Branch Manager,M/S.Newindia Assurance Co.Ltd. Vs Susama Behera

1 . Instant appeal is filed by the appellant Insurance Company challenging the quantum of compensation directed by learned 1st Motor Accidents Claims Tribunal, Angul with an award dated 19th May, 2018 in MAC Case No.60 of 2017 on the grounds inter alia that the same is on the higher side without deduction of several personal perquisites received by the deceased and other benefits by the claimants (respondent Nos.1 and 2) under the NALCO Employee’s Financial Assistance and Rehabilitation Scheme.

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2 . The claimants filed an application under Section 166 of the Motor Vehicles Act for award of compensation of Rs.1,10.00,000/- (rupees one crore and ten lac) on account of death of the deceased in a motor vehicular accident dated 1^st

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MACA No.955 of 2018 Page 1 of 8

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April, 2017. As per the case of the claimants, who are the wife (respondent No.1) and son (respondent No.2) on the deceased, the accident took place on the said date at about 11.45 AM while he was walking on the left side of the road and the offending motorcycle bearing registration No.OR-19-J-2628 running at a high speed in a rash and negligent manner dashed him, as a result of which, he sustained grievous injuries and during treatment succumbed to it. A report was lodged at the local PS registered as Angul P.S. Case No.180 dated 1^st April, 2017 under Section 279 and 304-A IPC which finally led to the submission of chargesheet after completion of investigation against the rider of the alleged motorcycle. The Tribunal considering the pleading on record, framed issues and thereafter, directed the appellant Insurance Company to pay a sum of Rs.1,08,73,694/- (rupees one crore eight lac seventy three thousand six hundred ninety four) to the claimants with the interest @ 6% per annum from the date of the claim application filed with penal interest @ 7.5% per annum followed by other directions with a cost of Rs.5000/- levied. The said amount of compensation is under challenge at the behest of the Insurance Company with a plea that the same is not just and reasonable.

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3 . Heard Mr. Dutta, learned counsel for the appellant Insurance Company and Mr. Mishra, learned counsel for claimants respondent Nos.1 and 2. None appeared for respondent No.3.

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4 . Initially, the appellant Insurance Company raised the following points for consideration, such as:

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(i) Whether the learned Tribunal was justified in holding the monthly income of the deceased to be Rs.1,32,119/referring to the pay slip (Ext.5) which includes other items of perquisites personal in nature and not taxable?

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(ii) Whether it was justified on the part of the learned Tribunal to hold that the claimants are entitled to future prospects, particularly, when one of them, namely, son (respondent No.2) examined as P.W.1 admitted to have received benefits under NALCO Employee’s Financial Assistance and Rehabilitation Scheme after death of the deceased?

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(iii) Whether a multiplier of 11 applied by the learned Tribunal is justified when the deceased was supposed to superannuate after five years and five months?

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5 . Resting the argument primarily on point Nos. (i) and (ii), according to Mr. Dutta, learned counsel for the Insurance Company, on a perusal of Ext.5, it would be evident that the deceased was receiving taxable and non-taxable amounts and since non-taxable sums are perquisites, learned Tribunal could not have included the same as the part of the monthly income received by him. With a calculation made excluding the nontaxable items, Mr. Dutta would submit that the monthly income of the deceased becomes of Rs.98,534/- and annual income being Rs.11,82,408/- and the total compensation payable stands at Rs.87,10,992/- and since the family of the deceased has availed the benefit under the NALCO Employee’s Financial Assistance and Rehabilitation Scheme, the claimants respondent Nos.1 and 2 are not entitled to any sum on future prospects in view of the decision of the Apex Court in Sebastiani Lakra and others Vrs. National Insurance Company Limited and another AIR 2018 SC 5034 and that apart, the compensation should not carry any penal interest. For the purpose of the perusal of the Court, the copies of pay slips with the certified copies of the depositions of P.W.1, namely, claimant respondent No.2 are produced by Mr. Dutta, learned counsel for the appellant Insurance Company.

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MACA No.955 of 2018 Page 3 of 8

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Hence, it is contended that the compensation amount on a revision stands at Rs.87,10, 992/-.

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6 . On the contrary, Mr. Mishra, learned counsel for the claimants submits that the deceased was aged about 54 years and at the relevant point of time, when he died, was working as a Junior Technician at NALCO, CPP. As per the last month salary slip i.e. Ext.5, according to Mr. Mishra, income of the deceased was Rs.1,32,119/- and in order to assess the actual income, the amount he received deducting the statutory taxes only is to be considered but in support of such contention, he relies on a decision in the case of National Insurance Company Limited Vrs. Indira Srivastava and others 2008 (I) TAC 424 (SC) . Hence, Mr. Mishra, learned for the claimants submits that with the calculation made on the gross earnings for the month of March, 2017 with the deductions toward professional and income taxes and 2/3^rd contribution to family on the annual income at Rs.12,81,072/-, applying a multiplier of 11, the amount is arrived at Rs.93,94,928/- and adding the general damages for a sum of Rs.1,10,000/-, it becomes Rs.95,04,528/- without future prospects which is admittedly not permissible in view of the decision in Sebastiani Lakra (supra). Thus, therefore, Mr. Mishra would submit that the claimants are entitled to the above amount along with 6% interest from the date of the claim application filed i.e. on 7^th April, 2017.

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7 . The deduction which is claimed by the appellant Insurance Company relates to the non-taxable items as indicated in Ext.5. The said allowances are on the heads of liveries (Rs.522/-), conveyance (Rs.900/-), transport (Rs.1600/-) and washing charges (Rs.3000/-) besides professional tax (Rs.300/-) and income tax

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(Rs.25,063/-). The contention of the appellant Insurance Company is that the perquisites are no part of the income of the deceased, hence, the amount on the respective heads should have been excluded while calculating the total income.

