Salary Certificate not the only basis for Assessing Income of the Deceased for Calculating Compensation in cases of Motor Accident Claims.

The Apex Court in a recent judgment held that there is nothing in the law which requires the Tribunal to assess the income of the deceased only on the basis of a salary certificate for arriving at a just and fair compensation to be paid to the claimants for the loss of life. Where income of the deceased as disclosed in income tax returns was more than the salary, the same shall be considered by the Court.

The said judgment was pronounced by the Hon’ble Supreme Court in the matter of United India Insurance Co. Ltd. Vs. Indiro Devi & Ors. [SLP (Civil) No. 7104-7105 of 2016] which was decided on 03.07.2018.

Challenge

Before the tribunal, the claimants had produced salary certificate as well as the income tax assessment for calculating the compensation. The tribunal held that since the claimants had not led any evidence to explain the contradictions between the two figures of income emerging from the evidence of the employer of the deceased and the income tax record, and passed the award relying on the salary certificate issued by the employer of the deceased.

The High Court of Punjab and Haryana subsequently took into consideration the income tax records of the deceased and increased the compensation thereby giving rise to the present Appeal.

The question before the Supreme Court was whether the P & H High Court was justified in relying upon the income tax records of the deceased, in the face of the contradiction between the salary slip and tax records.

Held

The Apex Court opined that it was not necessary for the claimants to explain the contradiction between the figures of the salary certificate and the income as mentioned in the income tax records/assessment. It was held that there is nothing in the law which requires the Tribunal to assess the income of the deceased only on the basis of a salary certificate for arriving at a just and fair compensation to be paid to the claimants for the loss of life.

The Bench concluded by holding that that salary certificate need not be the only basis to assess income of the deceased for arriving at a just and fair compensation to be paid to the claimants for the loss of life.