Shipra Dutta & Ors vs The Oriental Insurance Company ...
2023 Latest Caselaw 3478 Cal

                      IN THE HIGH COURT AT CALCUTTA
                       CIVIL APPELLATE JURISDICTION
                              APPELLATE SIDE

PRESENT:
THE HON'BLE JUSTICE BIVAS PATTANAYAK

                         FMA No.2709 of 2016
             CAN No.1 of 2019 (Old CAN No.11144 of 2019)

                          Shipra Dutta & Ors.
                               versus
            The Oriental Insurance Company Limited & Ors.


For the      appellants-        : Mr. Amit Ranjan Roy, Advocate
claimants

For the      respondent         : Mr. Rajesh Singh, Advocate

No.1-           Oriental
Insurance      Company
Limited

For the respondent              : Mrs. Sucharita Paul, Advocate
No.2-Bajaj    Allianz
General    Insurance
Company Limited

Heard on                        : 01.12.2022

Judgment on                     : 17.05.2023


Bivas Pattanayak, J. :-

1. This appeal is preferred against the judgment and award dated 28th

January, 2016 passed by learned Judge, Motor Accident Claim Tribunal, 2nd

Court, Hooghly, in M.A.C. Case No. 34 of 2012 granting compensation of

Rs.2,73,500/- in favour of the claimants under Section 166 of the Motor

Vehicles Act, 1988.

2. The brief fact of the case is that on 10th October, 2011 at about 5:30

hours while the victim was travelling by the vehicle bearing registration No.

WB-16N/3000 (scorpio) through Delhi Road from Kolkata to Bandel and

when the said vehicle reached near 100 Begha under Bhadreswar P.S. the

offending vehicle bearing registration No. WB-25D/5438 (lorry) driven in a

rash and negligent manner dashed the vehicle in which the victim was

travelling. Due to the said accident, the victim along with one other

sustained grievous injury and they were taken to Serampore Walsh Hospital

where the victim succumbed to his injuries and died. On account of sudden

demise of the victim, the claimants being the widow, son, mother and

married daughter filed application for compensation of Rs. 6,50,000/-

together with interest under Section 166 of the Motor Vehicles Act, 1988.

3. The claimants in order to establish their case, examined three witnesses

and produced documents which have been marked as Exhibit 1 to 11

respectively.

4. The respondent nos. 1 & 2-insurance companies did not adduce

evidence.

5. Owners of both the vehicles namely, respondent no. 3 and 4 did not

contest the claim application and the case was disposed of ex parte against

them. For the aforesaid reasons, by order dated 12th August, 2022, the

service of notice of appeal upon the said respondents was dispensed with.

6. Upon considering the materials on record and the evidence adduced on

behalf of the claimants, the learned Tribunal granted compensation of Rs.

2,73,500/- in favour of the claimants. Although the claim application was

allowed on contest against both the insurance companies namely, Oriental

Insurance Company Limited (respondent no. 1) and Bajaj Allianz General

Insurance Company Limited (respondent no. 2), yet the learned tribunal

directed only respondent no.1 to satisfy the award.

7. Being aggrieved by and dissatisfied with the impugned judgment and

award, the claimants have preferred the present appeal.

8. During the pendency of the instant appeal, appellant no. 3, Smt. Abha

Rani Dutta died on 19th March, 2017 and her name has been deleted from

the memorandum of appeal by order of this Court dated 12th August, 2022.

