Partly allowed

Rakeshi and 3 Others v. National Insurance Company Ltd. and 2 Others

Allahabad HC9 Dec 2021FAFO/1161/2019

Case brief

AI extract

What is this about?

This First Appeal challenged the compensation awarded by the Motor Accident Claims Tribunal for a death resulting from a motor accident. The High Court found that the Tribunal erred in assessing the deceased's income and refused to add a 30% prospect for future prospects. The Court recalculated the compensation, held the interest rate should be 7.5%, and modified the Tribunal's order.

What did the court decide?

Tribunal order modified; compensation recalculated; interest fixed at 7.5%; respondent to deposit deficit amount within 12 weeks.

Rakeshi and 3 Others Vs National Insurance Company… — Motor Accident Claims | Allahabad HC (2021)

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Court No. - 21

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Case :- FIRST APPEAL FROM ORDER No. - 1161 of 2019

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Appellant :- Rakeshi And 3 Others Respondent :- National Insurance Company Ltd. And 2 Others Counsel for Appellant :- Mayank Counsel for Respondent :- Namit Kumar Sharma, ,Krishna Shanker Chaudhary

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Hon'ble Dr. Kaushal Jayendra Thaker,J. Hon'ble Ajai Tyagi,J.

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1. Heard Shri Mayank, learned counsel for the appellants; Shri Krishna Shanker Chaudhary, learned counsel for the respondents; and perused the record.

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2. This appeal, at the behest of the claimants, challenges the judgment dated 07.02.2019 passed by Motor Accident Claims Tribunal/Additional District Judge, Court No.4, Mathura (hereinafter referred to as 'Tribunal') in Motor Accident Claim Petition No.564 of 2016 awarding a sum of Rs.14,20,000/- with interest at the rate of 7% as compensation.

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3. The accident is not in dispute. The issue of negligence decided by the Tribunal is not in dispute. The respondent concerned has not challenged the liability imposed on them. The only issue to be decided is, the quantum of compensation awarded.

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4. It is submitted by learned counsel for the appellants that the Tribunal has not granted any amount towards future loss of income of the deceased which is required to be granted in view of the decision in National Insurance Company Limited Vs.

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Pranay Sethi and Others, 2017 0 Supreme (SC) 1050 . It is further submitted that amount under non-pecuniary heads granted and the interest awarded by the Tribunal are on the lower side and require enhancement and learned counsel submitted that deceased was an Assistant Teacher in Primary School and was getting Rs.32,021/- per month. It is also

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submitted that as the deceased was survived by his wife, two minor children and mother and hence the deduction towards personal expenses of the deceased as 1/4 is not in dispute. The multiplier has to be as per age of deceased should have been granted 14 and not 15.

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5. Learned counsel for the respondents, has vehemently objected the contentions raised by the learned counsel for the appellants and has submitted that the compensation awarded by the Tribunal is just and proper and does not call for any enhancement.

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6. Having heard learned counsel for the parties and considered the factual data, this Court found that the accident occurred on 03.09.2016 causing death of Kamal Singh who was 43 years of age and left behind him, wife, two minor children and mother. The Tribunal has assessed the income of the deceased to be Rs.10,000/- per month. The deceased was Assistant Teacher in Primary School by profession. The tribunal has erred itself in not considering the income of the deceased and has deducted amount which he could not deduct holding that they were personal benefits to the deceased. All that could have been deducted would be the tax benefit and, therefore, we cannot concur with the tribunal as far as holding that the deceased was entitled to that the income was Rs.10,000/- per month. The income has to be considered to be Rs.32,000/- would be the income which would be admissible to the family. We are considering to be Rs.32,000/- per month which we feel is just and proper. The deductions made by the tribunal could not have been made. To which as the deceased was age bracket of 40 to 50 years as a salaried person, 30% of the income will have to be added as future prospects in view of the decision of the Apex Court in National Insurance Company Limited Vs. Pranay Sethi and Others, 2017 0 Supreme (SC) 1050 . As far as

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deduction towards personal expenses of the deceased is concerned, it should be 1/4 as the deceased had four persons to feed.

