MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 1 of 27

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Reserved on : 28

th

April 2026

Pronounced on: 26

th

May 2026

Uploaded on : 29

th

May 2026

+ MAC.APP. 1181/2014 & CM APPL. 21214/2014

RELIANCE GENERAL INSURANCE CO LTD .....Appellant

Through: Mr. A.K. Soni, Adv ocate.

(through VC)

versus

G C AGGARWAL & ORS .....Respondents

Through: Mr. S.N. Parashar, Mr. Ritik

Singh, Advocates.

+ MAC.APP. 535/2016

G C AGGARWAL & ORS .....Appellants

Through: Mr. S.N. Parashar, Mr. Ritik

Singh, Advocates.

versus

SOMVEER PAL & ORS (RELIANCE GENERAI. INSURANCE

CO LTD). .....Respondents

Through: Mr. A.K. Soni, Adv ocates.

(through VC) for Respondent

no.3

CORAM:

HON'BLE MR. JUSTICE ANISH DAYAL

JUDGMENT

ANISH DAYAL, J

1. These are cross appeals- MAC APP. 1181/2014 filed by Insurance

Company and MAC APP. 535/2016 filed by claimants in respect of the

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 2 of 27

impugned award dated 18

th

October 2014 passed by Motor Accidents

Claims Tribunal [‘MACT/Tribunal’], Dwarka Courts, New Delhi,

whereby, Rs. l,04,09,103/- alongwith interest at the rate of 7.5% per

annum was awarded to the legal representative (‘LRs’) of

deceased/claimants. While the Insurance Company seeks reduction of

compensation, claimants seek enhancement.

The Incident

2. On 17

th

June 2011, at about 12 a.m., Ms. Iti Aggarwal (hereinafter,

‘deceased’) was travelling near Naraina flyover in a Tata Swift car

bearing registration no. DL-8CQ-4307. She was allegedly hit by a Tata

Ace car bearing registration no. DL-1LP-1310 (hereinafter, ‘offending

vehicle’), being driven in a rash and negligent manner at a high speed.

The deceased was taken to Jai Prakash Narayan Apex Trauma Centre,

AIIMS, New Delhi, where she was declared as ‘brought dead’. FIR No.

111/11 was registered at P.S. Naraina. At the time of the accident,

deceased was 27 years of age and was working as a consultant with M/s.

Xebia IT Architects India Pvt. Ltd.

3. Claim petition was filed by parents of deceased (hereinafter,

claimants’) seeking compensation. The offending vehicle was being

driven by Mr. Somveer Pal (‘driver’), owned by Mr. Dharam Pal

(‘owner’) and insured with Reliance General Insurance Company Ltd.

(‘Insurance Company’).

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 3 of 27

Impugned Award

4. G.C. Agarwal/father of deceased examined himself as PW-1, Om

Prakash, Income Tax Officer was examined as PW-2, Pawan Kohli,

Assistant Manager, Administration, M/s Xebia IT Architects India Pvt.

Ltd., Gurgaon was examined as PW-3, Jayant Yadav, Accountant was

examined as PW-4. No eyewitnesses were examined.

5. On the issue of negligence, reliance was placed upon chargesheet

(Ex. PW 1/5) FIR No. 111/11 (Ex. PW 1/6), site plan (Ex. PW 1/7),

arrest memo (Ex. PW 1/8), postmortem report (Ex. PW 1/9), mechanical

inspection report (Ex. PW 1/10), which formed a part of the Detailed

Accident Report (‘DAR’).

6. Mechanical Inspection Reports showed that the left side of

deceased’s vehicle and right side of the offending vehicle was damaged.

Therefore, on the principle of preponderance of probabilities, the

Tribunal held that the accident was caused due to the negligence of the

driver and no contributory negligence was made out on the part of

deceased.

7. As regards the quantum of compensation, the Tribunal relied upon

the statements of PW-3 and PW-4 to conclude that the deceased was

working as a Consultant with M/s Xebia IT Architects India Pvt. Ltd. and

drawing a monthly salary of Rs. 80,829/-. After deducting tax deducted

at source (‘TDS’) and transport allowance, her monthly income was

determined to be Rs. 67,151/-. Multiplier was taken as 17, considering

that she was 27 years old at the time of accident. Future prospects were

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 4 of 27

calculated at 50% and ½ was deducted towards personal and living

expenses.

8. Compensation awarded by the Tribunal is tabulated as under:

1) Loss Of Dependency = Rs. 1,02,74,103/-

2) Loss Of Love and Affection = Rs. 1,00,000/-

3) Funeral Expenses = Rs. 25,000/-

4) Loss Of Estate = Rs. 10,000/-

-------------------

TOTAL Rs.1,04,09,103/-

-------------------

Submissions on behalf of Insurance Company

9. Mr. A.K. Soni¸ counsel appearing on behalf of Insurance

Company, has challenged the impugned award on four counts.

