The Uttarakhand High Court affirms that a posthumously filed income tax return may be relied upon in computing compensation under the Motor Vehicles Act when corroborated by evidence, and further reasserts that the multiplier must correspond to the nearest completed age as clarified by the Supreme Court. This judgment upholds settled precedents, confirming the law for tribunals and appellate courts in motor accident claims.
Summary
| Category | Data |
|---|---|
| Case Name | AO/196/2019 of IFFCO TOKIO GIC LTD. Vs SMT. ARUNA GARG |
| CNR | UKHC010070222019 |
| Date of Registration | 14-05-2019 |
| Decision Date | 30-10-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | HON’BLE MR. JUSTICE ALOK MAHRA |
| Court | High Court of Uttarakhand |
| Precedent Value | Binding within Uttarakhand; persuasive for other High Courts and Tribunals |
| Overrules / Affirms | Affirms settled Supreme Court precedents: Sarla Verma, Pranay Sethi, Shashikala |
| Type of Law | Motor Accident Claims—Compensation Computation |
| Questions of Law |
|
| Ratio Decidendi | The Court held that a posthumously filed income tax return does not become unreliable solely on the basis of the time of filing, if corroborated by earlier returns and evidence of income trends. The appropriate multiplier for determining compensation is to be selected as per the age last completed, in accordance with Sarla Verma and Shashikala, with judicial discretion exercised in favor of “just compensation.” Appellate courts will not interfere with factual findings of negligence except where perverse or unsupported by evidence. The Tribunal’s approach, found to be judicious and balanced, was thus affirmed. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | Reasonable guesswork, “just compensation” principles, scrutiny of evidence, adherence to binding Supreme Court rulings |
| Facts as Summarised by the Court | The appellant insurer challenged the Tribunal’s compensation award, disputing (i) reliance on posthumous income tax returns reflecting increased income, (ii) the use of multiplier 13 for a deceased aged 50 years 11 months, and (iii) the absence of deduction for tax and for alleged contributory negligence. The Tribunal had found on evidence that the accident occurred due to the rashness of the insured vehicle’s driver and that income evidence, including the impugned return, was credible. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and Motor Accident Tribunals within Uttarakhand |
| Persuasive For | Motor Accident Tribunals and High Courts in other states; relevant for insurers and claimants in nationwide claims |
| Follows |
|
What’s New / What Lawyers Should Note
- Reaffirms that posthumous income tax returns, if corroborated by prior returns and evidence, may be relied on to assess the annual income of the deceased in accident compensation cases.
- Clarifies that the multiplier is to be chosen based on the deceased’s last completed age, not the age nearest to the date of death, per Supreme Court guidance.
- Appellate courts remain slow to disturb factual findings of negligence or income assessment by Tribunals, except where findings are perverse or unsupported by evidence.
- Lawyers should ensure adequate documentation of income trends and be prepared to counter challenges to posthumous filings with corroborative evidence.
Summary of Legal Reasoning
- The court considered the appellant’s contention regarding the unreliability of a posthumously filed income tax return, noting that the mere timing of such filing does not render the return false if corroborated by previous years’ income trends.
- Addressing multiplier selection, the court relied on Supreme Court rulings in Sarla Verma and Shashikala, emphasizing that the age to be used is the last completed year; thus, a deceased aged 50 years and 11 months attracts the multiplier applicable for age 50, not 51.
- The Court referred to Pranay Sethi for the principle that compensation should be “just, fair, and reasonable,” which may require reasonable guesswork rather than strict mathematical accuracy.
- On the charge of contributory negligence, the Court concluded that the Tribunal’s findings against the insurer on this issue were reasoned and based on evidence; there was thus no cause for interference.
- The overall approach of the Tribunal was upheld as judicious and balanced, applying established law and justified findings of fact.
Arguments by the Parties
Petitioner (Appellant — Insurance Company):
- Alleged gross error of law for not deducting the tax element from the deceased’s income and for relying on a posthumously filed income tax return, which purportedly reported an anomalous income spike.
- Contended that, as the deceased was 50 years, 11 months, and 11 days old, the appropriate multiplier should be 11 (not 13), as per Sarla Verma.
- Argued that accident involved contributory negligence by both drivers and that quantum should be reduced accordingly.
- Sought setting aside or modification of the Tribunal’s award.
Respondent (Claimants):
- Asserted that deceased was running in 50th year (not completed 51), so a multiplier of 13 was correct, per Sarla Verma and Shashikala.
- Emphasized Supreme Court authority for taking the completed year for multiplier application.
- Supported Tribunal’s acceptance of income evidence, including posthumous return, as credible and consistent.
Factual Background
The deceased died in a motor vehicle accident in Dehradun. The claimants (family) sought compensation from the appellant insurance company, submitting income tax returns, including one for the assessment year 2015–16 filed after the death, reflecting a significant increase in income. The Tribunal awarded compensation based on this evidence and applied a multiplier corresponding to age 50. The insurer appealed, disputing (i) admissibility of the posthumous return, (ii) choice of multiplier, and (iii) exclusion of contributory negligence.
Statutory Analysis
- The judgment analyzed Section 173 of the Motor Vehicles Act, which concerns the appellate jurisdiction of the High Court over awards passed by the Motor Accident Claims Tribunal.
- Cited the Supreme Court’s interpretation in Sarla Verma and Shashikala regarding the determination of the appropriate multiplier based on the age last completed.
- Discussed “just compensation” as expounded in Pranay Sethi, allowing reasonable guesswork and emphasizing fairness and adequacy to the dependents.
- No other statutory provisions or constitutional articles were specifically interpreted.
Alert Indicators
- ✔ Precedent Followed – The court followed and applied settled Supreme Court guidelines (Sarla Verma, Shashikala, Pranay Sethi).