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2025 DIGILAW 160 (CAL)

Saswati Ghosh v. New India Assurance Company Ltd.

2025-02-06

PRASENJIT BISWAS

body2025
JUDGMENT : Prasenjit Biswas, J. 1. This appeal is directed against the judgment and award dated 7th April, 2014 passed by the learned Judge, Motor Accident Claims Tribunal, Additional District and Sessions Judge, 2nd Court, Sealdah, South 24 Parganas in connection with M.A.C.C. No. 2 of 2009 (Arising out of M.A.C.C. No. 120 of 2008). 2. By passing the impugned judgment and award learned Tribunal awarded compensation to the tune of Rs. 12,42,000/- in favour of the claimants which should be given within two months from the date of impugned order and in default interest should be given to the claimants at the rate of 10% of their respective amount till realization. 3. The victim, Tapan Ghosh faced an unnatural death on 26.06.2008 due to a road traffic accident. On that fateful date the deceased being the husband and father of the claimants was returning home from his office at about 8:00 P.M. and since he reached at Lake Town Road and VIP road and was on moving towards West along Southern footpath of Southern flank of V.I.P. Road, at that moment the victim was dashed from behind by the offending vehicle (Ambassador being No. WB-19D/4276). In consequence to that incident the victim fell down on the road side footpath and he was taken to R.G. Kar Medical College and Hospital where he was declared brought dead by the doctors. It is stated by the claimants that the accident occurred due to rash and negligent act of the driver of the offending vehicle. Over the said death of the victim the claimants being the heirs/ legal representatives of the deceased filed a case claiming compensation from the respondent/Insurance Company. Over the self-same incident concerned police station started a case being Lake Town P.S. Case No. 126 dated 26.06.2008 under Section 279/338/304A of IPC. 4. Insurance Company/respondent appeared before the Tribunal and contested the claim case by filing written statement denying all the allegations/averments as made in the petition. 5. Although notice was served upon the owner of the offending vehicle but he did not venture to appear and contest the case and as such, the case was proceeded exparte by the tribunal. In the present case, also after getting notice from the Court, the said owner did not choose to appear and contest it. 6. Mr. 5. Although notice was served upon the owner of the offending vehicle but he did not venture to appear and contest the case and as such, the case was proceeded exparte by the tribunal. In the present case, also after getting notice from the Court, the said owner did not choose to appear and contest it. 6. Mr. Ashique Mondal, learned Advocate appearing on behalf of the appellants/ claimants said that the learned Tribunal committed error of law and fact in computing the income of the deceased. He submitted that the income of the deceased ought to be calculated as “gross income less income tax” for the purpose of assessment of income of the deceased but the Tribunal only considered the net income of the deceased at the time of computing the compensation granted to the claimants. To buttress his submission learned Advocate cited a decision rendered by the Hon’ble Apex Court in case of National Insurance Company Ltd.-vs- Indira Srivastava & Ors., (2008) 2 SCC 763 . 7. It is said by the learned Advocate that in view of the decision rendered by the Hon’ble Apex Court in Pranay Sethi and Ors. actual salary should be read as actual salary less tax and in view of the decision rendered by the Apex Court in Indira Srivastava & Ors. (supra), the Tribunal can make only statutory deductions such as Income tax and Professional tax and any other contribution, which is not repayable by the employer from the salary of the deceased person while determining the monthly income for computing the dependency compensation. The recovery of the housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the deceased cannot be deducted while computing the net monthly income earnings of the deceased. So, it is submitted by the learned counsel that in view of the decisions of the Hon’ble Apex Court as cited above the income of the victim for computing compensation shall be of his annual “gross income less income tax” but the learned Tribunal has grossly erred in taking the net income of the deceased computing the compensation which is not acceptable as per decision of the Hon’ble Apex Court. 8. 8. It is further assailed by the learned Advocate that future prospects should be added with the income depending upon the age of the deceased but the Tribunal did not add any income towards the future prospect of the deceased who at the time of the incident was aged about 51 years. It is further submitted by the learned Advocate that the learned Tribunal granted only Rs.10,000/- under the heading general damages. But as per dictum of the Hon’ble Apex Court Rs.1 lakh is payable towards loss of consortium and Rs.25,000/- towards funeral expenses besides loss of estates but the Tribunal committed error in granting a total of Rs. 10,000/- only towards those heads. So, it is submitted by the learned Advocate that the award passed by the learned Tribunal may be modified to that extent as mentioned above. 