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8 . In Indira Srivastava (supra), the Apex Court had the occasion to consider whether the allowances to be included as income. It has been held therein that the term ‘income’ has different connotations and a Court of law having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family and loss caused to the family on a death of a near and dear one can hardly be compensated on monetary terms. In the said decision, it is also held that Section 168 of the Motor Vehicles Act has a word ‘just compensation’ which should be assigned a broad meaning and one cannot ignore the fact that the private sector companies in place of introducing a pension scheme take recourse to payment of Contributory Provident Fund, Gratuity and other perks which may either for the benefit of the employee himself or the entire family and if some facilities are being provided whereby the family stands to benefit, the same must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable is required to be determined referring to the other decisions, such as, National Insurance Company Limited Vrs. Padmavathy & others of the Madras High Court dated 29^th January, 200 7 , S. Narayanamma and others Vrs. Secretary to Government of India, Ministry of Telecommunications and others 2002 ACC 582 of Andhra Pradesh High Court and Asha and

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others Vrs. United India Insurance Company Limited and another 2004 ACC 533 .

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9 . In Indira Srivastava (supra), the Apex Court expounded the real import of ‘just compensation’ which are to be determined having regard to the facts and circumstances of each particular case. Citing many other decisions on the point of statutory income and whether, the allowances to be a part of it or otherwise, the Apex Court in the said decision held that amounts beneficial to the family shall have to be included for computing income but in the case at hand, the deduction is claimed in respect of the allowances received by the deceased towards liveries, conveyance, transport and washing on the ground that the same are the perquisites. On a proper reading of the aforesaid decision, though, it has been held by the Apex Court that the perks of the deceased payable by the employer should be included in the monthly income for the purpose of calculation of compensation but it depends on the premise that such benefit was meant for the entire family, which is, however, deprived of the same due to untimely death of the deceased. In other words, if some facilities are being provided whereby the entire family is or would have benefited, in that case, it must be held to be relevant for computation of total income, otherwise not. If allowances have been received by the deceased on non-taxable head and it was exclusively meant for the employee himself and not to benefit the family, if cannot be included in the total income for calculation of the compensation. Besides the professional and income taxes, the allowances or perquisites vis-à-vis the deceased are on the heads of liveries, conveyance, transport etc. which were meant for him and hence, could not be said as the amount relevant for computation of total income. In other words, the contention of Mr. Dutta, learned MACA No.955 of 2018 Page 6 of 8

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counsel for the appellant Insurance Company is acceptable and with the allowances being deducted from the gross monthly income, the annual income stands Rs.11,82, 408/-. In other words, the perquisites received by the deceased on such heads could not have been included to determine income of the deceased. The net monthly income of the deceased after such calculation with the deduction of allowances besides the professional and income taxes reaches at Rs.1,00,734/-. With the above monthly income, the annual salary of the deceased would be Rs.12,08,808/- and on further calculation of the head of the dependency with 2/3^rd contribution to the family and a multiplier of 11, the same stands at Rs.88,64,592/- and further including the non-pecuniary damages for a sum of Rs.70,000/-, the total compensation becomes Rs.89,34,592/-. Such non-pecuniary damages include the loss of love and affection, consortium etc.

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10 . Referring to the decision in Sebastiani Lakra (supra), it is admitted by Mr. Mishra, learned counsel for respondent Nos.1 and 2 that the claimants are not entitled for future prospects since they have availed the benefit under the scheme of NALCO. In the aforesaid decision, the Apex Court held that the claimants, having received benefits under any such scheme, are not entitled to claim additional amount @ 15% by way of future prospects as in the said case, the payment of the amount under the Employee’s Family Benefit Scheme was found to be more than offsets the loss of future prospects. In view of the above legal position, no amount on the head of future prospects is allowed while computing the compensation. Hence, dealing with the main challenge on the quantum since the argument is confined to it, the Court reaches at a conclusion that the compensation excluding the allowances payable to the claimants respondent Nos.1 and 2

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should be fixed at Rs.89,34,592/- along with 6% interest from the date of claim application filed. The Court is also the view that the compensation amount should not carry any penal interest, which has been levied by the learned Tribunal.

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11 . Hence, it is ordered.

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12 . In the result, the appeal stands partly allowed. As a logical sequitur, the impugned award dated 19^th May, 2018 passed in MAC Case No.60 of 2017 by the learned 1^st Motor Accident Claims Tribunal, Angul is hereby modified to the extent as aforesaid with a direction to the appellant Insurance Company to deposit an amount of Rs.89,34,592/- along with interest @ 6% per annum from the date of the claim application filed till its realization towards the compensation determined within eight weeks from today and on such deposit being made, it shall immediately be disbursed in favour of claimants respondent Nos.1 and 2. It is further directed that the aforesaid amount shall not carry any penal interest. Furthermore, the Court directs that the statutory deposit along with the accrued interest thereon shall be refunded to the appellant Insurance Company on proof of such deposit of compensation made before the learned Tribunal within the above stipulated period.

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(R.K. Pattanaik) Judge

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Signature Not VerifiedTUDU

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Digitally Signed Signed by: THAKURDAS TUDU Designation: Sr. Stenographer Reason: Authentication Location: OHC,CTC Date: 23-Apr-2024 12:46:14

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MACA No.955 of 2018 Page 8 of 8

Branch Manager,M/S.Newindia Assurance Co.Ltd. v. Susama Behera

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Branch Manager,M/S.Newindia Assurance Co.Ltd. v. Susama Behera

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