Case Note & Summary
The appellant, Mahebub Kasambhai Bogha, an injured claimant, filed a first appeal under Section 173 of the Motor Vehicles Act, 1988, against the judgment and award dated 26.03.2025 passed by the Motor Accident Claims Tribunal (Aux.), Rajkot, in MACP No.577/2022. The appellant was a driver who sustained serious injuries and permanent disability when his legs were crushed by a ST bus on 24.01.2022. The Tribunal awarded compensation of Rs.25,00,000/-. The appellant sought enhancement, arguing that the Tribunal erroneously reduced his annual income to Rs.3,88,053/- by averaging the past three years' income tax returns, whereas his income for F.A. 2021-22 was Rs.4,41,380/-. He also contended that future prospects were not added. The respondent, Gujarat State Road Transport Corporation, opposed the appeal. The High Court, relying on Govind Yadav v. National Insurance Co. Ltd. and Sarla Verma v. DTC, held that the income should be taken as Rs.4,41,380/- p.a. based on the latest income tax return. The Court further held that 40% should be added towards future prospects, as the appellant was about 40 years old. The disability of 50% and multiplier of 15 were upheld. The Court recalculated the future loss of income as Rs.4,41,380/- + 40% = Rs.6,17,932/-; 50% disability = Rs.3,08,966/-; multiplied by 15 = Rs.46,34,490/-. After deducting the Tribunal's award of Rs.3,88,053/- under that head, the additional amount was Rs.42,46,437/-. The Court also enhanced other heads: pain, shock and suffering from Rs.50,000/- to Rs.1,00,000/-; special diet, attendant charges, and transportation from Rs.25,000/- to Rs.50,000/-; and awarded Rs.50,000/- for loss of amenities. The total enhanced compensation was Rs.44,46,437/-, with interest at 7.5% per annum from the date of petition till realization. The appeal was allowed in part.
Headnote
A) Motor Accident Compensation - Assessment of Income - Income Tax Returns - In a claim for compensation under the Motor Vehicles Act, 1988, the income of the injured must be assessed based on the income tax returns for the relevant assessment year, not the average of past three years, if the returns are produced. The Court held that the Tribunal erred in reducing the annual income to Rs.3,88,053/- when the income for F.A. 2021-22 was Rs.4,41,380/-. (Paras 3-7) B) Motor Accident Compensation - Future Prospects - Addition of 40% - For a self-employed person aged about 40 years, an addition of 40% towards future prospects is warranted as per the principles laid down in National Insurance Co. Ltd. v. Pranay Sethi. The Court held that the Tribunal failed to add future prospects, and accordingly enhanced the compensation under the head of future loss of income. (Paras 7-8) C) Motor Accident Compensation - Disability and Multiplier - The Tribunal's finding of 50% disability and application of multiplier 15, based on Sarla Verma, were upheld as just and proper. (Para 7)
Issue of Consideration
Whether the Tribunal erred in not considering the actual income from income tax returns and in not adding future prospects to the income for calculating loss of future earnings.
Final Decision
The appeal is partly allowed. The compensation is enhanced by Rs.44,46,437/- over and above the Tribunal's award. The respondent is directed to deposit the enhanced amount with interest at 7.5% per annum from the date of petition till realization within eight weeks. The award of the Tribunal is modified accordingly.
Law Points
- Motor accident compensation
- future prospects
- income assessment based on income tax returns
- disability calculation
- multiplier application
