United India Insurance Company Limited vs Sheelendra Kumar & Ors.

Anish Dayal, J.

This appeal has been filed by appellant/Insurance Company assailing impugned award dated 01^st December 2018, passed by the Motor Accident Claims Tribunal, South-East, Saket Courts, New Delhi [‘MACT/Tribunal’] in Suit No. 125/2017, whereby compensation of Rs.42,02,535/- along with interest @ 9% per annum, was awarded [‘impugned award’].

The aforesaid suit arose out of an accident which occurred on 18^th August 2016, and resulted in injuries to Sheelendra Kumar [claimant herein], when he was travelling on a motorcycle and was hit by the offending vehicle, being the truck bearing registration no. UP-14ET-8490.

Mr. Amit Singh, counsel for appellant/Insurance Company, pointed out to the salary slip issued by Electroserve Centre, the employer of claimant/injured, who was working as a ‘Field Surface Installer’ at Tata Sky. The said salary slip recorded that the remuneration of claimant/injured was fixed at Rs.18,000/- per month, along with a conveyance allowance of Rs.3,500/-, and a mobile allowance of Rs. 300/-.

The appellant/Insurance Company has challenged the awarded compensation on one issue, i.e. the notional income of claimant/injured being taken at Rs.21,800/- per month. Counsel for appellant/Insurance Company contends that the allowances towards conveyance and mobile, amounting to Rs. 3,800/-, were not deducted from the aforesaid amount, though they ought to have been deducted, and the salary ought to have been taken at Rs. 18,000/- per month, which was the basic salary being paid to claimant/injured as per the salary slip.

In this regard, Mr. Amit Singh, counsel for appellant/Insurance Company, has placed reliance upon the decision of the Supreme Court in National Insurance Co. Ltd. v. Indira Srivastava, (2008) 2 SCC 763, wherein the Court has held as under:

(emphasis added)

On this basis, he contends that since the allowances towards conveyance and mobile form perks granted for the personal benefit of an employee, the same ought not to be included while determining the notional income of injured/claimant.

Countering the same, Mr. Shekhar Aggarwal, counsel for claimant/injured, relies upon the decision of this Court in New India Assurance Company Ltd. v. Jyoti Prajapati, 2017 SCC OnLine Del 10117. In this case, the Single Judge, while relying upon Indira Srivastava (supra), considered the conveyance allowance, as per the evidence led, to be regular emolument forming part of the terms and conditions of service and, therefore, included the same in computation of monthly income. It is noted that while Indira Srivastava (supra) was a case of fatal accident, the present case pertains to an injury, as was also the case in Jyoti Prajapati (supra). Therefore, the conveyance allowance and mobile allowance, being perks, ought to be included for the purposes of calculating notional income of injured/claimant.

Reliance in this regard is also placed upon the decision in Manorma Sinha v. Oriental Insurance Co. Ltd., 2025 SCC OnLine SC 2241, wherein while taking note of the decisions in Indira Srivastava (supra) and National Insurance Co. Ltd. v. Nalini, 2024 SCC OnLine SC 2252, the Court held that “emoluments and the benefits accruing to the deceased under various heads for the purposes of computation of loss of income, ought to be included irrespective of whether they are taxable or not”. Even though the aforesaid decision concerned a fatal accident, the principle laid down therein would have to be considered in the present context as well.

As regards the issue of allowances, reference may also be made to the decision of the Supreme Court, in Vijay Kumar Rastogi v. Uttar Pradesh State Roadways Transport Corporation, 2018 SCC OnLine SC 193, wherein the Supreme Court held, “income” should include those benefits, either in terms of money or otherwise, which are taken into consideration for the purpose of payment of income tax or professional tax, although some elements thereof may or may not be taxable due to the exemption conferred thereupon under the statute”.

Further, in Kavita Devi v. Sunil Kumar, 2025 SCC OnLine SC 1639, the Supreme Court observed that the allowances regularly received and used for the benefit of the family must be considered while determining dependency. For ease of reference, relevant portion from Kavita Devi (supra) is extracted as under:

The aforesaid views are also supported by the decision of the Supreme Court in National Insurance Co. Ltd. v. Nalini (supra), wherein the Supreme Court, while relying upon Vijay Kumar Rastogi (supra), observed that allowances under the heads of transport allowance, house rent allowance, provident fund loan, provident fund and special allowance ought to be added while considering the basic salary of victim/deceased. Reference to National Insurance Co. Ltd. v. Nalini (supra) was also made by the Supreme Court in Meenakshi v. Oriental Insurance Co. Ltd., 2024 SCC OnLine SC 1872.

This Court had also taken a detailed view in this regard, in E. Neeta Devi v. Ashwani Kumar, 2026:DHC:5184, while deliberating upon the issue of allowances forming part of the income. Though that was also a case of a fatal accident, the Court, while traversing through various decisions of the Supreme Court, held that components which do not accrue to the benefit of the family members may not be included in the assessment of income.

From the above discussion what transpires is that, essentially, in cases of fatal accidents, what is required to be considered is the benefit of the income of deceased which would have accrued for the benefit of family members. This is quite distinct from the assessment of notional income in case of an injured claimant, which is meant to determine the income that he would have earned had he continued in his vocation. Therefore, there is no reason why any perks or components forming part of his salary package ought to be excluded, as in the present case.

Accordingly, the plea of appellant/Insurance Company is rejected.

