Chhattisgarh HC Triples Motor Accident Compensation After Tribunal Wrongly Ignored Income Tax Returns

The Chhattisgarh High Court enhanced compensation from ₹14.08 lakh to ₹51.24 lakh after finding the Claims Tribunal had no basis to discard the deceased's duly filed income tax returns when computing loss of dependency.

Justice Sanjay K. Agrawal, sitting singly at the High Court of Chhattisgarh at Bilaspur, has substantially enhanced the motor accident compensation payable to the family of Gajadhar Verma, who died in a road accident. The 5th Additional Motor Accident Claims Tribunal, Raipur had awarded ₹14,08,000 in Claim Case No. 255 of 2016. The claimants — the deceased's widow, two minor children, and his mother — challenged that award as inadequate, while the insurer, Bajaj Allianz General Insurance Company Limited, separately challenged its liability. By a common order dated 6 July 2026, the High Court dismissed the insurer's appeal and allowed the claimants' appeal in part, revising the total compensation to ₹51,24,980.

Two Cross-Appeals Arising from the Same Accident

The accident gave rise to two cross-appeals before the High Court. MAC No. 162 of 2020 was filed by the claimants under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement of the compensation amount. MAC No. 2252 of 2019 was filed by Bajaj Allianz General Insurance Company Limited, contesting the Tribunal's decision to fasten liability upon it as the insurer of vehicle No. CG/06/E/1416.

Both appeals were heard together because they arose from the same underlying claim and involved common questions of fact and law.

The insurer's appeal in MAC No. 2252 of 2019 was disposed of at the outset. Counsel for the claimants pointed out that the insurer had filed an earlier appeal — MA(C) No. 1440 of 2018 in Bajaj Allianz General Insurance Company Limited v. Smt. Sahodra Bai & Ors. — arising from the same accident, and that appeal had already been dismissed by this Court on 28 February 2026. In light of that prior dismissal, the Court dismissed MAC No. 2252 of 2019 as well.

The Tribunal's Approach to the Deceased's Income

The central dispute in the claimants' appeal was the Tribunal's assessment of the deceased's monthly income at ₹7,000. The claimants had placed before the Tribunal income tax returns for assessment years 2011-12, 2012-13, and 2013-14. The return for 2012-13 disclosed a gross annual income of ₹2,62,445 and income from other sources of ₹94,800.

The Tribunal chose to discard these returns on two grounds: first, that the income disclosed was based on estimation; and second, that no separate documentary evidence of monthly income had been produced. Armed with that reasoning, it instead assessed the deceased's monthly income at ₹7,000 — producing an annual figure of ₹84,000 — and applied a multiplier of 15 to arrive at the loss of dependency component.

Counsel for the claimants, Ms. Anamika Jain, argued that the deceased was engaged in construction work, earned ₹60,000 per month, and filed income tax returns regularly. She submitted that the Tribunal's disregard of the returns and its consequent under-assessment of income resulted in an award far below what just compensation required. She also raised inadequacy in the amounts awarded under consortium and funeral expenses, and the complete omission of any amount under the head of loss of estate.

Why the Tribunal's Rejection of ITRs Was Unsustainable

Justice Agrawal held that the Tribunal's approach was unsustainable. The income tax returns had been duly produced and exhibited before the Tribunal. In the absence of any material to suggest they were fabricated, manipulated, or otherwise unreliable, there was no justification for ignoring the income disclosed in them.

The Court stated that “ITR will be considered as a mandatory document” in cases of motor accident compensation, and that income must be assessed on the basis of income tax returns for the purpose of determining just compensation. The Tribunal's invocation of a supposed lack of monthly income documentation was not a valid reason to bypass returns that had been formally exhibited.

The reasoning carries practical weight. A Tribunal cannot demand additional proof of the very figure that a statutory return — filed under the Income Tax Act and exhibited in evidence — already discloses, without first identifying a specific reason to doubt the return's authenticity.

Recomputation of Compensation

Drawing on the Supreme Court's decisions in National Insurance Company Ltd. v. Pranay Sethi (2017) 16 SCC 680, Sarla Verma & Ors. v. Delhi Transport Corporation & Ors. (2009) 6 SCC 121, and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors. (2018) 18 SCC 130, the Court recalculated the award head by head.

The annual income was taken as ₹3,57,245 (being ₹2,62,445 plus ₹94,800 from other sources). After deducting personal expenses, the net income came to ₹3,12,697. A future prospects addition of 40 per cent on net income was applied, yielding ₹1,25,079, to produce a yearly income figure of ₹4,37,776. After deducting one-fourth for the deceased's own expenses (₹1,09,444), the figure used for multiplier application was ₹3,28,332. With a multiplier of 15, the loss of dependency component came to ₹49,24,980.

On the conventional heads, the Court awarded ₹20,000 for loss of estate (the Tribunal had awarded ₹30,000), ₹1,60,000 for loss of consortium for four claimants at ₹40,000 each (the Tribunal had awarded ₹40,000 in total), and ₹20,000 for funeral expenses (the Tribunal had awarded ₹15,000).

The aggregate came to ₹51,24,980, against the Tribunal's ₹14,08,000.

Outcome

MAC No. 2252 of 2019 filed by Bajaj Allianz General Insurance Company Limited was dismissed in view of the prior dismissal of the insurer's connected appeal on 28 February 2026.

MAC No. 162 of 2020 filed by the claimants was allowed in part. The impugned award of ₹14,08,000 was enhanced to ₹51,24,980. The claimants are entitled to an additional amount of ₹37,16,980 beyond what the Tribunal awarded.

The respondent concerned was directed to deposit the enhanced compensation within three months from the date of receipt of a copy of the order. The additional amount carries interest at 7 per cent per annum from the date of filing of the claim application before the Tribunal until realisation. All other conditions of the Tribunal's award remain intact.