Smt. Avantika Aggarwal And Ors. vs Sh. Vinod Kumar Yadav
2008 Latest Caselaw 342 Del

JUDGMENT

Kailash Gambhir, J.

1. By way of this appeal, the appellants seek enhancement in the compensation. The Motor Accident Claims Tribunal has awarded a sum of Rs. 77,18,000/- in favor of the appellants and against the respondent along with interest @7.5% per annum on the award amount from the date of institution of the petition till the date of realisation. Feeling not satisfied with the amount of compensation, the appellants have preferred the present appeal and sought enhancement in the said compensation to the extent of Rs. 3,67,20,000/- as claimed by them in their petition moved under Section 166 read with Section 140 of the Motor Vehicles Act. The appellants are also aggrieved with the interest rate and have claimed interest @9% per annum in place of 7.5% per annum as awarded by the Tribunal.

2. The conspectus of facts relevant for deciding the present appeal in brief are that on 30th August at about 8.00 a.m., the deceased Shri Alok Aggarwal along with his wife and son, appellant Nos.1 and 2 started for Jaipur from their residence. Deceased Shri Alok Aggarwal was driving Santro Car bearing registration No. DL 3C S 4971, owner of which was his employer, M/s. Modi Revlon. On Delhi-Jaipur Highway on reaching Dharuheara, a Tata Sumo bearing registration No. HR 34A 9920 being driven in a very rash and negligent manner by driver Shri Vinod Kumar Yadav, respondent No. 1 herein, collided head on with the Santro Car driven by the deceased. The deceased was taken to the hospital. Pursuant to this, the appellants filed a claim petition on 8.2.2002, which led to the passing of award on 1.3.2005 and being aggrieved with the said award, present appeal has been preferred by the appellants. I have heard learned Counsel for the parties at a considerable length and have perused the record.

3. The principal contention raised by the counsel for the appellants is that the Tribunal has not correctly applied the legal principles as settled by this Court in the case of Mamta Mohindra and Ors. v. Deputy Commissioner of Police and Anr. . The contention of the counsel for the appellants is that although while deciding the quantum of compensation, the Tribunal has relied upon the said judgment of Mamta Mohindra (Supra) but yet missed its sight and glossed over the amount of compensation allowed by this Court towards various allowances by holding that other allowances mentioned in the exhibit PW-1/R-6(salary slip) shall not be considered. The Tribunal, thus, completely ignored the medical expenses, provident fund, leave travel allowance and bonus amount while taking into consideration the salary slip duly exhibited as Ex.PW-1/R-6 and returned the wrong finding by denying the said legally permissible allowances. The counsel for the appellants thus confined his argument for the enhancement of the compensation limited to the extent as has been allowed by this Court in the aforesaid judgment giving benefit of grant of aforesaid allowances to which the deceased would have been entitled as would be evident from the salary slip duly exhibited by the appellants as Ex. PW-1/R-6. Counsel for the appellants contended that deriving strength from the judgment of this Court, the Tribunal has taken into consideration the basic salary and house rent allowance while calculating the loss of dependency but has wrongly ignored other allowances as were being reimbursed to the deceased to which the dependents become legally entitled after the death of Sh. Alok Aggarwal.

4. The counsel for the appellants has invited my attention to paras 13 and 14 of the said judgment in which this Court has considered the said allowances for granting compensation to the dependent members and on the same analogy, counsel contends that the appellants being dependent on the deceased are entitled for the grant of compensation under the Act. It would be appropriate to refer to the said paras of the judgment as under:

13. As regards the plea regarding enhancement of compensation, the deceased Sh. Sunil Mohindra had left behind Smt. Mamta his widow, Mst. Sahil, Miss Shalvi his two minor children and Smt. Kanta Mohindra, mother of the deceased. Smt. Mamta stated that all of them were absolutely dependent on the deceased. Her father- in-law had already died much before the death of the deceased. She had also deposed that her husband was working with Uniplas India Limited as Area Manager and his basic pay was Rs. 4,400/-. However, he was drawing salary of Rs. 7,000/- inclusive of perks and other allowances. He had bright chances of promotion. She also proved service records vide Ex. P. W.5/1 to Ex. P.W. 5/10. She claimed that the deceased used to give her the entire salary for the household purposes and he used to spend money on himself out of perks, and as and when he needed money he used to take it from her and used to only spend Rs. 500/- on himself. From his salary slips it is established that he was getting a basic salary of Rs. 4,000/- per month i.e. Rs. 48,000/- per annum. In addition to his basic salary he was getting house rent allowance of Rs. 9,600/- per annum. He was also getting conveyance reimbursement amounting to Rs. 9,000/- per annum, medical reimbursement amount to Rs. 4,000/- per annum, L.T. A. reimbursement amounting to Rs. 4,000/- per annum, Bonus/Ex Gra. amounting to Rs. 3,840/- per annum, P.F. /E.P.F. Contribution amounting to Rs. 4,800/- per annum. In so far as his basic salary of Rs. 48,000/- is concerned, there could not be any dispute. Similarly, the house rent allowance of Rs. 9,600/- has to be considered by the Court and it is not such an allowance which should be reduced by any stretch of imagination, for the claimants/appellants are liable to the pay the rent. However, conveyance reimbursement is exclusively personal to his professional expenditure and it has to be ignored.

