Smt. Sunita Yadav & Others vs The Oriental Insurance Co. Ltd. & ...
2017 Latest Caselaw 8018 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Court No. - 37                                          
 

 
Case :- FIRST APPEAL FROM ORDER No. - 565 of 2008
 

 
Appellant :- Smt. Sunita Yadav & Others
 
Respondent :- The Oriental Insurance Co. Ltd. & Others
 
Counsel for Appellant :- H.N. Singh,B. Narayan Singh
 
Counsel for Respondent :- Dinkar Mani Tripathi,Sanjeev Singh,Santosh Kumar Singh
 

 
Hon'ble Amreshwar Pratap Sahi,J.

Hon'ble Saral Srivastava,J.

(Delivered by Hon'ble Saral Srivastava,J.)

Heard Sri Vineet Kumar Singh, learned counsel for the appellants, Sri Santosh Kumar Singh, learned counsel for the Insurance Company and Sri Dinkar Mani Tripathi, learned counsel for the respondent no. 2.

The Claimant/appellant has challenged the judgment and order dated 25.10.2007 passed by Motor Accident Claim Tribunal/Additional District Judge Court No. 8, Gorakhpur, whereby the Tribunal has awarded Rs. 4,85,500/- along with 6% interest as compensation to the appellants-claimants.

The case of the appellants-claimants in the claim petition was that one Shiv Mohan @ Pappu Yadav was riding on motorcycle on 05.05.2005 from Nausadh to his home, and when he reached near Nausadh Petrol Pump at about 12:30 P.M., he was hit by a Bus No. U.P. 53 L-9890 driven by its driver rashly and negligently. It was stated that Shiv Mohan suffered injuries and died. He was registered as C-Category Contractor with P.W.D., Gorakhpur, and was earning Rs.8,000/- per month from the contract work. He owned agricultural land, and was earning Rs.30,000/- per annum from it. Thus, the claimants-appellants prayed for a compensation of Rs.75,65,000/-.

The owner of the Bus U.P.S.R.T.C contested the claim petition by filing written statement, wherein it denied the factum of the accident. It was further pleaded that the compensation prayed for by the claimants was highly excessive and exorbitant.

The Oriental Insurance Company, respondent no. 2 filed written statement contending the claim to have been instituted on wrong and incorrect facts. The Insurance Company further pleaded that the compensation prayed for is highly excessive and exorbitant. It denied its liability to pay compensation. It further pleaded that the liability, if any, to pay compensation is subject to the terms and conditions of the insurance policy. The insurance company prayed for dismissal of the claim petition.

On the basis of pleadings between the parties, the Tribunal framed as many as four issues. Contest in the present appeal is only with regard to issue no. 4 regarding quantification of compensation. The tribunal on other issues returned finding against the insurance company; since the insurance company has not challenged the finding on those issues, therefore, they have became final between the parties.

It is relevant to mention that the claimants-appellants filed documentary evidence namely registration certificate issued by the Executive Engineer PWD, Gorakhpur, Income Tax Return for the A.Y. 2003-04 and 2004-05 to prove the business income of the deceased. The claimants produced two witnesses namely Shiv Kumar Dubey PW-4 and Udaibhan Pandey PW-5 to establish that the deceased was Contractor, and was earning through contract work.

The Tribunal on the issue of quantification recorded the finding that the claimants have filed Income Tax Return for the A.Y. 2003-04 and 2004-05; but they have failed to prove that the income shown in the aforesaid Income Tax Return was earned by the deceased from the contract work awarded to him by PWD Department. The Tribunal further held that the deceased could produce pass-book etc. to prove that the income shown in the Income Tax Return was earned from the contract work. Thus, the Tribunal disbelieved the income the Income Tax Return, and assessed the income of the deceased on the basis of notional income treating it to be Rs.3,000/- per month i.e Rs.36,000/- per annum. The Tribunal further held that the deceased was owner of four acres agricultural land, and must have been earning Rs.6,000/- per annum from the agriculture. The tribunal added notional and agriculture income of the deceased to arrive at the annual. The tribunal held the annual income of the deceased to be Rs.42,000/- per annum. The Tribunal, thereafter deducted 1/3rd towards the personal expenses of the deceased from the annual income, and by applying the multiplier of 17 awarded Rs.4,76,000/- towards loss of income to the claimants-appellants. Besides the above, the Tribunal awarded Rs.2,000/- for funeral expenses, Rs.5,000/- towards loss of consortium, and Rs.2,500/- towards loss of estate. Thus, the total compensation awarded was Rs.4,85,500/- along with 6% interest.

