[Cites 7, Cited by 0]
Jharkhand High Court
Devendra Prasad vs Oriental General Insurance Company Ltd on 28 November, 2025
2025:JHHC:35686
IN THE HIGH COURT OF JHARKHAND AT RANCHI
M.A. No. 149 of 2014
1. Devendra Prasad, S/o Late Awadhesh Kumar Singh
2. Seema Kumari, D/o Late Awadhesh Kumar Singh
3. Sarita Kumari, D/o Late Awadhesh Kumar Singh,
All resident of village Tehar P.O. Agiyawan Bazar, P.S. Piro,
District Bhojpur at present at Qr. No. NF/ 334, Patratu
Thermal Power Station, P.O. & P.S. Patratu, District
Hazaribagh ...... Appellants
Versus
1. Oriental General Insurance Company Ltd., P.O. & P.S.-
Ranchi, Dist-Ranchi
2. Maithli Sharan Singh S/o K.D. Singh, resident of village
Karbasin, P.O Karbasin, District Bhojpur, at present
residing in No. 8 Offices, Booty Road, Ranchi
......Respondents
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For the Appellants : Mr. Rabindra Nath, Advocate
For the Resp. No.1 : Mr. Tapeshwar Nath Mishra, Advocate
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PRESENT
HON'BLE MR. JUSTICE ARUN KUMAR RAI
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JUDGMENT
C.A.V. on 31.07.2025 Pronounced on: 28 .11.2025
1. Heard Mr. Rabindra Nath, learned counsel appearing
on behalf of the appellants/claimants and Mr. Tapeshwar Nath
Mishra, learned counsel for the respondent no. 1- Insurance
Company.
2. The appellants/claimants have preferred instant appeal
for enhancement of compensation award dated 01.09.2012
passed in Claim Case No. 147-148 of 1997 whereby and
whereunder the 5th District Judge- cum- Presiding Officer,
M.V.A.C.T., Hazaribagh has awarded compensation to the
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tune of Rs. 4,09,500/- (amount of compensation modified vide
order dated 11.09.2012 passed by the Tribunal).
3. It is the case of the appellants/ claimants that at the
time of accident, deceased was having monthly income of Rs.
7,526/- as he was working in Technician Grade -I at PTPS,
(Hazaribag) and as per the claim application, he was 43 years of
age at the time of accident. Learned Tribunal accepted the monthly
income of Rs. 7,500/- as last pay certificate was adduced during
inquiry with regard to the income of the deceased and by taking
age of 45 years of the deceased as per the post-mortem report, the
final compensation amount was computed to the tune of Rs.
4,09,500/-.
4. It is argued by the learned counsel on behalf of the
appellants/claimants that the Tribunal erred while computing the
compensation and thus, the deduction made in terms of carry
home salary and Income Tax deduction in the gross salary based
upon last pay certificate is bad in law and deductions like Tax etc.
have already been deducted from the gross salary of the deceased.
5. It is argued by the learned counsel for the appellants/
claimants that the award passed by the learned Tribunal is not in
consonance with the ratio laid down by the Hon'ble Supreme
Court in National Insurance Company Ltd. vs. Pranay Sethi,
reported in (2017) 16 SCC 680 as loss of income under the head of
Future Prospect has not been considered and further under the
conventional head, nothing has been awarded. Further, it is prayed
to grant interest @7.5% p.a from the date of claim.
6. It is submitted by the learned counsel on behalf of the
respondent- Insurance Company that the learned Tribunal has
rightly deducted the carry home salary and tax from the salary of
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the deceased. He fairly conceded that learned Tribunal erred while
computing compensation as the deceased was aged 45 years and
multiplier ought to be 14, in terms of ratio in the case of Sarla
Verma v. DTC, reported in (2009) 6 SCC 121.
7. Having considered the submissions advanced on behalf
of both the sides and perusing the materials on record, it transpires
that owner of the offending vehicle and Insurance Company has
also been made party before learned Tribunal, but owner chose not
to appear before the learned Tribunal and the learned Tribunal
proceeded ex-parte against the owner. However, both the
respondents have been made party before this Court and only
Insurance Company marked his appearance being respondent no.