10. First, the Tribunal has wrongly assessed the issue of negligence by

solely relying upon the FIR and chargesheet. No eyewitnesses were

examined by the claimants. Further, the offending vehicle had been

found 60 feet away from the place of accident. Therefore, the inquiry

under Section 166 of Motor Vehicles Act, 1988 (‘MV Act’) had not been

conducted appropriately.

11. Second¸ on the quantum of compensation, counsel for Insurance

Company contended that the claimants had already received Rs. 20 lakhs

on account of Group Accident Insurance Company Scheme provided by

the employer of deceased and this amount should have been deducted

from the final amount of compensation. Reliance was placed upon the

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 5 of 27

decision of this Court in Noorjadi Khatoon and Another v. Pinku Yadav

& Others, 2015 SCC Online Del 9949 to contend that amount paid under

the group accident scheme is liable to be deducted from the amount of

compensation.

12. Third, income tax payable as per the applicable slab has not been

deducted by the Tribunal and only TDS has been deducted while

calculating monthly income of deceased. Therefore, the income tax

applicable would have been 30% and ought to be deducted.

13. Fourth, future prospects have been wrongly awarded at 50%,

considering that the deceased was working in a private job and not a

permanent job. Therefore, future prospects should be calculated at 40%.

Submissions on behalf of claimants

14. Mr. S.N. Parashar, counsel for claimants, has primarily raised two

grounds for enhancement of compensation.

15. First, transport allowance has been wrongly deducted by the

Tribunal and forms a part of the benchmark income. Only income tax

paid is liable to be deducted from the total income. Allowances are fixed

in nature and are not liable to be deducted.

16. Second, interest has been awarded at 7.5% and should be

increased to 9%.

17. In response to the issue of deduction towards group accident

scheme, Mr. S.N. Parashar, counsel for claimants, stated that the benefits

received from insurance policy cannot be deducted from the

compensation awarded. Reliance in this regard was placed on the order

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 6 of 27

of Supreme Court passed on 8

th

April 2025 in Pramod Kumar Tiwari v

Premlal Gautam & Ors. SLP(C) No. 26620/2023 and KSRTC v. P.

Chandramouli, 2026 SCC OnLine SC 375 to contend that amounts

received by dependents of deceased under group insurance scheme are

not liable to deducted from compensation awarded under the MV Act.

Analysis

Negligence

18. In order to assess the claim of negligence, it is imperative to

examine the Mechanical Inspection Report (‘MIR’) prepared for both the

vehicles. MIR of the offending vehicle recorded damage on the front

right side, along with dents on the front left side door. MIR of the Swift

car on the other hand, recorded that left side of the body of the car was

damaged, along with damages on the front left side and dent on the rear

right side. MIR also records that, considering the height of offending

vehicle from the ground, it is possible that the dents on the right side of

the Swift car, driven by deceased, were caused by left side of the

offending vehicle.

19. This fact is also corroborated by the positioning of the Swift car

after the accident, which has been recorded in the FIR and charge sheet

prepared after receiving the PCR call. After reaching the spot of accident,

photographs of the accident site were taken by SI Sandeep Yadav and no

eyewitnesses were found on the spot.

20. The DD Entry records that the offending vehicle was found to be

parked near the situs of the accident and upon inspection, damage on the

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 7 of 27

right side light and dents/scratches on the left side portion of the car were

found. Driver of the vehicle was not present and the vehicle was taken

into police possession for further investigation.

21. MACT recorded its finding on negligence by placing reliance on

the MIRs, as well as, the filing of FIR and chargesheet and recorded as

under:

“12. From two reports it could be seen that left side of

the car has been heavily damaged and the right side of

the offending vehicle was damaged. The photographs

placed on record also supports this fact. The logical

inference is that the offending vehicle must have hit the

left side of the car with its right side and the impact

was so heavy that the car was heavily damaged and the

occupants of the car Iti Agarwal received fatal injuries.

Therefore, it is believable that the accident was caused

due to rash and negligent driving of the offending

vehicle by Somveer. There appears to be no

contributory negligence on the part of Iti Agarwal as

nothing on record has come which could suggest so.

13. As far as present case is concerned it is evident that

respondent no. 1 was arrested by the Police and he had

to face criminal proceedings. This supports and

corroborates the case of claimants.”

