M/S VIJAY GROUP OF COMPANIES vs. LEARNED INCOME TAX APPELLATE TRIBUNAL

1 IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Appeal From Order No.21 of 2020

The Oriental Insurance Company Limited …. Appellant

Versus

Smt. Kavita Karki and others …… Respondents

Judgment reserved on: 19.09.2025 Judgment delivered on: 25.09.2025

---------------------------------------------------------------------- Presence:- Mr. I.P. Kohli and Mr. Kanti Ram Sharma, learned counsel for the appellant/insurance company. Mr. Mayank Pandey, learned counsel for respondent nos.1 & 2. Mr. Saurav Adhikari, learned counsel for respondent no.4. ----------------------------------------------------------------------

Hon'ble Alok Mahra, J.

The present appeal has been preferred by the appellant–Insurance Company under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the Act, 1988’), assailing the judgment & award dated 18.10.2019 passed by the learned Motor Accident Claims Tribunal/First Additional District Judge, Haldwani, District Nainital, in M.A.C.P. No.146 of 2018, whereby a sum of ₹90,01,776/- has been awarded as compensation in favour of the claimants. 2.

The brief factual matrix, as borne out from the record, is that on 09.06.2018 at about 07:00 p.m., the husband of respondent no. 1, namely, late Parvendra

2 Singh alias Pappu Karki, alongwith his companions, was travelling from Gauniyaro to Haldwani in a Car, bearing registration No. UK04-H-7447; that, when the said vehicle reached near Village Murkudia Haidakhan, the driver, Pushkar Singh, drove the Car in a rash and negligent manner, as a result of which, the vehicle fell into a deep gorge. Consequent thereto, late Pravendra Singh alias Pappu Karki, the driver-Pushkar Singh, as well as another occupant of the vehicle, succumbed to the injuries on the spot; whereas, two other co- passengers sustained grievous injuries. The unfortunate incident was promptly reported to Police Station Patti Rousil, whereupon First Information Report No. 02 of 2018 was registered under Sections 279, 304-A, 337, and 338 of the Indian Penal Code. 3.

Learned counsel for the appellant contended that the learned Tribunal erred in taking into consideration the Income Tax Returns of the deceased, which pertained to the period subsequent to his demise. The second ground urged by the learned counsel for the appellant is that the deceased did not have a fixed or regular income, being a professional singer; notwithstanding this, the learned Tribunal relied upon an average of the last three years’ Income Tax Returns of the deceased for the purpose of computing his income. It was further submitted that no other vehicle was involved in the accident and that the unfortunate incident occurred in an attempt to save the life of a wild animal, and not on account of rash or negligent driving on the part of the driver.

3 4.

Learned counsel further submitted that the learned Tribunal, without assigning any cogent or convincing reasons, has erroneously held that the driver of the vehicle had driven the Car in a rash and negligent manner. To fortify his submissions, learned counsel for the appellant has placed reliance upon the judgment rendered by the Hon’ble Apex Court in the case of ICICI Lombard General Insurance Co. Ltd. Vs. Ajay Kumar Mahanty, reported in (2018) 3 SCC 686, wherein the Hon’ble Supreme Court examined the principles for assessing compensation under Section 166 of the Motor Vehicles Act, 1988. The Court emphasized that while computing compensation, the claimant’s actual income, evidence of earning capacity, and disability must be duly considered. The Court clarified that averaging past incomes is permissible, but care must be taken to avoid computational inconsistencies. It held that disability percentage and future prospects directly influence loss of earning capacity. The judgment reinforces that Tribunals must base awards on cogent evidence, maintaining consistency and transparency, ensuring fair compensation to claimants. Paragraph No.7 of the said judgment, upon which learned counsel for the appellant has placed significant reliance, is reproduced hereinbelow for ready reference: “7. On perusing the order of the Tribunal, we find merit in the contention of the insurer that while calculating the income in para 10 of its order, the Tribunal has committed an error of computation. The Tribunal has on the basis of the income tax returns for 2007, 2008 and 2009 arrived at an average income of Rs 1,45,231. However, the Tribunal has thereafter noted that the average income comes to Rs

4 2,62,372. Ultimately, the Tribunal proceeds on the annual income of Rs 2,22,000 on the basis of the testimony of the claimant that he was earning Rs 18,500 per month. This is contradictory. In our view, on the basis of the finding of the Tribunal that the average income of the claimant for the previous three years was Rs 1,45,231, it would be necessary to take into account the evidence of PW 2 that the disability is to the extent of 55%. In other words, the loss of earning as a result of the aforesaid disability would work out to Rs 79,877 per year.” 5.

Per contra, learned counsel appearing for the claimants contended that the award is just and equitable, requiring no interference by this Court. It is submitted that the learned Tribunal rightly considered the Income Tax Returns submitted to prove the income of the deceased, which pertained to Assessment Years 2015-16, 2016-17, and 2017-18; whereas, the accident occurred on 09.06.2018 and, therefore, all the ITRs reflected the income of the deceased upto 31.03.2018. He further contended that the learned Tribunal, in exercise of its statutory discretion, was competent to either adopt the average income reflected in the Income Tax Returns or select a particular Assessment Year to rely upon, having due regard to the social purpose and the salutary object underlying the Motor Vehicles Act, which is enacted as a beneficial legislation to ensure prompt and adequate compensation to victims and claimants of motor accidents. 6.

