Harpreet Kaur & Ors. vs Dharam Pal Singh & Ors.
2011 Latest Caselaw 4455 Del

                                        REPORTED
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 FAO 616/2001


HARPREET KAUR & ORS.                             ..... Appellants
                 Through:            Mr. J.S.Garkal, Advocate.


                  Versus


DHARAM PAL SINGH & ORS.                         ..... Respondents
                 Through:            Mr. D.K.Sharma, Advocate.


%                        Date of Decision : September 13, 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?


                         JUDGMENT

: REVA KHETRAPAL, J.

1. By way of this appeal, the appellants, who are the legal

representatives of the deceased Surender Pal Singh, who died in a

road accident on 28.08.1992, seek enhancement of the amount of

compensation awarded to them by the learned Motor Accident Claims

Tribunal, Delhi by its judgment and award dated 25.07.2001.

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

petition bearing Suit No. 899/1992 was filed by the appellants under

Sections 166 and 140 of the Motor Vehicles Act, 1988, claiming

compensation in the sum of ` 80 lacs against the driver, the owner

and the insurer of the offending tanker, which had crushed the TSR in

which the deceased was travelling as a passenger. In the written

statement filed by him, the respondent No.1 denied that he was

driving the offending tanker at the time of the accident, but the

insurance of the said vehicle in the name of the respondent No.2-

owner was admitted by the Insurance Company, arrayed as the

respondent No.3 in the claim petition. The learned Claims Tribunal

having come to the conclusion that the deceased Surender Pal Singh

as well as the driver of the TSR had suffered fatal injuries in the

accident due to the rash and negligent driving of the respondent No.1,

proceeded to assess the monthly income of the deceased on the basis

of the documentary evidence on record.

3. The Tribunal took into account the testimony of PW4 - Smt.

Harpreet Kaur (the appellant No.1), who testified that her husband,

whose date of birth was 25.11.1955, was an Engineer by profession

earning a sum of ` 40,000/- per month and was an income-tax

payee. She also stated that he was the proprietor of M/s.

Hydrolog Engineers which was dealing in water treatment plants and

a Director in M/s. Moon Drop Chemineers Private Limited and M/s.

I.E.I. Engineering Services Limited. He was also the proprietor of

M/s. K.S.Chugh and Associates, Ludhiana dealing in the manufacture

of auto parts and machine products and had taken over the factory just

before his death. She proved on record the Income-tax Returns for

the Assessment Years 1992-93 and 1993-94 as well as the

Assessment Order under Section 143(3) of the Income Tax Act for

the Assessment Year 1992-93 (Exhibit PW4/2 to Exhibit PW4/4). In

the course of her examination, she stated that M/s. Hydrolog

Engineers is now a partnership firm and she is one of the partners.

She further stated that the present income from the said business was

` 2,00,000/, which was her share and the firm was still paying

income-tax. In answer to a query put to her, she admitted that the

Income-tax Returns were filed after the death of her husband, though

she categorically denied the suggestion that her husband was not

earning ` 40,000/- per month.

3. On the basis of aforesaid evidence on record, the learned

Tribunal awarded a sum of ` 4,78,000/- to the appellants with interest

at the rate of 9% per annum from the date of the filing of the petition

till the date of the realisation of the award amount, including the

amount of the interim award dated 24.01.1995. Aggrieved therefrom,

the present appeal has been preferred by the appellants claiming that a

niggardly amount of compensation has been award to them.

4. The contention of Mr. J.S.Garkal, the learned counsel for the

appellants, is that the learned Tribunal grossly erred in the assessment

of the income of the deceased for the following reasons:

(i) The deceased was holding a Permanent Income Tax

Number as PAN/GIR NO. 60-S, CIR No. 20 (1), New Delhi

and was being assessed in his individual capacity. He had an

income of ` 4,64,588/- which was taxable for the Assessment

Year 1991-92.

(ii) The learned Tribunal failed to consider that the deceased

during his lifetime, had paid advance tax to the tune of `

1,70,000/- and TDS in the sum of ` 25,199/- for the

Assessment Year 1992-93, that is, the financial year 1991-92.

(iii) The learned Tribunal failed to consider the fact that in

the Assessment Order under Section 143(3) of the Income Tax

Act for the Assessment Year 1992-93 (Exhibit PW4/3) it had

been clearly mentioned that the total turnover from the business

of M/s. Hydrolog Engineers was ` 1,10,95,856/- and a gross

profit of ` 16,75,051/- had been declared, giving a Gross Profit

Rate of 15.09% as against the Gross Profit Rate of 15.08% as

in the immediately preceding Assessment Year, on a total

turnover of ` 93.09 lacs, leaving aside the other income of the

deceased.

(iv) The learned Tribunal also failed to consider the fact that

the Assessment Order for the Assessment Year 1992-93

clearly shows that the net taxable income of the deceased was

` 4,06,320/- while the earnings of the deceased for the

Assessment Year 1993-94 up to the demise of the deceased

were ` 1,68,130/- on which an advance tax of ` 69,000/- was

paid, as per the Income-tax Return filed for the aforesaid

Assessment Year.

