Partly allowed

Iffco Tokio General Insurance Company Ltd. v. Hardeep Kaur and Others

Punjab & Haryana HC9 Sept 2024FAO/3977/2024

Case brief

AI extract

What is this about?

This appeal challenged the Motor Accident Claims Tribunal's compensation quantum. The single judge allowed the appeal partly, rejecting the inclusion of full agricultural income but awarding a modest amount for lost managerial capacity, and increased the final compensation by 20% for inflation.

What did the court decide?

Compensation reduced to ₹45,19,463/- by disallowing full agricultural income and adding 20% inflation adjustment.

Iffco Tokio General Insurance Company Ltd. Vs… — Money Laundering | Punjab & Haryana HC (2024)

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FAO-3977-2024 (O&M)

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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FAO-3977-2024 (O&M) Reserved on : September 06, 2024 Date of Decision : September 09, 2024

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Iffco Tokio General Insurance Company Ltd.

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… Appellant

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Versus

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Hardeep Kaur and others

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…Respondents

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CORAM: HON'BLE MR. JUSTICE DEEPAK GUPTA

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Present: - Mr. Preet Harinder Singh Pannu, Advocate for the appellant. Mr. B.S. Guliani, Advocate for the respondents.

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DEEPAK GUPTA, J.

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The Insurance Company is in this appeal against the quantum of compensa&on as awarded by the Motor Accident Claims Tribunal, SAS Nagar (hereina+er referred as 'the Tribunal' ) vide Award dated 14.05.2024.

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Brief facts of the case are that Jasvir Singh expired in a motor vehicular accident on 23.07.2021. His legal representa&ves filed claim pe&&on against driver, owner and insurer of the offending vehicle. Appellant is the Insurance Company. His income on the basis of income tax return was assessed by the Tribunal to be ₹8,02,950/-. 10% amount was added towards the future prospectus. 1/3^rd deduc&on was made towards self-expenses. Deceased was found to be above 50 years of age and so, mul&plier of 11 was applied. An amount of 15,000/- each for funeral expenses & loss of estate; and ₹40,000/- each for loss of consor&um and loss of parental consor&um were allowed and this way,

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Sarita Rani 2024.09.09 03:58 I attest to the accuracy of this document/order

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FAO-3977-2024 (O&M)

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total compensa&on of ₹66,27,130/- was assessed by the Tribunal.

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There is no dispute regarding the accident or the liability of the Insurance Company to pay the compensa&on amount. Even the mul&plier of ‘11’ applied by the Tribunal or the deduc&on to the extent of 1/3 for self-expenses applied by the Tribunal are also not in dispute. The only dispute raised by the Insurance Company is regarding the addi&on of the agricultural income in the total earning of the deceased on the basis of the income tax return.

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As per the income tax return for the year 2020-21, the deceased had agricultural income of ₹4,95,000/-. Under the head of income from business or profession, he had earned ₹4,17,950/-, out of which ₹1,10,000/- was deducted towards the Life Insurance Policy and thus, his income from business or profession was assessed in the income tax return to be ₹3,07,950/- and thus, the total income was ₹9,12,950/-. The Tribunal took into account an amount of ₹3,07,950/- as income from businesses or profession and thus, total income of the deceased has been taken to be ₹8,02,950/- and based thereon, the compensa&on has been assessed.

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The conten&on of learned counsel for the appellant – Insurance Company is that income of ₹4,95,000/- towards agricultural income could not have been added towards the total income of the deceased. By relying upon “State of Haryana v. Jasbir Kaur and Others”, (2003) 7 SCC 784 and “K. Ramya & Others v Na'onal Insurance Co. Ltd. and another”, [Civil Appeal No.7046 of 2002, arising out of Special Leave Pe''on (C) No.31931 of 2017, decided on 30.09.2022], it is urged by learned counsel that the agricultural land, from which the deceased was earning income, s&ll remains with the family and therefore, the

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Sarita Rani 2024.09.09 03:58 I attest to the accuracy of this document/order

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FAO-3977-2024 (O&M)

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en&re income from this source as men&oned in the income tax return cannot be taken into considera&on, as the family can s&ll earn from the agricultural land. Learned counsel contends further that at the most, the amount which the deceased might have spent for engaging the labours to do the agricultural work, can be added towards the income of the deceased.

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6.1 Refu&ng the aforesaid conten&ons, it is argued by learned counsel for the respondents-claimants that the income tax return is a statutory document and therefore, reliance may be placed on it for determining the annual income of the deceased. Learned counsel has referred to “Malarvizhi & Ors. v. United India Insurance Company Limited and Anr.”, 2019(4) ACC 715.

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6.2 It is further the conten&on of learned counsel for the respondents-claimants that when the deceased is engaged in mul&ple tasking, his en&re income as per the income tax return is liable to be taken into considera&on. He has referred to “Vethambal and others v.

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The Oriental Insurance Company and Others”, 2024 AIR (Supreme Court) 1377.

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6.3 S&ll further, it is argued by learned counsel that an amount of ₹1,10,000/-, which was paid by the deceased towards Life Insurance Policy, could not be deducted from the income of the deceased from business or profession and that income should have also been taken into considera&on.

