Madhya Pradesh High Court
The National Insurance Co. Ltd. Thru. ... vs Smt. Gaytri Devi And 5 Others on 22 December, 2023
Author: Achal Kumar Paliwal
Bench: Achal Kumar Paliwal
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDOR E
BEFORE
HON'BLE SHRI JUSTICE ACHAL KUMAR PALIWAL
MISC. APPEAL No.2354/2013
BETWEEN:-
1. SMT. GAYATRI DEVI W/O CHETAN SHARMA, AGED
ABOUT 22 YEARS, OCCUPATION: HOUSE HOLD R/O 251,
ALKAPURI DEWAS (MADHYA PRADESH)
2. RUDRA PRATAP S/O CHETAN SHARMA, AGED ABOUT 2
YEARS, MINOR THR GUARDIAN SMT. GAYATRI DEVI W/O
CHETAN SHARMA R/O 251, ALKPURI, DEWAS (MADHYA
PRADESH)
3. SATYANARAYAN SHARMA S/O LATE MAYARAM JI
SHARMA, AGED ABOUT 55 YEARS, OCCUPATION:
AGRICULTURE R/O GRAM ALWASA TEH HATOD DIST
INDORE (MADHYA PRADESH)
4. SMT. SHARDA BAI W/O SATYANARAYAN SHARMA, AGED
ABOUT 52 YEARS, OCCUPATION: HOUSE WORK R/O GRAM
ALWASA TEH HATOD DIST INDORE (MADHYA PRADESH)
.....APPELLANTS
(SHRI RAJESH LAL, LEARNED COUNSEL FOR THE APPELLANTS)
AND
1. ROOP NARAYAN S/O BADRILAL SAHU, AGED ABOUT 36
YEARS, OCCUPATION: DRIVER R/O 334, GIL TRANSPORT
GURU JAMBESHWAR NAGAR VAISHALI JAIPUR,
RAJASTHAN (RAJASTHAN)
2. SANTOSH GIL S/O SURESH GIL, AGED ABOUT 35 YEARS,
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 12/22/2023
5:35:10 PM
2
OCCUPATION: BUSINESS R/O 334 GIL TRANSPORT, GURU
JAMBESHWER NAGAR VAISHALI JAIPUR (RAJASTHAN)
3. KSHETRIYA PRABANDHAK NATIONAL INSURANCE CO.
LTD. INDORE 13 OLD PALASIYA INDORE (MADHYA
PRADESH)
.....RESPONDENTS
(SHRI PRADEEP GUPTA, LEARNED SR. COUNSEL WITH SHRI
BHASKAR AGRAWAL FOR THE RESPONDENT/INSURANCE
COMPANY)
MISC. APPEAL No.2278/2013
BETWEEN:-
THE NATIONAL INSURANCE CO. LTD. THRU.
REGIONAL MANAGER 13, OLD PALASIYA, INDORE
(MADHYA PRADESH)
........APPELLANT
(SHRI PRADEEP GUPTA, LEARNED SR. COUNSEL WITH SHRI
BHASKAR AGRAWAL FOR THE APPELLANT/INSURANCE
COMPANY)
AND
1. SMT. GAYTRI DEVI AND WD/O CHETAN
SHARMA, AGED ABOUT 22 YEARS, OCCUPATION:
HOUSE HOLD R/O 251, ALKAPURI (MADHYA
PRADESH)
2. RUDRAPRATAP S/O CHETAN SHARMA, AGED
ABOUT 2 YEARS, MINOR THROUGH MOTHER SMT.
