HRA, Other Allowances Forming Part Of Deceased's Income Must Be Included To Calculate Motor Accident Compensation: Rajasthan High Court

Rajasthan High Court has reiterated that the amount paid to the deceased in his income towards Higher Duties allowance, City Compensatory Allowance, House Rent Allowance, Washing allowance etc., cannot be deducted while calculating accident compensation under the Motor Vehicles Act.

While enhancing the compensation to the claimants, the bench of Justice Sandeep Taneja held that the district judge was not justified in deducting such amount while calculating the compensation towards the loss of dependency.

"In view of the law expounded by the Hon'ble Supreme Court, this Court is of the view that the learned Tribunal was not justified in deducting the amount from the monthly salary of the deceased which was being paid to him towards Higher Duties Allowance (HDA), City Compensatory Allowance (CCA), House Rent Allowance (HRA), washing allowance, other misc. allowances. Therefore, the above allowances would be part of the income of the deceased, for the purpose of calculating the compensation towards loss of dependency".

The Court relied upon the Supreme Court case of Manorma Sinha and Anr. v. Divisional Manager, Oriental Insurance Company Limited and Anr. in which it was held that the “income” included all those benefits, either monetary or otherwise, that were considered for payment of income tax or professional tax, even though some elements may not be taxable due to exemption under the statute. Hence, allowances could not be excluded from the computation.

Further reference was made to the Apex Court decision in National Insurance Company Ltd. v. Indra Srivastava & Ors., that had observed, “The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit.”

In this background, the Court enhanced the compensation granted by the district judge, and accordingly, the petition was disposed of.

Title: Priyanka & Ors. v Swarn Singh & Anr.

Citation: 2026 LiveLaw (Raj) 153

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