Madhya Pradesh High Court
The New India Assurance Co. Ltd. Thr. vs Smt. Laxmi Bai on 12 March, 2025
Author: Gurpal Singh Ahluwalia
Bench: G. S. Ahluwalia
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1 MA. No. 983 of 2020
IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE G. S. AHLUWALIA
ON THE 12th OF MARCH, 2025
MISC. APPEAL No. 983 of 2020
THE NEW INDIA ASSURANCE CO. LTD. THR.
Versus
SMT. LAXMI BAI AND OTHERS
Appearance:
Shri Badri Nath Malhotra - Advocate for appellant.
Shri R.P. Gupta- Advocate for respondents No.1 to 8.
Shri Vinay Kumar Mishra - Advocate for respondents No.9 to 10.
ORDER
This Misc. Appeal, under Section 173 of the Motor Vehicles Act, has been
filed against the Award dated 06.12.2019 passed by Xth Motor Accident Claims
Tribunal, Gwalior (M.P.) in MACC No.642/2018.
2. Since the factum of accident & liability is not in dispute therefore it is
suffice to mention here that in a head on collision which took place on 25/05/2018
between two vehicles, two persons, namely, Hariom Batham & Vimlesh Dixit lost
their lives. Vimlesh Dixit was driving the car whereas Hariom Batham was
sitting. The present appeal arises out of the Claim Petition filed by Lrs of Hariom
Batham.
3. It is submitted by counsel for Insurance Company that ex gratia amount
which has been received by the claimants from the department on account of
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death of deceased has not been adjusted, which is contrary to judgment passed by
Supreme Court in the case of Krishna and others Vs. Tek Chand and others
reported in 2024 ACJ 443. It is submitted that mother and father of deceased
cannot be treated as dependents and therefore personal expenses should have been
taken as 1/4. It is further submitted that Claims Tribunal has also directed that the
income tax which was payable at the relevant time is also liable to be deducted
and submitted that in fact the claims tribunal should not have left that discretion
to the appellant. It is further submitted that the Claims Tribunal has also imposed
penal interest at the rate of 12% per annum in case if the Award amount is not
paid within a period of two months. It is submitted that penal interest cannot be
directed to be paid.
4. Per contra, appeal is vehemently opposed by counsel for claimants. It is
submitted that it is true that respondent No.8 is a pensioner and even if it is held
that respondent No.8 is not dependent, then still respondent No.7 who is mother
of deceased has to be treated as legal representative. So far as non-deduction of ex
gratia amount as well as non-calculation of income tax as well as professional tax
is concerned, it was fairly conceded by counsel for claimants that in fact the
Claims Tribunal should have awarded the total recoverable amount after
deducting the income tax as well as professional tax. Furthermore, in the light of
judgment passed by Supreme Court in the case of National Insurance Co. Ltd.
Vs. Keshav Bahadur and others reported in 2004 ACJ 648, it is submitted that
award of penal interest at the rate of 12% is erroneous.
5. Heard learned counsel for parties.
6. The claimant/Smt. Lakshmi Bai, in her evidence, has accepted that she has
received Rs.50,000/- from the department by way of ex gratia compensation. The
Supreme Court in the case of Krishna (supra) has held that amount paid by way
of compassionate assistance to dependents of deceased government employee is
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deductible while assessing the compensation for death of government employee
in road accidents and has held as under:
"6. We find that the observations of this court in Sebastiani Lakra
(supra) distinguishing the case of Shashi Sharma (supra) clearly apply
to the case in hand. It is observed that the amount of Rs.31,37,665 was
paid to the dependents of the deceased-employee who are the
petitioners herein under the aforesaid Rules by way of compassionate
assistance owing to the sudden death of the employee in harness for
any reason whatsoever including as a result of a road accident. This is
in order to compensate the loss of the bread earner of the family who
dies in harness.
In the case of a motor vehicle accident, when negligence is
proved, loss of dependency is compensated for the very same reason.
In our view, there cannot be a duplication in payments or a windfall
owing to a misfortune. In other words, on the death of the person in
harness, owing to a road accident, the dependents of a deceased cannot
be doubly benefited as opposed to those who are dependents of a
deceased who dies owing to illness or any other reason under the Rules
formulated by the Haryana Government."
Thus, it is held that Claims Tribunal has committed a mistake by not
deducting the ex gratia compensation amount paid by the department to the
claimants.
