Allowances Benefiting Family Must Be Included While Computing Deceased MLA's Income For MACT Compensation: Delhi High Court

The Delhi High Court has held that while assessing compensation under the Motor Vehicles Act, allowances received by a deceased employee that accrue to the benefit of the family must be included in computing the deceased's income. [2026 LiveLaw (Del) 623]Applying this principle, Justice Anish Dayal enhanced the compensation payable to the family of late Manipur MLA E. Suraj Singh by over ₹57 lakh, holding that allowances such as entertainment, contingency, telephone, housing, and water and electricity allowances formed part of his income, whereas constituency, secretarial and certain duty-related allowances could not be included.The Court was hearing an appeal filed by Singh's family seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal (MACT). Singh, then a Member of the Manipur Legislative Assembly, died in a road accident in Delhi in August 2011. While the MACT had calculated his monthly income at ₹18,500 by considering only his basic salary, the Appellants contended that various allowances attached to his office must be included while determining the loss of dependency.The High Court referred to Supreme Court decisions in National Insurance Co. Ltd. v. Indira Srivastava (2008), Meenakshi v. Oriental Insurance Co. Ltd. (2024), Manorma Sinha v. Divisional Manager Oriental Insurance Ltd. (2025), Triveni Kodkany v. Air India Ltd. (2020) and National Insurance Co. Ltd. v. Nalini (2024), and summarised the principles governing computation of income in motor accident claims. It observed, “Income is not limited to the pay packet carried home by an employee, but also allowances which are beneficial to the members of the entire family…Allowances such as transport allowance/conveyance allowance, house rent allowance, provident fund contribution and special allowances which are fixed pro-rata with reference to the basic salary will be included before assessment of future prospects.”As such it held that entertainment, contingency, telephone, housing/compensatory, and water and electricity allowances received by the MLA were beneficial to the family and therefore includible.However, it also clarified that constituency allowance, secretarial allowance, travelling allowance, daily allowance, medical reimbursement and other reimbursements linked to the discharge of official duties were excluded, as they were personal to the legislator or meant for official functions.The Bench also reiterated that pensionary benefits cannot be deducted while computing compensation, observing that such benefits arise out of the deceased's contractual or statutory entitlements and are independent of compensation payable under the Motor Vehicles Act.Appearance: Mr. Pukhrambam Ramesh Kumar & Ms. Rajkumari Divyasana, Advs for Appellants; Mr. Rajeev M. Roy and Mr. P. Srinivasan, Advs. for R-3. Ms. Suman Bagga and Ms. Mouli Sharma, Advs. for R-5.Case title: E Neeta Devi & Ors. v. Ashwani Kumar & Ors (Bharti Axa General Insurance Co Ltd)Citation: 2026 LiveLaw (Del) 623Case no.: MAC.APP. 530/2017Click here to read order

Allowances Benefiting Family Must Be Included While Computing Deceased MLA's Income For MACT Compensation: Delhi High Court

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Allowances Benefiting Family Must Be Included While Computing Deceased MLA's Income For MACT Compensation: Delhi High Court

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