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Madhya Pradesh High Court · body

2019 DIGILAW 143 (MP)

National Insurance Co. Ltd. v. Saraswati @ Lalita

2019-02-13

PRAKASH SHRIVASTAVA

body2019
ORDER 1. Heard finally with consent. 2. This appeal under section 173 of the Motor Vehicles Act is at the instance of the appellant/insurance company challenging the award dated 10.4.2017 passed by MACT Indore in Claim Case No. 599/2016. Respondents No. 1 to 3 (claimants) have filed the cross-objection seeking enhancement of compensation amount. 3. The respondents No. 1 to 3 (claimants) had filed the claim petition before the tribunal with the plea that on 17.4.2016, Dharamdas was going in his Activa MP-09-LC-8863 carefully when the accident was caused by truck MP-09-KD-8052 driven in rash and negligent manner by respondent No. 5 owned by respondent No. 4 and insured with appellant in which Dharamdas had received grievous injuries and had died on the way to the hospital. Hence compensation of Rs. 55/- lakhs was claimed. 4. Respondents No. 4 and 5 remained ex parte before the Tribunal. 5. Appellant by filing the reply had denied the liability and had also denied the accident and had taken the plea of violation of policy condition. 6. The Tribunal by permitting the parties to lead evidence and after examining the same had found that accident was caused on account of rash and negligent driving of truck No. MP-09- KD-8052 in which Dharamdas had received injury and had died. The tribunal further found that there was no contributory negligence on the part of the deceased in causing the accident. It has also been found that there was no violation of policy condition and insurance company was liable to pay the compensation amount. The Tribunal assessed the age of deceased below 65 years and applied the multiplier of 7 and further assessed the annual income of deceased as Rs. 1,90,000/- and after deducting 1/3, towards the self expenses and applying the multiplier of 7, calculated the loss of dependency of Rs. 8,86,662/- . It further awarded a sum of Rs. 1,00,000/- towards loss of consortium to respondent No. 1; Rs. 25,000/- towards funeral expenses; and Rs. 25,000/- to respondent No. 3 for loss of love and affection. Hence the tribunal awarded compensation of Rs. 10,36,662/- along with interest @ 6% from the date of application. 7. Learned counsel for the appellant/insurance company submits that the amount which has been awarded by the Tribunal is on higher side and tribunal has committed an error in calculating the income of the deceased. 8. Hence the tribunal awarded compensation of Rs. 10,36,662/- along with interest @ 6% from the date of application. 7. Learned counsel for the appellant/insurance company submits that the amount which has been awarded by the Tribunal is on higher side and tribunal has committed an error in calculating the income of the deceased. 8. Learned counsel for respondents/claimants opposing the appeal and pressing cross objection has submitted that Tribunal has not awarded adequate amount and the income ought to have been assessed on higher side. Hence the appeal be dismissed and cross-objection be allowed 9. I have heard the learned counsel for the parties and perused the record. 10. The record reflects that deceased was doing business of electric parts by the name of M/s Shalimar Radios. The income tax returns for the period 2013-14 showing the annual income of Rs. 2,25,814/-; 2014-15 showing the annual income of Rs. 2,53,557/- and 2015-16 showing the annual income of Rs. 3,01,027. were filed by claimants before the Tribunal along with the supporting documents as Ex. P-17 to P-18. 11. The tribunal though has taken note of the income as reflected in the annual income tax return but has deducted the interest income therefrom and has calculated the annual income of the deceased as Rs. 1,90,000/-. Such an approach of the Tribunal is erroneous in view of judgment of the Supreme Court in the matter of Vijay Kumar Rastogi v. Uttar Pradesh State Roadways Transport Corporation, reported in I(2018) ACC 584 (SC) wherein it has been held that interest is not required to be deducted and the taxable income is to be taken into account for computing the head towards loss of income. Supreme Court in this judgment has held as under : 10. The principal issue that needs to be addressed in these appeals is about the denial of claim in reference to commission and interest amounts earned by the appellant during the relevant period, as disclosed in the Income Tax Return filed by the appellant. The appellant claimed income from other sources under two heads, namely, Bank Interest: Rs. 72/-; and Commission: Rs. 50,454/-. The Tribunal opined that commission and interest cannot be considered for computation of loss of income and confined the claim of the appellant only on the basis of his net annual salary income to Rs. 44,511/-. The appellant claimed income from other sources under two heads, namely, Bank Interest: Rs. 72/-; and Commission: Rs. 50,454/-. The Tribunal opined