M/S.United India Insurance ... vs Veeramachaneni Chairanya 3 Ors
2022 Latest Caselaw 4446 AP

      HON'BLE SRI JUSTICE U.DURGA PRASAD RAO
                        AND
HON'BLE SRI JUSTICE GANNAMANENI RAMAKRISHNA PRASAD

                        M.A.C.M.A.No.3563/2005
                                 and
                        Cross Appeal No.2/2017

COMMON JUDGMENT: (Per Hon'ble Sri Justice U.Durga Prasad Rao)

        Challenging   the    common      order      dated   06.09.2005     in

M.V.O.P.No.948/2003 and M.V.O.P.No.1549/2003 passed by the MACT-

cum-District & Sessions Judge, Visakhapatnam, both the Insurance

Company as well as claimants preferred M.A.C.M.A.No.3563/2005 and

Cross Appeal No.2/2017 against the order in M.V.O.P.No.1549/2003.


2.      The undisputed factual matrix is concerned, on 17.06.2002, one

Kantipudi Ramakrishna (P.W.3 in M.V.O.P.No.1549/2003) and three others

viz. Veeramachineni Dilip (deceased in M.V.O.P.No.1549/2003), P.V.Subba

Rao and Kolli Chandrasekhar (deceased in M.V.O.P.No.948/2003) were

proceeding in a Maruti Zen car bearing registration No.AP 32 B 4578 from

Kuntikota village to their Gudivada camp office and when they reached

Sumadevi Road junction on N.H.5, a lorry bearing registration No.WB 19

5341 came in opposite direction in high speed being driven by its Driver in a

rash and negligent manner and dashed the car and thereby P.V.Subba Rao,

Chandrasekhar and Dilip died instantaneously, whereas, Kantipudi

Ramakrishna suffered injuries. Attributing fault to the lorry Driver, the

wife,     daughter    and    mother     of    the     deceased-Dilip     filed

M.V.O.P.No.1549/2003 against the respondents 1 and 2 who are the Owner

and Insurer claiming Rs.1,00,00,000/- (Rupees One Crore only) under

different heads.

(a) The 1st respondent-owner of the lorry remained ex parte and the

2nd respondent-Insurance Company contested the petition on the plea that the

accident was occurred due to the fault of the driver of the Car, but not the

lorry driver and that the compensation claimed under various heads was

highly excessive. The Tribunal, on appreciation of evidence, ultimately

decreed the M.V.O.P. and awarded Rs.1,00,00,000/- as compensation with

costs and interest at 7.5% per annum.

Hence, the appeal and cross-appeal.

3. Heard arguments of Sri Vutla Srinivasa Rao, learned counsel for

appellant/Insurance Company and Sri K.V.Bhanu Prasad, learned counsel

for the respondents/Cross Objectors.

4. The main thrust of argument of the appellant is in respect of quantum

of compensation awarded by the Tribunal. While severely fulminating

compensation as highly excessive, exorbitant and not in accordance with the

accepted norms and principles, learned counsel would argue that the

Tribunal committed a grave error in awarding Rs.1,00,00,000/- (Rupees one

crore only) as prayed for by the claimants. In expatiation, he would submit,

the Tribunal while arriving at the income of the deceased, simply carried

away by the four heads under which the deceased was allegedly earning

income and took total of those four heads, to fix his gross annual income.

Of the aforesaid four heads, the deceased was allegedly getting income from

two heads i.e., two sets of fish tanks. Learned counsel would submit that the

deceased was a young person of 29 years and studied Bachelor of Business

Management and Masters in Computer Application only few years prior to

his accidental death. Therefore, it is highly unbelievable that immediately

after his studies, he started earning and could able to purchase around

Ac.18.00 acres of land in two different villages and started aquaculture to

earn huge income. On the other hand, during relevant period his father

V.Purna Chandra Rao who worked as the Motor Vehicles Inspector was

facing criminal charge of amassing illegal wealth and purchasing the

properties in the names of his wife and two sons. Therefore, deceased's

capability to purchase huge extent of land and convert into aqua tanks with

his earnings is a highly suspicious and debatable issue. The learned counsel

would further argue that even assuming that the lands were purchased by the

deceased with his own exertions and doing aquaculture and getting income,

however, the entire income allegedly derived by him through aquaculture

cannot be taken into consideration for computing his gross income. Learned

counsel would argue that inspite of the death of the deceased, the original

assets such as lands and aqua tanks will remain intact with his family and it

is obvious that despite his death, his family will derive income there from.

Therefore, on the premise that had the deceased been alive, he would have

supervised the aquaculture and his family could have got more income than

what they have been getting subsequent to his death for lack of supervision,

the supervisory charges alone have to be taken as the loss of earnings of the

deceased. Contrary to it, the Tribunal took entire income allegedly earned

by the deceased through aquaculture. Thereby the compensation was unduly

escalated.