9. Mr. Amit Ranjan Roy, learned Advocate for the appellants-claimants,

submitted that learned Tribunal erred in considering the notional income of

Rs. 36,000/- per annum as income of the deceased and failed to take into

account the income tax return for the assessment year 2010-2011 filed prior

to the death of the deceased and the subsequent income tax return for the

assessment year 2011-2012 filed after the death of the deceased by the legal

heirs who are entitled to furnish the return under Section 159 of the Income

Tax Act. He further submitted that the last income tax return for the

assessment year 2011-2012 filed by the legal heirs disclosing income tax of

the deceased of Rs. 1,78,810/- less tax component of Rs. 2,089/- is the

actual income of the deceased-victim which should be taken into

consideration for computation of compensation amount. To buttress his

aforesaid contentions, he relied on the decision of the Hon'ble Supreme

Court passed in Kalpanaraj & Ors. versus Tamil Nadu State Transport

Corporation reported in (2015) 2 SCC 764 and another decision passed in

Malarvizhi & Ors. versus United India Insurance Company Limited &

Anr. reported in (2020) 4 SCC 228. He further submitted that the

claimants are also entitled to an amount equivalent to 10% of annual

income of the deceased towards future prospect and general damages of

Rs.70,000/-. In light of his aforesaid submissions, he prayed for

enhancement of compensation amount.

10. Mr. Rajesh Singh, learned Advocate appearing for the respondent no.1-

Oriental Insurance Company Limited, submitted that, as per the settled

proposition of law, the income tax disclosed in income tax return filed prior

to the death of the deceased is to be taken into account for assessment of

compensation. In support of his contention, he relied upon the following

decisions of the Hon'ble Supreme Court.

(i) V. Subbulakshmi and Ors. versus S. Lakshmi and Ors. reported in

(2008) 4 SCC 224;

(ii) Amrit Bhanu Shali and Ors. versus National Insurance Co. Ltd. and

Ors. reported in (2012) 11 SCC 738 and

(iii) Shashikala and Ors. versus Gangalakshmamma and Ors. reported

in (2015) 9 SCC 150.

He further submitted that the claimants though entitled to further prospect,

but such future prospect shall not carry interest, since future prospect is

with regard to probable income to be received in the future and thus, there

is no requirement to compensate the claimants by way of future interest for

the loss that is to occur in the future. In support of his contention, he relied

on the decision of the Hon'ble Supreme Court passed in R.D. Hattangadi

versus Pest Control (India) Pvt. Ltd. and Ors. reported in (1995) 1 SCC

551 and the decision of Gauhati High Court passed in The Oriental

Insurance Co. Ltd. versus Champabati Ray and Ors. reported in

MANU/GH/0730/2019.

11. Having heard the learned Advocates for the respective parties precisely,

following issues are raised in this appeal:

Firstly, whether the learned Tribunal erred in considering notional income of

the deceased at Rs. 36,000/- per annum;

Secondly, whether the claimants are entitled to an amount equivalent to

10% of annual income of the deceased towards future prospect, and

Lastly, whether the claimants are entitled to general damages of Rs.

70,000/-.

11.1. With regard to the first issue relating to determination of income by

the learned Tribunal, it is found that the learned Tribunal considered the

notional income of the deceased at Rs. 36,000/- per annum and did not

consider the income tax returns submitted on behalf of the claimants on the

ground that those were not supported by any document. The claimants, in

order to establish the income of the deceased, adduced the evidence of one

Prasun Halder, Inspector, Income Tax Department, Chinsurah who proved

the income tax returns for the assessment year 2010-2011 and 2011-2012

which has been marked as Exhibit 10 and 11 respectively. The question

that arises is whether such income tax returns are acceptable in the

absence of supportive documents. It will be profitable to refer to the

decisions of the Hon'ble Supreme Court passed in Kalpanaraj (supra) where

the only available documentary evidence on record of the monthly income of

the deceased was the income tax return filed by him with the Income Tax

Department and the Hon'ble Supreme Court in such circumstances held

that the High Court was correct to determine the monthly income on the

basis of the income tax return. Further the Hon'ble Supreme Court in

Malarvizhi (supra) endorsed the finding of 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. From the

aforesaid observation of the Hon'ble court, it goes without saying that the

income tax return being the statutory document should be relied upon for

determining the income of the deceased even though it is the only available

documentary evidence. Mr. Roy, learned Advocate for the appellants-

claimants, strenuously argued that the income tax return filed after the

death of the deceased in terms of Section 159 of the Income Tax Act by the

legal heirs of the deceased should be taken into account. Per contra, Mr.

Singh, relying on the decisions of the Hon'ble Supreme Court in V.