14. As regards, the medical reimbursement and L.T.A. reimbursement amounting to Rs. 8,000/- this has to be proportionately reduced, but it has to be included in the income to the extent of Rs. 6,000/- per annum. As regards bonus, bonus is being usually given at least @ 8.88%. Therefore, it could not be ignored and the same is true about the P.F. contributions and the E.P. F. contributions. Thus, out of total gross income of Rs. 83,240/- per annum, Rs. 9,000/- towards conveyance and Rs. 2,000/- towards medical and L.T.A. reimbursement are required to be deducted. This leaves a balance of Rs. 72,240/- per annum. Thus, a sum of Rs. 72,240/- should be taken to be the effective gross income of the deceased. In terms of the judgments of the Supreme Court in the case of General Manager, Kerala State Road Transport Corporation v. Susamma Thomas and Sarla Dixit and Anr. v. Balwant Yadav and Ors. , this amount has to be doubled. After doubling this amount, the amount comes to Rs. 1,44,480/-. Since the conveyance expenditure of Rs. 9,000/- per annum has already been deducted, one-third cannot be deducted towards the personal expenditure of the deceased on himself and in such circumstances, this deduction has to be confined to 1/4th. After making 1/4th deduction, the average dependency of the claimants comes to Rs. 1,08,360/-.

5. Per contra counsel for the respondent/Insurance Company has contended that the compensation amount as awarded in favor of the appellants is already excessive. The contention of the counsel for the respondent is that the Tribunal has wrongly taken the income of the deceased as Rs. 25,000/- per month without taking into account the standard deductions towards income tax and TDS etc. The counsel for the respondent contends that the Tribunal fell in grave error by taking into account the entire house rent allowance of Rs. 1890/- per month which in no circumstance could form part of the income of the deceased. The counsel also contends that the Tribunal has wrongly applied the multiplier of 17 which as per his argument is quite on the higher side. As regards these contentions of the counsel for the respondent are concerned, the respondent had preferred a separate appeal challenging the said award and by way of separate order dated 4th October 2007 in MAC Appeal No. 446/2006 the same has been dismissed. This Court did not find any force in the contentions raised by the respondent, more particularly when the respondent had not taken over the defense of the owner and the driver as envisaged under Section 170 of the Motor Vehicles Act. Once the said contentions raised by the counsel for the respondent already stands repelled by this Court in the said order dated 4th October 2007, therefore, it would be suffice to mention that the arguments raised by the respondent are legally impermissible and wholly devoid of any merit.

6. Reverting back to the contentions raised by the counsel for the appellant claiming inclusion of medical expenses, provident fund, leave travel allowance and bonus amounts while considering the net income of the deceased, the recent decision of the Apex Court reported in National Insurance Co. Ltd. v. Indira Srivastava and Ors. 2007 (14) Scale 461, will clinch the entire controversy involved in the present appeal. In the said judgment, the Hon'ble Apex Court observed that the term 'income' having regard to the societal conditions should mean the pay packet which the employee carries home at the end of a month including the perks which are beneficial to the members of the entire family. In this regard, the relevant paras of the said judgment are reproduced below:

8. The term 'income' has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on monitory terms.

9. Section 168 of the Act uses the word 'just compensation' which, in our opinion, should be assigned a broad meaning. We cannot, in determining the issue involved in the matter, lose sight of the fact that the private sector companies in place of introducing a pension scheme takes recourse to payment of contributory Provident Fund, Gratuity and other perks to attract the people who are efficient and hard working. Different offers made to an officer by the employer, same may be either for the benefit of the entire family. If some facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicants is required to be determined. For the aforementioned purpose, we may notice the elements of pay, paid to the deceased:

   Basic                :   63,400.00
   CONVEYANCE ALLOWANCE :   12,000.00
   RENT CO LEASE        :   49,200.00
   BONUS (35% OF BASIC) :   21,840.00
                          _____________    
                  TOTAL : 1,45,440.00
 

