'Unsigned Employment Contract Can Be Considered For Assessing Notional Income': Bombay High Court Enhances Motor Accident Compensation
The Bombay High Court has held that an unsigned employment contract can still be considered for determining notional income, provided it is supported by credible evidence on record. The Court observed that such documents cannot be discarded merely on the ground of absence of signature when the surrounding circumstances establish their genuineness.Justice Jitendra Jain was hearing an appeal...
The Bombay High Court has held that an unsigned employment contract can still be considered for determining notional income, provided it is supported by credible evidence on record. The Court observed that such documents cannot be discarded merely on the ground of absence of signature when the surrounding circumstances establish their genuineness.
Justice Jitendra Jain was hearing an appeal filed by the claimants seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal, which had assessed the notional income of the deceased at ₹8,000 per month and awarded ₹10 lakhs as compensation. The deceased, a qualified maritime engineer with about 20 years of experience, died in a road accident while travelling in connection with his professional work. The claimants relied on an employment offer issued by M/s Samson Maritime Limited, indicating a monthly compensation of ₹1,59,932/-.
The Court noted that the employer's representative had entered the witness box and confirmed the employment arrangement, and that the deceased was travelling for work related to the said company at the time of the accident.
The Court held that merely because the employment contract did not bear the signature of the deceased, the evidence could not be rejected, especially when it stood corroborated by oral testimony and surrounding circumstances. It further observed that even if the contract was not treated as fully concluded, it could still be used as a basis for estimating a reasonable notional income.
“Merely because the contract did not bear the signature of the deceased, the Tribunal cannot reject the evidence led by the claimants, more so because the accident happened while he was travelling for M/s. Samson Maritime Limited to Paradeep Port for a visit. Even assuming that there was no agreed contract because the deceased had not signed the employment contract dated 19 June 2009, still the Tribunal ought to have considered that document as a basis for arriving at a just and fair notional income of the deceased,” the Court observed.
The Court also relied on additional evidence showing that the deceased had earned ₹2.5 lakhs for a 40-day assignment with another maritime company shortly before the accident, and took into account his qualifications, experience, and the nature of the maritime industry.
Rejecting the Tribunal's assessment of ₹8,000 per month, the Court held that a just and fair estimate of the deceased's income would be ₹1,25,000 per month after balancing all factors, including the nature of contractual employment.
After accounting for future prospects, personal expenses, and tax deductions, the Court recalculated the total compensation at ₹1,31,95,000/-.
Accordingly, the High Court enhanced the compensation from ₹10 lakhs to ₹1,31,95,000/- along with interest, and directed the insurer to deposit the enhanced amount within the stipulated time.
Case Title: Dr. Dhanashri Rajesh Deshmukh & Ors. vs. Saroj Kumar Behera & Anr. [First Appeal No. 670 of 2015]
Case Title: 2026 LiveLaw (Bom) 224