As per case facts, the claimant-appellants sought compensation for the death of Mr. Manoranjan Pandey in a motor accident. The Tribunal awarded compensation based on his last ITR, but the ...
2026 INSC 661 C.A. @ SLP (C) No. 27220 of 2024 Page 1 of 13
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2026
(Arising out of SLP(C) No. 27220 of 2024)
RASHMIREKHA TRIPATHY
AND ANR. … APPELLANT(S)
VERSUS
THE BRANCH MANAGER (LEGAL CLAIMS),
SRIRAM GENERAL INSURANCE
COMPANY LIMITED AND ORS. … RESPONDENT(S)
J U D G M E N T
SANJAY KAROL, J.
1. Leave granted.
C.A. @ SLP (C) No. 27220 of 2024 Page 2 of 13
2. This appeal is directed against the judgment and order dated
25.04.2024 passed in MACA No. 452 of 2023 by the High Court of
Orissa at Cuttack, which, in turn was preferred against the order
dated 24.02.2023 in MAC Case No. 92/2019 by the Motor Accident
Claims Tribunal
1
, Behrampur
2
.
3. The brief facts giving rise to this appeal are that on
29.05.2018, the deceased, namely Mr. Manoranjan Pandey, aged 39
years, was travelling from Behrampur to Bhubaneswar in his vehicle
bearing registration number OD-02H-7929. Near Kaliabali Chakka
on the National Highway, the offending vehicle, a truck bearing
registration number AP-05TD-2112, being driven in a rash and
negligent manner, struck the vehicle of the deceased. As a result of
the said accident, he suffered injuries and passed away during
treatment.
4. In connection with the same, an FIR came to be registered at
Chamakhandi Police Station, bearing number Case No. 55/2018,
under Sections 279, 337, 338, 304-A of the Indian Penal Code, 1860.
1
Hereinafter ‘MACT’.
2
Hereinafter ‘the Tribunal’.
C.A. @ SLP (C) No. 27220 of 2024 Page 3 of 13
5. An application seeking compensation was filed by the
claimant-appellants, being the legal representatives of the deceased,
before the Tribunal under Section 166 of the Motor Vehicle Act,
1988, to the tune of Rs.2,25,00,000/-. It was stated therein that the
deceased was running his own construction business and earning Rs.
15,00,000/- per annum. He was the sole breadwinner of his family.
6. The Tribunal, vide its order dated 24
th
February, 2023, held
Respondent No.2, Insurance Company, liable to pay a compensation
of Rs. 2,27,00,064/- along with 6% interest per annum, to the
claimant-appellants from the date of filing of the claim petition i.e.,
from 7
th
May 2019. The income of the deceased was ascertained as
Rs. 15,00,000/- per annum considering his Income Tax Return
3
for
the Assessment Year
4
2018-19. A deduction of 1/3rd was made
considering 3 dependents and a multiplier of ‘16’ was applied,
considering the age of the deceased. The Tribunal further awarded
compensation towards conventional heads, in accordance with law.
7. Aggrieved thereof, Respondent No. 2 the Insurance Company
filed an appeal before the High Court seeking reduction in
compensation awarded by the Tribunal. It was submitted therein that
3
Hereinafter ‘ITR’.
4
Hereinafter ‘AY’.
C.A. @ SLP (C) No. 27220 of 2024 Page 4 of 13
the Tribunal erred in computing the income of the deceased and
applied the wrong multiplier, as the age of the deceased was 39 as
per his PAN card.
8. The High Court, vide, the impugned judgment, allowed the
appeal and reduced the compensation awarded by an amount of Rs.
39,24,914/- to Rs. 1,87,75,150/- along with 6% interest per annum.
The Court reduced his annual income as Rs. 13,33,226/-. For this
purpose, the Court took the average of the previous two ITRs which
were on record, instead of only the previous ITR, which was taken
into consideration by the Tribunal. Furthermore, the Court applied
a multiplier of 15.