7. In addition to above, his other entitlements were:
  Con. To PF 10% Basic              Rs. 6,240/- (p.a.)
LTA reimbursement                 Rs. 7,000/-( p.a.)
Medical reimbursement             Rs. 6,000/- (p.a.)
Superannuation 15% of Basic       Rs. 9,360/- (p.a.)
Gratuity Cont.5.34% of Basic      Rs. 3,3332/- (p.a.)
Medical Policy-self and Family @  Rs. 55000/- (p.a.)
Education Scholarship @ Rs. 500   Rs. 12,000/- (p.a.)
 

8. Payable to is two children Directly?
 

9. As regards the medical reimbursement, according to the judgment in Indira Srivastava's Case (Supra), the Hon'ble Apex Court has observed as follows:
 12. We have, however, no doubt in mind that medical reimbursement which provides for a slab ad which keeping in view the terminology used, would mean reimbursement for medical expenses on production of medical bills and, thus, the same would not come within the purview of the aforementioned category.
 

10. In view of the above discussion, the contention of the counsel for the appellants that the benefit of medical reimbursement should be included in the income of the deceased has no merits and the same cannot be included in the income of the deceased. The judgment of this Court in Mamta Mohindra (Supra) may not be of much help to the appellant in view of the said Apex Court decision.
 

11. As regards, the leave travel allowances also the Hon'ble Apex Court has held in Indira Srivastava's Case (Supra) that the same is enjoyed by virtue of the vocation in which the deceased was prior to his death and the same need not be included in the salary while computing the net earnings of the deceased. Therefore, in the instant case, the leave travel allowances also cannot be included in the income of the deceased. As regards, bonus and provident fund is concerned, same shall be allowed to be included in the income of the deceased as bonus is payable as a part of the salary and contribution towards provident fund is in the form of deferred payments and are in the form of savings. Applying the principles laid down in the said judgment, the appellants will be entitled to the provident fund contribution @ 3024 per month and the bonus amount of Rs. 2099/-. The total gross salary of the deceased would come to Rs. 49,223/- per month. While calculating this amount the gross salary per annum of the deceased would come to Rs. 5,90,676/- and net income of the deceased would come to Rs. 4,90,676/- after deducting a sum of Rs. 1 lac towards income tax which deduction has already been taken into consideration by the Tribunal. The Tribunal has also applied the criteria for calculating the compensation amount as laid down in Sarla Dixit's case. In applying the said criteria, which also takes into consideration the future prospects, the total anticipated income of the deceased would come to Rs. 7,36,014/- p.a. The Tribunal has already deducted 1/3rd of the annual earnings towards personal expenses and maintenance of the deceased and if the same is deducted from the aforesaid anticipated income the average annual loss of dependency of the appellants would come to Rs. 4,90,676/-. Capitalising the said income of the deceased with the multiplier of 17, the gross income of the deceased would come to Rs. 83,41,492/-. With this calculation of the amount the appellants shall now be entitled to a sum of Rs. 83,81,492/- after adding a sum of Rs. 20,000/- for loss of consortium, 15,000/- towards loss of love and affection besides a sum of Rs. 5,000/- towards funeral expenses etc. As regards the award of interest @7.5 % per annum by the Tribunal, I do not find any justification for increasing the same to 9% per annum as there has been variation in the rate of interest in various decisions given by the Supreme Court. In any case, the award of interest @7.5% cannot be considered to be on the lower side if not on higher side. Even otherwise counsel for the appellants has not given any justification for the award of higher rate of interest except placing reliance on one of the judgments of, the Supreme Court Kaushnuma Begum v. New India Assurance Col. Ltd. There cannot be any dispute that in many other judgments of the Supreme Court it has granted lower rate of interest also at 6.5% and in some cases it has been 7.5% and in some other matters it is 9% as well. I, therefore, do not feel inclined to interfere in the discretion exercised by the Tribunal awarding 7.5% interest on the award amount. As a result of the aforesaid discussion, the impugned award is modified and enhanced from Rs. 77,18,000/- to Rs. 83,81,492/-. The differential amount as enhanced by this Court shall be paid by the respondent No. 2 insurance company along with the up to date interest @ 7.5% per annum from the date of filing of the petition till its realization. With these directions, the matter is remanded back to the Tribunal for necessary calculation and apportionment of the award amount in favor of the appellants after giving due adjustment of the amount if any already paid by the respondent to the appellants.

12. The present appeal is accordingly allowed in part.