Andhra Pradesh High Court - Amravati
National Insurance Company vs Udayagiri Sumathi And 6 Others on 4 October, 2024
1
* THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
&
*THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
+MOTOR ACCIDENT CIVIL MISCELLANEOUS
APPEAL NO:2308 OF 2018
% 04.10.2024
# National Insurance Company
Limited
......Appellant
And:
$1. Udayagiri Sumathi and
others
....Respondents.
!Counsel for the appellant : Sri Sravan Kumar
^Counsel for the respondents : Sri P. Siva Prasad
<Gist:
>Head Note:
? Cases referred:
1
2009 ACJ 1298
2.2022(5) ALD (DB)
3.(2017)16 SCC 680
4.(2020) 11 SCC 356
5.(2007) 10 SCC 643
6.[1989]2SCR810
7.(1987) 3 SCC 234
8.(2022) 14 SCC 712
9.ILR 2023 KAR 311
10.2023 SCC OnLine Ker 7902
11.(2013) 7 Supreme Court Cases 476
12.(2017) 16 SCC 680
13.(2018) 18 SCC 130
14.(2022) SCC OnLine SC 1683
15.(2022) SCC OnLine SC 1683
16.(2021) 11 SCC 780
2
HIGH COURT OF ANDHRA PRADESH
****
MOTOR ACCIDENT CIVIL MISCELLANEOUS
APPEAL NO: 2308 OF 2018
DATE OF JUDGMENT PRONOUNCED: 04.10.2024
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 NYAPATHY VIJAY
M.A.C.M.A.No.2308 OF 2018
JUDGMENT:
per the Hon'ble Sri Justice Ravi Nath Tilhari:-
Heard Sri Sravan Kumar, learned counsel for the appellant-
Insurance company and Sri P. Siva Prasad, learned counsel for
the claimants/respondents 1 to 5.
2. This appeal under Section 173 of the Motor Vehicles Act,
1988 (for short, ―the M.V Act‖) was filed by the National Insurance
Company Limited challenging the award dated 06.03.2018 in
M.V.O.P. No.533 of 2016 (in short, ―M.V.O.P‖), passed by the
Motor Accidents Claims Tribunal-cum-IV Additional District Judge
Kadapa (for short, ―the Tribunal‖). By the said award, the claim of
the claimant-respondents 1 to 5 was partly allowed granting
compensation of Rs.76,58,364/- with interest thereon @ 9% p.a
from the date of the claim petition till date of deposit.
3. The claimants-respondents 1 to 5 filed the aforesaid
M.V.O.P No.533 of 2016 under Section 166 of the M.V. Act for
awarding the compensation of Rs.90,00,000/- for the death of one
Udayagiri Venkataiah @ Venkata Rao (deceased) in a motor
vehicle accident which occurred on 12.08.2016 at about 7.00 a.m
on N.H.16, Gudavalli Village, opposite to TATA Motors,
Gannavaram, Vijayawada, Krishna District due to rash and
negligent driving of the driver of Innova Car bearing No.AP 37-
BA-1449. (The offending vehicle).
Facts:
4. The case of the claimants was that on 09.08.2016 at about
6.45 a.m, while the deceased and some other police men of A.R.
Unit, Chittoor District, who were deputed to maintain bandobust
for Krishna Pushkaralu at Vijayawada, were waiting by standing
for a bus to go to Air Port; at that time one Innova car bearing
No.AP 37-BA-1449 came from Vijayawada side in a rash and
negligent manner at high speed, without blowing horn and
dashed the deceased who was standing extremely on left side of
the road, as a result of which the deceased sustained multiple
bleeding injuries all over the body and became unconscious, fell
on the road. He was immediately shifted to Andhra Hospital,
Vijayawada where he declared as ‗dead'. Prior to the accident,
the deceased was working as A.R. Head Constable, A.R Unit,
Chittoor District and was getting salary of Rs.51,000/- per month
and contributing the same for the family.
5. The respondents 6 and 7 herein remained ex parte before
the Tribunal.
6. The National Insurance Company-appellant (respondent
No.3 in M.V.O.P) filed written statement denying the allegations in
the claim petition and inter alia contending that the claimants be
put to strict proof of their case in the claim petition. It was denied
that the driver of the offending lorry was rash and negligent. The
accident occurred only due to the deceased who suddenly
crossed the road, got confused, got slipped and fallen on the
road. The offending vehicle was not at all involved in the accident.
