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Synopsis

The Supreme Court on February 11, 2025, emphasised that income tax returns, being a statutory document, can be considered for determining earnings of a man to calculate compensation in road accident cases.

A bench of Justices Sanjay Karol and Manmohan raised the compensation amount payable to Vijayalaxmi alias Roopa V Shenoy and another from Rs 13,91,300 to Rs 24,53,280. Her husband had died due to injuries received in a road accident.

The matter before the court arose out of an appeal against the judgment and order of October 5, 2020, passed by the High Court of Karnataka, Bengaluru, which in turn was preferred against the judgment and order of August 14, 2015 by the Motor Accidents Claims Tribunal and IInd Additional Senior Civil Judge, Mangalore, DK.

On September 30, 2012, the deceased, namely, Vivekananda Shenoy, aged 47 years, was travelling on his motorcycle from Kavoor towards his house. At Kottara Cross, the offending bus, being driven in a rash and negligent manner, collided with the deceased. Thereafter, he was taken to A J Hospital at Mangalore, where he succumbed to the injuries on October 3, 2012.

A claim petition was filed by the appellan/wife of the deceased before the tribunal seeking compensation to the tune of Rs 1,00,00,000, stating that the deceased was the only earning member of the family, being a Mechanical Engineer by profession and earning upto Rs 5,00,000 per annum as per his Income Tax Returns.

The tribunal, by its order, awarded the appellants an amount of Rs 13,91,300 along with interest at the rate of 6% per annum, taking the income of the deceased as Rs 90,000 per annum.

Being aggrieved with the amount of compensation awarded, the claimant-appellants filed an appeal before the high court on the ground that the tribunal had incorrectly appreciated the monthly income of the deceased.

The high court, by the impugned order, dismissed the appeal, holding that there was no scope for further enhancement and that the tribunal had awarded a just compensation.

Dissatisfied, the claimant-appellants filed the appeal before the apex court. Their significant point of challenge was that the courts below had erred in computing the income of the deceased, and the high court had incorrectly observed that Income Tax Returns could not be accepted as proof of income.

After hearing the counsel for the parties, the bench said, "We are unable to agree with the view taken by the Tribunal and High Court on the income of the deceased."

The bench pointed out that it has been clarified in Malarvizhi & Ors Vs United India Insurance Co Ltd & Ors (2020) that the determination of income must proceed on the basis of Income Tax Return when available, being a statutory document.

The bench further said, more recently, the court in New India Assurance Co Ltd Vs Sonigra Juhi Uttamchand (2025) while determining the income of the deceased observed: "Monthly income could be fixed taking into account the tax returns only if the details of payment of tax are appropriately brought into evidence so as to enable the Tribunal/Court to calculate the income in accordance with law.”

Adverting to the facts at hand, the bench said, on a perusal of the Income Tax Return of the deceased for the Financial Year 2012-2013, his gross total income was seen to be Rs 1,98,192 per annum.

"In the light of the expositions of law, his income is, therefore, fixed at Rs 1,98,192 per annum," the bench said.

The court thus recalculated the compensation payable to the claimant appellant as Rs 24,53,280.

It determined the amount under various heads like future prospects, multiplier of 13, medical expenses, loss of estate, and consortium and funeral expenses.

Case Title: Vijayalaxmi alias Roopa V Shenoy Vs National Insurance Co Ltd & Ors