Andhra Pradesh High Court - Amravati

Kaliseti Kalisetty Syam Babu, vs Kunchem Sambasiva Rao on 12 August, 2024

                                   1




   * THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
     *THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY

           +MOTOR ACCIDENT CIVIL MISCELLANEOUS
                          APPEAL NO:3216/2017
                              % 12.08.2024

# Kaliseti @ Kalisetty Syam Babu
 and another
                                                       ......Appellants
And:

$1. Kunchem Sambasiva Rao
    and & others
                                                     ....Respondents.

!Counsel for the appellants                  : Sri K. Ramesh Babu

^Counsel for the respondents                 : Sri P. Harinath Gupta


<Gist:
>Head Note:
? Cases referred:
(2013) 7 SCC 476
2 (2019) 5 SCC 554
3
  (2020) 18 SCC 808
4
  (2009) 6 SCC 121
5
  2022 LiveLaw (SC) 828
6
  (2012) 11 SCC 738
7
  (2021) 11 SCC 780
8
  (2015) 1 SCC 539
9
  (2021) 6 SCC 188
10
   (2021) 2 SCC 166
                                 2




           HIGH COURT OF ANDHRA PRADESH

                            ****

        MOTOR ACCIDENT CIVIL MISCELLANEOUS
                   APPEAL NO:3216/2017

DATE OF JUDGMENT PRONOUNCED: 12.08.2024


SUBMITTED FOR APPROVAL:

       THE HON'BLE SRI JUSTICE RAVI NATH TILHARI

                                &

        THE HON'BLE SRI JUSTICE NYAPATHY VIJAY

1. Whether Reporters of Local newspapers         Yes/No
   may be allowed to see the Judgments?
2. Whether the copies of judgment may be         Yes/No
   marked to Law Reporters/Journals
3. Whether Your Lordships wish to see the        Yes/No
   fair copy of the Judgment?


                                      ____________________
                                       RAVI NATH TILHARI, J


                                          __________________
                                           NYAPATHY VIJAY,J
                                    3




            THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
                                       &
               THE HON'BLE SRI JUSTICE NYPATHY VIJAY
                       M.A.C.M.A.No.3216 OF 2017

JUDGMENT:

per the Hon‟ble Sri Justice Ravi Nath Tilhari:-

This appeal under Section 173 of the Motor Vehicles Act,

1988 (for short, "the M.V Act") was filed by the claimants

challenging the award dated 30.08.2017 in M.V.O.P.No.618 of

2015, passed by the Motor Accidents Claims Tribunal-cum-II

Additional District Court, West Godavari, Eluru (for short, "the

Tribunal") for enhancement of compensation amount.

2. Heard Sri Kambhampati Ramesh Babu, learned counsel for

the appellants and Sri A. Satish Babu, learned counsel

representing Sri P. Harinath Gupta, learned counsel for the 3rd

respondent-insurance company.

3. The appellants-claimants claimed compensation of

Rs.82,50,000/- for the demise of Kaliseti @ Kalisetti Vijay in a

road accident that took place on 30.07.2015 at 11.30 p.m near

Mulpuri fish packing plant.

4. The Tribunal awarded the compensation of Rs.36,53,240/-

in total. The appellants are the parents of the deceased Kalisetti

Vijay.

5. The deceased was aged about 26 years and was working

as Assistant Manager, Andhra Bank, Ravulapalem Branch and

was drawing a salary of Rs.40,242.85 ps. On 30.07.2015 after

closure of the bank he started on his CBZ Motor cycle bearing

No.A.P.16 BE 8051 from Ravulapalem and going to his native

village, Pamarru. While he was proceeding on Arugolanu-

Gudlawada Road at about 11.30 p.m when he reached near

Mulpuri Fish Packing plant, the 1st respondent - driver of lorry

bearing No.A.P. 16TY 9918 stationed the said lorry on the road in

a negligent manner without taking precautionary measures, such

as applying signal lights, blinkers or indicators.