It was pleaded that the driver of the offending vehicle should
possess valid and effective driving license, otherwise the
Insurance Company was not liable to indemnify. The amount
claimed was high and excessive, without any basis and the claim
petition was liable to be dismissed.
7. The Tribunal framed the following issues:
―(1). Whether Udayagiri Venkataiah @ Venkat Rao died in
a motor vehicle accident on 12.08.2016 at about 7.00
a.m due to negligent driving of Innova car bearing
No.AP 37-BA-1449 or not?
(2) Whether the petitioners are entitled to any
compensation, if so to what amount and from whom?
(3) To what result?
8. On behalf of the claimants, P.W.1 U. Sumathi, P.W.2 G.
Manjunath, Sr. Assistant and P.W.3 S. Raghunath, ARSI, Chittoor
were examined and Ex.A.1 certified copy of FIR inCr.No.257 of
2016 of Gannavaram P.S, Ex.A.2 certified copy of inquest report,
Ex.A.3 certified copy of postmortem certificate, Ex.A.4 certified
copy of MVI report, Ex.A.5 certified copy of charge sheet, Ex.A.6
salary certificate, Ex.A.7 SSC marks list of the deceased and
Ex.X.1 authorization letter dated 21.11.2017 and Ex.X.2 salary
certificate were marked. On behalf of the Insurance company,
R.W1 Malathi, Branch Manager was examined and Ex.B.1
attested copy of insurance policy copy was marked.
9. The Tribunal on consideration of evidence on record,
recorded the finding that the deceased met with an accident
caused due to negligent driving of the driver of Innova Vehicle
and died due to the said accident. The policy was in force on the
date of accident. There were no violations of policy conditions or
relating to driving license, Registration Certificate, fitness
certificate or permit.
10. On the point of compensation, the Tribunal determined the
gross salary of the deceased as Rs.49,661/-. It added 30% as
future prospectus to the age group 40 to 50. It deducted 1/4th
amount towards personal expenses of the deceased. It applied
the multiplier of ‗13' at the age group of 46 to 50, the deceased
being 50 years 3 months and 11 days i.e., not having completed
51 years. It awarded Rs.10,000/- as transport charges,
Rs.15,000/-, as funeral expenses, Rs.40,000/- as loss of
consortium and Rs.40,000/- for loss of love and affection. In total,
the Tribunal awarded Rs.76,58,364/-. The Tribunal recorded that
there was no violation of the policy condition. The respondents 1
to 3 in the M.V.O.P (The appellant and Respondents 6 and 7 in
this appeal) were held jointly and severally liable to pay the
compensation. The Tribunal awarded interest of 9% p.a from the
date of the claim petition till the date of deposit.
Submissions of the learned counsels:
11. Learned counsel for the appellant submitted that the
Income tax was not deducted by the Tribunal which deserved to
be deducted to determine actual salary. He further submitted that
the 2nd and 3rd claimants (the present respondents 2 and 3) being
the married daughter and major son respectively, those legal
representatives, would not be the dependents. Consequently, the
deduction towards personal expenses of the deceased should
have been 1/3rd and not 1/4th. He placed reliance in Sarla Verma
and others vs. Delhi Transport Corporation and another1, and
in Reliance General Insurance Company, Krishna District vs.
Boorra Gowri Ratna Kumari and others2.
12. Learned counsel for the claimants-respondents submitted
that the insurance company did not take the plea of the claimants
respondents 2 and 3 not being the dependents on the deceased.
The plea of the income tax deduction was also not taken. He
submitted that claimants filed salary certificate (Ex.A.6) and
Ex.X.2). It shall be taken that such payment was made after
income tax deductions. He submitted that the grant of future
prospects and deduction towards personal expenses of the
deceased is as per law. However, he submitted that under the
conventional heads the amount awarded is not as per the
judgment in National Insurance Co. Ltd., vs. Pranay Sethi &
others3.
13. Learned counsel for the respondents placed reliance in
Shaik Kalesh and 2 others vs. B. Sreenivasa Rao and 5
others (decided on 14.09.2023 in M.A.C.M.A.No.2403 of 2012)
2009 ACJ 1298
2022(5) ALD (DB)
(2017)16 SCC 680
and National Insurance Company Limited vs. Birender and
others4.
Points for determination:
14. We have considered the aforesaid submissions and
perused the material on record.
15. The following points arise for our consideration and
determination.
