Allowed

Madavi Bayya Bai v. Gummula Ellaiah

Telangana HC12 Aug 2014MACMA/339/2011

Case brief

AI extract

What is this about?

The High Court allowed an appeal against the quantum of compensation awarded for a fatal road accident. The Court held that pension should not be deducted, gross salary should be used due to lack of tax evidence, and added 30% for future prospects. It also enhanced the conventional heads and a multiplier to increase total compensation beyond the initial claim.

What did the court decide?

Compensation enhanced from Rs.4,35,000 to Rs.9,13,148 with interest at 6% p.a. from the date of the petition.

Madavi Bayya Bai Vs Gummula Ellaiah — Income Tax | Telangana HC (2014)

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THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR

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M.A.C.M.A. No.339 OF 2011

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JUDGMENT:

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Not being satisfied with the quantum of compensation awarded by the Chairman, MACT-cum-District Judge, Adilabad in M.V.O.P. No.734 of 2004, the claimants, who are the wife and children of one Madavi Koudu (deceased), filed the present appeal under Section 173 of the M.V. Act, seeking enhancement of compensation.

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2. For the sake of convenience, the parties will hereafter be referred to as arrayed in M.V.O.P.

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3. The facts in issue are as under :

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The petitioners filed a claim petition under Section 166 of the M.V. Act claiming compensation of Rs.8 lakhs for the death of one Madavi Koudu in a road accident that occurred on 26.04.2004. It is stated that on that day the deceased boarded an auto-rickshaw bearing No. A.P.1U/7852 belonging to the first respondent at Asifabad to go to Wankidi. At about 5.30 p.m. while the vehicle was crossing Kerameri crossroads, the driver of the said auto-rickshaw drove it in a rash and negligent manner with high speed, as a result of which the Auto rickshaw capsized leading to severe injuries all over the body of the deceased. Immediately thereafter, he was shifted to Government Hospital, Asifabad where he was given first aid and later referred to Government Hospital, Mancherial. But on the way to Mancherial, the deceased breath his last. Since the accident took place due to the fault of the driver of the Auto-rickshaw and as the same was insured with the second respondent, an application under Section 166 of the M.V. Act came to be filed making both the respondents jointly and severally liable to pay the compensation. It is stated that the deceased was working as an Attender in the Office of the Deputy Executive Engineer

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Rural Water Supply at Asifabad and was getting a salary of Rs.6,382/per month.

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4. Both the respondents filed separate written statements opposing the claim. They denied the manner in which the accident took place, the earnings of the deceased and also the relationship of the petitioners with the deceased. The first respondent in his counter pleaded that since the vehicle was insured with the second respondent and as the policy was in-force at the time of the accident, the second respondent alone is liable to pay the compensation. The second respondent filed their written statement denying the insurance of Auto with them and also stated that the driver was not having a valid licence to drive the vehicle at the time of the accident. Since the owner of the vehicle violated the condition of the policy, it was contended that the insurer is not liable to pay any compensation.

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5. Basing on the above pleadings, the following issues have been framed for trial by the Tribunal :

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1. Whether the pleaded accident occurred resulting in the death of the deceased and if so was it due to the fault of the driver of the first respondent’s auto-rickshaw bearing No.A.P.1-U-7852 ?

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2. Whether the first respondent’s auto rickshaw stood insured with the second respondent insurance company on the date of the accident and if so whether it covers the risk of the deceased ?

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3. Whether the petitioners are in principle entitled to compensation and if so to what amount and what is the liability of the respondents ?

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6. In support of the claim, the first claimant examined herself as P.W.1 and also examined P.Ws.2 and 3 in support of her evidence. She also got marked Exs.A-1 to A-8. Further, the claimants also got marked Ex.C-1, the salary certificate of the deceased, through P.W.3. Though no oral evidence has been adduced on behalf of the respondents, but they got marked Ex.B-1-insurance policy.

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7. After analyzing the evidence available on record, the Tribunal held that the accident took place due to rash and negligent driving by the driver of the Auto and accordingly awarded an amount of Rs.4,35,000/- as compensation. The finding of the Tribunal with regard to the manner in which the accident took place and the driver of the Auto-rickshaw being responsible for the said accident has become final as the same is not challenged either by the owner or insurer of the vehicle. Therefore, the short point that arises for consideration is; “Whether the quantum of compensation awarded to the claimants is just and reasonable?”

