Telangana High Court
The New India Assurance Company Ltd., vs Ch. Saritha, on 7 August, 2024
THE HON'BLE SRI JUSTICE SUJOY PAUL
AND
THE HON'BLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO
M.A.C.M.A.No.914 of 2016
JUDGMENT:
(per Hon'ble Sri Justice Namavarapu Rajeshwar Rao) This Motor Accident Civil Miscellaneous Appeal is filed by the appellant-Insurance Company, aggrieved by the order and decree dated 06.02.2015 passed in M.V.O.P.No.101 of 2012 on the file of the XXVII Additional Chief Judge-cum-Chairman, Motor Vehicle Accidents Claims Tribunal, City Civil Courts, Secunderabad (for short 'the Tribunal').
2. For convenience, the parties will be referred to as arrayed before the Tribunal.
3. The brief facts of the case are as follows:
On 19.03.2011 at about 3.30 p.m., while one Sri Ch.Venkat Reddy (deceased) was proceeding on his Maruti Alto Car bearing No.AP-29-S-5970 from Sathupalli towards Khammam, and when he reached near Ramachandra Rao village bus station, one lorry bearing No.UP-78-T-4825, driven by its driver at high speed in a rash and negligent manner, dashed the Maruti Alto Car from the opposite direction, as a result of which, the deceased received multiple injuries and 2 SP,J and RRN,J MACMA No.914 of 2016 succumbed to his injuries on the spot. After the accident, the P.S. V.M.Banjara (Penuballi) registered a case in Cr.No.27 of 2011 for the offences punishable under Sections 304-A and 337 IPC against the driver of the offending vehicle. Therefore, the petitioners/claimants filed the claim petition seeking compensation of Rs.40,00,000/-.
4. Before the Tribunal, the 1st respondent remained ex-parte. The 2nd respondent filed a counter denying the allegations made in the claim petition.
5. To prove the petitioners' case, PWs.1 to 3 were examined, and Exs.A1 to A9 were marked. RW.1 was examined for the respondent Insurance Company, and Ex.B1-Copy of the Insurance Policy was marked.
6. The Tribunal, after considering the oral and documentary evidence available on record, allowed the claim petition by granting compensation of Rs.40,00,000/- (Rupees Forty lakh Only) with costs with future interest @ 7.5% per annum from the date of the petition till the date of realization. Respondent Nos.1 and 2 were jointly and severally liable to pay the awarded amount. Challenging the same, the respondent Insurance Company filed the present appeal.
3 SP,J and RRN,J MACMA No.914 of 2016
7. Heard Sri A. Ramakrishna Reddy, learned counsel appearing for the appellant-Insurance Company and Sri T. Rahul, learned counsel appearing for the respondent Nos.1 to 3 and perused the record.
8. Learned counsel appearing for the appellant-Insurance Company contended that the Tribunal failed to note that as per Ex.A-7, the taxable income of the deceased (inclusive of the agricultural income) for the assessment years 2006-07, 2007-08 and 2008-09 is Rs.1,26,000/-, Rs.1,59,600/- and Rs.1,52,730/- respectively, and the average income of the deceased would arrive at Rs.1,46,110/-. The Tribunal has erroneously taken a disproportionate amount under the head of salary, based on the income tax returns filed by the deceased and consequently granting excessive amounts to the claimants. Further, The Tribunal erroneously considered 50% towards future prospects of the deceased's income, which is contrary to the guidelines laid down in the judgment of the Hon'ble Apex Court in Sarla Verma v. Delhi Transport Corporation 1. Therefore, the same has to be reduced.
1 2009 ACJ 1298 (SC) 4 SP,J and RRN,J MACMA No.914 of 2016
9. Per contra, learned counsel appearing for the petitioners/claimants contended that the Tribunal, after hearing both sides and after considering the material available on record, rightly awarded compensation amount and the same needs no interference by this Court.
