Gujarat High Court Allows Appeal and Enhances Compensation in Motor Accident Claim — Income Tax Returns Accepted as Reliable Evidence for Deceased's Income. Self-Employed Deceased Below 40 Years Entitled to 40% Future Prospects Under Section 166 of Motor Vehicles Act, 1988.

High Court: Gujarat High Court In Favour of Accused

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2026-05-19 06:51:11

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Case Note & Summary

The case arises from a motor accident claim petition filed by the legal heirs of Rajendrabhai Amrutbhai Bhatt, who died in a road accident on 22.11.2018. The deceased was travelling in a motorcar driven by opponent No.1, which, while being driven at excessive speed and in a rash and negligent manner, dashed from behind into a camel-cart loaded with eucalyptus wood on Petlad-Khambhat Road near village Jogan. The deceased sustained serious injuries and was declared dead at Shree Krushna Hospital, Karamsad. An FIR was registered as I-C.R. No.37 of 2018 against the driver. The claimants, being the widow and two children, filed Motor Accident Claim Petition No.149 of 2019 before the Motor Accident Claims Tribunal, Vadodara, seeking compensation of Rs.24,69,555/-. The Tribunal awarded only Rs.4,42,480/- with 7.5% interest, assessing the deceased's income at Rs.2,83,644/- per annum, granting only 10% future prospects, and making deductions. Aggrieved, the claimants appealed to the High Court. The High Court found that the Tribunal erred in not accepting the Income Tax Returns (Exhibits 32, 33, 34) which showed an annual income of Rs.4,49,301/- from construction and consultancy work. The Court held that Income Tax Returns are reliable documentary evidence and must be accepted unless rebutted. Following National Insurance Co. Ltd. v. Pranay Sethi, the Court held that the deceased, being self-employed and below 40 years, was entitled to 40% addition towards future prospects. Applying Sarla Verma, the Court applied a multiplier of 16 (deceased aged 38), deducted 1/3rd towards personal expenses, and awarded Rs.15,000/- for loss of estate, Rs.15,000/- for funeral expenses, and Rs.40,000/- for loss of consortium. The total compensation was recalculated at Rs.63,47,212/-. The Court allowed the appeal, set aside the Tribunal's award, and directed the insurance company to pay the enhanced amount with 7.5% interest from the date of petition.

Headnote

A) Motor Accident Claims - Assessment of Income - Income Tax Returns as Evidence - The Tribunal erred in disregarding Income Tax Returns (Exhibits 32, 33, 34) showing annual income of Rs.4,49,301/- from construction and consultancy work, and instead assessing income at Rs.2,83,644/- per annum based on vague reasoning. Held that Income Tax Returns are reliable documentary evidence and must be accepted unless rebutted (Para 5).

B) Motor Accident Claims - Future Prospects - Self-Employed Person Below 40 Years - As per National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, a self-employed person below 40 years is entitled to 40% addition towards future prospects. The Tribunal's grant of only 10% was erroneous and contrary to settled law (Para 6).

C) Motor Accident Claims - Deduction for Personal Expenses - Married Deceased - For a married deceased with three dependents, deduction of 1/3rd towards personal expenses is appropriate as per Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121 (Para 7).

D) Motor Accident Claims - Multiplier - Age of Deceased - The deceased was aged 38 years at the time of accident, hence multiplier of 16 applies as per Sarla Verma (Para 7).

E) Motor Accident Claims - Conventional Heads - Under Section 166 of the Motor Vehicles Act, 1988, claimants are entitled to Rs.15,000/- for loss of estate, Rs.15,000/- for funeral expenses, and Rs.40,000/- for loss of consortium (Para 8).

Issue of Consideration

Whether the Motor Accident Claims Tribunal erred in assessing the income of the deceased at Rs.2,83,644/- per annum instead of the income shown in Income Tax Returns, and in granting only 10% future prospects instead of 40% as per settled law.

Final Decision

The appeal is allowed. The judgment and award dated 08.09.2025 passed by the Motor Accident Claims Tribunal, Vadodara in MACP No.149 of 2019 is set aside. The compensation is enhanced to Rs.63,47,212/- with interest at 7.5% per annum from the date of petition till realization. The insurance company is directed to deposit the enhanced amount within eight weeks.

Law Points

Income Tax Returns are reliable evidence for assessing income of deceased
Future prospects at 40% for self-employed persons below 40 years
Deduction of personal expenses at 1/3rd for married deceased
Multiplier of 16 for age 38
Conventional heads under Section 166 MV Act

Case Details

2026 LawText (GUJ) (01) 461

R/First Appeal No. 4442 of 2025

2026-01-30

Hasmukh D. Suthar

Mr. Mohsin M Hakim for Appellant(s), Mr. Dhairyawan D Bhatt for Defendant No.2, Mr. Moulesh A Vyas and Ms. Dixa U Pandya for Defendant No.1

Diptiben Rajendrabhai Bhatt (LHS-LRS of Late Rajendrabhai Amrutbhai Bhatt) & Ors.

Kishorbhai Bhikhabhai Patel & Anr.

Nature of Litigation

First Appeal against judgment and award of Motor Accident Claims Tribunal in a claim petition under Section 166 of the Motor Vehicles Act, 1988.

Remedy Sought

Appellants (legal heirs of deceased) sought enhancement of compensation from Rs.4,42,480/- to Rs.24,69,555/-.

Filing Reason

The Tribunal assessed income of deceased at Rs.2,83,644/- per annum ignoring Income Tax Returns showing Rs.4,49,301/-, granted only 10% future prospects, and awarded inadequate compensation.

Previous Decisions

Motor Accident Claims Tribunal, Vadodara, by judgment and award dated 08.09.2025 in MACP No.149 of 2019, awarded Rs.4,42,480/- with 7.5% interest.

Issues

Whether the Tribunal erred in assessing the income of the deceased at Rs.2,83,644/- per annum instead of the income shown in Income Tax Returns? Whether the Tribunal erred in granting only 10% future prospects instead of 40% as per settled law? Whether the Tribunal erred in not awarding adequate compensation under conventional heads?

Submissions/Arguments

Appellant argued that the Tribunal ignored Income Tax Returns (Exhibits 32, 33, 34) showing annual income of Rs.4,49,301/- from construction and consultancy work. Appellant argued that the Tribunal granted only 10% future prospects, contrary to National Insurance Co. Ltd. v. Pranay Sethi which mandates 40% for self-employed persons below 40 years. Appellant argued that the Tribunal erred in not awarding adequate compensation under conventional heads.

Ratio Decidendi

Income Tax Returns are reliable documentary evidence for assessing income of deceased and must be accepted unless rebutted. For a self-employed person below 40 years, 40% addition towards future prospects is to be granted as per Pranay Sethi. Multiplier of 16 applies for age 38, deduction of 1/3rd for personal expenses, and conventional heads of Rs.15,000 for loss of estate, Rs.15,000 for funeral expenses, and Rs.40,000 for loss of consortium.

Judgment Excerpts

The learned Tribunal has committed an error in not properly considering the evidence produced on record. Income Tax Returns are reliable documentary evidence and must be accepted unless rebutted. As per National Insurance Co. Ltd. v. Pranay Sethi, a self-employed person below 40 years is entitled to 40% addition towards future prospects.

Procedural History

The claimants filed MACP No.149 of 2019 before the Motor Accident Claims Tribunal, Vadodara, which awarded Rs.4,42,480/- on 08.09.2025. Aggrieved, the claimants filed First Appeal No.4442 of 2025 before the High Court of Gujarat, which was heard and decided on 30.01.2026.