Reliance upon ITR shall be made while determining compensation under Motor Vehicles Act

Smt. Anjali Vs Lokendra Rathod (Supreme Court of India)

Conclusion: The Hon’ble Supreme Court determined compensation under Motor vehicles Act, 1988 on basis of Income Tax Return which was held to be a statutory document on which reliance be placed, where available, for computation of annual income.

Facts: In present facts, the present appeal arises from a judgment of the Madhya Pradesh High Court dated 16^th August, 2018 in a First Appeal from the decision of the Motor Accident Claims Tribunal, Indore.

The Appellants are the heirs and legal representatives of Rajesh (deceased) who died as a result of a motor accident on 15^th August 2010.  The claimants/appellants filed a Claim Petition under Section 166 of the Motor Vehicles Act, 1988 before the Tribunal, seeking compensation in the amount of Rs.20 Lakhs. By its award dated 12^th July, 2013, the Tribunal estimated the deceased’s income at Rs.4000/- per month and allowed the claim in the amount of Rs.6,24,000/- together with interest at the rate of 6% per annum from the date of filing the Claim Petition till the date of full realization of the decreed amount. The appellants filed a First Appeal before the High Court of Madhya Pradesh, Indore Bench, wherein vide impugned judgment dated 16^th August, 2018 the High Court increased the deceased’s estimated income to Rs. 5000/-per month and awarded a compensation of Rs. 11,41,000/- with interest at the rate of 6% per annum from the date of filing the Claim Petition till the date of full realization of the decreed amount. Aggrieved by the judgment of the High Court, the claimants are in appeal before this Court.

The Hon’ble Supreme Court observed that the Tribunal and the High Court both committed grave error while estimating the deceased’s income by disregarding the Income Tax Return of the Deceased. The appellants had filed the Income Tax Return (2009­2010) of the deceased, which reflects the deceased’s annual income to be Rs.1,18,261/-, approx. Rs.9,855/- per month. It was observed that this Court in Malarvizhi & Ors. [(2020) 4 SCC 228], has reaffirmed that the Income Tax Return is a statutory document on which reliance be placed, where available, for computation of annual income. In Malarvizhi (Supra), this Court has laid as under:

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