In a significant clarification for motor accident claim adjudication, the Punjab & Haryana High Court has affirmed that the absence of documentary proof of income does not preclude tribunals from reasonably estimating a deceased’s earnings based on prevailing economic conditions and oral testimony. The judgment reinforces that summary proceedings under the Motor Vehicles Act prioritize substantive justice over rigid evidentiary formalities.
Background & Facts
The Dispute
The claim arose from the death of Mordhawaj in a motor vehicle accident on 06.05.2019. His family filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for loss of dependency, loss of consortium, funeral expenses, and loss of estate. The claimants asserted that the deceased earned ₹15,000 per month, but produced no salary slips, income tax returns, or employment records.
Procedural History
- 2019: Accident occurred on 06.05.2019 in Nuh, Haryana.
- 2024: Motor Accident Claims Tribunal awarded ₹16,49,480/-, including interest at 7.5% per annum.
- 2024: Insurance company appealed to the High Court, challenging the income assessment.
- 2026: High Court heard the appeal and upheld the Tribunal’s award.
Relief Sought
The appellant-insurance company sought reduction of compensation by reclassifying the deceased as an unskilled laborer under Rajasthan’s minimum wage notification (₹5,850/month), arguing that the Tribunal erred in using ₹7,800/month (skilled worker rate) without documentary proof.
The Legal Issue
The central question was whether the absence of documentary evidence precludes a Motor Accident Claims Tribunal from relying on oral testimony and minimum wage notifications to estimate the deceased’s monthly income, particularly when such estimation aligns with regional economic realities.
Arguments Presented
For the Appellant
The appellant contended that the Tribunal’s reliance on ₹7,800/month as the deceased’s income was legally unsustainable without documentary proof. It argued that under Section 166, compensation must be based on verifiable income, and in the absence of such proof, the lowest tier of minimum wage (₹5,850 for unskilled labor) must apply. It cited Chandra @ Chanda @ Chandraram v. Mukesh Kumar Yadav to argue that guesswork must be grounded in objective data, not speculation.
For the Respondents
The respondents argued that the Tribunal correctly applied the principles laid down in Sarla Verma and Pranay Sethi, recognizing that in rural and informal sectors, income documentation is often unavailable. They emphasized that the deceased was a 32-year-old male from Bharatpur, Rajasthan, engaged in manual labor, and ₹7,800/month was a reasonable estimate under the skilled worker category of Rajasthan’s 2019 minimum wage notification. Oral testimony from family members was credible and consistent with local economic conditions.
The Court's Analysis
The Court undertook a structured review of the legal framework for income estimation in death claims under the Motor Vehicles Act. It emphasized that summary proceedings under Section 166 are not bound by the strict rules of evidence under the Indian Evidence Act. The Court relied on Chandra @ Chanda @ Chandraram v. Mukesh Kumar Yadav (2022) 1 SCC 198, which explicitly held that while minimum wage notifications serve as a yardstick, they are not absolute, and some degree of guesswork is permissible - provided it is not detached from reality.
"In the absence of documentary evidence on record, some amount of guesswork is required to be done. But at the same time the guesswork for assessing the income of deceased should not be totally detached from reality."
The Court noted that the Tribunal had not arbitrarily chosen the skilled worker rate. It cross-referenced the deceased’s age (32), location (Bharatpur, Rajasthan), and the nature of work inferred from the context (manual labor requiring skill), and concluded that ₹7,800/month was a reasonable midpoint between unskilled and skilled wage brackets. The Court further held that the 40% addition for future prospects was justified under Pranay Sethi, as the deceased was below 40 and engaged in labor requiring skill.
The Court also affirmed the Tribunal’s application of the 1/4th deduction for personal expenses (due to six dependents), the multiplier of 16 (for age 32), and the conventional heads of compensation - ₹44,000 for loss of consortium, ₹16,500 for funeral expenses, and ₹16,500 for loss of estate - as consistent with Pranay Sethi and Magma General Insurance v. Nanu Ram.
The judgment rejected the appellant’s attempt to impose a rigid, document-centric standard that would disadvantage claimants from informal sectors, thereby upholding the beneficial and humanitarian purpose of the Motor Vehicles Act.
The Verdict
The appeal was dismissed. The Court upheld the Tribunal’s award of ₹16,49,480/- with interest at 7.5% per annum. It held that income estimation in motor accident claims may rely on oral testimony and minimum wage notifications when documentary proof is unavailable, provided the estimate is grounded in economic reality and not speculative. The appellant’s statutory deposit of ₹25,000 was ordered refunded.
What This Means For Similar Cases
Documentary Evidence Is Not Absolute
- Practitioners must now argue that absence of documents does not equate to absence of income in informal sector cases.
- Claimants should submit affidavits from family, neighbors, or local employers to corroborate oral testimony.
- Opposing parties cannot automatically reduce income to the lowest minimum wage tier without justifying why higher tiers are inapplicable.
Future Prospects Apply Even Without Formal Employment
- The 40% addition for future prospects applies to laborers below age 40, even if they are not formally employed, as long as their work is skill-based.
- Courts must distinguish between unskilled, semi-skilled, and skilled labor based on context, not just job titles.
- The Pranay Sethi guidelines on future prospects are binding and must be applied uniformly across states.
Loss of Consortium Is Recognized for Filial Relationships
- Parents of deceased unmarried children are entitled to filial consortium compensation under Magma General Insurance.
- The ₹40,000 benchmark (adjusted for inflation) is now a standard for such claims, and courts must not deny it on technical grounds.
- This principle extends to adult unmarried children, reinforcing the non-economic value of familial bonds in compensation law.