(emphasis added)

22. In this regard, reliance may be placed upon decision of this Court

in National Insurance Company Ltd. v. Shehnaj Begum & Ors.

2026:DHC:3169 which applied the doctrine of res ipsa loquitor which

states that the burden to rebut the inference of negligence shifts on the

defendant. Proceedings before the Tribunal are in the nature of an

inquiry, therefore, strict rules of procedure or evidence do not apply. The

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 8 of 27

assessment of negligence has to be conducted on the test of

preponderance of probabilities. Relevant observations of the Court are

extracted as under:

“Summarizing

38. From the above discussion relating to the nature of

inquiry before the Tribunal, the operation of the

doctrine of res ipsa loquitur, and the applicable

standard of proof, three aspects emerge clearly.

39. First, that the proceedings before the Motor

Accident Claims Tribunal are in nature of an inquiry

and are not hemmed in by rules of procedure or

evidence. The Supreme Court in Shila Datta (supra)

[passages extracted in paragraph 20 (a) above], has

elaborated on this aspect. Essentially, a claim under

Section 165 of the MV Act, is neither a suit nor an

adversarial lis.

40. Tribunal holds an inquiry and makes an award to

determine compensation, which ought to be just and

reasonable. The procedure to be followed is

summarised in the best discretion of the Tribunal. It

has the power under Section 169 of MV Act to summon

persons possessing special knowledge of the matters

relevant to the inquiry.

41. In Anita Sharma (supra), the Supreme Court

emphasised that fault may not be found merely because

Tribunals do not examine some of the best

eyewitnesses, as in a criminal trial, but should do their

best to analyse the material placed on record by the

parties.

42. Having clearly sketched the contours of the

procedure undertaken by a Tribunal, it brings us to the

second issue, which is determination of negligence.

The nature of the accident and the basic facts

surrounding the same are presented before the

Tribunal in the form of a DAR (Detailed Accident

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 9 of 27

Report), or through an FIR, or a recording in a police

diary, along with the claim for compensation. In order

to arrive at an assessment of negligence and, therefore,

consequential liability in tort law, the principle of res

ipsa loquitur, particularly in accident cases, is often

brought into play.

43. Doctrine of res ipsa loquitur constitutes an

exception to the general rule that the burden of proving

negligence lies upon the claimant. The facts, “tell its

own story” and “speak for itself”. The fact of the

accident itself sometimes constitutes evidence of

negligence. The principal function of the maxim is to

prevent injustice, that would be caused to a plaintiff

who would otherwise be compelled to prove the precise

cause of the accident and responsibility of the

defendant, when the facts are unknown to plaintiff but

lie only within the knowledge of defendant. The burden

then shifts to the defendant, who can, by leading

evidence, rebut the inference drawn by the Court based

on the doctrine.

…

45. Therefore, for application of the principle, it must

be shown that the offending vehicle was under the

management of the defendant and that the accident was

such that, in the ordinary course of things, it would not

have happened if those who were in management had

used proper care. Having reached a reasonable

inference based on the facts of the accident and being

presented with a defence raised by defendants that they

exercised care to avert foreseeable harm, the issue

before the Tribunal would be how to balance the two

aspects and what parameter is to be applied in

measuring this balance, or in assessing which side the

scales tilt.

46. This brings us to the third aspect, which is the test

to be applied. It is well settled that the test or the

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 10 of 27

burden of proof which applies is not that of beyond a

reasonable doubt (as in criminal cases), but on the test

of preponderance of probabilities.”

(emphasis added)

23. As regards reliance placed by the Tribunal on criminal proceedings

to arrive at the finding of negligence, this Court in Oriental Insurance

Co. v. Sunita Singh 2026:DHC:3190 relied upon the decision of

Supreme Court in Ranjeet v. Abdul Kayam Neb, 2025 SCC OnLine SC

497 and Meera Bai & Ors. v. ICICI Lombard General Insurance Co.

Ltd. & Anr. 2025 INSC 600 where the Supreme Court held that in cases

where there are no eye-witness and FIR having been lodged and

chargesheet filed, there cannot be a finding that negligence was not

established. Relevant finding of the Court in Sunita (supra) is extracted

as under:

“49. Therefore, the Court is of the opinion that, in this

process, the Tribunal can rely upon testimonies made

in a Criminal Proceeding, which has led to filing of a

charge sheet, which has not been set aside or

protested, to be persuasive data to apply the test of

preponderance of probabilities.”

(emphasis added)

24. Moreover, upon perusal of the order of the Metropolitan

Magistrate, Dwarka which forms a part of the TCR, it is apparent that the

driver admitted his guilt for offence under Section 279/304-A of Indian

Penal Code, 1860 (‘IPC’), therefore, leading to a sentence of plea

bargaining at the request of the driver (accused therein).

