Motor accident compensation turns on reliable income proof, limited vehicle income, and strict proof of policy breach.

Motor accident compensation should be assessed on reliable recent income evidence, ordinarily the immediately preceding three financial years' returns, and an earlier year was not justified. Limited addition for income from goods vehicles was permissible only where the vehicles were recently purchased and there was no reliable proof of a full year's earnings. Insurer liability could not be avoided without specific proof of policy breach such as absence of a valid licence or permit violation, and the alleged breach was not established. After recalculating income, deductions, multiplier, future prospects, and conventional heads, the compensation was revised downward while interest at 7% per annum was maintained.

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Issues: (i) whether the deceased's annual income was to be assessed on the basis of the previous three years' income tax returns and whether income from the goods vehicles could be added on a presumptive basis; (ii) whether the insurer could avoid liability on the ground of breach of policy conditions; and (iii) whether the compensation and interest required modification.

Issue (i): whether the deceased's annual income was to be assessed on the basis of the previous three years' income tax returns and whether income from the goods vehicles could be added on a presumptive basis.

Analysis: The income should ordinarily be determined on the basis of the immediately preceding three financial years, and the inclusion of an additional earlier year was not justified. The provision relating to presumptive taxation for goods carriages was noticed, but the Court confined the addition for the vehicles because they had been purchased only a few months before the accident and there was no reliable material showing continued income from them for a full year.

Conclusion: The annual income was correctly reassessed on the basis of the previous three years, and only a limited addition towards income from the goods vehicles was permissible.

Issue (ii): whether the insurer could avoid liability on the ground of breach of policy conditions.

Analysis: The insurer did not produce specific evidence to establish absence of a valid driving licence, lack of permit, or any proved endorsement-related violation sufficient to dislodge the finding of liability. The available documents supported the view that the vehicle was covered and the alleged breach was not proved.

Conclusion: The plea of breach of policy conditions was rejected and the insurer remained liable to indemnify.

Issue (iii): whether the compensation and interest required modification.

Analysis: After reassessing income, adding limited vehicle income, deducting personal expenses, applying the appropriate multiplier, and allowing future prospects and conventional heads in accordance with settled principles, the compensation required downward recalculation. The rate of interest at 7% was found appropriate and enhancement to 9% was declined.

Conclusion: The compensation was modified to the revised figure and interest at 7% per annum was maintained.

Final Conclusion: The appeals were disposed of by modifying the award to the revised compensation figure, while affirming insurer liability and maintaining interest at 7% per annum.

Ratio Decidendi: In motor accident compensation matters, income should be assessed on reliable recent returns, presumptive vehicle income may be added only to the extent supported by the facts, and insurer liability cannot be avoided without specific proof of policy breach.

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