9. Dissatisfied, the claimant-appellants are now before us. The
significant ground of challenge taken is that the Courts below, have
erred in assessing the income of the deceased.
10. We have heard the learned counsel for the parties.
11. The issue which arises before this Court is whether for
assessing the annual income of a deceased person or claimant under
the Motor Vehicles Act 1988, the ITRs for the previous year is
C.A. @ SLP (C) No. 27220 of 2024 Page 5 of 13
appropriate or average of the past two/three years is to be taken into
consideration?
12. In view of the importance of the issue involved, vide order
dated 07.02.2025, this Court appointed Mr. J.R. Midha, learned
senior counsel and Mr. Salil Paul, learned counsel as amicus curiae,
both experts in this field, to assist in this matter.
13. Mr. J.R. Midha, learned senior counsel, has submitted that
there is no uniformity in the principles relating to the computation
of annual income on the basis of ITRs. Some Courts take the average
of the last three years, whereas some Courts take the last return filed
to assess the income of the deceased. He further submitted that while
the ITR is the prima facie evidence of the deceased’s income, it does
not always reflect the true income of the deceased. Factors such as
business income pattern, growth pattern and nature of business
5
also
warrant consideration. Moreover, in cases where the ITR has been
filed after the death, it would be appropriate to call for the ITRs for
the past three years along with balance sheets of the concerned
person/entity.
5
Nature of business would also include businesses and professions where negative income in
the initial years is common and does not reflect the true financial standing of the individual.
C.A. @ SLP (C) No. 27220 of 2024 Page 6 of 13
14. Mr. Salil Paul, learned amicus curiae has submitted that this
Court in ICICI Lombard General Insurance Co. Ltd. v. Ajay
Kumar Mohanty and Anr.
6
relied upon the average income of the
ITRs for the previous three years to compute the income of the
claimant therein.
15. At the outset, we must reiterate that it is settled law that the
objective behind the claim process in the Motor Vehicles Act 1988
is to grant ‘just and fair compensation’. Recently, a two-judge
Bench of this Court in V. Pathmavathi and Ors. v. Bharthi Axa
General Insurance Co. Ltd. and Anr.
7
had succinctly summarised
this position and observed:
“12. We ought to remind ourselves, at the outset, that
when an individual dies as a result of a fatal road
accident and his distressed dependents apply for
compensation either from the owner of the vehicle
responsible for the death or the insurance company
with whom such vehicle is insured, no amount of
money can truly compensate for the loss.
Compensation is nothing but a rough estimate, being a
token attempt to ease the financial burden on the
dependents. Take consortium, for example. It is
impossible to put a price on the loss of a loved one's
companionship. Spousal, filial or parental
compensation are all about acknowledging the
emotional void but the payout can never be more than
6
(2018) 3 SCC 686.
7
2026 SCC OnLine SC 158.
C.A. @ SLP (C) No. 27220 of 2024 Page 7 of 13
a rough approximation. It is like trying to measure the
immeasurable. Considering the income of the
deceased, the needs of his dependents and the
emotional toll of the loss, the best that can be ensured
is that the compensation is fair and reasonable, without
being either arbitrary or niggardly. This would be in
accord with the foundational principle governing the
determination of “just compensation” under Section
168 of the Act.
13. In Reshma Kumari v. Madan Mohan [(2013) 9 SCC
65], a three-Judge Bench of this Court held that the
purpose of award of compensation under section 166
read with section 168 of the Act is to place the
distressed dependents of the victim of a fatal road
accident, if the victim had been the sole bread earner,
in almost the same position financially if he lived his
natural span of life. It is obviously not intended to put
such distressed dependents in a better financial position
in which they would otherwise have been if the
accident had not occurred. At the same time, the
determination of compensation is not an exact science
and the exercise involves an assessment based on
estimation and conjectures, here and there, as many
imponderable factors and unpredictable contingences
have to be taken into consideration. Obviously, award
of damages in each case would depend on the particular
facts and circumstances of the case but the element of
fairness in the amount of compensation so determined
is the ultimate guiding factor.”
