Telangana High Court
The New India Assurance Company Ltd., vs Ch. Saritha, on 7 August, 2024
THE HON'BLE SRI JUSTICE SUJOY PAUL
AND
THE HON'BLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO
M.A.C.M.A.No.914 of 2016
JUDGMENT:
(per Hon'ble Sri Justice Namavarapu Rajeshwar Rao)
This Motor Accident Civil Miscellaneous Appeal is filed by
the appellant-Insurance Company, aggrieved by the order and
decree dated 06.02.2015 passed in M.V.O.P.No.101 of 2012 on
the file of the XXVII Additional Chief Judge-cum-Chairman,
Motor Vehicle Accidents Claims Tribunal, City Civil Courts,
Secunderabad (for short 'the Tribunal').
2. For convenience, the parties will be referred to as arrayed
before the Tribunal.
3. The brief facts of the case are as follows:
On 19.03.2011 at about 3.30 p.m., while one
Sri Ch.Venkat Reddy (deceased) was proceeding on his Maruti
Alto Car bearing No.AP-29-S-5970 from Sathupalli towards
Khammam, and when he reached near Ramachandra Rao
village bus station, one lorry bearing No.UP-78-T-4825, driven
by its driver at high speed in a rash and negligent manner,
dashed the Maruti Alto Car from the opposite direction, as a
result of which, the deceased received multiple injuries and
2 SP,J and RRN,J
succumbed to his injuries on the spot. After the accident, the
P.S. V.M.Banjara (Penuballi) registered a case in Cr.No.27 of
2011 for the offences punishable under Sections 304-A and 337
IPC against the driver of the offending vehicle. Therefore, the
petitioners/claimants filed the claim petition seeking
compensation of Rs.40,00,000/-.
4. Before the Tribunal, the 1st respondent remained ex-parte.
The 2nd respondent filed a counter denying the allegations made
in the claim petition.
5. To prove the petitioners' case, PWs.1 to 3 were examined,
and Exs.A1 to A9 were marked. RW.1 was examined for the
respondent Insurance Company, and Ex.B1-Copy of the
Insurance Policy was marked.
6. The Tribunal, after considering the oral and documentary
evidence available on record, allowed the claim petition by
granting compensation of Rs.40,00,000/- (Rupees Forty lakh
Only) with costs with future interest @ 7.5% per annum from
the date of the petition till the date of realization. Respondent
Nos.1 and 2 were jointly and severally liable to pay the awarded
amount. Challenging the same, the respondent Insurance
Company filed the present appeal.
3 SP,J and RRN,J
7. Heard Sri A. Ramakrishna Reddy, learned counsel
appearing for the appellant-Insurance Company and
Sri T. Rahul, learned counsel appearing for the respondent
Nos.1 to 3 and perused the record.
8. Learned counsel appearing for the appellant-Insurance
Company contended that the Tribunal failed to note that as per
Ex.A-7, the taxable income of the deceased (inclusive of the
agricultural income) for the assessment years 2006-07, 2007-08
and 2008-09 is Rs.1,26,000/-, Rs.1,59,600/- and
Rs.1,52,730/- respectively, and the average income of the
deceased would arrive at Rs.1,46,110/-. The Tribunal has
erroneously taken a disproportionate amount under the head of
salary, based on the income tax returns filed by the deceased
and consequently granting excessive amounts to the claimants.
Further, The Tribunal erroneously considered 50% towards
future prospects of the deceased's income, which is contrary to
the guidelines laid down in the judgment of the Hon'ble Apex
Court in Sarla Verma v. Delhi Transport Corporation 1.
Therefore, the same has to be reduced.
2009 ACJ 1298 (SC)
4 SP,J and RRN,J
9. Per contra, learned counsel appearing for the
petitioners/claimants contended that the Tribunal, after hearing
both sides and after considering the material available on
record, rightly awarded compensation amount and the same
needs no interference by this Court.
