Andhra Pradesh High Court - Amravati
Smt Sunkavalli Padmavathi 4 Others vs Juttu Satish 2 Others on 24 September, 2024
* THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
AND
THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
+ MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 2961/2014
%Dated: .09.2024
# Smt.Sunkavalli Padmavathi and 4 others ...... Appellants
and
$ Sri Juttu Satish and 2 others ..... Respondents
! Counsel for the Appellants : Sri Parimi Rama Rayudu
^ Counsel for the 3rd Respondent : Sri N.Rama Krishna
< GIST :
> HEAD NOTE :
? Cases referred :
1. (2017) 16 SCC 680
2. 2024 SCC OnLine SC 1872
3. AIR 2012 SUPREME COURT 945
4. (2003) 7 SCC 484
5. 2022 SCC OnLine SC 1683
6. (2022) SCC OnLine SC 1683
7. (2013) 7 Supreme Court Cases 476
8. (2017) 16 SCC 680
9. (2009) 6 SCC 121
10. (2017) 16 SCC 680
11. (2018) 18 SCC 130
12. (2022) SCC OnLine SC 1683
13. (2021) 11 SCC 780
14. (2015) 1 SCC 539
15. (2021) 6 SCC 188
16. (2021) 2 SCC 166
17. (2022) SCC OnLine SC 1683
18. (2020) 4 SCC 228
2
THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
AND
THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 2961/2014
Between:
Smt.Sunkavalli Padmavathi and 4 others ...... Appellants
and
Sri Juttu Satish and 2 others ..... Respondents
DATE OF ORDER PRONOUNCED: .09.2024
(per Hon‟ble Sri Justice Ravi Nath Tilhari)
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 Their Lordship wishes Yes/No
to see the fair copy of the Judgment?
____________________
RAVI NATH TILHARI, J
____________________
NYAPATHY VIJAY, J
3
APHC010521492014
IN THE HIGH COURT OF ANDHRA
PRADESH
[3470]
AT AMARAVATI
(Special Original Jurisdiction)
FRIDAY ,THE TWENTIETH DAY OF SEPTEMBER
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL
NO: 2961/2014
Between:
Smt Sunkavalli Padmavathi & 4 Others ...APPELLANT(S)
and Others
AND
Juttu Satish 2 Others and Others ...RESPONDENT(S)
Counsel for the Appellant(S):
1. PARIMI RAMA RAYUDU
Counsel for the Respondent(S):
1. N RAMA KRISHNA
2.
The Court made the following:
JUDGMENT:
(per Hon‟ble Sri Justice Ravi Nath Tilhari)
Heard Sri Parimi Rama Rayudu, learned counsel for
the appellants/claimants and Sri N.Rama Krishna, learned
Standing Counsel for the 3rd respondent-Oriental
Insurance Company Ltd.
2. This appeal under Section 173 of the Motor Vehicles
Act (for short 'the M.V.Act) has been filed by the
claimants/appellants, challenging the award dated
05.11.2012 of the Motor Accidents Claims Tribunal(District
Judge), Rajahmundry (in short 'the Tribunal') passed in
M.V.O.P.No.737 of 2008, for enhancement of
compensation amount.
3. The 1st respondent is the driver of the offending lorry
bearing No.AP 37 W 8119, the 2nd respondent is the owner
and the 3rd respondent is the Oriental Insurance Company.
4. The appellants filed MVOP No.737 of 2008 under
Section 166 of the M.V.Act, claiming compensation of
Rs.90,00,000/- on account of death of Sunkavalli Venkata
Subbarao (in short 'the deceased') in a motor vehicle
accident that took place on 20.03.2007 at Nagahanuman
Solvent Factory, Kottagudem.
5. The claim petition was filed inter alia on the
averments that the deceased and the 1st claimant/appellant
were returning to Kovvuru from Gudiwada in their Maruti
Car, when they met an accident with a lorry bearing No.AP
37 W 8119 (in short 'the offending vehicle'), which came
from the wrong side being rashly and negligently driven by
its driver and dashed the Maruti Car in the opposite
direction, causing the grievous injuries to the 1st claimant
and the death of the deceased on the spot. The deceased
was 45 years of age and he was working as a
Development Officer in Life Insurance Corporation of
India(for short 'L.I.C'), Kovvur Branch. His earning was not
less than Rs.9,05,079/- p.a. by way of salary and other
benefits. He had completed 20 years of service as a
Development Officer and would have been promoted as a
Manager within a short time had he been alive. All the
claimants were said to be the legal representatives and the
dependents of the deceased.