(emphasis supplied)
16. Similarly, another two-judge Bench of this Court in Anant v.
Pratap and Anr.
8
, had expounded that ‘the purpose of compensation
8
(2018) 9 SCC 450.
C.A. @ SLP (C) No. 27220 of 2024 Page 8 of 13
under the Motor Vehicles Act is to fully and adequately restore the
aggrieved to the position prior to the accident.’
17. In the considered view of this Court, there can be no hard and
fast formula for computing the annual income of a deceased
person/claimant. ITRs being a statutory document are an important
reference point when it comes to assessing one’s income, for the
purposes of compensation under the Motor Vehicle Act.
18. We find force in the submission put forth by Mr. J.R Midha,
learned senior counsel. There must be a bifurcation made between
salaried individuals and self-employed individuals when it comes to
assessment of annual income. In our view, for salaried individuals,
only the ITR of the previous year will be sufficient for showcasing
the annual income from salary. The reason for considering only the
preceding year is that the financial impact of promotions is
significant and may be reflected in the ITR for only that year. A
situation may also arise whereby the deceased/claimant might not
have completed a year in the promoted position before the accident
or might not have filed ITR for such period. In such cases the Court
concerned shall take reference to the promotion letter and other
corroboratory financial statements.
C.A. @ SLP (C) No. 27220 of 2024 Page 9 of 13
19. When it comes to self-employed / individuals carrying out
their own business, in our view, the average of the income specified
in the ITRs of up to the previous three years is to be taken as a
reference point for assessment of annual income from their business.
There may also be a scenario where only one or two ITRs have been
filed. Given such scenarios and the fluctuation of income in these
professions, surrounding circumstances are also to be taken into
consideration. These would include:
a) The nature of the business (including geographic location,
category etc.);
b) Growth pattern of the business and impact of death on the
business;
c) Potential growth of business (for instance certain
businesses are capital intensive at the outset and are
profitable at scale/in the future);
d) Negative income (certain businesses may require losses in
the initial years, which may not reflect the true financial
standing); and
e) Any other relevant factor relating to the business.
20. The date when the ITRs are filed would also become a
relevant consideration, as there may be scenarios where inflated
C.A. @ SLP (C) No. 27220 of 2024 Page 10 of 13
income is showcased after death/injury. In these circumstances, the
surrounding factors of the business would become more relevant.
However, if sufficiently supported by financial statements, such
ITRs may also be taken into consideration.
21. Coming to the facts at hand, the claimant-appellants have
brought on record two ITRs for AY 2017-18 and AY 2018-19,
whereby the annual income of the deceased is Rs. 11,59,882/- and
Rs.15,06,571/- respectively.
22. The High Court took the average of these two years to assess
the annual income of the deceased as Rs. 13,33,226/-. There was no
reference made to other factors relating to the nature of business. It
is borne from the record that the deceased was running his own
construction business. Therefore, with a view to awarding just and
fair compensation, we fix his annual income as Rs. 14,00,000/-. In
view thereof, the compensation payable to the claimant-appellants
would be as follows:
C.A. @ SLP (C) No. 27220 of 2024 Page 11 of 13
CALCULATION OF COMPENSATION
Compensation Heads Amount Awarded In Accordance with:
Yearly Income Rs.14,00,000/-
Future Prospects (40%)
(Age being 39)
14,00,000/- + 5,60,000/-
= Rs.19,60,000/-
National Insurance
Co. Ltd. v. Pranay
Sethi
(2017) 16 SCC 680
Para 37, 39, 41, 42
and 59.4
Deduction (1/3) 19,60,000 – 6,53,333
= Rs.13,06,667/-
Multiplier (15) 13,06,667 x 13
= Rs.83,82,582/-
Loss of Income of the
Deceased
Rs.1,96,00,005
Loss of Estate Rs.18,150/-
(10% increase)
National Insurance
Co. Ltd. v. Pranay
Sethi
(2017) 16 SCC 680
Para 59.8 Loss of Funeral Expenses Rs.18,150/-
(10% increase)
Loss of Consortium 48,400 X 3
(10% increase)
National Insurance
Co. Ltd. v. Pranay
Sethi
(2017) 16 SCC 680
C.A. @ SLP (C) No. 27220 of 2024 Page 12 of 13
= Rs. 1,45,200/-
Para 59.8
United India
Insurance Co. Ltd. v.