9. Per contra, learned Advocate appearing on behalf of the respondent-Insurance Company submitted that there is no illegality or irregularity in the impugned award passed by the learned Tribunal. It is said by the learned Advocate that in computing the period of income of the deceased only his net income should be considered which, in fact, Tribunal has held in the impugned judgement. It is said that not only the tax components but also the loan amount and the festival advance which were given to the deceased may also be deducted from his gross income. Another point of argument on behalf of the Insurance Company is that the Tribunal committed error in applying the multiplier 12 on the proof age of the deceased being 51 years. At this juncture, learned Advocate for the appellant conceded to the fact that for determination of the multiplicand it should be taken as 11 in view of the decision rendered by the Hon’ble Apex Court in the case of Sarala Verma. 10. Having heard the learned Advocates for the respective parties following points have been fallen for consideration. i. Whether the learned Trial Court committed error at the time of calculating the income of the deceased. ii. Whether the learned Tribunal committed wrong in not granting any amount towards future prospect of the victim. iii. Whether the learned Tribunal committed wrong in granting Rs.10,000/- under the heading funeral expenses, loss of consortium, loss of estates. 11. i. Whether the learned Trial Court committed error at the time of calculating the income of the deceased. ii. Whether the learned Tribunal committed wrong in not granting any amount towards future prospect of the victim. iii. Whether the learned Tribunal committed wrong in granting Rs.10,000/- under the heading funeral expenses, loss of consortium, loss of estates. 11. Towards Monthly Income of the deceased : At the time of calculating the monthly income of the deceased only the net income was taken into consideration by the Tribunal. As per submission of the learned Advocate for the appellant in computing the income of the deceased only the component of income tax should be deducted from gross income. In view of the decision rendered by the Hon’ble Apex Court in case of National Insurance Co. Ltd.-vs- Pranay Sethi and Ors., (2017) 16 SCC 680 the actual salary of the victim should be read as actual salary less tax. It is profitable to quote the observation of the Hon’ble Apex Court in the said report at paragraph 59.3 which is as follows: “59.3. 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.” The Hon’ble Apex Court also held in the case of National Insurance Company Ltd. –vs- Indira Srivastava & Ors., (2008)2 SCC 763 that only statutory deduction such as income tax and professional tax which are not repayable by the employer from the salary of the deceased person must be taken into account while determining the monthly income of the deceased. In the said report it is held by the Hon’ble Apex Court that the amount which is recoverable from the salary of the deceased such as housing loan, vehicle loan, festival advance and other deductions, if any, cannot be deducted while computing the net monthly earnings of the deceased. The paragraph 14 and 15 of the said report are quoted herein below for better understanding of the law in this field. “14. The paragraph 14 and 15 of the said report are quoted herein below for better understanding of the law in this field. “14. The question came for consideration before a learned Single Judge of the Madras High Court in The Manager, National Insurance Co. Ltd. v. Padmavathy & Ors. [CMA No.114 of 2006 decided on 29.1.2007], wherein it was held : "Income tax, Professional tax which are deducted from the salaried person goes to the coffers of the government under specific head and there is no return. Whereas, the General Provident Fund, Special Provident Fund, L.I.C., Contribution are amounts paid specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. The Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if the Legal Representatives are entitled to lumpsum payment under the contractual liability. If the contributions made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependancy compensation, then the Legal Representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can make only statutory deductions such as Income tax and professional tax and any other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependancy compensation. Any contribution made by the employee during his life time, form part of the salary and they should be included in the monthly income, while computing the dependency compensation." “15. Similar view was expressed by a learned Single Judge of Andhra Pradesh High Court in S. Narayanamma & Ors. V. Secretary to Government of India, Ministry of Telecommunications and Ors. [2002 ACC 582], holding : "In this