1 2025:HHC:23792-DB IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA FAO No.4178 of 2013 Reserved on: June 18, 2025 Date of Decision: July 23, 2025 Reliance General Insurance Company ...Appellant. Versus Sarmila Devi and others ..Respondents. Coram: The Hon’ble Mr. Justice Vivek Singh Thakur, Judge. Whether approved for reporting?1 Yes For the Appellant: Mr.Jagdish Thakur, Advocate. For the Respondents: Mr.Umesh Kanwar, Advocate, for respondents No.1 to 4. Mr.C.N. Singh & Mr.Anshul Gandhi, Advocates, for respondent No.5. Vivek Singh Thakur, J. Appellant-Insurance Company, by way of this appeal, filed under Section 173 of the Motor Vehicles Act, 1988 (in short ‘M.V. Act’), has assailed the impugned Award dated 27.06.2013 passed by Motor Accident Claims Tribunal, Bilaspur, District Bilaspur, Himachal Pradesh, in M.A.C. No.12 of 2009, titled as Sarmila Devi and others vs. Des Raj and others, whereby Motor Accident Claims Tribunal, Bilaspur (MACT) has directed the appellant-Insurance Company to pay a sum of `21,36,460/- alongwith interest @ 7.5% per annum from the date of filing the petition till payment / deposit of the amount in favour 1 Whether reporters of the local papers may be allowed to see the judgment? 2 2025:HHC:23792-DB of the respondents-claimants and appellant-Insurance Company has been directed to pay/deposit the amount. 2. For convenience, parties to the lis shall be referred hereinafter as per their status before MACT. 3. Claim Petition under Section 166 of the M.V. Act, was preferred by the claimants on account of death of Hardev Kumar, predecessor-in-interest of the petitioners, in a motor accident due to rash and negligent driving of Hiwa (Tipper) No.HP-24B-7022 by respondent No.2-Sohan Lal, driver, which was owned by respondent No.1-Des Raj. Appellant-Insurance Company was respondent No.3. 4. Deceased-Hardev Kumar was employed with M/s A.K.S. Engineers and Contractors, who at the time of accident was 27 years old. Claimants are wife, mother and two children of deceased Hardev Kumar. 5. After taking into consideration material on record, MACT had awarded compensation to the claimants as referred supra. 6. Though appeal has been preferred by enumerating various grounds, however, at the time of arguments, learned counsel for the Insurance Company, has limited his arguments to the extent that MACT had erred by taking into consideration the amount paid by the employer to the deceased as ‘Overtime Allowance’ by including the same in the gross income to quantify the compensation. Whereas, according to him, gross salary for the purpose of determining the compensation has to be taken after excluding Overtime Allowance paid to the deceased by his employer. Therefore, it has been submitted that MACT has 3 2025:HHC:23792-DB committed a mistake by considering that income of deceased was `15500/- per month immediately before his death. 7. It has been contended by learned counsel for the Insurance Company that details of salary from the month of April 2008 to December 2008, placed on record as Ex.PE.6/A, has not been signed by any Competent Authority or the employer, thus, he has contended that there is no legally proved document on record to establish that salary of deceased was `15510/- (`15500/-) immediately before his death. 8. Though learned counsel for the Insurance Company has disputed the admissibility of Ex.PW.6/A in evidence for proving the last pay drawn by the deceased, however, at the same time, to substantiate his claim that basic pay of Hardev Kumar was `4670/- from April 2008 till December 2008 and rest all components of wages in this Chart are mainly Overtime Allowances. 9. The Insurance Company is breathing hot and cold at the same time. On one hand, it has been contended that Ex.PW.6/A is not authentic document to determine last pay drawn/wages paid to deceased Hardev Kumar, but on the other hand, the same document is being referred to substantiate plea of the Insurance Company that basic pay of deceased Hardev Kumar was `4670/-. It has been contended that overtime income is not a regular income of the deceased and, thus, regular income of deceased for calculating compensation has to be taken after deduction of Overtime Allowance. 