Delhi High Court
Oriental Insurance Company Ltd. vs Nirmal Choudhary & Ors. on 18 May, 2010
Author: Shiv Narayan Dhingra
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: 29.4.2010
Date of Order: 18th May, 2010
MAC. APPEAL No. 276/2004 & CM App. 5049/06 & 5095/06
% 18.5.2010
Oriental Insurance Company Ltd. ... Appellant
Through: Mr. Madhurendra Kumar, Advocate for
Mr. Joy Basu, Adovcate
Versus
Nirmal Choudhary & Ors. ... Respondents
Through: Mr. O.P.Mannie, Advocate for R - 1 to 4
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
By this appeal, the insurance company has assailed the award
of compensation of Rs.26,65,000/- passed by the Tribunal on the ground that
Tribunal had not taken into account the income tax payable by the deceased,
which was actually being paid by the deceased as per income tax returns and
has also wrongly deducted only 1/4th of the amount towards personal
expenses. The Tribunal had wrongly added 50% of the monthly income
towards future prospects while as per law only 30% should have been added
by the Tribunal since the age of deceased at the time of accident was 44
years. The Tribunal applied multiplier of 15 while the Tribunal should have
applied a multiplier of 14 in view of judgment of Supreme Court in Smt. Sarla
Verma & Ors. v. Delhi Transport Corporation & Anr. 2009 ACJ 1298.
2. It is not disputed that deceased in this case was a clerk in
Syndicate Bank. There is no dispute about his salary. The bank record was
produced to prove his salary as Rs.14,196.93 per month. The income tax
return for the assessment year 1999-2000 was also filed. The Tribunal did
not take into account the tax liability of the deceased as shown in the income
tax returns while calculating the income of the deceased and considered
monthly income of the deceased as Rs.14,000/-. The Tribunal considered
that the income of deceased would have increased to Rs.28,000/- in due
course of time and took the mean of the two incomes, thus it and gave 50% of
the income as future prospects. It is not disputed that the deceased was
survived by his wife one daughter and parents. There is no evidence that
parents of the deceased were dependent upon on him and were not having
any independent income.
3. It is settled law that where a person is employed and is having
salary which falls within the taxable limit then the real income of the person
has to be considered after deducting the tax payable by him. The income tax
return would show that even on gross salary of the deceased for the year
1999-2000. The tax liability of the deceased was Rs.13,144/-. In this case,
the Tribunal had taken income of the deceased as Rs.14,000/- p.m.. The
annual income of the deceased thus would be Rs.1,68,000/- as on the date of
accident. Out of this a tax liability of around Rs.15,000/- has to be deducted.
Thus, actual income of the deceased would be Rs.1,53,000/- per annum.
4. Since the deceased was having only two dependents and
parents, I consider that 1/3rd would have been the appropriate deduction in
this case towards personal expenses. Thus, the annual income has to be
taken at Rs.1,02,000/-. The Tribunal had taken multiplier of 15. The multiplier
as per the Second Schedule of Motor Vehicle Act is 15 where the age of
deceased is between 41 and 45. I, therefore consider that Tribunal rightly
took multiplier of 15. As far as future prospects are concerned, the Sarla
Verma's case had made following observations:
11. In Susamma Thomas, this Court increased the
income by nearly 100%, in Sarla Dixit, the income was
increased only by 50% and in Abati Bezbaruah the income
was increased by a mere 7%. In view of imponderables and
uncertainties, we are in favour of adopting as a rule of
thumb, an addition of 50% of actual salary to the actual
salary income of the deceased towards future prospects,
where the deceased had a permanent job and was below 40
years. [Where the annual income is in the taxable range, the
words 'actual salary' should be read as 'actual salary less
tax']. The addition should be only 30% if the age of the
deceased was 40 to 50 years. There should be no addition,
where the age of deceased is more than 50 years. Though
the evidence may indicate a different percentage of
increase, it is necessary to standardize the addition to avoid
different yardstick being applied or different methods of
calculations being adopted. Where the deceased was self-
employed or was on a fixed salary (without provision for
annual increments etc.), the Courts will usually take only the
actual income at the time of death. A departure therefrom
should be made only in rare and exceptional cases involving
special circumstances.
5. In view of law laid down by Supreme Court I consider that in this
case addition towards future should only be 30% since the age of deceased
was between 40 and 50. Thus, the just and fair compensation payable to the
deceased would be Rs.[1,02,000 + Rs.30,600 X 15 = Rs.19,89,000/-].
6. The Tribunal has awarded Rs.15,000/- towards conventional
ceremonies. I find no ground to interfere with this. I consider that the
appellant is also entitled for loss of consortium and loss of estate. In view of
Sarla Verma' case judgment a sum of Rs.10,000/- each on both counts is
awarded to the claimants. Thus, the total compensation would come to
Rs.19,89,000/- + Rs.15,000/- + Rs.20,000/- = Rs.20,24,000/-. The Tribunal
has awarded interest @ 9%. I find no reason to differ with the Tribunal on
this count.
7. The award of the Tribunal is thus modified to the above extent
and the claimants would be entitled to the above-mentioned compensation
with 9% interest. The apportionment of the compensation to different
claimants would be in the same ratio as allowed by the Tribunal. 50% of the
amount deposited was released in favour of the claimants. Remaining
compensation as per this order, along with interest thereon up to the date of
deposit be released in favour of claimants and balance amount, if any, be
returned to appellant.
May 18, 2010 SHIV NARAYAN DHINGRA, J.
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