Insurance Company vs Claimant - Motor Vehicle Accident Compensation Appeal

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The Oriental Insurance Co Ltd vs Sneha Lata & Ors on 25 March, 2026

$~65
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 25th March 2026

                +        MAC.APP. 1097/2018, CM APPL. 51336/2018, CM APPL.
                         51268/2022, CM APPL. 9343/2026
                         THE ORIENTAL INSURANCE CO LTD                  .....Appellant
                                         Through:   Mr. A.K. Soni, Advocate.

                                         versus

                         SNEHA LATA & ORS                           .....Respondents
                                     Through:       Mr. S. Waseem A Qadri, Sr. Adv.
                                                    with Mr. Diwas Kumar and Mr.
                                                    Umashankar Shanna, Advs. for R-2
                                                    to 4.
                         CORAM:
                         HON'BLE MR. JUSTICE ANISH DAYAL
                                         JUDGMENT ANISH DAYAL, J (ORAL)

1. This appeal has been filed by the insurance company, assailing the
   award dated 21st August 2018, passed by the Motor Accident Claims
   Tribunal, Tis Hazari Courts, Delhi ['MACT'] in Claim Petition
   No.729/2011, whereby a compensation of Rs.64,51,000/- with interest @
   9% per annum was awarded.

2.   The accident occurred on 4th May 2007 at about 2:30 p.m. near
               Police Station Ghabhan, Aligarh, when the deceased, travelling from
               Aligarh to Delhi in Maruti Wagon R collided with a Uttar Pradesh
               Roadways bus driven by respondent no.6 and operated by respondent no.5
               [Uttar Pradesh State Road Transport Corporation ('UPSRTC')] and insured
   

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by appellant/Insurance Company. It was a head-on collision which occurred
in the middle of the road where there was no divider.

1.   As regards the first issue, MACT concluded that the bus driver was
               negligent in driving on the right side of the carriageway, while, being a
               heavy vehicle, it ought to have been driving on the left side.
   

2.   The MACT also noted, testimony of the driver [R4W1] basis Court
               questions to him, that he was in the middle of the road, while the Wagon R
               car was overtaking a truck which was driving on the left side of the other
               carriageway.
   

3.   On this basis, the MACT concluded that it was the sole negligence of
               the bus driver.
   

4.   The Court has perused the site plan which has been filed, as also the
               testimony of PW-4 [alleged eyewitness] and R4W1 [driver of the offending
               vehicle].
   

5.   As regards testimony of PW-4, there is nothing much to be gleaned
               from the same, considering that PW-4 was running a hotel/dhaba and was
               sitting outside when the accident took place. In his cross-examination, he
               stated that he only saw the accident and then moved towards the site of the
               accident, but did not see the manner in which the accident took place.
   

6.   As regards the testimony of R4W1, which has been heavily relied
               upon by Mr. Qadri, Senior Advocate appearing on behalf of
               claimants/respondents, the Court questions become relevant. Same are
               extracted as under:
   

"Court Question:- Was there any road divider on the
road?

A:-No.
Court Question:- In which lane you were driving the
bus?

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A:-I was driving the bus in the middle lane of the road.
Court Question:- In which lane truck was being
driven?

A:-In its left lane.

Court Question:- In which lane car was being driven.
A:- Car was being driven in the middle of the road."
9. As per the site plan, which is also extracted hereunder, it does appear
that the bus was moving towards the middle of the road where there was no
divider, whereas it ought to have been driving on the left side.

1. Even otherwise, there was no reason why it was veering towards the middle of the road, where it was prone to collide with vehicles approaching

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from the opposite direction, in this case the unfortunate Wagon R.

1.  Considering that the proceedings before the MACT are based on
               preponderance of probability, the Court does not see anything amiss in the
               findings of the MACT in this regard.
   

2.  Further, it is also noted that the FIR was registered against the driver
               of the offending bus and chargesheet has also been filed.
   

3.  Considering the principles enunciated by the Supreme Court in [Ranjeet v Abdul Kayam Neb](https://indiankanoon.org/doc/179482511/) 2025 SCC OnLine 497, the issue would stand
               fortified in favour of the claimants.
   

4.  On the second issue, as far as quantum of the income is concerned,
               based on the ITR, Mr. Soni, Counsel for appellant/Insurance Company
               states that variable pay ought not to have been considered.
   

5.  The Court has perused the salary record, which has been produced by
               the employer of the deceased. The deceased was employed as "Assistant
               Manager" with Bharti Airtel Ltd. Mr. Mahesh Kumar [PW-2], officer from
               the Company, gave his testimony and the details of the last drawn salary
               was produced as Exhibit PW2/2, as well as the Form 16 for the Financial
               Year 2006-2007 as Exhibit PW2/3. The annual cost-to-company details of
               the deceased were exhibited as Exhibit PW2/4.
   