7. Admittedly, father of deceased is a pensioner. Total eight persons i.e.
widow, five children and mother and father of deceased have filed the claim
petition. For the purposes of calculating personal expenses, it has been held by
Supreme Court that in case if family members are above six then total deduction
towards personal expenses would be 1/5. It is true that father of deceased was a
pensioner, but under Section 166 of the Motor Vehicles Act, a legal representative
is entitled for compensation. Even the major and earning children are held to be
entitled to received compensation. The Supreme Court in the case of National
Insurance Company Limited Vs. Birender And Others reported in (2020) 11
SCC 356 has held as under:-
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12. The legal representatives of the deceased could move application
for compensation by virtue of clause (c) of Section 166(1). The major
married son who is also earning and not fully dependent on the deceased,
would be still covered by the expression "legal representative" of the
deceased. This Court in Manjuri Bera [Manjuri Bera v. Oriental
Insurance Co. Ltd., (2007) 10 SCC 643 : (2008) 1 SCC (Cri) 585] had
expounded that liability to pay compensation under the Act does not
cease because of absence of dependency of the legal representative
concerned. Notably, the expression "legal representative" has not been
defined in the Act. In Manjuri Bera [Manjuri Bera v. Oriental Insurance
Co. Ltd., (2007) 10 SCC 643 : (2008) 1 SCC (Cri) 585] , the Court
observed thus: (SCC pp. 647-48, paras 9-12)
"9. In terms of clause (c) of sub-section (1) of Section 166 of
the Act in case of death, all or any of the legal representatives of
the deceased become entitled to compensation and any such legal
representative can file a claim petition. The proviso to said sub-
section makes the position clear that where all the legal
representatives had not joined, then application can be made on
behalf of the legal representatives of the deceased by impleading
those legal representatives as respondents. Therefore, the High
Court was justified in its view [Manjuri Bera v. Oriental
Insurance Co. Ltd., 2003 SCC OnLine Cal 523 : (2004) 2 CHN
370] that the appellant could maintain a claim petition in terms of
Section 166 of the Act.
10. ... The Tribunal has a duty to make an award, determine the
amount of compensation which is just and proper and specify the
person or persons to whom such compensation would be paid.
The latter part relates to the entitlement of compensation by a
person who claims for the same.
11. According to Section 2(11) CPC, "legal representative"
means a person who in law represents the estate of a deceased
person, and includes any person who intermeddles with the estate
of the deceased and where a party sues or is sued in a
representative character the person on whom the estate devolves
on the death of the party so suing or sued. Almost in similar terms
is the definition of legal representative under the Arbitration and
Conciliation Act, 1996 i.e. under Section 2(1)(g).
12. As observed by this Court in Custodian of Branches of
Banco National Ultramarino v. Nalini Bai Naique [Custodian of
Branches of Banco National Ultramarino v. Nalini Bai Naique,
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1989 Supp (2) SCC 275] the definition contained in Section 2(11)
CPC is inclusive in character and its scope is wide, it is not
confined to legal heirs only. Instead it stipulates that a person who
may or may not be legal heir competent to inherit the property of
the deceased can represent the estate of the deceased person. It
includes heirs as well as persons who represent the estate even
without title either as executors or administrators in possession of
the estate of the deceased. All such persons would be covered by
the expression "legal representative". As observed in Gujarat
SRTC v. Ramanbhai Prabhatbhai [Gujarat SRTC v. Ramanbhai
Prabhatbhai, (1987) 3 SCC 234 : 1987 SCC (Cri) 482] a legal
representative is one who suffers on account of death of a person
due to a motor vehicle accident and need not necessarily be a
wife, husband, parent and child."
13. In para 15 of Manjuri Bera [Manjuri Bera v. Oriental Insurance Co.
Ltd., (2007) 10 SCC 643 : (2008) 1 SCC (Cri) 585] , while adverting to
the provisions of Section 140 of the Act, the Court observed that even if
there is no loss of dependency, the claimant, if he was a legal
representative, will be entitled to compensation. In the concurring
judgment of S.H. Kapadia, J., as his Lordship then was, it is observed
that there is distinction between "right to apply for compensation" and
"entitlement to compensation". The compensation constitutes part of the
estate of the deceased. As a result, the legal representative of the
deceased would inherit the estate. Indeed, in that case, the Court was
dealing with the case of a married daughter of the deceased and the
efficacy of Section 140 of the Act. Nevertheless, the principle underlying
the exposition in this decision would clearly come to the aid of
Respondents 1 and 2 (claimants) even though they are major sons of the
deceased and also earning.
14. It is thus settled by now that the legal representatives of the
deceased have a right to apply for compensation. Having said that, it
must necessarily follow that even the major married and earning sons of
the deceased being legal representatives have a right to apply for
compensation and it would be the bounden duty of the Tribunal to
consider the application irrespective of the fact whether the legal
representative concerned was fully dependent on the deceased and not to
limit the claim towards conventional heads only. The evidence on record
in the present case would suggest that the claimants were working as
agricultural labourers on contract basis and were earning meagre income
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between Rs 1,00,000 and Rs 1,50,000 per annum. In that sense, they
were largely dependent on the earning of their mother and in fact, were
staying with her, who met with an accident at the young age of 48 years.