that commission and interest cannot be considered for computation of loss of income and confined the claim of the appellant only on the basis of his net annual salary income to Rs. 44,511/-. The Tribunal noted that the appellant did not file any document of his age, educational qualification or profession. The High Court, on the other hand, in paragraph 11 of the impugned judgment observed thus : "11. Regarding the deduction of tax paid from the net income of injured - Vijay Kumar Rastogi is concerned, I find that the total income of injured - Vijay Kumar Rastogi as per the tax return (Ex.PW6/ F) is Rs. 77477.50 and after deduction of tax of Rs. 4,496/- the net income has been rightly taken into consideration by the learned Motor Accident Claims Tribunal.The disability of 25% suffered by injured Vijay Kumar Rastogi has been rightly taken to be the functional disability while keeping in view that the injured - Vijay Kumar Rastogi was working as the Medical Representative. No case for enhancement of compensation while taking the gross income of injured - Vijay Kumar Rastogi is made out, as net income has to be taken into consideration while assessing the compensation in such cases. Regarding the application of multiplier of is concerned, I do find that in case of injured Vijay Kumar Rastogi multiplier of 15 ought to have been adopted but by adoption of multiplier of 16, the difference in the compensation worked out is marginal and the same is set off by the fact that future prospects of injured Vijay Kumar Rastogi has not been taken into consideration and therefore, this Court is not inclined to interfere with the awarded compensation on this account." 11. Strikingly, the High Court noted the taxable income disclosed in tax return of the appellant for the relevant period as Rs. 77,480/- ( rounded off) and tax deduction of Rs. 4,496/-, yet proceeded to hold that the net income of the appellant has been rightly taken into consideration by the Tribunal. It is unfathomable that the High Court, despite having accepted the claim of the appellant founded on his tax return for the relevant period, disclosing the taxable income of the appellant as Rs. 4,496/-, yet proceeded to hold that the net income of the appellant has been rightly taken into consideration by the Tribunal. It is unfathomable that the High Court, despite having accepted the claim of the appellant founded on his tax return for the relevant period, disclosing the taxable income of the appellant as Rs. 77,480/- ( rounded off) and deduction of tax of Rs. 4,496/-, could have affirmed the conclusion of the Tribunal that the net annual income of the appellant was Rs. 44,511/-. It ought to have reckoned the taxable income for computing the head towards loss of income. This, in our opinion, is the manifest error committed by the High Court. The appellant is justified in relying upon the decisions of this Court which have taken the view that loss of taxable earning should be reckoned for the purpose of determining just compensation as enunciated in National Insurance Co. Ltd. v. Indira Srivastava and ors.1, which has been followed in Oriental Insurance Company Limited v. Jashuben and ors.2, and Kavita v. Deepak and ors. 3 It has been held that the "income" 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 professional tax, although some elements thereof may or may not be taxable due to the exemption conferred thereupon under the statute. 12. The issue involved in the present case is squarely covered by the aforesaid judgment of the Supreme Court in view of which the approach of the tribunal in deducting interest amount for calculating the annual income cannot be sustained. Hence taking into account the taxable income of assessment years i.e. 2013-14, 2014-15 and 2015-16 and averaging it, it is found that the annual loss of dependency was Rs. 2,60,132/- and deducting 1/3 i.e. 86,710/- from it, the annual loss of dependency comes to Rs. 1,73,422/- and applying multiplier of 7 the total loss of dependency comes to Rs. 12,13,954/- whereas the tribunal has only awarded a sum of Rs. 8,86,662/- under this head. 13. Hence the appellants are entitled to enhancement of compensation under this head to the tune of Rs. 3,27,292/-. The amount which has been awarded by the tribunal is just and proper. 14. 12,13,954/- whereas the tribunal has only awarded a sum of Rs. 8,86,662/- under this head. 13. Hence the appellants are entitled to enhancement of compensation under this head to the tune of Rs. 3,27,292/-. The amount which has been awarded by the tribunal is just and proper. 14. Hence the appeal filed by insurance company is dismissed and cross-objection filed by respondents/claimants are allowed by holding that the respondents/claimants are entitled for a further sum of Rs. 3,27,292/- over and above the amount which has been awarded by the tribunal. The enhanced amount will bear interest at the same rate as awarded by the Tribunal and will be Governed by the same conditions as contained in the award of the Tribunal. No cost.