background, now we will examine the present deductions made by the tribunal from the salary of the deceased in fixing the monthly contribution of the deceased to his family. V. Secretary to Government of India, Ministry of Telecommunications and Ors. [2002 ACC 582], holding : "In this background, now we will examine the present deductions made by the tribunal from the salary of the deceased in fixing the monthly contribution of the deceased to his family. The tribunal has not even taken proper care while deducting the amounts from the salary of the deceased, at least the very nature of deductions from the salary of the deceased. My view is that the deductions made by the tribunal from the salary such as recovery of housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the deceased cannot be deducted while computing the net monthly earnings of the deceased. These advances or loans are part of his salary. So far as House Rent Allowance is concerned, it is beneficial to the entire family of the deceased during his tenure, but for his untimely death the claimants are deprived of such benefit which they would have enjoyed if the deceased is alive. On the other hand, allowances, like Travelling Allowance, allowance for newspapers/periodicals, telephone, servant, club-fee, car maintenance etc., by virtue of his vocation need not be included in the salary while computing the net earnings of the deceased. The finding of the tribunal that the deceased was getting Rs.1,401/- as net income every month is unsustainable as the deductions made towards vehicle loan and other deductions were also taken into consideration while fixing the monthly income of the deceased. The above finding of the tribunal is contrary to the principle of 'just compensation' enunciated by the Supreme Court in the judgment in Helen's case (1 supra). The Supreme Court in Concord of India Insurance Co. v. Nirmaladevi and Ors., 1980 ACJ 55 (SC) held that determination of quantum must be liberal and not niggardly since law values life and limb in a free country 'in generous scales'." 12. It would appear from Exhibit 10B which is a salary slip for the month of June, 2008 wherein it is indicated that the gross salary of the victim was Rs. 27,797/-. In view of the decisions rendered by the Hon’ble Apex Court as referred above that from the said salary of the victim only the tax component should be deducted in assessing his monthly earnings. 27,797/-. In view of the decisions rendered by the Hon’ble Apex Court as referred above that from the said salary of the victim only the tax component should be deducted in assessing his monthly earnings. The total tax paid by the victim, that is, Professional Tax to the amount of Rs.150/- and Income Tax of Rs. 500/- should only be deducted from the gross salary of the victim. No other deduction such as provident fund, demand loan, consumer loan, term loan, cooperative housing, festival advance, union/association fee is permissible in view of the dictum of the Hon’ble Apex Court as mentioned in the foregoing paragraphs. The learned Tribunal has erroneously considered the net salary of the victim for determining the payable compensation to the appellants/claimants. In view of the above discussion the actual salary which ought to have been considered by the learned Tribunal would be Rs.27,147/- [Rs. 27,797/-- Rs. 650/- (professional tax Rs. 150/-+ Income tax Rs. 500/-)] 13. Towards Future Prospect: The learned Tribunal has not granted any amount towards future prospect. The law is now well settled by the Constitution Bench Judgment in case of Pranay Shethi (supra), the future prospect should be added to income depending upon the age of the deceased. So, awarding future prospect is not optional but mandatory and for victims who are in a permanent job and within the age group of 50-60 years. On the aspect of future prospects, the Supreme Court in the said report has held as under. “56. The seminal issue is the fixation of future prospects in cases of deceased who is self-employed or on a fixed salary. Sarla Verma (supra) has carved out an exception permitting the claimants to bring materials on record to get the benefit of addition of future prospects. It has not, per se, allowed any future prospects in respect of the said category. 57. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to enhance one’s income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self-employed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality. And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt concept of percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable. 58. The controversy does not end here. The question still remains whether there should be no addition where the age of the deceased is more than 50 years. Sarla Verma thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari. Judicial notice can be taken of the fact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to one reason or the other. To lay down as a thumb rule that there will be no addition after 50 years will be an unacceptable concept. We are disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of self- employed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. We are disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of self- employed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach by the tribunals and the courts.” 