1 and Owner being respondent no.-2 chose not to appear before
this Court even after notice has been validly served upon him.
8. An interlocutory application being I.A. No. 10093 of
2025 has been filed on behalf of the appellants/claimants to bring
on record the age proof of the deceased, claimed to be 43 years at
the time of accident. To substantiate this contention, Annexure-2 of
the above I.A. has been brought on record which is the Service
Book of the deceased wherein the date of birth of the deceased was
mentioned as 16.01.1954. Therefore, it transpires from the service
book that on the date of accident i.e. on 29.04.1997, the age of the
deceased was 43 years 3 months 13 days. Thus, this Court on the
basis of above discussion is of considered view that the age of the
deceased was 43 years at the time of the accident.
9. It is not in dispute that deceased was working in
Technician Grade -I at PTPS, (Hazaribagh) and receiving salary of
Rs. 7,526/- which has been rightly taken into consideration by the
learned Tribunal.
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10. As far as, deduction of income of deceased is
concerned, it is apposite to refer herein the judgment rendered by
the Hon'ble Supreme Court in the case of Vimal Kanwar v.
Kishore Dan reported in (2013) 7 SCC 476 wherein it has been held
by the Apex Court that as per the law, there is presumption that
employer-State Government at the time of payment of salary
deducts income tax on the estimated income of the deceased
employee from the salary. Relevant paragraphs of the judgment
read hereunder:-
22. The third issue is "whether the income tax is liable to be deducted for
determination of compensation under the Motor Vehicles Act".
23. In Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ)
770 : (2009) 2 SCC (Cri) 1002] this Court held: (SCC p. 133, para 20)
"20. Generally the actual income of the deceased less income tax should be the
starting point for calculating the compensation."
This Court further observed that: (SCC p. 134, para 24)
"24. ... Where the annual income is in taxable range, the words 'actual salary'
should be read as 'actual salary less tax'."
Therefore, it is clear that if the annual income comes within the taxable range, income
tax is required to be deducted for determination of the actual salary. But while
deducting income tax from the salary, it is necessary to notice the nature of the income
of the victim. If the victim is receiving income chargeable under the head "salaries" one
should keep in mind that under Section 192(1) of the Income Tax Act, 1961 any person
responsible for paying any income chargeable under the head "salaries" shall at the time
of payment, deduct income tax on estimated income of the employee from "salaries" for
that financial year. Such deduction is commonly known as tax deducted at source
("TDS", for short). When the employer fails in default to deduct the TDS from the
employee's salary, as it is his duty to deduct the TDS, then the penalty for non-
deduction of TDS is prescribed under Section 201(1-A) of the Income Tax Act, 1961.
Therefore, in case the income of the victim is only from "salary", the presumption
would be that the employer under Section 192(1) of the Income Tax Act, 1961 has
deducted the tax at source from the employee's salary. In case if an objection is raised
by any party, the objector is required to prove by producing evidence such as LPC
to suggest that the employer failed to deduct the TDS from the salary of the
employee. However, there can be cases where the victim is not a salaried person i.e. his
income is from sources other than salary, and the annual income falls within taxable
range, in such cases, if any objection as to deduction of tax is made by a party then the
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claimant is required to prove that the victim has already paid income tax and no further
tax has to be deducted from the income.
24. In the present case, none of the respondents brought to the notice of the Court
that the income tax payable by the deceased Sajjan Singh was not deducted at source by
the employer State Government. No such statement was made by Ram Avtar Parikh,
PW 2, an employee of the Public Works Department of the State Government who
placed on record the last pay certificate and the service book of the deceased. The
Tribunal or the High Court on perusal of the last pay certificate, have not noticed that
the income tax on the estimated income of the employee was not deducted from the
salary of the employee during the said month or financial year. In absence of such
evidence, it is presumed that the salary paid to the deceased Sajjan Singh as per
last pay certificate was paid in accordance with law i.e. by deducting the income
tax on the estimated income of the deceased Sajjan Singh for that month or the
financial year. The appellants have specifically stated that the assessment year
applicable in the instant case is 1997-1998 and not 1996-1997 as held by the High
Court. They have also taken specific plea that for Assessment Year 1997-1998 the rate
of tax on income more than Rs 40,000 and up to Rs 60,000 was 15% and not 20% as
held by the High Court. The aforesaid fact has not been disputed by the respondents.
