Bombay High Court upholds Supreme Court precedents and overrules tribunal’s 25% deduction for probationary status in motor accident compensation; binding on subordinate courts in Bombay
Summary
| Category | Data |
|---|---|
| Case Name | FA/1878/2021 of SUVARNAMALA GOVIND BOMBADE AND ORS Vs TANAJI WAGHAMBHAR MITKARI AND ANR |
| CNR | HCBM030440012019 |
| Decision Date | 26-08-2025 |
| Disposal Nature | Partly Allowed |
| Judgment Author | Hon’ble Shri Justice Abhay S. Waghwase |
| Court | Bombay High Court, Aurangabad Bench |
| Bench | Single Judge |
| Precedent Value | Binding on all subordinate courts under Bombay High Court jurisdiction |
| Overrules / Affirms |
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| Type of Law | Motor Vehicles Act, Section 166; Compensation law |
| Questions of Law |
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| Ratio Decidendi |
The tribunal’s deduction of 25% from the salary of a probationary employee is unwarranted because probation does not negate earnings once salary is drawn. The salary slip is conclusive evidence of income. Beneficial legislation under Section 166 MV Act mandates a liberal approach, and there is no presumption that a probationer would remain unconfirmed. Supreme Court precedents in Pranay Sethi and Magma govern future prospects and dependency calculations. Consequently, compensation should be computed on actual salary without arbitrary deductions, applying multiplier method with appropriate future prospects. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court | Deceased Govind, a probationary Supervisor at Indus Towers Ltd earning net ₹20,500, died on 27 Aug 2013 when a rashly driven tempo collided with his motorcycle. Claimants filed MACP No. 254/2013 seeking ₹1 crore; tribunal awarded ₹29,12,440, allowing insurance company to recover from owner. |
| Citations |
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Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts under Bombay High Court jurisdiction |
| Overrules | Tribunals applying 25% deduction on probationary employees’ salary |
| Distinguishes | Between probationary employment and negation of earnings when computing compensation |
| Follows |
|
What’s New / What Lawyers Should Note
- Probationary status does not warrant a 25% deduction from salary drawn for compensation purposes.
- Salary slips suffice as conclusive evidence of actual income under Section 166 MV Act.
- Beneficial nature of the Motor Vehicles Act precludes speculative deductions about confirmation.
- Supreme Court’s methodology in Pranay Sethi for future prospects and multipliers must be followed.
- Insurance companies cannot arbitrarily contest salary figures when documentary proof exists.
Summary of Legal Reasoning
- Tribunal’s Finding: Held that probationary employment entitled to 25% deduction due to lack of permanence (Paragraph 21).
- Re-appreciation of Evidence: Examined Exhs. 48 (service agreement) and 49 (salary certificate) confirming net salary of ₹20,500 despite probation (Paras 9–11).
- Evidentiary Principle: Salary slip is “effective” evidence establishing actual earnings; probation does not negate drawn salary.
- Deduction Unwarranted: 25% deduction lacks logical foundation; no presumption that employee would remain unconfirmed under a beneficial statute.
- Adoption of SC Jurisprudence: Applied Pranay Sethi and Magma to grant 50% future prospects, multiplier of 17, and consortium damages (Para 12).
- Quantum Enhancement: Computed total compensation at ₹48,20,750 vs. ₹29,12,440 awarded by tribunal; enhanced by ₹19,08,310.
Arguments by the Parties
Petitioners (Claimants):
- Deceased earned salary of over ₹29,000 with additional 10% increments; tribunal wrongly considered only ₹20,000.
- 25% deduction for probation is baseless; proof of service rendered (salary slips, appointment letter, manager’s testimony) entitles full salary.
- Future prospects should be 50% for a 27-year-old; interest rate of 9% too low.
Respondent (Insurance Company):
- Deceased was on probation and worked only 20 days; salary cannot be treated as fixed full-month salary.
- Evidence shows limited service; tribunal’s conservative award aligns with service period.
- Deceased’s educational qualification (12th standard) and probation warrant careful valuation.
Factual Background
Govind, a probationary Supervisor at Indus Towers Ltd, joined service 20 days before a fatal road accident on 27 Aug 2013 when a tempo driven rashly collided with his motorcycle, causing death on the spot. His heirs filed MACP No. 254/2013 under Section 166 MV Act claiming ₹1 crore compensation on the basis of a monthly salary of ₹29,562. The tribunal awarded ₹29,12,440. Appellants challenged only the quantum, contending under-valuation of income and faulty deductions.
Statutory Analysis
- Section 166 MV Act empowers tribunals to award just compensation in a beneficial manner.
- Salary slip qualifies as prima facie proof of income; no statutory basis for arbitrary deductions on account of probation.
- Supreme Court guidelines for future prospects and dependency calculations (Pranay Sethi; Magma) ensure uniformity.
Alert Indicators
- ✔ Precedent Followed – Supreme Court rulings in Pranay Sethi and Magma.
- 🚨 Breaking Precedent – Overturns tribunal’s practice of deducting 25% for probationary status.
Citations
- 2025:BHC-AUG:23239
- FA-1878-2021
- National Insurance Company Limited v. Pranay Sethi and Ors., 2017 SCC OnLine SC 1270
- Magma General Insurance Co. Ltd. v. Nanu Ram alias Chuhru Ram and Others, (2018) 18 SCC 130