―(A) Whether the claimants/respondents 2 and 3 are the legal
representatives and dependants of the deceased entitled to claim
compensation?
(B) Whether the amount awarded by the Tribunal is just and
fair compensation?
Consideration Point-A:
16. Section 166 of M.V. Act reads as under:-
―166. Application for compensation.--(1) An application for
compensation arising out of an accident of the nature specified in sub-
section (1) of section 165 may be made--
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of the
legal representatives of the deceased; or
(d) by any agent duly authorised by the person injured or all or any of
the legal representatives of the deceased, as the case may be:
Provided that where all the legal representatives of the deceased
have not joined in any such application for compensation, the
application shall be made on behalf of or for the benefit of all the legal
(2020) 11 SCC 356
representatives of the deceased and the legal representatives who
have not so joined, shall be impleaded as respondents to the
application.
[(2) Every application under sub-section (1) shall be made, at the
option of the claimant, either to the Claims Tribunal having jurisdiction
over the area in which the accident occurred or to the Claims Tribunal
within the local limits of whose jurisdiction the claimant resides or
carries on business or within the local limits of whose jurisdiction the
defendant resides, and shall be in such form and contain such
particulars as may be prescribed:
Provided that where no claim for compensation under section 140
is made in such application, the application shall contain a separate
statement to that effect immediately before the signature of the
applicant.]
[(4) The Claims Tribunal shall treat any report of accidents
forwarded to it under sub-section (6) of section 158 as an application
for compensation under this Act.]‖
17. The legal representatives can maintain the application
under Section 166 of the M.V. Act. ‗Legal Representative' has
not been defined under M.V.Act.
18. Section 2(11) of C.P.C defines Legal Representative as
under:
"Legal representative" means a person who in law
represents the estate of a deceased person, and
includes any person who intermeddles with the estate of
the deceased and where a party sues or is sued in a
representative character the person on whom the estate
devolves on the death of the party so suing or sued.‖
19. In Manjuri Bera (Smt) vs. Oriental Insurance Company
Limited and another5, the Hon'ble Apex Court observed that the
"legal representative" means a person who in law represents the
estate of a deceased person, and includes any person who
intermeddles with the estate of the deceased and where a party
sues or is sued in a representative character the person on whom
the estate devolves on the death of the party so suing or sued. It
referred, the judgment in the case of Custodian of Branches of
BANCO National Ultramarino v. Nalini Bai Naique6, in which it
was observed that the definition of the legal representative
contained in Section 2(11) CPC is inclusive in character and its
scope is wide, it is not confined to legal heirs only instead it
stipulates a person who may or may not be heir, competent to
inherit the property of the deceased but he should represent
the estate of the deceased person. It includes heirs as well as
persons who represent the estate even without title either as
executors or administrators in possession of the estate of the
deceased. All the persons would be legal representatives. The
Hon'ble Apex Court also referred to the previous judgment in
(2007) 10 SCC 643
[1989]2SCR810
Gujarat SRTC v. Ramanbhai Prabhatbhai7, in which, it was
observed that the legal representative is one who suffers on
account of death of a person due to a motor vehicle accident and
need not necessarily be a wife, husband, parent and child.
20. Paras 11 to 13 of Manjuri Bera (Smt) (supra) are as under:
―11. According to Section 2(11) CPC, "legal representative" means
a person who in law represents the estate of a deceased
person, and includes any person who intermeddles with the
estate of the deceased and where a party sues or is sued in a
representative character the person on whom the estate
devolves on the death of the party so suing or sued. Almost in
similar terms is the definition of legal representative under the
Arbitration and Conciliation Act, 1996 i.e. under Section
2(1)(g).
12. As observed by this Court in Custodian of Branches of BANCO
National Ultramarino v. Nalini Bai Naique the definition contained in
Section 2(11) CPC is inclusive in character and its scope is wide, it is not
confined to legal heirs only. Instead it stipulates that a person who may or
may not be legal heir competent to inherit the property of the deceased
can represent the estate of the deceased person. It includes heirs as well
as persons who represent the estate even without title either as executors
or administrators in possession of the estate of the deceased. All such
persons would be covered by the expression "legal representative". As
observed in Gujarat SRTC v. Ramanbhai Prabhatbhai, ( (1987) 3 SCC
234: 1987 SCC (Cri) 482: AIR 1987 SC 1690) a legal representative is one
who suffers on account of death of a person due to a motor vehicle
accident and need not necessarily be a wife, husband, parent and child.
