Partly allowed

The Oriental Insurance Co. Ltd., v. Smt. Mallika

Karnataka HC19 Mar 2021MFA/7640/2017

Case brief

AI extract

What is this about?

The High Court disposed of two mutually adverse appeals regarding a motor accident compensation claim. After reviewing the deceased's income and applying Supreme Court precedents, the court held the original award was excessive and modified the compensation amount to Rs.41,44,062/-.

What did the court decide?

Original compensation of Rs.91,15,000/- modified to Rs.41,44,062/- at 6% p.a. interest; excess refunded to insurer.

The Oriental Insurance Co. Ltd., Vs Smt… — Contract and Commercial Disputes | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 19^TH DAY OF MARCH 2021

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PRESENT

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THE HON'BLE MR. JUSTICE ALOK ARADHE

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AND

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THE HON'BLE MR. JUSTICE ASHOK S. KINAGI

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M. F. A. NO.7640 OF 2017 (MV)

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C/W

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M. F. A. NO.4546 OF 2018 (MV)

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IN M.F.A. NO.7640/2017

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BETWEEN:

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THE ORIENTAL INSURANCE CO. LTD., REGN. OFFICE: LEO COMPLEX, 4^TH FLOOR, RESIDENCY ROAD, M G ROAD CROSS, BENGALURU - 560 025 REPRESENTED BY ITS REGIONAL MANAGER

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...APPELLANT

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(BY SRI. P B RAJU, ADVOCATE)

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AND:

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SMT. MALLIKA W/O M MAHADEVA AGED ABOUT 37 YEARS R/AT E31, NGR LAYOUT,

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ROOPENA AGRAHARA BENGALURU - 560 068.

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MASTER NAVEEN M NAYAK S/O M MAAHADEVA AGED ABOUT 15 YEARS

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KUM. RUCHITHA M NAYAK D/O SRI. M. MAHADEVA AGED ABOUT 12 YEARS

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SMT. MANGAMMA W/O MADAPPA AGED ABOUT 67 YEARS

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ALL ARE RESIDING AT No. E31, NGR LAYOUT, ROOPENA AGRAHARA BENGALURU - 560 068.

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SINCE 2^ND AND 3^RD RESPONDENTS ARE MINORS, THEY ARE REPRESENTED BY THEIR MOTHER SMT. MALLIKA AS THEIR NATURAL GUARDIAN.

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SRI M GOPAL S/O M. SUBBA REDDY NEERUDUCHERIA (V) PEAPULLY (M) KURNOOL DISTRICT - 518 222 A. P. (LORRY NO AP-21/Y-3281)

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… RESPONDENTS

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(BY SRI. VASANTH KUMAR K.M., ADVOCATE FOR SRI. S P KULKARNI, ADVOCATE FOR R-1 TO R-4 R-2 AND R-3 ARE MINORS RESPRESENTED BY R-1

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VIDE ORDER DATED 08.06.2018 NOTICE TO R-5 DISPENSED WITH)

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THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 10.07.2017

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PASSED IN MVC No.4181 OF 2015 ON THE FILE OF THE VIII ADDITIONAL SMALL CAUSES JUDGE AND XXXIII ACMM MEMBER MACT BENGALURU (SCCH-5), AWARDING COMPENSATION OF Rs.91,15,000/- WITH INTEREST AT THE RATE OF 9% P.A. FROM THE DATE OF PETITION TILL ITS REALIZATION.

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IN M.F.A.NO.4546/2018

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BETWEEN:

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SMT. MALLIKA W/O M MAHADEVA AGED ABOUT 38 YEARS

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MASTER NAVEEN M. NAYAK S/O M MAAHADEVA AGED ABOUT 16 YEARS

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KUM. RUCHITHA M NAYAK D/O SRI. M. MAHADEVA AGED ABOUT 13 YEARS

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SMT. MANGAMMA W/O MADAPPA AGED ABOUT 68 YEARS

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ALL ARE RESIDING AT No. E31, NGR LAYOUT, ROOPENA AGRAHARA BENGALURU - 560 068.

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...APPELLANTS

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(BY SRI. VASANTH KUMAR K.M., ADVOCATE FOR SRI. S.P. KULKARNI, ADVOCATE)

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AND:

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THE ORIENTAL INSURANCE CO. LTD., REGN. OFFICE: LEO COMPLEX, 4^TH FLOOR, RESIDENCY ROAD,

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M G ROAD CROSS, BENGALURU - 560 025 REPRESENTED BY ITS REGIONAL MANAGER

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SRI M. GOPAL S/O M. SUBBA REDDY NEERUDUCHERIA (V) PEAPULLY (M) KURNOOL DISTRICT - 518 001, ANDHRA PRADESH (LORRY NO AP-21/Y-3281) … RESPONDENTS

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(BY SRI. P B RAJU, ADVOCATE)

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THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 10.07.2017 PASSED IN MVC No.4181 OF 2015 ON THE FILE OF THE VIII ADDITIONAL SMALL CAUSES JUDGE AND XXXIII ACMM, MEMBER, MACT, (SCCH-5), BENGALURU, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION.

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THESE APPEALS COMING ON FOR ORDERS THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

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JUDGMENT

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MFA No.7640/2017 has been filed by the Insurance Company whereas MFA No.4546/2018 has been filed by the claimants against the judgment dated 10.07.2017 passed by the Claims Tribunal. Since both the appeals arise out of the same accident, they were heard analogously and are being decided by this common judgment.