6. The respondents 1 and 2 remained ex parte.
7. The 3rd respondent-insurance company filed written
statement admitting the contract of insurance, but
submitting that the policy was subject to the terms and
conditions mentioned therein and the statutory provisions.
In the absence of a valid and effective driving license, the
insurance company was not liable to pay the
compensation. The petition was bad for non-joinder of
driver, owner and insurer of the Maruthi Car. The
compensation claimed was excessive. The insurance
company also pleaded that the amount received by the
claim petitioners from the L.I.C. on account of accidental
death of the deceased while the deceased was in
employment, ought to be considered and excluded out of
the compensation to be assessed by the Tribunal. The
compassionate appointment if any, given by the L.I.C. was
also to be taken into consideration. The claim for interest
was also denied.
8. The Tribunal framed the following issues:
1. Whether the accident was due to rash and
negligent driving of lorry bearing No.AP 37 W
8119 by its driver 1st respondent?
2. Whether the petitioners are entitled for the
compensation amount claimed? If so, from which
of the respondents?
3. To what relief?
9. The claimants examined PWs.1 to 4 and marked
Exs.A1 to A5, Exs.B1 and B2 and Exs.X1 to X4.
10. The respondents did not lead any evidence.
11. The Tribunal recorded the findings that the accident
occurred due to negligence of the 1st respondent, the driver
of the offending vehicle, which resulted in death of the
deceased. The claim petitioners were held to be the legal
heirs and dependents of the deceased. The age of the
deceased was considered as 45 years. His income was
considered as Rs.23,171.49 p.m. i.e. Basic Pay
Rs.17,480/- + Dearness Allowance Rs.4,467.89 + House
Rent Allowance Rs.1,223.60. On the said amount 30%
was added towards future prospects as the deceased was
45 years old. The Tribunal made deduction of 1/5th. It
applied the multiplier '14'. It added an amount of
Rs.10,000/- towards loss of consortium, Rs.5,000/- towards
loss of estate and Rs.5,000/- towards funeral expenses.
The Tribunal also deducted 30% of the income assessed
towards income tax. Thus, in total, it awarded
Rs.25,50,332/- with interest at 7.5% p.a. The respondents
1 to 3 were jointly and severally had liable to pay the
compensation amount.
12. Learned counsel for the appellants submitted that
even based on Ex.X1, which the Tribunal has taken into
consideration for determination of the monthly income of
the deceased, the salary comes to Rs.5,33,363/- annually.
He submitted that from the annual income only the
deduction towards income tax and the Professional Tax
were liable to be made. No other deduction was
permissible. But the Tribunal determined the income
considering only the Basic Pay, D.A. and H.R.A.
13. Learned counsel for the appellants next submitted
that once the income tax was so deducted from the income
as per Ex.X1, no further deduction towards income tax i.e.
@30% should have been made.
14. He further submitted that the deduction towards the
personal expenses of the deceased, considering the
number of dependents being '5' should have been only
1/4th and not 1/5th as deducted by the Tribunal.
15. Learned counsel for the appellants further submitted
that under the conventional heads, the amount awarded is
not as per the law in National Insurance company
limited v. Pranay Sethi, 1 . Finally, he submitted that
amount of compensation as awarded by the Tribunal is not
just and fair but inadequate and deserved to be enhanced.
Learned counsel for the appellants placed reliance in the
case of Meenakshi v. Oriental Insurance Co. Ltd2
16. Learned counsel for the 3rd respondent-insurance
company submitted that the Tribunal has rightly considered
the income aspect and there is no illegality in that regard.
He further submitted that the income of the deceased
being within the taxable range, the deduction towards
income tax @30% is justified.
(2017) 16 SCC 680
2024 SCC OnLine SC 1872
17. We have considered the aforesaid submissions and
perused the material on record.
18. The points that arise for our consideration in the light
of the submissions advanced are as follows:
A) Whether the compensation awarded by the Motor
Accidents Claims Tribunal to the claimants/
appellants is just and fair compensation or is it
inadequate and deserves enhancement?
B) To what rate of interest the appellants are
entitled?
19. Analysis:
Point (A):
We proceed to consider the points in the light of the
submissions advanced under different heads.
20. Just and Fair Compensation
It is well settled in law that the claimants are entitled for
just and reasonable compensation, which should neither be a
bonanza nor a pittance. Effort must be made to determine the
just compensation. In New India Assurance Co.Ltd vs
Yogesh Devi & Ors,3 the Hon'ble Apex Court held that the
claimants are entitled for just and reasonable compensation
in a motor vehicles accident claim. It referred to the case of
State of Haryana and another V. Jasbir Kaur and others,4
wherein it was held that "compensation must be "just", and it
cannot be a bonanza: not a source of profit; but the same
should not be a pittance."