(1987) 3 SCC 234
13. There are several factors which have to be noted. The liability under
Section 140 of the Act does not cease because there is absence of
dependency. The right to file a claim application has to be considered in
the background of right to entitlement. While assessing the quantum, the
multiplier system is applied because of deprivation of dependency. In other
words, multiplier is a measure. There are three stages while assessing the
question of entitlement. Firstly, the liability of the person who is liable and
the person who is to indemnify the liability, if any. Next is the quantification
and Section 166 is primarily in the nature of recovery proceedings. As
noted above, liability in terms of section 140 of the Act does not cease
because of absence of dependency.‖
21. Recently in N. Jayasree and others vs. Cholamandalam
Ms. General Insurance Company Limited8, the Hon'ble Apex
Court has held, on the point of legal representative and the
dependents, as under in paras 13 to 17:-
"13. Section 166 of the MV- Act provides for filing of an
application for compensation. The relevant portion of the
said section is as under:
"166. Application for compensation. (1) An application for
compensation arising out of an accident of the nature
specified in sub-section (1) of Section 165 may be made-
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any
of the legal representatives of the deceased; or
(d) by any agent duly authorised by the person injured or all
(2022) 14 SCC 712
or any of the legal representatives of the deceased, as the
case may be:
Provided that where all the legal representatives of the
deceased have not joined in any such application for
compensation, the application shall be made on behalf of or
for the benefit of all the legal representatives of the
deceased and the legal representatives who have not so
joined, shall be impleaded as respondents to the
application.
―14. The M. V Act does not define the term ‗legal
representative'. Generally, ‗legal representative' means a
person who in law represents the estate of the deceased
person and includes any person or persons in whom legal
right to receive compensatory benefit vests. A ‗legal
representative' may also include any person who
intermeddles with the estate of the deceased. Such person
does not necessarily have to be a legal heir. Legal heirs are
the persons who are entitled to inherit the surviving estate
of the deceased. A legal heir may also be a legal
representative.
15. Indicatively for the present inquiry, the Kerala
Motor Vehicle Rules, 1989, defines the term ‗legal
representative' as under:
―Legal Representative‖ means a person who in law is
entitled to inherit the estate of the deceased if he had left
any estate at the time of his death and also includes any
legal heir of the deceased and the executor or administrator
of the estate of the deceased.‖
16. In our view, the term ‗legal representative' should
be given a wider interpretation for the purpose of Chapter
XII of MV Act and it should not be confined only to mean the
spouse, parents and children of the deceased. As noticed
above, MV Act is a benevolent legislation enacted for the
object of providing monetary relief to the victims or their
families. Therefore, the MV Act calls for a liberal and wider
interpretation to serve the real purpose underlying the
enactment and fulfil its legislative intent. We are also of the
view that in order to maintain a claim petition, it is sufficient
for the claimant to establish his loss of dependency. Section
166 of the MV Act makes it clear that every legal
representative who suffers on account of the death of a
person in a motor vehicle accident should have a remedy
for realization of compensation.
17. It is settled that percentage of deduction for
personal expenses cannot be governed by a rigid rule
or formula of universal application. It also does not
depend upon the basis of relationship of the claimant
with the deceased. In some cases, the father may have
his own income and thus will not be considered as
dependent. Sometimes, brothers and sisters will not be
considered as dependents because they may either be
independent or earning or married or be dependent on
the father. The percentage of deduction for personal
expenditure, thus, depends upon the facts and
circumstances of each case.‖
22. In N.Jaysree (supra) The Hon'ble Apex Court held that so
far as the percentage of deduction for personal expenses are
concerned, they cannot be governed by a rigid rule or formula of
universal application. It also does not depend upon the basis of
relationship of the claimant with the deceased. In some cases,
the father may have his own income and thus will not be
considered as dependent. Sometimes, brothers and sisters will
not be considered as dependents because they may either be
independent or earning or married or be dependent on the father.
The percentage of deduction for personal expenditure, thus,
depends upon the facts and circumstances of each case.
23. In N. Jaysree (supra) the question was whether the 4th
appellant therein mother in law of the deceased would fall within
the expression ‗legal representative' for claiming compensation.
In the said case, the material on record established that she was
residing with son-in-law and his family members. She was also
dependent upon the deceased for her shelter and maintenance.