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 11 of 27

25. Accordingly, on the basis of the above discussion, the Tribunal’s

finding on holding the driver of offending vehicle liable for negligence

does not warrant interference and is upheld.

Deductions

26. Mr. A.K. Soni, counsel for Insurance Company, contended that the

claimants had received Rs. 20 lakhs on account of Group Accident

Insurance Scheme which ought to have been deducted by the Tribunal

while computing the compensation amount. Reliance was placed on the

decision of this Court in Noorjadi Khatoon (supra) wherein it was held

that compensation payable under Group Personal Accident Policy is

liable to be deducted from the amount of compensation payable.

27. On the other hand, Mr. S.N. Parashar, counsel for claimants, has

drawn attention of this Court to order of Supreme Court passed on 8th

April 2025 in Pramod Kumar Tiwari (supra) and P. Chandramouli

(supra) to contend that benefits received under Group Accident

Insurance Scheme shall not be deducted while computing compensation.

28. Considering that the issue of Group Accident Insurance Scheme

has been discussed by the Supreme Court recently, it would be apposite

to draw reference to these decisions.

29. The Supreme Court in Pramod Kumar Tiwari (supra) was dealing

with the issue of deduction of pension amount. Placing reliance upon the

decision of Supreme Court in Sebastiani Lakra & Ors. v. National

Insurance Company Limited & Anr. (2019) 17 SCC 465, wherein,

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 12 of 27

deductions on account of insurance or pensionary benefits were not

deducted, the Court held as under:

“6. Later, in a recent judgment in the case of

‘Sebastiani Lakra and others Vs. National Insurance

Company Limited and Another, (2019) 17 SCC 465’,

this Court observed that deductions cannot not be

allowed from amount of compensation either on

account of insurance or pensionary benefits or gratuity

or grant of employment to kith and kin of the deceased.

The Court in para 12 noted as thus –

“12. The law is well settled that deductions

cannot be allowed from the amount of

compensation either on account of insurance, or

on account of pensionary benefits or gratuity or

grant of employment to a kin of the deceased. The

main reason is that all these amounts are earned

by the deceased on account of contractual

relations entered into by him with others. It

cannot be said that these amounts accrued to the

dependents or the legal heirs of the deceased on

account of his death in a motor vehicle accident.

The claimants/dependents are entitled to “just

compensation” under the Motor Vehicles Act as a

result of the death of the deceased in a motor

vehicle accident. Therefore, the natural corollary

is that the advantage which accrues to the estate

of the deceased or to his dependents as a result of

some contract or act which the deceased

performed in his lifetime cannot be said to be the

outcome or result of the death of the deceased

even though these amounts may go into the hands

of the dependents only after his death.”

7. In view of the settled proposition of law, the question

posed above is answered in negative. Hence, order

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 13 of 27

impugned passed by High Court affirming the findings

recorded by the MACT is hereby set-aside.”

(emphasis added)

30. The Supreme Court in P. Chandramouli (supra) was addressing

the issue of deductions under employee group insurance. While the

Tribunal had deducted amount towards group insurance, same had been

modified by the High Court to not be deducted. In adjudicating the

appeal, the Supreme Court relied upon decisions in Helen C. Rebello v.

Maharashtra State Road Transport Corporation (1999) 1 SCC 90 and

United India Insurance Co. Ltd. v. Patricia Jean Mahajan (2002) 6

SCC 281 whereby, the Court held that, any amount received or

receivable not only on account of the accidental death, which would have

accrued to the claimant even otherwise, could not be construed as

“pecuniary advantage”, liable for deduction. Reliance was also placed

upon Sebastiani Lakra (supra) and conclusions of the Court are

extracted as under:

“16. In view of the foregoing discussion, and in light of

the settled principles laid down by this Court in Helen

C. Rebello (Supra), United India Insurance Co. Ltd.

(supra) and Sebastiani Lakra (Supra), It is clear that

amounts received by the dependents of the deceased

under employer-provided group insurance or other

contractual or social security benefits cannot be

treated as “pecuniary advantages” liable to be

deducted from compensation awarded under the Motor

Vehicles Act, 1988. Such benefits arise out of an

independent contractual relationship and lack the

requisite nexus with the statutory compensation

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 14 of 27

payable for death in a motor vehicle accident. The

principle of balancing loss and gain cannot therefore

be invoked to diminish the statutory entitlement of the

claimants to just compensation.”