Mr. Shekhar Aggarwal, counsel for claimant/injured, contends that despite noticing that the claimant/injured required a prosthetic, had purchased the same, and had produced the original invoice of Rs. 3,20,000/-, only this amount of Rs. 3,20,000/- was awarded towards one prosthetic limb. He contends that since claimant/injured was 21 years of age on the date of the accident, considering the principles laid down by the Supreme Court in Mohd. Sabeer v. U.P. SRTC, (2023) 20 SCC 774, the cost for replacement of the prosthetic limb ought to have been provided.

In Mohd. Sabeer (supra), the Court has considered 70 years as the average life expectancy and, taking into account the fact that a prosthetic limb would require replacement every 5-6 years, awarded compensation towards the cost of replacement of prosthetic limb. The Supreme Court also considered the amount required towards maintenance of each such prosthetic limb.

The principles relating to prosthetic limbs have now been further developed by the decision of the Supreme Court in Prahlad Sahai v. Haryana Roadways, 2026 SCC OnLine SC 651. The case concerned a right leg crush injury resulting in amputation below the knee. The claimant therein relied upon the decision in Mohd. Sabeer (supra), to contend that the injured was 32 years of age; therefore, considering the assumed life expectancy of 70 years, he would require prosthetic limb(s) for 38 years. He further contended that since an artificial limb needs to be replaced every 5 years, maintenance charges would also have to be granted.

Traversing through the law in this this regard, the Supreme Court, in Prahlad Sahai (supra), recognized a block of ‘5 years’ as the reasonable replacement period for a prosthetic limb. Further, the Supreme Court assumed the life span of the claimant at 70 years and, concluded that the claimant would require seven prosthetic limbs. It, therefore, awarded a consolidated amount of Rs.3,00,000/- per limb on a standard basis for seven limbs. No interest was awarded on this amount, considering that it was being awarded as a consolidated lump sum. Maintenance of the prosthetic limb, at Rs. 15,000/- per annum was also awarded, amounting to Rs. 75,000/- for each block of 5 years. For ready reference, relevant portion from Prahlad Sahai (supra) is reproduced hereinbelow:

Accordingly, in the facts and circumstances of this case, considering that the claimant/injured was 21 years of age at the time of the accident, and assuming his life span at 70 years, the Court deems it fit to consider that he would require a prosthetic limb for another 49 years. He would, therefore, require replacement of approximately ‘10’ prosthetic limbs over his lifetime, assuming a replacement period of 5 years.

Considering that he has already purchased one limb, the replacement cost for the remaining 9 limbs would have to be considered at Rs.3,20,000/- each, which was the benchmark price for the first limb. Further, following the direction of the Supreme Court, an amount of Rs. 75,000/- for each block of 5 years towards maintenance shall also be taken into consideration.

Accordingly, the aforesaid amount shall be calculated at Rs. 36,15,000/-.

An additional issue is being considered at the behest of Mr. Aggarwal, counsel for claimant/injured, namely, that the future prospects were not granted, which ought to have been granted as per the principles enunciated by the Supreme Court in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680. The aforesaid contention is accepted, and therefore, addition towards future prospects shall be made at 40%.

Accordingly, the revised compensation shall be calculated as under:

Accordingly, the compensation shall stand enhanced by Rs.6,21,760/- [‘enhanced amount’].

Enhanced amount along with 9% interest per annum from the date of filing the petition, shall be deposited before MACT within a period of four weeks. It is directed that a lump sum amount of Rs. 2,00,000/- shall be released in favour of the claimant/injured from the deposit of enhanced amount, thereafter. Remaining enhanced amount, along with accrued interest, shall be kept in Fixed Deposit Receipts [‘FDRs’] of Rs.25,000/- each for periods of 1 month, 2 months, 3 months and so on, in succession as maybe calculated. Interest accruing on said FDRs shall be credited to the designated Savings Bank Account of claimant/injured. The amount of FDRs on maturity would be released to the Savings Bank Account of claimant/injured upon due verification.

Vide order dated 8^th March 2019, this Court directed appellant/Insurance Company to deposit the entire awarded amount along with the accrued interest before the concerned Tribunal.

Furthermore, by order dated 22^nd September 2021, this Court had directed that 100% of the amount awarded under the head of pecuniary losses, including towards treatment, conveyance and special diet, nursing and attendant charges, and cost of artificial limb, as well as non-pecuniary losses towards mental and physical shock, pain and sufferings, loss of amenities in life, disfiguration and loss of marriage prospects be released to the claimant/injured. 50% of the amount awarded towards loss of income and loss of future prospects was also directed to be disbursed to the claimant/injured as per the scheme of disbursal.

Accordingly, the remaining amount along with accrued interest, if not already released, shall be released in favour of claimant/injured as per the directions passed by the MACT vide impugned award.

Amounts towards prosthetic limbs, calculated at Rs. 36,15,000/-, shall be deposited by appellant/Insurance Company before the MACT within a period of six weeks as a separate amount, not garnering interest for the period which has passed since the date of the accident. The amount, shall, however, be kept in an interest-bearing FDR.

Amounts towards prosthetic limbs shall be released only upon production of a verified original invoice and proof of payment from an authorised and reputed vendor.

Statutory amount be refunded to appellant/Insurance Company.

Accordingly, the appeal is disposed of.

Pending applications, if any, are rendered infructuous.

Judgment be uploaded on the website of this Court.