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Rashmirekha Tripathy v. The Branch Manager (Legal Claims), Shriram General Insurance Company Limited

Civil Appeal · 2026 INSC 661Decided 1 Jul 2026
Civil Appeal arising out of SLP(C) No. 27220 of 2024
Justice Sanjay Karol · Justice Nongmeikapam Kotiswar Singh · Justice N.V. Anjaria

Background

The appellant's husband, a construction-business owner, died in a road accident when a truck struck his vehicle. The Motor Accident Claims Tribunal computed his annual income based on his most recent Income Tax Return and awarded roughly Rs. 2.27 crore in compensation. The insurance company appealed, and the Orissa High Court reduced the compensation by averaging his income across the previous two ITRs and applying a lower multiplier, cutting the award to about Rs. 1.87 crore. The widow then appealed to the Supreme Court, which, given the importance and recurring nature of the issue, appointed two senior counsel as amicus curiae to help settle a uniform approach.

Decision Breakdown

The Supreme Court laid down a clear rule to resolve the inconsistency across courts: for salaried individuals, only the most recent year's ITR should ordinarily be used (since recent promotions are best captured that way), while for self-employed individuals running a business, the average of up to the previous three years' ITRs should be used, along with consideration of the nature and growth pattern of the business. Applying this to the facts, the Court found the deceased's business income fluctuated but fixed his annual income at Rs. 14,00,000, ultimately awarding the widow around Rs. 1.97 crore: higher than the High Court's figure and closer to the original Tribunal award, with interest and standard "Pranay Sethi" heads such as loss of consortium, funeral expenses and loss of estate included.

Lesson Learnt

In motor accident compensation cases, salaried employees' income is generally proven by their latest tax return, while self-employed or business-owning victims' income should be assessed as an average across up to three years of tax returns, factoring in the specific nature of their business: a rule that families of self-employed accident victims should know when preparing income evidence for a claim.

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

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