6.  On this basis, the MACT rightly concluded that the pro-rata salary
               would be considered, subject to deduction of tax, which the MACT has
               calculated.
   

7.  As regards variable pay, the Supreme Court has held in [Manorma
               Sinha & Anr. v. The Divisional Manager, Oriental Insurance Company
               Ltd & Anr](https://indiankanoon.org/doc/15253836/), 2025 INSC 1237, Kavita Devi & Ors. v. Sunil Kumar & Anr.,
               2025 INSC 938 and Meenakshi v. Oriental Insurance Co. Ltd., 2024 SCC
               Onlhne SC 1872 that incentives will also have to be taken into account.
   

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1.  Accordingly, this aspect of the matter does not sustain in favour of
               the insurance company.
   

2.  On the third issue, as far as future prospects are concerned, Mr. A.K.
               Soni, counsel appearing for the Insurance Company, submits that the same
               ought to have been taken at 25% instead of 30%, since the deceased was in
               private employment.
   

3.  In pursuance of the previous order dated 16 th March 2026, Mr. S.
               Waseem A. Qadri, Senior Advocate appearing for respondents/claimants,
               submits that the deceased, aged 44 years, was in permanent employment
               with Bharti Airtel Ltd., Gurgaon, as an Assistant Manager, and therefore
               future prospects were correctly granted at 30% by the MACT. This fact that
               deceased was employed with Bharti Airtel Ltd. has been duly proved by
               PW-2, Mr. Mahesh Kumar, an officer of the said company. The salary
               details, exhibited as Ex. PW-2/2, are extracted below:
   

4.  The salary slips show that there were regular revisions in income.
   

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From 1st June 2004 to 30th September 2005, the salary was Rs. 3,60,000/-;
from 1st October 2005 to 31st May 2006, the salary was Rs. 4,73,527/-; and
from 1st June 2006, the salary was Rs. 5,58,761/-. This clearly demonstrates
that the deceased continued in employment and was treated as a permanent
employee.

1.  The extract of the salary slip also indicates that the deceased was
               categorized as a "full-time regular" employee. Moreover, a letter dated 1st
               April 2002, issued by Bharti Airtel Ltd., has been handed up, showing that
               Employee Stock Options (ESOPs) were granted to the deceased, with an
               option to exercise the same until 1st April 2008 and tradable options
               available from 14th February 2003 onwards. Although these documents
               were not previously placed on record, the Court has perused the same.
   

2.  Mr. S. Waseem A Qadri, Senior Advocate, relies upon the
               observation of the Supreme Court on the issue of future prospects in [National Insurance Co. Ltd. v. Pranay Sethi & Ors.](https://indiankanoon.org/doc/139996215/), (2017) 16 SCC 680,
               the relevant paragraph is extracted as under:
   

"59.3. While determining the income, an addition of
50% of actual salary to the income of the deceased
towards future prospects, where the deceased had a
permanent job and was below the age of 40 years,
should be made. The addition should be 30%, if the
age of the deceased was between 40 to 50 years. In
case the deceased was between the age of 50 to 60
years, the addition should be 15%. Actual salary
should be read as actual salary less tax."
24. Mr. A.K. Soni, counsel for Insurance Company, and Mr. S. Waseem A
Qadri, Senior Advocate for claimant, submit that there is no other decision
which differentiates or throws light on what constitutes a permanent job and
what constitutes employment on a fixed salary.

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1. However, some guidance has been provided by the High Court of Madhya Pradesh at Jabalpur in Anjum Ansari v. R. Rajesh Rao, 2024 SCC OnLine MP 9613, wherein the Court held that, in view of the principles laid down in Pranay Sethi (supra), it is not correct to state that only a government servant would be treated as having a permanent job. In the facts of that case, the Court noted that the deceased was working as an Assistant Professor at Corporate Institute of Science & Technology, Bhopal, and that the salary drawn by the deceased was subject to periodic revisions/hikes, therefore, he was considered to be in permanent job. The relevant paragraphs are extracted hereinbelow.

"8. In this court's opinion, above issue stands settled
by Five Judges Bench of Hon'ble Apex Court
in National Insurance Company Ltd. v. Pranay Sethi,
(2017) 16 SCC 680 : AIR 2017 SC 5157 as under:--

1. "Presently, we come to the issue of addition of
   future prospects to determine the multiplicand.

