Supreme Court of India
NIDHI BHARGAVA & ORS. A1: NIDHI BHARGAVA A2: MANUJ BHARGAVA A3: ANUJ BHARGAVAversusNATIONAL INSURANCE COMPANY LTD. & ORS. R1: NATIONAL INSURANCE COMPANY LTD. THROUGH ITS REGIONAL MANAGER R2: K. L. BHARGAVA R3: ANIL KUMAR KUKREJA
- Citation
- 2025 INSC 526
- Decided
- 22 April 2025
- Disposal
- Disposed off
- Bench
- SUDHANSHU DHULIA
Holding
The High Court's reduction of compensation was unjustified; the Income Tax Return for AY 2008‑09 is relevant and the Tribunal's original award must be restored.
Summary
The appellants, heirs of a businessman who died when a bus collided with his motorcycle in August 2008, claimed compensation under the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal awarded Rs 31,41,000 with 9% interest, but the Delhi High Court reduced the amount to Rs 16,97,370, excluding the deceased's Income Tax Return for Assessment Year 2008‑09 on the ground that it was filed after the accident. The Supreme Court held that the Return pertains to the financial year ending March 2008 and therefore is relevant for assessing the deceased's income, rejecting the High Court's reasoning. It emphasized that Income Tax Returns are admissible statutory evidence and that the Tribunal may use the average of returns or select a year, without the court arbitrarily discounting them. Consequently, the Court restored the original compensation of Rs 31,41,000 with interest, directing the insurer to pay within two months, and dismissed any cost order.
Issues considered
- Whether the Income Tax Return for Assessment Year 2008‑09, filed after the accident, can be excluded from consideration in computing loss of dependency under the Motor Vehicles Act.
- Whether the High Court erred in reducing the compensation awarded by the Tribunal on the basis of the timing of the tax return filing.
- Whether the Tribunal has discretion to adopt any appropriate assessment year or average income for determining compensation.
Legislation cited
- Motor Vehicles Act, 1988s. 140, s. 166
Headnote
Issue for Consideration Whether the High Court was justified in reducing the compensation payable to the to Rs.16,97,370/- maintaining the interest awarded at the rate of 9% p.a. Headnotes† Motor Vehicle Act, 1988 – s.166 r/w. s.140 – On 12.08.2008, a Bus allegedly driven in a negligent manner hit a motorcycle, which was driven by victim along with his wife – Victim
Subjects
Motor Vehicle Accident ClaimCompensationReduction of compensationIncome Tax ReturnsRightful claimBeneficial legislationLoss of dependency
Judgment
[2025] 4 S.C.R. 1468 : 2025 INSC 526
Nidhi Bhargava & Ors.
A1: Nidhi Bhargava
A2: Manuj Bhargava
A3: Anuj Bhargava
v.
National Insurance Company Ltd. & Ors.
R1: National Insurance Company Ltd.
Through Its Regional Manager
R2: K. L. Bhargava
R3: Anil Kumar Kukreja
(Civil Appeal No. 5398 of 2025)
22 April 2025
[Sudhanshu Dhulia and Ahsanuddin Amanullah,* JJ.]
Issue for Consideration
Whether the High Court was justified in reducing the compensation
payable to the appellants from Rs.31,41,000/- to Rs.16,97,370/-
maintaining the interest awarded at the rate of 9% p.a.
Headnotes†
Motor Vehicle Act, 1988 – s.166 r/w. s.140 – On 12.08.2008, a
Bus allegedly driven in a negligent manner hit a motorcycle,
which was driven by victim along with his wife – Victim
died – Claim petition filed – MACT awarded a compensation
of Rs.31,41,000/- with interest at the rate of 9% p.a. from the
date of filing of the Claim Petition – However, the High Court
reduced the compensation payable to the appellants from
Rs.31,41,000/- to Rs.16,97,370/- – Correctness:
Held: The High Court interfered and reduced the compensation
as awarded by the Tribunal only on the ground that Return
for the Assessment Year 2008-2009 had to be excluded from
consideration – It is not in dispute that the deceased was a
businessman – The relevance of the Income Tax Return stems,
in the context of the Act, for the period which it relates to i.e.,
the Financial Year concerned, and not on the date on which it is
filed with the Income Tax Department – When faced with Returns
* Author
[2025] 4 S.C.R. 1469
Nidhi Bhargava & Ors. v. National Insurance Company Ltd. & Ors.