In furtherance of his contentions, learned counsel for the claimants sought to rely upon the judgment rendered by the Hon’ble Supreme Court in Special Leave Petition (Civil) No.10664 of 2019, “Nidhi

5 Bhargava & Ors. Vs. National Insurance Company Ltd. & others”, wherein the Hon’ble Supreme Court addressed the evidentiary value of Income Tax Returns (ITRs) in determining compensation under the Motor Vehicles Act, 1988. The Court held that the date of filing an ITR is irrelevant, if the income pertains to a period before the accident. The judgment emphasized that ITRs are statutory documents with a presumption of correctness and should not be rejected solely based on the filing date. The Court restored the Motor Accident Claims Tribunal’s award of ₹31,41,000/-, highlighting the welfare-oriented nature of the legislation. 7.

It is manifest from the record that the Income Tax Returns of the deceased were duly proved before the learned Tribunal and all such Returns pertained to the period upto 31.03.2018, that is, prior to the demise of the deceased. Learned Tribunal, having framed a specific issue pertaining to the alleged rash and negligent driving of the vehicle involved in the unfortunate incident, carefully examined the evidence on record before arriving at its conclusions. The Tribunal considered, in particular, the statements of eyewitnesses and co-passengers who were present at the time of the accident. These witnesses consistently deposed that the vehicle was being driven in a manner that was both rash and negligent, thereby causing the vehicle to lose control and ultimately fall into a deep ditch, resulting in the immediate demise of the husband of respondent no. 1. The Tribunal meticulously analysed the evidence adduced by both the parties and noted that there was no credible or contradictory evidence to suggest any contributory negligence on the

6 part of the deceased or any other external factor, except for the manner of driving adopted by the driver. The Tribunal also recorded that no other vehicle was involved in the accident, and the incident was not occasioned by any unavoidable or sudden natural cause. On a careful scrutiny of the deposition of eyewitnesses, the Tribunal observed that the driver failed to maintain proper control of the vehicle, drove at an excessive speed for the road conditions, and did not exercise due care while negotiating the stretch near Village Murkudia Haidakhan. These findings, the Tribunal held, were sufficient to establish the rash and negligent driving of the vehicle, as contemplated under Sections 279 and 304-A of the Indian Penal Code. 8.

Upon considering the objects and underlying policy of the Motor Accident Claims Tribunal under the Motor Vehicles Act, it is apparent that the Statute is a beneficial legislation aimed at securing just compensation to victims of motor accidents. On a comprehensive appraisal of the facts, circumstances and material on record, this Court is of the considered view that it may be reasonably inferred that the deceased had an annual income of ₹5,98,110/-. The compensation awarded by the learned Tribunal under the other heads, being in consonance with the principles laid down by the Hon’ble Court in the case of “Smt. Sarla Verma & others Vs. Delhi Transport Corporation & another”, (2009) 6 SCC 121, and “National Insurance Company Limited Vs. Pranay Sethi & others”, (2017) 16 SCC 680, does not call for any interference. In the case of “K. Ramya & others Vs. National Insurance Co. Ltd. & another”, reported in

7 2022 SCC On Line SC 1338, after referring, inter alia, to “Ningamma & another Vs. United India Insurance Co. Ltd.”, reported in (2009) 13 SCC 710, the Hon’ble Supreme Court addressed the computation of compensation for dependents of deceased in a fatal road accident. It emphasized that mere inheritance of the deceased’s business does not negate the financial loss suffered due to the deceased’s absence. The Court upheld the use of contemporaneous Income Tax Returns to determine income and endorsed the multipliers applied by the Tribunal under Sarla Verma (Supra). It restored the original MACT award, holding that compensation under the Motor Vehicles Act is forward-looking, just, and equitable, ensuring financial stability and continuity for victims’ dependents, and cannot be arbitrarily reduced. 9.

In the light of the foregoing discussion and having regard to the materials on record, it is evident that the impugned judgment and award dated 18.10.2019, rendered by the Motor Accident Claims Tribunal/First Additional District Judge, Haldwani (Nainital) in M.A.C.P. No.146 of 2018, is both reasoned and legally sound. Learned Tribunal has meticulously examined the evidence adduced by the parties, including the statements of eyewitnesses, co-passengers, and documentary proof such as Income Tax Returns of the deceased, in determining the income and future prospects. Learned Tribunal has correctly applied the principles laid down by the Hon’ble Apex Court in Smt. Sarla Verma & others Vs. Delhi Transport Corporation & another (Supra) and National Insurance Company

8 Limited Vs. Pranay Sethi & others (Supra), and subsequent authoritative pronouncements, thereby ensuring a just and equitable determination of compensation. Learned Tribunal has also correctly assessed the issue of rash and negligent driving based on credible and cogent evidence, and there is no reason to conclude that the findings suffer from any perversity or legal infirmity. 10. In these circumstances, this Court finds no legitimate ground for interference with the award. Consequently, the present appeal, lacks merit and is dismissed and the impugned judgment and award being upheld in their entirety. The appellant is directed to comply with the award forthwith. The statutory amount deposited by the appellant before this Court be remitted to the concerned court.

(Alok Mahra, J.)

25.09.2025 BS

BALWANT SINGH Digitally signed by BALWANT SINGH DN: c=IN, o=HIGH COURT OF UTTARAKHAND, ou=HIGH COURT OF UTTARAKHAND, 2.5.4.20=fbbd191c8bdb8b16e8ca7937deaf72a17c02fe2 eacbf28cdf4ba7ce8640c5820, postalCode=263001, st=UTTARAKHAND, serialNumber=04E141DF4614F9A4D5F48346EB553DE5 185F418755DC00A7A13C14A680C3FA90, cn=BALWANT SINGH Date: 2025.09.25 13:27:28 +05'30'