Jasminder Kaur & Ors. vs National Insurance Company Ltd. & ...
2011 Latest Caselaw 1710 Del

                                        REPORTED
*    IN THE HIGH COURT OF DELHI AT NEW DELHI


+                    MAC. APP. 750/2010


JASMINDER KAUR & ORS.            .....Appellants
             Through: Mr. Kundan Kumar Lal, Advocate

            versus

NATIONAL INSURANCE COMPANY LTD.
& ORS.                       .....Respondents
             Through: Ms. Neerja Sachdeva, Advocate for
                      the respondent No.1


%                         Date of Decision : March 25, 2011


CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL

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?

: REVA KHETRAPAL, J.

1. By way of this appeal, the appellants seek enhancement of the

amount of compensation awarded to them by the Motor Accident

Claims Tribunal by its award dated 19.07.2010.

2. The facts relevant for the disposal of the appeal are that on

16.08.2007 at about 2.00 p.m., Shri Avtar Singh (hereinafter referred

to as "the deceased") was going on his motorcycle. When he reached

near Basant Range Colony, NH-8, Main Road, opposite APS colony,

Delhi Cantt, New Delhi, a tanker bearing No.DL-1GB-7580 hit his

motorcycle resulting in his death. The said tanker (hereinafter

referred to as "the offending vehicle") was driven by the respondent

No.3, owned by the respondent No.2 and insured with the respondent

No.1.

3. A claim petition claiming compensation in the sum of ` 40

lakhs along with interest at the rate of 12% per annum having been

filed by the widow and the children of the deceased (the appellants

No.1 to 3 herein) and the mother of the deceased (the petitioner No.4

in the claim petition, who died during the pendency of the claim

petition), the Motor Accident Claims Tribunal passed an award in the

sum of ` 17,84,040/- with interest at the rate of 7.5% per annum from

the date of the filing of the petition, i.e., 13.09.2007 till the date of

realization, and directed the respondent No.1 herein to deposit the

award amount within 30 days therefrom.

4. The sole contention of Mr. Kundan Kumar Lal, the learned

counsel for the appellants in the present appeal is that the Motor

Accident Claims Tribunal while computing the total amount of

compensation payable to the appellants grossly erred in not

considering the future prospects of increase in the income of the

deceased. The learned counsel contended that the deceased was a

person of great potential with exceptional marketing skills, and as

such, with the passage of time the income of the deceased would have

definitely increased. The past increase in the income of the deceased,

the counsel contended, was apparent from his income-tax returns for

the assessment years 2003-04 (Ex. PW-1/6), 2004-05 (Ex. PW-1/5),

2005-06 (Ex. PW-1/4) and 2006-07 (Ex. PW-1/3), which had been

placed on record.

5. The learned counsel for the appellants, in particular, impugned

paragraph 16 of the award, which reads as under:

"16. So far as the income of the deceased is concerned, the income tax returns for the

period 2002-2003 (Ex. PW1/6), 2003-2004 (Ex. PW1/5), 2004-2005 (Ex. PW1/4) and 2005- 2006 (Ex. PW1/3), show that he was having income from salary as well as from business. He used to pay the income tax. As per Ex. PW1/3 the total income of the deceased from all sources was ` 1,78,366/-. He had paid ` 8,208/- as income tax. Therefore, in view of Sarla Verma's case (supra) the annual income of the deceased can be taken as ` 1,70,158 /-. The monthly income of the deceased thus comes to ` 14,179.83/-. There were four dependents. Therefore, in view of Sarla Verma's case (supra) ¼ of the monthly income shall have to be deducted towards the personal and living expenses of the deceased. The monthly loss of dependency thus comes to ` 10,634.87/-."

6. Reference was made by the learned counsel on behalf of the

appellants to the testimony of PW-1 Jasminder Kaur, the wife of the

deceased, who, in her affidavit by way of evidence, stated that at the

time of the accident, i.e., on 16.08.2007, her deceased husband was

working in M/s. Amarjyoti (India) Pvt. Ltd. at B-29, Som Dutt

Chambers-II, Bika Ji Cama Place, New Delhi as Cargo Assistant. He

was also doing the business of life insurance agent for LIC of India

and HDFC Insurance Company Limited from his residential address

and was earning ` 1,78,366/- per annum from both the aforesaid

sources, i.e., ` 93,600/- per annum as salary from the Private Limited

Company in which he was working and ` 84,286/- per annum from

his work as LIC agent. The salary certificates of the deceased were

Ex. PW-1/1 and Ex. PW-1/2, while the attested copies of the income-

tax returns were Ex. PW-1/3 to Ex. PW-1/6. She further stated that

the deceased was getting annual increments and that after his death

they had no other source of income from any means and resultantly

the future and education of her sons was jeopardized. Though this

witness was cross-examined by the counsel for the Insurance

Company, in her cross-examination her testimony remained

unshaken. She stated that her husband was in the employment of

M/s. Amarjyoti (India) Pvt. Ltd. as Cargo Assistant since 1990 even

prior to her marriage and that he had been working as an agent for

LIC and HDFC Life Insurance since 2001-02, from where the nature

of his income was on commission basis.