Challenging the finding on the quantification of compensation, the learned counsel for the appellants has submitted that the deceased was registered as ''C' Category Contractor with the PWD Department, Gorakhpur, and a certificate issued by the Executive Engineer PWD was filed before the tribunal. He further submits that the Income Tax Return for the A.Y. 2003-04 and 2004-05 showing the income of deceased Rs.1,14,700/- and Rs.82,000/- respectively was filed to prove the income of the deceased. He submits that the tax was deducted at source from the income of the deceased which was mentioned in the Income Tax Return. The deduction at source being a statutory deduction under Section 194C of the Income Tax Act 1961, it is established that the income indicated in the Income Tax Return was an income actually earned by the deceased in the form of remuneration for carrying out the work of the contract awarded to him by P.W.D., Gorakhpur. Thus, the finding of the Tribunal that the claimant could not prove the income shown in the Income Tax Return from the work of contract is perverse and against the record. Hence, the income of Rs.82,000/- shown in the Income Tax Return for the A.Y. 2004-05 should be taken as business income for the purpose of assessing annual income of the deceased.

He further submits that the insurance company has not assailed the finding of the tribunal regarding agriculture income of the deceased; therefore, the agriculture income of Rs.6,000/- per annum should be included in the income of the deceased for assessing the annual income of deceased. Thus, the annual income of the deceased comes to Rs.88,000/- (Business Income Rs.82,000/- + Agriculture Income Rs.6,000/-); and so compensation should be calculated treating the income of the deceased to be RS.88,000/- per annum.

The learned counsel for the appellants further submits that the deceased was self employed and was aged about 33-½ years, therefore, claimants are entitled for 40% towards future prospect. He further submits that the claimants are more than four in number, and therefore, 1/4th should be deducted towards personal and living expenses of the deceased instead of 1/3rd as has been done by the Tribunal. A very meagre amount has been awarded under conventional heads namely funeral expenses, loss of consortium, loss of estate which deserves to be enhanced. The aforesaid submission has been made by the learned counsel for the appellants, on the strength of Constitution Bench judgment of Apex Court in the case of National Insurance Company Ltd. Vs. Pranay Sethi 2017 (4) T.A.C. 673 (S.C.). He lastly submits that the award of 6% interest by the Tribunal is also on the lower side.

Per contra, the learned counsel for the Insurance Company submitted that the Tribunal after appreciating the evidence on record has correctly held that the claimants could not prove the source of the income of the deceased; and therefore, the Tribunal rightly assessed the compensation on the basis of notional income. He further submits that there is no evidence on record to indicate the enhancement in the income of the deceased in future, and therefore, the claimants are not entitled for any amount towards future prospect. The counsel for the respondent submitted that the age of the deceased was 33-½ years, and therefore, multiplier of 16 should be applied instead of 17 as has been applied by the Tribunal. He submits that in the facts of the present case, the compensation awarded by the Tribunal is just and fair and adequate to mitigate the hardship of the family, and consequently, the claimants-appellants have failed to make out any case for enhancement of compensation.

We have heard learned counsel for the parties and perused the record of the appeal as well as the original record of the Tribunal.

From a perusal of the Income Tax Return for the A.Y. 2003-04 and 2004-05, it is evident that the amount of Rs.1,14,700/- and Rs.82,000 has been shown in the return of A.Y.2003-04 & 2004-5 respectively against the column ''income from business or profession'. Further, the amount of Rs.32,005/- and Rs.24,195 respectively was shown against the column ''Tax Deducted at Source' in the Income Tax Return Form.

