- and Rs. 15,000/- respectively. The principle

of revisiting the said heads is an acceptable principle.

But the revisit should not be fact-centric or quantum-

centric. We think that it would be condign that the

amount that we have quantified should be enhanced on

percentage basis in every three years and the

enhancement should be at the rate of 10% in a span of

three years. We are disposed to hold so because that will

bring in consistency in respect of those heads.

59.3. While determining the income, an addition of 50%

of actual salary to the income of the deceased towards

future prospects, where the deceased had a permanent

job and was below the age of 40 years, should be made.

The addition should be 30%, if the age of the deceased

was between 40 to 50 years. In case the deceased was

between the age of 50 to 60 years, the addition should be

15%. Actual salary should be read as actual salary less

tax.

59.4. In case the deceased was self-employed or on a

fixed salary, an addition of 40% of the established

income should be the warrant where the deceased was

below the age of 40 years. An addition of 25% where the

deceased was between the age of 40 to 50 years and 10%

where the deceased was between the age of 50 to 60

years should be regarded as the necessary method of

computation. The established income means the income

minus the tax component.

59.5. For determination of the multiplicand, the

deduction for personal and living expenses, the tribunals

and the courts shall be guided by paragraphs 30 to 32 of

Sarla Verma which we have reproduced hereinbefore.

59.7. The age of the deceased should be the basis for

applying the multiplier.

59.8 Reasonable figures on conventional heads, namely,

loss of estate, loss of consortium and funeral expenses

should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/-

respectively. The aforesaid amounts should be enhanced

at the rate of 10% in every three years.”

18  ( 2026:HHC:18699-

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30. In view of the above considering the age of Som

Nath, at the time of his death which has been proved as 56.5,

15% amount is liable to be added in the income on account of

future prospectus. The monthly gross salary of Som Nath is held

to be Rs.28,892/- per month, adding 15% on account of future

prospects, his salary for the purpose of ascertaining the income

of Som Nath thus, comes to Rs.33,226/-, or to say

Rs.3,98,712/- per annum.

31. In order to ascertain the established income,

tax component is liable to be deducted, out of the said amount,

in terms of tax rates, as applicable, in the financial year 2010-

11. On deducting Rs.1,60,000/-, on account of exempted

annual income, the amount comes to Rs.2,38,712/. After

deducting tax @ 10% with education cess @ 3%, total tax

component, thus, comes to Rs.24,587/-. Thus, after deducting

tax component, the total annual income of Som Nath comes to

Rs.3,98,712-Rs.24,587/-=Rs.3,74,125/-.

32. Keeping in view the number of dependents,

1/3rd of the income is liable to be deducted, towards personal

expenses, had Som Nath, been alive and his contribution

towards his family comes to Rs.2,49,417/- per annum.

19  ( 2026:HHC:18699-

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33. Considering the fact that the age of the

deceased has been proved to be 56.5 and in view of law laid

down by Hon’ble Supreme Court in Sarla Verma versus Delhi

Transport Corporation and Another, (2009) 6 Supreme

Court Cases 121, the learned Tribunal has rightly applied the

multiplier of ‘9’ in the present case, which does not require any

interference.

34. The leaned Tribunal has awarded a sum of

Rs.10,000/- under the head ‘loss of consortium’, Rs.10,000/-

under the head ‘funeral charges’ and Rs.5,000/- under the head

‘loss of estate’. The same is liable to be enhanced in view of the

decision of the Hon’ble Supreme Court in Pranay Sethi’s case

(supra). Relevant paragraphs 59.8 of the judgment is

reproduced, as under:-

59.8. Reasonable figures on conventional

heads, namely, loss of estate, loss of

consortium and funeral expenses should be

Rs. 15,000/-, Rs. 40,000/- and

Rs.15,000/-, respectively. The aforesaid

amounts should be enhanced at the rate of

10% in every three years.”

35. Thus, the loss of contribution comes to

Rs.2,49,417x9=Rs.22,44,753/-.

36. In view of the decision of Hon’ble Supreme Court

in Magma General Insurance Company Limited vs. Nanu

Ram @ Chuhru Ram and others, (2018) 18 SCC 130 , all the

20  ( 2026:HHC:18699-

DB )

claimants are held entitled for the amount under the head loss

of consortium.

37. In addition to this, claimants are also entitled

for the enhanced amount of compensation under conventional

head i.e. loss of estate, loss of consortium and funeral expenses.