Subbulakshmi (supra), Amrit Bhanu Shali (supra) and Shashikala (supra),

refuted such contention and submitted that the income tax return filed prior

to the death should be taken into consideration for assessing the income of

the deceased. In V. Subbulakshmi (supra), the Hon'ble Supreme Court

endorsed the view of the High Court in not relying on the income tax return

filed after the accident. In Amrit Bhanu Shali (supra) the Hon'ble Supreme

Court affirmed the view taken by the tribunal in considering the income

disclosed in the income tax return filed prior to the death of the deceased.

Further in Shashikala (supra), the Hon'ble Supreme Court considered the

income disclosed in income tax return filed prior to the accident. Moreover,

in Sangita Arya versus Oriental Insurance Company Limited reported

in (2020) 5 SCC 327 the Hon'ble Supreme Court considered the income tax

return for assessment years filed prior to the death of the deceased for

determining the income of the deceased victim. Bearing in mind the

aforesaid observation the income disclosed in the income tax returns of the

deceased-victim, filed prior to his death, is to be considered for in

determining the income of the deceased. The deceased died on 10.10.2011.

The claimants have produced two income tax returns for the assessment

year 2010-2011 (Exhibit 10) filed on 31.03.2011 and 2011-2012 (Exhibit

11) filed on 29.03.2012. Therefore, the income tax return for the assessment

year 2010-2011 (Exhibit 10) filed prior to the death of the deceased should

be taken into consideration for determining the income of the deceased. As

per the income tax return for the assessment year 2010-2011, the total

gross income of the deceased is Rs. 1,55,400/- and tax paid is nil.

Therefore, actual yearly income of the deceased is determined at

Rs.1,55,400/-.

11.2. With regard to the second issue relating to future prospect, it is found

that the learned Tribunal has not considered any amount towards future

prospect. Be that as it may, at the time of accident, the deceased was self-

employed and was 54 years 10 months old. Following the proposition laid

down by the Hon'ble Supreme Court in National Insurance Company

Limited versus Pranay Sethi and Others reported in (2017) 16 SCC 680,

the claimants are entitled to an amount equivalent to 10% of the annual

income of the deceased towards future prospect.

11.3. With regard to last issue relating to general damages, it is found that

learned Tribunal has granted general damages of Rs. 9,500/- under the

conventional heads. However, following the observation of the Hon'ble

Supreme Court in Pranay Sethi (supra), the claimants are entitled to general

damages under the conventional heads of loss of estate, loss of consortium

and loss of funeral expenses of Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/-

respectively.

12. Mr. Rajesh Singh, learned Advocate for the insurance company has

raised an issue during the course of hearing of the appeal referring to the

decision in R.D. Hattangadi (supra) of Hon'ble Supreme Court and

Champabati Ray (supra) of Gauhati High Court that the claimants are not

entitled to interest on future prospect, since future prospect is with regard

to probable income to be received in the future and thus, there is no

requirement to compensate the claimants by way of future interest for the

loss that is to occur in the future.

12.1. At the very beginning, the decision of the Hon'ble Supreme Court in

R.D. Hattangadi (supra) is a proposition that the interest is to be paid over

the amount which becomes payable on the date of the award and not which

is to be paid for expenditures to be incurred in future. Thus, the said report

deals with interest on future expenditure and not on future prospect and,

therefore, is distinguishable from the case at hand. While dealing with the

issue of future prospect, the Hon'ble Supreme Court in Pranay Sethi (supra)

at paragraph 55 of the decision has made following observation:

"55. Section 168 of the Act deals with the concept of "just compensation" and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of "just compensation" has to be viewed through the prism of fairness, reasonableness and non- violation of the principle of equitability. In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance. Though the discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be guided by the expression, that is, "just compensation". The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla Verma (supra) and it has been approved in Reshma Kumari (supra). The age and income, as stated earlier, have to be established by adducing evidence. The tribunal and the Courts have to bear in mind that the basic principle lies in pragmatic computation which is in proximity to reality. It is a well accepted norm that money cannot substitute a life lost but an effort has to be made for grant of just compensation having uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. In such an

adjudication, the duty of the tribunal and the Courts is difficult and hence, an endeavour has been made by this Court for standardization which in its ambit includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency. We approve the principle of "standardization" so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age."