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7. In this backdrop let us see evaluate the income in view of the judgment of National Insurance Company Limited Vs. Pranay Sethi and Others, 2017 0 Supreme (SC) 1050 and Sarla Verma Vs. Delhi Transport Corporation, (2009) 6 SCC 121 and, the recalculation would be as follows:

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i. Income Rs.30,000/- p.m.

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ii. Percentage towards future prospects : 30% namely Rs.9000/-

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iii. Total income : Rs. 30,000 + 9000 = Rs.39,000/-

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iv. Income after deduction of 1/4 : Rs.29,250/-

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v. Annual income : Rs.29,250 x 12 = Rs.3,51,000/-

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vi. Multiplier applicable : 14 (as the deceased was in the age bracket of 41-45 years)

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vii. Loss of dependency: Rs.3,51,000 x 14 = Rs.49,14,000/-

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viii. Amount under non pecuniary heads : Rs.70,000/-

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ix. Total compensation : Rs.49,84,000/- .

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8. 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 V/s. Venugopal, Reported in 2012 (1) GLH (SC), 442 , the order of investment is not passed because applicants /claimants are neither illiterate or rustic villagers.

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9. In view of the ratio laid down by Hon'ble Gujarat High Court, in the case of Smt. Hansaguti P. Ladhani v/s The Oriental Insurance Company Ltd., reported in 2007(2)

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GLH 291 , total amount of interest, accrued on the principal

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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 Act, 1961 and if the amount of interest does not exceeds Rs.50,000/- in any financial year, registry of this 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) while disbursing the amount.

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10. Fresh Award be drawn accordingly in the above petition by the tribunal as per the modification made herein. The Tribunals in the State shall follow the direction of this Court as herein aforementioned as far as disbursement is concerned, it should look into the condition of the litigant and the pendency of the matter and not blindly apply the judgment of A.V. Padma (supra). The same is to be applied looking to the facts of each case.

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11. As far as issue of rate of interest is concerned, it should be 7.5% in view of the latest decision of the Apex Court in National Insurance Co. Ltd. Vs. Mannat Johal and Others, 2019 (2) T.A.C. 705 (S.C.) wherein the Apex Court has held as under :

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"13. The aforesaid features equally apply to the contentions urged on behalf of the claimants as regards the rate of interest. The Tribunal had awarded interest at the rate of 12% p.a. but the same had been too high a rate in comparison to what is ordinarily envisaged in these matters. The High Court, after making a substantial enhancement in the award amount,

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modified the interest component at a reasonable rate of 7.5% p.a. and we find no reason to allow the interest in this matter at any rate higher than that allowed by High Court."

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12. The insurance company has decided to settle the lis. The Apex Court in AIR 2021 SC 3301, Lakkamma & others. v. The Regional Manager M/S United India Insurance Co. Ltd & another has accepted the submission of the insurance company that for a period when the appeal is belated. The interest shall not be paid. We will adopt the similar mode from the date of the judgment till the delay is condoned, interest be not granted.

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13. In view of the above, the appeal is partly allowed . Judgment and decree passed by the Tribunal shall stand modified to the aforesaid extent. The respondent-Insurance Company shall deposit the amount along with additional amount within a period of 12 weeks from today with interest at the rate of 7.5% from the date of filing of the claim petition till the amount is deposited. The amount already deposited be deducted from the amount to be deposited.

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We are thankful to learned counsels for the parties for ably assisted the Court.

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Order Date :- 9.12.2021 A.N. Mishra

Rakeshi and 3 Others v. National Insurance Company Ltd. and 2 Others

Case brief

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Rakeshi and 3 Others v. National Insurance Company Ltd. and 2 Others

Case brief

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