Satinder Kaur,
(2021) 11 SCC 780
Para 37.12
Rajwati alias Rajjo
and Ors v. United
India Insurance
Company Ltd. and
Ors.
2022 SCC Online SC
1699
Para 34
Total
Rs.1,97,81,505
Thus, the difference in compensation would be as under:
MACT High Court This Court
Rs.2,27,00,064/- Rs.1,87,75,150/- Rs.1,97,81,505/-
23. The Civil Appeal is allowed in the aforesaid terms. The
impugned award dated 24.02.2023 passed in M.A.C. Case No. 92 of
2019 by MACT, Behrampur, as modified by the High Court of
C.A. @ SLP (C) No. 27220 of 2024 Page 13 of 13
Orissa at Cuttack vide the impugned order dated 25.04.2024 in
MACA No. 452 of 2023, stands modified accordingly. Interest on
the enhanced amount is to be paid, as awarded by the Tribunal.
24. The amount be directly remitted into the bank account of the
claimant-appellants. The particulars of the bank account are to be
immediately supplied by the learned counsel for the appellants to
the learned counsel for the respondents. The amount be remitted
positively within a period of four weeks thereafter.
25. Pending application(s), if any, shall stand disposed of.
………………… ………………………… …J.
(SANJAY KAROL)
………..………… ………………………. …..J.
(NONGMEIKAPAM KOTISWAR SINGH )
New Delhi
July 1, 2026
C.A. @ SLP (C) No. 3088 of 2025 Page 1 of 7
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2026
(Arising out of SLP(C) No. 3088 of 2025)
RAJANI & ORS. … APPELLANT(S)
VERSUS
MUKESH & ORS. … RESPONDENT(S)
J U D G M E N T
SANJAY KAROL, J.
1. Leave granted.
2. The appeal is directed against the judgment and order
dated 24.09.2024 passed in Miscellaneous Appeal No. 1832 of
2022 by the High Court of Madhya Pradesh at Indore, which, in
turn was preferred against the order dated 19.01.2022 in Claim
C.A. @ SLP (C) No. 3088 of 2025 Page 2 of 7
Case No. 92/2019 by the Motor Accident Claims Tribunal
1
,
Manawar
2
.
3. The brief facts giving rise to this appeal are that on
08.01.2017, the deceased namely Sushil, then aged 49 years, was
proceeding along with two others from Indore towards Manawar,
in a vehicle bearing registration number MP 11 CC 2555, when
the offending vehicle, a dumper bearing registration number MP
09 HG 9690 being driven by Respondent No. 1, dashed into the
vehicle of the deceased from the opposite side in a rash and
negligent manner. Consequently, the deceased lost his life on the
spot due to serious injuries suffered on his head, chest and other
parts of the body.
4. An application seeking compensation
3
was filed before
MACT, Manawar, Dhar, Madhya Pradesh under Section 166 of
the Motor Vehicles Act, 1988 by the claimant-appellants, being
his legal representatives, seeking compensation to the tune of Rs.
2,41,00,000/-, stating therein that deceased was conducting
business as an Insurance Agent and was the sole breadwinner of
the family. It was stated therein that he used to earn Rs.
1,50,000/- per month.
1
Hereinafter ‘MACT’.
2
Hereinafter ‘the Tribunal’.
3
Claim Case No. 141/17.
C.A. @ SLP (C) No. 3088 of 2025 Page 3 of 7
5. The Tribunal awarded an amount of Rs. 49,77,000/-, vide
award dated 19.01.2022, along with interest at the rate of 9% per
annum from the date of filing of the claim petition. The Tribunal
assessed the income of the deceased as Rs. 40,000/- per month.
