Clarifying the determination of notional income in the absence of documentary evidence, the Gauhati High Court applies and follows Supreme Court precedent (Rani & ors. v. National Insurance Co. Ltd., 2018), holding that a reasonable, evidence-based assessment—here fixed at Rs. 6,000/month by consensus—should be adopted. This ruling affirms and clarifies the applicable standard for motor accident claims under the Motor Vehicles Act, serving as binding authority within the Gauhati High Court’s jurisdiction and persuasive for other courts.
Summary
| Category | Data |
|---|---|
| Case Name | MACApp./339/2019 of ORIENTAL INSURANCE COMPANY LTD. Vs MS. NISPILA O. SANGMA AND 5 ORS.; CNR GAHC010111372019 |
| Date of Registration | 27-06-2019 |
| Decision Date | 28-10-2025 |
| Disposal Nature | Disposed Of |
| Judgment Author | HON’BLE MR. JUSTICE BUDI HABUNG |
| Court | Gauhati High Court |
| Precedent Value | Binding within jurisdiction, persuasive for other courts |
| Overrules / Affirms | Affirms Supreme Court’s principle in Rani & ors. v. National Insurance Co. Ltd. (2018) |
| Type of Law | Motor Vehicle Accident Claim (Motor Vehicles Act, 1988) |
| Questions of Law | What is the appropriate notional income to be taken for a deceased victim in a motor accident claim in the absence of documentary evidence of income? |
| Ratio Decidendi |
The Court held that where there is no documentary proof of the deceased’s income, notional income assessment must be reasonable and in line with Supreme Court precedent. Relying on Rani & ors. v. National Insurance Co. Ltd. (2018), the Court determined that the Tribunal’s assessment of Rs. 6,500/month was excessive and, by consensus of parties, fixed the notional monthly income at Rs. 6,000 for calculation of compensation. The rest of the Tribunal’s award remained unaltered except for this modification in income assessment. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | The Court followed the Supreme Court’s principle that notional income should not be arbitrary and must be reasonable when documentary proof is lacking, ensuring fairness to both parties. |
| Facts as Summarised by the Court | The deceased died in a motor accident when his motorcycle was struck by a Bolero Pickup Van. The claimants (legal heirs) alleged he was a Government employee with a salary of Rs. 27,000/month, but produced no documentary proof. The Tribunal assessed notional income as Rs. 6,500/month. The Insurance Company appealed, relying on Supreme Court precedent and seeking lower notional income assessment. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the jurisdiction of the Gauhati High Court |
| Persuasive For | Other High Courts and Tribunals, as well as arguments before the Supreme Court in similar factual situations |
| Follows |
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What’s New / What Lawyers Should Note
- Restates and applies the Supreme Court’s approach in Rani & ors. and Bajaj Alliance cases for notional income assessment where there is no documentary proof of the deceased’s earnings.
- Rejects exaggerated income claims unsupported by documentation, emphasizing the need for evidentiary backing and judicial reasonableness.
- Accepts fixing of notional income at Rs. 6,000/month by consensus between parties, as a reasonable standard in the prevailing context.
- Affirms that future prospects (25%) are to be factored, and standard deductions (e.g., for personal expenses, multiplier application) remain as per precedent.
- Lawyers should ensure production of credible income proof; in its absence, expect courts to determine income strictly by national standards and Supreme Court guidance.
Summary of Legal Reasoning
- The Court first analyzed whether the evidence on record demonstrated the deceased’s claimed income of Rs. 27,000/month; it found no documentary proof was provided by the claimants.
- The Tribunal’s assessment of Rs. 6,500/month as notional income was scrutinized and found excessive given absence of documentary support.
- The appellant Insurance Company relied on Supreme Court authority (Rani & ors. v. National Insurance Co. Ltd., 2018), advocating Rs. 5,000/month as the proper notional income.
- The Court considered the parties’ consensus and deemed Rs. 6,000/month a fair notional income.
- The Court followed the calculation methodology laid down by Supreme Court precedent: add 25% for future prospects, deduct one-third for personal expenses, and apply the appropriate multiplier (14 in this case).
- Other grounds raised by appellant were expressly not pressed, in view of the decision in Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi & ors.
- The award was modified accordingly, compensational quantum recalculated as per the revised notional income, with all other elements of the Tribunal’s award remaining untouched.
Arguments by the Parties
Petitioner (Oriental Insurance Company Ltd.)
- Armed that the Tribunal erred in assessing notional income as Rs. 6,500 per month, which was too high in the absence of proof.
- Relied on Rani & ors. v. National Insurance Company Ltd. (2018) Supreme Court judgment to contend for notional income of Rs. 5,000/month.
- Submitted, additionally, that other grounds raised in the memo of appeal were not pressed due to the Supreme Court ruling in Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi & ors.
Respondents (Claimants and Other Parties)
- Contended for fair compensation based on the facts and circumstances.
- Ultimately, by consensus, agreed to fix the notional income at Rs. 6,000 per month.
Factual Background
The deceased victim died in a road accident on 27.03.2014, when his motorcycle was struck from behind by a Bolero Pickup Van in Assam. The claimants, who are his legal heirs, filed for compensation, alleging the accident happened due to the negligent driving of the other vehicle and claiming the deceased earned a monthly salary of Rs. 27,000 as a government employee. No documentation supporting his employment or income was produced. The owner and driver of the offending vehicle denied negligence but admitted insurance was in place. The Motor Accident Claims Tribunal awarded compensation on the basis of notional income of Rs. 6,500/month; the Insurance Company appealed against this quantum.
Statutory Analysis
- The judgment interprets and applies Section 173(1) of the Motor Vehicles Act, 1988 (appeals from Claims Tribunals’ awards).
- The Court refers to the method of calculating just compensation per Supreme Court precedent — notional income, future prospects addition (25%), deduction for personal expenses (1/3rd), and application of a multiplier (14).
- No new statutory interpretation or constitutional provision was invoked; the focus remained adherence to judicially established standards for assessment of compensation in the absence of documentary income proof.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinions were recorded or summarized in the judgment.
Procedural Innovations
No new procedural precedents, changes to evidence requirements, or suo motu guidelines/directions were set out in the judgment.
Alert Indicators
- Precedent Followed – The judgment closely follows and applies established precedent (Supreme Court’s rulings in Rani & ors. v. National Insurance Co. Ltd., 2018, and Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi & ors.).