National Insurance Company ... vs Soumya.V.S
2021 Latest Caselaw 19947 Ker

           IN THE HIGH COURT OF KERALA AT ERNAKULAM
                           PRESENT
          THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
 FRIDAY, THE 24TH DAY OF SEPTEMBER 2021 / 2ND ASWINA, 1943
                    MACA NO. 4476 OF 2019
AGAINST THE COMMON AWARD DATED 31.01.2019 IN OPMV 1529/2019
        OF MOTOR ACCIDENT CLAIMS TRIBUNAL, PERUMBAVOOR
APPELLANT/3RD RESPONDENT IN O.P(MV) NO.1529/2015

          M/S.NATIONAL INSURANCE COMPANY LIMITED
          DOOR NO.19/B, S.R.COMPLEX, RAJAMANI THOTTAM
          BHAVANI MAIN ROAD, N.H.47, SANDAGIRI, SELEM.P.O,
          TAMIL NADU STATE, PIIN-673301 REPRESENTED BY ITS
          MANAGER, REGIONAL OFFICE, M.G.ROAD, BAZAR (PO)
          ERNAKULAM, PIN-682 016.
          BY ADV LAL GEORGE
RESPONDENTS/PETITIONERS 1 TO 5 IN O.P(MV)NO.1529/2015

    1     SOUMYA.V.S, AGED 35 YEARS, W/O.DECEASED SOORAJ R,
          FLAT NO.31, FEDERAL GARDENS, PULINCHUVADU.P.O,
          ALUVA, ERNAKULAM DISTRICT, PIN-683101.
    2     SANJANA(MINOR), AGED 14 YEARS
          D/O.DECEASED SOORAJ.R. FLAT NO.31, FEDERAL
          GARDENS, PULINCHUVADU.P.O, ALUVA, ERNAKULAM
          DISTRICT REPRESENTED BY HER MOTHER SOUMYHA V.S.
          AGED 35 YEARS, W/O.DECEASED SOORAJ.R, FLAT NO.31,
          FEDERAL GARDENS, PULINCHUVADU.P.O, ALUVA,
          ERNAKULAM DISTRICT, PIN-683101.
    3     MEGHNA (MINOR), AGED 14 YEARS
          D/O.DECEASED SOORAJ.R, FLAT NO.31, FEDERAL
          GARDENS PULINCHUVADU.P.O, ALUVA, ERNAKULAM
          DISTRICT REPRESENTED BY HER MOTHER SOUMYA.V.S,
          AGED 35 YEARS, W/O.DECEASED SOORAJ.R, FLAT NO.31,
          FEDERAL GARDENS, PULINCHUVADU.P.O, ALUVA,
          ERNAKULAM DISTRICT, PIN-683101.
    4     RAVEENDRAN, AGED 69 YEARS,F/O.DECEASED SOORAJ R.,
          FLAT NO.31, FEDERAL GARDENS PULINCHUVADU.P.O,
          ALUVA, ERNAKULAM DISTRICT-683101.
 M.A.C.A.No.4476 of 2019           2



     5       M.B.VALSALA,AGED 64 YEARS,M/O.DECEASED SOORAJ.R,
             FLAT NO.31, FEDERAL GARDENS PULINCHUVADU.P.O,
             ALUVA DISTRICT, PIN-683101.

             BY ADV SRI.A.N.SANTHOSH


             THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR
             HEARING ON 14.09.2021, THE COURT ON 24.09.2021
             DELIVERED THE FOLLOWING:
 M.A.C.A.No.4476 of 2019            3




                                                               "C.R"

                      A. BADHARUDEEN, J.
             ================================
                     M.A.C.A No.4476 of 2019
             ================================
              Dated this the 24th day of September, 2021


                            JUDGMENT

National Insurance Company, the original 3rd respondent in

the O.P(MV).No.1529/2015, has preferred this appeal challenging

award dated 31.1.2019 on the file of the Motor Accident Claims

Tribunal, Perumbavoor urging that excess amount was granted

towards compensation by the Tribunal. Original petitioners 1 to 5

are the respondents herein.

2. The parties in this appeal will be referred as `insurance

company' as well as `petitioners', hereinafter.

3. Briefly spelt, the petitioners, who are legal-heirs and

dependents of the deceased Sooraj Raveendran, approached the

Tribunal and sought compensation to the tune of Rs.80 lakh.

