APHC010607122017 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL Nos:448 AND 3188 OF 2017 Bench Sr.No:-68 [3584] M.A.C.M.A.No.448 of 2017 National Insurance Company Limited, Nellore ...Appellant Vs. Trishla W/o.late Vipul Kumar, Nellore and 4 Others ...Respondent(s) ********** CORAM : THE CHIEF JUSTICE LISA GILL SRI JUSTICE CHALLA GUNARANJAN DATE : 3rd September 2026 Present: Advocate for Appellant: MS.MANIMMA MEDIDA (FOR INSURER) Advocate for Respondents: MR.SIVAPRASAD REDDY VENATI (FOR CLAIMANTS) *** COMMON JUDGMENT: (per Hon’ble Sri Justice Challa Gunaranjan) Both insurer as well as claimants preferred present appeals under Section 173 of the Motor Vehicles Act, 1988 (for short, “the Act”), dissatisfied by award, dated 09.09.2016, in M.V.O.P.No.689 of 2010, passed by the Chairman, Principal Motor Vehicle Accidents Claims Tribunal, Nellore (for short, “the Tribunal”), by which compensation of ₹45,59,000/- was awarded along with interest at the rate of 9% per annum. 2 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 2. For the sake of convenience, the parties hereinafter are referred to as they were arrayed in the M.V.O.P. before the Tribunal. 3. M.A.C.M.A. No.448 of 2017 was filed by the Insurer and M.A.C.M.A. No.3188 of 2017 by the claimants. 4. Brief facts of the case are as follows: (a) Deceased was aged 30 years and engaged in gold and shares business. While he was proceeding on motorcycle, along with his brother-in-law, when they reached Mini Bypass road at four lines junction of Bakthavastala Nagar, Nellore, lorry bearing registration No.AP-16-T-4944, belonging to 1st respondent, on account of rash and negligent driving of its driver, dashed against the motorcycle from behind. Resultantly, deceased fell down on ground and front wheels of lorry ran over him, thus, deceased succumbed on spot. (b) Deceased claimed to be earning ₹6,00,000/- per annum, therefore, wife, minor daughter, and parents of deceased preferred the claim for compensation. (c) The incident was reported to police, and Crime No.68 of 2010 for the offence punishable under Section 304-A of IPC was registered against driver of offending lorry. After completion of investigation, police laid charge sheet. 3 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 5. 1st respondent, owner of the lorry, remained ex parte. 6. 2nd respondent, insurer of the lorry, filed written statement denying that the accident occurred due to rash and negligent driving of driver of the lorry, rather, it was pleaded that the accident occurred due to rash and negligent driving of motorcycle by deceased himself. Further, it was also pleaded that the driver of lorry did not possess valid and effective driving licence, therefore, the same amounted to violation of terms and conditions of policy. Besides, the avocation, age and income of deceased were also disputed, and accordingly, prayed for dismissal of the claim. 7. Based on the aforesaid pleadings, the Tribunal framed the following issues and additional issues: “1) Whether the death of the deceased Vipul Kumar was due to rash and negligent driving of the driver of the lorry bearing registration No.AP-16-TV-4944? 2) Whether the claimants are entitled for any compensation, if so, how much amount and against which of the respondents? 3) To what relief? Additional Issues: 1) Whether the owner and insurance company of the motorcycle are proper and necessary parties in view of the plea of contributory negligence of the rider of the motorcycle as pleaded by R2? 2) Whether the driver of the lorry and the deceased are not having valid driving licenses as pleaded by R2?” 4 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 8. Claimants examined PW.1 to PW.4 and marked Exs.A1 to A17. The insurer examined RW.1 to RW.3 and marked Ex.C1 and Exs.X.1 to X,6. 9. On appreciation of evidence on record, the Tribunal held that accident took place due to rash and negligent driving of the lorry by its driver, which resulted in death of deceased. Having held so, the Tribunal answered additional Issue No.1, holding that it would be inconsequential for the owner and insurer of motorcycle being arrayed as necessary parties. Insofar as, additional Issue No.2, the Tribunal held that the insurer did not adduce any evidence nor produced any material documents to indicate that the driver of offending lorry did not possess valid and effective driving licence. Further, the Tribunal also held that as it has already decided that accident occurred on account of rash and negligent driving of the driver of offending lorry, that there was no negligence attributable to the deceased, whether the deceased had valid driving licence or not would be of no significance, however, at any rate, the Tribunal believed that the claimants under Ex.A10 could establish that deceased had valid driving licence to drive motorcycle. Coming to the aspect of income of deceased, the income tax returns filed under Exs.A11, A13 to A15 were taken into consideration, accordingly, the income was assessed on notional basis at ₹3,60,000/- per annum. 