25. In view of the finding as recorded above and the provisions of the Income Tax
Act, 1961, as discussed, we hold that the High Court was wrong in deducting 20% from
the salary of the deceased towards income tax, for calculating the compensation. As per
law, the presumption will be that employer State Government at the time of payment of
salary deducted income tax on the estimated income of the deceased employee from the
salary and in absence of any evidence, we hold that the salary as shown in the last pay
certificate as Rs 8920 should be accepted which if rounded off comes to Rs 9000 for
calculating the compensation payable to the dependant(s).
11. Coming to the case in hand and the above legal
proposition, this Court is of considered view that no material, qua
the Tax payable by the deceased was not deducted at source, has
been brought on record by the Insurance Company and in absence
of material evidence, presumption goes in favor of the claimants
that salary paid to the deceased as per the last pay Certificate
includes deduction of the Tax on the estimated income and, as
such, deduction made in Income as carry home salary and Income
Tax while computation of compensation is not tenable.
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12. Considering Rs. 7,500/- as the monthly income of the
deceased, being three members as dependents 1/3rd as deduction
towards personal and living expenses and 14 as multiplier as per
Sarla Verma (supra), addition of 30% as future prospect as
deceased being permanent employee of PTPS, (Hazaribagh) and
Rs. 70,000/- under the conventional head as per Pranay Sethi
(Supra), the final compensation amount will workout as under:-
Monthly Income Rs. 7500/-
Personal & Living Expenses (Deduction) Rs. 7500 × 1/3 = 2500
Sarla Verma (supra) Rs. 7500 - Rs. 2500 =
Rs. 5,000/-
Annual Income Rs. 5,000 ×12 =
Rs. 60,000
Multiplier of 14 (43 years as the age of the Rs. 60,000×14=
deceased at the time of the accident) Rs. 8,40,000/-
Sarla verma (supra)
Future Prospect - (30%) Rs. 8,40,000 × 30% =
Pranay Sethi (Supra) Rs. 2,52,000/-
Rs. 8,40,000 + 2,52,000=
Rs. 10,92,000/-
Conventional Head (Loss of Estate, Funeral Rs. 70,000/-
Expenses and Loss of Consortium)
Pranay Sethi (Supra)
Total Compensation Rs. 10,92,000+ Rs.70,000 =
Rs. 11,62,000/-
13. As far as, interest part is concerned, this Court taking
into account the legal proposition in the judgment rendered by the
Apex Court in the case of National Insurance Co. Ltd. v. Mannat
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Johal, reported in (2019) 15 SCC 260, is of considered view that
Respondent- Insurance Company is liable to pay the aforesaid
compensation amount along with interest @ 7.5% per annum
simple interest, from the date of filing of the suit till its realization.
14. Further, record of Tribunal reveals that two Cheques,
dated 13.03.2013 for the sum of Rs. 2, 04,750/- each have already
been received by the appellants/claimants. Therefore, the
Insurance Company is directed to indemnify the remaining
aforesaid amount of award, after deducting the amount of interim
compensation if awarded, to the appellants/claimants, along with
the interest @ 7.5% per annum simple interest, within a period of
45 days from today.
15. Consequently, the Instant Miscellaneous Appeal
being M.A. No. 149 of 2014, is hereby, allowed.
16. Pending I.A. stands disposed of.
17. Let LCR be consigned to the court concerned.
(Arun Kumar Rai, J.)
Jharkhand High Court, at Ranchi
Dated : 28.11.2025
Rajnish /- A.F.R.