GAYATRI DEVI R/O 251, ALKAPURI, DEWAS
(MADHYA PRADESH)
3. SATYANARAYAN SHARMA S/O LATE MAYARAM
SHARMA, AGED ABOUT 55 YEARS, OCCUPATION:
AGRICULTURE R/O VILL-ALWASA, TEH-HATOD,
DISTT-INDORE (MADHYA PRADESH)
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 12/22/2023
5:35:10 PM
3
4. SMT. SHARDA BAI W/O SATYANARAYAN, AGED
ABOUT 52 YEARS, OCCUPATION: HOUSEHOLD R/O
VILL-ALWASA, TEH-HATOD, DISTT-INDORE
(MADHYA PRADESH)
5. ROOPNARAYAN S/O BADRILAL SAHU, AGED
ABOUT 36 YEARS, OCCUPATION: DRIVER R/O 334,
GIL TRANSPORT, GURU JAMBESHWAR NAGAR,
VAISHALI, JAIPUR (RAJ.) (RAJASTHAN)
6. SANTOSH GIL S/O SURESH GIL, AGED ABOUT 35
YEARS, OCCUPATION: BUSINESS 334, GIL
TRANSPORT, GURU JAMBESHWAR NAGAR,
VAISHALI, JAIPUR (RAJ.) (RAJASTHAN)
.........RESPONDENTS
(SHRI REJESH LAL, LEARNED COUNSEL FOR RESPONDENTS NO.1
TO 4)
.............................................................................................
Reserved on : 22.11.2023.
Pronounced on : 22.12.2023.
------------------------------------------------------------------------------------
These miscellaneous appeals having been heard and reserved
for orders, coming on for pronouncement this day, JusticeAchal
Kumar Paliwal pronounced the following:
ORDER
This common order shall govern disposal of both
M.A.No.2354/2013 and M.A.No.2278/2013 as both appeals arise out
common award dated 13.08.2013.
2. These appeals by the appellants/claimants (M.A.No.2354/2013)
and Insurance Company (M.A.No.2278/2013) under section 173(1) of
the Motor Vehicles Act are arising out of the award dated 13.08.2013
passed by Member, MACT, Dewas district Dewas in Claim Case
No.248/2009 seeking enhancement/reduction of compensation amount
awarded by the Tribunal.
3. Learned counsel for the appellant/claimants has submitted that
Tribunal has assessed deceased's income on the lower side. Deceased
was appointed on a monthly salary of Rs.14,603/-. Hence, his monthly
income should be determined as Rs.14,603/- per month. Further,
annual bonus of Rs.55,000/- be also added in the income.
4. Learned counsel for the Insurance Company has submitted that
Tribunal has assessed deceased's income on the higher side. As per
deposition of PW/2 Anil Sharma and salary slip Ex.P/17, Deceased's
basic salary was Rs.8190/- per month. Learned counsel for the
Insurance Company, after referring to para-11 of impugned award,
submits that Tribunal has wrongly assessed deceased's monthly
income as Rs.12,784/- by including other allowances which is not
permissible in law.Learned counsel has submitted that only allowances
under the head of HRA and education allowances should be added for
calculating monthly income and other allowances i.e. washing
allowance, conveyance allowance, supervisory allowance, CCA,
medical allowance etc. cannot be added for determining monthly
income. In this connection learned counsel for the appellant has relied
upon the decision in the case of National Insurance Company Ltd. Vs.
Indira Srivastava and others - (2008) 2 SCC 763. It is also urged that
as deceased was not in any permanent job and he was in job for less
than 9 months, therefore, 50% of the income cannot be added under the
head of future prospects, instead only 40% of the income should be
added as future prospects. Therefore, Tribunal has wrongly added 50%
as future prospects while calculating deceased's income. Learned
counsel after referring to para-24 of the order passed in the case of
Sarla Verma & others vs. Delhi Transport Corporation & another -
AIR 2009 SC 3104 submits that bonus cannot be added for calculating
/determining income. In Sarla Verma's case (supra) bonus has already
been taken into consideration while allowing addition under the head
of future prospects. Therefore, while calculating / determining income
bonus cannot be added separately.
5. I have heard learned counsel for parties and perused record of
the case.