10. It is also noticeable that MACT has taken income of the deceased immediately before his death as `13500/- and in the said 4 2025:HHC:23792-DB amount 20% has been added as a future income. Thus, income for the purpose of calculating compensation has been taken as `16200/- and after deducting 1/4th income, annual loss of income has been calculated as `1,45,800/-, and after applying multiplier of 17, amount of compensation has been quantified as `24,78,600/-, and besides this for love and affection; deprivation of protection, social security etc. lump sum amount of `25000/- has been awarded; for compensation to the widow of deceased for loss of love and affection, pains and sufferings, loss of consortium, deprivation of protection and social security etc. lump sum amount of `50,000/- has been awarded; and for funeral expenses `10,000/- have been awarded. As such the total amount of compensation has been determined as `25,63,600/-. 11. Claimants have examined six witnesses to prove their case. Whereas, respondents, including Insurance Company have not examined any witness. Owner of the vehicle has placed reliance upon copy of Registration Certificate Ex.R.1; copy of Insurance Policy Ex.R.2; copy of Driving Licence Ex.R.3; copy of Route Permit Ex.R.4. These documents have not been disputed by the Insurance Company. 12. Learned counsel for the Insurance Company to substantiate claim that Overtime Allowance should be deducted from the income for calculating compensation, has referred judgment passed by High Court of Bombay (Aurangabad Bench) in First Appeal No.852 of 2021, titled as The Divisional Controller, Maharashtra State Road Transport Corporation vs. Surekha and others, decided on 21.10.2021, wherein it has been held that since 5 2025:HHC:23792-DB the overtime work was not regular, therefore, MACT ought not to have considered overtime wages for grant of compensation, because overtime was not certain. In this judgment, the Court has taken judicial note of the fact that during Covid Pandemic, Maharashtra State Road Transport Corporation (MSRTC) was worst hit and the same situation was continuing and, therefore, it was observed that overtime work was not regular and was not certain. This judgment has been passed in peculiar facts and circumstances of the said case. 13. Learned counsel for the Insurance Company has also placed reliance on judgment of High Court of Madhya Pradesh, passed in Misc. Appeal No.3387 of 2010, titled as Sukmani vs. Jagdish, decided on 22.07.2011, wherein deduction of Conveyance Allowance and Overtime from income taken into consideration to determine compensation, was justified. 14. Learned counsel for the Insurance Company has placed further reliance upon judgment of the Supreme Court in Civil Appeal No.6221 of 2011, titled as The Regional Provident Fund Commissioner (II), West Bengal and others vs. Vivekananda Vidyamandir and others, alongwith connected matters, decided on 28.02.2019 (See: AIR 2019 SC 1240) wherein it has been observed that allowances, not payable to all concerns or may not be earned by all employees of the concern, have to be excluded from income and it is only when a worker produces beyond the base standard, what he earned would not be a basic wage but a production bonus or incentive wage which would then fall outside the purview of basic wage under the Employees Provident Fund and Miscellaneous 6 2025:HHC:23792-DB Provisions Act, 1952. This judgment has been rendered by the Apex Court for computation deduction towards Provident Fund, with reference to expression “basic wages” provided under Section 2(b) (ii) read with Section 6 of EPF and Miscellaneous Provisions Act, 1952, and, therefore, this judgment is of no benefit to the Insurance Company. In this judgment, it has also been observed that beneficial welfare legislation is required to be interpreted in a manner to sub-serve and advance the purpose of the legislation. 15. Learned counsel for the Insurance Company has also relied upon judgment passed by the Supreme Court Civil Appeal No.2753 of 2002, titled as Supe Dei and others vs. National Insurance Co. Ltd. and others, decided on 16.04.2002, wherein exclusion of Overtime Allowance from the monthly income has been approved by the Apex Court. 