6. Being aggrieved thereof, the claimant-appellants filed an
appeal before the High Court of Madhya Pradesh at Indore,
seeking enhancement of the amount of compensation awarded by
the Tribunal.
7. The High Court vide the impugned order dated 24.09.2024
in Misc. Appeal No. 1832 of 2022 enhanced the total
compensation payable by Rs. 26,32,500/-, to a total amount of
Rs. 76,09,500/-. The monthly income of the deceased was
enhanced to Rs. 62,500/-.
8. Yet dissatisfied, the claimant-appellants are now before us.
The significant point of challenge is that the compensation
awarded is inadequate, warranting interference in accordance
with law.
9. Keeping in view the principles laid down by this Court in
Rashmirekha Tripathy and Anr. v. The Branch Manager
C.A. @ SLP (C) No. 3088 of 2025 Page 4 of 7
(Legal Claims), Sriram General Insurance Company Limited
and Ors
4
, we proceed to examine the issue at hand.
10. In the considered view of this Court, the High Court erred
by taking the average income of the last four ITRs. Given that the
deceased was working as an Insurance Agent, it is completely
plausible that there was a hike in his income in a certain financial
year, dependent on performance. The same would not become a
reason to take an additional ITR into consideration for the
purposes of computation of his annual income.
11. Upon a perusal of the ITRs on record, the income of the
deceased for the AY 2015-16 stood at Rs. 4,03,180/-. For AY
2016-17, it stood at Rs. 9,59,665/- and for the previous AY 2017-
18, it stood at Rs.7,00,559/-. Therefore, taking into consideration
the average of these previous three years and the nature of
profession of the deceased, his annual income is assessed as
Rs.6,87,802/-.
12. In view of the aforesaid, the compensation now payable to
the appellants would be recalculated as under:
4
C.A. @ SLP (C) No. 27220 of 2024.
C.A. @ SLP (C) No. 3088 of 2025 Page 5 of 7
CALCULATION OF COMPENSATION
Compensation Heads Amount Awarded In Accordance with:
Yearly Income Rs.6,87,802/-
Future Prospects (25%) (Age
being 49)
6,87,802 + 1,71,950
= Rs.8,59,752/-
National Insurance Co.
Ltd. v. Pranay Sethi
(2017) 16 SCC 680
Para 37, 39, 41, 42 and
59.4
Deduction (1/4) 8,59,752 – 2,14,938
= Rs.6,44,824/-
Multiplier (13) 6,44,824 X 13
= Rs.83,82,582/-
Loss of Income of the Deceased
Rs.83,82,582/-
Loss of Estate Rs.18,150/-
(10% increase)
National Insurance Co.
Ltd. v. Pranay Sethi
(2017) 16 SCC 680
Para 59.8
Loss of Funeral Expenses Rs.18,150/-
(10% increase)
Loss of Consortium 48,400 X 6
(10% increase)
= Rs. 2,90,400/-
National Insurance Co.
Ltd. v. Pranay Sethi
(2017) 16 SCC 680
Para 59.8
United India Insurance
Co. Ltd. v. Satinder Kaur,
(2021) 11 SCC 780
Para 37.12
Rajwati alias Rajjo and
Ors v. United India
C.A. @ SLP (C) No. 3088 of 2025 Page 6 of 7
Insurance Company Ltd.
and Ors.
2022 SCC Online SC
1699
Para 34
Total
Rs.87,09,282
Thus, the difference in compensation is as under:
MACT High Court This Court
Rs.49,77,000/- Rs. 76,09,500/- Rs.87,09,282/-
13. The Civil Appeal is allowed in the aforesaid terms. The
impugned award dated 19.01.2022 passed in Claim Case No.
141/17 by the MACT, Manawar as modified by the High Court
of Madhya Pradesh at Indore vide the impugned order dated
24.09.2024 in Miscellaneous Appeal No. 1832 of 2022, stands
modified accordingly. Interest on the enhanced amount is to be
paid, as awarded by the Tribunal.