21. The Hon'ble Supreme Court in Anjali and Others Vs
Lokendra Rathod and Others 5 while referring to Sarla
Verma (Supra) also observed that,
"10. 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., this Court
has laid down as under:
AIR 2012 SUPREME COURT 945
(2003) 7 SCC 484
2022 SCC OnLine SC 1683
"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."
22. Income of deceased:
We have perused Ex.X1. In the month of February,
2007, the total remuneration inclusive of different heads is
Rs.5,33,363.99. Under the heads of deductions, in total the
deductions shown are Rs.3,07,512.09 for the financial year
from April 2006 to March 2007. We find from Ex.X1 that
towards income tax, an amount of Rs.13,700/- + Rs.73,000/-
i.e. Rs.86,700/- was deducted and towards Profession Tax,
an amount of Rs.2,400/- was deducted. Consequently, we
are of the considered view that from the annual remuneration
of Rs.5,33,363.99 only the amount of tax of Rs.89,100/- (i.e.
income tax and profession tax) deserves to be deducted.
The amount shown under the other heads of deductions was
not to be deducted from income.
23. In Meenakshi (supra), the Hon'ble Apex Court
observed that components of house rent allowance, flexible
benefit plan and company contribution to provident fund have
to be included in the salary of the deceased while applying
the component of rise in income by future prospects to
determine the dependency factor. In Meenakshi (supra), the
Hon'ble Apex Court, held as follows in para-10:
"10. Therefore, components of house rent allowance,
flexible benefit plan and company contribution to
provident fund have to be included in the salary of the
deceased while applying the component of rise in
income by future prospects to determine the
dependency factor. The Accident Claims Tribunal was
justified in factoring these components into the salary
of the deceased, before applying 50% rise by future
prospects due to future prospects, while calculating
the total compensation payable to the appellant."
24. Therefore, we hold the annual income of the deceased
as Rs.4,44,263/- (i.e. Rs.5,33,363/- (-) 89,100/-).
25. Income Tax:
In Smt. Anjali and Others V. Lokendra Rathod and
Others 6 , the Hon'ble Apex Court while referring to its
previous judgment has observed that,
"...This Court in Malarvizhi & Ors. (Supra) has
reaffirmed that the Income Tax Return is a statutory
(2022) SCC OnLine SC 1683
document on which reliance be placed, where available,
for computation of annual income. In Malarvizhi
(Supra), this Court has laid as under:
"10. ...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..."
26. On the point of deduction of Income Tax, the Tribunal
has deducted 30% towards income tax. In the case of Vimal
Kanwar and Ors. Vs Kishore Dan and Ors.7, 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 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
(2013) 7 Supreme Court Cases 476
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 (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)."
27. In ICICI Lombard General Insurance Co. Ltd. v.
Dasari Nagalakshmi, 8 a Coordinate Bench of this Court
observed on the point of deduction of income tax as per the
slab applicable from time to time in different financial years
that certain exemptions like HRA, Transport allowance,
medical reimbursements, Home loans / study loans etc., are
provided under the Income Tax Act. In that scenario, it would
be difficult to visualize the amount of tax payable by the
deceased as a lot of it would depend on the tax planning and
exemptions claimed by the individual.
28. We are of the considered view firstly that once the
income tax is deducted from the Gross Salary, it cannot be
deducted again, and secondly that the deceased being a
salaried person and in view of Ex.X1, applying the law laid
down in Vimal Kanwar(supra), the income tax deducted shall
be presumed to have been deducted as per law. If it was the
case of the respondent that such deduction of income tax
was not as per law, the burden of proof was on the
respondent but they did not lead any evidence.
MACMA.36 of 2024, APHC,
Decided on 18.12.2023
29. Future Prospects:
In National Insurance Company Limited vs. Pranay
Sethi and others, 9 the Constitution Bench of the Hon'ble
Apex Court, has held as under in Paras 59.3 and 59.4 :-
"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.
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."
The Tribunal awarded future prospects at 30%, which is as
per law. But the said future prospects would be on the
(2017) 16 SCC 680
annual income of Rs.4,44,263/- as determined in this
judgment.