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Facts giving rise to the filing of the appeals, briefly stated, are that on 07.07.2015 at about 1.30 p.m., the deceased Mahadeva was proceeding in a car bearing Reg.No.KA-51-MD-6115 along with 3 other inmates near NH-44 outskirts, Dhone Town, Kurnool District and at that time, a lorry bearing Reg.No.AP-21-Y-3281 came in high speed in a rash and negligent manner and dashed against the car. As a result of the aforesaid accident, the deceased sustained grievous injuries and succumbed to the same. Thereupon, the claimants filed a petition under Section 166 of the Motor Vehicles Act, 1988, inter alia on the ground that the deceased at the time of accident was aged about 41 years and was earning Rs.50,000/- p.m., by doing business. It was further pleaded that the accident took place on account of rash and negligent driving of the driver of the lorry. Accordingly, compensation to the extent of Rs.2,00,00,000/- was claimed along with interest.

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Respondent No.1 in its statement of objections

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admitted that a policy of insurance was issued in respect of the offending vehicle. It was pleaded that the liability, if any, is subject to the terms and conditions of the policy. It was also pleaded that the driver of the offending vehicle did not have a valid and effective driving licence. It was further pleaded that the petition is bad for non-joinder of necessary parties.

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On the basis of pleadings of the parties, the Claims Tribunal framed issues and thereafter recorded the evidence. The claimant No.1 examined herself as PW-1 and got exhibited documents namely Ex.P1 to Ex.P31. The Insurance Company did not adduce any oral or documentary evidence. The Claims Tribunal, vide judgment dated 10.07.2017, inter alia held that the accident took place on account of rash and negligent driving of the driver of the lorry. It was further held that the claimants are entitled to compensation of Rs.91,15,000/- along with interest at the

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rate of 9% p.a. from the date of petition till its realization. In the aforesaid factual background, these appeals have been filed.

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The learned counsel for the Insurance Company submitted that the Claims Tribunal erred in taking the income of the deceased at Rs.50,000/- p.m. on the basis of the income tax returns filed for the assessment year 20152016. It is further submitted that the Claims Tribunal ought to have appreciated that from the income as reflected in the returns, the amounts under the head 'income from house property' and the amount paid towards 'tax' were required to be deducted. It is further submitted that if the aforesaid amounts are deducted from the income of the deceased as shown in the income tax returns, the annual income comes to Rs.2,36,957/-. It is therefore submitted that the amount

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of compensation deserves to be modified suitably.

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On the other hand, the learned counsel for the claimants supported the judgment passed by the Claims

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Tribunal and has submitted that the amount of

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compensation awarded by the Claims Tribunal is just and proper and does not call for any interference in this appeal.

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We have considered the submissions made on both sides and have perused the records.

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The only issue which arises for consideration in this appeal is with regard to the quantum of compensation.

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Admittedly, the deceased was aged 41 years at the time of accident. From perusal of the returns filed for the assessment year 2015-2016 (Ex.P12 before the Claims Tribunal), it is evident that the gross income of the deceased was Rs.4,20,000/- p.a. which was assessed to tax under the head 'Income from House Property' and Rs.3,06,957/- p.a. which was assessed to tax under the head 'Income from business or profession'. From the aforesaid amounts, Rs.3,06,957/- p.a. is assessed as income of the deceased for

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the purpose of computation of loss of dependency as 'income

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from house property' continues to accrue to the claimants even after the death of the deceased in the accident. From the aforesaid amount, Rs.5,695/- has to be deducted on account of income tax as the tax payable for the assessment year 2015-16, for income between 2.5 lacs to 5 lacs being 10% of the amount exceeding. Therefore, the income of the deceased is assessed at Rs.3,01,262/- per annum. To the aforesaid amount, 25% is required to be added on account of future prospects in view of the law laid down by the Hon’ble Supreme Court in the case of ‘NATIONAL

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INSURANCE CO. LTD. -v- PRANAY SETHI AND OTHERS’

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(AIR 2017 SC 5157) , which comes to Rs.3,76,578/-. Since there are 4 dependants, 1/4^th is required to be deducted on account of personal expenses, which comes to Rs.2,82,433/-. Taking into account the age of the deceased,

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'14' multiplier has to be applied. Hence, loss of dependency is assessed at Rs.39,54,062/-.

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As per the judgment of the Hon’ble Supreme Court

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in the case of MAGMA GENERAL INSURANCE CO. LTD.

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-vs- NANU RAM (2018 ACJ 2782) , each of the claimants are entitled for compensation of Rs.40,000/- under the head ‘loss of love and affection and consortium’. Hence the claimants are entitled to Rs.1,60,000/- under the said head. In addition, the claimants are held entitled to Rs.15,000/- on account of ‘loss of estate’ and Rs.15,000/- on account of

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‘funeral expenses’.

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Thus, in all, the claimants are entitled to a sum of Rs.41,44,062/-.

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Needless to state that the enhanced amount of compensation shall carry interest at the rate of 6% per annum from the date of petition till payment is made.

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To the aforesaid extent, the judgment of the Claims

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Tribunal is modified. The amount in deposit shall be transmitted to the Claims Tribunal. The Claims Tribunal is

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directed to refund the excess amount to the Insurance Company.

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In the result, the appeals are disposed of.

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SD/JUDGE

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