Partly allowed

Smt. Gyanesh and 2 Others v. National Insurance Co. Ltd. and 2 Others

Allahabad HC15 Dec 2021FAFO/2459/2017

Case brief

AI extract

What is this about?

The High Court allowed a first appeal against the Motor Accident Claims Tribunal's award of Rs. 3,16,000/-, enhancing the compensation to Rs. 9,74,000/- based on recalculated income and future prospects. Interest was fixed at 7.5% per annum, and TDS implications for interest payments were addressed.

What did the court decide?

Compensation enhanced to Rs. 9,74,000/-; interest fixed at 7.5% p.a.; TDS provisions applicable if interest exceeds Rs. 50,000/- per financial year.

Smt. Gyanesh and 2 Others Vs National Insurance Co… — Motor Accident Claims | Allahabad HC (2021)

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Court No. - 21

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Case :- FIRST APPEAL FROM ORDER No. - 2459 of 2017

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Appellant :- Smt. Gyanesh And 2 Others Respondent :- National Insurance Co. Ltd. And 2 Others Counsel for Appellant :- Jagdish Prasad Mishra,Suhas Subhash Mehta Counsel for Respondent :- Deepak Kaushik,Komal Mehrotra

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

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(Oral Judgment by Hon'ble Ajai Tyagi, J.)

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By way of this appeal, the claimants have challenged the judgment and order dated 22.5.2017, passed by Motor Accident Claims Tribunal/Additional District and Sessions Judge, Court No.1, Muzaffarnagar (herein after referred to as 'the Tribunal') in MACP No.11 of 2016 awarding a sum of Rs.3,16,000/- as compensation to the claimants with interest at the rate of 7% per annum.

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Heard Shri Jagdish Prasad Mishra, learned counsel for the appellants-claimants, Mr.Komal Mehrotra, learned counsel for the respondents-Insurance Co. and perused the record.

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The accident is not in dispute. The insurance company has not challenged the liability on it. Now the only issue to be decided is the quantum of compensation awarded by the tribunal. Therefore, the details of facts, except for deciding compensation, are not being narrated.

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Learned counsel for the appellants has submitted that deceased was unmarried and his age was 20 years. It is also submitted that deceased was earning from tutions and he was having income also from agriculture. Therefore, his total income

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was about Rs.8,000/- per month, but the Tribunal has assessed his monthly income only Rs.3,000/-, which is on lower-side. It is next submitted that the Tribunal did not award any amount towards future-loss of income. It is also argued that the Tribunal has deducted 1/2 towards personal expenses of the deceased, which is not proper. It is also contended by learned counsel for the appellants that the Tribunal has applied multiplier of 17 while it should have been 18, in view of the fact that deceased was 20 years' old at the time of accident. It is very emphatically argued that the Tribunal has awarded only Rs.5,000/- for loss of estate and Rs.5,000/- for funeral expenses, which is on lower-side. Apart from it, learned counsel claimed that 12% rate of interest should be applied.

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Per contra, Shri Mehrotra, learned counsel appearing on behalf of National Insurance Insurance Co.Ltd., vehemently opposed the arguments advanced by learned counsel for the appellants and submitted that monthly income of deceased is not proved by any cogent evidence, therefore, learned Tribunal was justified in assessing his income Rs.3,000/- per month and since the deceased was unmarried, 1/2 was rightly deducted towards his personal expenses. Multiplier is also proper. There is no error or illegality in calculating the amount of compensation by the Tribunal and, therefore, the awarded amount may not be enhanced.

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It is admitted fact that deceased was 20 years' old unmarried boy at the time of accident. He was imparting tutions and having agricultural income also. Hence, we fix his monthly income Rs.6,000/- per month.

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The Tribunal has not added any percentage of amount towards future loss of income, which is, in our opinion, grave

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error. Since, the deceased will fall within the category of selfemployed and his age was 20 years at the time of accident, 40% shall be added towards future prospects as held by Hon'ble Apex Court in National Insurance Company vs. Pranay Sethi [2014 (4) TAC 637 (SC)]. Hon'ble Apex Court has also held in Munna Lal Jain vs. Vipin Kumar Sharma [2015 (3) TAC 1 (SC)] that if the deceased was unmarried, 1/2 shall be deducted for his personal expenses. In this case, Hon'ble Apex Court has also held that multiplier will be applied with reference to the age of the deceased. Therefore, keeping in view the age of the deceased, multiplier of 18 will be applied in the light of the judgment of Hon'ble Apex Court in Smt.Sarla Verma vs. Delhi Transport Corporation [2009 (2) TAC 677 (SC)]. As far as non-pecuniary damages are concerned, the Tribunal has awarded only Rs.5,000/- each towards loss of estate and funeral expenses, which are also on the lower-side. In the light of Judgment in the case of Pranay Sethi (supra), claimants shall be entitled to get Rs.15,000/- each for loss of estate and funeral expenses. Rs.40,000/- x 2 = Rs.80,000/- towards filial consortium is granted in the light of the judgment of Hon'ble Apex Court in the case of Kurvan Ansari alias Kurvan Ali and another vs. Shyam Kishore Murmu and another [2021 (4) TAC (SC)] .

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Hence, the total compensation, in view of the above discussions, payable to the appellants-claimants is being recalculated herein below:

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i.	Annual Income	Rs.6,000/- x 12	Rs.72,000/-
ii.	Percentage towards Future-Prospects	Rs.72,000/- x 40%	Rs.24,000/-
iii.	Total Income	Rs.72,000/- + Rs.24,000/-	Rs.96,000/-
iv.	Income after deduction of 1/2	Rs.96,000/- - Rs.48,000/-	Rs.48,000/-
v.	Multiplier applicable	18
vi.	Loss of dependency	Rs.48,000/- x 18	Rs.8,64,000/-

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vii.	Amount under non-	Rs.15,000/- + Rs.15,000/- +	Rs.1,10,000/-
	pecuniary heads	Rs.80,000/-
viii.	Total Compensation		Rs.9,74,000/-

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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, 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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Learned Tribunal has awarded rate of interest as 7% per annum but we are fixing the rate of interest as 7.5% in the light of the above judgment.

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In view of the above, the appeal is partly allowed. Judgment and award passed by the Tribunal shall stand modified to the aforesaid extent. The Insurance Company shall deposit the 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. Statutory amount be remitted to the Tribunal.

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In view of the ratio laid down by Hon'ble Gujarat High Court, in the case of Smt. Hansagori P. Ladhani vs. The Oriental Insurance Company Ltd., [2007(2) GLH 291] and this High Court in total amount of interest, accrued on the principal amount of compensation is to be apportioned on financial year to financial year basis and if the interest payable to

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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 claimants 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 v. Chola Mandlam M.S. General Insurance Co. Ltd.) decided on 19.3.2021 while disbursing the amount.

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(Ajai Tyagi, J.) (Dr. Kaushal Jayendra Thaker, J.)

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Order Date :- 15.12.2021 LN Tripathi

Smt. Gyanesh and 2 Others v. National Insurance Co. Ltd. and 2 Others

Case brief

What is this about?

What did the court decide?

Smt. Gyanesh and 2 Others v. National Insurance Co. Ltd. and 2 Others

Case brief

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What did the court decide?

What the court decided

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