INCOME / SALARY:-
6. So far as monthly salary of deceased Chetan Sharma is
concerned, from depositions of Smt.Gayatridevi, Anil Sharma and
Ex.P/16 (salary certificate) & P/17 (salary slip), it is clearly established
that at the time of accident, deceased was working in Eicher
Engineering Company as Accounts Officer and he was appointed on
above post on 04.04.2008.
7. Break-up of Ex.P/17 (pay slip) is as under:
ECV Dewas - 2009-10
Pay-slip for the month of July, 2009
Name : Chetan Sharma ESIC# Days paid 31.00
Employee ID -00916 PF# 743 LOP Days .00
Designation - Officer DOJ 04/04/2008 OT days-
Dept. -Accounts & Finance EL Balance -13.00
CL Balance -2.00
EARNINGS DEDUCTIONS
Description Basic Payable Description Amount
structure (Rs) (Rs)
Basic 8190.00 8190.00 Provident Fund 983.00
Allowance Society 12.00
Conveyance 300.00 300.00 282.00
Allowance
Loan deduction
Washing 325.00 325.00 1250.00
Allowance
Supervisory EMP welfare
Allowance 2985.00 2985.00 fund
Education 6.00
allowance 100.00 100.00
City Com. 50.00 50.00
Allowance
Medical
417.00 417.00
Allowance
GROSS PAY 12867.00 Gross deduction 2616.00
Net Pay 10251.00 Ten Thousand Two hundred fifty one only
8. As per above salary slip Ex.P/17 basic monthly salary of
deceased appears to be Rs.8190/- and not Rs.14603 as deposed by
PW/2 Anil Sharma. As per Ex.P/17 (pay slip), gross salary of deceased
is Rs.12867/-, including perks as mentioned in the salary slip. It is
well established that while calculating salary/ income, statutory
deductions such as professional tax etc. have to be excluded. In the
instant case, as per Ex.P/17 (salary slip), Rs.83/- was being deducted as
professional tax.
9. So far as other perks, as mentioned in above salary slip, are
concerned, Hon'ble Apex Court in the case of National Insurance Co.
Ltd. Vs. Indira Srivastava and others - (2008) 2 SCC 763 has
discussed and examined the matter and has determined as to which
perks are to be included and which perks are to be excluded, while
calculating income.
10. In the case of Indira Srivastava (supra), Hon'ble Apex Court
has held as under:-
2. Connotation of the term "income" for the purpose of
determination of 'just compensation' envisaged under Section 168
of the Motor Vehicles Act, 1988 (the Act) calls for question in
this appeal............A salary certificate was produced in the said
proceedings which is in the following terms:
Earnings Amount Deductions Amount
Basic 3420.00 CPF(S) 488.00
Special Pay 70.00 CPF (Add)
FDA 350.00 GIS 3.75
VDA 1040.00 LIC/GIS 509.10
CCA 100.00 HRR
HRA 1047.00 MSPI 60.00
Washing All. 75.00 Soceity 576.00
Conv. 225.00 Union 3.00
Cant. Sub 265.00 HBA 340.00
CEA 2040.00 B.fund 10.00
Total 8632.00 Total 1089.85
9. The term "income" has different connotations for different
purposes. A court of law, having regard to the change in societal
conditions must consider the question not only having regard to
pay packet the employee carries home at the end of the month but
also other perks which are beneficial to the members of the entire
family. Loss caused to the family on a death of a near and dear
one can hardly be compensated on monetary terms.
10. Section 168 of the Act uses the word 'just compensation'
which, in our opinion, should be assigned a broad meaning. We
cannot, in determining the issue involved in the matter, lose sight
of the fact that the private sector companies in place of
introducing a pension scheme takes recourse to payment of
contributory Provident Fund, Gratuity and other perks to attract
the people who are efficient and hard working. Different offers
made to an officer by the employer, same may be either for the
benefit of the employee himself or for the benefit of the entire
family. If some facilities are being provided whereby the entire
family stands to benefit, the same, in our opinion, must be held to
be relevant for the purpose of computation of total income on the
basis whereof the amount of compensation payable for the death
of the kith and kin of the applicants is required to be determined.