14. The amount be directly remitted into the bank account of
the claimant-appellants. The particulars of the bank account are
to be immediately supplied by the learned counsel for the
appellants to the learned counsel for the respondents. The amount
be remitted positively within a period of four weeks thereafter.
C.A. @ SLP (C) No. 3088 of 2025 Page 7 of 7
15. Pending application(s), if any, shall stand disposed of.
………………… ………………………… …J.
(SANJAY KAROL)
………..………… ………………………. …..J.
(NONGMEIKAPAM KOTISWAR SINGH )
New Delhi
July 1, 2026
C.A. @ SLP (C) No. 7735 of 2025 Page 1 of 7
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2026
(Arising out of SLP(C) No. 7735 of 2025)
SMT. REKHA & ORS. … APPELLANT(S)
VERSUS
DINESH PORWAL & ORS. … RESPONDENT(S)
J U D G M E N T
SANJAY KAROL, J.
1. Leave granted.
2. This appeal is directed against the judgment and order
dated 30.07.2024 passed in Misc. Appeal No. 1932 of 2018 by
the High Court of Madhya Pradesh at Indore, which, in turn was
preferred against the order dated 20.12.2017 passed in MACT
C.A. @ SLP (C) No. 7735 of 2025 Page 2 of 7
Case No. 155/2017 by the Motor Accident Claims Tribunal
1
,
Mandsaur
2
.
3. The brief facts giving rise to this appeal are that on
15.06.2015, the deceased namely Krishnavallabh, then aged 28
years, was travelling from Sakhtali to Barkheda, on his
motorcycle. On the main road, near Miriyakhedi nai abadi, the
offending vehicle bearing registration number MP 43 C 8969,
struck the motorcycle at a very high speed, in a rash and negligent
manner. As a result of the injuries suffered, the deceased passed
away during treatment.
4. In connection thereof, an FIR came to be registered
3
under
Section 304A of the Indian Penal Code against the driver being
Respondent No. 1 herein.
5. An application was filed under Section 166 of the Motor
Vehicles Act, 1988 before the MACT, Mandsaur, Madhya
Pradesh, on behalf of the claimant-appellants being the legal
representatives of the deceased. A compensation amount of Rs.
90,25,000/- was claimed. It was stated therein that the deceased
was running his own grocery business and had an annual income
1
Hereinafter ‘MACT’.
2
Hereinafter ‘the Tribunal’.
3
Crime No. 255/2015.
C.A. @ SLP (C) No. 7735 of 2025 Page 3 of 7
of Rs. 5,00,000/-. Furthermore, he was the sole breadwinner of
the family.
6. The Tribunal vide its award dated 20.12.2017 in MACT
No. 155/2017 awarded an amount of Rs. 15,36,560/- to the
claimant-appellants along with 7% interest from the date of filing
of the claim petition. The Tribunal assessed the monthly income
of the deceased as Rs. 7,000/- on the basis of the net profit from
the ITR of the previous year. The Tribunal further awarded
compensation towards conventional heads, in accordance with
law.
7. Aggrieved thereof, the claimant-appellants preferred an
appeal before the High Court of Madhya Pradesh at Indore. The
significant ground of challenge taken was that the Tribunal erred
in assessing the monthly income of the deceased, by not
considering the average of the previous ITRs filed by him.
8. The High Court vide the impugned judgment dated
30.07.2024 in Misc. Appeal No. 1932 of 2018, allowed the
appeal and enhanced the compensation payable by an amount of
Rs. 23,04,920/- to a total compensation of Rs. 38,40,850/-. The
High Court assessed his monthly income as Rs. 16,750/- per
month, on the basis of the average income in his ITRs for AY
2012-13 and AY 2013-14. Two ITRs which were filed after the
C.A. @ SLP (C) No. 7735 of 2025 Page 4 of 7
death of the deceased, were excluded for the purposes of this
assessment.