It was held that she might not be the legal heir of the deceased
but she certainly suffered on account of his death. Therefore,
she was held to be legal representative of the deceased entitled
to maintain C.P under Section 166 of the M.V. Act.
24. Para 21 of N. Jayasree (supra) is as under:
―21. Coming to the facts of the present case, the fourth
appellant was the mother-in-law of the deceased.
Materials on record clearly establish that she was
residing with the deceased and his family members. She
was dependent on him for her shelter and maintenance.
It is not uncommon in Indian Society for the motherinlaw
to live with her daughter and soninlaw during her old age
and be dependent upon her soninlaw for her
maintenance. Appellant no.4 herein may not be a legal
heir of the deceased, but she certainly suffered on
account of his death. Therefore, we have no hesitation to
hold that she is a ―legal representative‖ under Section
166 of the MV Act and is entitled to maintain a claim
petition.‖
25. In Birender (supra), the claim petition was filed by the
major sons of the deceased. Plea was taken by the insurance
company that the Claimants were the major sons and not
dependent upon the deceased and as such not entitled to any
compensation. The Tribunal noted that though claimants were
major and earning hands, the fact that they were the legal heirs of
the deceased had been deprived of a pecuniary benefits through
deceased, could not be denied the Tribunal deducted 50%
towards personal expenses of the deceased, the claimants being
major and earning hands. The High Court in appeals filed by both
the sides, maintained 50% deduction. The matter approached
the Hon'ble Apex Court. The Hon'ble Apex Court held that the
legal representatives of the deceased have a right to apply for
compensation. It must necessarily follow that even the major
married and earning sons of the deceased being the legal
representatives have a right to apply for compensation and it
would be the bounden duty of the Tribunal to consider the
application irrespective of the fact whether the legal
representatives concerned was fully depending on the deceased
and not to limit the claim towards conventional heads only.
26. We observe that in Birender (supra), the evidence on
record suggested that the claimants were working as agricultural
labourer on contract basis and were earning meager income. The
Hon'ble Apex Court observed that in that sense they were legally
dependant on the earnings of the deceased, their mother. The
Hon'ble Apex Court deducted only 1/3rd amount towards personal
expenses of the deceased.
27. In Reliance General Insurance Company Limited Hubli
vs. Gangappa and others9, the Karnataka High court held that
the married sons are also entitled for compensation. No
discrimination can be made between the married sons or married
daughters. The married sons and the major sons are liable to
claim compensation and hence the married daughters are also
entitled for compensation on all the heads which cannot be
limited only for conventional heads. Para 23 as follows:
"23. The Apex Court in the said judgment further held even
married sons are also entitled for compensation. This Court
also cannot make any discrimination whether they are
ILR 2023 KAR 311
married sons or married daughters and hence, very
contention that married daughters of deceased are not
entitled for compensation cannot be accepted and the Court
has to take note of the rationale behind in coming to the
conclusion of even married sons and major sons are eligible
to claim compensation and hence the married daughters also
entitle for compensation on all the heads and not to limit only
for conventional heads."
28. In Royal Sundaram Allinace Insurance Company
Limited represented by Their Zonal Head vs. V.S. Sujatha and
others10, the Kerala High court held that even if there is no loss
of dependency, if the claimant is a legal representative of the
deceased, he would be entitled to compensation. The
compensation payable goes to the 'estate' of the deceased. The
compensation constitutes part of the estate of deceased and as a
result, the legal representative of deceased would inherit the
estate even if he was not dependent on the deceased and even if
he is not a legal heir. Relevant paragraph 32 is as under:
"32. Thus, even if there is no loss of dependency, if the claimant is a
legal representative of the deceased, he would be entitled to
compensation. The compensation payable goes to the 'estate' of the
deceased. As held by the Apex Court, compensation constitutes part of
2023 SCC OnLine Ker 7902
the estate of deceased and as a result, the legal representative of
deceased would inherit the estate ...........‖
29. In Shaik Kalesha (supra), learned single Judge of this
court observed that ―this Court also cannot make any
discrimination whether they are the married sons or married
daughters and hence very contention of the Insurance Company
that the married daughters of the deceased are not entitled for
compensation cannot be accepted and the Court has to take note
of rationale behind in coming to the conclusion of even married
sons and major sons are eligible to claim compensation and
hence the married daughters also entitled for compensation on all
the heads and not to limit only for conventional heads.‖
30. On consideration of the aforesaid judgments, we are of the
considered view that the married daughter and the major son are
the legal representatives of their deceased parent. They are
entitled to maintain the claim petition and are also entitled for
grant of compensation. The grant of compensation cannot be
confined to the grant of conventional heads only. The application
for compensation is to be considered full fledged, irrespective of
the fact whether the concerned legal representative was fully
dependent on the deceased or not.