10. Learned counsel appearing for the petitioners/claimants
has relied upon a few judgments of the Hon'ble Apex Court to
demonstrate that where there is no specific salary certificate,
only income tax returns would be the basis for considering the
deceased's income. In support of his contentions, he relied upon
the judgment of Hon'ble Apex Court in Smt. Anjali & ors. V
Lokendra Rathod & ors. 2, wherein the Hon'ble Apex Court
observed as follows :-
"9. The Tribunal and the High Court both committed grave
error while estimating the deceased's income by
disregarding the Income Tax Return of the Deceased. The
appellants had filed the Income Tax Return (2009-2010) of
the deceased, which reflects the deceased's annual
income to be Rs.1,18,261/-, approx. Rs.9,855/- per month.
This Court in Malarvizhi & Ors. (Supra) has reaffirmed that
the Income Tax Return is a statutory document on which
reliance be placed, where available, for computation of
annual income. In Malarvizhi (Supra), this Court has laid
as under:
2022 SCC OnLine SC 1683
5 SP,J and RRN,J
"We are in agreement with the High Court that the
determination must proceed on the basis of the income tax
return, where available. The income tax return is a statutory
document on which reliance may be placed to determine the
annual income of the deceased."
10. Hence, this Court is of the opinion that the deceased's
annual income be fixed at Rs.1,18,261/-, approx.
Rs.9,855/- per month keeping in mind the deceased's
Income Tax Return for the year 2009-2010.
11. The provisions of the Motor Vehicles Act, 1988 (for short,
"MV Act") gives paramount importance to the concept of 'just
and fair' compensation. It is a beneficial legislation which
has been framed with the object of providing relief to the
victims or their families. Section 168 of the MV Act deals
with the concept of 'just compensation' which ought to be
determined on the foundation of fairness, reasonableness
and equitability. Although such determination can never be
arithmetically exact or perfect, an endeavor should be made
by the Court to award just and fair compensation
irrespective of the amount claimed by the applicant/s. In
Sarla Verma & Ors. Vs. Delhi Transport Corporation &
Anr.3, this Court has laid down as under:
"16. ..."Just compensation" is adequate compensation which
is fair and equitable, on the facts and circumstances of the
case, to make good the loss suffered as a result of the wrong,
as far as money can do so, by applying the well settled
principles relating to award of compensation. It is not
intended to be a bonanza, largesse or source of profit."
11. On the other hand, learned counsel for the respondent
Insurance Company averred that in such circumstances, the
average income of the preceding three years has to be taken,
6 SP,J and RRN,J
and to such extent, relied upon the judgment of the Hon'ble
Apex Court in K.Ramya And Others Vs. National Insurance
Company Limited and Anr 3, wherein the Hon'ble Apex Court
observed:
"C.2 RELIABILITY ON INCOME TAX RETURNS AND
AUDIT REPORTS TO DETERMINE 'LOSS OF INCOME'
13. The Deceased in the present case was a
businessman and during the proceedings before the
Tribunal, the Appellants produced the relevant
income tax returns, audit reports and other
relevant documents pertaining to the commercial
ventures of the Deceased to prove the loss of income
attributable on account of his sudden demise. The
Tribunal relied on the same and computed the income
by taking an average of the income recorded in three
prior financial years (FY 2000¬2001, FY 2001¬2002
and FY 2002¬2003) to determine the
compensation under the head of 'loss of income'."
"18. The Appellants have produced audit reports for the
last four financial years which highlight the amounts
under 'Income from Business Ventures and other
Investments' which is as per follows - (i) for FY 2000-
2001 is Rs. 8,95,812/ (ii) for FY 2001-2002 is
Rs.10,31,091/ (iii) for FY 2002-2003 is Rs.14,65,060/
and (iv) for FY2003-2004 is Rs. 9,79,099/. The average
of these amounts comes upto Rs. 10,92,765.50/, which
is rounded off to Rs 10,93,000/ and the same is
awarded to the Appellants as loss of income derived
under 'Income from Business Ventures and other
Investments'."
7 SP,J and RRN,J
12. Learned counsel appearing for the respondent Insurance
Company also relied upon the judgment of the Hon'ble Apex
Court in Smt.Sangita Arya And Others Vs. Oriental
Insurance Company Limited 4, wherein it was held:
"7. We have heard the learned counsel for the parties and
perused the material on record. We find that the impugned
order passed by the High Court bristles with serious factual
inaccuracies :- first, the learned Single Judge wrongly
assumed that the deceased Harish Singh Arya was a
Government employee. This has nowhere been averred by
the Claimants in any of their pleadings. The entire basis of
the judgment is hence misconceived.