The entitlement of the claimants, thus, ascertain as under:-

1.Loss of contribution=Rs.22,44,753/-

2.Loss of estate = Rs.19,500/-(Rs.15,000/-+Rs.4500-)

3.Funeral expenses = Rs.19,500/-(Rs.15,000/-+Rs.4500/-)

4.Loss of consortium= Rs.1,56,000/- (Rs.52,000 x 3)

Total= Rs.24,39,753-(Rs.22,44,753/-+

Rs.19,500/-+Rs.19,500/- +Rs.1,56,000/-)

38. The compensation under the head ‘loss of

consortium’ is given only to claimants No.1 to 3, as the 4

th

claimant Makori Devi has expired, and her name has been

ordered to be deleted, vide order dated 18.07.2024.

39. Thus, the claimants are held entitled for a sum

of Rs.24,39,753/-. The rate of interest, which has been awarded

by the learned Tribunal does not require any interference.

40. In view of the above, the amount of

compensation is ordered to be reduced from 24,55,585/- to

Rs.24,39,753/-

21  ( 2026:HHC:18699-

DB )

41. Consequently, the present appeal is allowed. The

awarded amount is reduced, in the above terms. The claimants

are held entitled for the amount of Rs.24,39,753/-along with

interest @ 7.5%, from the date of filing of the petition. In view of

the death of claimant No.4, Makori Devi, now, the amount of

compensation is ordered to be apportioned against claimants

No.1 to 3, as under:-

Claimants No.1 & 2 (sons) = 20% each.

Claimant No.3 (widow) = 60%

42. The award passed by the learned Tribunal is

modified in the above terms.

43. Memo of costs be prepared.

44. Pending application(s), if any, are also disposed

of. Record be sent back.

(Virender Singh)

Judge

May 20, 2026

(subhash)

Reference cases

Description

Himachal Pradesh High Court Modifies Motor Accident Claim Compensation Award

In a significant ruling concerning Himachal Pradesh High Court jurisprudence on Motor Accident Claim Compensation, the court recently rendered a detailed judgment in FAO No.4108 of 2013, decided on May 20, 2026. This case, involving Oriental Insurance Company Ltd. as the appellant against Radha Krishan & Ors., underscores the meticulous approach of the judiciary in ensuring 'just compensation' to victims' families and is now available for analysis on CaseOn.in.

The appeal challenged an award passed by the Motor Accident Claims Tribunal (MACT), Bilaspur, dated March 16, 2013, which granted Rs.24,55,585/- with 7.5% interest to the dependents of the deceased, Som Nath. Oriental Insurance Company sought a reduction in this amount, raising several points of contention regarding the calculation of compensation.

Understanding the Case: An IRAC Analysis

Issue

In an appeal by Oriental Insurance Company Ltd. challenging a Motor Accident Claims Tribunal award, did the Himachal Pradesh High Court appropriately apply principles of motor accident claim compensation to determine 'just compensation' for the dependents of the deceased Som Nath, particularly concerning the inclusion of future prospects, treatment of various allowances, deduction for personal expenses, and the application of conventional heads, leading to a modified award?

Rule

The High Court's decision was guided by several key Supreme Court precedents:

  • Motor Vehicles Act, 1988: Emphasizes beneficial legislation and the awarding of 'just and equitable compensation'.
  • Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121: Provides guidelines for multiplier application and deduction for personal and living expenses based on the number of dependents.
  • National Insurance Company Limited versus Pranay Sethi and others (2017) 16 SCC 680: Mandates the addition of future prospects to income and provides revised figures for conventional heads, with periodic enhancements.
  • Sushila and others versus Sudhakar and another (2026) Live Law Supreme Court Cases 343: Reiterates that income should be calculated based on the last drawn salary, rejecting the 'split multiplier' approach even for those near retirement.
  • Meenakshi versus Oriental Insurance Company Limited, 2024 ACJ 1647 & National Insurance Company Ltd. v. Nalini, 2024 ACJ 1637 (SC): Clarified that allowances such as house rent, provident fund loan, provident fund, and special allowances should be included in the basic salary for determining the dependency factor.
  • Laxmibai (dead) through Lrs. and another versus Bhagwantbuva (dead) through LRs and others, (2013)4 SCC 97: States that unchallenged evidence of a witness must be relied upon.

Analysis

The appellant, Oriental Insurance Company, primarily sought a reduction in the compensation amount on grounds related to the deceased's age (56.5 years, near superannuation), the appropriate deduction for personal expenses, and the dependency status of the deceased's married sons. The High Court addressed each point meticulously:

Dependency of Sons

The appellant argued that the deceased's sons, being married, might not be considered dependents. However, the High Court rejected this, relying on the unchallenged testimony of the deceased's wife (PW-3), who unequivocally stated that both her sons were unemployed. Citing the principle from Laxmibai (dead), which emphasizes reliance on uncontroverted evidence, the Court upheld the dependency of the sons.