It is necessary to have a glance at Section 194C of the Income Tax Act to appreciate the submission of the learned counsel for the appellant which is extracted herein below:

"194C. Payments to contractors and sub-contractors :-

(1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor 1) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to--

.................."

Section 194C of The Income Tax Act, 1961 makes it obligatory upon the person responsible to pay any sum to any person for carrying out any work in pursuance of the contract between the Contractor, and specified person, at the time of payment of such amount to the Contractor, to deduct the amount equal to the amount as provided in the said Section as income tax.

The claimant had filed registration certificate dt.09.12.2002 (Paper No.24C) issued by the Executive Engineer, P.W.D., Gorakhpur to prove that deceased was registered as ''C' category contractor with P.W.D., Gorakhpur; the said certificate was not rebutted by the insurance company. Thus, it is proved that deceased was ''C' category contractor with P.W.D., Gorakhpur. Further, it is established from the Income Tax Return tax that income tax had been deducted from the income of the deceased at source which is a statutory deduction as provided under Section 194C of The Income Tax Act. Thus, it is also established that the income shown in the Income Tax Return of the deceased was actually earned by him in the form of payment received by him in carrying out the work of contract awarded to him by the PWD Department.

No evidence of contradict the same was led by the respondents so as to rebut the contents of the Income Tax return. It is therefore safe to logically construe and infer that the appellant had honestly disclosed tax liability against actual income that had been deducted at source.

The learned counsel for the appellants placed reliance upon the judgment of the Apex Court in the case of Shashikala and others Vs. Gangalakshmamma and others (2015) 9 SCC 150, and judgment of this Court in F.A.F.O. No. 2482 of 2005 Mohd. Haneef and others Vs. U.P.S.R.T.C decided on 03.11.2017, to contend that the income shown in the Income Tax Return are the proof of income of the deceased. The Apex Court in the case of Shashikala (Supra) has taken the income indicated in the last Income Tax Return of the deceased for the purpose of computing the compensation.

This court also in F.A.F.O. No. 2482 of 2005 Mohd. Haneef (Supra) has held that the income shown in the Income Tax Return of the deceased should be taken for computing the compensation.

Thus, for the reasons indicated hereinabove, we hold that the Tribunal fell into an error in not taking the income shown in the Income Tax return of the deceased for assessing the annual income of the deceased for the purposes of computation of compensation. Thus, we hold that Rs.82,000/- as shown in I.T. Return for the A.Y.2004-05 should be taken as actual income from business of deceased for assessing the annual income of the deceased.

The insurance company has not assailed the finding of the tribunal with regard to agricultural income of the deceased; therefore, we agree with the submission of the counsel for the appellant that Rs.6,000/- being agricultural income should also be added to the income of the deceased to arrive at the annual income of the deceased.

Accordingly, we hold that the total income of the deceased is Rs. 88,000/- per annum for the purposes of computation of compensation.

The Apex Court in the case of National Insurance Company Ltd. (supra) has held that that the claimants are entitled for 40% future prospects where the age of the deceased is below 40 years; accordingly we hold that claimants are entitled for 40% towards future prospect.

We find from the record that the claimants are more than four in numbers, and therefore, we direct that 1/4th should be deducted towards personal and living expenses of the deceased. We find that the amount awarded towards funeral expenses, loss of consortium and loss of estate is on lower side, and therefore, we enhance the amount of funeral expenses from Rs.2,000/- to Rs. 15,000/-, loss of consortium from Rs.5,000/- to Rs.40,000/-, and loss of estate from Rs.2,500/- to Rs.15,000/-.

So far as the submission of the learned counsel for the respondent regarding the multiplier is concerned, we find force in the said submission; and accordingly we hold that the compensation should be computed by applying the multiplier of 16 and not 17 as has been done by the Tribunal.

We further provide that the enhanced amount of compensation shall carry 7% interest from the date of institution of claim petition instead of 6% as has been awarded by the Tribunal.

Thus, the appeal is allowed to the extent indicated above. The Insurance Company is directed to pay the enhanced amount of compensation after adjusting the amount already paid to the claimants-appellants within a period of three months.

There shall be no orders as to costs.

Order Date :- 15.12.2017

Ishan