6. The New India Assurance CompanyLimited-3rd respondent

filed the written statement. The vehicle was insured with the

insurance company and the policy was valid as on the date of the

accident. The policy commenced from 03.09.2014 to mid night of

02.09.2015. However, it was denied that the driver had valid and

effective driving license. It was also denied that the vehicle had

valid permit and fitness certificate. It was pleaded that the

accident only due to the negligent driving of the deceased; the

compensation claimed was said to be excessive.

7. The Tribunal framed the following issues:

1. Whether the pleaded accident, dated 30.07.2015 occurred due to the rash and negligent driving of lorry bearing No.A.P.16TY 9918 and whether the deceased Kalisetti @ Kalisetti Vijay succumbed to injuries in the said accident?

2. Whether the crime vehicle lorry bearing No.AP 16 TY 9919 was driven by R.1, owned by R.2 and insured with R.3 at relevant time?

3. Whether the petition is bad for non joiner of owner and insurer of CBZ Motor Cycle bearing No.AP 16 BE8051 as proper and necessary pareties?

4. Whether there are any violations of conditions of Policy?

5. Whether the petitioners are entitled for compensation, if so, to what quantum and what is the liability of respondents?

6. To what relief?

8. The claimants-petitioners in order to prove their case

examined 1st petitioner as P.W.1 eye witness as P.W.2 and

employer as P.W.3, relied upon Exs.A.1 to A.7 and Ex.X.1. The

contesting respondent filed Ex.B.1 policy copy. No oral evidence

is adduced.

9. The Tribunal recorded the finding that the accident was

caused due to sheer negligence on the part of the driver of the

lorry. The vehicle was insured with the 3rd respondent. The

insurance company failed to prove that the driver had no valid

driving license. No evidence was adduced.

10. The Tribunal awarded total compensation of Rs.36,53,240/.

The compensation was calculated as Rs.3,62,196/- X 11 =

Rs.39,84,156/- and after deducting the income tax @ 10%, the

compensation was determined as Rs.35,85,740/-. Additionally

under transport charges Rs.2,000/-, damages to cloths and

articles Rs.500/-, funeral expenses Rs.25,000/-, loss of love and

affection Rs.40,000/- were awarded.

11. Learned counsel for the appellants submitted that the

Tribunal acted illegally in applying the multiplier of 11 considering

the age of the appellants (parents). He submitted that the

Tribunal ought to have considered the age of the deceased for

choosing the appropriate multiplier which in his submission is 17.

12. Learned counsel for the appellants further submitted that

the Tribunal acted illegally in mentioning the deductions towards

income tax. He submitted that as per the salary certificate, the

Tribunal ought to have determined the monthly income and

placing reliance in the case of Vimal Kanwar and others vs.

Kishore Dan and others1 that even in the absence of the evidence

(2013) 7 SCC 476

of deduction of the income tax it should have been presumed

that the salary which is restricted in salary certificate is after

making the deductions of the income tax.

13. Learned counsel for the respondents submitted that there is

no evidence of deduction of the income tax. He submitted that

the judgment in the case of Vimal Kanwar (supra) was taken

note of by the Tribunal. In the absence of any evidence of

deduction of income tax, the Tribunal rightly considered that

judgment and deducted the income @ 10%.

14. We have considered the aforesaid submissions and

perused the material on record.

15. The points for determination arises for consideration:

(i)Whether the Tribunal is justified in applying the multiplier considering the age of the parents of the deceased and not the age of the deceased?

(ii) Whether in the absence of any proof of payment of income tax, on the basis of the salary certificate, the salary of the deceased is to be determined?

16. On the first point the law is now well settled that it is the

age of the deceased that is to be considered for choosing

appropriate multiplier. Not the age of the parents.

