Bombay High Court rules Form 16 reliable evidence in accident compensation
The kin of the deceased to receive nearly 3 crores after a decade of struggle
The Bombay High Court has held that Form 16 issued by an employer for income tax purposes, showing a higher remuneration than a salary slip, is a reliable piece of evidence for compensation under the Motor Vehicles Act.
A division bench of Justice Gautam Patel and Justice Gauri Godse observed, "The reason is that Form 16 has been signed and generated by the employer of the deceased."
The court added, "Whenever a tribunal or a court fixes an amount of compensation in cases of accident, it involves some guess work, hypothetical consideration, and a certain amount of sympathy. Thus, the tribunal ought to have considered the entries in Form 16, which showed the total income of the deceased."
The bench, thus, ordered Tata AIG General Insurance Co Ltd to pay the kin of the deceased Vilas Ramkumar Deshpande Rs.2,78,76,708 with 8 percent interest within four months.
The accident happened in December 2012 on the Mumbai–Agra Highway. A vehicle rammed into the divider, crossing over to the other side of the road and hitting Deshpande's car, resulting in his death instantly. Deshpande was 46 years old and a senior manager at Ultratech Cement Limited in Mumbai.
In 2018, instead of Form 16, the Motor Accident Claims Tribunal ordered compensation of Rs.1,76,08,400, relying on the petitioner's salary slip. It observed that there could always be ups and downs in business, therefore, it was not right to consider the income in addition to his salary.
Deshpande's wife, two minor children, and ailing parents appealed before the high court seeking enhancement of compensation.
The family submitted that Form 16 should be considered, as it was an official document provided at the time of paying the Income Tax Return. In Form 16, apart from the basic salary, there were several other heads that increased the annual income. The family also submitted the employer's letter, according to which his salary was revised from July 2012 due to his exceptional performance. The administrative officer of the employer was also examined.
Meanwhile, Prabha Gupta, the person driving the offending vehicle did not appear in court. And Tata AIG resisted the claim on the ground that the letter did not disclose that Deshpande was entitled to the same perks every year. Therefore, the tribunal rightly relied on the salary slip.
However, the court held, "The tribunal erred in taking into consideration only the income as shown in the salary slip. As stated herein, the evidence and the documents produced on record show that over and above the basic salary, the deceased was also entitled to an additional remuneration on account of his performance. It also shows that his performance was exceedingly well and there is no reason to disbelieve that he would have been always entitled to additional remuneration. Therefore, the total income of the deceased shown in Form 16 can be attributed to his earnings."
Since the letter did not have the revised 'cost to company', the figures of income, as reflected in Form 16, would be taken into consideration. The court noted that the appellant's calculations were accurate based on the guidelines in the National Insurance Company Limited vs Pranay Sethi case.