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Madhya Pradesh High Court · body

2014 DIGILAW 46 (MP)

Gemini Fuels Pvt. Ltd. v. Commercial Tax Officer

2014-01-08

A.M.KHANWILKAR

body2014
Judgment Ajay Manikrao Khanwilkar; CJ Heard. This order shall lead to final disposal of Misc. Appeal No.1876/2010 and Misc. Appeal No.1841/2011, as both these appeals emanate from an Award dated 22.1.2010 passed by the First Additional Member to the Fourth Additional Motor Accident Claims Tribunal (Fast Track Court), Khandwa [hereinafter referred to as 'Tribunal']. Whereas, Misc. Appeal 1876/2010 is by the Bajaj Allianz General Insurance Co. Ltd, on the findings regarding involvement of the offending vehicle and on quantum. The appeal has been filed on the strength of permission granted under Section 170 of the Motor Vehicles Act, 1988. Misc. Appeal 1841/2011 is by the claimants for enhancement of compensation on the ground that the Tribunal has erred in properly computing the gross annual income of the deceased, in applying the multiplier of 13 instead of 15 and not granting compensation in lieu of future loss of income, as a deceased was a Govt. Servant. Accident occurred on 30.4.2008 at 7.45 p.m. when the deceased Vikram Singh, driving the motorcycle no.MP-09-MC5930 along with his friend, was coming back from village Bamnala Khandwa, was hit head on by the offending vehicle, bearing registration no.MP-12-MB-7037 driven by Ashok, respondent no.1 in the claim petition, at culvert near village Dondwada. Vikram Singh succumbed to the injuries. He was employed as Civil Assistant Grade II in the office of Executive Engineer, Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd. The claim case was filed by the widow, son and daughters of the deceased for compensation of Rs.38,85,938/-. The offending vehicle was insured with the Bajaj Allianz General Insurance Company Ltd., the appellant in Misc. Appeal No.1841/2010. Whereas, the vehicle with which the accident had occurred was insured with National Insurance Company Limited. To prove the accident, income, age of the claimants' son and daughters, the claimants filed the final report under Section 173 of the Code of Criminal Procedure, 1973 of the criminal case registered vide Crime No.104/2009 along with FIR (Ex.A/2), Crime Details Form comprising spot map (Ex.A/3), property seizure memo (Ex.A/4), MLC (Ex. A/5), Post-mortem Report (Ex. A/7), salary certificate (Ex.A/8) and Rin Pustika (Ex.A/12). Claimant No.4 examined herself and examined Suresh, son of Bhaiyalal, pillion rider accompanied the deceased when the accident occurred. A/5), Post-mortem Report (Ex. A/7), salary certificate (Ex.A/8) and Rin Pustika (Ex.A/12). Claimant No.4 examined herself and examined Suresh, son of Bhaiyalal, pillion rider accompanied the deceased when the accident occurred. Respondents No.1 and 2 (Ashok Patel and Bhaghirath Tanwar), respectively the rider of offending vehicle and the owner of offending vehicle, though denied of the accident be ing due to their negligence; however, they did not enter the witness box to establish their contention. That, respondent no.3, present appellant in Misc. Appeal No.1876/2010 and respondent No.5-National Insurance Company Ltd., stated that the accident had occurred due to negligence of the deceased and not by the rider of the offending vehicle. It was further stated that the deceased and the rider of offending vehicle were not having the driving license and the vehicles were driven contrary to the insurance policy. However, neither Bajaj Allianze General Insurance Company Ltd. nor National Insurance Company Ltd. entered the witness box to establish their contentions in the written statement. Right of the appellant in Misc. Appeal No.1876/2010 was closed on 8.1.2010 as despite of repeated opportunities, it did not examine the witness in defence. The Tribunal, in paragraph 18, returned a specific finding that the deceased was, in no manner, instrumental in the cause of accident and was not found having contributed to the accident. To arrive at this conclusion, the Tribunal relied upon the material documents and uncontroverted evidence of the pillion rider, applicant's witness no.2-Suresh, son of Bhaiyyalal. As to the age and income of the deceased, the Tribunal relied on the MLC and post-mortem report and the income certificate and discarded the age in the ration card filed by the Bajaj Allianze General Insurance Company Ltd. in paragraph 26 of the award and determined the age of the deceased at the time of death being 48 years. As for income of the deceased, in paragraph 22 of the award, the Tribunal recorded that on the date of death, the deceased was employed as Civil Assistant Grade-II and gross salary was Rs.21,712/- and the net salary