5. Nextly, the learned counsel would argue that the deceased was

allegedly the Proprietor of Saiber World Pool and earning Rs.6,00,000/- per

year by offering internet facility to the public. In this regard, the Tribunal

basing on Ex.A.6-invoice and Ex.A.7-receipts issued by M/s.Excel Media

Private Limited to M/s.Saiber World Pool towards internet charges paid by

the deceased, jumped into conclusion as if the deceased was earning

Rs.40,000/- per month i.e. Rs.4,80,000/- per year by running Cyber Café.

He would argue that the receipts and invoices belong to different months and

even if internet consumption receipts are taken into consideration, still one

cannot conclude that the deceased was earning Rs.40,000/- per month. The

petitioners have not produced account books showing income actually

earned from Cyber Café. Therefore, the Tribunal was not correct in relying

on Exs.A.6 and A.7 to fix the income of the deceased. He thus prayed to

allow appeal and reassess compensation.

6. Per contra, the learned counsel for respondents while supporting the

award, would argue that the Tribunal while computing income of the

deceased did not add suitable amount towards future prospects. He would

further argue that the Tribunal failed to grant compensation for loss of

consortium, funeral expenses and loss of estate and thereby the

compensation was drastically reduced. He would also argue that the

Tribunal ought to have granted full amount, which the claimants deserved

instead of restricting the same to Rs.1,00,00,000/- as prayed for. He thus

prayed to allow the cross appeal.

7. The point for consideration is whether the award passed by the lower

Tribunal is factually and legally sustainable?

8. Point: We gave our anxious consideration to the facts, law and above

respective arguments of either side. According to the Claimants, the

deceased-Dilip studied Bachelor of Business Management and passed

Masters in Computer Applications in the year 1995 and was aged about 29

years by the time of his accidental death. Their further case is that he was

earning income under four distinct heads. Firstly, he owned fish tanks in an

extent of Ac.09.71 cents in Arugolanu village, Bapulapadu mandal, Krishna

district and was earning Rs.2,42,750/- per annum. Secondly, he also owned

fish tanks in an extent of Ac.09.76 cents in Pedalingala village of Nandivada

Mandal, Krishna District and was earning Rs.2,14,770/- per annum.

Besides, the deceased was the Proprietor of Saiber World Pool, opposite to

Hotel Meghalaya, Visakhapatnam and was earning about Rs.6,00,000/-per

year by operating 12 (twelve) systems and providing internet to public.

Above all, the deceased was one of the Directors in M/s.Sai Gayatri Projects

Private Limited, Kakinada engaged in ship building and breaking and he was

getting Rs.20,000/- per month as salary.

9. The Award would show that the Tribunal accepted the income from

aqua tanks as claimed by the claimants. So far as income from Saiber World

Pool is concerned, the Tribunal basing on Exs.A.6 and A.7 fixed his income

at Rs.4,80,000/- per year and so far as income from M/s.Sai Gayatri Projects

Private Limited, it took Rs.1,20,000/- and thus arrived his gross annual

income at Rs.10,50,000/-. On a close scrutiny, we are unable to approve the

above income arrived at by the Tribunal.

10. The income from the aqua tanks is concerned, Exs.A.9 and A.10

certificates issued by the concerned Mandal Revenue Officers would show

as if the deceased got Rs.2,42,750/- and Rs.2,14,770/- respectively from the

above tanks. Even if the capacity of the deceased to acquire such huge

extents of aqua tanks at an young age of 29 years without showing any

financial capacity is shelved and accepted, still his income as shown in

Exs.A.9 and A.10 cannot be counted for computing his gross income. In

D.Vinoda v. B.Basava Raju1, a learned single Judge of the High Court of

A.P. Sri M.Jagannadha Rao (as his Lordship was then) referring to various

judgments has observed thus:

"(i) In the case of death of an agriculturist owning agricultural land, the value of the 'supervisory' services of the deceased have to be first estimated. This will not be merely equivalent to the value of the services of a farm-servant or a manager of the property employed for that purpose. It will be more than that because an owner-manager takes extra care in increasing the income year by year and also in increasing the value of the property. After thus estimating the 'special' value of the supervisory services of an 'owner-manager', a deduction is to be made in respect of the money the deceased would have spent for himself out of such sum and then the annual contribution to the family is to be arrived at."

Therefore, it is obvious that in the instant case instead of entire income out

of fish tanks, only loss of supervisory services of the deceased on the

premise that had he been alive, he would have supervised the tanks to

augment the income, shall be taken into consideration. Exs.A.9 and A.10-

income certificates issued by the respective Mandal Revenue Officers would

show that the deceased used to get Rs.2,42,750/- and Rs.2,14,770/-

respectively from his aqua tanks prior to his death. Needless to emphasize

the deceased must have supervised the tanks during his life time. Therefore,

we fix the supervisory charges at Rs.1,00,000/- [Rupees one lakh only] each

for the two sets of fish tanks and accept as loss of income for his family as

Rs.2,00,000/- [Rupees Two lakhs only].