for different Assessment Years, it would be upto the Tribunal
concerned to adopt either the average income therefrom or choose
an Assessment Year to rely upon – There is good reason to leave
judicial discretion on the Tribunal to adopt one of the afore-noted
two courses of action, bearing in nature the social purpose and
object behind the Act, which is a beneficial legislation – It is quite
unfortunate that the High Court in the present case has dealt
with the matter in such a casual and superficial way where the
rightful claim of the appellants under a welfare legislation has been
drastically reduced without any cogent reason on a very tenuous
ground – Thus, the impugned order is modified to the extent that
the original amount Rs.31,41,000/- awarded by the Tribunal as
compensation is restored. [Paras 15, 16]
Case Law Cited
Malarvizhi v. United India Insurance Co. Ltd. [2019] 16 SCR 1086 :
(2020) 4 SCC 228; S Vishnu Ganga v. Oriental Insurance Company
Limited, 2025 SCC OnLine SC 182; Shivaleela v. Divisional
Manager, United India Insurance Co. Ltd. [2025] 4 SCR 63 : 2025
SCC OnLine SC 563 – referred to.
List of Acts
Motor Vehicles Act, 1988.
List of Keywords
Motor Vehicle Accident Claim; Compensation; Reduction of
compensation; Income Tax Returns; Rightful claim.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5398 of 2025
From the Judgment and Order dated 20.09.2018 of the High Court
of Delhi at New Delhi in MACAP No. 589 of 2018
Appearances for Parties
Adv. for the Appellants:
Kaushik Choudhury.
Advs. for the Respondents:
Abhishek Gola, Anshul Mehral, Viresh B. Saharya, Akshat Agarwal,
Rishabh Mathur.
1470 [2025] 4 S.C.R.
Supreme Court Reports
Judgment / Order of the Supreme Court
Judgment
Ahsanuddin Amanullah, J.
Leave granted.
2. This appeal arises from the Final Judgment and Order dated
20.09.2018 (hereinafter referred to as the ‘Impugned Order’)
[2018:DHC:6122 | 2018 SCC OnLine Del 11494] in MAC. APP.
No.589 of 2018 rendered by a learned Single Judge of the High
Court of Delhi (hereinafter referred to as the ‘High Court’) filed by
Respondent No.1-Insurance Company, whereby the High Court
disposed of the appeal by reducing the compensation payable to the
Appellants from Rs.31,41,000/- (Rupees Thirty-One Lakhs Forty-One
Thousand) to Rs.16,97,370/- (Rupees Sixteen Lakhs Ninety-Seven
Thousand Three Hundred and Seventy) maintaining the interest
awarded at the rate of 9% per annum.
FACTS IN BRIEF:
3. On 12.08.2008, a Blue Line bus bearing Registration No.DL-
1PB-0035, being driven by one Javed Aftar in an allegedly negligent
manner, hit a motorcycle bearing Registration No.DL-6SX-6483,
which was being driven by Kapil Bhargava (hereinafter referred to
as the ‘deceased’) along with his wife (Appellant No.1), as a result
of which the deceased died in hospital and Appellant No.1 survived,
but suffered grievous injuries.
4. The Appellants and other legal heirs of the deceased filed a Claim
Petition viz. MACT No.357515/2016 under Section 166 read with
Section 140 of the Motor Vehicles Act, 1988 (hereinafter referred
to as the ‘Act’) before the Court of the learned Judge, MACT-1
(Central), Delhi (hereinafter referred to as the ‘Tribunal’), claiming
compensation for the death of the deceased for Rs.40,00,000/-
(Rupees Forty Lakhs). After hearing the parties, on 20.03.2018,
the Tribunal by a common judgment awarded a compensation of
Rs.31,41,000/- (Rupees Thirty-One Lakhs Forty-One Thousand)
with interest at the rate of 9% per annum from the date of filing
of the Claim Petition, i.e., 27.09.2008 till realization in MACT
No.357515/2016.
[2025] 4 S.C.R. 1471
Nidhi Bhargava & Ors. v. National Insurance Company Ltd. & Ors.
5. The Appellants, being aggrieved by the Award/Order dated 20.03.2018
in MACT No.357515/2016 preferred an appeal, namely, MAC.
APP. No.796/2018 before the High Court for enhancement of the
compensation awarded by the Tribunal. Respondent No.1, also
aggrieved by the Award/Order dated 20.03.2018, preferred MAC. APP.
Nos.589/2018 and 592/2018 before the High Court against, apropos
MACT No.357515/2016 and MACT No.357259/2016, respectively.
