Partly allowed

Smt. Prema Devi and Others v. United India Insurance Co.Ltd. and Another

Allahabad HC23 Feb 2022FAFO/2078/2002

Case brief

AI extract

What is this about?

In a first appeal, the High Court modified the Tribunal's award for a motor accident claim. The compensation was recalculated using the 40% future loss of income rule and the multiplier from Pranay Sethi, and the interest rate was fixed at 7.5% following Mannat Johal.

What did the court decide?

Tribunal's award modified to Rs. 4,78,000; interest rate fixed at 7.5% p.a.; respondent directed to deposit amount within 12 weeks.

Smt. Prema Devi and Others Vs United India Insurance… — Money Laundering | Allahabad HC (2022)

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Court No. - 2

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Case :- FIRST APPEAL FROM ORDER No. 2078 of 2002

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Appellant :- Smt. Prema Devi And Others Respondent :- United India Insurance Co.Ltd. And Another Counsel for Appellant :- Ram Singh Counsel for Respondent :- Raghaendra Dwivedi

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Hon'ble Dr. Kaushal Jayendra Thaker,J.

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Heard Sri Ram Singh, learned counsel for the appellant. None present for United India Insurance Company Ltd.

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This appeal, at the behest of the claimants, challenges the judgment and award dated 19.7.2002 passed by Motor Accident Claims Tribunal/A.D.J. Court No.10, Allahabad, (hereinafter referred to as 'Tribunal') in M.A.C.P. No. 750 of 1995 awarding a sum of Rs. 2,69,000/- with interest at the rate of 8% as compensation.

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The accident took place in the year 1995, which is not in dispute. The issue of negligence decided by the Tribunal is not in dispute. The Insurance Company has not challenged the liability imposed on them. The only issue to be decided is the quantum of compensation awarded. At the time of the accident, the deceased was 35 years of age leaving behind him 6 persons. The Tribunal has considered his income as Rs. 2,000/- per month in the year 1995 as he was an agriculturist, hence, the income is not disturbed.

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Learned counsel for the appellant has submitted that the income of the deceased should be considered at least Rs. 3,000/- per month and that 40% should be added as future loss of income of the deceased in view of the decision in National Insurance Company Limited Vs. Pranay Sethi and Others, 2017 0 Supreme (SC) 105. It is further submitted that under non-pecuniary heads, the claimants

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are entitled to at least Rs.70,000/- and the interest thereon.

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After hearing the counsel for the appellant and after perusing the judgment and order impugned, his income can not be disturbed which should be Rs. 2,000/-, to which as the deceased was in the age bracket of 35 - 40 years, 40% will have to be added. Hence, the compensation payable to the appellants in view of the decision of the Apex Court in Pranay Sethi (Supra) is computed herein below:

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i. Income Rs.2,000/-

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ii. Percentage towards future prospects : 40% namely Rs. 800/-

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iii. Total income : Rs. 2,000 + 800 = Rs. 2,800/-

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iv. Income after deduction of 1/4th : Rs. 2,100/-

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v. Annual income : Rs. 2100 x 12 = Rs. 25,200/-

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vi. Multiplier applicable : 15

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vii. Loss of dependency: Rs.25,200 x 15 = Rs. 3,78,000/viii. Amount under non pecuniary heads : Rs.1,00,000/-

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x. Total compensation : Rs. 4,78,000/-

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As far as issue of rate of interest is concerned, the interest 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

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no reason to allow the interest in this matter at any rate higher than that allowed by High Court."

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No other grounds are urged orally when the matter was heard.

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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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In view of the ratio laid down by Hon'ble Gujarat High Court, in the case of Smt. Hansaguri P. Ladhani v/s The Oriental Insurance Company Ltd., reported in 2007(2) GLH 291 , 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 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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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-

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Insurance Company shall deposit the amount with interest at the rate of 7.5% from the date of filing of the claim petition till the amount is deposited within a period of 12 weeks from today. The amount already deposited be deducted from the amount to be deposited.

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Fresh Award be drawn accordingly in the above petition by the tribunal as per the modification made herein.

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This Court is thankful to both the counsels to see that this very old matter is disposed of.

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Order Date :- 23.2.2022 Irshad

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Smt. Prema Devi and Others v. United India Insurance Co.Ltd. and Another

Case brief

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Smt. Prema Devi and Others v. United India Insurance Co.Ltd. and Another

Case brief

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