On the basis of the aforesaid erroneous assumption, the High
Court has erroneously observed that the deceased was
running a parallel business by plying two taxis, and held
that the income derived from the same could not be taken
into consideration for assessing the compensation. These
findings being based on a completely erroneous assumption,
are liable to be set aside.
Second, the High Court determined the income of the
deceased by taking the average of the ITRs filed for the years
2002-03 at Rs. 54,000 p.a., 2003-04 at Rs. 52,405 p.a., and
2004-05 at Rs. 51,500 p.a. The learned Single Judge
disregarded the ITR for the year 2006-07, wherein the
income of the deceased was shown as Rs. 98,500 p.a. on the
ground that it was allegedly filed almost one year after the
death of the deceased. This finding also is factually incorrect.
A photocopy of the original ITR for the year 2006-07 was
filed before this Court, bearing the rubber stamp of the
Income Tax Department. It shows that the date of filing the
8 SP,J and RRN,J
ITR was 20.04.2007, which is prior to the death of the
deceased which occurred on 18.06.2007. Hence, the High
Court was not justified in disregarding the ITR for the year
2006-07 while assessing the income of the deceased. The
Appellants have also placed on record a copy of the ITR for
the year 2005-06, which bears the rubber stamp of the
Income Tax Department, and reveals the income of the
deceased at Rs. 98,100 p.a. during the previous assessment
year. As a consequence, the impugned judgment dated
22.07.2016 passed by the High Court is hereby set aside."
13. It is clear from the aforesaid judgments of the Hon'ble
Apex Court that even though the nature of the MV Act is that of
a beneficial legislation, it was enacted purely with the intention
of compensating the victims of a motor vehicle accident for the
loss suffered by them. It should not be treated as a bounty,
bonanza or a source of profit. The extent of compensation has to
be calculated depending upon the facts and circumstances of
each case, on based on the material available on record and in
terms of the decisions of the Hon'ble Apex Court. The
compensation amount cannot be treated as a means of
enrichment. This Court is of the considered view that the
learned counsel appearing for the respondent Insurance
Company has rightly contended that for the purpose of
calculating the compensation amount, the average income of the
past three years ought to be taken into consideration.
9 SP,J and RRN,J
14. A perusal of the impugned order discloses that the
Tribunal, having framed issue No.1 as to whether the accident
had occurred due to rash and negligent driving of the offending
vehicle by its driver and having considered the evidence of PW.2,
an eye witness to the accident, coupled with the documentary
evidence i.e., Ex.A-1-FIR and Ex.A-2-charge-sheet, rightly came
to the conclusion that the accident occurred due to the rash and
negligent driving of the driver of the offending vehicle and has
answered in favour of the petitioners and against the
respondents. Therefore, there are no reasons to interfere with
the Tribunal's finding that the accident occurred due to the rash
and negligent driving of the offending vehicle's driver.
15. Insofar as the quantum of compensation is concerned, the
learned counsel for the respondent Insurance Company
contended that the monthly income/annual income of the
deceased was wrongly taken. The average income of the
preceding three assessment years has to be taken. For the
assessment year 2006-07, the taxable income is Rs.1,26,000/-,
for 2007-08 is Rs.1,59,600/- and for 2008-09 is Rs.1,52,730/-.
The total income for three years comes to Rs.4,38,330.
Accordingly, the average income comes to Rs.1,46,110/. Hence,
the annual income of the deceased is fixed at Rs.1,46,110/-.
10 SP,J and RRN,J
16. The deceased was aged 38 years at the time of the
accident. Since the deceased was self-employed, the petitioners
are entitled only to 40% of the deceased's income towards future
prospects, as per the decision of the Hon'ble Apex Court in
National Insurance Company Limited Vs. Pranay Sethi 5.
