New India Assurance Company ... vs Smt. Satnam Kaur & Ors
2012 Latest Caselaw 5240 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                   Date of decision: 3rd September, 2012
+        MAC.APP. 509/2012

         NEW INDIA ASSURANCE COMPANY LTD...... Appellant
                      Through: Mr. S.L. Gupta, Adv.

                           versus


         SMT. SATNAM KAUR & ORS.                                ..... Respondents
                      Through: Nemo.

         CORAM:
         HON'BLE MR. JUSTICE G.P.MITTAL

                                       JUDGMENT

G. P. MITTAL, J. (ORAL)

1. The Appeal is for reduction of compensation of `34,02,350/- awarded by the Motor Accident Claims Tribunal (the Claims Tribunal) in favour of Respondents No.1 to 3 for the death of Nirmal Singh who died in a motor vehicle accident which occurred on 16.07.2010.

2. The following contentions are raised on behalf of the Appellant:-

(i) As the deceased was a self employed person, the Respondents were not entitled to addition on account of future prospects.

(ii) No deduction towards payment of income tax was made while computing the loss of dependency. Reliance is placed on Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121.

(iii) It is urged that the compensation of ` 1,00,000/- awarded towards loss of love and affection and `25,000/- awarded towards funeral expenses is on the higher side.

3. During inquiry before the Claims Tribunal it was established that the deceased was an income tax assessee for about last ten years. The Income Tax Return (ITR) for the Assessment Year 2000-01 was proved on record. The deceased returned an income of `1,20,610/-, 1,79,870/- and `2,17,490/- during the AYs 2007-08, 2008-09 and 2009-10 respectively. This shows that there is a quantum jump in the deceased's income on year to year basis.

4. It cannot be said that the deceased's income was fluctuating; it would be only when the deceased's income would have fallen in some assessment year/years. There was an increase of about 15% in the income in AY- 2008-09 from the previous year. Similarly, there was an increase of over 20% in the income in AY-2009-10 from the previous year. The Claims Tribunal was, therefore, justified in making an addition of 50% towards future prospects.

5. In Sarla Verma the Supreme Court stated that in case of a self employed person usually the actual income at the time of the death should be considered to award compensation towards loss of dependency. Since, in this case the deceased's income was gradually increasing and the deceased was aged 39 years, the Claimants were entitled to an addition of 50% in the deceased's income to compute the loss of dependency.

6. As far as deduction of income tax is concerned, the law is well settled.

The judgment of the Supreme Court in Sarla Verma supports that income

tax has to be deducted from the actual income of the deceased at the time of death to compute the loss of dependency. In the Assessment Year 2010-11 there would be liability towards income tax of about `5,000/- on an income of `2,17,490/-.

7. The loss of dependency thus comes to `31,87,350/- (2,17,490/- - 5,000/-

(income tax) + 50% x 2/3 x 15).

8. The Claims Tribunal awarded a sum of `1,00,000/- towards loss of love and affection. Loss of love and affection can never be measured in terms of money. Thus, uniformity has to be adopted by the Courts while granting non-pecuniary damages. The Supreme Court in Sunil Sharma v. Bachitar Singh (2011) 11 SCC 425 and in Baby Radhika Gupta v. Oriental Insurance Company Limited (2009) 17 SCC 627 granted only ` 25,000/- (in total to all the claimants) under the head of loss of love and affection. Thus, I would reduce the compensation under this head to ` 25,000/- only.

9. The Claims Tribunal awarded a sum of `25,000/- towards funeral expenses. Funeral expenses are awarded on the basis of actual expenditure. No evidence was led with regard to the expenditure on last rites. In the absence of any evidence, Courts usually award a sum of `10,000/- towards funeral expenses. The compensation awarded towards funeral expenses is thus reduced from `25,000/- to `10,000/-.

10. The Claimants are further awarded a sum of `10,000/- each towards loss to estate and loss of consortium.

11. The overall compensation thus comes to `32,42,350/- as against `34,02,350/- awarded by the Claims Tribunal.

12. Thus there is reduction of `1,60,000/- in the compensation award.

13. The excess amount of `1,60,000/- along with proportionate interest and the interest accrued, if any, during the pendency of the Appeal shall be refunded to the Appellant Insurance Company.

14. The amount deposited shall be released in favour of the Respondents No.1 to 3 (the Claimants) in the proportion and in the manner as directed by the Claims Tribunal.

15. The statutory deposit of `25,000/- be refunded to the Appellant Insurance Company.

16. The Appeal is allowed in above terms.

17. Pending Applications also stand disposed of.

(G.P. MITTAL) JUDGE SEPTEMBER 03, 2012 vk