10. Learned counsel appearing for the petitioners/claimants has relied upon a few judgments of the Hon'ble Apex Court to demonstrate that where there is no specific salary certificate, only income tax returns would be the basis for considering the deceased's income. In support of his contentions, he relied upon the judgment of Hon'ble Apex Court in Smt. Anjali & ors. V Lokendra Rathod & ors. 2, wherein the Hon'ble Apex Court observed as follows :-
"9. The Tribunal and the High Court both committed grave error while estimating the deceased's income by disregarding the Income Tax Return of the Deceased. The appellants had filed the Income Tax Return (2009-2010) of the deceased, which reflects the deceased's annual income to be Rs.1,18,261/-, approx. Rs.9,855/- per month. This Court in Malarvizhi & Ors. (Supra) has reaffirmed that the Income Tax Return is a statutory document on which reliance be placed, where available, for computation of annual income. In Malarvizhi (Supra), this Court has laid as under:2
2022 SCC OnLine SC 1683 5 SP,J and RRN,J MACMA No.914 of 2016 "We are in agreement with the High Court that the determination must proceed on the basis of the income tax return, where available. The income tax return is a statutory document on which reliance may be placed to determine the annual income of the deceased."
10. Hence, this Court is of the opinion that the deceased's annual income be fixed at Rs.1,18,261/-, approx. Rs.9,855/- per month keeping in mind the deceased's Income Tax Return for the year 2009-2010.
11. The provisions of the Motor Vehicles Act, 1988 (for short, "MV Act") gives paramount importance to the concept of 'just and fair' compensation. It is a beneficial legislation which has been framed with the object of providing relief to the victims or their families. Section 168 of the MV Act deals with the concept of 'just compensation' which ought to be determined on the foundation of fairness, reasonableness and equitability. Although such determination can never be arithmetically exact or perfect, an endeavor should be made by the Court to award just and fair compensation irrespective of the amount claimed by the applicant/s. In Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr.3, this Court has laid down as under:
"16. ..."Just compensation" is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit."
11. On the other hand, learned counsel for the respondent Insurance Company averred that in such circumstances, the average income of the preceding three years has to be taken, 6 SP,J and RRN,J MACMA No.914 of 2016 and to such extent, relied upon the judgment of the Hon'ble Apex Court in K.Ramya And Others Vs. National Insurance Company Limited and Anr 3, wherein the Hon'ble Apex Court observed:
"C.2 RELIABILITY ON INCOME TAX RETURNS AND AUDIT REPORTS TO DETERMINE 'LOSS OF INCOME'
13. The Deceased in the present case was a businessman and during the proceedings before the Tribunal, the Appellants produced the relevant income tax returns, audit reports and other relevant documents pertaining to the commercial ventures of the Deceased to prove the loss of income attributable on account of his sudden demise. The Tribunal relied on the same and computed the income by taking an average of the income recorded in three prior financial years (FY 2000¬2001, FY 2001¬2002 and FY 2002¬2003) to determine the compensation under the head of 'loss of income'."
"18. The Appellants have produced audit reports for the last four financial years which highlight the amounts under 'Income from Business Ventures and other Investments' which is as per follows - (i) for FY 2000- 2001 is Rs. 8,95,812/ (ii) for FY 2001-2002 is Rs.10,31,091/ (iii) for FY 2002-2003 is Rs.14,65,060/ and (iv) for FY2003-2004 is Rs. 9,79,099/. The average of these amounts comes upto Rs. 10,92,765.50/, which is rounded off to Rs 10,93,000/ and the same is awarded to the Appellants as loss of income derived under 'Income from Business Ventures and other Investments'."3 Civil Appeal No.7046 of 2022
7 SP,J and RRN,J MACMA No.914 of 2016
12. Learned counsel appearing for the respondent Insurance Company also relied upon the judgment of the Hon'ble Apex Court in Smt.Sangita Arya And Others Vs. Oriental Insurance Company Limited 4, wherein it was held:
"7. We have heard the learned counsel for the parties and perused the material on record. We find that the impugned order passed by the High Court bristles with serious factual inaccuracies :- first, the learned Single Judge wrongly assumed that the deceased Harish Singh Arya was a Government employee. This has nowhere been averred by the Claimants in any of their pleadings. The entire basis of the judgment is hence misconceived.