Future Prospects and Split Multiplier

A key contention was the application of a 'split multiplier' given Som Nath's age and proximity to retirement. The appellant argued that his income would significantly decrease post-retirement. The High Court firmly rejected this, referring to the recent Supreme Court decision in Sushila. This ruling clearly states that no deduction should be made from the salary on account of the duration of service left, and the annual income should be calculated based on the last drawn salary. Consequently, following Pranay Sethi, 15% was added for future prospects, applicable for deceased persons aged between 50 and 60 years.

Inclusion of Allowances in Income Calculation

The Court further clarified that various allowances, which are not purely personal but contribute to the family's financial well-being, must be included in the income for calculating dependency. Referencing Meenakshi and Nalini, the Court held that house rent allowance, provident fund loan, provident fund, and special allowances should be added to the basic salary to arrive at the true dependency factor.

Legal professionals often navigate complex calculations in such cases, and this is where CaseOn.in's 2-minute audio briefs prove invaluable, assisting in quickly grasping the nuances of these specific rulings and their implications for compensation assessment.

Final Income and Compensation Calculation

Based on the evidence, the monthly gross salary of Som Nath was determined to be Rs.28,892/-. With a 15% addition for future prospects (as per his age group), his monthly income for dependency purposes rose to Rs.33,226/-, totaling Rs.3,98,712/- annually. After deducting the applicable tax component (Rs.24,587/-) for the financial year 2010-11, the net annual income for dependency was established at Rs.3,74,125/-.

Given the number of dependents (widow and two sons, after the mother's demise during the appeal), 1/3rd of the income was deducted for personal expenses, bringing the annual contribution to the family to Rs.2,49,417/-. A multiplier of '9' was applied, aligning with the deceased's age as per Sarla Verma, resulting in a loss of contribution amounting to Rs.22,44,753/-.

Conventional Heads Enhancement

The High Court enhanced the awards under conventional heads as per Pranay Sethi guidelines, which stipulate a 10% enhancement every three years. Accordingly, Loss of Estate and Funeral Expenses were increased from Rs.15,000/- to Rs.19,500/- each, and Loss of Consortium (awarded per claimant) was increased from Rs.40,000/- to Rs.52,000/-. With three eligible claimants (the widow and two sons), the total for loss of consortium was Rs.1,56,000/-.

After this detailed recalculation, the total compensation was slightly reduced from the MACT's awarded sum of Rs.24,55,585/- to Rs.24,39,753/-, with interest at 7.5% per annum. The final amount was apportioned among the claimants: 60% to the widow and 20% to each son.

Conclusion

The Himachal Pradesh High Court, in this instance, meticulously applied the principles laid down by the Supreme Court to ensure that the compensation awarded was 'just and equitable'. While the appeal by Oriental Insurance Company Ltd. was technically 'allowed' for recalculation, the Court largely rejected the appellant's primary arguments for a drastic reduction based on the split multiplier and non-dependency of sons. Instead, it reaffirmed the inclusion of various allowances, future prospects, and enhanced conventional heads, leading to a minor adjustment in the total award. This judgment serves as a robust re-affirmation of the claimant-centric approach mandated by the Motor Vehicles Act.

Why This Judgment is an Important Read for Lawyers and Students

This ruling is crucial for legal professionals and students for several reasons:

  • Clarity on Future Prospects: It reinforces the rejection of the 'split multiplier' concept, providing clarity on how to calculate future prospects for deceased individuals nearing retirement, aligning with the latest Supreme Court pronouncements.
  • Scope of 'Income': The judgment provides a comprehensive understanding of what constitutes 'income' for dependency calculations, specifically enumerating various allowances that must be included.
  • Application of Conventional Heads: It illustrates the correct application and periodic enhancement of conventional heads like loss of estate, funeral expenses, and loss of consortium, as guided by leading Supreme Court cases.
  • Dependency of Adult Children: The case offers valuable insight into establishing the dependency of adult (and married) children, emphasizing the importance of uncontroverted evidence.
  • Practical Calculation: Lawyers dealing with motor accident claims can refer to the detailed calculation methodology adopted by the High Court to guide their submissions and arguments.

Disclaimer

All information provided in this article is for informational purposes only and does not constitute legal advice. Readers are advised to consult with a qualified legal professional for advice on specific legal matters.

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