Commission Is Income: Gujarat High Court Raises Accident Award in Appeal Argued by Adv. Manan Bhatt
The tribunal had treated a 24-year-old salesman's earnings as notional. Pointing to his pay slip and employer certificate, Adv. Manan Bhatt secured an enhancement of Rs 9.42 lakh, taking the award to Rs 15.38 lakh.
Well Argued · Gujarat High Court
A 24-year-old salesman was left with 53% permanent disability after a truck hit his motorcycle. The tribunal ignored the commission he earned and awarded him ₹5.96 lakh. On appeal, Adv. Manan Bhatt put his pay slip and employer certificate back in front of the Gujarat High Court. The Court held that incentives are part of income even when they vary from month to month, and raised the award to ₹15.38 lakh.
- Court: High Court of Gujarat at Ahmedabad, Division Bench of Justice A.Y. Kogje and Justice Nisha M. Thakore.
- Case: R/First Appeal No. 4926 of 2019, a motor accident compensation appeal.
- For the appellant: Adv. Manan Bhatt.
- Result: appeal partly allowed. Compensation raised from ₹5,95,800 to ₹15,38,053, an enhancement of ₹9,42,253 with 7.5% interest from the date of the claim petition.
- The principle: variable incentives and commission count as income for computing loss of earnings.
01The accident
On the afternoon of 7 March 2008, a 24-year-old was riding his motorcycle towards Kadi with a junior colleague when a truck came from the wrong side and hit them. He suffered fractures to his right leg and needed surgery. He was left with 53% permanent disability.
He worked for India Infoline Limited, on a fixed salary plus monthly incentives. Like many people in sales, a large share of what he took home each month was commission.
02The tribunal’s award
He filed a claim before the Motor Accident Claims Tribunal at Ahmedabad in 2009. Nine years later, in September 2018, the tribunal assessed total compensation at ₹6,62,000. After deducting 10% for contributory negligence, it awarded ₹5,95,800.
The tribunal did not work from what he actually earned. It used a notional income.
03The argument
On appeal, Adv. Manan Bhatt made a simple point: the earnings were on the record. The documents had been produced and marked as exhibits.
- Exhibit 82, the employer’s certificate, showed a monthly salary of ₹4,000, a petrol allowance of ₹700, and monthly incentives.
- Exhibit 83, the pay slip for December 2007, showed gross commission of ₹5,935.
When actual income is on record, he argued, a tribunal cannot fall back on a notional figure.
The insurer defended the award. Incentives vary from month to month with performance, it said, so they cannot be fixed at any particular amount and should not count towards future loss of income.
04What the Court held
The Division Bench rejected the insurer’s argument:
“Even if such incentives or allowances vary from month to month based on performance, they nevertheless represent the actual earning capacity and skill of the appellant and the same cannot be brushed aside in entirety merely because the quantum varies periodically.”
The Court left out the petrol allowance but counted the incentives as part of his income. Reading Exhibits 82 and 83 together, it fixed his monthly income at ₹9,000. A witness’s deposition (Exhibit 70) also confirmed, under cross-examination, that his income included allowances and incentives on top of salary.
05How the new amount was worked out
Following the Supreme Court’s decision in National Insurance Co. Ltd. v. Pranay Sethi, the Court added 40% for future prospects, because he was 24 and in regular employment.
| Step | Figure |
|---|---|
| Monthly income | ₹9,000 |
| With 40% future prospects | ₹12,600 a month (₹1,51,200 a year) |
| Loss at 53% disability | ₹80,136 a year |
| Multiplier of 18 (age 24) | ₹14,42,448 future loss of income |
| Other heads, as assessed by the tribunal | ₹2,66,500 |
| Gross compensation | ₹17,08,948 |
| Less 10% contributory negligence | ₹1,70,895 |
| Net compensation | ₹15,38,053 |
| Already awarded | ₹5,95,800 |
| Enhancement | ₹9,42,253 |
The insurer must deposit the enhanced amount, with interest at 7.5% a year from the date of the claim petition, within four weeks.
Partly allowed
The Court kept the 10% contributory negligence deduction and the tribunal’s figures for medical expenses and pain and suffering, and applied the 53% disability figure rather than the 100% functional disability the appellant had argued for. But on the question that mattered most, how to measure what the claimant had lost, the record won.
06Why it matters
Commission-based work is common: sales staff, delivery riders, agents and many others. When they are injured, insurers often argue that the variable part of their pay is too uncertain to count. This judgment answers that directly. A pay slip and an employer’s certificate are evidence of income, even if the number changes every month.
It also shows careful advocacy. The documents had been on file for years. The win came from putting them back in front of the Court.
- Case: R/First Appeal No. 4926 of 2019, High Court of Gujarat at Ahmedabad
- Bench: Justice A.Y. Kogje and Justice Nisha M. Thakore
- Decided: 3 August 2026
- For the appellant: Adv. Manan Bhatt
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