Partly allowed

New India Assurance Company Limited v. Vidya Devi and 5 Others

Allahabad HC20 Jan 2021FAFO/38/2021

Case brief

AI extract

What is this about?

In an appeal against a Motor Accident Claims Tribunal award, the High Court held that the correct deduction for dependents is 1/3rd instead of 1/4th and penal interest is not payable. Consequently, the claimant's total compensation was reduced from Rs.43,54,000 to Rs.38,78,068 while finding the income assessment reasonable.

What did the court decide?

Reduction of compensation from Rs.43,54,000 to Rs.38,78,068; dismissal of claim for penal interest.

New India Assurance Company Limited Vs Vidya Devi… — Motor Accident Claims | Allahabad HC (2021)

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Court No. - 1

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Case :- FIRST APPEAL FROM ORDER No. - 38 of 2021

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Appellant :- New India Assurance Company Limited Respondent :- Vidya Devi And 5 Others Counsel for Appellant :- Amaresh Sinha Counsel for Respondent :- Lal Chandra Sahu

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Hon'ble Vivek Agarwal,J.

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Heard Sri Amaresh Sinha, learned counsel for the appellant and Sri Lal Chandra Sahu, learned counsel for the respondents.

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This appeal has been filed by the Insurance Company being aggrieved of award dated 13.10.2020 passed by learned Motor Accident Claims Tribunal, Bareilly in Claim Case No.624 of 2014 on four grounds namely, income of the deceased has been computed at Rs.20,000/- per month without there being any proof of income. It is submitted that Income Tax Return has not been enclosed and, therefore, relying on incorrect judgment of Supreme Court in case of M. Mansoor and another Vs. United India Insurance Co. Ltd. and another; 2013 (4) TAC 832 (SC) , income of the deceased has been taken at Rs.20,000/- per month, whereas in case of M. Mansoor and another (supra), deceased was a salaried employee and, therefore, no parity can be drawn between the case of M. Mansoor and another (supra) and the facts of the present case.

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Learned counsel for the appellant further submits that learned Claims Tribunal has incorrectly considered father of the deceased to be dependent on him and, therefore has wrongly applied deduction of 1/4th, whereas, it should be 1/3rd in the light of the law laid down by Supreme Court in case of Smt. Sarla Verma others Vs. Delhi Transport Corporation and others; 2009 (6) SCC 121.

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Learned counsel further submits that learned Tribunal has

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awarded penal interest in case compensation is paid after 30 days. This is contrary to the judgment of the Supreme Court in case of National Insurance Company Ltd. Vs. Keshav Bahadur and others; 2004 (2) T.A.C. 1 (S.C.) . It is further submitted that there are material contradictions in the evidence of P.W.-2 creating doubt as to the involvement of the offending vehicle namely, Truck bearing Registration No.HR 38-S/3677 and on that ground also, indulgence of this court is required to interfere in the impugned award.

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Learned counsel for the respondent-claimants, Sri Lal Chandra Sahu, in his turn submits that sufficient evidence was led in regard to income of the deceased as is evident from the documents produced before the Claims Tribunal and the testimony of P.W.-2. It has come on record that P.W.-2 deposed that deceased was having Franchise of one Traco Courier Company. P.W.-2 was also working in the sales department of the said Courier Company. Deceased was paying rent @ 1500/per month for the shop, which he had taken on rent. Rent agreement was produced on record. Similarly receipts issued by Life Insurance Corporation, which is a statutory Corporation created by Government of India were produced on record to show that deceased was paying L.I.C. Premium to the tune of Rs.5,000/- per month. Besides this, registration of the shop with the labour department, educational qualification certificate of the deceased showing him to be qualified Master of Business Administration was also brought on record and, therefore, income @ Rs.20,000/- for an accident which took place on 19.08.2014 cannot be said to be excessive especially taking into account professional qualification of the deceased namely, Master of Business Administration. It is further submitted that minor contradictions in the testimony of p.w.-2 will not be sufficient to defeat the case, when it is apparent that a person

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not acquainted with the proceedings of the court, when examined by a professional lawyer is not able to face volley of questions having different connotations and put with different intention.