(emphasis added)

31. In order to canvass the issue of deduction under Group Insurance

Policy, reliance may be placed upon the decision of Madras High Court

in R. Suganya v. B. Suresh, 2021 SCC OnLine Mad 17980 where the

Court has comprehensively discussed the difference between the

statutory nature of compensation under the Motor Vehicles Act, 1988

(‘MV Act’) and the contractual liability under insurance schemes. The

Court traversed through a line of judgments following Helen C. Rebello

(supra) and Patricia (supra). Relevant observations of the Court are

extracted as under:

“9. In Vimal Kanwar v. Kishore Dan, (2013) 7 SCC

476 : (2013) 3 SCC (Civ) 564 : (2013) 3 SCC (Cri) 583

: (2013) 354 ITR 95 : (2013) 1 TN MAC 641 (SC), the

Honourable Supreme Court observed as under:

“21. “Compassionate appointment” can be one of

the conditions of service of an employee, if a

Scheme to that effect is framed by the Employer.

In case, the employee dies in harness i.e. while in

service leaving behind the dependants, one of the

dependants may request for Compassionate

appointment to maintain the family of the

deceased employee who dies in harness. This

cannot be stated to be an advantage receivable by

the heirs on account of one's death and have no

correlation with the amount receivable under a

statute occasioned on account of accidental death.

Compassionate appointment may have nexus with

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 15 of 27

the death of an employee while in service but it is

not necessary that it should have a correlation

with the accidental death. An employee dies in

harness even in normal course, due to illness and

to maintain the family of the deceased one of the

dependants may be entitled for Compassionate

appointment but that cannot be termed as

“Pecuniary advantage” that comes under the

periphery of the Motor Vehicles Act and any

amount received on such appointment is not liable

for deduction for determination of Compensation

under the Motor Vehicles Act.”

…

12. In the present case, there was only a Personal

Accident Policy (Group). The aforesaid Policy cannot

be compared with the Rules framed under Article 309

of the Constitution of India Reliance General

Insurance Co. Ltd. v. Shashi Sharma, (2016) 9 SCC

627 : (2016) 3 SCC (Cri) 713 : (2016) 2 TN MAC 721

(SC). It was a Private Contract between the deceased

who was the insured person and the beneficiaries were

his dependents. In the case of Group Insurance, there

is the payment of Premium and the Compensation is

not automatic. Merely because the deceased may have

had such a Policy covering the risk by itself will not

been that the amount payable under the provisions of

the Motor Vehicles Act, 1988 has to be deducted. A

deceased may insure to protect himself and his family

from uncertainties of life to save his family from

penury by taking different Insurance Policies.

However, Compensation under such Policies, which

liabilities subsist as long as the deceased paid

Premium and under a private arrangement/Contract

with the Insurer cannot be deducted. The Hon'ble

Supreme Court in Helen C. Rebello (Mrs.) v.

Maharashtra State Road Transport Corporation,

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 16 of 27

(1999) 1 SCC 90 : 1999 SCC (Cri) 197 : (1999) 95

Comp Cas 509 : AIR 1999 SC 3191 recognised this in

Para 35 which has been extracted above. The insured

(the deceased) contributes his own money for which he

receives the amount which has no correlation to the

Compensation computed as against the tortfeasor for

his negligence on account of the accident. As

aforesaid, the amount receivable as Compensation

under the Act is on account of the injury or death

without making any contribution towards it, then how

can the fruits of an amount received through

contributions of the insured be deducted out of the

amount receivable under the Motor Vehicles Act. The

amount under this Act he receives without any

contribution. As we have said, the Compensation

payable under the Motor Vehicles Act is statutory

while the amount receivable under the Life Insurance

Policy is contractual.

13. Therefore, there cannot be any comparison. As

mentioned earlier, if an Insurance Company is allowed

to make such deductions from the Compensation

payable, the very purpose of providing Insurance

under Section 147 of the Motor Vehicles Act, 1988

would be defeated/rendered otiose. Section 168 of the

Motor Vehicles Act, 1988 has also not provided for

such deductions. Therefore, I am inclined to allow this

appeal as prayed for.”

(emphasis added)

32. Accordingly, in view of the above discussion, considering the

binding precedent of the Supreme Court, this Court is not inclined to

deduct Rs. 20 lakhs towards Group Accident Insurance Policy as

received by the claimants.

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 17 of 27

33. MACT has dealt with the issue of deductions in paragraph 20 of

the impugned award. Relying upon the statement of PW-3, Sh. Pawan

Kumar, Assistant Manager and PW-4, Jayant Yadav, Accountant, along

with Ex. PW3/A, which is an offer of employment given by Xebia IT

Architects India Private Limited whereby, the annual package of Rs.

10,50,600/- was offered to deceased. Reliance was also placed upon Ex.

