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Nidhi Bhargava v. National Insurance Company Ltd.

Civil Appeal · 2025 INSC 526Decided 22 Apr 2025
C.A. No.-005398-005398 - 2025 (arising from SLP(C) No.10664 of 2019)
Justice Sudhanshu Dhulia · Justice Ahsanuddin Amanullah

Background

On 12 August 2008, a bus driven negligently hit a motorcycle carrying Kapil Bhargava and his wife, killing him and grievously injuring her. The Motor Accident Claims Tribunal awarded the family Rs. 31,41,000 as compensation, relying on the deceased's Income Tax Return for the assessment year 2007-08. The Delhi High Court reduced this to Rs. 16,97,370, reasoning that the tax return (filed after the accident) should be excluded from the income assessment. The family appealed to the Supreme Court against this reduction.

Decision Breakdown

The Supreme Court held that the High Court's approach was flawed: an Income Tax Return is admissible evidence of income based on the financial year it covers, not the date it happens to be filed, and the deceased's 2007-08 return (covering income earned before the accident) could not be disregarded merely because it was submitted afterward. Relying on precedents including Sarla Verma and Pranay Sethi for the multiplier and future-prospects addition, the Court found the Tribunal's original computation legally sound and criticised the High Court for dealing with a welfare-legislation claim in a "casual and superficial way." It restored the original compensation of Rs. 31,41,000 with 9% interest, plus an additional 9% penal interest if not paid within two months.

Lesson Learnt

In motor accident claims, income tax returns remain valid proof of a deceased person's earnings for the period they cover, even if filed after the accident occurred. Courts should not penalise claimants over technical timing issues when assessing rightful compensation under welfare legislation.

Official source (sci.gov.in)View Judgment (PDF)

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