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2021 DIGILAW 852 (ALL)

United India Insurance Company Ltd. v. Anita

2021-08-11

KAUSHAL JAYENDRA THAKER, SUBHASH CHAND

body2021
JUDGMENT : 1. Heard Sri N.K. Srivastava, learned counsel for the appellant and Sri Manish Tandon, learned counsel for the respondents. 2. This appeal, at the behest of Insurance Company, challenges the judgment and award dated 07.02.2019 passed by Motor Accident Claims Tribunal/12th Additional District Judge, Kanpur Nagar (hereinafter referred to as 'Tribunal') in M.A.C.P. No.461 of 2017 awarding a sum of Rs.78,83,928/- with interest at the rate of 7% as compensation. 3. It is submitted by learned counsel for the appellant that the deceased was in the age bracket of 35-40, therefore, multiplier to be applied would be 16. The fact that the Tribunal has gone by schedule is bad. The schedule has been found faulty and Tribunal ought to have relied on judgment of National Insurance Company Limited Vs. Pranay Sethi and Others, (2017) 0 Supreme (SC) 1050, which it has referred but not allowed. 4. It is submitted by learned counsel for the claimants that the claimants can raise objection as far as the question of quantum is concerned, as the appeal is in continuation of the proceedings. He has relied on the provisions of Order 41 rule 33 of the Code of Civil Procedure and has contended that as held by this Court in the case of National Insurance Company Limited Vs. Smt. Vidyawati Devi and others, F.A.F.O. No. 2389 of 2016 the oral cross objection can be raised and it is submitted that the calculations made by the Tribunal are erroneous as the Tribunal has considered the income to be Rs.37451/- added 50% i.e. Rs.18726/- and deducted Rs.9913/-, which was given as personal expenses, income tax and other amounts, which could not be done. It is submitted that the Tribunal has not considered the grant of compensation in its proper perspective. 5. Sri Manish Tandon, learned counsel for the respondents submits that the entire calculation of compensation requires recalculation in view of judgment in case of Manasvi Jain Vs. Delhi Transport Corporation Limited and others (2014) 13 SCC 22 and Vimal Kanwar and others Vs. Kishore Dan and others (2013) 7 SCC 476 as well as Pranay Sethi (supra), whereby special allowances could not have been deducted by the Tribunal. Delhi Transport Corporation Limited and others (2014) 13 SCC 22 and Vimal Kanwar and others Vs. Kishore Dan and others (2013) 7 SCC 476 as well as Pranay Sethi (supra), whereby special allowances could not have been deducted by the Tribunal. As far as income tax is concerned, we are obliged to accept the submissions of Sri Srivastava that deduction of Rs.7000/- towards income tax from the salary of Rs.37451/-per month was erroneous and it has to be at least in the slab of 10% which would mean that we would deduct 10% per annum. It is proved that the salary was Rs.37451/-per month, hence 37451 x 12 and also add 50% of the amount for future loss as per rule 220 A and 220A(i) and decision in Pranay Sethi (supra), we do not disturb the same, but recalculate the same, as the deceased was survived by four people, the deduction of 1/4 is not disturbed. The multiplier of 15 as per judgment of Pranay Sethi is maintained. The rate of interest is maintained. We have perused the salary slip of the deceased as given by Sri Tandon. 6. Learned counsel for the appellant has contended that the Tribunal has deducted only Rs.7000/- as tax. It is submitted that tax would be in the slab of 20% and not Rs.7000/-per annum. It is submitted that income has not been properly calculated. The second ground of argument is that there was breach of policy condition as RC book was not valid and, therefore, the Insurance Company should be exonerated. The issue of negligence is not raised by the Insurance Company and it was not pleaded before the Tribunal. However, going by the facts it is clear that the validity of license of the driver is also not under challenge. The Tribunal has perused and returned a findings that the RC book fitness is produced, which was not found to be fabricated or false, therefore, the Tribunal decided the issue nos. 2 and 3 against the Insurance Company. We also concur with the same. The only issue which requires reconsideration is quantum. The deceased was 40 years of age. He has left behind him his widow, two daughters, son and father. The salary