Law Web: Whether court can assess income of deceased for computation of compensation on basis of Income tax return?

REPORTABLE

We have given our anxious consideration to this

contention. There is no doubt that if the salary certificate is taken into

account the salary of the deceased should be taken as Rs. 1,06,176/-

since the gross salary was

Rs.8848 per month. That, however, in our view does not mean that

the income of the deceased as stated in the Income Tax return should

be totally ignored. It is not possible to agree with the observation of

the Tribunal that it was necessary for the claimants to “explain the said

contradiction” between two figures of income. The claimants had led

reliable evidence that the deceased had returned an income of Rs.

2,42,606/- for the assessment year 2004-05. This piece of evidence

has not been discredited. Indeed, it was possible that the deceased

had income from other sources also. There is nothing in the law which

requires the Tribunal to assess the income of the deceased only on the

basis of a salary certificate for arriving at a just and fair compensation

to be paid to the claimants for the loss of life.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) Nos. 7104-7105 OF

2016

UNITED INDIA INSURANCE CO. LTD.

Versus

INDIRO DEVI & ORS.

Coram:S.A. BOBDE, J.

Dated:JULY 03, 2018

The deceased was 39 years old. He was employed with the Food

Corporation of India (hereinafter referred to as ‘FCI’). He met with an

accident when the three-wheeler he was travelling in collided with a

rashly driven Canter truck and died. The claimants claimed

compensation before the Motor Accident Claims Tribunal (hereinafter

referred to as “Tribunal”).

2. These petitions arise from the order dated 27.08.2015 passed in

C.R. No. 408 of 2006 and the Civil Appeal FAO No. 4086 of 2005 by the

High Court of Punjab and Haryana at Chandigarh. The Insurance

Company is before us (hereinafter referred to as “the petitioner”) in

the instant petitions.

3. The Tribunal found that the accident occurred because of rash

and negligent driving and held the owner of the truck, the insurer and

the driver jointly and severally liable to pay the amount of

compensation determined.

4. The Tribunal passed an award of a sum of

Rs. 12,90,000/- in favour of the claimants recoverable @ 9% per

annum from the date of filing of claim petition, till its realization from

the respondents jointly and severally.

5. The issue in this case revolves around the income of the

deceased. On behalf of the accounts section of the employer of the

deceased, it was deposed that the deceased was getting Rs. 8848/- as

gross monthly salary. The deponent proved the salary certificate. The

amount of salary was not questioned. The Tribunal passed the award

on the basis that the salary he was receiving i.e. Rs. 8848/-.

6. The Tribunal did not take into account the fact that the Income

Tax Returns of the deceased showed an income of Rs. 2,42,606/- per

annum for the assessment year 2004-05 and Rs. 2,17,130 for the

assessment year 2003-04. The Tribunal held that the claimants had

not led any evidence to explain the contradictions between the two

figures of income emerging from the evidence of the employer of the

deceased and the income tax record, and passed the award relying on

the salary certificate issued by the employer of the deceased.

7. In a revision carried to the High Court by the Insurance Company

and appeal by the claimants, the High Court took the income of the

deceased as found in the income tax assessment and provided for 50%

increase as future prospect. The High Court applied the lower

multiplier of 15 instead of 16 and after making a deduction of 1/4th for

the personal expenses, increased the compensation to Rs. 44,03,980/-

with interest @ 7.5% per annum from the date of petition till the date

of payment. The amount payable was tabulated as follows:-

FATAL ACCIDENTS

Date of accident

27.2.2004

Age 39 years

Occupatio

Employee in FCI 8848/-

Claimants Widow, 4 children and mother

Heads of claim Tribunal High Court

Sl.No. Amount

(Rs.)

Amount (Rs.

1. Income 10,000

(monthly)

2,42,606

(annual)

2. Add, % of increase 50% 3,63.909

3. Less, Deduction 2,72,932

4. Multiplicand (annualized by

multiplying 12)

80,000 2,72,932

5. Multiplier 16 15

6. Loss of dependence 12,80,000 40,93,980

7. Medical Expenses & Transportation

8. Loss of Consortium & funeral

expenses

10,000 1,00,000

9. Loss of love and affection 2,00,000

10. Loss to estate 5000

11. Funeral expenses 5000

Total 12,90,000 44,03,980

8. It was argued before us on behalf of the petitioner that the

High Court has committed a gross error and perversity in taking into

account the income of the deceased as per the income tax returns.

According to the petitioner, the income of the deceased was Rs. 8848

per month, i.e. the amount according to the salary certificate of the

deceased and the High Court ought to have relied upon the salary

certificate for the calculation of the compensation.

9. We have given our anxious consideration to this

contention. There is no doubt that if the salary certificate is taken into

account the salary of the deceased should be taken as Rs. 1,06,176/-

since the gross salary was

Rs.8848 per month. That, however, in our view does not mean that

the income of the deceased as stated in the Income Tax return should

be totally ignored. It is not possible to agree with the observation of