PW3/B, which is the last salary slip drawn by deceased, certified by

Senior Manager- HR, whereby, her net salary, after deduction is noted as

Rs. 69,350/-. The MACT assessed her monthly income at Rs. 67,151/-

after deducting Rs. 7,297/- towards tax deductible source (‘TDS’) and

Rs. 6,381/- towards transport allowance.

34. Mr. S.N. Parashar, counsel for claimants, contended that transport

allowance of Rs. 6,381/- has been wrongly deducted by the Tribunal

while ascertaining the monthly income of deceased. In this regard, it

would be apposite to consider decisions of the Supreme Court on

deduction of allowances from the monthly income.

35. The connotation of ‘income’ for different purposes has been

discussed by the Supreme Court in National Insurance Co. Ltd. v.

Indira Srivastava and Others (2008) 2 SCC 763, where the Court held

that income is not limited to the pay packet carried home by an employee

but also other perks beneficial to the members of the entire family.

Conveyance allowance forms a part of income. Relevant paragraphs are

extracted as under:

“9. The term “income” has different connotations for

different purposes. A court of law, having regard to the

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 18 of 27

change in societal conditions must consider the

question not only having regard to pay-packet the

employee carries home at the end of the month but also

other perks which are beneficial to the members of the

entire family. Loss caused to the family on a death of a

near and dear one can hardly be compensated on

monetary terms.

…

17. This Court in Asha [(2008) 2 SCC 774] did not

address itself the questions raised before us. It does not

appear that any precedent was noticed nor the term

“just compensation” was considered in the light of the

changing societal condition as also the perks which are

paid to the employee which may or may not attract

income tax or any other tax. What would be “just

compensation” must be determined having regard to

the facts and circumstances of each case. The basis for

considering the entire pay-packet is what the

dependants have lost due to death of the deceased. It is

in the nature of compensation for future loss towards

the family income.

…

19. 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

contradistinguished 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.”

(emphasis added)

36. On the issue of transport allowance, reliance may be placed upon

Meenakshi v Oriental Insurance Company, (2024) SCC OnLine SC

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 19 of 27

1872, where allowances under head of transport allowance, house rent

allowance, provident fund, special allowances were to be added by

considering benchmark income. While considering addition of house rent

allowance to the income of deceased, the Supreme Court observed as

under:

“7. As per the service conditions and pay scales of the

Government officials, the house rent allowance is

payable between 8% and 30% of the basic salary.

Therefore, the house rent allowance is paid in a fixed

ratio proportionate to the basic salary. With the

increase in basic salary, the quantum of house rent

allowance also increases proportionately. The flexible

benefit plan and Company contribution admissible to a

person employed in private service would also not

remain static and are bound to increase with the length

of service. The only bone of contention in this appeal is

whether perquisites/allowances referred to above

should also be taken into account while applying the

future prospects. Therefore, entirely excluding these

components from the salary of the employee for

applying the principle of future prospects would be

unjustified. Consequently, we have no hesitation in

holding that these allowances cannot be ignored and

have to be added to the salary when assessing the rise

in income due to future prospects of a person employed

in private service. This Court has carved out a rational

formula to fix the percentage of rise of income by

future prospects. In the case at hand, the said

percentage has been fixed at 50% by both, the Accident

Claims Tribunal as well as the Division Bench of the

High Court. In view of the discussion made supra, the

perquisites/allowances have to be added to the basic

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 20 of 27

salary of the deceased before applying the rise by

future prospects.

(emphasis added)

37. The Supreme Court in National Insurance Company Ltd. v.

Nalini 2024 SCC OnLine SC 2252 relying upon the decision of the

Court in Vijay Kumar Rastogi v. U.P. SRTC, 2018 SCC OnLine SC 193

considered the issue of allowances and 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. Relevant finding of the Court is extracted as

under:

“3. It is apparent from the observations made in the

aforesaid decision that the emoluments and the benefits

accruing to the deceased under various heads for the

purposes of computation of loss of income, which are

described by learned counsel for the petitioner-

Insurance Company as personal to him to arrive at the

dependency factor, ought to be included irrespective of

whether they are taxable or not.”

(emphasis added)

38. Therefore, in view of the above decisions, transport allowance

shall be included while computing the monthly income of deceased.

39. Another issue regarding deduction of income tax applicable in the

relevant assessment year was raised by counsel for Insurance Company.