1/3rd of the same was deducted towards 5 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 personal and living expenses. Considering the age of deceased as 30 years, 17 multiplier was applied. The Tribunal granted future prospects at the rate of 50%, considering that deceased was self-employed, and after deducting 30% out of the same, towards income tax, assessed the loss of income. Further, it also awarded ₹25,000/- towards funeral expenses, ₹1,00,000/- towards loss of consortium to 1st claimant-wife; ₹1,00,000/- towards loss of love and affection to 2nd claimant, and ₹50,000/- towards loss of estate, thus, in total awarded ₹45,59,000/-, payable along with interest at the rate of 9% per annum. 10. Both insurer as well as claimants challenged the award in respective appeals. 11. Heard Ms.Manimma Medida, learned counsel for Insurer and Mr.Sivaprasad Reddy Venati, learned counsel for claimants. 12. Learned counsel for insurer raised the following contentions: (i) That the Tribunal erred in fixing entire liability on insurer without appreciating the evidence on record, which suggested that there was contributory negligence on the part of deceased, as the accident has occurred on account of collision of lorry and the motorcycle on which the deceased was proceeding. Further, the Tribunal also erred in believing that the driver of offending lorry did 6 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 possess valid and effective driving licence for the purpose of attributing liability to the insurer; (ii) The Tribunal further erred in considering income of deceased at ₹3,60,000/- per annum on national basis, which is excessive and exorbitant and not supported by any evidence, further, it is also submitted that the Tribunal awarded future prospects at the rate of 50%, which is also not in consonance with the law laid down by Hon’ble Apex Court in National Insurance Co. Ltd. v. Pranay Sethi1. (iii) Further, the interest awarded at the rate of 9% p.a. is also excessive, and that the Tribunal also awarded various components of compensation under conventional heads, which are not in consonance with the ratio laid down by the Hon'ble Apex Court in Pranay Sethi1. 13. Conversely, learned counsel for claimants, while supporting the award to the extent of fixing the liability on the insurer as well as determination of income of deceased at ₹3,60,000/- per annum, further contended that the Tribunal ought not to have applied flat rate of 30% income tax on income assessed, rather it ought to have applied the then income tax slab rates. 14. We have given our anxious consideration to the submissions advanced by both parties and perused the record. 1(2017) 16 SCC 680 7 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 15. Given the facts and circumstances, following questions would fall for our consideration. 1. Whether the Tribunal was justified in negating contributory negligence on the part of deceased and fixing negligence solely on driver of offending lorry for causing the accident, thereby fastening liability on insurer for entire compensation? 2. Whether the amount of compensation determined by the Tribunal is just, fair and reasonable? If not, what would be proper compensation to be awarded? 16. POINT No.1 As per the version of claimants, on 09.07.2010 at about 04.00 p.m., while deceased and his brother-in-law were proceeding on motorcycle, when they reached four road junction at Bhaktavasthala Nagar, Nellore, the offending lorry, driven by its driver in a rash and negligent manner, has hit motorcycle from behind, thus, deceased fell down on ground and front tyres of lorry have ran over him, thus, deceased succumbed on spot due to severe injuries. In order to prove the same, claimants have relied on evidence of PW.2, eye witness. PW.2 was also one of the listed witnesses in the charge sheet. The claimants exhibited Ex.A1 FIR, Ex.A2 post mortem report, Ex.A3 inquest report, and Ex.A4 charge sheet, to establish that 8 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 accident occurred on account of rash and negligent driving of driver of offending lorry, 17. PW2 in his evidence categorically stated