Case Note & Summary
The case arises from a motor vehicle accident that occurred on 4 October 2002 involving a scooter bearing registration number MH 27/E316 and a truck bearing registration number MTV 845. The deceased, Ajay Sudhakarrao Borade, was the son of respondent nos. 1 and 2 and brother of respondent no. 3. He sustained fatal injuries and died. The claimants, being the parents and brother of the deceased, filed a claim petition before the Motor Accident Claims Tribunal, Amravati, seeking compensation of Rs.7,00,000. They alleged that the deceased was unmarried and had taken training in running small-scale industries. He, along with claimant no. 3, started a business in the name of M/s Mahalaxmi Industry, for which a loan of Rs.10,00,000 was borrowed from the Maharashtra State Finance Corporation. Claimant no. 3 was handicapped and a sleeping partner, while the deceased managed the entire business. The claimants claimed that the deceased used to earn Rs.15,000 per month. The Tribunal, by award dated 20 September 2011, granted compensation of Rs.4,47,000. The appellant, Oriental Insurance Company Limited, being the insurer of the truck, challenged the award primarily on the ground that the compensation was excessive and based on an assumed income without any evidence. The respondents (claimants) supported the award. The court noted that the claimants did not produce any documentary evidence such as income tax returns, account books, or any other proof to establish the deceased's income from the business. The only evidence was the oral testimony of claimant no. 1, which was not corroborated. The court held that in the absence of proof of income, the Tribunal ought to have assessed compensation on a notional income basis as per the Second Schedule of the Motor Vehicles Act, 1988, which presumes an annual income of Rs.15,000 for a non-earning person. Applying the multiplier of 15 (based on the deceased's age), the total loss of dependency would be Rs.2,25,000. Adding Rs.2,000 for funeral expenses and Rs.5,000 for loss of estate, the total compensation was reduced to Rs.2,32,000. The court also upheld the Tribunal's finding that the accident was caused solely due to the negligence of the truck driver, as no evidence of contributory negligence was led. The appeal was partly allowed, reducing the compensation from Rs.4,47,000 to Rs.2,32,000 with interest at 6% per annum from the date of petition till realization.
Headnote
A) Motor Accident Claims - Compensation Assessment - Proof of Income - Section 168 Motor Vehicles Act, 1988 - Claimants sought compensation for death of son in road accident, alleging monthly income of Rs.15,000 from business - Tribunal awarded Rs.4,47,000 based on assumed income - Held that claimants failed to produce any documentary evidence of income, such as income tax returns or account books, and therefore compensation must be reassessed on notional income basis (Paras 5-7). B) Motor Accident Claims - Multiplier Method - Applicability - Section 168 Motor Vehicles Act, 1988 - Tribunal applied multiplier of 15 based on deceased's age - Held that multiplier method is correct but must be applied to a properly determined multiplicand; in absence of income proof, notional income of Rs.15,000 per annum (as per Second Schedule) is appropriate (Paras 6-7). C) Motor Accident Claims - Contributory Negligence - Not Established - Section 168 Motor Vehicles Act, 1988 - Insurance company alleged negligence by deceased - Held that no evidence was led to prove contributory negligence, and Tribunal's finding of sole negligence on truck driver is upheld (Para 4).
Issue of Consideration
Whether the Motor Accident Claims Tribunal erred in awarding compensation based on an assumed income of Rs.15,000 per month without sufficient evidence, and whether the insurance company is liable to pay the awarded amount.
Final Decision
Appeal partly allowed. The award of the Motor Accident Claims Tribunal, Amravati dated 20.9.2011 in Claim Petition No.317/2002 is modified. The compensation amount is reduced from Rs.4,47,000 to Rs.2,32,000 with interest at 6% per annum from the date of petition till realization. The appellant insurance company is directed to deposit the modified amount within six weeks.
Law Points
- Compensation in motor accident claims must be based on established income
- not speculative earnings
- burden of proof lies on claimants to prove income
- multiplier method under Section 168 of Motor Vehicles Act
- 1988 applies
- no addition for future prospects if income not proved.