11. Then the income of the deceased from Saiber World Pool is

concerned, we agree with the contention of the appellant. Exs.A.6 is the

MANU/AP/0288/1988 = 1988 ACJ 1072

bunch of invoices issued by M/s.Excel Media Private Limited to M/s.Saiber

World Pool towards internet charges for the months of November and

December, 2001, whereas Ex.A.7 is bunch of three money receipts

dt.15.12.2000, 23.05.2001 and 23.10.2001 issued by the same company in

favour of M/s.Saiber World Pool for a sum of Rs.40,000/- towards internet

access charges. As rightly contended by the appellant, Exs.A.6 and A.7

could, at best, show internet consumption charges of M/s.Saiber World Pool,

but do not reflect its income. Unfortunately, the Tribunal took the total

internet charges of Rs.40,000/- covered by Ex.A.7 and fixed the same as the

income of M/s.Saiber World Pool. This assessment is illogical. The three

receipts covered a period of 10 months from 15.12.2000 to 23.10.2001. In

the absence of account books showing the actual income, the Tribunal ought

not to have taken sporadic receipts to compute the income from the Cyber

Café. So, a rational approach is required to compute the income under this

head. The deceased was operating 12 systems in Cyber café on rental basis.

Assuming that each system was hired for ten (10) hours in a day @ Rs.15/-

per hour, the total income per day will be Rs.1,800/- [12 systems x 10 hours

x Rs.15/-]. The annual income would be Rs.6,48,000/- [Rs.1800/- per day x

30 days (one month) x 12 months]. After deducting establishment and

internet charges, it can be said that the deceased would get net income of

Rs.3,00,000/-.

12. So far as M/s.Sai Gayatri Projects Private Limited is concerned, the

deceased was getting Rs.20,000/- per month as salary. So, the same can be

accepted. His annual income comes to Rs.2,40,000/-. Thus, the gross

annual income of the deceased from the aforesaid four resources would be

Rs.7,40,000/- [1,00,000 + 1,00,000 + 3,00,000 + 2,40,000].

13. Now, following the decisions in Sarla Verma v. Delhi Transport

Corporation2 and National Insurance Company Limited v. Pranay

Sethi3, 50% has to be added towards 'future prospects' of the deceased.

Thus, the gross annual income of the deceased would be Rs.11,10,000/-

[(7,40,000) + (740,000 x 50/100 = 370,000)]. From this amount, prevalent

income tax has to be deducted. [During the F.Y. 2001-2002, the Income Tax

slab rates are: up to Rs.50,000/- - NIL; Rs.50,000/- to Rs.60,000/- - 10%;

Rs.60,000/- to Rs.150,000/- - 20% and above Rs.150,000/- - 30%]. From

the annual gross income of Rs.11,10,000/-, the tax amount of Rs.3,07,000/-

is to be deducted. Thus, the net annual income of the deceased is

Rs.8,03,000/-. From this amount, 1/3rd is deducted towards personal

expenses of the deceased and the balance amount of Rs.5,35,334/-

[(8,03,000) - (8,03,000/3 = 267,666)] is the net contribution of the deceased

to his family. Taking 29 years age of the deceased, '17' is fixed as

multiplier. So, the loss of the income comes to Rs.91,00,678/- [Rs.535,334

x 17 multiplier].

14. Then following the Pranay Sethi (3 supra), compensation of

Rs.70,000/- is paid for loss of consortium, funeral expenses and loss of

estate and 10% increment is provided for every three years. The total comes

to Rs.1,12,735/-. Thus, the total compensation comes to 92,13,413/-

[Rs.91,00,678/- + Rs.1,12,735/-].

MANU/SC/0606/2009 = (2009) 6 SCC 121

MANU/SC/1366/2017 = 2018 (3) SCJ 218

15. In the result, the M.A.C.M.A.No.3563/2005 and Cross Appeal

No.02/2017 filed by the parties are disposed of as follows:

(i) The claimants are entitled to compensation of Rs.92,13,413/- (Rupees Ninety two lakhs thirteen thousand four hundred and thirteen only) with costs and interest at 7.5% per annum from the date of M.V.O.P. till the date of realization.

(ii) The 1st claimant is entitled to Rs.62,13,413/-

(Rupees Sixty two lakhs thirteen thousand four hundred and thirteen only) with interest and costs towards her share. The 2nd claimant is entitled to Rs.10,00,000/- (Rupees ten lakhs only) with interest to her share. The 3rd claimant is entitled to Rs.20,00,000/- (Rupees twenty lakhs only) with interest to her share. The claimants are entitled to withdraw their shares on deposit.

(iii) The Insurance Company shall deposit the said amount within two (2) months from the date of this judgment, failing which the claimants can execute the decree.

Interlocutory applications, if any pending, also stand closed.

__________________________ U. DURGA PRASAD RAO, J

_____________________________ G. RAMAKRISHNA PRASAD, J 25.07.2022 MVA