17. In Royal Sundaram Alliance Insurance company

Limited vs. Mandala Yadagari Goud and others2, the Hon‟ble

Apex Court observed and held as under on the aforesaid point:

4. Learned counsel conceded that a three Judge bench of this Court in Sube Singh & Anr. Vs. Shaym Singh (Dead) & Ors.1, looked into this issue and has opined that it is the age of the deceased which should be the basis of the multiplier. However, his contention is that a reading of this judgment would show that reliance has been placed on the earlier judgment in Munna Lal Jain & Anr. Vs. Vipin Kumar Sharma & Ors.2, to come to this conclusion. Munna Lal Jain (supra) in turn relied upon the judgment in Sarla Verma (Smt.) & Ors. Vs. Delhi Transport Corporation & Anr., which view is stated to have been affirmed by the 1 (2018) 3 SCC

18 2 (2015) 6 SCC 347 3 (2009) 6 SCC 121 Constitution Bench in National Insurance Company Ltd. Vs. Pranay Sethi (supra). It was submitted that a sequential error has taken place as Sarla Verma (supra) did not deal with the case of a deceased bachelor and thus, the imprimatur given in Pranay Sethi case could be of no avail. Thus, a mere affirmation of the views in Sube Singh (supra) also does not settle this legal position. On the other hand, there are two Judge Bench judgments taking a contra view that the age of the dependents is what has to be the basis for multiplier and not the age of the deceased in the case of death of a bachelor. He also made a reference to one order of a three Judge Bench in New India Assurance Company Ltd. Vs. Shanti Pathak (Smt.) & Ors.5, but that one is indisputably an adjudication on given facts.

(2019) 5 SCC 554

18. In Joginder Singh and another vs. ICICI Lombard General

Insurance Company3, the same principle has been reiterated

following Royal Sundaram Alliance Insurance Company

(supra). Paragraphs 6 and 7 are as under:

"6. We have perused the judgments of the Courts below, and find that the wrong Multiplier has been applied to the facts of the present case. The issue with respect to whether the Multiplier to be applied in the case of a bachelor, should be computed on the basis of the age of the deceased, or the age of the parents, is no longer res integra. This issue has been recently settled by a three Judge bench of this Court in wherein it has been held that the Multiplier has to be applied on the basis on the age of the deceased. The Court held that :

"10. A reading of the judgment in Sube Singh (supra) shows that where a three Judge Bench has categorically taken the view that it is the age of the deceased and not the age of the parents that would be the factor for the purposes of taking the multiplier to be applied. This judgment undoubtedly relied upon the case of Munna Lal Jain (supra) which is also a three Judge Bench judgment in this behalf. The relevant portion of the judgment has also been extracted. Once again the extracted portion in turn refers to the judgment of a three Judge Bench in Reshma Kumari and Ors. v. Madan Mohan and Anr. (2013) 9 SCC

65. The relevant portion of Reshma Kumari in turn has referred to Sarla Verma (supra) case and given its imprimatur to the same. The loss of dependency is thus stated to be based on: (i) additions/deductions to be made for arriving at the income; (ii) the deductions to be made towards the personal living expenses of the deceased; and

(iii) the multiplier to be applied with reference to the age of the deceased. It is the third aspect which is of significance

(2020) 18 SCC 808

and Reshma Kumari categorically states that it does not want to revisit the law settled in Sarla Verma (Smt) and others vs. Delhi Transport Corporation and another4 case in this behalf.

11. Not only this, the subsequent judgment of the Constitution bench in Pranay Sethi (supra) has also been referred to in Sube Singh for the purpose of calculation of the multiplier.

12. We are convinced that there is no need to once again take up this issue settled by the aforesaid judgments of three Judge Bench and also relying upon the Constitution Bench that it is the age of the deceased which has to be taken into account and not the age of the dependents." (emphasis supplied).

7. In the present case, since the deceased was 20 years old, a multiplier of 18 ought to have been applied as per the decision of this Court in Sarla Verma (supra)."

19. Recently in Giasi Ram and another vs. ICICI Lombard

General Insurance Co. Limited and others5, in which the High

court applied the multiplier of 9 reducing the multiplier of 18 as

was applied by the Tribunal, having regard to the age of the

surviving mother, the same was set aside holding that the

approach of the High Court was incorrect. It is the age of the

deceased and not of the dependents in case of death of a

Bachelor which is to be the basis for multiplier.

(2009) 6 SCC 121

2022 LiveLaw (SC) 828

20. In Amrit Bhanu Shali and others vs. National Insurance

Company Limited and others6, the Hon‟ble Apex Court held that

the selection of multiplier is based on the age of the deceased

and not on the basis of the age of the dependent and the age of

the dependent has no nexus with the computation of

compensation.