that he witnessed the occurrence of incident. He further deposed that the lorry had hit the motorcycle from behind, consequently, deceased fell down, and the front wheels of lorry ran over him. As against aforesaid evidence, the insurer, except for cross-examining PW.2, has not led in any other evidence to suggest that deceased, who was driving motorcycle, was negligent and contributed to the accident. Since it is the insurer who had set up the plea of contributory negligence, the onus clearly rests on it to prove the same. The best person who could have spoken about the manner of occurrence of accident would be none other than driver of offending lorry, admittedly, he was not examined. The Tribunal, on appreciation of aforesaid evidence, has come to conclusion that there was no iota of evidence to suggest any contributory negligence on the part of deceased, rather, the evidence clearly pointed out the negligence solely to the driver of offending lorry. As it is now fairly settled that in the motor accident cases, the aspect of negligence is required to be proved only on the touchstone of preponderance of probabilities, but not beyond all reasonable doubts, we are of the view that claimants have let in sufficient evidence, pointing out negligence to the driver of offending lorry. The findings of 9 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 the Tribunal with regard to aforesaid aspect are sound and reasonable, therefore, do not call for any interference. 18. Insofar as the plea of insurer, that driver of offending lorry since did not possess valid and effective driving licence, no liability could have been fastened on it, in our considered opinion, is clearly unsubstantiated. It is for the insurer to prove aforesaid aspect by producing proper evidence, admittedly, it did not even examine the driver of offending lorry, therefore, the Tribunal has rightly rejected the said plea. 19. POINT No.2: To prove the income of deceased, claimants have examined PW.3, Chartered Accountant, PW.4, Superintendent in Income Tax Office and relied on Exs.A5 to A7, which are income tax returns for assessment years 2008-09, 2009-10, and 2010-11. Further, they also relied on Exs.A11, A13 to A15, which are income tax returns for assessment years 2003-04, 2004-05, 2005-06 and 2006-07. The income tax returns for financial years 2008-09, 2009-10 and 2010-11, since were filed after the occurrence of accident and death, the Tribunal did not take the same into consideration. However, income tax returns filed under Exs.A11, A13 to A15 relating to assessment years 2003-04, 2004-05, 2005-06 and 2006-07 were taken into 10 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 consideration. Further, under Ex.A17, acknowledgement for assessment year 2006-07 was also produced. The gross income declared for aforesaid years was ₹2,10,720/-, ₹2,00,836/-, ₹2,14,905/- and ₹5,98,331/- respectively. The deceased was earning income mainly on account of business carried on in gold and shares. It was driven by the financial market scenario. Taking into consideration the fact that deceased was assessed to income tax as early as from assessment year 2003-04 and he has been consistently earning income, which was predominantly on account of trading in gold and shares, the Tribunal has considered gross income at ₹3,60,000/- per annum. The Tribunal has assessed the same on notional basis. No doubt, the Tribunal has rightly discarded the income tax returns filed for the assessment years 2008-09, 2009-10 and 2010-11, nevertheless, the same indicate that deceased had regular business income. 20. Normally, if it is a case of salaried employee, income as reflected in income tax return indicates the annual income from salary, and there would be a greater amount of certainty depending on whether such employee is holding permanent employment or temporary employment. However, if it is a case of self- employed individual, the income reflected in the income tax returns would not be static, rather, it depends on various intervening 11 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 circumstances, such as nature of business, area where it is carried on, potential and growth pattern of business, impact of death, and such other factors. Normally, in cases where income tax returns for the past three years before death are on record, the average income of three years is to be adopted. For any reason, the immediate past three years' income tax returns are either not readily available, or they came to be filed after the death, while assessing income of deceased, one should evaluate surrounding factors