40. The issue of deduction towards income tax has been discussed by

the Supreme Court in Manorma Sinha & Anr. v. The Divisional

Manager, Oriental Insurance Company Ltd & Anr. 2025 SCC OnLine

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 21 of 27

SC 2241 whereby the Court held that deduction towards income tax

should be at such rate which the annual income may be subjected to in

the relevant year. Relevant observations of the Court are extracted as

under:

“13. As regards deduction towards income tax is

concerned, same is permissible in view of the decision

of this Court in Ranjana Prakash (supra). However, in

our view, deduction towards income tax should be at

such rate which the annual income may be subjected to

in the relevant year. It is not demonstrated that the

allowances received were exempt from income tax.

Even the nature of allowances has not been disclosed

to enable us to determine whether they are exempt

from tax. Therefore, we include them in the annual

income and compute the annual income as Rs.

6,40,400 (approximately) for the purposes of tax. The

tax payable in the relevant year (i.e., with reference to

the date of death) would be Rs. 62,080 (Tax: Nil up to

Rs. 1.60 lacs; Rs. 34,000 @ 10% up to Rs. 5.00 lacs;

and Rs. 28,080 @ 20% up to Rs. 6,40,400). Thus, net

annual income from salary after deduction of income

tax, with the allowances, would be Rs. 5,78,324.”

(emphasis added)

41. It is to be noted that in the case before us, the Tribunal had

deducted Rs. 7,297/- in the form of TDS. In this regard, reliance may be

placed upon Vimal Kanwar and Ors. v. Kishore Den and Ors, (2013) 7

SCC 476 where reliance was placed upon Sarla Verma v. DTC, (2009) 6

SCC 121 and the Court observed as under:

“23. In Sarla Verma [Sarla Verma v. DTC, (2009) 6

SCC 121: (2009) 2 SCC (Civ) 770: (2009) 2 SCC (Cri)

1002] this Court held: (SCC p. 133, para 20)

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 22 of 27

“20. Generally, the actual income of the deceased

less income tax should be the starting point for

calculating the compensation.”

This Court further observed that: (SCC p. 134, para

24)

“24. … Where the annual income is in taxable

range, the words ‘actual salary’ should be read as

‘actual salary less tax’.”

Therefore, it is clear that if the annual income comes

within the taxable range, income tax is required to be

deducted for determination of the actual salary. But

while deducting income tax from the salary, it is

necessary to notice the nature of the income of the

victim. If the victim is receiving income chargeable

under the head “salaries” one should keep in mind

that under Section 192(1) of the Income Tax Act, 1961

any person responsible for paying any income

chargeable under the head “salaries” shall at the time

of payment, deduct income tax on estimated income of

the employee from “salaries” for that financial year.

Such deduction is commonly known as tax deducted at

source (“TDS”, for short). When the employer fails in

default to deduct the TDS from the employee's salary,

as it is his duty to deduct the TDS, then the penalty for

non-deduction of TDS is prescribed under Section

201(1-A) of the Income Tax Act, 1961. Therefore, in

case the income of the victim is only from “salary”, the

presumption would be that the employer under Section

192(1) of the Income Tax Act, 1961 has deducted the

tax at source from the employee's salary. In case if an

objection is raised by any party, the objector is

required to prove by producing evidence such as LPC

to suggest that the employer failed to deduct the TDS

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 23 of 27

from the salary of the employee. However, there can be

cases where the victim is not a salaried person i.e. his

income is from sources other than salary, and the

annual income falls within taxable range, in such

cases, if any objection as to deduction of tax is made by

a party then the claimant is required to prove that the

victim has already paid income tax and no further tax

has to be deducted from the income.”

(emphasis added)

42. The Tribunal arrived at the benchmark income after deduction of

TDS, subsequently, any further deduction towards income tax would

result in double taxation of the same income. Therefore, the argument

raised by counsel for Insurance Company is hereby, rejected.

Future Prospects

43. Mr. A.K. Soni, counsel for Insurance Company, contended that

future prospects ought to have been awarded at 40%, instead of 50%

considering that the deceased was working in a private job.

44. Mr. Parashar, counsel for claimants, in support of the award of

50% towards future prospects, relied upon decision of this Court in

National Insurance Co. Ltd. v. Laxmi Bisht & Ors. 2026:DHC:2238

where the Court considered the issue of inclusion of increment in the

benchmark income. In that case, the deceased was employed as a lecturer

with Lovely Professional University (LPU) and the Tribunal had

considered his benchmark income after including increments. Upholding

the finding on benchmark income and award of future prospects, this

Court relied upon documents proved by witness from the employer

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 24 of 27

institution, which proved that that the deceased was receiving increments

in his salary.

45. Reliance on the above decision, however, may not come to the aid

of claimants, considering that the deceased was employed as a

‘Consultant’ and had only begun working from 12

th

April onwards, as

stated in her employment letter dated 19

th

February, issued by her

employer.