According to the petitioners, on 21.10.2015 at about 10.30 p.m

while Sooraj Raveendran was riding his scooter bearing

Registration No.KL-41/H-9695 through the Seaport-Airport road

from south to north and when he reached near Poojari corner, he

was hit down by a lorry bearing Registration No.TN-52/F-2454

driven by the 2nd respondent in a rash and negligent manner came

from behind. Though Sooraj Raveendran was taken to Sunrise

Hospital, he succumbed to injuries on the same day.

4. The original respondents 1 and 2, the owner and driver

of the lorry bearing Registration No.TN-52/F-2454 were set

exparte by the Tribunal.

5. The 3rd respondent insurance company filed written

statement admitting valid policy to the lorry. The negligence

alleged against the 2nd respondent was denied. The age, occupation

and income of the deceased also were disputed. Various claims

were opposed. The learned Tribunal tried O.P(MV).No.1529/2015

along with O.P(MV).No.1201/2016 and as per common award

dated 31.1.2019, Rs.69,49,800/- was granted as compensation.

6. The learned counsel for the insurance company Sri. Lal

George submitted that the Tribunal granted excess amount by

considering Ext.X2 salary certificate of Sooraj Raveendran in its

entirety excluding income tax. According to the learned counsel,

the gross earnings of the deceased was Rs.34,733/-. But the

Tribunal only deducted Rs.700/- towards statutory bonus and

Rs.780/- towards income tax. It is specifically pointed out that the

Tribunal went wrong in including conveyance allowance, medical

allowance and manager allowance as part of income for calculating

compensation.

7. Whereas the learned counsel for the petitioners Sri

A.N.Santhosh submitted that as per the decision reported in [2011

(2) KLT 451 : 2011 KHC 4321], Sunil Sharma & Ors. v. Bachitar

Singh & Ors., the Apex Court held that HRA, CCA and medical

allowance are liable to be considered in calculating the income of

the deceased. Similarly , EPF and GIS are also to be included as

part of the income.

8. On reading the above decision, the submission appears

to be correct. The learned counsel for the insurance company also

conceded this aspect. Therefore, the Tribunal could not be faulted

in considering Rs.1,250/- shown as medical expenses in Ext.X2

also as part of the income.

9. The learned counsel for the insurance company

zealously opposed inclusion of Rs.9,583/- shown under the head

`manager allowance' in Ext.X2. According to the learned counsel,

the same also should have been excluded. This submission

appears to be not convincing even at the first blush. The rationale

is, if a person is given manager allowance while holding the post

of a manager, the same is part of his work and the same is liable to

be considered for calculating the monthly income. In this

connection, the decision reported in [2009(1) KLT 462 : 2009

KHC 4009], Oriental Insurance Company Ltd. v. Ram Prasad

Varma & Ors. is relevant. In this decision it was held by the

Honourable Supreme Court that the amount which were required

to be paid to the deceased by its employer by way of perks should

be included for computation of monthly income as that would have

been added to his monthly income by way of contribution to the

family as contra distinction to the ones who were for his benefit.

However, statutory amount of tax paid thereupon must be

deducted. Thus there is no justification to reduce managerial

allowance considered by the Tribunal for assessing the monthly

income. As such this challenge at the instance of the Insurance

Company also cannot sustain.

10. The third challenge at the instance of the learned

counsel for the insurance company is inclusion of conveyance

allowance in Ext.X2. As per Ext.X2 salary certificate proved by

examining PW2, the author of the same, it has come out in

evidence that the deceased Sooraj Raveendran was working as

manager in Indus Ind Bank Ltd. at the relevant time of accident

and his gross earnings was Rs.34,733/- inclusive of Rs.3,200/-

under the head `conveyance allowance'. The learned counsel for

the insurance company not cited any precedent to support his

contention that conveyance allowance cannot be included as part

of income. Similarly, the learned counsel for the petitioners also

not produced any decision supporting inclusion of conveyance

allowance as part of monthly income.