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6.4 Apart from this, it is urged that compensa&on towards loss of estate, funeral expenses and loss of consor&um etc. should be allowed by adding 20% to the compensa&on as per dictum of Hon'ble Supreme Court in “Na'onal Insurance Company Ltd. v. Pranay Sethi”, (2017) 16 SCC 680.

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Sarita Rani 2024.09.09 03:58 I attest to the accuracy of this document/order

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FAO-3977-2024 (O&M)

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I have considered submissions of both the sides and have appraised the record.

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As per the income tax return for the year 2020-2021, the computa&on of total income of the deceased is as under:-

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*Income from profession - ₹4,17,950/-

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*Deduc&on towards LIC Policy - ₹1,10,000/*A+er deduc&on of LIC Policy total Income - ₹3,07,950/Agricultural Income ₹4,95,000/ Total Income ₹9,12,950/-

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*A+er deduc&on of LIC Policy total Income - ₹3,07,950/-

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As far as deduc&on of ₹1,10,000/- made by the Tribunal towards the LIC policy made from the income from businesses or profession of the deceased is concerned, it has been wrongly made by the Tribunal. In case, a person a+er earning from his businesses or profession invests in some policy to save the tax as per law, the amount paid towards premium of that policy cannot be deducted from his total income and as such, I agree with the conten&on of learned counsel for the respondents-claimants that total amount of ₹4,17,750/- towards income from businesses or profession should have been taken into considera&on.

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However, as far as agricultural income is concerned, the total amount of ₹4,95,000/- as men&oned in the income tax return could not have been taken into considera&on. As has emerged in the tes&mony of PW1 – Inderpreet Singh, the son of the deceased, the deceased was having 2.5 acres of land. It cannot be disputed that a+er the death of deceased – Jasvir Singh, the land has been inherited by his legal heirs and thus, family can s&ll earn income from that land. What the family has lost is the managerial capacity of the deceased, so as to manage the

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Sarita Rani 2024.09.09 03:58 I attest to the accuracy of this document/order

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FAO-3977-2024 (O&M)

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agricultural land. Reliance in this regard can be placed upon Jasbir Kaur's case ( supra ), wherein it was observed by Hon’ble Apex Court as under:-

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“ The land possessed by the deceased s&ll remains with the claimants as his legal heirs. There is however a possibility that the claimants may be required to engage persons to look a+er agriculture. Therefore, the normal rule about the depriva&on of income is not strictly applicable to cases where agricultural income is the source. AMendant circumstances have to be considered.”

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This authority was also applied by Hon'ble Supreme Court in K. Ramya's case ( supra) regarding the rental income from leased out proper&es of the deceased.

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In view of above, this Court holds that the en&re income of ₹4,95,000/- under the head of agricultural income cannot be taken into considera&on as the income of the deceased.� At the most, it can be assumed that family has been deprived of ₹10,000/- per month as the managerial capacity of the deceased. As such, amount of ₹1,20,000/- per annum towards managerial capacity of the deceased is liable to be taken into considera&on, which the family has lost. This way, total income of the deceased works out to be as under:-

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Income from businesses or profession - ₹4,17,950/-.

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The loss of managerial capacity of deceased to manage agricultural land - ₹1,20,000/-.

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Total income of the deceased - ₹5,37,950/-.

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As deceased was above 50 years of age, so 10% of the amount is liable to be added towards the future prospectus, i.e. ₹53,795/- and thus, total income a+er this addi&on works out to be ₹5,91,745/-. There being three claimants, 1/3^rd of the income is liable to be deducted towards self-expenses and so. a+er making this deduc&on, the loss of dependency works out to be ₹3,94,497.66/-. Mul&plier of 11

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Sarita Rani 2024.09.09 03:58 I attest to the accuracy of this document/order

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FAO-3977-2024 (O&M)

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has been rightly adopted by the Tribunal and a+er mul&plying the same with the mul&plicand, the total compensa&on works out to be ₹43,39,463/-.

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Taking into account the observa&ons made by Hon'ble Supreme Court in Pranay Sethi's case ( supra ) announced in October, 2017, 10% of the amount payable under the conven&onal heads is liable to be added a+er every three years and this way, as this appeal is being disposed of in the year 2024, so 20% amount is to be added under the conven&onal heads of compensa&on. This way, the loss of consor&um/ parental consor&um to the three claimants works out to be ₹1,44,000/-, (i.e. ₹48,000/- per claimant), whereas ₹36,000/- is awarded towards loss of estate and funeral expenses, i.e. ₹18,000/- each.

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Thus, the total compensa&on works out to be ₹45,19,463/-

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Consequent to the aforesaid discussion, the compensa&on amount as awarded by the Tribunal is reduced to ₹45,19,463/-. Rest of the terms of the Award regarding the share in which the claimants will take the amount and the interest as awarded by the Tribunal shall remain intact.

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Present appeal is partly allowed accordingly.

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September 09, 2024 (DEEPAK GUPTA) Sarita JUDGE Whether reasoned/speaking: Yes/No Whether reportable: Yes/No

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Sarita Rani 2024.09.09 03:58 I attest to the accuracy of this document/order

Iffco Tokio General Insurance Company Ltd. v. Hardeep Kaur and Others

Case brief

What is this about?

What did the court decide?

Iffco Tokio General Insurance Company Ltd. v. Hardeep Kaur and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

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