16. Reliance, on behalf of Insurance Company, has also been placed on judgment of High Court of Madhya Pradesh (Jabalpur Bench), in Misc. Appeal Nos.4465 of 2022, tiled as National Insurance Company Ltd. vs. Ashwini Sinha and others, decided on 10.05.2023, wherein non inclusion of overtime in the salary of the deceased was approved with observation that claimant could not point out as to how non inclusion of overtime and production incentive in salary, was bad in law. 17. Learned counsel for Insurance Company has also referred judgment passed by High Court of Gujarat in First Appeal No.1593 of 1990, titled as Shardaben and others vs. Parsottambhai P. Patel and others, decided on 21.07.2010, wherein overtime income was excluded for determining compensation. 7 2025:HHC:23792-DB 18. Learned counsel for the respondents-claimants has submitted that judgments referred by learned counsel for the Insurance Company are not applicable in present case because in present case Overtime Allowance is a regular feature. To substantiate his submissions, he has placed reliance on Ex.PW.6/A by submitting that details of salary from the month of April 2008 to December 2008 indicate that Overtime Allowance was regularly being paid to the deceased and it was a regular component of his monthly income. It has been submitted that once the Overtime Allowance is paid regularly, it cannot be termed as irregular income or uncertain income and, therefore, Overtime Allowance, in present case, has been rightly added and taken into consideration as part of gross monthly income for determining compensation. 19. To substantiate the claim, learned counsel has also placed reliance upon in National Insurance Company Ltd. vs. Indira Srivastava and others, (2008) 2 SCC 763, wherein it has been provided as under:- “8.Mr. Rao, however, submitted that apart from the basic salary, contributions made by the employee should also be taken into consideration for calculation of the amount of compensation, inter alia, on the premise that the same would have become payable to him at a future date as, for example, voluntary retirement, superannuation etc. which would be beneficial to the entire family. It was pointed out that the contributions towards Provident Fund, Life Insurance Corporation, gratuity etc. are includable in the definition of income. 9. The term 'income' has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are 8 2025:HHC:23792-DB beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on monetory terms. 10. Section 168 of the Act uses the word 'just compensation' which, in our opinion, should be assigned a broad meaning. We cannot, in determining the issue involved in the matter, lose sight of the fact that the private sector companies in place of introducing a pension scheme takes recourse to payment of contributory Provident Fund, Gratuity and other perks to attract the people who are efficient and hard working. Different offers made to an officer by the employer, same may be either for the benefit of the employee himself or for the benefit of the entire family. If some facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicants is required to be determined. For the aforementioned purpose, we may notice the elements of pay, paid to the deceased: Basic 63,400.00 Conveyance allowance 12,000.00 Rent CO lease 49,200.00 Bonus (35% of basic) 21,840.00 Total 1,45,440.00 In addition to above, his other entitlements were : Contribution to PF- 10% basic Rs 6240 (p.a.) LTA reimbursement Rs 7000 (p.a.) Medical Reimbursement Rs. 6000 (p.a.) Superannuation 15% of Basic Rs. 9360 (p.a.) Gratuity contribution – 5.34% Rs. 3332 (p.a.) Medical policy- self and family @ Rs. 55,000 (p.a.) Education scholarship @ Rs 500 payable to his two Rs. 12,000 (p.a.)” 9 2025:HHC:23792-DB children directly 19. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted. 20. The term 'income' in P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn.) has been defined as under: ‘The value of any benefit or perquisite whether convertible into money or not, obtained from a company either by a director or a person who has substantial interest in the company, and any sum paid by such company in respect of any obligation, which but for such payment would have been payable by the director or other person aforesaid, occurring or arising to a person within the State from any profession, trade or calling other than agriculture.’ It has also been stated : ‘ “Income” ‘ signifies 'what comes in' (per Selborne, C., Jones v. Ogle, (1872) LR 8 Ch App 192. “It is as large a word as can be used” to denote a person's receipts (per Jessel, M.R.,Huggins, In re, ex p Huggins, (1882) 21 Ch D 85. Income is not confined to receipts from business only and means periodical receipts from one's work, lands, investments, etc. Boasrd of Revenue, Income Tax v. Al. Ar. Rm. Arunachalam Chettiar and Bros., AIR 1921 Mad 427. Ref. Vulcan 10 2025:HHC:23792-DB Insurance Co. Ltd. v. Corpn. Of Madras, AIR 1930 Mad 626." 21. If the dictionary meaning of the word 'income' is taken to its logical conclusion, it should include those benefits, either in terms of money or otherwise, which are taken into consideration for the purpose of payment of income-tax or profession tax although some elements thereof may or may not be taxable or would have been otherwise taxable but for the exemption conferred thereupon under the statute.”” 20. Learned counsel for the respondents-claimants has also placed reliance upon judgment passed by the Supreme Court in Yerramma and others vs. G. Krishnamurthy and another, (2014) 15 SCC 65, with observation that in this case referring pronouncement in Indira Srivastava’s case and others, it has been observed that for determining just and proper compensation, gross income of deceased has to be taken into consideration. 21. Reliance on behalf of claimants, has also been placed on judgment dated 06.12.2019 passed by learned Single Judge of this High Court inFAO No.551 of 2019, titled as Future General Insurance Company Limited vs. Gurwinder Singh and others, wherein overtime wages have been taken into consideration for determining amount of compensation. 22. By referring judgment dated 21.11.2023, passed by learned Single Judge of this High Court in FAO No.123 of 2016, titled as Oriental Insurance Company Ltd. vs. Smt. Ram Piyari & others, it has been contended on behalf of claimants that gross income, including Overtime Allowance, has to be taken into consideration for 11 2025:HHC:23792-DB determining compensation particularly when Overtime Allowance is regular feature of the monthly wages. 23. Learned counsel for claimants has also referred judgment of Delhi High Court passed in MAC.App.No.1017 of 2015 and CMA No.32534 of 2015, titled as The New India Assurance Col Ltd. vs. Rinku Devi, decided on 29.05.2017, wherein overtime and working overtime has been taken into consideration for calculating compensation with observation that when admitted position was that an employee had done the overtime work and received or was due to receive remuneration towards the work done for his rendering service, necessarily, it is a wage paid or payable by virtue of implied contract and remuneration received during working hours and overtime constitute a composite wages and thereby it is a part of wages. 24. Judgment passed by Delhi High Court in National Insurance Company Ltd. vs Smt.Pushpa Rana and others, decided on 20.12.2007, (2009) ACJ 287, has also been relied upon by learned counsel for claimants, wherein overtime allowance was taken into consideration as wages with observation that claimants had proved on record that deceased was earning overtime allowance per month. 25. On behalf of claimants reliance has also been placed upon judgment passed in Royal Sundaram Alliance Ins. Co. Ltd. vs. Smt. Pabitri Khattri and others, Latest HLJ 2018(2) 1171 HP, wherein, in cross-examination, for not putting any specific suggestion that deceased was not receiving salary of `7100/- per month, income of deceased was taken into consideration as `7100/- per month. 12 2025:HHC:23792-DB 26. Learned counsel for the respondent has also relied upon judgment dated 24.03.2006 passed in FAO No.501 of 2003, titled as The Oriental Insurance Company Ltd. vs. Hans Raj and another, wherein learned Single Judge of this High Court had taken into consideration Overtime Allowance, night allowance etc. to assess income of the victim for determining the compensation. 27. Learned counsel for claimants has submitted that High Court of Delhi in MAC. App. No.848 of 2018 and CM Appl. No.38642 of 2018, titled as HDFC ERGO General Insurance Co. Ltd. vs. Prakash Singh and others, decided on 07.03.2025 has taken into consideration overtime allowance to calculate amount of compensation. 