31. In the present case the claimant Nos.2 and 3, the married
daughter and the major son respectively have been awarded
compensation by the Tribunal. There is no illegality in that
regard. The case of the insurance company as per the memo of
appeal is that after the death of the deceased, the major son got
the compassionate appointment. It follows that, the major son
came in employment only after the death of the father.
32. So far as the married daughter is concerned, the law is
settled that they are also entitled for compensation. Even if the
submission of the learned counsel for insurance company is
accepted that the married daughter was not dependent, it will
have no impact on the deductions made by the Tribunal i.e 1/4th
towards personal expenses of the deceased. The reason is that
in that case, there would be four dependents out of 5 claimants
and as per Sarla Verma (supra), then also 1/4th will be the
deduction towards personal expenses of the deceased.
Point-B:
INCOME:
33. So far as the income of the deceased is concerned, the
Tribunal has determined the monthly gross salary as Rs.49,661/-
based on Ex.X.2 the salary certificate. There is no challenge to
Ex.X.2. The submission advanced is that from the gross salary,
income tax deduction has not been taken into consideration
which should have been @ 10% more. We are not convinced.
The submission deserves rejection.
34. In Vimal Kanwar and Ors. Vs Kishore Dan and Ors.,11
the Hon'ble Apex Court held that in the case of salaries person, 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 income of the deceased by that
month or the financial year. In case any objection is raised, the
objection is required to prove by producing evidence that the
employer failed to deduct tax at source, the salary of the
employee.
35. In Vimal Kanwar (supra), the Hon'ble Apex Court held as
under in paras 22 to 25 as under:
(2013) 7 Supreme Court Cases 476
"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 (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 1997-1998 and not 1996-1997 as
held by the High Court. They have also taken specific
plea that for the Assessment Year 1997-1998 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)."
36. The deceased was a salaried person. The presumption as
in Vimal Kumar (supra) is attracted. The insurance company did
not lead any evidence to show that the T.DS was not deducted
from the salary of the deceased. Insurance company failed to
discharge its burden. Consequently, we do not find any illegality
in the finding of the Tribunal ascertaining the income as in Ex.X.2
salary certificate.
FUTURE PROSPECTS:
37. The age of the deceased was 50 years 3 months and 11
days. The Tribunal has awarded an addition of 30%, as future
prospects considering the age group of 40 - 50.
38. In National Insurance Company Limited vs. Pranay
Sethi and others,12 the Constitution Bench of the Hon'ble Apex
Court, has held as under in Paras 59.3 and 59.4, on the point of
future prospects.
―59.3. While determining the income, an addition of
50% of actual salary to the income of the deceased
towards future prospects, where the deceased had a
permanent job and was below the age of 40 years,
should be made. The addition should be 30%, if the age
of the deceased was between 40 to 50 years. In case
the deceased was between the age of 50 to 60 years,
the addition should be 15%. Actual salary should be
read as actual salary less tax.
(2017) 16 SCC 680
59.4. In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established
income should be the warrant where the deceased was
below the age of 40 years. An addition of 25% where
the deceased was between the age of 40 to 50 years
and 10% where the deceased was between the age of
50 to 60 years should be regarded as the necessary
method of computation. The established income means
the income minus the tax component.‖
39. A perusal of the judgment in Pranay Sethi (supra) shows
that in case the deceased in the present case, was between the
age of 50 to 60 years, the addition should be 15% if the deceased
was in permanent job. The deceased was police Head Constable
in Armed Reserved Force, A.R Unit, Chittoor. He was in
permanent job. Consequently, at the age of the deceased (50 to
60 years) as per para 59.3, of Pranay Sethi (supra), the addition
should be 15% of the actual salary of the deceased. The Tribunal
granted 30% considering him in the age group of 40 to 50. The
Tribunal was of the view, while determining the age for the
purpose of choosing the multiplier that, the deceased had not
completed the age of 51 years, as he was 50 years 3 months and
11 days. So far as the choosing of the appropriate multiplier is
concerned, the Tribunal is right that the age of the deceased
would be taken as 50 years, as he had not attained the age of 51
years then, as per Sarla Verma (supra) the deceased would
fall in the age group of 46 to 50 for determination of multiplier
and not in the age group of 51 to 55. For the purpose of
multiplier, the deceased would not be put in the group of 51 to 60.