For the aforementioned purpose, we may notice the elements of
pay, paid to the deceased :
Basic 63,400.00
Conveyance allowance 12,000.00
Rent CO lease 49,200.00
Bonus (35% of basic) 21,840.00
Total 1,45,440.00
In addition to above, his other entitlements were:
Contribution to PF-10% Rs.6240 (p.a)
basic
LTA reimbursement Rs.7000(p.a)
Medical reimbursement Rs.6000(p.a)
Superannuation 15% of Rs.9360 (p.a)
basic
Gratuity contribution- Rs.3332 (p.a)
5.34% of basic
Medical policy - self and @Rs.55,000
family (p.a)
Education scholarship @ Rs.12,000 (p.a)
Rs.500 payable to his two
children directly
11. There are three basic features in the aforementioned statement
which require our consideration :
1. Reimbursement of rent would be equivalent to HRA;
2. Bonus is payable as a part of salary; and
3. Contribution to the Provident Fund.
12. We may furthermore notice that apart therefrom,
superannuation benefits, contributions towards gratuity, insurance
of medical policy for self and family and education scholarship
were beneficial to the members of the family.
13. We have, however, no doubt in mind that medical
reimbursement which provides for a slab and which keeping in
view the terminology used, would mean reimbursement for
medical expenses on production of medical bills and, thus, the
same would not come within the purview of the aforementioned
category.
16. We may, however, notice that a Division Bench of this Court
in Asha & Ors. v. United Indian Insurance Co. Ltd. & Anr.
[(2008) 2 SCC 774], whereupon reliance has been placed by Mr.
Satija, was considering a case where, like the present one, several
perks were included in salary. We may reproduce the salary
certificate hereto below :
"This is to certify that Shri A.M. Raikar was working as AG 111
in this organisation has been paid the following Pay &
Allowances for the month of May, 1995:
Earnings Amount Deductions Amount
Basic 3420.00 CPF(S) 488.00
Special Pay 70.00 CPF (Add)
FDA 350.00 GIS 3.75
VDA 1040.00 LIC/GIS 509.10
CCA 100.00 HRR
HRA 1047.00 MSPI 60.00
Washing All. 75.00 Soceity 576.00
Conv. 225.00 Union 3.00
Cant. Sub 265.00 HBA 340.00
CEA 2040.00 B.fund 10.00
Total 8632.00 Total 1089.85
Net payable Rs.6642.00 (Rupees six thousand six hundred and forty two
only)."
In that case, this Court held :
" 9. Lastly it was submitted that the salary certificate
shows that the salary of the deceased was Rs.8,632/-. It was
submitted that the High Court was wrong in taking the salary to be
Rs.6,642/-. It was submitted that the High Court was wrong in
deducting the allowances and amounts paid towards LIC, Society
charges and HBA etc. We are unable to accept this submission
also. The claimants are entitled to be compensated for the loss
suffered by them. The loss suffered by them is the amount which
they would have been receiving at the time when the deceased
was alive. There can be no doubt that the dependents would only
be receiving the net amount less l/3rd for his personal expenses.
The High Court was therefore right in so holding."
17. This Court in Asha (supra) did not address itself the questions
raised before us. It does not appear that any precedent was noticed
nor the term 'just compensation' was considered in the light of the
changing societal condition as also the perks which are paid to the
employee which may or may not attract income tax or any other
tax. What would be 'just compensation' must be determined
having regard to the facts and circumstances of each case. The
basis for considering the entire pay packet is what the dependents
have lost due to death of the deceased. It is in the nature of
compensation for future loss towards the family income.