On the basis of the aforesaid erroneous assumption, the High Court has erroneously observed that the deceased was running a parallel business by plying two taxis, and held that the income derived from the same could not be taken into consideration for assessing the compensation. These findings being based on a completely erroneous assumption, are liable to be set aside.
Second, the High Court determined the income of the deceased by taking the average of the ITRs filed for the years 2002-03 at Rs. 54,000 p.a., 2003-04 at Rs. 52,405 p.a., and 2004-05 at Rs. 51,500 p.a. The learned Single Judge disregarded the ITR for the year 2006-07, wherein the income of the deceased was shown as Rs. 98,500 p.a. on the ground that it was allegedly filed almost one year after the death of the deceased. This finding also is factually incorrect. A photocopy of the original ITR for the year 2006-07 was filed before this Court, bearing the rubber stamp of the Income Tax Department. It shows that the date of filing the 4 Civil Appeal No.2612 of 2020 8 SP,J and RRN,J MACMA No.914 of 2016 ITR was 20.04.2007, which is prior to the death of the deceased which occurred on 18.06.2007. Hence, the High Court was not justified in disregarding the ITR for the year 2006-07 while assessing the income of the deceased. The Appellants have also placed on record a copy of the ITR for the year 2005-06, which bears the rubber stamp of the Income Tax Department, and reveals the income of the deceased at Rs. 98,100 p.a. during the previous assessment year. As a consequence, the impugned judgment dated 22.07.2016 passed by the High Court is hereby set aside."
13. It is clear from the aforesaid judgments of the Hon'ble Apex Court that even though the nature of the MV Act is that of a beneficial legislation, it was enacted purely with the intention of compensating the victims of a motor vehicle accident for the loss suffered by them. It should not be treated as a bounty, bonanza or a source of profit. The extent of compensation has to be calculated depending upon the facts and circumstances of each case, on based on the material available on record and in terms of the decisions of the Hon'ble Apex Court. The compensation amount cannot be treated as a means of enrichment. This Court is of the considered view that the learned counsel appearing for the respondent Insurance Company has rightly contended that for the purpose of calculating the compensation amount, the average income of the past three years ought to be taken into consideration.
9 SP,J and RRN,J MACMA No.914 of 2016
14. A perusal of the impugned order discloses that the Tribunal, having framed issue No.1 as to whether the accident had occurred due to rash and negligent driving of the offending vehicle by its driver and having considered the evidence of PW.2, an eye witness to the accident, coupled with the documentary evidence i.e., Ex.A-1-FIR and Ex.A-2-charge-sheet, rightly came to the conclusion that the accident occurred due to the rash and negligent driving of the driver of the offending vehicle and has answered in favour of the petitioners and against the respondents. Therefore, there are no reasons to interfere with the Tribunal's finding that the accident occurred due to the rash and negligent driving of the offending vehicle's driver.
15. Insofar as the quantum of compensation is concerned, the learned counsel for the respondent Insurance Company contended that the monthly income/annual income of the deceased was wrongly taken. The average income of the preceding three assessment years has to be taken. For the assessment year 2006-07, the taxable income is Rs.1,26,000/-, for 2007-08 is Rs.1,59,600/- and for 2008-09 is Rs.1,52,730/-. The total income for three years comes to Rs.4,38,330. Accordingly, the average income comes to Rs.1,46,110/. Hence, the annual income of the deceased is fixed at Rs.1,46,110/-.
10 SP,J and RRN,J MACMA No.914 of 2016
16. The deceased was aged 38 years at the time of the accident. Since the deceased was self-employed, the petitioners are entitled only to 40% of the deceased's income towards future prospects, as per the decision of the Hon'ble Apex Court in National Insurance Company Limited Vs. Pranay Sethi 5. However, the Tribunal erroneously considered 50% of the deceased's income towards future prospects instead of 40% and the same needs to be modified. Accordingly, the annual income of the deceased would come to Rs.2,04,554/- [Rs.1,46,110+40%]. Since the claimants are three in number, the Tribunal rightly considered 1/3rd deduction towards the personal expenditure of the deceased, in terms of Pranay Sethi (supra). Accordingly, the annual income of the deceased comes to Rs.1,36,369/- [Rs.2,04,554 - Rs.68,185].