7. My attention was next invited by the learned counsel for the

appellants to the income-tax returns of the deceased (Ex. PW-1/3 to

Ex. PW-1/6) to show that there was a consistent increase in the

income of the deceased from the year 2002 till the deceased died in

the year 2007.

"The earning from salary was ` 4988.33 / month as reflected from the income tax return of the assessment year 2003-04 for earnings in period 01.04.2002 to 31.03.2003.

The earning from salary was ` 5300 / month as reflected from the income tax return of the assessment year 2004-05 for earnings in period 01.04.2003 to 31.03.2004.

The earning from salary was ` 5300 / month as reflected from the income tax return of the assessment year 2005-06 for earnings in period 01.04.2004 to 31.03.2005.

The earning from salary at the time of death i.e. in 2007 was ` 7800 / month as reflected from the income tax return of the assessment year 2006-07 for earnings in period 01.04.2005 to 31.03.2006."

8. The aforesaid facts could not be rebutted by Ms. Neerja

Sachdeva, the learned counsel for the Insurance Company. The sole

submission of Ms. Sachdeva was that the income of the deceased

derived from the LIC and HDFC Life Insurance by way of

commission must be deducted from the returned income of the

deceased and ought not to be taken into account for the purpose of

ascertaining the future income of the deceased.

9. I am unable to agree with the aforesaid contention and in this

regard I draw support from the judgment of the Supreme Court

rendered in Sarla Verma and Ors. vs. Delhi Transport Corporation

and Anr., (2009) 6 SCC 121, wherein, in paragraph 24 of the

judgment, the following apposite dicta was laid down by the Hon'ble

Supreme Court:

"24. 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 yardsticks 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."

10. In the instant case, it is not in dispute that the deceased had a

permanent job from the year 1990 till the date of his death on

16.08.2007 in a Private Limited Company, viz., M/s. Amarjyoti

(India) Pvt. Ltd. with a provision for annual increments and was also

earning commission as an agent of the LIC and HDFC Life Insurance.

The income-tax returns of the deceased clearly depict the increase in

the income of the deceased over the years. There is no dispute as to

the fact that the deceased falls in the age group of persons between 40

to 50 years of age. The addition prescribed by the Supreme Court

towards future prospects for this age group is 30% increase "as a rule

of thumb". No plausible reason has been given by the counsel for the

respondent No.1 as to why a departure should be made in the instant

case from the dicta laid down by the Hon'ble Supreme Court.

Accordingly, I proceed to compute the income of the deceased in

consonance therewith as under.

11. As per Ex. PW-1/3, which is the income-tax return for the

assessment year 2006-07 filed by the deceased himself on

28.03.2007, the total income of the deceased from all sources was

` 1,78,366/- per annum and he had paid ` 8,373/- as income-tax.

Thus, the annual income of the deceased after deduction of tax was

` 1,69,993/-, which may be rounded off to ` 1,70,000/-, and his

monthly income thus comes to ` 14,166.66, which may be rounded

off to ` 14,167/-. Adding 30% to the said income towards the future

prospects of the deceased, the monthly income of the deceased works

out to ` 14,167/- + ` 4,250/- = ` 18,417/-. The deceased had four

dependents, and, therefore, 1/4th of the monthly income of the

deceased is to be deducted towards his personal and living expenses.

Thus calculated, the monthly loss of dependency of the appellants

works out to ` 13,813/- per month, i.e., ` 1,65,756/- per annum. In

consonance with the judgment rendered in Sarla Verma's case

(supra), this multiplicand is to be augmented by adopting the

multiplier of 13 for arriving at the total loss of dependency. Thus

calculated, the total loss of dependency of the appellants works out to

` 21,54,828/-.

12. After adding the non-pecuniary compensation awarded by the

learned Tribunal to the aforesaid pecuniary damages, the appellants

are thus entitled to an enhanced amount of compensation of

` 22,79,828/-, inclusive of the amount of the interim award, with

interest at the rate of 7.5% per annum from the date of the filing of

the petition, i.e., 13.09.2007 till the date of realization.

The appeal is allowed in the aforesaid terms.

REVA KHETRAPAL (JUDGE) March 25, 2011 km