21. We, therefore held that the Tribunal acted illegally in

applying the multiplier of 11 at the age of the dependents parents.

The appropriate multiplier would be considering the age of the

deceased i.e 26 years and the multiplier of 17 in view of Sarla

Verma (supra).

22. We accordingly, apply the multiplier of „17‟.

23. On the next point No.2, the Tribunal has deducted 10%

towards income tax. In the case of Vimal Kanwar (supra), the

Hon‟ble Apex Court held that in the absence of any evidence that

the income tax on the estimated income of the employee was not

deducted from salary of the employee during the particular month

or the financial year. It is presumed that the salary paid to the

deceased as per the last pay certificate was paid in accordance

with law i.e., by deducting the income tax on the estimated

(2012) 11 SCC 738

income of the deceased by that month or the financial year. The

Hon‟ble Apex Court observed and held that if the annual income

comes within the taxable range, income is required to be

deducted for determination of the annual salary, but while

deducting the income tax from the salary, it is necessary to notice

the nature of the income of the victim. On this issue, the Hon‟ble

Apex Court in Vimal Kanwar (supra) held as under in paras 22 to

25 as under:

22. The third issue is "whether the income tax is liable to be deducted for determination of compensation under the Motor Vehicles Act"

23. In Sarla Verma & Anr.(Supra), this Court held "20. Generally the actual income of the deceased less income tax should be the starting point for calculating the compensation." This Court further observed that "24.....Where the annual income is in taxable range, the word "actual salary" should be read as "actual salary less tax".

Therefore, it is clear that if the annual income comes within the taxable range income tax is required to be deducted for determination of the actual salary. But while deducting income- tax from salary, it is necessary to notice the nature of the income of the victim. If the victim is receiving income chargeable under the head "salaries" one should keep in mind that under Section 192 (1) of the Income-tax Act, 1961 any person responsible for paying any income chargeable under the head "salaries" shall at the time of payment, deduct income-tax on estimated income of the employee from

"salaries" for that financial year. Such deduction is commonly known as tax deducted at source („TDS‟ for short). When the employer fails in default to deduct the TDS from employee salary, as it is his duty to deduct the TDS, then the penalty for non-deduction of TDS is prescribed under Section 201(1A) of the Income-tax Act, 1961. Therefore, in case the income of the victim is only from "salary", the presumption would be that the employer under Section 192 (1) of the Income- tax Act, 1961 has deducted the tax at source from the employee‟s salary. In case if an objection is raised by any party, the objector is required to prove by producing evidence such as LPC to suggest that the employer failed to deduct the TDS from the salary of the employee.

However, there can be cases where the victim is not a salaried person i.e. his income is from sources other than salary, and the annual income falls within taxable range, in such cases, if any objection as to deduction of tax is made by a party then the claimant is required to prove that the victim has already paid income tax and no further tax has to be deducted from the income.

24. In the present case, none of the respondents brought to the notice of the Court that the income-tax payable by the deceased Sajjan Singh was not deducted at source by the employer- State Government. No such statement was made by Ram Avtar Parikh, PW-2 an employee of Public Works Department of the State Government who placed on record the Last Pay Certificate and the Service Book of the deceased. The Tribunal or the High Court on perusal of the Last Pay Certificate, have not noticed that the income-tax on the estimated income of the employee was not deducted from the salary of the employee during the said month or Financial

Year. In absence of such evidence, it is presumed that the salary paid to the deceased Sajjan Singh as per Last Pay Certificate was paid in accordance with law i.e. by deducting the income-tax on the estimated income of the deceased Sajjan Singh for that month or the Financial Year. The appellants have specifically stated that Assessment Year applicable in the instant case is 1997-98 and not 1996-97 as held by the High Court. They have also taken specific plea that for the Assessment Year 1997-98 the rate of tax on income more than 40,000/- and upto Rs.60,000/- was 15% and not 20% as held by the High Court. The aforesaid fact has not been disputed by the respondents.