after deductions towards gratuity and General Insurance Scheme was Rs.20,162/-. Appellant in Misc. Appeal 1876/2010 i.e. Bajaj Allianz General Insurance Co. As for income of the deceased, in paragraph 22 of the award, the Tribunal recorded that on the date of death, the deceased was employed as Civil Assistant Grade-II and gross salary was Rs.21,712/- and the net salary after deductions towards gratuity and General Insurance Scheme was Rs.20,162/-. Appellant in Misc. Appeal 1876/2010 i.e. Bajaj Allianz General Insurance Co. Ltd. questions the Award on the ground that the Tribunal committed grave folly in relying on the FIR and the income certificate to arrive at a conclusion that the offending vehicle was involved in the accident and that the deceased was employed as Civil Assistant Grade II and his gross salary was Rs.21,712/- and net income Rs.20,162/-. It is urged that since FIR was lodged after four days, the same creates a doubt of accident having occurred. However, no evidence was led by the appellant-Bajaj Allianz General Insurance Co. Ltd to substantiate the doubt raised about the accident; therefore, the Tribunal was within its right, in absence of any evidence to the contrary, to have relied on the FIR indicating that the offending vehicle being involved in the accident resulting in death of Vikram Singh. In respect of the pay of the deceased, the same has been proved vide Ex.A/8, pay certificate which has been issued in due course and the appellant fails to establish vide cogent evidence that the pay of the deceased was not as shown in Ex.A/8. The contention that unless a departmental personnel is examined, the pay certificate produced and proved by the claimant ipso facto will not be a proof of pay the deceased was receiving on the day when he met with accident. The contention could have been accepted had there been any evidence by the appellant-Insurance Company contradicting the pay certificate which has been issued in due course and does not, on the face of it, give rise to any doubt. Thus, there is no error on the part of the Tribunal in accepting the pay certificate and computing the deceased's income thereon. Thus, the appellant in M.A. 1876/2010 fails to establish any error in the award dated 22.10.2010 as would warrant any interference at the instance of the Insurance Company. Before dwelling on M.A. 1841/2011, an appeal by the claimant for enhancement, worth it would be to take note of recent development. In Reshma Kumari and Ors. vs. Madan Mohan and Anr. Thus, the appellant in M.A. 1876/2010 fails to establish any error in the award dated 22.10.2010 as would warrant any interference at the instance of the Insurance Company. Before dwelling on M.A. 1841/2011, an appeal by the claimant for enhancement, worth it would be to take note of recent development. In Reshma Kumari and Ors. vs. Madan Mohan and Anr. : Civil Appeal No.4646/2009 decided on 2.4.2013, a three-Judge Bench of the Supreme Court, on reference in respect of two issues viz. (i) whether multiplier specified in the Second Schedule appended to the Motor Vehicle Act, 1988 should be scrupulously applied in all cases ? and (ii) whether for determination of the multiplicand, the 1988 Act provides for any criterion, particularly as regards determination of future prospect, has held - 38. The above does provide guidance for the appropriate deduction for personal and living expenses. One must bear in mind that the proportion of a man's net earnings that he saves or spends exclusively for the maintenance of others does not form part of his living expenses but what he spends ex- clusively on himself does. The percentage of deduction on account of personal and living expenses may vary with reference to the number of dependant members in the family and the personal living expenses of the deceased need not exactly correspond to the number of dependants. 39. In our view, the standards fixed by this Court in Sarla Verma on the aspect of deduction for personal living expenses in paragraphs 30, 31 and 32 must ordinarily be followed unless a case for departure in the circumstances noted in the preceding para is made out. 40. In what we have discussed above, we sum up our conclusions as follows: (i) In the applications for compensation made under Section 166 of the 1988 Act in death cases where the age of the deceased is 15 years and above, the Claims Tribunals shall select the multiplier as indicated in Column (4) of the table prepared in Sarla Verma read with para 42 of that judgment. (ii) In cases where the age of the deceased is upto 15 years, irrespective of the Section 166 or Section 163A under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in Column (6) of the table in Sarla Verma should be followed. (iii) As a result of