19. The amounts, therefore, which were required to be paid to the
deceased by his employer by way of perks, should be included for
computation of his monthly income as that would have been
added to his monthly income by way of contribution to the family
as contra distinguished to the ones which were for his benefit. We
may, however, hasten to add that from the said amount of income,
the statutory amount of tax payable thereupon must be deducted.
20. The term 'income' in P. Ramanatha Aiyar's Advanced Law
Lexicon (3rd Ed.) has been defined as under :
"The value of any benefit or perquisite whether convertible into
money or not, obtained from a company either by a director or a
person who has substantial interest in the company, and any sum
paid by such company in respect of any obligation, which but for
such payment would have been payable by the director or other
person aforesaid, occurring or arising to a person within the State
from any profession, trade or calling other than agriculture."
It has also been stated :
" INCOME' signifies 'what comes in' (per Selborne, C., Jones v.
Ogle, 42 LJ Ch.336). 'It is as large a word as can be used' to
denote a person's receipts '(per Jessel, M.R. Re Huggins, 51 LJ
Ch.9355), income is not confined to receipts from business only
and means periodical receipts from one's work, lands,
investments, etc. Secy. to the Board of Revenue, Income Tax v.
Al. Ar. Rm. Arunachalam Chettiar & Brothers (AIR 1921
Mad 427). Ref. Vulcun Insurance Co. Ltd. v. Corpn. Of
Madras (AIR 1930 Mad 626)."
21. If the dictionary meaning of the word 'income' is taken to its
logical conclusion, it should include those benefits, either in terms
of money or otherwise, which are taken into consideration for the
purpose of payment of income-tax or profession tax although
some elements thereof may or may not be taxable or would have
been otherwise taxable but for the exemption conferred thereupon
under the statute.
24. Yet again in New India Assurance Co. Ltd. v. Charlie & Anr
[(2005) 10 SCC 720], the same view was reiterated. However,
therein although the words 'net income' has been used but the
same itself would ordinarily mean gross income minus the
statutory deductions. We must also notice that the said decision
has been followed in New India Assurance Co. Ltd. v. Kalpana
(Smt.) & Ors. [(2007) 3 SCC 538].
25. The expression 'just' must also be given its logical meaning.
Whereas it cannot be a bonanza or a source of profit but in
considering as to what would be just and equitable, all facts and
circumstances must be taken into consideration.
26. In view of our finding above mentioned, the appeal is to be
allowed in part in so far as the High Court had directed deduction
of medical reimbursement and tax elements on the entire sum
which according to the statute constitute income. But we decline
to do so for two reasons. Firstly, the accident had taken place as
far back as on 1st September, 1997 and secondly the Tribunal as
also the High Court failed to take into consideration rise in
income of the deceased by way of promotion or otherwise.
27. For the aforementioned reasons, we are not inclined to
interfere with the impugned judgment. This appeal is, therefore,
dismissed. In the facts and circumstances of the case, there shall
be no order as to costs."
11. Therefore, in view of principles laid down by Hon'ble Apex
Court in Indira Srivastava (supra), in this Court's opinion,
following perks, as mentioned in Ex.P/17 (pay slip), needs to be
included in Basic monthly salary (Rs.8,190/-) of deceased:
HRA -Rs.500/-
Education allowance -Rs.100/-
Supervisory allowance -Rs.2985/-
CCA -Rs.50/-
Medical allowance -Rs.417
12. Thus, if above perks are calculated alongwith basic salary,
then, deceased Chetan Sharma's monthly gross salary comes to
Rs.12,242/- but washing allowance Rs.325/- and conveyance
allowance Rs.300/- cannot be included while computing monthly
salary and the same are excluded from gross salary.
13. Thus, in view of above, after deducting professional tax of
Rs.83/-, net salary of deceased comes to Rs.12,159/-.