25. In view of the finding as recorded above and the provisions of the Income-tax Act, 1961, as discussed, we hold that the High Court was wrong in deducting 20% from the salary of the deceased towards income-tax, for calculating the compensation. As per law, the presumption will be that employer-State Government at the time of payment of salary deducted income- tax on the estimated income of the deceased employee from the salary and in absence of any evidence, we hold that the salary as shown in the Last Pay Certificate at Rs.8,920/- should be accepted which if rounded off comes to Rs.9,000/- for calculating the compensation payable to the dependent(s)."

24. In the present case, no evidence was filed on behalf of

the insurance company. So following the judgment of the

Hon‟ble Apex Court in Vimal Kanwar (supra), in case the

income is only from salary, the presumption would be that

the employer under Section 192(1) of the Income Tax Act

has deducted the tax at source from the employees salary. If

an objection is raised by any party, the objector is required to

prove by producing evidence such as LPC to suggest that the

employer failed to deduct the TDS from the salary of the

employee.

25. In the present case the deceased was a salaried person

and though the income was within the taxable range, we are of

the view that the burden to prove that the income tax was not

deducted from the income of the deceased was on the

respondent. In the absence of any evidence that the income tax

was not deducted by the employer as T.D.S, the presumption will

be that the income tax was deducted and the salary certificate

which was given was in accordance with law i.e. by deducting the

income tax on the estimated income of the deceased. The

income should have been determined based on salary certificate.

Consequently, we hold that the deduction of income tax @ 10%

is contrary to the law as laid down by the Hon‟ble Apex Court in

Vimal Kanwar (supra).

26. As per para 30 of the Sarla Verma (Supra), ½ deducted

towards personal expenses.

27. Additionally, the appellants are entitled for an amount of

Rs.48,000/- to each of the claimants being Rs.96,000/- for loss of

consortium instead of Rs. 10,000/- as awarded by the Tribunal,

towards funeral expenses Rs. 18,000/- in place of Rs.5,000/- and

towards loss of estate Rs. 18,000/-, in view of a three-Judge

Bench of the Hon‟ble Apex Court in United India Insurance Co.

Ltd. vs. Satinder Kaur @ Satwinder Kaur and Ors. 7 after

considering Pranay Sethi (Supra), observed that the aforesaid

conventional heads are to be revised every three years @ 10%.

Accordingly, the three Conventional Heads have increased by

20%.

28. In view of the aforesaid, the calculation the just

compensation to the petitioners comes to as under:

(2021) 11 SCC 780

S. No. Head Compensation Awarded

1. Net Annual Income Rs. 40,242.85/- x 12 = Rounded to Rs.

5,00,000/- (As per Tribunal)

2. Future Prospects Rs. 2,50,000/-

(i.e., 50% of the income) Total = Rs. 7,50,000/-

3. Deduction towards personal expenditure Rs. 3,75,000/-

(i.e. 1/2)

4. Total income Rs. 3,75,000/-

5. Multiplier of 17 at the age of 26 years i.e. 17 x 3,75,000/- = Rs.63,75,000/-

6. Conventional Heads:

                  i)      Loss of Consortium                               Rs. 96,000/-
                                                                         (Rs. 48,000/- x 2)

                  ii)     Loss of Estate                                   Rs. 18,000/-

                  iii) Funeral expenses                                    Rs. 18,000/-

      7.                    Transportation Charges                          Rs. 2000/-

      8.                Damages to clothes and Articles                      Rs. 500/-

      9.                     Total Compensation                           Rs. 65,09,500/-

29. The tribunal granted interest at the rate of @ 7.5% p.a. In

Kumari Kiran vs. Sajjan Singh and others,8 the Hon‟ble Apex

Court set aside the judgment of the Tribunal therein awarding

interest @ 6% as also the judgment of the High Court awarding

interest @7.5% and awarded interest @ 9% p.a. from the date of

the claim petition. In Rahul Sharma & Another vs. National

(2015) 1 SCC 539

Insurance Company Limited and Others,9the Hon‟ble Apex

Court awarded @ 9% interest p.a. from the date of the claim

petition. Also, in Kirthi and another vs. Oriental Insurance

Company Limited,10 the Apex Court allowed interest @9% p.a.

30. Accordingly, on the aforesaid amount the claimants are