* THE HON’BLE SRI JUSTICE U. DURGA PRASAD RAO
+ M.A.C.M.A No.1141 of 2010
%14.07.2014
Between:
Mangali Parvathamma and others. ... Appellants AND P. Yadaiah and another. ….
Respondents ! Counsel for Appellants : Sri P. Ramakrishna Reddy ^ Counsel for Respondent No.2 : Sri V. Sambasiva Rao < Gist:
> Head Note:
? Cases referred:
1) 2013 ACJ 1441 (SC)
2) 2008 ACJ 614 (SC)
3) 2012 ACJ 1428 (SC)
4) 2013 ACJ 1403 (SC)
5) 2004 ACJ 448 (SC)
6) 2009 ACJ 1298 (SC) HON’BLE SRI JUSTICE U. DURGA PRASAD RAO
M.A.C.M.A. No.1141 of 2010
JUDGMENT:
The bone of contention in this MACMA filed by the claimants against the Award dated 16.09.2009 in O.P.No.1784 of 2007 passed by the Chairman, MACT-cum-II Additional Chief Judge, City Civil Court, Hyderabad (for short ‘the Tribunal’), is the adequacy of compensation of Rs.6,78,168/- awarded by the Tribunal as against the claim of Rs.12,00,000/- for the death of one M. Shankaraiah, Maali in the department of Horticulture, University of Hyderabad, in a lorry accident on 30.05.2007. The claim was made against respondents 1 and 2 who are the owner and insurer of the offending lorry. The Tribunal on consideration of the evidence held the lorry driver was responsible for the accident and fixed liability on respondents and awarded the aforesaid compensation with proportionate costs and simple interest at 7.5% p.a to the claimants who are the wife, daughter and son of the deceased respectively.
2) Heard arguments of Sri P.Ramakrishna Reddy, learned counsel for appellants and Sri V.Sambasiva Rao, learned counsel for R2/Insurance Company. Notice to R1 was unserved.
3 a) Challenging the award as grossly inadequate and its computation bereft of legal tenets, learned counsel firstly argued that the Tribunal erred in accepting only the net salary of the deceased instead of gross salary minus tax deductions for computation of loss of dependency and thereby the quantum of compensation was unduly plummeted. He relied upon the following decisions regarding the items of the salary to be taken for computation of compensation:
1) Vimal Kanwar and others vs. Kishore Dan and
[1]
others .
2) National Insurance Co. Ltd. vs. Indira Srivastava and
[2]
others .
b) Secondly, he argued that the Tribunal did not consider future prospects and add to the salary. He relied upon the decision reported in Santosh Devi vs. National Insurance Co.
[3]
Ltd and others on the necessity of adding the future prospects to the income of the deceased.
c) Thirdly he argued that in view of the recent judgment of the Apex Court, in Rajesh and others vs. Rajbir Singh and
[4]
others , compensation for the loss of consortium and funeral expenses needs to be awarded Rs.1,00,000/- and Rs.25,000/- respectively.
d) Finally, he submitted that in the process of awarding just and reasonable compensation, the Court can grant more compensation than claimed by the claimants. On this aspect, he relied upon the decision of the Supreme Court in Rajesh’s case (supra).
Thus he prayed to allow the appeal.
4 a) Per contra, while supporting the award, learned counsel for respondent No.2/ Insurance Company firstly argued that the Tribunal was right in accepting the net salary for computation of compensation as it was done on the strength of Apex Court’s decision in Asha and others vs. United India Insurance Co.
[5]
Ltd. and another .
b) Secondly, he argued that the son and daughter are not dependants of the deceased inasmuch as they are majors and daughter was married long back.
c) Finally, he submitted that the award in all respects was just and reasonable and there is no need to revise the same.
He thus prayed for dismissal of the appeal.
5 ) In the light of above rival arguments, the point for determination in this appeal is:
“Whether the compensation awarded by the Tribunal was just and reasonable or needs any enhancement?”
6) POINT: The accident, involvement of the lorry bearing No.AP 23 T 1188 and death of deceased are all admitted facts. As stated supra, the quantum of compensation alone is the subject matter of discussion in the appeal. On hearing both sides and upon perusal of the award, I am of the view that the Tribunal committed some mistakes in computation of compensation which necessitated the intervention by this Court. Before that, on facts, the deceased was admittedly a Gardener (Maali) working in Hyderabad Central University. As per Ex.A.10—service certificate, his date of birth was 01.07.1953 whereas the accident was occurred on 30.05.2007. Thus, he was aged 54 years by the time of his death.