However, the Tribunal erroneously considered 50% of the
deceased's income towards future prospects instead of 40% and
the same needs to be modified. Accordingly, the annual income
of the deceased would come to Rs.2,04,554/-
[Rs.1,46,110+40%]. Since the claimants are three in number,
the Tribunal rightly considered 1/3rd deduction towards the
personal expenditure of the deceased, in terms of Pranay Sethi
(supra). Accordingly, the annual income of the deceased comes
to Rs.1,36,369/- [Rs.2,04,554 - Rs.68,185].
17. As per the decision of the Hon'ble Apex Court in Sarla
Verma v. Delhi Transport Corporation 6, the appropriate
multiplier applicable for the deceased's age is '15', as the
deceased was aged 38 years at the time of the accident. The
Tribunal rightly adopted a multiplier of '15' and after applying
the said multiplier, the total loss of dependency comes to
Rs.20,45,535/-.
2017 (16) SCC 680.
2009 ACJ 1298 (SC)
11 SP,J and RRN,J
18. The Tribunal erroneously granted an amount of
Rs.1,00,000/- towards consortium, Rs.1,00,000/- towards loss
of love and affection to the minor children @ 50,000/- each,
Rs.20,000/- towards loss of estate and Rs.25,000/- towards
funeral expenses, and the same requires interference by this
Court. As per Pranay Sethi (supra), petitioner No.1 is entitled to
a sum of Rs. 48,400/- (Rs. 40,000/- +10%+10%) towards loss of
spousal consortium. The petitioners are also entitled to a sum of
Rs. 36,300/- (Rs.15,000/- + Rs. 15,000/- + 10% + 10%) towards
loss of estate and funeral expenses. Further, since petitioner
Nos. 2 and 3 were minors at the time of the accident, they are
entitled to a sum of Rs. 40,000/- each towards loss of parental
consortium as per the decision of the Hon'ble Apex Court in
Magma General Insurance Company Vs. Nanu Ram alias
Chuhru Ram 7. The Tribunal awarded a sum of Rs.5,000/-
towards transport charges, which needs no interference by this
Court.
19. Accordingly, the order dated 06.02.2015 passed by the
Tribunal in M.V.O.P.No.101 of 2012 is modified as follows:-
7 2018 18 SCC 130
12 SP,J and RRN,J
S.No. Particulars Amount
1. Annual salary of the Rs.1,46,110/-
deceased
2. Add: 40% Future Rs.58,444/-
Prospects
3. Sub-Total Rs.2,04,554/-
4. Less: 1/3rd towards (-)Rs.68,185
Personal Expenditure
5. Sub-Total [5-6] Rs. 1,36,369/-
6. Total Loss of Dependency Rs.20,45,535/-
(Rs.1,36,369/-x 15)
7. Add : Conventional Heads Rs.36,300/-
(Funeral Expenses and
Loss of Estate)
(Rs.15,000/- +
Rs.15,000/- +10%+10%)
8. Add: Loss of spousal Rs.48,400/-
consortium (Rs.40,000/-
+10%+10%)
9. Add : Loss of parental Rs.80,000/-
consortium (Rs.40,000/-
x 2)
10. Transportation Charges Rs.5,000/-
(as awarded by the
Tribunal)
Total Compensation Rs.22,15,235
20. The Tribunal has rightly awarded the rate of interest at
7.5% per annum which needs no interference by this Court.
21. In the result, this M.A.C.M.A. is partly allowed and the
compensation amount awarded by the Tribunal is reduced from
Rs.40,00,000/- to Rs.22,15,235 (Rupees Twenty Two Lakh
13 SP,J and RRN,J
Fifteen Thousand Two Hundred Thirty Five Only) with interest
@ 7.5 % p.a. from the date of petition till the date of realization.
Respondent Nos. 1 and 2 are directed to deposit the said amount
with costs and interest, after giving due credit to the amount
already deposited, if any, within a period of two months from the
date of receipt of a copy of this judgment. On such deposit, the
claimants are permitted to withdraw the said amount in the
same manner and ratio as apportioned by the Tribunal. No
order as to costs.
As a sequel, miscellaneous petitions, if any are pending,
shall stand closed.
________________
SUJOY PAUL, J
_____________________________________
NAMAVARAPU RAJESHWAR RAO, J
07th August, 2024
Prv
