In my view, the assessment of compensation made by
the Tribunal is against the settled position in law. It is well settled
position in law that except the statutory deduction to be made
towards income tax, professional tax, no other deduction is
permissible under law. The deduction from salary of the deceased towards insurance, pensionary benefts, gratuity or grant of employment to kin of deceased is not permissible. In this context, the learned counsel for the appellant has placed reliance upon the decision in the case of Sebastiani Lakra & others v. National Insurance Company Ltd. & another reported at 2018 ALL SCR 2175 wherein the Apex Court has observed in paragraph nos.12 to 16 as under:-
“12. The law is well settled that deductions cannot be
allowed from the amount of compensation either on
account of insurance, or on account of pensionary
benefts or gratuity or grant of employment to akin of the
deceased. The main reason is that all these amounts are
earned by the deceased on account of contractual
relations entered into by him with others. It cannot be
said that these amounts accrued to the dependents or
the legal heirs of the deceased on account of his death in
a motor vehicle accident. The claimants/dependents are
entitled to ‘just compensation’ under the Motor Vehicles
Act as a result of the death of the deceased in a motor
vehicle accident. Therefore, the natural corollary is that
the advantage which accrues to the estate of the
deceased or to his dependents as a result of some
contract or act which the deceased performed in his life
time cannot be said to be the outcome or result of the
death of the deceased even though these amounts may
go into the hands of the dependents only after his death.
13. As far as any amount paid under any insurance
policy is concerned whatever is added to the estate of
the deceased or his dependents is not because of the
death of the deceased but because of the contract
entered into between the deceased and the insurance
company from where he took out the policy. The
deceased paid premium on such life insurance and this
amount would have accrued to the estate of the
deceased either on maturity of the policy or on his death,
whatever be the manner of his death. These amounts are
paid because the deceased has wisely invested his
savings. Similar would be the position in case of other
investments like bank deposits, share, debentures etc..
The tortfeasor cannot take advantage of the foresight
and wise fnancial investments made by the deceased.
14. As far as the amounts of pension and gratuity are
concerned, these are paid on account of the service
rendered by the deceased to his employer. It is now an
established principle of service jurisprudence that
pension and gratuity are the property of the deceased.
They are more in the nature of deferred wages. The
deceased employee works throughout his life expecting
that on his retirement he will get substantial amount as
pension and gratuity. These amounts are also payable on
death, whatever be the cause of death. Therefore,
applying the same principles, the said amount cannot be
deducted.
15. As held by the House of Lords in Perry v. Cleaver
[(1969) 1 ALL ER 555] the insurance amount is the fruit
of premium paid in the past, pension is the fruit of
services already rendered and the wrong doer should not
be given beneft of the same by deducting it from the
damages assessed.
16. Deduction can be ordered only where the
tortfeasor satisfies the court that the amount has
accrued to the claimants only on account of death of the
deceased in a motor vehicle accident.”
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
FIRST APPEAL NO.754 OF 2012
Anita Arun Memane, Vs The Maharashtra State Road Transport Corporation,
CORAM: V.L. ACHLIYA, J.
JUDGMENT PRONOUNCED ON : 24.07.2020
1] Being aggrieved by the judgment and award dated
9.12.2011 passed by the Motor Accident Claims Tribunal,
Ahmednagar, in Motor Accident Claim Petition No.376/2007, the
appellant – claimant has preferred this appeal seeking enhancement
of compensation.
2] Heard learned counsel appearing for the appellant and
respondents. Perused the record and proceedings.
3] Before adverting to deal with the submissions advanced,
it is useful to refer few facts leading to fling of claim petition. For
the sake of brevity and convenience, the parties are referred as
they are described in the impugned judgment.
4] The appellant – claimant had fled petition u/s 166 of the
Motor Vehicles Act seeking compensation on account of accidental
death of her husband Arun Ramdas Memane who died in motor
vehicle accident which had taken place on 2.6.2007 at about 4-00
p.m. on Nagar-Pune road opposite Kamargaon Bus Stand. The
claimant has approached with a case that at the time of accident,
the appellant – claimant and the deceased were proceeding from
Pune towards Nagar on their motorcycle bearing registration No.MH-
16-P-3680. The deceased was driving the motorcycle and the
appellant – claimant was a pillion rider. While they were near
Kamargaon Shivar, the ofending vehicle i.e. the S.T. Bus bearing
registration No.MH-20-D-7720 owned by the respondent no.1 which
was coming from Pune and proceeding towards Nagar gave dash to
motorcycle. Due to dash given, the deceased sustained multiple
injuries including injury to head. The appellant – claimant also
sustained injury in said accident. It is contended that the accident
occurred due to sole negligence and rash & negligent driving on the
part of driver of the S.T. Bus. The deceased was shifted to Civil
Hospital, Ahmednagar, He succumbed to injuries sustained in the
accident. The appellant was admitted to Kamalnayan Hospital at
Tarakpur, Ahmednagar.