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8. The learned counsel for the appellants mainly submits that the Tribunal erred in taking into consideration the pension received by the first claimant and only the net income of the deceased instead of gross salary while calculating the loss of dependency. It is also urged that the Tribunal failed to take into consideration the future prospects of the deceased and also a suitable multiplier for calculating the loss of dependency.

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9. In spite of service of notice, there is no representation on behalf of the owner of the vehicle. Per contra, the learned standing counsel for the Insurance Company submits that there is nothing illegal in taking the net income of the deceased for calculating the loss of dependency and as such submits that the order under challegne warrants no interference from this Court. In any event he submits that the compensation awarded being just and reasonable, warrants no interference from this Court at this stage.

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10. In order to appreciate the rival contentions, it may be useful to refer to the oral evidence adduced on behalf of the claimants. The material available on record would show that at the time of the death, the deceased was aged about 49 years and was working as an Attender in the office of the Deputy Executive Engineer, Rural Water Supply (R.W.S.) at Asifabad, getting a salary of Rs.6,868/- per month.

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Ex.C-1 is salary certificate issued by the concerned Deputy Executive Engineer of the Department. Taking into consideration the admission made by P.W.1 in her cross-examination that she was getting a sum of Rs.3,000/- as pension and in view of the judgment of Apex Court in

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Bhakra Beas Management Board v. Kanta Aggarwa l^[1] the Tribunal fixed the income of the deceased at Rs.6,500/- per month. The said finding is now under challenge.

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11. In Vimal Kanwar v. Kishore Dan^[2] , the Apex Court while dealing with the deductions to be made from the salary, for calculating the loss of dependency, summarized the issue as under :

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“Whether the provident fund, pension and insurance receivable by claimants come within the periphery of the Motor Vehicles Act to be termed as “Pecuniary Advantage” liable for deduction. The aforesaid issue fell for consideration before the Apex Court in Helen C.Rebello (Mrs) and others v. Maharashtra State

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Road Transport Corporation & Anothe r^[3] . In the said case, the Apex Court held that provident fund, pension, insurance and similarly any cash, bank balance, shares, fixed deposits, etc. are all “pecuniary advantage” receivable by the heirs on account of one’s death but all these have no correlation with the amount receivable under a statute occasioned only on account of accidental death. Such an amount will not come within the periphery of the Motor Vehicles Act to be termed as “pecuniary advantage” liable for deduction.

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12. In view of the judgment of the Apex Court referred to above, the finding of the Tribunal in deducting the pension received by P.W.1 from the salary of the deceased while calculating the loss of dependency appears to be incorrect and the same is accordingly setaside.

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13. The issue as to whether Income Tax is liable to be deducted for determination of compensation under M.V. Act came up for

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consideration before the Apex Court on number of occasions. In Sarla Verma and others v. Delhi Transport Corporation and anothe r^[4] , the Apex Court held as under :

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“Generally the actual income of the deceased less income tax should be the starting point for calculating the compensation.”

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The Apex Court further observed that;

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“Where the annual income is in taxable range, the word “actual salary” should be read as “actual salary less tax”. Therefore, it is clear that if the annual income comes within the taxable range income tax is required to be deducted for determination of the actual salary.”

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The Apex Court also observed that;

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“While deducting the income tax from the salary it is necessary to notice the nature of the income of the victim. The Court held that if the victim was receiving the income chargeable under the head “salaries” one should keep in mind that under Section 192(1) of the Income-tax Act, 1961 any person responsible for paying any income chargeable under the head “salaries” shall at the time of payment, deduct income-tax on estimated income of the employee from “salaries” for that financial year. Such deduction is commonly known as tax deducted at source (‘TDS’ for short). Therefore, in case the income of the victim is only from “salary”, the presumption would be that the employer under Section 192(1) of the Income Tax Act, 1961 has deducted the tax at source from the employee’s salary. Further, the Apex Court categorically held that in any case with regard to deduction to be made, it is for that party to prove by producing the evidence with regard to the deductions to be made.”

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14. In Manasvi Jain v. Delhi Transport Corporation and

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others^[5] , a three Judge Bench of the Apex Court while dealing with the deductions to be made from the income observed that;

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“Except contribution towards income tax, the other voluntary contributions made by the deceased, which are in the nature of savings, cannot be deducted from the monthly salary of the deceased to decide his net salary or take home salary.”

