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2018 DIGILAW 2383 (ALL)

Asha Batra v. Oriental Insurance Co. Ltd.

2018-11-22

SAUMITRA DAYAL SINGH

body2018
JUDGMENT : SAUMITRA DAYAL SINGH, J. 1. Heard Sri Archit Goyal, learned counsel for the claimant-appellants and Sri Rajeev Ojha, learned counsel for the insurer-respondent. 2. The present appeal has been filed by the claimant-appellants seeking enhancement of the compensation awarded by the Motor Accident Claims Tribunal/Addl. District Judge, Court No.1, J. P. Nagar, Amroha dated 28.05.2016 in M.A.C.No. 193 of 2013. 3. Briefly, the Deepak (who was more than 40 years of age) died in a road accident on 08.05.2013 when the two wheeler/Scooty (bearing registration No. DL 45 CD 1950) being driven by him was hit in head on by a four wheeler Bolero vehicle bearing registration no. UP-38-2480. The Tribunal has awarded total compensation Rs. 4,57,600/-, against the insurer of the Bolero vehicle. 4. Learned counsel for the claimant-appellants submits that in the first place, the Tribunal has erred in reaching conclusion of contributory negligence against the deceased. In this regard, it has been submitted the deceased was on the extreme left side of the road while the Bolero vehicle coming from the opposite direction hit the Scooty being driven by the deceased by getting on to its wrong side of the road. That being the finding of the Tribunal he would submit the further observation made by the Tribunal that the accident may have been avoided, if the deceased had moved further left i.e. on to the pavement and because the deceased failed to do so, he had contributed to the accident, is self contradicted and in any case wholly perverse. 5. Second, it has been submitted that the Tribunal has grossly erred in estimating the income of the deceased at Rs. 4,500/- per month i.e. Rs. 54,000/- per annum. The said finding is assailed to be wholly perverse in view of the income tax returns of the deceased for the AY 2011-12 and AY 2012-13 having been filed on record. According to those returns, the income of the deceased for the AY 2011-12 had been disclosed and assessed at Rs. 1,57,621/- and Rs. 1,85,792/- for the AY 2012-13. He therefore submits that the income of the deceased being progressive it should have been estimated at not less than Rs. 2,00,000/- per annum, the deceased having met with the accident on 08.05.2013 which date would be relevant to AY 2014-15. 1,57,621/- and Rs. 1,85,792/- for the AY 2012-13. He therefore submits that the income of the deceased being progressive it should have been estimated at not less than Rs. 2,00,000/- per annum, the deceased having met with the accident on 08.05.2013 which date would be relevant to AY 2014-15. He relied on the decision of the Supreme Court in the case of Shashi Kala and others Vs. Gangalakshmamma and another reported in 2015 (9) SCC 150 and a Division Bench decision of this Court in First Appeal From Order No. 2482 of 2005 (Mohd. Haneef & others Vs. U.P.S.R.T.) decided on 03.11.2017. 6. Third, in has been submitted, the Tribunal has erred in not giving the benefit of future prospects that should have been allowed @ 25%. 7. Fourth, it has been submitted that the Tribunal has erred in making deduction towards personal expenses @ 1/3 whereas on account of their being three dependents, the same could not have been allowed @ more than 1/4. 8. Fifth, it has been submitted non pecuniary losses have been under estimated. Keeping in mind the principle enunciated by the Supreme Court in the case of National Insurance Co. Ltd. Vs. Pranay Sethi and others reported in (2017) ACJ 2700. 9. Last, it has been submitted that the interest has been awarded at a very low rate @ 6%. According to the claimant-appellants the interest should have been awarded @ 9%. 10. Sri Rajeev Ojha, learned counsel for the insurer respondent insurer submits that the Tribunal has not erred in reaching the finding of contributory negligence in as much as the undeniably, there was a pavement on which the deceased could have gone to avoid the accident. Next it has been submitted the Tribunal has not erred in disbelieving the income tax returns of the deceased as the claimant appellants could not establish the source of income of the deceased. According to him, unless the source of income had been established, no reliance could have been placed on the figure disclosed in the income tax returns. Alternatively, it has been submitted, if the ITR figures are to be believed, then, deduction on account of tax payments should be made from those figures. 11. According to him, unless the source of income had been established, no reliance could have been placed on the figure disclosed in the income tax returns. Alternatively, it has been submitted, if the ITR figures are to be believed, then, deduction on account of tax payments should be made from those figures. 11. Though objection has been raised to the enhancement claimed on account of future prospects and reduction in the rate of deduction as also enhancement sought for non-pecuniary losses, it is seen that those issues are covered by direct decisions of Supreme Court in the case of National Insurance Company Limited Vs. Pranay Sethi and others, reported in (2017) ACJ 2700 wherein the Supreme Court held as below: "61. In view of the aforesaid analysis, we proceed to record our conclusions:- (i) The two-Judge Bench in Santosh Devi should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench. (ii) As Rajesh has not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent. (iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax. (iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component. (v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced herein before. (vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment. (vii) The age of the deceased should be the basis for applying the multiplier. (viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years." 12. Also, in Sarla Verma v. DTC, (2009) 6 SCC 121 it was held : "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 Chandra4, 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 (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six". 13. Having considered the arguments advanced by learned counsel for the parties, it is seen that before the Tribunal, claimants had led evidence as to the income of the deceased in the shape of the latter's income tax returns for the A.Y. 2011-2012 and A.Y. 2012-2013 which would be referable to financial years 2010-11 and 2011-12, whereas the death occurred on 08.05.2013, one year thereafter. 14. 