11. In this scenario, it is necessary to look into various

decisions on this point. In this connection it is apposite to refer a

3 Bench decision of the Honourable Supreme Court reported in

[(2014) 13 SCC 22 : 2014 KHC 4292 : 2014 ACJ 1416], Manasvi

Jain v. Delhi Transport Corporation. In this decision, the

Honourable Supreme Court considered reduction of GPF, House

Rent, GIS and Income Tax from the salary of the deceased as done

by the Tribunal and upheld by the High Court. While answering

the query, 3 Bench of the Honourable Supreme Court held that

contribution towards income tax, the other voluntary contributions

made by the deceased, which are in the nature of savings, cannot

be deducted from the monthly salary of the deceased to decide his

net salary or take-home salary. Another decision reported in

[(2010) 12 SCC 378], Shyamwati Sharma & Ors. v. Karam Singh

& Ors. was referred in this decision.

12. Though the above decision of the Apex Court excludes

only income tax, there is no mention as regards to inclusion of

conveyance allowance. But the Apex Court held that only income

tax is liable to be reduced. In the decision reported in [2020 KHC

2550 : 2020 ACJ 117], Hannah Angelin & anr. v. Parveen

Travels Pvt. Ltd. & Ors., a Division Bench of the Bombay High

Court reduced conveyance allowance, vehicle maintenance

allowance and personal allowance from the income of the

deceased. Similarly, a Division Bench of the Karnataka High

Court, in the decision reported in [2020 KHC 3834 : 2020 ACJ

1452], Devamma & Ors. v. Bharat & anr., calculated the income

after reducing conveyance allowance, variable allowance and

professional tax and income tax. Likewise in the decision reported

in [2019 KHC 2390 : 2019 ACJ 589], New India Assurance Co.

Ltd. v. Ashish Ravindra Kulkarni & Ors., another Division Bench

of the Bombay High Court excluded conveyance allowance for

calculating the monthly income. However, in the decision reported

in [2017 KHC 7102 : 2017 ACJ 64], Taneja S.K & Ors. v.

Amarjeet Singh, Delhi High Court held that the conveyance

allowance being part of the terms and conditions of the regular

service of the deceased with the bank, the said amount cannot be

excluded. In this decision also, death of a Stenographer in Punjab

National Bank was the matter considered. In another decision

reported in [2015 KHC 6202 : 2015 ACJ 2865], Jasvinder Singh

& Ors. v. Lovkush Giri & Ors. a single Bench of the Delhi High

Court also supported the view that conveyance allowance and

other allowances were cash in hand received by the deceased and

would have to be counted as part of salary. Thus different High

Courts expressed divergent views with regard to inclusion of

conveyance allowance as part of net salary for calculating the loss

of dependency income.

13. It is in this backdrop a detailed discussion with regard

to the point argued by the learned counsel for the insurance

company to reduce conveyance allowance is required to be made.

Otherwise, the seminal query arises for consideration is as to

whether conveyance allowance is liable to be included as part of

income being perk payable to the employee while calculating

monthly income for arriving loss of dependency? In order to give

a quietus to the dispute, firstly, it is apposite to refer the note given

under second schedule to S.163A of the Motor Vehicles Act, 1988

dealing with compensation for third party fatal accidents/injury

cases claims. The note provides that the amount of compensation

arrived at on the basis of the table in the schedule in the case of

fatal accident claims shall be reduced by 1/3 in consideration of

the expenses which the victim would have incurred towards

maintaining himself had he been alive. Although the second

schedule provided under Section 163A of M.V Act is for

calculating compensation under the principle of no fault, the same

schedule has been following as the guideline while assessing

compensation in a claim under Section 166 of the M.V Act as well,

subject to judicial pronouncements with modifications.

14. In the constitution Bench decision in [(2017) 16 SCC

680], National Insurance Company Ltd. v. Pranay Sethi & Ors.,

deduction towards personal and living expenses, as embodied in

paragraphs 30 to 32 of [(2009) 6 SCC 121], Sarla Verma (SMT) &

Ors. v. Delhi Transport Corporation & anr., is quoted with

approval and it was held that the said deduction to be followed.

Paragraphs 30, 31 and 32 of Sarla Verma's case (supra), being

relevant, are extracted here under:

"30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3 rd) where the number of dependent family members is 2 to 3, one-fourth (1/4 th) where the number of dependent family member is 4 to 6, and one-fifth (1/5 th) where the number of dependent family members exceeds six.

31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father.

32. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where the family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widow mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family to be taken as two-third. "

15. The principle behind the deduction of 1/2, 1/3, ¼ and

1/5, as the case may be, has been followed taking note of the fact

that such portions of the total income would have spent by the

deceased for his personal and living expenses had he been alive.

