The Delhi High Court, sitting in a bench presided over by Justice Anish Dayal, delivered a judgment on an appeal filed by the family of the late Manipur MLA E Suraj Singh seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal (MACT). The appellants contended that the tribunal had erred by considering only the basic salary of the deceased MLA while computing his monthly income, thereby undervaluing the loss of dependency. The court was required to determine which components of the remuneration received by a legislator constitute ‘income’ for the purpose of assessing compensation under Section 166 of the Motor Vehicles Act, 1988.
Justice Dayal began by referring to a series of Supreme Court pronouncements that have shaped the jurisprudence on computation of income in motor accident claims. The bench cited National Insurance Co. Ltd. v. Indira Srivastava (2008), Meenakshi v. Oriental Insurance Co. Ltd. (2024), Manorma Sinha v. Divisional Manager Oriental Insurance Ltd. (2025), Triveni Kodkany v. Air India Ltd. (2020) and National Insurance Co. Ltd. v. Nalini (2024). From these authorities, the court distilled the principle that income is not confined to the salary credited to the employee’s account but extends to any allowance that confers a benefit upon the employee’s family.
The bench observed, “Income is not limited to the pay packet carried home by an employee, but also allowances which are beneficial to the members of the entire family… Allowances such as transport allowance/conveyance allowance, house rent allowance, provident fund contribution and special allowances which are fixed pro‑rata with reference to the basic salary will be included before assessment of future prospects.” Applying this test to the remuneration structure of a Member of the Legislative Assembly, the court classified the various allowances into two categories.
Allowances that were deemed to accrue to the benefit to be included entertainment allowance, contingency allowance, telephone allowance, housing or compensatory allowance, and water and electricity allowance. The court reasoned that these components directly assisted the household in meeting everyday expenses and therefore formed part of the deceased’s earning capacity.