9. Still dissatisfied, the claimant-appellants are now before
us. The point of challenge raised is that the High Court has
erroneously excluded the two recent ITRs for the purposes of
computation of income.
10. Keeping in view the principles laid down by this Court in
Rashmirekha Tripathy and Anr. v. The Branch Manager
(Legal Claims), Sriram General Insurance Company Limited
and Ors
4
, we proceed to examine the issue at hand.
11. It cannot be disputed that this is a case where the claimant-
appellants have filed ITRs for the AY 2014-15 and 2015-16 after
the death of the deceased. The annual income has been shown as
Rs. 2,35,881/- and Rs. 4,98,671/-, respectively. Whether these
figures have been unduly enhanced have to be seen from
surrounding financial statements, which this Court does not have
the benefit of. At this stage, it also not in the interest of justice
for the matter to be remanded.
12. It is a matter of record that the deceased was running his
own wholesale grocery store. Considering the ITRs available on
4
C.A. @ SLP (C) No. 27220 of 2024.
C.A. @ SLP (C) No. 7735 of 2025 Page 5 of 7
record and the nature of his profession, we deem it appropriate to
fix the annual income of the deceased as Rs. 3,25,000/-.
13. In view of the aforesaid, the compensation now payable to
the appellants would be recalculated as under:
CALCULATION OF COMPENSATION
Compensation Heads Amount Awarded In Accordance with:
Yearly Income Rs.3,25,000/-
Future Prospects (40%) (Age
being 28)
3,25,000 + 1,30,000
= Rs.4,55,000/-
National Insurance Co.
Ltd. v. Pranay Sethi
(2017) 16 SCC 680
Para 37, 39, 41, 42 and
59.4
Deduction (1/4) 4,55,000 – 1,13,750
= Rs.3,41,250/-
Multiplier (17) 3,41,250 x 17
= Rs.58,01,250/-
Loss of Income of the
Deceased
Rs.58,01,250/-
Loss of Estate Rs.18,150/-
(10% increase)
National Insurance Co.
Ltd. v. Pranay Sethi
(2017) 16 SCC 680
Para 59.8
Loss of Funeral Expenses Rs.18,150/-
(10% increase)
Loss of Consortium 48,400 X 5
National Insurance Co.
Ltd. v. Pranay Sethi
C.A. @ SLP (C) No. 7735 of 2025 Page 6 of 7
(10% increase)
= Rs.2,42,000/-
(2017) 16 SCC 680
Para 59.8
United India Insurance
Co. Ltd. v. Satinder
Kaur,
(2021) 11 SCC 780
Para 37.12
Rajwati alias Rajjo and
Ors v. United India
Insurance Company
Ltd. and Ors.
2022 SCC Online SC
1699
Para 34
Total
Rs.60,79,550
Thus, the difference in compensation is as under:
MACT High Court This Court
Rs.15,36,560/- Rs. 38,40,850/- Rs.60,79,550/-
14. The Civil Appeal is allowed in the aforesaid terms. The
impugned award dated 20.12.2017 passed in MACT Case No.
155/2017 by the MACT, Mandsaur as modified by the High
Court of Madhya Pradesh at Indore vide the impugned order
dated 30.07.2024 in Misc. Appeal No. 1932 of 2018, stands
C.A. @ SLP (C) No. 7735 of 2025 Page 7 of 7
modified accordingly. Interest on the enhanced amount is to be
paid, as awarded by the Tribunal.
15. The amount be directly remitted into the bank account of
the claimant-appellants. The particulars of the bank account are
to be immediately supplied by the learned counsel for the
appellant to the learned counsel for the respondent. The amount
be remitted positively within a period of four weeks thereafter.
16. Pending application(s), if any, shall stand disposed of.
………………… ………………………… …J.
(SANJAY KAROL)
………..………… ………………………. …..J.