record is also produced, which shows that his gross salary was Rs.37188/- in the month of January and in the month of February it was Rs.37451/-. The only issue which requires reconsideration is quantum. The deceased was 40 years of age. He has left behind him his widow, two daughters, son and father. The salary record is also produced, which shows that his gross salary was Rs.37188/- in the month of January and in the month of February it was Rs.37451/-. He was working in Ircon International Limited, which is Central Government Organization under the Railway Ministry. The deceased has left over a period of 20 years of job. The Tribunal added 50% for future loss of income and as there were five members in his family, deducted 1/4 and that is how the Tribunal came to the figure of Rs.5,05,596/-per year. The Tribunal deducted Rs.16913/- and that is how it calculated Rs.4,88,683/- to be the annual income and multiplied the same by 16 and granted what is known as Rs.25000/- for funeral expenses and Rs.40,000 as consortium with 7% interest. 7. As per the submission of Sri Tandon this amount will have to be recalculated as the deductions of Rs.9000/- is bad. We will have to deduct only Rs.12000/- per year as income tax as he was in the slab of more than five lac, but he would at the same time entitled what is known as tax deductions. 8. Hence, the judgment and order passed by the Tribunal would stand re-modified and the total compensation payable to the appellants is computed herein below : (i) Income Rs.36500/-(Rs.37451/- per month – Rs.1000/- income tax) (ii) Percentage towards future prospects 40%, namely Rs.14,600/- (iii) Total income 36500+14600 = Rs.51,100/- (iv) Income after deduction of 1/3rd towards personal expenses Rs.17033/- (v) Annual income : (51,100 - 17033=34,467) 34,467 x 12 = 4,13,604/- (vi) Multiplier applicable 16 (vii) Loss of dependency Rs.4,13,604 x 16 = Rs.66,17,664/- (viii) Amount under non-pecuniary heads Rs.70,000 + Rs.30,000 (10% per year due to pendency of appeal) (ix) Total compensation Rs.67,17,664/- 9. In view of the above, the appeal is partly allowed. The oral cross objection of the Insurance Company is also partly allowed. Judgment and decree passed by the Tribunal shall stand modified to the aforesaid extent. The amount be deposited by the respondent-Insurance Company within a period of 12 weeks from today with interest as awarded by Tribunal. The amount already deposited be deducted from the amount to be deposited. 10. Judgment and decree passed by the Tribunal shall stand modified to the aforesaid extent. The amount be deposited by the respondent-Insurance Company within a period of 12 weeks from today with interest as awarded by Tribunal. The amount already deposited be deducted from the amount to be deposited. 10. In view of the ratio laid down by Hon’ble Gujarat High Court in case of Smt. Hansagori P. Ladhani Vs. The Oriental Insurance Company Ltd., reported in 2007 (2) GLH 291 , the total amount of interest, accrued on the principle amount of compensation is to be apportioned on financial year to financial year basis and if the interest payable to claimant for any financial year exceeds Rs.50,000/-, Insurance Company/owner is/are entitled to deduct appropriate amount under the head of ‘Tax Deducted at Source’ as provided u/s 194A(3)(ix) of the Income Tax At, 1961 and if the amount of interest does not exceeds Rs.50,000/- in any financial year, registry of the Tribunal is directed to allow the claimant to withdraw the amount without producing the certificate from the concerned Income-Tax Authority. The aforesaid view has been reiterated by this High Court in Review Application No.1 of 2020 in First Appeal From Order No. 23 of 2001 (Smt. Sudesna and others Vs. Hari Singh and another) and in First Appeal From Order No. 2871 of 2016 (Tej Kumari Sharma Vs. Chola Mandlam M.S. General Insurance Co. Ltd.) decided on 19.03.2021 while disbursing the amount. 11. On depositing the amount in the Registry of Tribunal, Registry is directed to first deduct the amount of deficit court fees, if any. Considering the ratio laid down by the Hon’ble Apex Court in the case of A.V. Padma Vs. Venugopal reported in 2012 (1) GLH (SC) 442, the order of investment is not passed because respondents are neither illiterate nor rustic villagers. 12. We are thankful for both the counsels for getting the appeal decided without record and ably assisting the Court.