5] The appellant has claimed that at the time of accident,
the deceased was 24 years of age and serving in Military (Infantry)
and posted at Gwalior as a Sipoy. He was receiving Rs.10,000/- per
month as salary. The appellant – claimant has claimed that the
deceased was getting free meal and residential facilities at the
place of his posting. On account of accidental death, the claimant
has worked out the claim as Rs.15,30,000/-. However, restricted
the claim for the purpose of petition and Court fees to
Rs.10,00,000/-.
6] The respondent no.1 – MSRTC contested the claim with
contention that the accident solely occurred due to fault on the part
of the deceased who was driving the motorcycle in an excessive and
unmanageable speed. While overtaking the Truck ahead of him, the
deceased could not control his motorcycle and gave dash to the
driver side bumper of the Bus and sustained injuries. The
respondent no.1 denied the case as pleaded about age, occupation
and income of the deceased to claim compensation of
Rs.10,00,000/-.
7] The respondent nos.2 & 3 – the father and mother of the
deceased, appeared in the matter and fled their written statement.
They have claimed that the appellant has fled the petition in gross
suppression of true facts and tried to mislead the Court. The
appellant – claimant has shown her residential address as her
matrimonial house at village Raytale Tq.Parner Dist.Ahmednagar
though she is residing at her parental place at Sonewadi Tq. &
Dist.Ahmednagar. In order to grab the entire amount of
compensation, the appellant has deliberately shown her address as
that of her matrimonial place of residence. In brief, the respondent
nos.2 & 3 have approached with a case that the deceased was their
only son. The deceased married with the appellant about one
month prior to the accident. After the accident, the entire
expenditure of her treatment was borne by them. Instead of taking
care of respondent nos.2 & 3, the appellant – claimant left the
matrimonial house and residing with her parents. Her parents are
trying to perform her marriage. According to respondent nos.2 & 3,
the appellant – claimant is not entitled to receive compensation. In
short, the respondent nos.3 & 4 have claimed that they alone are
entitled to receive the compensation.
8] In order to prove the claim, the appellant – claimant has
examined herself. The respondent no.1 examined the driver of the
Bus in support of their defence. On due appreciation of rival
pleadings and oral and documentary evidence adduced in the case,
the Tribunal has reached to the conclusion that the accident and
consequential death of deceased had occurred due to sole
negligence on the part of the driver of S.T. Bus. The Tribunal has
assessed the compensation to be payable as Rs.9,00,000/-
(inclusive of No Fault Liability) with future interest at the rate of
7.5% p.a. from the date of petition till its realization. Out of the
compensation awarded, the amount to the extent of Rs.1,50,000/-
each was directed to be paid to respondent nos.2 and 3. The
balance of Rs.5,50,000/- was directed to be paid to the appellant –
claimant. Being dissatisfed with the award passed by the Tribunal,
the appellant – claimant has preferred this appeal seeking
enhancement of compensation.
9] In brief, it is the contention of learned counsel for the
appellant that the Tribunal has erred in deducting Rs.4750/- from
monthly salary of deceased in assessment of compensation. It is
submitted that except the statutory deductions, no other deduction
is permissible under law from the salary of the salaried person while
assessing compensation to be payable under the provisions of
Motor Vehicles Act. So also the view taken by the Tribunal that as
appellant – claimant is receiving pensionary beneft, she is not
entitled to receive more than Rs.6,000/- per month towards loss of
income, is against the settled position in law.