14. So far as computing bonus in above net salary is concerned,
learned counsel for the appellant has submitted that Rs.55,000/-
annual bonus be also included while computing/calculating monthly
salary of the deceased. It is correct that in Ex.P/16 certificate
Rs.8400/- is mentioned as bonus and Rs.46,000/- as performance
pay. PW/2 Anil Sharma, who has proved documents Ex.P/16
/Ex.P/17, has stated in his examination-in-chief that Rs.55,000/- was
payable for one year as performance bonus but this witness has
admitted in his cross examination that Chetan Sharma (deceased)
did not work in his company for minimum none months, hence, no
performance bonus was given to him. Further, from documentary as
well as oral evidence, it is not proved that any bonus payable to
deceased was either part of salary or amount of bonus was fixed.
Further, as per deposition of Anil Sharma, bonus was performance
based. In view of above, in this Court's opinion, it will not be just
and proper to add any bonus while calculating / computing monthly
salary of the deceased.
15. In view of above facts, principles laid down in the case of New
India Assurance Co. Ltd. Vs. Gopali - 2012 ACJ 2131 do not apply
to the facts of the present case because in above case bonus was
being paid to deceased at the rate of 20% of his salary and it is not
so in the present case.
Future Prospects:
16. So far as future prospects is concerned, perusal of impugned
award reveal that learned Tribunal has awarded 50% as future
prospects by holding deceased 30 years old at the time of accident.
Learned counsel for the appellant/Insurance Company has submitted
that Tribunal has wrongly awarded 50% as future prospects because
deceased was not in permanent job. Hence, 40% should have been
added as future prospects. Perusal of PW/2 Anil Sharma's
testimony reveal that there is nothing in his testimony to show that
job of deceased was not permanent, instead, it was temporary. No
such suggestion has been given to Anil Sharma during his cross
examination that deceased was not working in the company as
permanent employee and he was temporarily employed with the
company. Further, there is nothing in Ex.P/16 & P/17 to show that
deceased did not have permanent job in the company. Hence, it
cannot be said that Tribunal has wrongly awarded 50% as future
prospects.
17. Perusal of para 18 of impugned award reveal that Tribunal
has also awarded Rs.1,00,000/- for spousal consortium &
Rs.25,009/- for funeral expenses. But Tribunal has not awarded any
amount for loss of estate & parental/filial consortium, for which an
appropriate amount should have also awarded.
18. In view of discussion in the foregoing paras, the compensation
payable to the claimants is recalculated as under:
Loss of dependency -Rs.24,80,436/- (i.e.
Rs.12,159+50% FP i.e. Rs.6080=18,239 - 1/3 personal
expenses i.e. 6080=12159 x 12=1,45,908 x 17=24,80,436/-)
Funeral expenses -Rs.15,000/-
Loss of Estate -Rs.15,000/-
Consortium -Rs.1,60,000/- (Rs.40,000/-x4)
------------------
TOTAL -Rs.26,70,436/-
19. Thus, the just and proper amount of compensation in the instant
case is Rs.26,70,436/- as against the award of the Tribunal of
Rs.27,32,936/-. Accordingly, appellant No.1 Smt. Gayatri shall refund
the difference amount (Rs.62,500/-) along with interest to
appellant/insurance company, if compensation amount is already
deposited &appellant/insurance company shall have right to recover
difference amount (Rs.62,500/-) from appellant No.1 Smt. Gayatri.
Appellant No. 3 & 4 (Satyanarayan Sharma & Smt.Sharda Bai) shall
be entitled to receive only Rs.40,000/- each for "parental Consortium".
20. In the result, the appeal filed by the claimants (MA
No.2354/2013) is dismissed and the appeal filed by the Insurance
Company (M.A.No.2278/2013) is partly allowed by reducing the
compensation amount from Rs.27,32,936/- to Rs.26,70,436/-. The
other findings recorded by the Tribunal shall remain intact.
21. Let a copy of this order be placed in the record of connected
appeal.
(ACHAL KUMAR PALIWAL)
JUDGE
hk/