The Hon'ble Supreme Court in order to provide just compensation having

uniformity of approach approved for standardization which in its ambit

includes addition of future prospects on the present proven income.

Accordingly, the determination of income while computing compensation has

to include future prospects so that the method will come within the ambit

and sweep of just compensation as postulated under Section 168 of the Act.

Therefore, future prospect is not to be recorded as probable income which is

to be received in the future. The principle laid down by the Hon'ble Supreme

Court in Pranay Sethi (supra) is to asses just compensation on the

foundation of fairness, reasonableness and equitability. It is pertinent to

note that while dealing with future prospect, the Constitution Bench in the

aforesaid report never observed that such additional amount of future

prospect shall not carry interest. In Champabati Ray (supra) the Gauhati

High Court negated future interest since future prospect is with regard to

probable income which is to be received in the future, however in view of

proposition of Hon'ble Supreme Court, I most humbly differ from the

observation of Gauhati High Court in Champabati Ray (supra). For the

aforesaid reasons, the argument advanced by Mr. Singh, learned advocate

for respondent no.1-insurance company is not acceptable.

13. Other factors have not been challenged in this appeal. The

compensation is calculated as hereunder:

Calculation of Compensation

Annual income Rs. 1,55,400/-

          Add: 10% of annual income            Rs. 15,540/-
          towards future prospect

          Total income                         Rs. 1,70,940/-

          Less: 1/3rd towards personal         Rs. 56,980/-
                and living expenses

          Loss of annual dependency            Rs. 1,13,960/-

          Adopting the multiplier 11           Rs. 12,53,560/-
          (1,13,960x11)

          Add: General damages                 Rs. 70,000/-
          Loss of estate......... Rs.15,000/-
          Loss of consortium. Rs.40,000/-
          Funeral expenses... Rs. 15,000/-
          Total amount                         Rs. 13,23,560/-

14. Thus, the total compensation amount is calculated to Rs. 13,23,560/-.

The claimants have received the amount Rs. 2,73,500/- as per the order of

the learned Tribunal. It is found that no interest was awarded by the learned

Tribunal on the compensation amount. Thus, the claimants are entitled to

interest at the rate of 6% per annum on Rs. 2,73,500/- from the date of

filing of the claim application (21.02.2012) till deposit of the said amount

before the learned Tribunal. The claimants are further entitled to balance

amount of compensation of Rs. 10,50,060/- together with interest at the

rate of 6% per annum from the date of filing of the claim application

(21.02.2012) till payment.

15. The respondent no.1-insurance company is directed to deposit the

aforesaid balance amount and interest as indicated before the learned

Registrar General, High Court, Calcutta by way of a cheque within a period

of six weeks from date of this order.

16. The appellants-claimants are directed to deposit ad valorem Court fees

on the balance amount of the compensation assessed, if not already paid.

17. Upon deposit of the aforesaid amount, learned Registrar General, High

Court, Calcutta shall release the said amount in favour of the claimants

after making payment of Rs. 40,000/- in favour of the appellant no.1-widow

of the deceased towards loss of consortium, in the following proportion that

appellant no.1 shall receive ½ (half) of the balance amount and appellant

nos. 2 & 4 shall receive the rest amount in equal shares, upon satisfaction

of their identity and payment of ad valorem Court fees on the balance

amount, if not already paid.

18. With the aforesaid observation, the appeal stands disposed of. The

impugned judgment and award of the learned tribunal is modified to the

above extent.

19. All connected applications, if any, stand disposed of.

20. Interim order, if any, stands vacated.

21. Let a copy of this judgment be forwarded to the learned Tribunal along

with lower court records for information.

22. Urgent photostat certified copy of this judgment, if applied for, be given

to the parties upon compliance of necessary legal formalities.

(Bivas Pattanayak, J.)