10] It is further submitted that while assessing the
compensation, the Tribunal has not considered the future prospects
of the deceased who was in permanent employment with
Government of India. He had good prospects. The salary was
subject to upward revision in near future. On account of future
prospects, the income to the extent of 50% should have been added
to the existing income of the deceased while assessing
compensation by the Tribunal. Similarly, the multiplier of 18 ought
to have been applied in assessment of compensation by taking into
consideration the age of deceased. In support of the submissions
that for the purpose of assessment of compensation, no deduction
other than statutory deductions are permissible in law, the learned
counsel has referred and relied upon decisions of the Apex Court in
the cases of Manasvi Jain v. Delhi Transport Corporation Limited &
others reported at (2014) 13 SCC 22 and Sebastiani Lakra &
others v. National Insurance Company Ltd. & another reported at
2018 ALL SCR 2175. By referring the decision in the case of
National Insurance Company Limited V/s Pranay Sethi and others
reported at (2017) 16 SCC 680, the learned counsel submits that
compensation of Rs.23,92,000/- deserves to be awarded to the
appellant and urged to re-assess the compensation after adjusting
the compensation already awarded and paid to the claimants.
11] On the other hand, learned counsel for the respondent
no.1 supported the judgment and award passed by the Tribunal. It
is submitted that the accident and consequential death of deceased
occurred due to sole negligence and fault on the part of deceased.
It is submitted that the compensation as claimed is excessive. The
Tribunal has duly considered the evidence and awarded the
compensation.
12] I have carefully considered the submissions advanced in
the light of rival pleadings, oral and documentary evidence adduced
in the case and the reasons and fndings recorded by the Tribunal in
assessing the compensation. If we consider the reasons and
fndings recorded by the Tribunal in assessing the compensation,
then the Tribunal has accepted the case of the appellant that the
deceased was 24 years of age and earning Rs.10,750/- per month
as a person permanently employed in military service as Sipoy.
While assessing the compensation, the Tribunal has considered the
monthly contribution of the deceased to his family as Rs.6,000/- per
month. The Tribunal has observed that after the death of the
deceased, the appellant – claimant is receiving pension to the
extent of half of the salary of deceased. After deducting the
pension to be payable to the appellant – claimant from the monthly
salary of the deceased, the Tribunal has assessed the monetary loss
as Rs.6,000/- per month on account of accidental death of
deceased. Accordingly, the Tribunal has assessed the monetary loss
as Rs.72,000/- per year. After making deduction to the extent of
1/3rd towards personal expenses of the deceased, the Tribunal
worked out the yearly loss of income as Rs.48,000/- (Rs.72000 –
Rs.24000 = Rs.48000). Accordingly, the Tribunal assessed the
monetary loss as Rs.8,64,000/- and further awarded Rs.26,000/- in
lump-sum towards loss of consortium, loss of estate, funeral
expenses, mental and physical agony and awarded total
compensation of Rs.9,00,000/-.
13] In my view, the assessment of compensation made by
the Tribunal is against the settled position in law. It is well settled
position in law that except the statutory deduction to be made
towards income tax, professional tax, no other deduction is
permissible under law. The deduction from salary of the deceased
towards insurance, pensionary benefts, gratuity or grant of
employment to kin of deceased is not permissible. In this context,
the learned counsel for the appellant has placed reliance upon the
decision in the case of Sebastiani Lakra & others v. National
Insurance Company Ltd. & another reported at 2018 ALL SCR
2175 wherein the Apex Court has observed in paragraph nos.12 to
16 as under:-
“12. The law is well settled that deductions cannot be
allowed from the amount of compensation either on
account of insurance, or on account of pensionary
benefts or gratuity or grant of employment to akin of the
deceased. The main reason is that all these amounts are
earned by the deceased on account of contractual
relations entered into by him with others. It cannot be
said that these amounts accrued to the dependents or
the legal heirs of the deceased on account of his death in
a motor vehicle accident. The claimants/dependents are
entitled to ‘just compensation’ under the Motor Vehicles
Act as a result of the death of the deceased in a motor
vehicle accident. Therefore, the natural corollary is that
the advantage which accrues to the estate of the
deceased or to his dependents as a result of some
contract or act which the deceased performed in his life
time cannot be said to be the outcome or result of the
death of the deceased even though these amounts may
go into the hands of the dependents only after his death.
13. As far as any amount paid under any insurance
policy is concerned whatever is added to the estate of
the deceased or his dependents is not because of the
death of the deceased but because of the contract
entered into between the deceased and the insurance
company from where he took out the policy. The
deceased paid premium on such life insurance and this
amount would have accrued to the estate of the
deceased either on maturity of the policy or on his death,
whatever be the manner of his death. These amounts are
paid because the deceased has wisely invested his
savings. Similar would be the position in case of other
investments like bank deposits, share, debentures etc..