Now comes the significant question as regards to exclusion of

conveyance allowance being one out of the arena of perks on the

premise that conveyance allowance has been given for the

employees' personal use. As already discussed, deduction viz., ½,

1/3, ¼ and 1/5, as the case may be, is being followed as the

guideline while fixing monthly income of the deceased for the

purpose of calculating loss of dependency income considering the

said amount would have been spent by the deceased had he been

alive. In my view, after having accepted the guideline to have

deduction from the total salary @ ½, 1/3, ¼ and 1/5 as the case

may be, towards the personal expenses from the deceased,

excluding the tax, any further deduction from the perks of the

deceased employee tantamounts to deduction of salary towards

personal expenses twice. To put it differently, suppose, a principle

is evolved to exclude anything in excess of tax to be paid by the

employee while fixing the monthly income, the same would lead to

a situation that a deceased person's total emoluments after reducing

amount under the head conveyance allowance or any other

allowance categorising the same as personal allowances for the use

of the employee, then deduction @ ½, 1/3rd, 1/4th and 1/5th, as the

case may be, will amount to deduction in excess of ½, 1/3 rd, 1/4th

and 1/5th. Such a principle cannot be accepted for the simple

reason that the same would result in reducing the just

compensation entitled to by the claimants under a social welfare

legislation.

16. In this context it is necessary to discuss about medical

allowance granted to an employee. As I have already pointed out,

in Sunil Sharma's case (supra), the Apex Court held that medical

allowance also to be included while calculating income of the

deceased. Medical allowance given to an employee can be held as

one given to the employee for his medical attendance, or else, for

the benefit of the employee and his family together. This is the

rationale by which the Apex Court held that medical allowance

also to be added to the monthly income. Coming to conveyance

allowance, the position is not so different as conveyance allowance

given to an employee can be held as one given to the employee for

his own use or else for the benefit of the employee and his family

together. It is difficult to lay down a principle that conveyance

allowance has been given for the use of the employee alone and the

employee must use conveyance allowance for his own in its

entirety and he cannot use the same for his family Therefore, I

am of the considered view that deduction from the total salary has

to be made only in relation to the tax payable by the employee and

all other perks shall be counted while fixing the monthly income of

the employee/deceased as per the salary certificate issued. In view

of the matter, I am to hold that except tax, all other perks

inclusive of conveyance allowance, manager allowance, HRA,

CCA, medical allowance, EPF and GIS given by an employer

to an employee are liable to be included for the purpose of

arriving at the net monthly income, to calculate the loss of

dependency income. The above discussion would lead to the

conclusion that conveyance allowance included by the Tribunal for

calculating the monthly income of the deceased is liable to be

justified. In consequence thereof, the contention raised by the

learned counsel for the insurance company canvassing reduction of

conveyance allowance from the monthly salary of the deceased is

liable to fail.

17. Another challenge raised by the learned counsel for the

insurance company is that 50% addition to the actual salary

permissible to a permanent job, as approved in Pranay Sethi's case

(supra), cannot be given in this case and therefore, the Tribunal

went wrong in adding 50% more under the head, instead of adding

40% alone in the case of Sooraj Raveendran since he was not a

permanent employee of the bank. This argument is vehemently

opposed by the learned counsel for the petitioners on the

submission that going by the evidence of PW2, the author of

Ext.X2, supported by Exts.X1 and X2, the status of Sooraj

Raveendran as that of a permanent employee in a recognised bank

is established and therefore there is no justification to reduce the

same to 40% instead of 50%. I find merit in the submission of the

learned counsel for the petitioners. Here, undisputedly Sooraj

Raveendran was an employee of Indus Ind Bank Ltd., Kakkanad

Branch during the time of his death. It is true that Indus Ind Bank

is not a nationalised bank. Its status is that of a private bank.

However, Indus Ind Bank has been operating business in India at

par with a scheduled bank and as such there is no reason to hold

that the status of an employee in the said bank is not permanent.

Therefore, I am to hold that 50% of addition given by the Tribunal

treating the deceased as a person having permanent job also is not

liable to be interfered.

18. In view of the discussion, none of the contentions

raised by the insurance company are liable to be accepted.

Consequently, the impugned award is not liable to be interfered in

any manner. Therefore, the appeal deserves dismissal and I do the

same.

In the result, the appeal fails and is accordingly dismissed.

There is no order as to costs, considering the particular nature of

this case.

Sd/-

A. BADHARUDEEN, JUDGE rtr/