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Real income for compensation can be determined from Form-16 issued by employer

Cause Title : Anjali Vilas Deshpande vs Prabha Rajendra Gupta, First Appeal No. 17 Of 2022, Bombay High Court

Date of Judgment/Order : 18th November 2022

Corum : G.S. Patel & Gauri Godse, JJ.

Citied: 

  1. Sarla Varma and others v DTC and another, (2009) 6 SCC 121
  2. National Insurance Company Limited v Pranay Sethi, (2017) 16 SCC 680
  3. Magma General Insurance Company Ltd v Nanuram, (2018) 18 SCC 130

Background

Appeal was filed by the Appellant/claimants was the compensation allowed by the Tribunal. The said compensation was based on the salary of the deceased as well as his possible promotion. The Appellant claimed that the tribunal had erred in relying only on the last drawn salary slip of the deceased and refused to consider the income of the deceased as per Form 16 which is submitted under the Income Tax Act. The Appellant/claimants relied upon last letter issued by the employer which revealed that the employer had revised the salary of the deceased few months before the accident.

The insurer objected to the nature of the job and income of the deceased as claimed by the Appellant/claimants. 

Judgment

The High Court observed that the Tribunal has considered as to whether the income of the deceased is to be calculated as per the last drawn salary slip or as per Form 16 and recorded that the Form 16 showed much more income than the the last month salary of the deceased. The Tribunal had also considered the last letter issued by the employer which indicated revision of the salary of the deceased due to good performance but decided not to include the additional amount (allowance / perks) which was in the Form 16 cannot be considered as permanent source of income of the deceased as there were always ups and downs in the progress of business. Therefore, the only earning of the deceased taken into consideration by the Tribunal was as per the last drawn salary.

The HC disagreeing with Tribunal held that  Form 16 is a reliable piece of evidence to determine the real income of the deceased as the same has been signed and generated by the employer of the deceased. The income shown in the Form 16 is attributable to the amounts earned by the deceased from his employer and there is no evidence produced by the Respondents to show that the income of the deceased was contrary to what is shown in Form 16. 

The HC observed that evidence and documents produced on record shows that over and above the basic salary, the deceased was also entitled to an additional remuneration on account of his performance and thus there is no reason to disbelieve that the deceased would have been always entitled to additional remuneration. Whenever a Tribunal or a Court fixes an amount of compensation in cases of accident, it involves some guess work, some hypothetical consideration and certain amount of sympathy.

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