The Punjab and Haryana High Court has reaffirmed that income assessment in motor accident compensation cases must be based on the deceased's last drawn salary, without mechanically importing deductions from prior employment. The judgment clarifies that consolidated stipends cannot be arbitrarily reduced by excluding allowances not actually paid in the current employment, while also rejecting unsubstantiated claims of contributory negligence.
Background & Facts
The Accident and Claim
On 21 September 2021, Bajrang Sharma died while riding pillion on a motorcycle that was struck by a truck near Hisar. The accident occurred when the truck (HR-39B/4225), allegedly driven rashly and negligently, collided with the motorcycle. Following Pardeep's statement (the motorcycle driver), FIR No. 839 dated 21.09.2021 was registered under Sections 279, 337, 304-A, and 427 of the Indian Penal Code.
The deceased's widow and two minor children filed a claim petition, asserting that Bajrang Sharma was employed as a Sales Manager with Edisafe Logistics Pvt. Ltd., earning ₹30,000 per month. The claimants sought compensation for his death.
Procedural History
The case progressed through the following stages:
- 2021: FIR registered and charge-sheet filed against the truck driver
- 2024: Motor Accident Claims Tribunal, Hisar, awarded ₹52,20,000 with 7% interest
- 2025: The United India Insurance Company filed the present appeal challenging the income assessment and alleging contributory negligence
Positions of the Parties
The appellant-insurer contested the claim on multiple grounds:
- Erroneous inclusion of transport and special allowances in income assessment
- Alleged contributory negligence by the deceased
- Disputed the deceased's employment and income
The respondents-claimants relied on documentary evidence, including salary slips and income tax returns, to establish the deceased's income and refuted the contributory negligence claim.
The Legal Issue
The appeal raised two central questions:
- Whether the Motor Accident Claims Tribunal erred in assessing the deceased's income at ₹30,000 per month by including allowances that were not part of his last drawn salary.
- Whether the deceased's alleged contributory negligence should reduce the compensation awarded.
Arguments Presented
For the Appellant (Insurance Company)
The appellant contended that the Tribunal wrongly included transport and special allowances in the income assessment. Relying on The New India Assurance Company Ltd v. Shri Lal & Others, the appellant argued that such allowances are personal and should be excluded. The appellant further asserted that the deceased's income should have been assessed at ₹24,610 per month, based on his prior employment with Inland World Logistics Private Limited.
Additionally, the appellant claimed that the deceased contributed to the accident through negligence and sought a 50% reduction in liability.
For the Respondents (Claimants)
The claimants argued that the deceased's last drawn salary of ₹30,000 was a consolidated stipend, not including any allowances. They relied on the offer letter (Ex.P37) and salary slips (Ex.P38 to Ex.P43) from Edisafe Logistics Pvt. Ltd. to establish this fact. The claimants also pointed to the deceased's income tax return for A.Y. 2020-2021, which reflected an annual income consistent with ₹30,000 per month.
The claimants further contended that the plea of contributory negligence was baseless, as the Tribunal had already found the truck driver solely responsible based on eye-witness testimony and police investigation.
The Court's Analysis
The Court examined the evidence and legal principles governing income assessment in motor accident claims. It held that the Tribunal's approach was correct in relying on the deceased's last drawn salary, as evidenced by the offer letter and salary slips from Edisafe Logistics Pvt. Ltd. The Court rejected the appellant's argument that allowances from prior employment should be excluded, noting that the deceased's current salary was a consolidated stipend without such components.
"The reliance placed by the appellant on the salary structure of the deceased’s previous employment with Inland World Logistics Private Limited, where travel allowance was granted, is wholly misconceived. Salary components of a prior employment cannot be mechanically imported into a subsequent and distinct employment."
The Court also upheld the Tribunal's rejection of contributory negligence, emphasizing that the accident was solely caused by the truck driver's rash and negligent driving. The absence of any evidence to suggest negligence on the deceased's part further supported this finding.
The Verdict
The appeal was dismissed. The Court upheld the Tribunal's award of ₹52,20,000 with 7% interest, holding that:
- The income assessment of ₹30,000 per month was correctly based on the deceased's last drawn salary.
- The plea of contributory negligence was unsubstantiated and rightly rejected.
What This Means For Similar Cases
Income Assessment Must Reflect Last Drawn Salary
Practitioners must ensure that income assessment in motor accident claims is based on the deceased's last drawn salary, supported by documentary evidence such as offer letters and salary slips. Courts will not mechanically exclude allowances from prior employment if they are not part of the current salary structure.
- Key Takeaway: Consolidated stipends cannot be arbitrarily reduced by excluding allowances not paid in the current employment.
- Actionable Step: Always verify the salary structure of the deceased's last employment to avoid erroneous deductions.
Contributory Negligence Requires Cogent Evidence
Claims of contributory negligence must be substantiated with clear evidence. Courts are unlikely to reduce compensation based on speculative or unsubstantiated allegations.
- Key Takeaway: The burden of proving contributory negligence lies on the party alleging it.
- Actionable Step: Ensure that eye-witness testimonies, police reports, and other evidence are thoroughly examined to refute claims of contributory negligence.