The tortfeasor cannot take advantage of the foresight
and wise fnancial investments made by the deceased.
14. As far as the amounts of pension and gratuity are
concerned, these are paid on account of the service
rendered by the deceased to his employer. It is now an
established principle of service jurisprudence that
pension and gratuity are the property of the deceased.
They are more in the nature of deferred wages. The
deceased employee works throughout his life expecting
that on his retirement he will get substantial amount as
pension and gratuity. These amounts are also payable on
death, whatever be the cause of death. Therefore,
applying the same principles, the said amount cannot be
deducted.
15. As held by the House of Lords in Perry v. Cleaver
[(1969) 1 ALL ER 555] the insurance amount is the fruit
of premium paid in the past, pension is the fruit of
services already rendered and the wrong doer should not
be given beneft of the same by deducting it from the
damages assessed.
16. Deduction can be ordered only where the
tortfeasor satisfes the court that the amount has
accrued to the claimants only on account of death of the
deceased in a motor vehicle accident.”
14] Similar view has been taken by the Apex Court in the
case of Manasvi Jain v. Delhi Transport Corporation Limited & others reported at (2014) 13 SCC 22. The Apex Court has observed in paragraph no.8 as under:-
“8. This Court in Shyamwati Sharma & Ors. Vs. Karam
Singh & Ors. (2010) 12 SCC 378, while considering the
issues of deduction of taxes, contributions etc., for arriving
at the figure of net monthly income, held that -
“while ascertaining the income of the deceased, any
deductions shown in the salary certifcate as
deductions towards GPF, life insurance premium,
repayments of loans etc., should not be excluded
from the income. The deduction towards income
tax / surcharge alone should be considered to arrive
at the net income of the deceased.”
15] In the case of National Insurance Company Limited V/s
Pranay Sethi and others (supra), the Constitution Bench of the
Hon’ble Apex Court has laid down following broad guidelines for the
purpose of determination of compensation u/s 166 of the Motor
Vehicles Act :-
“59.1. The two-Judge Bench in Santosh Devi should have
been well advised to refer the matter to a larger Bench as
it was taking a diferent view than what has been stated
in Sarla Verma, a judgment by a coordinate Bench. It is
because a coordinate Bench of the same strength cannot
take a contrary view than what has been held by another
coordinate Bench.
59.2. As Rajesh has not taken note of the decision in
Reshma Kumari, which was delivered at earlier point of
time, the decision in Rajesh is not a binding precedent.
59.3. While determining the income, an addition of 50% of
actual salary to the income of the deceased towards future
prospects, where the deceased had a permanent job and
was below the age of 40 years, should be made. The
addition should be 30%, if the age of the deceased was
between 40 to 50 years. In case the deceased was
between the age of 50 to 60 years, the addition should be
15%. Actual salary should be read as actual salary less
tax.
59.4. In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established income
should be the warrant where the deceased was below the
age of 40 years. An addition of 25% where the deceased
was between the age of 40 to 50 years and 10% where the
deceased was between the age of 50 to 60 years should
be regarded as the necessary method of computation. The
established income means the income minus the tax
component.
59.5. For determination of the multiplicand, the deduction
for personal and living expenses, the tribunals and the
courts shall be guided by paras 30 to 32 of Sarla Verma
which we have reproduced hereinbefore.
59.6. The selection of multiplier shall be as indicated in
the Table in Sarla Verma read with para 42 of that
judgment.
59.7. The age of the deceased should be the basis for
applying the multiplier.
59.8. Reasonable figures on conventional heads, namely,
loss of estate, loss of consortium and funeral expenses
should be Rs.15,000, Rs.40,000 and Rs.15,000
respectively. The aforesaid amounts should be enhanced
at the rate of 10% in every three years.”