28. Reference on behalf of claimants has also made to judgment of Calcutta High Court passed in FMA No.552 of 2014, titled as Smt.Jayanti Das and another vs. National Insurance Co. Ltd. and another, on 30.09.2024, wherein overtime allowance has been taken into consideration for determining the compensation. 29. It is settled that grounds not taken in defence before MACT, now cannot be agitated in appeal for the reason that in case this point would have been raised before MACT the claimants would have opportunity to rebut the same or to prove contrary or to place on record necessary material, if any, required to justify their claim. 30. It is also settled that facts not pleaded cannot be proved by leading evidence, similarly facts stated in pleadings, without leading any evidence to prove the same, cannot be considered for adjudication of the matter. 13 2025:HHC:23792-DB 31. In present case, neither it has been pleaded nor any evidence has been produced or payment of Overtime Allowance has been disputed at any point of time before MACT. For this reason also, plea raised by the Insurance Company in this regard, in present appeal, is not permissible. 32. Further, there is nothing on record to substantiate that ‘Overtime Allowance’ was not regular feature of monthly wages of the deceased. There is no cross examination of the witness, who has proved on record Ex.PW.6/A, disputing regular payment of Overtime Allowance to the deceased. Insurance Company has not produced any evidence to rebut the claim of the petitioners with respect to receipt of monthly wages, including Overtime. In fact, Insurance Company has not led any evidence to prove its pleadings of defence much less to rebut the claim of the petitioners, including monthly wages being earned by the deceased. 33. In present case, claimants have established on record, as also observed supra, as has been detailed in Ex.PW.6/A overtime allowance was a regular feature of monthly wages of deceased being earned by and paid to him regularly since April 2008 till December 2008 which indicates that deceased was receiving monthly wages regularly with permanent continuous addition of overtime allowance ranging from `4214/- to `13510/-. 34. It is also noticeable that it is apparent from Ex.PW.6/A that deceased was being regularly paid Project Allowance @ 25%, Tunnel Allowance @ 20% and Attendance Allowance `280/- as well as from 20% Overtime Allowance on Tunnel Allowance. 14 2025:HHC:23792-DB 35. Keeping in view variation in the wages of last eight months prior to death of the deceased, however, instead of determining receipt of salary by deceased on the basis of last month’s receipt, it would be appropriate to take average of monthly wages since April to December, proved on record by document Ex.PW.6/A. Therefore, in way total monthly wages being earned by deceased comes to be `10,500/- per month. 36. The amount of compensation payable to the respondents shall be as under:- Monthly income `10500/- Additional for future prospects income @50% 10500+50%-`15,750 1/4th Deduction 15750 x 25%-`3,937/- Monthly Loss 15750 – 3937=`11,813/- Annual Loss 11813x12=1,41,756/- Total Loss with multiplier of 17 141756x17 =`24,09,852/-. 37. In view of above loss of dependency, instead of `24,78,600/-, will be `24,09,852/-. 38. From the amount of salary/monthly wages received by the deceased, it is apparent that his annual salary was not crossing the slab exempted from income tax and, therefore, no tax is to be deducted from his salary. However, rate of interest awarded by MACT is reduced from 7.5% to 6% per annum. 39. Rest of the Award shall remain same and claimants shall be entitled for `24,09,852/- plus `25000/- plus `50,000/- 15 2025:HHC:23792-DB plus 10,000/- = `24,94,852/- alongwith interest @ 6% per annum from the date of filing the petition till realization thereof either paying the same directly to claimants or depositing in the Registry of this Court on or before 30.09.2025. 40. No other point is urged or raised. 41. Accordingly, appeal is disposed of by modifying the amount of compensation. The compensation shall be apportioned amongst the petitioners, in terms of apportionment done by MACT. The amount of no fault liability shall be deducted from the aforesaid amount of compensation. 42. Pending application(s), if any, also stand disposed of. (Vivek Singh Thakur), Judge. July 23, 2025 (Purohit)