But when it comes to the future prospects, it cannot be said that
the deceased would fall in the age group of 40 to 50 because he
had not attained the age of 51 years. Once the deceased had
attained the age of 50 years, and was over 50 years, may be by
only 3 months 11 days, he would be within the age group of 50 to
60 years, as per Pranay Sethi (supra), for the purpose of future
prospects.
40. Consequently, we award the future prospects @ 15% only.
The award of future prospects by the Tribunal @ 30% is
unsustainable and is modified to @ 15%.
CONVENTIONAL HEADS
41. On the point of the conventional heads, as per the
judgment in Pranay Sethi (supra), Magma National Insurance
Company Limited vs Nanu Ram @ Chuhru Ram and Ors.13
and Smt. Anjali and Others V. Lokendra Rathod and Others, 14
United India Insurance Co. Ltd vs. Satinder Kaur @
Satwinder Kaur and ors.,15 and Rojalini Nayak and others vs.
Ajit Sahoo and others16, we award the enhanced amounts
under the conventional heads of loss of consortium, loss of estate
and funeral expenses, as Rs.48,400/- (per claimant), Rs.18,150/-
and Rs.18,150/- respectively as was awarded in Rojalini (supra).
42. The amount of just and fair compensation would come to
as follows:
S. No. Head Compensation Awarded
1. Net Annual Income Rs. 49,661/- x 12 = Rs. 5,95,932/-
(As per the Tribunal)
2. Future Prospects Rs. 89,389/-
(at the age group of 50 to 60 years) (i.e., 15% of the income)
Total (i.e., 1+2) = Rs. 6,85,321/-
3. Deduction towards personal expenditure Rs. 1,71,330/-
(i.e.1/4th)
4. Total Annual loss Rs. 5,13,991/-
(2018) 18 SCC 130
(2022) SCC OnLine SC 1683
(2022) SCC OnLine SC 1683
16 (2021) 11 SCC 780
5. Multiplier of 13 at the age of 50 years i.e. 13 x 5,13,991/- = Rs. 66,81,887/-
6. Conventional Heads:
i) Loss of Consortium Rs. 2,42,000/-
(Rs. 48,400/- x 5)
ii) Loss of Estate Rs. 18,150/-
iii) Funeral expenses Rs. 18,150/-
7. Total Compensation Rs. 69,60,187/-
43. On the aforesaid amount the claimants are granted interest
@ 9 % p.a. from the date of the claim petition till realisation.
RESULT:
44. In the result:
i) The appeal of the Insurance Company is dismissed.
ii) The claimants/respondent Nos.1 to 5 are granted enhanced
compensation of Rs.69,60,187/- as just and fair compensation,
with interest @ 9% per annum thereon from the date of the claim
petition till realization;
iii) The appellant/insurance company shall deposit the amount as
aforesaid, adjusting the amount already deposited if any, before
the Tribunal within one month, failing which the amount shall be
recovered as per law;
iv) On such deposit being made, the claimants/respondents 1 to 5
shall be entitled to withdraw the same in the proportion as per the
award,
v) The costs throughout is allowed in favour of the
Claimants/respondent Nos.1 to 5, and against the appellant.
45. The claimants are not represented. The Tribunal is directed
to ensure service of notice on them as also that the payment is
made to them preferably in their respective bank accounts
attached to their Aadar numbers, without unnecessary delay.
46. The District Legal Services Authority of the District shall
also ensure to communicate this judgment to the claimants.
47. Let a copy of this judgment be sent to the Tribunal and also
to the District Legal Services Authority of the District.
48. The Tribunal shall submit a report to this Court, through the
Registrar (Judicial) on the above aspect, which shall be placed on
the record of this appeal.
Consequently, the Miscellaneous Petitions, if any, pending
shall also stand closed.
________________________
RAVI NATH TILHARI,J
_______________________
NYAPATHY VIJAY,J
Date: .10.2024.
Note:
L.R copy to be marked.
B/o.Gk.
THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
&
THE HON'BLE SRI JUSTICE NYAPATHY VIJAY
M.A.C.M.A.No.2308 OF 2018
Date: 04.10.2024.
Gk.
