Nidhi Bhargava vs National Insurance Company Ltd

REPORTABLE 2025 INSC 526 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2025 [@ SPECIAL LEAVE PETITION (CIVIL) NO.10664 OF 2019]

NIDHI BHARGAVA & ORS. …APPELLANTS A1: NIDHI BHARGAVA

A2: MANUJ BHARGAVA

A3: ANUJ BHARGAVA

VERSUS

NATIONAL INSURANCE COMPANY LTD. & ORS.

…RESPONDENTS 1

R1: NATIONAL INSURANCE COMPANY LTD. THROUGH ITS REGIONAL MANAGER

R2: K. L. BHARGAVA

R3: ANIL KUMAR KUKREJA

Signature Not Verified

Digitally signed by J U D G M E N T

VARSHA MENDIRATTA Date: 2025.04.22 17:08:51 IST Reason:

1

As per the amended Memo of Parties.

2

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 3

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.

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 4

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.

5

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 High Court MACT No. Head (In Rs.) (In Rs.) 1. Loss of 16,27,370/- 30,70,690/- Income 2. Loss of 15,000/- 15,000/- Estate 3. Loss of 40,000/- 40,000/- Consortium 4. Funeral 15,000/- 15,000/- Expenses Total 16,97,370/- 31,40,690/- [Rounded off to 31,41,000/-]

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 6

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 7

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. 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 8

disadvantage the appellants, for the reason that the period for which

the Return is to be submitted covers the period starting 1 st 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, (2015) 2 SCC 764 [Para 7], 9

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 10

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 position, the compensation under the Act is concerned with providing stability and continuity in peoples’ lives in the future. …’ …’2 (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

2 Also reported as [2025] 4 SCR 63 | 2025 INSC 357. 11

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.

…………………......................J. [SUDHANSHU DHULIA]

………………….......................J. [AHSANUDDIN AMANULLAH] NEW DELHI APRIL 22, 2025