(Per : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. This appeal is filed by the claimants seeking enhancement of compensation awarded by the Claims Tribunal dated 30.8.2011 passed in MACP No.495 of 2003.
2. Noticing that a small legal question arises, we had issued notice for final disposal on 22.3.2012, passing the following order:
"1. Counsel for the appellants submitted that the Claims Tribunal deducted flat 30% from the gross salary of the deceased towards income tax liability. He submitted that looking to the salary of the deceased, he would not fall in highest tax bracket. In any case, Tribunal did not take into account basic exemption limit in income tax and slab-wise tax liability.
2. Prima facie, on this ground and other certain grounds, we find some scope for increase in compensation paid to the claimants.
3. For the above purpose, issue NOTICE for final disposal, returnable on 19th April 2012.
Direct service is permitted.
3. In response to such notice, learned counsel Shri Thomas appeared for respondent No.3 United India Insurance Company Limited. Though served, nobody appeared for respondent Nos.1 and 2.
4. Before going to the legal contentions, brief facts may be noted. The appellants are dependents and legal heirs of deceased Chhatrasinh Maganbhai Mankar, who died in a vehicular accident, which took place on 2.2.2003. Vehicle causing incident was a tempo, which was insured by respondent No.3 Insurance Company. The claimants, which included widow, three minor children and aged father and other relatives of the deceased, therefore, filed the above mentioned claim petition, claiming compensation of Rs.20,00,000/- from the driver, owner and Insurance Company of the vehicle involved in the accident. Claims Tribunal held driver of the tempo solely negligent in causing the accident. With respect to computation of compensation, Tribunal believed the income of the deceased at the time of his death to be Rs.4,838/- per month. Considering future rise in the income, Tribunal believed prospective income of Rs.7,257/- per months. From such amount, the Tribunal deducted 30% i.e. Rs.2177/- per month towards tax. Out of remaining Rs.5080/-, the Tribunal deducted 1/4th for personal expenditure of the deceased, leaving 3/4th for the claimants looking to large number of dependents. Tribunal thus arrived at a datum figure of Rs.3810/ per month towards benefit of the claimants. Considering the age of deceased of 30 years, Tribunal adopted multiplier of 17 and awarded sum of Rs.7,77,240/- (i.e. Rs.3810 x 12 x17) towards dependency benefits. Tribunal awarded a sum of Rs.15,000/- towards loss of estate, Rs.10,000/- towards loss of consortium to the wife and Rs.5,000/- towards funeral expenses. Tribunal thus awarded total compensation of Rs.8,07,240/- to the claimants.
5. It is this award that claimants have challenged in this appeal. Counsel for the appellants raised only one contention, viz. that the Tribunal committed grave error in deducting 30% towards income tax when the income of the deceased was taken as Rs.7257/- per month. He submitted that such deduction from Rs.7257/- per month has resulted in gross injustice to the claimants. He relied on the tax slabs for the relevant assessment year, to contend that there would be virtually no tax liability of the deceased considering the basic exemption limits and deductions permissible under the Income Tax Act.
6. Counsel Shri Thomas for the Insurance Company was not in a position to sustain 30% deduction towards income tax applied by the Claims Tribunal. He however, submitted that other than such error, no further modification is called for.
7. From the Income Tax ready reckoner, we notice that there was a basic exemption limit of Rs.50,000/- from payment of tax in case of individual or Hindu Un-divided family in the year under consideration. For income between Rs.50,000/- and Rs.60,000/-, 10% income tax applied. For income beyond Rs.60,000/- upto Rs.1,50,000/-, tax was collected at 20%. Several deductions such as under Section 80C were also available.
8. In the present case, prospective income of the deceased believed by the Tribunal was Rs.85,000/- (approximately) per annum. Even if we consider conservative deduction of Rs.10,000/-, which the deceased could have availed under Section 80C and other provisions applicable at the relevant time, he would have no tax liability upto income of Rs.60,000/- (Rs.50,000/- basic exemption limit plus Rs.10,000/- deduction). On the remaining amount of Rs.25,000/-, he would pay tax of Rs.4,000/- (i.e. Rs.1,000/- for first Rs.10,000/- at the rate of 10% and Rs.3,000/- for remaining Rs.15,000/- at the rate of 20%). If we deduct this Rs.4,000/- from yearly income of deceased of Rs.85,000/-, and if we round up the remaining amount to Rs.80,000/-, 1/4th thereof or Rs.20,000/- should be deducted for his personal expenditure, leaving a net figure of Rs.60,000/- per annum towards dependency benefits of the claimants. Multiplier of 17 is left unchanged. The claimants should also receive amount towards loss of consortium and loss of estate at the current rates. In the result, the claimants would receive compensation in the following manner.
Tribunal has already awarded compensation of Rs.8,07,240/-. The claimants, therefore, shall receive additional sum of Rs.2,62,760/-. Such additional compensation shall carry simple interest at the rate of 7.5% as provided by the Tribunal from the date of the claim petition till payment.
9. Insurance Company shall deposit such additional amount with proportionate costs and interest before the Tribunal latest by 31st May 2012. Upon such deposit, the Claims Tribunal shall invest the entire amount in any nationalized Bank for a period of 5 years. The claimants, however, shall receive periodical interest on such investment.
10. With the above directions, the impugned award stands modified. First Appeal is partly allowed and disposed of.
Sd/-
(AKIL KURESHI, J.) Sd/-
(C.L.
SONI, J.) omkar Top