46. While her compensation was revised in May 2011 and her gross

annual salary was increased to Rs. 11,00,000/-, with further information

that her next appraisal will be due on 31

st

March 2012, the same shall not

accrue to be promotion or an increment as discussed in Sarla Verma

(supra) and National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16

SCC 680.

47. Therefore, future prospects shall be considered at 40% and the

submission made by counsel for claimants is rejected.

Rate of interest

48. Mr. S.N. Parashar, counsel for claimants, raised an additional

ground that the rate of interest should be enhanced from 7.5% to 9%,

since it was highly inadequate.

49. The Supreme Court in Kaushnuma Begum & Ors. v. New India

Assurance Co. Ltd. (2001) 2 SCC 9, stated that the standard rates of

fixed deposit interest provided by the nationalized banks as per Reserve

Bank of India ('RBI') policy have to be followed. In this regard, reliance

may be placed upon the fixed deposit rates as per published by RBI,

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 25 of 27

which states that the interest rate for 2011 was 8.5%. Therefore, the

Court is inclined to increase the interest rate to 8.5%.

Alignment as per Pranay Sethi

50. As regards, compensation awarded under other heads, alignment

will have to be made as per Pranay Sethi (supra).

51. Rs. 1,00,000/- has been awarded on account of loss of love and

affection which shall stand deleted in view of the decision in United

India Insurance Co. Ltd. v. Satinder Kaur (2021) 11 SCC 780, since the

same has been subsumed under the head of loss of consortium.

52. The Tribunal has not awarded compensation under the head of loss

of consortium, therefore, in view of the principles enunciated in Pranay

Sethi (supra), same shall be awarded at Rs. 80,000/- (Rs. 40,000 x 2),

considering there were two dependents.

53. Loss of estate and funeral expenses shall be awarded at Rs.

15,000/- each, instead of Rs. 10,000/- and Rs. 25,000/-, respectively.

54. Therefore, the revised computation is as under:

S.

No.

Heads Awarded by the

Tribunal

Awarded by this

Court

1 Income of deceased (A) Rs. 8,05,812/- Rs. 8,82,384/-

2 Add: Future Prospects (B) Rs. 4,02,906/- Rs. 3,52,954/-

3 Less: Personal expenses of

deceased (C)

Rs. 6,04,359/- Rs. 6,17,669/-

4 Loss of dependency (A+B)-C=D Rs. 6,04,359/- Rs. 6,17,669/-

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 26 of 27

5 Multiplier (E) 17 17

6 Total loss of dependency (D x

E) = (F)

Rs. 1,02,74,103/- Rs. 1,05,00,373/-

7 Compensation for loss of

consortium (G)

Nil Rs. 1,20,000/-

8 Compensation for loss of love

and affection (H)

Rs. 1,00,000/- Nil

9 Compensation for loss of estate

(I)

Rs. 10,000/- Rs. 15,000/-

10 Compensation towards funeral

expenses (J)

Rs. 25,000/- Rs. 15,000/-

11 Total compensation

(F+G+H+I+J)= K

Rs. 1,04,09,103/- Rs. 1,06,50,373/-

12 Rate of Interest Awarded 7.5% 8.5%

Directions

55. For the aforesaid reasons, compensation has been enhanced by

Rs.2,41,270/- (“enhanced amount”).

56. It is therefore directed as under:

i. Enhanced amount along with 8.5% interest per annum from

the date of filing the petition shall be deposited before the

Registrar General of this Court within a period of six weeks. This

amount shall be released to the claimants as lumpsum.

ii. By order dated 23

rd

December 2014, this Court had directed

the Insurance Company to deposit 40% of the originally awarded

MAC.APP. 1181/2014 & MAC.APP. 535/2016 Page 27 of 27

amount before the Registrar General, which was to be released as

per the directions of the Tribunal. Needless to clarify, interest at

the rate of 8.5% per annum as awarded by this Court, shall be

applicable from the date of filing of the petition. Accordingly, it is

directed, that Insurance Company shall deposit the balance

compensation amount, along with accrued interest at the rate of

8.5% per annum on the entire compensation as awarded by the

Tribunal, before the Registrar General of this Court within six

weeks, which shall be disbursed as per the directions of Tribunal.

57. Accordingly, the appeals stand disposed of with above directions.

58. Pending applications, if any, are rendered infructuous.

59. Statutory deposit, if any, shall be refunded to Insurance Company,

only if the order of deposit has been complied with.

60. Judgment be uploaded on the website of this Court.

ANISH DAYAL

(JUDGE)

MAY 26, 2026/sp