5. Mr. Garkal, the learned counsel for the appellants vehemently

contended that there was no reason for the learned Tribunal to have

disbelieved the testimony of PW4 - Smt. Harpreet Kaur with regard

to the income of the deceased, more so, in view of the fact that the

said testimony remained unshaken after cross-examination of the said

witness and was supported by documentary evidence (Exhibit PW4/2

to Exhibit 4/4).

6. After scrutinizing the oral and documentary evidence on

record, I am inclined to agree with the contention of the learned

counsel for the appellants that the income of the deceased has not

been properly assessed by the learned Tribunal. There is no manner

of doubt that in the financial year 1991-92 the deceased himself had

deposited advance tax of ` 1,70,000/-and tax at source to the extent of

` 25,199/- had been deducted from the income of the deceased, that

is, in all ` 1,95,199/- had been paid as tax by the deceased prior to his

death. In such circumstances, to my mind, the learned Tribunal ought

not to have assessed the income of the deceased to be in the sum of

` 5,000/- per month only. The deceased was a qualified Engineer and

this fact is borne out from the passport of the deceased, Exhibit

PW4/1. He was a Director in one private company and one public

limited company and also a proprietor of M/s. Hydrolog Engineers as

well as the proprietor of M/s. K.S. Chugh Associates at Ludhiana. He

could not possibly have paid the advance tax to the tune of `

2,00,000/- if his total earnings were ` 60,000/- per annum as assessed

by the learned Tribunal.

7. While this Court is conscious of the fact that the Income-tax

Returns filed after the death of a person cannot be taken into

consideration for computing his income for the purpose of awarding

compensation to his legal representatives, (See V.Subbulakshmi and

Others versus S.Lakshmi and Anothers 2008 ACJ 936), it cannot be

said that this is not an inflexible or rigid rule of thumb. In a case,

such as the present one where an advance tax of almost two lacs had

been paid by the deceased during his lifetime, it would be absurd to

believe that he would have paid the tax in anticipation of his own

accidental death. Thus, I see no reason to disbelieve the income of

the deceased as declared by him in the Assessment Year 1992-93. I

am fortified in coming to the aforesaid conclusion from the

Assessment Order of the Income Tax Authority, which shows that as

per the return of the income filed by the deceased on 31.12.1991, the

income of the deceased for the Assessment Year 1991-92 as declared

by him was ` 4,43,390/-. This declaration was, however, not

accepted by the Income-tax Department, which assessed the taxable

income of the deceased assessee to be ` 4,64,588/- under Section 143

(3) of the Income-tax Act, 1961.

7. In view of the aforesaid, in my view, the income of the

deceased on the date of his demise was not less than ` 3,77,610/- as

declared by him for the Assessment Year 1992-93 (Exhibit PW4/2).

After deduction of tax payable by him on the said income to the tune

of ` 182,774/-, the income of the deceased thus works out to

` 1,94,836/-, which may be rounded off to ` 1,95,000/- for the sake of

convenience. Deducting threfrom one-fourth of the income of the

deceased towards his personal expenses in view of the fact that he had

four dependant family members, the average annual loss of

dependency of the appellants comes to ` 1,46,250/-. The deceased

was nearly 37 years of age on the date of the accident, and thus, the

appropriate multiplier for augmenting the income of the deceased

would be the multiplier of 15, which is also sought to be pressed into

service by the learned counsel for the appellants for the reason that

the multiplier of 15 is the multiplier approved of by the Hon'ble

Supreme Court in the case of Smt. Sarla Verma and Ors. vs. Delhi

Transport Corporation and Anr. (2009) 6 SCC 121. Thus

calculated, the total loss of dependency of the appellants comes to

` 21,93,750/- (that is ` 1,46,250/- x 15).

8. The learned counsel for the appellants has prayed for grant of

funeral expenses and non-pecuniary damages in addition to the

pecuniary damages to which the appellants are held entitled.

Accordingly, it is deemed expedient to award a sum of ` 7,000/-

towards funeral expenses and last rites of the deceased and a further

sum of ` 10,000/- each under the heads of loss of consortium, loss of

love and affection and loss of estate of the deceased, that is, in all a

sum of ` 22,30,750/- (Rupees twenty two lacs thirty thousand seven

hundred and fifty only) is awarded to the appellants.

9. In view of the aforesaid, the award amount is enhanced by a

sum of ` 17,52,750/-. Interest at the rate of 7.5% per annum shall be

payable on the enhanced amount from the date of the filing of the

petition till the date of realization. Forty percent of the enhanced

amount shall enure to the benefit of the widow and the remaining

amount shall enure to the benefit of two children and the mother of

the deceased in the proportion of twenty percent each. The

respondent No.3 is directed to satisfy the award as modified

hereinabove within one month of the passing of this order.

10. The appeal is allowed in the aforesaid terms. There shall be no

order as to costs.

11. The records of the Claims Tribunal be sent back forthwith.

REVA KHETRAPAL (JUDGE) September 13, 2011 ak