Delhi High Court
Iffco Tokio General Insurance Co ... vs Rekha & Ors on 3 August, 2018
$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 03rd August, 2018
+ MAC.APP. 330/2017 & CM APPLs. 12622/2017, 12624/2017
IFFCO TOKIO GENERAL INSURANCE CO LTD ..... Appellant
Through: Mr.Brijesh Bagga, Advocate
versus
REKHA & ORS ..... Respondents
Through: Mr.Jatinder Kamra, Advocate
CORAM:
HON'BLE MR. JUSTICE J.R. MIDHA
JUDGMENT (ORAL)
1. The appellant has challenged the award of Claims Tribunal whereby
compensation of Rs.61,14,000/- has been awarded to respondent No.1 to 5.
The appellant is seeking reduction of the award amount.
2. The accident dated 16th February, 2016 resulted in the death of Shish
Pal Singh. The deceased was working as Constable with Delhi Police
earning Rs.35,890/- per month at the time of the accident. The deceased was
aged 44 years at the time of accident and was survived by his widow, two
sons and two daughters out of which one son and one daughter were
married.
3. The Claims Tribunal took the income of the deceased as Rs.35,890/-
per month, added 30% towards future prospects, deducted 1/4th towards
personal expenses and applied the multiplier of 14 to compute the loss of
dependency as Rs.58,78,782/-. The Claims Tribunal has awarded
Rs.1,00,000/- towards loss of love and affection, Rs.1,00,000/- towards loss
of consortium, Rs.10,000/- towards loss of estate and Rs.25,000/- towards
funeral expenses. Total compensation awarded is Rs.61,14,000/-.
4. Learned counsel for the appellant urged following submission at the
time of hearing:
i. The claimants received ex-gratia amount of Rs.5,00,000/- from Delhi
Police Welfare Society which should be deducted from the
compensation amount.
ii. Income tax should be deducted from the income of the deceased.
iii. The personal expenses of the deceased be increased from 1/4th to 1/3rd
as the deceased left behind three dependents.
iv. The non-pecuniary compensation be reduced to Rs.70,000/- in terms of
principles laid down in National Insurance Co. Limited vs. Pranay
Sethi and Ors. 2017 SCC Online SC 1270.
5. Learned counsel for the claimants urged following submissions at the
time of the hearing:
i. The ex-gratia amount of Rs.5,00,000/- was paid by Delhi Police
Welfare Society and was not linked to the accidental death and therefore, not
deductable.
ii. The personal expenses of the deceased have been rightly taken as 1/4th
considering that one daughter of the deceased is handicapped.
iii. Learned counsel has no objection to deduction of Income Tax from
the income of the deceased and the reduction of the non-pecuniary
compensation amount in terms of Pranay Sethi (supra).
6. Vide order dated 31st January, 2018, Delhi Police was directed to
produce the service record of the deceased and confirm the Income Tax
deducted from his salary as well as the record related to the ex-gratia amount
paid to the family of the deceased.
7. On 25th April, 2018, the officer from Delhi Police produced the
Certificate under Section 203 of the Income Tax Act, according to which the
annual income of the deceased at the time of the accident was Rs.3,50,410/-
out of which Rs.8,282/- was deducted towards Income Tax for the
assessment year 2016-17. Income Tax of the deceased for computation of
the income is taken as Rs.3,50,410/- and Rs.8,282/- has to be deducted as
Income Tax. The net income of the deceased, after deducting Income Tax,
is computed as Rs.3,42,128/- (Rs.3,50,410/- minus Rs.8,282/-).
8. The ex-gratia amount of Rs.5,00,000/- received by the claimants from
Delhi Police Welfare Society is not linked to the accidental death as the
Delhi Police Welfare Society is a Society based on contribution by the
employees for the welfare of the family of the deceased employees who die
on duty and is, therefore, not deductable from the compensation amount.
Reference be made to the judgment of the Supreme Court in Reliance
General Insurance Co. Ltd. V. Shashi Sharma and ors., (2016) 9 SCC 627
in which the Supreme Court held that only pecuniary advantage received on
account of the death or injury in a motor accident, is deductible from the
compensation amount. However, if the amount would be due to the
dependents of the deceased even otherwise, the same shall not be deductible
from the compensation amount. The Supreme Court further held that the
benefits extended to the dependants of the deceased government employee
including family pension, Life Insurance, Provident Fund etc., cannot be
allowed to be deducted. The relevant portion of Reliance General
Insurance Co. Ltd. V. Shashi Sharma and ors (Supra) is reproduced
hereunder:
"12. ........the "pecuniary advantage" from whatever source must
correlate to the injury or death caused on account of motor
accident.....
xxx xxx xxx
16. The principle discernable from the exposition in Helen
C.Rebello's case (supra) is that if the amount "would be due to the
dependants of the deceased even otherwise", the same shall not be
deductible from the compensation amount payable under the Act of
1988. At the same time, it must be borne in mind that loss of income
is a significant head under which compensation is claimed in terms
of the Act of 1988............
xxx xxx xxx
22. .....other benefits extended to the dependents of the deceased
Government employee in terms of sub-rule (2) to sub-rule (5) of
Rule 5 including family pension, Life Insurance, Provident Fund
etc., that must remain unaffected and cannot be allowed to be
deducted, which, any way would be paid to the dependents of the
deceased Government employee, applying the principle expounded
in Helen C.Rebello and Patricia Jean Mahajan's cases (supra)."
(Emphasis Supplied)
9. With respect to the personal expenses of the deceased, the Claims
Tribunal held that one son and one daughter of the deceased were married
and not dependent upon the deceased. The Claims Tribunal held that the
deceased left behind three dependents namely widow, one son and one
daughter. It is well settled that in the case of three dependants, the personal
expenses of the deceased has to be taken as 1/3rd. However, the Claims
Tribunal took the personal expenses as 1/4th considering that one daughter of
the deceased was handicapped, which is not an exception to the rule of
deduction. In that view of the matter, the personal expenses of the deceased
are increased from 1/4th to 1/3rd.
10. The Claims Tribunal has awarded Rs.1,00,000/- towards the loss of
love and affection which is not a permissible head and is therefore, set aside.
The compensation for loss of consortium, loss of estate and funeral expenses
is reduced to Rs.40,000/-, Rs.15,000/- and Rs.15,000/- respectively.
11. Taking the net income of the deceased as Rs.3,42,128/- per annum
(Rs.3,50,410/- - Rs.8,282/-), adding 30% towards future prospects,
deducting 1/3rd towards the personal expenses and applying the multiplier of
14, the loss of dependency is computed as Rs.41,51,153.07. Adding
Rs.40,000/- towards loss of consortium, Rs.15,000/- towards loss of estate
and Rs.15,000/- towards funeral expenses, total compensation is computed
as Rs.42,21,153.07, rounded off to Rs.42,21,155/-.
12. The appeal is allowed and the award amount is reduced from
Rs.61,14,000/- to Rs.42,21,155/- along with interest at the rate of 9% per
annum from the date of institution i.e. 10th March, 2016.
13. Pending applications are disposed of.
14. The respondent No.1 is present in Court and has produced the pass
book of her savings bank account.
15. Both the parties are directed to bring the computation of interest on
the next date of hearing.
16. List for disbursement of the computation amount on 24 th August,
2018.
17. Copy of this judgment be given dasti to counsel for the parties under
the signature of the Court Master.
AUGUST 3, 2018 J.R.MIDHA, J.
ds