6. The High Court disposed all the three MAC. APP. petitions by the
common Impugned Order and held that the Income Tax Returns
for the Assessment Year 2008-2009 were filed after the date of the
accident, therefore, the income of the deceased had to be assessed
on the basis of Assessment Year 2007-2008. While changing some
of the heads of compensation granted by the Tribunal, the High
Court reduced the compensation payable to the Appellants from
Rs.31,41,000/- (Rupees Thirty-One Lakhs Forty-One Thousand)
to Rs.16,97,370/- (Rupees Sixteen Lakhs Ninety-Seven Thousand
Three Hundred and Seventy). The High Court also modified the
compensation under various heads from Rs.4,30,000/- (Rupees
Four Lakhs Thirty Thousand) to Rs.3,94,543/- (Rupees Three Lakhs
Ninety-Four Thousand Five Hundred Forty-Three) insofar as MACT
No.357259/2016 was concerned.
7. The Appellants have filed the instant appeal challenging the Order
of High Court only qua MAC. APP. No.589/2018.
8. It would be useful to set out the computation as per the Tribunal’s
Award and the Impugned Order:
Sl. Name of Head High Court MACT
No. (In Rs.) (In Rs.)
1. Loss of Income 16,27,370/- 30,70,690/-
2. Loss of Estate 15,000/- 15,000/-
3. Loss of Consortium 40,000/- 40,000/-
4. Funeral Expenses 15,000/- 15,000/-
Total 16,97,370/- 31,40,690/-
[Rounded off to
31,41,000/-]
1472 [2025] 4 S.C.R.
Supreme Court Reports
APPELLANTS’ SUBMISSIONS:
9. The learned counsel for the Appellants submitted that the High Court
had erred in ignoring the gross income shown by the deceased-
Assessee for the Assessment Year 2008-2009. As a matter of fact,
the Assessment Year for the Return filed in 2008-2009 was, in fact,
the gross income of the deceased-Assessee for the Financial Year
01.04.2007 to 31.03.2008, for which, the accounts of the Assessee
were already sealed, as cut-off date i.e., 31.03.2008, was prior to the
date of the accident. It was submitted that there was no question of
any manipulation by the Assessee or the persons claiming through
him. It was prayed that the appeal be deservedly allowed, on this
short ground alone.
RESPONDENT NO.1’S SUBMISSIONS:
10. The learned counsel for the Respondent No.1 submitted that
the Impugned Order is well-reasoned and does not warrant any
interference. Learned counsel urged that the average of the Income
Tax Returns for the Assessment Years 2007-2008 and 2008-2009,
at best, could be the basis for assessing the income of deceased. It
was otherwise prayed that the appeal be dismissed and the Impugned
Order be upheld.
ANALYSIS, REASONING AND CONCLUSION:
11. Having considered the matter, we find the reasoning in the Impugned
Order to be, putting it mildly, erroneous. The only reasoning by the
High Court can be found in Paragraph 10 of the Impugned Order,
extracted below:
‘10. Upon hearing and on perusal of impugned Award,
evidence on record and the decisions cited, I find that
in the case of deceased-Kapil Bhargava, the income
tax returns for assessment years 2008-09 was filed
on 10th September, 2008 i.e. after the day of accident
and so, it has to be excluded from consideration. The
income of deceased-Kapil Bhargava has to be assessed
on the basis of previous assessment year›s income
tax return i.e. for the year 2007-08. The gross income
of deceased in the assessment year 2007-08 was Rs.
[2025] 4 S.C.R. 1473
Nidhi Bhargava & Ors. v. National Insurance Company Ltd. & Ors.
1,25,600/- and after deducting tax of Rs. 1610/-, the
net income of deceased is assessed at Rs. 1,23,990/-.
Deceased- Kapil Bhargava was aged 43 years on the day
of accident and in view of Supreme Court’s decision in
Sarla Verma (Smt.) v. Delhi Transport Corporation (2009)
6 SCC 121, the Tribunal has rightly applied multiplier
of 14. In light of Supreme Court’s Constitution Bench
decision in National Insurance Company Ltd. v. Pranay
Sethi (2017) 16 SCC 680, the Tribunal has rightly made
addition of 25% towards “future prospects. In view of
aforesaid, the “loss of dependency” of deceased- Kapil
Bhargava is reassessed as under:—
Rs. 1,23,990/- × 14 × 125/100 × ¾ = Rs. 16,27,370/-’
(emphasis supplied)
12. Just because on the date of the accident i.e., 12.08.2008, the Return
for the Assessment Year 2008-2009 had not been filed, cannot
disadvantage the appellants, for the reason that the period for which
the Return is to be submitted covers the period starting 1st of April,
2007 and ending 31st March, 2008. Thus, for obvious reasons, the
Return would be only for the period 01.04.2007 to 31.03.2008, and
date of submission would be post-31.03.2008. No income earned
beyond 31.03.2008 would reflect in the Income Tax Return for the
Assessment Year 2008-2009. To reject the Return on the sole ground
of its submission after the date of accident alone, in our considered
view, cannot be legally sustained.
