Motor Vehicles Act, 1988 — Ss. 166, 168 — Compensation — Determination of income — Exaggerated / conjectural income — Proof — Income-tax returns — Business income — Loss of dependency — Deceased alleged to be earning ₹95,000 p.m. as transport contractor — No income-tax returns or documentary proof produced — Tribunal fixing income on assumption based on EMI payments — Held, computation based on surmises and conjectures unsustainable — Distinction drawn from Gurpreet Kaur v. United India Insurance Co. Ltd. — Business owned by deceased capable of continuing even after death — Compensation not to result in windfall — Principle in Pranay Sethi reiterated — Lump-sum reduction of loss of dependency justified — Award modified — Appeal allowed.

Motor Vehicles Act, 1988 — Ss. 166, 168 — Compensation — Determination of income — Exaggerated / conjectural income — Proof — Income-tax returns — Business income — Loss of dependency — Deceased alleged to be earning ₹95,000 p.m. as transport contractor — No income-tax returns or documentary proof produced — Tribunal fixing income on assumption based on EMI payments — Held, computation based on surmises and conjectures unsustainable — Distinction drawn from Gurpreet Kaur v. United India Insurance Co. Ltd. — Business owned by deceased capable of continuing even after death — Compensation not to result in windfall — Principle in Pranay Sethi reiterated — Lump-sum reduction of loss of dependency justified — Award modified — Appeal allowed.

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B. ANALYSIS OF FACTS

1. The deceased died in a motor vehicle accident on 29.08.2017, leaving behind his wife and three children as legal representatives.

2. The accident occurred due to the rash and negligent driving of the fifth respondent’s vehicle. Negligence and cause of death were not in dispute.

3. The claim petition asserted that the deceased was a reputed transport contractor, owner of two trucks, and earning ₹95,000 per month.

4. The Motor Accidents Claims Tribunal accepted this figure, primarily relying upon:

   • loan accounts showing payment of EMIs of about ₹42,500 per month, and

   • an assumption that income would be at least double the EMI amount.

5. No income-tax returns or independent documentary proof of such income were produced.

6. The Tribunal awarded compensation accordingly, which was affirmed by the High Court.

7. The Insurance Company appealed, challenging only the quantum of compensation, specifically the computation of monthly income.

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C. ANALYSIS OF LAW

1. Proof of Income and Role of Assumptions

The Court held that:

• An income of ₹95,000 per month would necessarily attract income-tax liability.

• Absence of income-tax returns or reliable documentary evidence assumes significance where income beyond taxable limits is claimed.

• The Tribunal’s inference that income must be double the EMI amount was without evidentiary basis and rested on mere conjectures.

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2. Distinction from Gurpreet Kaur v. United India Insurance Co. Ltd.

The Court distinguished Gurpreet Kaur, holding that:

• In that case, the deceased was a young contractor personally engaged in earth-moving work, whose income ceased entirely upon death.

• The loan had been regularly serviced and cleared within a short period.

• In contrast, the present deceased was a transport contractor owning two trucks, and the business could reasonably continue even after his death through hired drivers.

Hence, the ratio in Gurpreet Kaur was held inapplicable.

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3. Continuity of Business Income

The Court noted that:

• Ownership of two trucks implied engagement of drivers.

• The death of the owner would not necessarily extinguish income from the business.

• The assertion that the trucks were lying idle was not accepted.

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4. Principle Against Windfall Compensation

Reiterating the Constitution Bench decision in National Insurance Co. Ltd. v. Pranay Sethi, the Court emphasized:

• Compensation should be just, neither a windfall nor a pittance.

• Courts must guard against speculative enhancement of income leading to unjust enrichment.

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5. Re-assessment of Loss of Dependency

Applying these principles, the Court held that:

• The amount of ₹50,00,000 already deposited would be sufficient towards loss of dependency, representing half of what was computed by the Tribunal.

• This adjustment balanced fairness to claimants with the mandate against speculative awards.

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D. DECISION / OPERATIVE PART

1. The Supreme Court held that the income of the deceased had been grossly over-assessed by the Tribunal and affirmed by the High Court.

2. The compensation for loss of dependency was restricted to ₹50,00,000, already deposited.

3. The claimants were held entitled to:

   • Interest at 9% per annum on the award amount from the date of claim petition,

   • Loss of consortium, loss of estate and funeral expenses as awarded,

   • Filial consortium to children, following Magma General Insurance Co. Ltd. v. Nanu Ram & Ors.

4. An additional sum of ₹1,60,000 was awarded under conventional heads.

5. The balance amount with accrued interest was directed to be paid within one month.

6. The appeal was allowed and pending applications were disposed of.