Chhattisgarh High Court Increases Accident Compensation By ₹37 Lakh, Says Victim's IT Returns Cannot Be Discarded During Calculation

The Chhattisgarh High Court has held that Income Tax Returns, once duly produced and exhibited, constitute relevant documentary evidence for determining the income of a deceased while assessing compensation under the Motor Vehicles Act. The Court held that such returns cannot be discarded merely on the ground that the income disclosed therein is based on estimation. [2026 LiveLaw (Chh) 73]

Justice Sanjay K. Agrawal was hearing two appeals arising out of the same motor accident. The claimants sought enhancement of compensation awarded by the Motor Accident Claims Tribunal, while the Insurance Company challenged the award fastening liability upon it. The claimants contended that the deceased was engaged in construction work, earning Rs.60,000 per month and regularly filing Income Tax Returns. They argued that despite the production of the Income Tax Returns for the assessment years 2011-12, 2012-13 and 2013-14, along with examination by an Income Tax official, the Tribunal had assessed the deceased's monthly income at Rs.7,000 and had awarded inadequate amounts under the conventional heads. The Insurance Company opposed the claim for enhancement.

The Court observed that the Tribunal had discarded the Income Tax Returns solely on the ground that the income disclosed therein was based on estimation and that no documentary evidence regarding the deceased's monthly income had been produced. It held that this approach was unsustainable.

The Court observed that the Income Tax Returns had been duly produced and exhibited and constituted relevant documentary evidence for determining the income of the deceased. It further held that, in the absence of any material establishing that the returns were fabricated, manipulated or otherwise unreliable, there was no justification for ignoring the income disclosed therein.

“The Income Tax Returns, having been duly produced and exhibited, constitute relevant documentary evidence for determining the income of the deceased. In the absence of any material to establish that the returns were fabricated, manipulated or otherwise unreliable, there was no justification for ignoring the income disclosed therein,” the Court observed.

The Court held that, in cases relating to compensation, Income Tax Returns would be considered a mandatory document for determining the income of the deceased and that the income ought to be assessed on that basis for awarding just compensation.

Accordingly, the Court dismissed the Insurance Company's appeal. It partly allowed the claimants' appeal, enhanced the compensation from Rs.14,08,000 to Rs.51,24,980, and held the claimants entitled to an additional amount of Rs.37,16,980 with interest at the rate of 7% per annum from the date of filing of the claim petition till realization.

Case Title: Smt. Gulab Verma & Ors. v. Kundan Lal Dheevar Nayak & Ors. [MAC No. 162 of 2020] and Bajaj Allianz General Insurance Company Ltd. v. Smt. Gulab Verma & Ors. [MAC No. 2252 of 2019]

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Citation: 2026 LiveLaw (Chh) 73