Deceased's Ability To Pay Heavy EMIs Relevant Factor When Determining His Income In Motor Accident Compensation Claim: Rajasthan High Court

The Rajasthan High Court recently enhanced the compensation awarded by the Motor Accidents Claims Tribunal from around Rs. 7.80 Lakhs to around Rs. 60.62 lakhs, by recomputing the deceased's income in light of monthly EMIs being paid by him, as well as his holding of the agricultural land capable of yielding regular income.The bench of Justice Rekha Borana held that the ability of an individual to repay heavy loan installments on a regular basis presupposed the existence of a substantially higher income than the discharged liability. “…it would be wholly unrealistic to assume that a person paying EMI exceeding Rs.35,000/- could have been subsisting on a meagre income of Rs.4,914/- per month. The financial outgo evidenced by the bank transactions constitutes strong circumstantial proof of the deceased's earning capacity.”The Court was hearing an appeal against the order of the Tribunal seeking enhancement of the amount of the compensation awarded which was quantified taking deceased's monthly income as Rs. 4,607, treating him as an unskilled labour. It was argued by the appellants that the deceased was engaged in mining operations for which statutory consents were duly in place. He also owned heavy machinery for which he was paying monthly EMI of around Rs. 35,000. Further, he also owned an agricultural plot using which around Rs. 10,000 were earned monthly.On the contrary, the respondents argued that no documentary evidence like income tax returns or other reliable finance records were put forth to substantiate this assertion of higher income. After hearing the contentions, the Court held that the claims of the appellants were in-fact corroborated by documentary evidences like statutory consents for mining operations; registration certificate of crane; bank statements & passbook etc. Hence, the Court held that absence of records like income tax returns or audited financial statements did not by itself negated deceased' engagement in mining activities. Rather, other documents like statutory consents were unimpeachable evidence towards the same. “Such statutory consents definitely presuppose not only the existence of mining rights but also requisite infrastructure to operate the said mine…the official consent orders issued by the statutory authority constitute unimpeachable evidence that the deceased was actively carrying on mining operations prior to the unfortunate accident. Equally compelling is the evidence relating to the ownership and financing of heavy machinery by the deceased.”The Court further made a reference to a Supreme Court case of Gurpreet Kaur v. United India Insurance Co. Ltd. in which it was held that where a deceased was regularly servicing a substantial loan instalment, such fact was reliable evidence of earning capacity. In relation to the agricultural income, the Court highlighted that records clearly indicated deceased's joint ownership of an agricultural land, comprising of a tubewell as well, capable of yielding regular income. It was opined that an agriculturalist could not be treated as an unskilled labour since the vocation involved application of knowledge and skill. In this background, the Court held that deceased's monthly income was greater than what was assessed by the Tribunal and in no situation was less than Rs. 45,000 per month from his mining and agricultural ventures. Accordingly, the compensation awarded by the Tribunal was increased from Rs. 7.88 lakhs to Rs. 60.62 Lakhs, and the appeal was disposed of. Title: Smt. Imarti Devi & Ors. v Nattha Ram & Ors.Citation: 2025 LiveLaw (Raj) 326Click Here To Read/Download Order

Deceased's Ability To Pay Heavy EMIs Relevant Factor When Determining His Income In Motor Accident Compensation Claim: Rajasthan High Court

Nupur Agrawal

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