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15. From the judgments referred to above it is clear that only the gross salary minus income tax deductions if any alone should be taken into consideration for calculating the loss of dependency.

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16. In the instant case, no evidence has been placed before this Court to show deductions if any made from the salary of the deceased and also as to whether the deceased was liable to pay any income tax on the gross salary received by him. In the absence of any evidence, the gross salary of the deceased has to be taken into consideration for calculating the loss of dependency. As per Ex.A7 the deceased was getting salary of Rs.6,382/- per month. Further, the deceased was aged about 48 years at the time of the accident and was a salaried employee working as an Attender in the office of the Deputy Executive Engineer, Rural Water Supply (R.W.S.) at Asifabad. He being a salaried person, the future prospects of the deceased also have to be taken into consideration while calculating the loss of dependency. Since the deceased was aged about 48 years and having fixed income, 30% of actual salary should be added to the salary of the deceased for the purpose of calculating the loss of dependency in view of the Judgments of the Apex Court in Sarla

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Verma(5 Supra) and Rajesh V. Rajbir Singh and others^[6] . The said proposition is not disputed by the learned Insurance Company. If 30% of the income is added to the actual income, the monthly salary of the deceased would be Rs.6,382/- + Rs.1915/- = Rs.8,297/- which is rounded of to Rs.8,300/-. As the claimants are three in number, it would be appropriate to deduct 1/3^rd of the amount towards the personal and living expenses of the deceased. If 1/3^rd is deducted the contribution of the deceased to the family would be Rs.5,533/- per month.

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17. The learned counsel for the appellant mainly submits that the Tribunal adopted multiplier of 7.68 while calculating the loss of dependency. In view of the Judgment of the Apex Court in Sarla

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Verma’s case, and taking the age of the deceased as 48 years at the time of the accident, the suitable multiplier to be adopted for calculating the loss of dependency would be 13. Applying multiplier ‘13’, the total loss of dependency would be Rs.8,63,148/-. (Rs.5,533/x 12 x 13).

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18. The Tribunal also awarded a sum of Rs.19,000/- towards conventional heads. The said amount in my view appears to be lower side and the same is enhanced to Rs.50,000/- in view of the judgment o f th e Apex Court in Kishan Gopal and another v. Lala and others^[7] .

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19. At this stage, the learned standing counsel for the insurance company submits that the amount which the claimants would be getting is more than what has been claimed and the same is impermissible under law. The learned counsel for the Insurance company submits that under Order 41 rule 33 of Code of Civil Procedure, appellate court has got no power to award more amount thatn what has been claimed by the parties. It is urged that at the most the appellate court can only re-arrange the amount awarded which should not be more than what has been claimed by the claimants. I am afraid the said argument cannot be accepted.

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20. In Laxman @ Laxman Mourya Vs. Divisional Manager, Oriental Insurance Company Limited and anothe r^[8] , the Apex Court after referring to Nagappa Vs. Gurudayal Singh^[9] held as under:

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“It is true that in the petition filed by him under Section 166 of the Act, the appellant had claimed compensation of Rs.5,00,000/- only, but as held in Nagappa vs. [10] Gurudayal Singh , in the absence of any bar in the Act, the Tribunal and for that reason any competent Court is entitled to award higher compensation to the victim of an accident.”

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21. In view of the Judgments of the Apex Court referred to above, the claimants are entitled to get more amount than what has been claimed. Further the Motor Vehicles Act being a beneficial piece of legislation, where the interest of the claimant is a paramount consideration, the Courts should always endeavour to extend the benefit to the claimants to a just and reasonable extent.

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22. For the aforesaid reasons, the appeal is allowed by enhancing the amount from 4,35,000/- to Rs.9,13,148/-. The enhanced amount shall carry interest at 6% p.a from the date of the petition till the date of realization. It is made clear that the claimants shall pay the deficit court fee while claiming the compensation.

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There shall be no order as to costs.

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As a sequel thereto, Miscellaneous Petitions, if any, pending in this appeal, shall stand closed.

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___________________________ JUSTICE C. PRAVEEN KUMAR

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Dt: 12.08.2014 GM

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