P&H High Court: Late Advocate's last ITR determines MACT award, rejects averaging 3 years' income

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Published 2 November 2026

Case: Oriental Insurance Company Ltd. v. Smt. Santosh Devi and others
Court: High Court of Punjab and Haryana
Bench: Justice H.S. Madaan
Citation: 2023 LiveLaw (PH) 263
Decided: 2 May 2023
Statutes: Motor Vehicles Act, 1988
Source: LiveLaw

Bottom Line Up Front (BLUF)

In Oriental Insurance Company Ltd. v. Smt. Santosh Devi and others, the Punjab and Haryana High Court (Justice H.S. Madaan) on 2023-05-02 held that the last Income Tax Return (ITR) of a deceased advocate should be used to determine the Motor Accident Claims Tribunal (MACT) award, rather than averaging income over three years, recognizing experience at the Bar as an asset.

Ratio Decidendi · Legal Principle Established

The income of a deceased advocate for the purpose of calculating a Motor Accident Claims Tribunal (MACT) award should be determined based on their last filed Income Tax Return (ITR), as experience at the Bar is an asset that leads to increased income, making a three-year average inappropriate.

Practice & Procedural Impact for Advocates

Advocates representing claimants in MACT cases involving deceased professionals, especially advocates, should emphasize the deceased's last ITR as the most accurate reflection of income. Litigants should be prepared to argue against the averaging of income over multiple years when the deceased's profession demonstrates a clear upward trajectory in earnings due to experience.

Key Legal Takeaways

1Last ITR is preferred for calculating MACT awards for professionals.
2Experience at the Bar is considered an asset leading to higher income.
3Averaging income over three years may not be suitable for professionals with increasing earnings.

The Legal Issue The Oriental Insurance Company Ltd. challenged a Motor Accident Claims Tribunal (MACT) award, arguing that the income of the deceased advocate should have been calculated by averaging his income over the last three years, rather than relying solely on his last Income Tax Return (ITR). The Tribunal had determined the compensation based on the deceased's last ITR, which showed a higher income than the previous years.

Court's Reasoning The Punjab and Haryana High Court, through Justice H.S. Madaan, dismissed the appeal, affirming the MACT's decision. The Court observed that the deceased was an advocate, and 'experience at the Bar is an asset'. It reasoned that an advocate's income tends to increase with experience, making it inappropriate to average the income over three years. The Court held that the last ITR, reflecting the most recent earnings, was the most suitable basis for calculating the compensation. This approach acknowledges the progressive nature of an advocate's professional earnings.

What Follows The appeal filed by Oriental Insurance Company Ltd. was dismissed. The Court upheld the MACT award, confirming that the compensation for the deceased advocate's family would be calculated based on his last filed Income Tax Return. This decision sets a precedent for how professional incomes, particularly those of advocates, should be assessed in MACT claims, emphasizing the value of experience.