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After hearing learned counsel for the parties and going through the record, submission of learned counsel for the appellant that wrong deduction has been made and in place of 1/4th deduction, 1/3rd deduction should have been made needs to be accepted and is accepted.

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Similarly, another argument put forth by the learned counsel for the Insurance Company that penal interest is not to be charged in the light of the law laid down by Supreme Court in case of Keshav Bahadur and others (supra) is also required to be accepted.

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As far as plea of inconsistency in the evidence of p.w.-2 and failure of the claimants to prove income of the deceased are concerned, Insurance Company has not been able to bring any material on record to contradict testimony of p.w.-2 or to contradict finding in regard to assessment of income @ 20,000/- per month.

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Fact of the matter is that, Income Tax was exempted upto the income of Rs.2,50,000/-(two lakhs and fifty thousand) even for the accounting years 2014-15 when accident took place and, therefore, plea of non-availability of Income Tax Return is not germane to the present controversy. Secondly, when a person was paying Rs.5,000/- as premium towards Life Insurance Policy, then it can be easily conferred by making an unmotivated backward calculation that he must be at least spending Rs.15,000/- on other heads to meet the expenses of the family, but buttressed with the facts that, deceased was

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possessing degree of Master of Business Administration, which is a prestigious professional degree and has chosen to involve in the vocation of self employment, though the facts of the case of M. Mansoor and another (supra) are different and Tribunal has wrongly applied its ratio, but at the same time, guidance can be taken to the extent that when an M.B.A. almost on the equal footing for an accident which took place in the year 2001 aged about 24 years working as Business Manager was earning Rs.18,100/- per month, then calculation of income at Rs.20,000/- per month for an accident which took place in September, 2014 cannot be said to be excessive or arbitrary, as it is duly supported by cogent documentary evidence.

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In view of the aforesaid discussion, these two pleas of contradiction in testimony of p.w.-2 and assessment of income of a self employed qualified Post-Graduate in Business Administration is not made out.

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Accordingly, appeal is allowed in part.

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It is directed that Insurance Company will not be liable to pay any penal rate of interest on the award passed by learned Claims Tribunal.

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Secondly, in place of making deduction of 1/4th, when deduction of 1/3rd is made, then pecuniary compensation will be required to be calculated as under:-

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Monthly income of the deceased is Rs.20,000/- when 40% is added towards future prospect, it will be Rs.28,000/-. When 1/3rd is deducted towards expenses incurred by the deceased on self, then total monthly dependency will come out to Rs.18,667/- per month or Rs.2,24,004/-(two lakhs twenty four thousand and four) per annum. When multiplier of 17 as has

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been applied by learned Claims Tribunal is applied, then total pecuniary compensation will come out to Rs.38,8,0068/-(thirty eight lakhs eight thousand and sixty eight). Over and above this, a sum of Rs.70,000/- is added under the head of non-pecuniary compensation, then total compensation will come out to Rs.38,78,068/-(thirty eight lakhs seventy eight thousand and sixty eight) against Rs.43,54,000/-(fourty three lakhs and fifty four thousand) awarded by learned Claims Tribunal.

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Thus, there will be reduction of Rs.4,75,932/-(four lakhs seventy five thousand and nine hundred thirty two) from the amount awarded by learned Claims Tribunal.

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Other terms and conditions of the award except for payment of penal interest shall remain intact.

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In above terms, appeal is partly allowed and disposed off.

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Order Date :- 20.1.2021 Ashutosh

New India Assurance Company Limited v. Vidya Devi and 5 Others

Case brief

What is this about?

What did the court decide?

New India Assurance Company Limited v. Vidya Devi and 5 Others

Case brief

What is this about?

What did the court decide?

What the court decided

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