8. Even otherwise mother of deceased is not a pensioner and is not earning
anything. Merely because she is dependent upon the pension of her husband, it
cannot be said that she cannot be treated as dependent and legal representative of
deceased. If mother of deceased is held to be legal representative and entitled to
receive compensation, then total number of claimants even after excluding father
of deceased would come to seven i.e. above six and therefore, personal expenses
of deceased have to be taken as 1/5 which has been rightly taken by the Claims
Tribunal.
9. So far as the deduction of income tax and professional tax is concerned,
counsel for appellant is correct that the said exercise should have been done by
the Claims Tribunal. However, counsel for claimants has provided a calculation
after deducting the professional tax as well as income tax which is as under:-
Award 55,36,872
Income (para 17) 33,664
Yearly 33,664 x 12 4,03,968
2018- Income Tax EICC 2,50,000+ 3,00,000
50000 (standard deduction)
Taxable Income 4,03,968-3,00,000 1,03,968
Income Tax (10%) 10,396
After deduction Income Tax yearly 3,93,572
income 4,03,968-10396
Income [3,93,572-2500 (professional 3,91,072
Tax)]
Deduction 1/5 = 3,91,072-78,214 = 3,12,858
3,12,858
+30% Future 312858+93857 4,06,715
Multiplier 13 (4,06,715x13) 52,87,295
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Other heads +consortium+loss of estate 70,000
Total Compensation 53,57,295
Award - compensation 1,79,577
55,36,872-53,57,295
Learned Claims Tribunal not awarded consortium to each claimant
Claimants are eight in number
Ex gratia amount Rs.50,000/- less in compensation, so excess amount Rs.
1,79,577+50000 = 2,29,577/-
Total Excess Amount = 2,29,577/-
10. If the appellant is satisfied with the aforesaid chart, then he may not re-
approach the Claims Tribunal, but if it is not satisfied with the above calculation
then it can approach the Claims Tribunal for refixation of compensation amount
after deducting income tax as well as professional tax. So far as imposition of
penal interest is concerned, as already held, the aforesaid direction given by the
Claims Tribunal does not hold field in the light of judgment passed by Supreme
Court in the case of Keshav Bahadur (supra).
Now, the only question for consideration is as to whether the excess
amount of Rs.2,29,577/- is liable to be refunded by respondent No.1 to 8 or
not?
11. The Claims Tribunal has awarded consortium to only widow of deceased
i.e. Rs.40,000/- whereas widow of deceased, her children and parents of the
deceased were entitled for separate consortium amount at the rate of Rs.40,000/-.
It is true that respondents No.1 to 8 have not preferred any appeal, but this Court
can always ascertain the just compensation. After accepting the submissions made
by appellant, the compensation amount awarded by the Claims Tribunal is liable
to be reduced by Rs.2,29,577/- whereas, as already held each and every claimant
i.e. widow, children and parents of decreased were entitled to spousal consortium,
parental consortium and filial consortium respectively. Therefore the Claims
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Tribunal should have awarded separate consortium to each claimant and should
have awarded Rs.3,20,000/- in place of Rs.40,000/- only. Thus, prima facie an
amount of Rs.2,80,000/- less has been awarded towards consortium amount
which was payable to all the claimants. Under these circumstances, since the
amount awarded by the Claims Tribunal is liable to be reduced after accepting the
submissions made by counsel for appellant, but as respondents No.2 to 8 are also
entitled for separate consortium amount, therefore, this Court is of considered
opinion that respondent No.2 to 8 are also entitled for Rs.2,80,000/- by way of
parental and filial consortium respectively. Since total amount of compensation is
liable to be reduced by Rs.2,29,577/- and in fact respondents No.2 to 8 are also
entitled for separate consortium amount which has not been awarded to
respondents No.2 to 8 but in absence of any appeal by respondent Nos. 2 to 8, this
Court is of considered opinion that although respondents No.2 to 8 may be
entitled to further amount of Rs.2,80,000/- but the same may be adjusted towards
the reduction in the compensation amount. Accordingly, it is held that although
the income tax, professional tax as well as ex gratia compensation which has
already been calculated is liable to be deducted by the Insurance Company, but
the claimants are entitled to get the entire compensation amount which has been
awarded by Tribunal.
12. With aforesaid observation, Award dated 06.12.2019 passed by X Motor
Accident Claims Tribunal, Gwalior (M.P.) in MACC No.642/2018 is modified to
the extent indicated above.
13. Appeal stands accordingly disposed of.
(G.S. Ahluwalia)
pd Judge