16] Thus, considering the overall facts of the case in the light
of broad principles of law as discussed above, the appeal deserves
to be allowed and the compensation awarded by the Tribunal is
required to be re-assessed. Undisputedly, the deceased was 24
years of age. Considering the multiplier applicable to victim in the
age group of 21 to 25 years, as provided in the case of Sarla
Varma (Smt.) and others Vs. Delhi Transport Corporation and
another reported at (2009) 6 SCC 121, the multiplier of 18 is
required to be applied in assessment of compensation. Since the
deceased was having permanent job and earning Rs.10,750/- per
month and a married person with dependency of three persons, the
deduction to the extent of 1/3rd is to be made from the monthly
salary of the deceased towards personal expenses of the deceased.
In that view, amount of Rs.3583/- per month is to be deducted
towards personal expenses of the deceased from the monthly salary
of Rs.10,750/- which the deceased was drawing at the time of his
death. Thus, the monthly contribution of the deceased to the
claimants is worked out as Rs.7167/-. The amount to the extent of
50% of monthly salary is to be added towards future prospects in
terms of guidelines laid down by the Apex Court in the case of
National Insurance Company Limited V/s Pranay Sethi and others
(supra) as the deceased was having permanent job and a salaried
person. On account of addition of income towards future prospects,
the amount of Rs.3583/- deserves to be added to the monthly
contribution of the deceased to his family. In that view, the net
monthly income of the deceased to be considered for the purpose of
assessment of compensation is worked out as Rs.10,750/-. Besides
this, a reasonable amount deserves to be awarded under the
conventional head. In the case of National Insurance Company
Limited V/s Pranay Sethi and others (supra), the Apex Court has
provided to award fixed amount of Rs.70,000/- under the said head and further recommended revision of the same after every three years with addition of amount to the extent of 10%. Since the accident in question occurred about 10 years prior to the decision in the said case, in my view, award of amount of Rs.30,000/- in lumpsum towards conventional head would meet the ends of justice.
Accordingly, the compensation has been re-assessed and re-worked
out as under:-
Sr.
No.
Heads Compensation
awarded
1. Monthly Income of deceased Rs.10,750/-
2. Deduction to the extent of 1/3rd
towards personal expenses
Rs.3583/-
3. Monthly Income of deceased
(10750-3583)
Rs.7167/-
4. Addition towards future prospects
(i.e. 50% of 7167)
Rs.3583/-
5. Net monthly income of the deceased Rs.10,750/-
6. Yearly loss of income to be considered
for assessment (10750 x 12)
Rs.1,29,000/-
7. Multiplier of 18 to be applied
considering age of deceased as 24
years
(1,29,000 X 18)
Rs.23,22,000/-
8. Compensation under conventional
heads such as loss of love and
affection, consortium, funeral expenses
and loss of estate etc.
Rs.30,000/-
9. Total compensation to be awarded Rs.23,52,000/-
17] Considering the overall facts of the case that the
marriage of the deceased had taken place about few months prior
to the accident and the appellant – claimant lost her husband at
young age, I am of the view that the amount of compensation be
apportioned in the ratio of 50% to the appellant – claimant and
balance 50% to the respondent nos.2 & 3 i.e. father and mother
being dependent upon the deceased.
18] In view of above, the appeal deserves to be allowed and
the award passed by the Tribunal needs to be modifed.
Accordingly, following order is passed.
O R D E R
A] Appeal is allowed with proportionate costs.
B] The compensation of Rs.9,00,000/- awarded by the
Tribunal is enhanced to Rs.23,52,000/-.
C] The amount of compensation of Rs.9,00,000/-
awarded by the Tribunal and if paid by the respondent
no.1 and withdrawn by the claimants be adjusted towards
enhanced compensation awarded in the case.
D] The enhanced amount of compensation i.e.
Rs.14,52,000/- shall be paid by the respondent no.1 to the
appellant – claimant and respondent nos.2 & 3 with future
interest at the rate of 6% p.a. from the date of petition till
its realization within a period of twelve weeks.
E] The amount of enhanced compensation be
apportioned between the appellant – claimant and
respondent nos.2 & 3 in the ratio of 50 : 50. Out of
enhanced amount of compensation, 50% amount together
with proportionate interest be paid to the appellant –
claimant and balance 50% amount together with
proportionate interest be apportioned in equal proportion
amongst the respondent nos.2 & 3.
F] The appellant - claimants shall pay the additional
Court fees to be payable in terms of compensation
enhanced and awarded within eight weeks from the date
of receipt of modifed award.
G] The modifed award be drawn accordingly.
H] The appeal is disposed of in above terms.
(V.L. ACHLIYA, J.)
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