17. As per the decision of the Hon'ble Apex Court in Sarla Verma v. Delhi Transport Corporation 6, the appropriate multiplier applicable for the deceased's age is '15', as the deceased was aged 38 years at the time of the accident. The Tribunal rightly adopted a multiplier of '15' and after applying the said multiplier, the total loss of dependency comes to Rs.20,45,535/-.
5 2017 (16) SCC 680.
62009 ACJ 1298 (SC) 11 SP,J and RRN,J MACMA No.914 of 2016
18. The Tribunal erroneously granted an amount of Rs.1,00,000/- towards consortium, Rs.1,00,000/- towards loss of love and affection to the minor children @ 50,000/- each, Rs.20,000/- towards loss of estate and Rs.25,000/- towards funeral expenses, and the same requires interference by this Court. As per Pranay Sethi (supra), petitioner No.1 is entitled to a sum of Rs. 48,400/- (Rs. 40,000/- +10%+10%) towards loss of spousal consortium. The petitioners are also entitled to a sum of Rs. 36,300/- (Rs.15,000/- + Rs. 15,000/- + 10% + 10%) towards loss of estate and funeral expenses. Further, since petitioner Nos. 2 and 3 were minors at the time of the accident, they are entitled to a sum of Rs. 40,000/- each towards loss of parental consortium as per the decision of the Hon'ble Apex Court in Magma General Insurance Company Vs. Nanu Ram alias Chuhru Ram 7. The Tribunal awarded a sum of Rs.5,000/- towards transport charges, which needs no interference by this Court.
19. Accordingly, the order dated 06.02.2015 passed by the Tribunal in M.V.O.P.No.101 of 2012 is modified as follows:-
7 2018 18 SCC 130 12 SP,J and RRN,J MACMA No.914 of 2016 S.No. Particulars Amount
1. Annual salary of the Rs.1,46,110/-
deceased
2. Add: 40% Future Rs.58,444/-
Prospects
3. Sub-Total Rs.2,04,554/-
4. Less: 1/3rd towards (-)Rs.68,185 Personal Expenditure
5. Sub-Total [5-6] Rs. 1,36,369/-
6. Total Loss of Dependency Rs.20,45,535/-
(Rs.1,36,369/-x 15)
7. Add : Conventional Heads Rs.36,300/-
(Funeral Expenses and Loss of Estate) (Rs.15,000/- + Rs.15,000/- +10%+10%)
8. Add: Loss of spousal Rs.48,400/-
consortium (Rs.40,000/-
+10%+10%)
9. Add : Loss of parental Rs.80,000/-
consortium (Rs.40,000/-
x 2)
10. Transportation Charges Rs.5,000/-
(as awarded by the
Tribunal)
Total Compensation Rs.22,15,235
20. The Tribunal has rightly awarded the rate of interest at 7.5% per annum which needs no interference by this Court.
21. In the result, this M.A.C.M.A. is partly allowed and the compensation amount awarded by the Tribunal is reduced from Rs.40,00,000/- to Rs.22,15,235 (Rupees Twenty Two Lakh 13 SP,J and RRN,J MACMA No.914 of 2016 Fifteen Thousand Two Hundred Thirty Five Only) with interest @ 7.5 % p.a. from the date of petition till the date of realization. Respondent Nos. 1 and 2 are directed to deposit the said amount with costs and interest, after giving due credit to the amount already deposited, if any, within a period of two months from the date of receipt of a copy of this judgment. On such deposit, the claimants are permitted to withdraw the said amount in the same manner and ratio as apportioned by the Tribunal. No order as to costs.
As a sequel, miscellaneous petitions, if any are pending, shall stand closed.
________________ SUJOY PAUL, J _____________________________________ NAMAVARAPU RAJESHWAR RAO, J 07th August, 2024 Prv