(NONGMEIKAPAM KOTISWAR SINGH )
New Delhi
July 1, 2026
In a pivotal move for **Motor Accident Compensation** jurisprudence, the Supreme Court of India has issued comprehensive guidelines on **ITR-Based Income Assessment** for determining compensation. These landmark rulings, delivered by a bench comprising Justices Sanjay Karol and Nongmeikapam Kotiswar Singh on July 1, 2026, are now prominently featured on CaseOn, offering crucial insights for legal professionals and claimants alike.
The central question addressed by the Supreme Court was whether, for assessing the annual income of a deceased person or claimant under the Motor Vehicles Act, 1988, it is appropriate to consider only the Income Tax Return (ITR) for the previous year, or an average of the past two or three years. This issue arose due to inconsistencies in how different courts approached ITRs, a statutory document crucial for compensation calculations.
The Supreme Court reiterated that the objective of motor accident claims is to grant 'just and fair compensation,' aiming to place distressed dependents in a similar financial position to before the accident, without making them better off. While not an exact science, the assessment must be fair and reasonable.
To bring uniformity, the Court, aided by amicus curiae Mr. J.R. Midha and Mr. Salil Paul, established a clear distinction:
The **Rashmirekha Tripathy** judgment is particularly noteworthy for elaborating on these principles, providing a bedrock for future claims. Legal professionals navigating the complexities of these specific rulings will find CaseOn.in's 2-minute audio briefs to be an invaluable resource, offering quick and precise analyses that distill the core legal arguments and implications, significantly aiding in case preparation and understanding.
In the case of Rashmirekha Tripathy, the deceased was a 39-year-old construction business owner. The Tribunal initially considered his last ITR of Rs. 15,00,000/- per annum. The High Court, however, averaged two ITRs, reducing the annual income to Rs. 13,33,226/-.
The Supreme Court, applying its newly laid down principles for self-employed individuals and considering the nature of the construction business, fixed his annual income at Rs. 14,00,000/-. This was a considered adjustment, acknowledging factors beyond a mere average. The final compensation awarded by the Supreme Court was Rs. 1,97,81,505/-, significantly modifying the High Court's award.
The case of Rajani & Ors. involved a 49-year-old deceased who worked as an Insurance Agent. The High Court had averaged four ITRs to determine his income. The Supreme Court observed that for professionals like insurance agents, income can fluctuate based on performance, making a simple average of many years potentially misleading.
Aligning with the principles of considering up to three years for self-employed-like professions, the Supreme Court re-assessed his annual income by averaging his ITRs for AY 2015-16, 2016-17, and 2017-18, arriving at Rs. 6,87,802/-. Consequently, the total compensation was recalculated to Rs. 87,09,282/-.
Smt. Rekha & Ors. presented a scenario where the deceased, a 28-year-old grocery business owner, had ITRs filed after his death that showed higher income. The High Court had excluded these post-death ITRs, basing its assessment on earlier ITRs. The Supreme Court acknowledged the concerns regarding potentially inflated ITRs filed after death, emphasizing the need for corroborating financial statements.
Without remanding the matter for detailed examination, and in the interest of justice, the Supreme Court exercised its discretion. Considering the nature of the wholesale grocery business and available records, it fixed the deceased’s annual income at Rs. 3,25,000/-. The total compensation in this case was determined to be Rs. 60,79,550/-.
These judgments collectively streamline the process of **ITR-Based Income Assessment** in **Motor Accident Compensation** cases, providing much-needed clarity. The Supreme Court’s distinction between salaried and self-employed individuals, coupled with the detailed considerations for business income, ensures a more equitable and 'just and fair' determination of compensation. The final compensation awarded in each case:
All enhanced amounts are to be remitted with interest, as originally awarded by the Tribunal, within four weeks.
These Supreme Court pronouncements are critical for several reasons:
Understanding these nuances is vital for anyone practicing or studying motor accident law, ensuring that 'just and fair compensation' remains the guiding principle.
All information provided in this article is for informational purposes only and does not constitute legal advice. While efforts have been made to ensure accuracy, readers are advised to consult with a qualified legal professional for advice pertaining to their specific circumstances.
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