13. The Income Tax Return is a legally admissible document on which
the income assessment of the deceased could be made. This Court
in Malarvizhi v United India Insurance Co. Ltd., (2020) 4 SCC 228
affirmed that the determination of income must proceed on the basis
of Income Tax Return(s), when available, being a statutory document.
In S Vishnu Ganga v Oriental Insurance Company Limited,
2025 SCC OnLine SC 182, we opined:
‘11. …It is no longer res integra that Income Tax Returns
are reliable evidence to assess the income of a deceased,
reference whereof can be made to Amrit Bhanu Shali v.
National Insurance Co. Ltd., (2012) 11 SCC 738 [Para
17]; Kalpanaraj v. Tamil Nadu State Transport Corporation,
1474 [2025] 4 S.C.R.
Supreme Court Reports
(2015) 2 SCC 764 [Para 7], and K Ramya (supra) [Para
14 of 2022 SCC OnLine SC 1338].’
(emphasis supplied)
14. In Malarvizhi (supra), the Madras High Court relied upon the Returns
‘for Assessment Year 1997-1998 and not 1999-2000 and 2000-2001
which reflected a reduction in the annual income of the deceased’
therein.
15. The High Court interfered and reduced the compensation as awarded
by the Tribunal only on the ground that Return for the Assessment
Year 2008-2009 had to be excluded from consideration. It is not
in dispute that the deceased was a businessman. The relevance
of the Income Tax Return stems, in the context of the Act, for the
period which it relates to i.e., the Financial Year concerned, and not
on the date on which it is filed with the Income Tax Department.
When faced with Returns for different Assessment Years, it would
be upto the Tribunal concerned to adopt either the average income
therefrom or choose an Assessment Year to rely upon. There is
good reason to leave judicial discretion on the Tribunal to adopt
one of the afore-noted two courses of action, bearing in nature
the social purpose and object behind the Act, which is a beneficial
legislation. It is quite unfortunate that the High Court in the present
case has dealt with the matter in such a casual and superficial way
where the rightful claim of the appellants under a welfare legislation
has been drastically reduced without any cogent reason on a very
tenuous ground, which we find to be totally unjustified. As pointed
out in Shivaleela v Divisional Manager, United India Insurance
Co. Ltd., 2025 SCC OnLine SC 563:
‘13. ... In K Ramya v. National Insurance Co. Ltd., 2022 SCC
OnLine SC 1338, after taking note of, inter alia, Ningamma v.
United India Insurance Co. Ltd., (2009) 13 SCC 710, the
Court held that the ‘… Motor Vehicles Act of 1988 is a
beneficial and welfare legislation that seeks to provide
compensation as per the contemporaneous position of
an individual which is essentially forward-looking. Unlike
tortious liability, which is chiefly concerned with making
up for the past and reinstating a claimant to his original
[2025] 4 S.C.R. 1475
Nidhi Bhargava & Ors. v. National Insurance Company Ltd. & Ors.
position, the compensation under the Act is concerned
with providing stability and continuity in peoples’ lives in
the future. …’ …’1
(underlined in original)
16. On the strength of the reasons afore-indicated, the Impugned Order
is modified to the extent that the original amount [Rs. 31,41,000/-
(Rupees Thirty-One Lakhs Forty-One Thousand)] awarded by the
Tribunal in MACT No.357515/2016 as compensation is restored.
Payment be made to the Appellants by the Respondent No.1 at
the rate of 9% interest per annum after adjusting amount(s), if any,
that may have been paid during the interregnum. The exercise be
completed within two months from today, failing which an additional
9% interest per annum shall be payable for the period of delay, both
on the principal amount as well as on the interest component, till the
date of actual payment. No order as to costs, in the circumstances.
17. The Civil Appeal is disposed of accordingly.
Result of the case: Appeal disposed of.
†
Headnotes prepared by: Ankit Gyan
1 Also reported as [2025] 4 SCR 63 : 2025 INSC 357.
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