14. From the aforesaid judgment it is evident that compensation is determined on standardized formula stipulated by the Supreme Court so that there is consistency and objectivity in the compensation awarded. Future prospect is not only an ingredient for determination of “just compensation”. The Hon’ble Supreme Court in the case of Pranay Sethi and Ors. bestowed their anxious consideration and observed in paragraph 57 thereof that there is really no rationale not to apply the principle with respect to fix future prospect to the self-employed or a person who is on a fixed salary. Hon’ble Apex Court has gone on to observe that to follow the doctrine of actual income at the time of death and not add any amount with regard to future prospects to the income for the purposes of determination of multiplicand would be unjust. Section 171 of the Act empowers the Tribunal to award interest of the compensation amount. There is nothing to differentiate only a hypothetical ingredient of the formula that is used for purposes of comparing “just compensation” from award of interest on the whole of compensation amount. In view of the observation of the Hon’ble Apex Court the claimants are entitled to future prospect and not granting any amount towards future prospect to the claimants by the learned Tribunal is held to be erroneous. At the time of the incident the victim was in a permanent job and was within the age group of 50 to 60 years and, as such, the addition should be 15% under the heading of future prospect of the established income of the deceased. 15. Towards General Damages: With regard to the entitlement of general damages it appears that the learned Tribunal granted Rs. 10,000/- under funeral expenses, loss of consortium, loss estate. 15. Towards General Damages: With regard to the entitlement of general damages it appears that the learned Tribunal granted Rs. 10,000/- under funeral expenses, loss of consortium, loss estate. However, bearing in mind the proposition as laid down by the Hon’ble Apex Court in Pranay Sethi (supra) claimants are entitled to general damages under the conventional heads of loss of estate, loss of consortium and funeral expenses to the tune of Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/-respectively. In view of the said decision of the Hon’ble Apex Court non-pecuniary damages together with 10% increment in every three years should be awarded. 16. In view of the above discussion, the calculation of compensation is made hereunder: HEADS OF COMPENSATION AMOUNT IN INR Monthly income [Rs. 27,797/ -- Rs. 500/- (Income Tax) – Rs. 150/- (Professional tax] Rs. 27,147/- Annual income (27,147 x 12) Rs. 3,25,764/ Add: 15% future prospect Rs. 48,864/- Rs. 3,74,628/ Less: Personal expenses (1/3) Rs. 1,24,876/- Rs. 2,49,752/- Multiplier (11) (Rs. 2,49752/- X 11) Rs. 27,47,272/- 17. It is said by the appellants they have already received the awarded compensation amount to the tune of Rs. 12,42,000/-. Accordingly, the claimants are entitled to Rs. 28,31,272/- - Rs. 12,42,000/- = Rs. 15,89,272/- along with interest @ 6% p.a. upon the enhanced amount from the date of filing of the claim application till date. 18. Appellants/claimants are directed to deposit deficit court fees on the enhanced compensation amount assessed, if not already paid. 19. Respondent No. 1/New India Assurance Co. Ltd. is directed to deposit the balance compensation amount along with accrued interest thereon before the office of the Learned Registrar General, High Court at Calcutta within one month from this date. 20. Learned Registrar General, High Court Calcutta is directed to release the compensation amount along with interest accrued thereon in favour of the appellants/claimants as proportioned by the learned Tribunal in the impugned judgment and award after making payment of Rs. 40,000/- in favour the appellant/claimant no. 1-widow of the deceased towards spousal consortium upon satisfaction of their identities. 21. With the above observations the judgment and award passed by the learned Tribunal dated 7th April, 2004 passed in connection with M.A.C.C. No. 2 of 2019 (arising out of M.A.C.C. No. 120 of 2008) is hereby modified in this appeal to the above extent but without any order as to costs. 22. 21. With the above observations the judgment and award passed by the learned Tribunal dated 7th April, 2004 passed in connection with M.A.C.C. No. 2 of 2019 (arising out of M.A.C.C. No. 120 of 2008) is hereby modified in this appeal to the above extent but without any order as to costs. 22. Consequently, other applications, if any, also stand disposed of. 23. Let a copy of the judgment be forwarded to the learned Tribunal along with the Tribunal Court Record immediately for information. 24. Urgent Photostat certified copy of this order, if applied for, be given to the parties on payment of requisite fees.