the above, while considering the claim applications made under Section 166 in death cases where the age of the deceased is above 15 years, there is no necessity for the Claims Tribunals to seek guidance or for placing reliance on the Second Schedule in the 1988 Act. (iv) The Claims Tribunals shall follow the steps and guidelines stated in para 19 of Sarla Verma for determination of compensation in cases of death. (v) While making addition to income for future prospects, the Tribunals shall follow paragraph 24 of the Judgment in Sarla Verma. (vi) Insofar as deduction for personal and living expenses is concerned, it is directed that the Tribunals shall ordinarily follow the standards prescribed in paragraphs 30, 31 and 32 of the judgment in Sarla Verma subject to the observations made by us in para 38 above. (vii) The above propositions mutatis mutandis shall apply to all pending matters where above aspects are under consideration. In Sarla Verma vs. Delhi Transport Corporation (2009) 6 SCC 121 , it has been held : 19. To have uniformity and consistency, Tribunals should determine compensation in cases of death, by the following well settled steps : Step 1 (Ascertaining the multiplicand) The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand. Step 2 (Ascertaining the multiplier) Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said table with reference to the age of the deceased. Step 3 (Actual calculation) The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the 'loss of dependency' to the family. Thereafter, a conventional amount in the range of Rs.5,000/- to Rs.10,000/- may be added as loss of estate. Where the deceased is survived by his widow, another conventional amount in the range of 5,000/- to 10,000/- should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased. The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the deceased before death (if incurred) should also be added. 24. In Susamma Thomas, this Court increased the income by nearly 100%, in Sarla Dixit, the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. [Where the annual income is in the taxable range, the words 'actual salary' should be read as 'actual salary less tax']. The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances. 30. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances. 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 standardized 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 (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependant family members is 4 to 6, and one-fifth (1/5th) where the number of dependant family members exceed 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 parents 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 dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependant 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 family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed 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 will be taken as twothird. However, where family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed 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 will be taken as twothird. In the case at hand, taking into consideration the fact that the net income of the deceased was Rs.20,162/- and that he was 48 years of age. Thus, applying multiplier of 13 and 1/5th income being spent on himself, the annual dependency has been taken to be at Rs.1,86,400/- and the total dependency at Rs.2,42,300/-. Thus, though the principle laid down in Sarla Verma (supra) has been followed, however, the Tribunal committed two fold error, (i) that the dependant being 4 yet, 1/5th is taken into consideration and (ii) loss of future prospect has not been considered. The Award, therefore, is liable to be modified in the following terms - Particulars Amount in Rs. Net Income 20162 Annual Income 20162 x 12 = 241944 Subtract Income Tax Rs.9000 241944-9000 = 232944 Deduct 1/4th from annual income [1/4 of 232944) 232944-58236=174708 Loss of prospective income being below 50 years of age @ 30% [232944x30%] 69883+174708=244591 Multiplier 13' 244591x13=3179683 Amount towards - (i) Loss of estate (ii) Loss of consortium 10000 10000 Total 20000+3179683=3199683 The loss of dependency then comes to Rs.31,99,683/- of which the amount of Rs.24,35,200/- (awarded by Tribunal) is deducted. The appellants in M.A. 1841/2011 would thus be entitled for enhanced amount of Rs.7,64,483/- and simple interest thereon @ 6% from the date of appeal till realization, to be deposited, in the same manner as has been ordered by the Tribunal. In the result, - (i) Misc. Appeal No.1876/2010 preferred by the Bajaj Allianz General Insurance Co. Ltd is dismissed. (ii) Misc. Appeal No.1841/2011 filed by the claimants stands allowed to the extent above.