2026 Supreme(Online)(Del) 6581

IN THE HIGH COURT OF DELHI AT NEW DELHI
Anish Dayal, J
Savita – Appellant
Versus
National Insurance Company Ltd – Respondent
MAC.APP. 330/2024

In the absence of salary records, courts must determine income for motor accident compensation through holistic examination of oral testimony and socioeconomic factors. Using intelligent guesswork and fair benchmarks, rather than defaulting to the lowest minimum wage tier, ensures a just and reasonable compensation for the deceased's dependents.

Headnote:(A) Motor Vehicles Act, 1988 - Sections 165, 168 and 173 - Death in motor accident - Quantum of compensation - Assessment of notional income - In the absence of formal documentary proof of income, the tribunal is tasked with determining a just and equitable amount based on the evidence available. (Para 30)

(B) Courts should avoid mechanical reliance on the lowest tier of minimum wages as the sole benchmark for assessing monthly income. (Paras 9, 18.1, 26)

(C) The process of inquiry under the relevant legislative framework is summary in nature and precludes the application of strict procedural rules of evidence. (Para 19.2)

(D) Assessment of income should be conducted through a holistic examination of oral testimony and socioeconomic indicators, incorporating a degree of intelligent guesswork to bridge gaps left by informal employment records. (Paras 21, 30, 38)

Facts of the case:
The appellants challenged the award amount granted by the lower authority, arguing that the income of the deceased was erroneously assessed using the minimum wage rate for an unskilled worker, despite evidence suggesting employment in a private establishment.

Findings of Court:
The Court found that the lower authority failed to account for the nature of employment and the socioeconomic standing of the deceased in its reliance on the lowest minimum wage tier. The income was re-evaluated by applying the minimum wage standards of a skilled worker, resulting in an enhancement of the compensation awarded.

Issues: Whether the lower authority was justified in utilizing the lowest minimum wage tier to assess the monthly income of the deceased in the absence of formal salary documents, and whether the oral testimony provided was sufficient to merit an enhancement in compensation.

Ratio Decidendi: The calculation of compensation in motor accident claims must be reflective of true earning potential. When direct documentation is absent, courts are obligated to make informed estimates based on reliable oral testimonies and regional wage standards to prevent the under-compensation of dependents.

Result: Appeal allowed; compensation enhanced.