14. While the claimants thus proved that the deceased had a definite level of income, one year before the occurrence of the accident which income he had duly disclosed to his income tax authorities and further while the claimants had also proven through oral evidence that the deceased was a book selling agent, neither the insurer nor the owner led any evidence to the contrary. The oral testimony led by the claimants withstood the test of cross-examination. Perusal of the income tax returns filed by the deceased for A.Y. 2011-12 and A.Y. 2012-13 confirm the quantum of income (of the deceased) disclosed by the claimants. 15. There being no evidence led in rebuttal, the income (of the deceased) as disclosed to his income tax authorities much prior to the occurrence of the accident constitutes credible and sufficient evidence as to the quantum of income earned by him. In our society, while understatement of income may be a fact reality, however, no prudent person is known to overstate his income and pay more taxes. 16. In fact, the Tribunals should treat income levels disclosed in income tax returns filed in normal course, before the occurrence of an accident, as evidence of higher credibility as to the facts stated therein. No prudent person plans to provide for a higher compensation claim arising from his accidental death. In cases of fraudulent claims or where income tax returns may have been filed subsequent to the date of accident, the Tribunal may examine such evidence with circumspection and seek corroboration with other facts, events and evidence. However, in a case of a genuine claim, such as this, the income tax returns should be treated as evidence of highest fidelity. 17. Thus the Tribunal grossly erred in ignoring that evidence on the reasoning of lack of evidence as to source of income. That reasoning was clearly not available in the present case. However, in a case of a genuine claim, such as this, the income tax returns should be treated as evidence of highest fidelity. 17. Thus the Tribunal grossly erred in ignoring that evidence on the reasoning of lack of evidence as to source of income. That reasoning was clearly not available in the present case. It may have been available if the income tax returns had been filed after the date of the accident or if some such circumstance existed as may have created a doubt as to the correctness of the facts stated in the income tax returns relied upon by the claimants, either on account of some other fact proven by the parties or on account of some positive evidence led by any party that may have given rise to a doubt as to the correctness of the facts stated in the income tax return relied upon. 18. In absence of such fact, circumstance or evidence, the Tribunal ought to have relied on the evidence existing in the shape of income tax returns of the deceased. This evidence of highest fidelity should have been trusted by the Tribunal as the Pole star to steer the claim for compensation. Unfortunately, the Tribunal discarded evidence that was exact in favour of that which was only a guess. It also emerges from perusal of the income tax returns of the deceased for the A.Y. 2011-2012 and A.Y. 2012-2013 that his income was progressive. It had increased by about Rs. 28,500/- in two years. 19. Keeping in mind the income proven by the claimants, the estimation could not have been made below the levels disclosed in those returns. Since the income of the deceased was progressive (as noted above) and the further fact that the accident occurred more than a year after the closure of the accounting period relevant to the A.Y. 2012-2013, the income of the deceased should have been and is being estimated progressively at Rs. 2,00,000/- per annum. Further, the deceased being more than 40 years of age on the date of the accident, the claimants are further entitled to 25% addition to that income on account of future prospects in view of the decision of the Supreme Court in the case of National Insurance Company Limited Vs. Pranay Sethi and others (supra). 20. 2,00,000/- per annum. Further, the deceased being more than 40 years of age on the date of the accident, the claimants are further entitled to 25% addition to that income on account of future prospects in view of the decision of the Supreme Court in the case of National Insurance Company Limited Vs. Pranay Sethi and others (supra). 20. Accordingly the estimated income of the deceased for the purpose of computation of compensation should have been and is being taken at Rs. 2,50,000/-. However, learned counsel for the insurer is correct in his submission that in such case a deduction should be made towards payment of taxes. Keeping in mind the fact that annual income upto Rs. 1,50,000/- would remain practically exempt from taxes, a deduction on account of taxes is made @ 20% on the balance income of Rs. 1,00,000/-, being 20,000/-, leaving a net annual income of Rs. 2,30,000/- available for further computation of compensation amount. 21. Then total number of dependents being four, in view of the dictum of the Supreme Court in the case of Sarla Verma v. DTC (supra) a deduction of 1/4 should have been made (in place of 1/3) from that estimate allowing for a total deduction of Rs. 57,500/- towards personal expenses. The balance yearly income of the deceased available for determination of compensation would be Rs. 1,72,500/-. Applying a multiplier of 15 to that average yearly income, the compensation awarded Rs. 25,87,500/- for loss of life. 22. As to non-pecuniary losses, again applying principle laid down in the case of National Insurance Company Limited Vs. Pranay Sethi and others (supra), the compensation is awarded to the claimant-appellant no. 1 Rs. 15,000/- towards loss of estate; Rs. 40,000/- towards loss of consortium and; Rs. 15,000/- towards funeral expenses. Also, Rs. 10,000/- each/Rs. 30,000/- in all is awarded to each of the three claimants (daughters and mother of the deceased) towards loss of love and affection. 23. Thus, the total compensation awarded to the claimant-appellants is enhanced from Rs. 4,57,600/- as awarded to Rs. 25,87,500/- + Rs. 1,00,000/- = Rs. 26,87,500/-. The aforesaid amount would be payable together with interest @ 8% from the date of the accident to the date of actual payment, that being a reasonable amount of interest keeping in mind the date of accident and the range in which bank rate/s of interest fluctuated in the meanwhile. 24. 25,87,500/- + Rs. 1,00,000/- = Rs. 26,87,500/-. The aforesaid amount would be payable together with interest @ 8% from the date of the accident to the date of actual payment, that being a reasonable amount of interest keeping in mind the date of accident and the range in which bank rate/s of interest fluctuated in the meanwhile. 24. The appeal is thus allowed. No order as to costs.