and circumstances and vis-a-vis the variance in the income on a year-on-year basis, however, subject to the same being sufficiently supported by financial statements, etc. The determination of compensation is not an exact science and the exercise involves an assessment based on estimation and conjectures, in the process, as many imponderable factors and unpredictable contingencies have to be taken into consideration. In the present case, the Tribunal has given due credence to the income for assessment years 2004-05, 2005-06, and 2006-07, which are three years before the occurrence of accident, however, it has also given credence to the nature and potentiality of business carried on by deceased and thus, arrived at the income of deceased at ₹3,60,000/- per annum on national basis. 21. Considering totality of circumstances, we are of the view that the Tribunal has rightly assessed the income of deceased at ₹3,60,000/- 12 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 per annum and we do not see any reason to interdict with the same. Having said that, the Tribunal has deducted flat 30% of the same towards income tax, which is not justified. Rather, the Tribunal should have applied income tax slab rates prevailing at that point of time. As per the slab rates for financial year 2010-11, assessment year 2011- 12, income tax up to ₹1,60,000/- is nil and over and above ₹1,60,000/- and up to ₹5,00,000/- income tax rate is 10% (i.e., ₹2,00,000/- x 10% = ₹20,000/-). Thus, ₹20,000/- has to be deducted towards income tax, and accordingly, net income of deceased would be ₹3,40,000/- per annum. The Tribunal has held that 3rd claimant, father of deceased, was also in the business of gold and had independent earnings and living separately. Therefore, 3rd claimant, father of deceased, was found not to be depending on the deceased. Accordingly, considering that there were only three dependants, one- third of income towards personal and living expenses was deducted. We sustain the same. Therefore, 1/3rd of income is deducted towards personal and living expenses. 22. Further, the Tribunal has awarded future prospects at the rate of 50%. Since the deceased was self-employed, considering his age, claimants would be entitled for future prospects at the rate of 40%. Even the amounts awarded under various components, falling under conventional heads, are on higher side, thus, the same are revised in 13 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 consonance with the law laid down by Hon’ble Apex Court in Pranay Sethi1, and rate of interest is also revised to 7.5%. 23. The claimants, therefore, are entitled to just and fair compensation as under: Compensation Heads Amount Awarded In Accordance with: Net annual income ₹3,40,000/- Future Prospects (Age being 30 years) 40% of ₹3,40,000/- = ₹1,36,000/- National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680 Para 37, 39, 41, 42 and 59.4 Deduction (1/3) ₹4,76,000/- – ₹1,58,667/- = ₹3,17,333/- Multiplier (17) ₹3,17,333/- x 17 = ₹53,94,661/- (rounded off to ₹53,94,700/-) Loss of Income of the deceased ₹53,94,700- Loss of Estate ₹18,150/- (with 10% increase every 3 years from 2017) National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680 Para 37, 39, 41, 42 and 59.4 Funeral expenses ₹18,150/- (with 10% increase every 3 years from 2017) Loss of Consortium ₹48,400x3 = ₹1,45,200/- (with 10% increase every 3 years from 2017) United India Insurance Co. Ltd. v. Satinder Kaur, (2021) 11 SCC 780 Para 37.12 Rajwati alias Rajjo v. United India Insurance Co. Ltd. 2022 SCC OnLine SC 1699 Para 34 Sadhana Tomar v. Ashok Khushwaha 2025 SCC OnLine 14 HCJ & CGR, J. M.A.C.M.A. Nos.448 & 3188 of 2017 SC 554 Para 17 Total ₹55,76,200/- 24. Accordingly, both these appeals are disposed of. The impugned award, dated 09.09.2016, shall stand modified by revising the compensation amount to Rs.55,76,200/- as just and fair compensation, along with interest at the rate of 7.5% p.a. thereon from the date of claim petition till date of realisation. Out of which, 1st claimant is entitled to Rs.30,76,200/-, 2nd claimant is entitled to Rs.18,00,000/- and 4th claimant is entitled to Rs.7,00,000/-. The 2nd respondent Insurer to deposit the amount as aforesaid, adjusting the amount already deposited/paid if any, before the Tribunal within one month. On such deposit being made, the claimants shall be entitled to withdraw the same as apportioned above, failing which, the amount shall be recovered as per law. No order as to costs. As a sequel, miscellaneous petitions pending, if any, shall stand closed. LISA GILL, CJ CHALLA GUNARANJAN,J cs