a) Be that it may, Ex.A.9—pay sip of the deceased issued by Central University of Hyderabad for the month of May, 2007 shows his salary as follows:
SALARY CERTIFICATE
INCOME DEDUCTIONS
Less: Deductions Rs. 2,964/- Total Rs.2,964/-
Net Salary = Rs. 7,536/-
The above being the salary structure, the Tribunal accepted only his net salary for computation of compensation on the strength of the decision reported in Asha’s case (5 supra) submitted by the respondent/ Insurance Company. The award shows, the claimants contended that except deduction of Rs.100/- towards Professional Tax, no other amounts should be deducted and they relied upon Indira Srivastava’s case (2 supra) which is cited also by counsel for appellants in the appeal. Learned counsel for appellants submitted that except the statutory deduction of Professional Tax, no other items shall be deducted from the salary since all other items of the deductions shown in Ex.A.9 are in fact contributions made by the deceased from out of his salary to obtain some future benefit to him and his family members. Expatiating it, he submitted that deduction towards Provident Fund of Rs.450/-
was a contribution made by the deceased for Provident Fund, C.C.S, E.B.F and G.I.S were in fact different types of contributions made by him from out of his salary amount as savings against a rainy day. Hence they are not liable to be deducted from gross salary for computation of compensation. Sofaras deduction towards loans like P.F loan, C.C.S loan and Festival advance etc., are concerned, learned counsel argued that the deceased secured those loans for his family necessities and he was repaying those loans from out of his salary amount. Logically speaking, he used those loans from the respective funds maintained by the employer and now he is reimbursing from his salary. Once the loan is cleared, his salary would remain as it was. Therefore, there is no point in treating these items like taxes to reduce them from salary. I find force in the above argument. No doubt in Asha’s case (5 supra) relied upon by the Tribunal, the Apex Court took net salary after deducting the allowances like L.I.C, society charges and H.B.A etc. However in that case, the point for consideration was not as to what items should or should not be included in the salary for computation of compensation. It may be noted that it was so observed in Indira Srivastava’s case (2 supra) relied upon by the claimants before the Tribunal. In that case—connotation of the term ‘income’ for the purpose of determination of just compensation was the question for determination. The Apex Court happened to refer various decisions including Asha’s case (5 supra) in answering the point before it, and observed thus:
“This Court in Asha’s case (supra) did not address itself to the questions raised before us. It does not appear that any precedent was noticed nor the term 'just compensation' was considered in the light of the changing societal conditions as also the perks which are paid to the employee which may or may not attract income tax or any other tax.”
Ultimately, the Apex Court in Indira Srivastava’s case (2 supra) held thus:
“17. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted.”
Unfortunately, the Tribunal did not notice the observation i n Indira Srivastava’s case (2 supra) and accepted only net salary of the deceased for computation of compensation. Therefore, following Indira Srivastava’s case (2 supra) Professional tax alone has to be deducted. Subsequently, Apex Court in Vimal Kanwar’s case (1 supra) in another context held that the Provident Fund, Pension and Insurance receivable by the claimants on the death of deceased were not liable for deduction as they are not the pecuniary advantage within the periphery of M.V. Act.
b ) In view of the above discussion, the salary for computation of compensation comes to Rs.10,400/- (Rs.10,500/- minus Rs.100/- towards Professional Tax).
7) Now the second argument of the appellants is concerned, t h e Apex Court in Sarla Verma vs. Delhi Transport Corporation
[6]
, held that there should be no addition to the salary of a deceased towards future prospects where the age of the deceased is more than 50 years. Since the deceased in this case was aged 54 years, no future prospects can be considered in view of the aforesaid dictum.
8) Then multiplier is concerned, the Tribunal has selected ‘11’ as multiplier following the Second Schedule of the M.V. Act. Even as per Sarla Verma’s case (6 supra) also the same is the multiplier Then loss of dependency is concerned, the annual income of the deceased which will serve the purpose as multiplicand comes to Rs.1,24,800/- (Rs.10,400/- x 12), from this 1/3rd is deducted towards personal expenditure of the deceased and the balance amount is multiplied with ‘11’ to arrive at the loss of dependency which comes to Rs.9,15,200/- (Rs.1,24,800/- x 2/3rd x 11).
9 ) Then loss of consortium is concerned, the Tribunal awarded Rs.10,000/-. Though in Rajesh’s case (4 supra) it was suggested to award Rs.1,00,000/-, in view of the fact that the deceased died in his middle age, compensation is enhanced to Rs.20,000/- only. Similarly, considering the amount of Rs.2,500/- awarded by the Tribunal towards funeral expenses as inadequate, the same is enhanced to Rs.10,000/-
. Thus the total compensation payable to the claimants under different heads is detailed as below:
Loss of dependency Rs.9,15,200-00
Total Rs.9,47,700-00 So, the compensation is enhanced by Rs.2,69,532/- (Rs.9,47,700/- minus Rs.6,78,168/-).
10) It was argued that the claimants 2 and 3 are not entitled to compensation. However, the evidence of PW.1 would show that all the petitioners were depending on the earnings of the deceased as he was maintaining them and further the second claimant is a widow and hence, she too was depending on her father. Hence, the above argument cannot be accepted.
11) In the result, this appeal is partly allowed and ordered as follows:
a) The compensation is enhanced by Rs.2,69,532/- with proportionate costs and interest at 6% p.a from the date of filing this appeal till the date of realization.
b) The respondents are directed to deposit the compensation amount within one month from the date of this judgment, failing which execution can be taken out against them.
c) No order as to costs.
As a sequel, miscellaneous applications pending, if any,
shall stand closed.
U. DURGA PRASAD RAO, J Date: 14.07.2014
Note: L.R Copy to be marked: Yes/ No
scs
[1] 2013 ACJ 1441 (SC)
[2] 2008 ACJ 614 (SC)
[3] 2012 ACJ 1428 (SC)
[4] 2013 ACJ 1403 (SC)
[5] 2004 ACJ 448 (SC)
[6] 2009 ACJ 1298 (SC)