2. In Santosh Devi ((2012) 6 SCC 421 : AIR 2012
   SC 2185) the Court has not accepted as a
   principle that a self-employed person remains on a
   fixed salary throughout his life. It has taken note
   of the rise in the cost of living which affects
   everyone without making any distinction between
   the rich and the poor. Emphasis has been laid on
   the extra efforts made by this category of persons
   to generate additional income. That apart, judicial
   notice has been taken of the fact that the salaries
   of those who are employed in private sectors also
   with the passage of time increase manifold. In
   Rajesh s case, the Court had added 15% in the
   case where the victim is between the age group of
   15 to 60 years so as to make the compensation
   just, equitable, fair and reasonable. This addition
   has been made in respect of self-employed or
   engaged on fixed wages.
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57........... In such an adjudication, the duty of the
tribunal and the courts is difficult and hence, an
endeavour has been made by this Court for
standardisation which in its ambit includes
addition of future prospects on the proven income
at present As far as future prospects are
concerned, them has been standardisation keeping
in view the principle of certainty, stability and
consistency. We approve the principle of
"standardisation" so that a specific and certain
multiplicand is determined for applying the
multiplier on the basis of age.

1. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardisation, there is really no rationale not to apply the said principle to the self- employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to slate that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an

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incessant effort to enhance one's income for
sustenance. The purchasing capacity of a salaried
person on permanent job when increases because
of grant of increments and pay revision or for
some other change in service conditions, there is
always a competing attitude in the private sector
to enhance the salary to get better efficiency from
the employees. Similarly, a person who is self-
employed is bound to gamer his resources and
raise his charges/fees so that he can live with
same facilities. To have the perception that he is
likely to remain static and his income to remain
stagnant is contrary to the fundamental concept of
human attitude which always intends to live with
dynamism and move and change with the time.
Though it may seem appropriate that there cannot
be certainty in addition of future prospects to the
existing income unlike in the case of a person
having a permanent job yet the said perception
does not really deserve acceptance. We are
inclined to think that there can be some degree of
difference as regards the percentage that is meant
for or applied to in respect of the legal
representatives who claim on behalf of the
deceased who had a permanent job than a person
who is self-employed or on a fixed salary. But not
to apply the principle of standardisation on the
foundation of perceived lack of certainty would
tantamount to remaining oblivious to the marrows
of ground reality.........

1. In view of the aforesaid analysis, we proceed to record our conclusions:

(i) XXX XXX XXX XXX
(ii) XXX XXX XXX XXX (iii) While determining the income, an addition of
50% of actual salary to the income of the deceased
towards future prospects, where the deceased had
a permanent job and was below the age of 40
years, should be made. The addition should be

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30%, if the age of the deceased was between 40 to
50 years. In case the deceased was between the
age of 50 to 60 years, the addition should be 15%.
Actual salary should be read as actual salary less
tax.

(iv) In case the deceased was self-employed or on
a fixed salary, an addition of 40% of the
established income should be the warrant where
the deceased was below the age of 40 years. An
addition of 25% where the deceased was between
the age of 40 to 50 years and 10% where the
deceased was between the age of 50 to 60 years
should be regarded as the necessary method of
computation................"

1. Thus, from observations as well as principle of law laid down by Hon'ble Apex Court in Pranay
   Sethi (Supra), it is clearly evident that if a person is in
   such a job wherein his salary is increased
   periodically/receives annual increment etc., then, such
   person would be treated as being in "permanent job". Hence, in view of principle of law laid down in Pranay
   Sethi (Supra), it is not correct that only government
   servant would be treated as being in "permanent
   job"."

2.  Accordingly, this Court is of the view that, in the facts and
               circumstances of the present case, the deceased would be considered to
               have held a permanent job, following the cue from the Coordinate Bench of
               the High Court of Madhya Pradesh and the principles enunciated in [Pranay
               Sethi](https://indiankanoon.org/doc/139996215/) (supra). Therefore, the grant of future prospects at 30% by the MACT
               warrants no interference and is upheld.
   

Directions

1. By order dated 10th December 2018, when notice was issued, the complete amount was deposited with the Registry of this Court, and the operation of the impugned award was stayed. Vide order dated 11th April

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2023, the application for release was allowed and the Tribunal was directed
to release 50% of the awarded amount, in terms of the scheme of disbursal.

1.  It is therefore directed that the balance amount along with accrued
               interest as deposited with the Registrar General of this Court be released to
               claimants as per the scheme of the impugned award.
   

2.  This application has been filed by respondents with prayer for taking
               on record death of respondent no. 1/Smt. Sneh Lata, who expired on 17th
               May 2021. The Death Certificate has been filed. The surviving member
               certificate issue by the District Magistrate, Dwarka, South West District,
               shows that respondents nos. 2-4 are legal heirs of the deceased. Therefore,
               Mr. S. Waseem A Qadri, Senior Advocate, prays that the amount which was
               apportioned to respondent no. 1 be released in equal parts i.e. 1/3rd each to
               respondents nos. 2-4. It is directed accordingly. The awarded amount to
               respondent no.1 be apportioned in equal parts to respondent nos. 2-4.
   

3.  Accordingly, the appeal stands dismissed. Pending applications, if
               any, are rendered infructuous.
   

4.  Statutory deposit, if any, be refunded to the appellant.
   

5.  Judgement be uploaded on the website of this Court.
   

ANISH DAYAL, J
MARCH 25, 2026/da/zb

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