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Motor Accident Claims – Potential To Earn Can Be Considered To Determine Compensation If There Is No Evidence For Actual Income : Supreme Court

The Supreme Court has held that even if there is no evidence on record of actual income, deceased person’s potential to earn can be considered while considering insurance claims in motor accidents matter.

The deceased was a computer engineer with a B.Tech degree. While there was evidence on record to show that the deceased was earning Rs.10,000/ month, there was no documentary evidence to show an additional 10,000/month which Appellants claimed. The Motor Accidents Claims Tribunal, Ranchi in its judgement assessed the “future loss of income” of the deceased at Rs.20,000/month and on that basis arrived at a compensation figure of Rs. 30 Lakhs.

The Jharkhand High Court in its impugned judgement reduced the amount of compensation from 30 Lakh Rupees to 15 Lakh Rupees. The impugned judgement held that: “this Court is of the opinion that without any evidence with regard to income and only on the basis of oral statement income of the deceased was considered by the learned Tribunal to the tune of Rs.20,000/- is not just and proper, though there no contrary evidence was brought by Insurance Company nor cross-examination has been done by the Insurance Company, but the learned Tribunal ought to have been very reasonable in granting compensation as the same cannot be bonanza rather the same must be just and fair compensation.” (Para 28)

Before the Supreme Court, the Respondent-Insurance Company argued that there was no documentary evidence produced on record to show that Rs.20,000/ month was the actual income of the deceased at the time of death.

In this light, the Order holds: “assuming that there was no supporting evidence laid, in that case also considering the potentiality to earn, as the deceased was a Bachelor of Engineering in Computer Technology, his income can safely be assessed at-least at Rs.20,000/- per month.”

On the basis of this reasoning, the Order dated 06.12.2021 sets aside the impugned judgement noting that the “High Court has committed grave error in reducing the compensation.”

Case name: Basant Devi v Divisional Manager, The New India Assurance Company Ltd

Coram: Justice M.R. Shah and Justice B.V.Nagarathna

Counsels: Mr.Kaushik Laik for Appellants, Mr.J.P.N.Shahi for Respondents.

Citation : LL 2021 SC 728

Source: https://www.livelaw.in/top-stories/motor-accident-claims-potential-to-earn-can-be-considered-to-determine-compensation-if-there-is-no-evidence-for-actual-income-supreme-court-187406