Tip Amount Can Be Included In Waiter’s Income For Assessing Motor Accident Compensation: Punjab & Haryana High Court

The High Court was considering an appeal filed by the appellant-insurance company impugning the award passed by the Motor Accident Claims Tribunal, Chandigarh (Tribunal) whereby compensation of Rs 38,77,360 was awarded to the respondent-claimant on account of injuries suffered by him in a motor vehicle accident.

The Single Bench of Justice Mandeep Pannu held, “In the present case, the injured was admittedly employed as a waiter and the receipt of ₹4,000/- per month towards tips, in addition to his salary of ₹ 8,000/-,  has not been disputed by the appellant by bringing any cogent material on record. The mere fact that the tips were received from customers and were not part of the fixed salary paid by the employer would not be sufficient to exclude the same from his monthly earnings. Accordingly, the learned Tribunal has rightly assessed the monthly income of the injured at ₹12,000/- by adding the amount received towards tips to his fixed salary.”

Advocate Harsh Aggarwal represented the Appellant while Advocate Arun Takhi represented the Respondent.

Arguments

It was the case of the appellant-insurance company that the Tribunal had erred in assessing the monthly income of the injured at Rs 12,000 instead of Rs 8,000, as reflected in the salary certificate. It was submitted that, as per the statement of an employee of Score Club, the injured was drawing a monthly salary of Rs 8,000. It was submitted that taking his monthly income as Rs 12,000 by adding an amount of Rs 4,000 towards tips was not sustainable in law.

The respondents-claimants, on the other hand, submitted that the fact of receipt of tips was duly established from the evidence on record and had not been disputed by the appellant. It was further submitted that tips received by persons working in the hospitality industry constitute a regular source of earnings and cannot be excluded merely because the same are received from customers.

Reasoning

The Bench referred to the judgment of the Delhi High Court in Oriental Insurance Company Limited v. Ms. Milly Das Gupta (2017), wherein the Court upheld the inclusion of tips, observing that earning tips by persons employed in the hospitality industry is a usual feature and constitutes a part of their regular earnings.

The Bench thus held that the Tribunal had rightly assessed the monthly income of the injured at 12,000 by adding the amount received towards tips to his fixed salary.

The Bench also noted that the injured had suffered 100% permanent disability as a result of the injuries sustained in the accident. “The extent of disability has a direct bearing upon the assessment of compensation, particularly under the head of loss of future earning capacity. In a case where the injured has suffered 100% disability, the consequences of such disability upon his future life and earning capacity assume considerable significance. The compensation is required to be assessed keeping in view the nature and extent of the disability and its impact upon the injured's ability to earn his livelihood”, it added.

The Bench further held that the Tribunal had assessed the compensation after taking into consideration the relevant factors, including the income of the injured. Finding no illegality or perversity in the assessment of the monthly income of the injured at 12,000 by the Tribunal, the Bench stated, “The amount of ₹4000 received towards tips has rightly been included in his monthly income. The appellant has failed to make out any ground warranting interference with the impugned award on this account.”

Decision

Thus, upholding the order of the Tribunal, the Bench dismissed the appeal.

Cause Title: United India Insurance Company Limited v. Vipin Kumar (Neutral Citation: 2026:PHHC:199075)

Appearance

Appellant: Advocate Harsh Aggarwal, Parit Aggarwal

Respondent: Advocate Arun Takhi

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