30. Deductions towards personal expenses of deceased:
The Tribunal deducted 1/5th towards personal and living
expenses of the deceased. In Sarla Verma v. Delhi
Transport Corporation 10 , the Hon'ble Apex Court held in
para-30 as under:
"30. ...Having a considered several subsequent
decisions of this Court, we are of the view that where he
deceased was married, the deduction towards personal
and living expenses of the deceased, should be one-
third (1/3rd) where the number of dependent family
members is 2 to 3, one-fourth (1/4th) where the number
of dependent family members is 4 to 6, and one-fifth
(1/5th) where the number of dependent family members
exceeds six.
31. In view of the aforesaid, the number of
dependents members being '5' i.e. in between 4 to 6, 1/4th
deduction would apply towards personal and living expenses
of the deceased and not 1/5th. We accordingly deduct 1/4th
only.
(2009) 6 SCC 121
32. Conventional heads:
On the point of the conventional heads, as per the
judgment in National Insurance Company Limited V.
Pranay Sethi and Others, 11 Magma National Insurance
Company Limited vs Nanu Ram @ Chuhru Ram and
Ors.12and Smt. Anjali and Others V. Lokendra Rathod and
Others, 13 the claimants are entitled for an amount of
Rs.48,000/- to each of the claimants, being Rs.2,40,000/- for
loss of consortium and towards funeral expenses Rs.
18,000/- 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. 14 which after considering Pranay Sethi (Supra),
observed that the aforesaid conventional heads are to be
revised every three years @ 10% i.e. as on today @20%. We
grant the same accordingly.
33. Thus, considered the appellants/claimants are entitled
for the following amount of compensation being just and fair.
(2017) 16 SCC 680
(2018) 18 SCC 130
(2022) SCC OnLine SC 1683
(2021) 11 SCC 780
S. No. Head Compensation Awarded
1. Net Annual Income Rs. 4,44,263/-
(Rs.5,33,363.99-Rs.89,100/-
income tax and professional
tax)
2. Future Prospects Rs. 1,33,278/-
(i.e., 30% of the income)
Total (i.e., 1+2) = Rs. 5,77,542/-
3. Deduction towards personal Rs. 1,44,385/-
expenditure
(i.e.1/4th)
4. Total Annual loss Rs. 4,33,156/-
5. Multiplier of 14 at the age of 14 x 4,33,156/- = Rs.
45 years i.e. 60,64,191/-
6. Conventional Heads:
i) Loss of Rs. 2,40,000/-
Consortium (Rs. 48,000/- x 5)
ii) Loss of Estate Rs. 18,000/-
iii) Funeral Rs. 18,000/-
expenses
7. Total Compensation Rs. 63,40,191/-
34. Point (B):
Interest:
The Tribunal granted interest at the rate of @ 7.5% p.a. In
Kumari Kiran vs. Sajjan Singh and others15, the Hon'ble
Apex Court set aside the judgment of the Tribunal therein
awarding interest @ 6% as also the judgment of the High
(2015) 1 SCC 539
Court awarding interest @7.5% and awarded interest @ 9%
p.a. from the date of the claim petition. In Rahul Sharma &
Another vs. National Insurance Company Limited and
Others 16 , the Hon'ble Apex Court awarded @ 9% interest
p.a. from the date of the claim petition. In Kirthi and another
vs. Oriental Insurance Company Limited 17 , and in Smt.
Anjali and Others V. Lokendra Rathod and Others 18 also
the Hon'ble Apex Court referring to Malarvizhi & Ors. Vs.
United India Insurance Co. Ltd. & Ors.19, allowed interest
@ 9% p.a. We allow interest @9% p.a.
35. In the result,
i) The Appeal is allowed in-part;
ii) The appellants/claimants are granted enhanced
compensation of Rs. 63,40,191/- as just and fair,
with interest @ 9% per annum thereon from the
date of claim petition till realization;
iii) The 3rd respondent-insurance company shall
deposit the amount as aforesaid, adjusting the
amount already deposited if any, before the
(2021) 6 SCC 188
(2021) 2 SCC 166
(2022) SCC OnLine SC 1683
(2020) 4 SCC 228
Tribunal within one month, failing which the
amount shall be recovered as per law;
iv) On such deposit being made, the claimants shall
be entitled to withdraw the same in the
proportion as per the award,
v) The costs throughout is made in favour of the
claimants to be paid by the 3rd respondent.
As a sequel thereto, miscellaneous petitions, if any
pending, shall also stand closed.
____________________
RAVI NATH TILHARI, J
____________________
NYAPATHY VIJAY, J
Date: .09.2024
Note:
L.R.copy to be marked.
B/o.
Pab
THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
AND
THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 2961/2014
Date:- .09.2024
Pab
