* THE HON’BLE SRI JUSTICE U. DURGA PRASAD RAO
+ M.A.C.M.A No.341 of 2009
%08.12.2014
Between:
National Insurance Company Limited Rep. by its Divisional Manager, Hyderabad.
.... Appellant AND M. Madhavilatha and others ….
Respondents ! Counsel for Appellant : Sri Kota Subba Rao ^ Counsel for Respondent Nos.1 to 3: Sri K. Dhanunjaya Reddy < Gist:
> Head Note:
? Cases referred:
1) 2008 ACJ 614 (SC) THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO
M.A.C.M.A. No.341 of 2009
JUDGMENT:
Challenging the Award dated 18.01.2008 in O.P.No.523 of 2006 passed by the Chairman, M.A.C.T-cum-Chief Judge, City Civil Court, Hyderabad (for short ‘Tribunal’), the National Insurance Company Limited/2nd respondent in OP, preferred the instant MACMA.
2) The factual matrix of the case is thus:
a) The deceased-M.V.Ugandhar, who was working as Supervisor in M/s. P.K.Ramaiah and Company, Hyderabad was proceeding on his Hero Honda motor cycle No. AP 10 AB 2529 a t Vikrampuri Karkhana Road on the night of 30.07.2005 at about 7.45PM and when he reached near Palete Bar and Restaurant, at that time one garbage clearing vehicle No.F/6366902 and RC No.AP 11 B 8466 came behind his motor cycle being driven by its driver in a rash and negligent manner and dashed him causing his instantaneous death. It is averred that the driver of garbage vehicle was responsible for the accident and due to sudden death of deceased, petitioners, who are wife and minor daughter and son of the deceased became destitutes. On these pleas, the claimants filed O.P.No.523 of 2006 against respondents 1 and 2, who are owner and insurer of the offending vehicle and claimed Rs.14 lakhs compensation as under different heads.
b) Respondents 1 and 2 contested OP denying all material averments and urged to put the claimants in strict proof. Respondent no.1 denied that his driver was at fault and counter attacked that the deceased himself was in rash and negligent in driving his vehicle. Finally, while contending that the claim is excessive, respondent No.1 pleaded since the vehicle was insured with respondent No.2, it has to indemnify the liability that may be fastened on it.
c) Respondent No.2 also in its counter denied the fault of the driver of the garbage vehicle. It contended that the claim is excessive and untenable. In its additional counter, R2 denied its liability on the pleas that respondent No.1 violated the rules of M.V. Act and terms and conditions of the policy by running the vehicle on road without registration, fitness certificate and permit and also without paying tax and further the driver had no valid driving license.
d) During trial, PWs.1 to 3 were examined and Exs.A.1 to A.12 and Ex.X.1 to X.3 were marked on behalf of the claimants. Policy copy filed by respondent NO.2 was marked as EX.B.2. No oral or documentary evidence was adduced for respondents.
e) Award shows, with reference to issue No.1, the Tribunal basing on the eye witness evidence of PW.2 coupled with Ex.A.1-FIR, Ex.A.2-charge sheet and Ex.A.4-inquest report held that the accident was occurred due to the fault of the driver of the offending garbage vehicle. Issue No.2, which relates to compensation is concerned, though the Tribunal observed that the claimants are entitled to Rs.16,90,000/- under various heads mentioned infra, but restricted compensation to the extent of Rs.14 lakhs as claimed by them in OP.
(a) Compensation towards loss of Income and future expectancy of life Rs.16,64,000/-
(b) Compensation towards loss of estate Rs. 15,000/-
(c) Compensation towards funeral expenses Rs. 2,000/-
(d) Compensation towards loss of consortium in favour of the first petitioner Rs. 9,000/-
Total Rs.16,90,000/-
Hence, the appeal by the Insurance Company.
3) The parties in the appeal are referred as they stood before the Tribunal.
4) Heard arguments of Sri Kota Subba Rao, learned Counsel for appellant/Insurance Company and Sri K. Dhanunjaya Reddy, learned counsel for respondents No.1 to 3/claimants. Though notice to R.4 was served but there is no representation.
5 a) Impugning the Award, learned counsel for the appellant firstly argued that the Tribunal erred in finding fault with the driver of the offending vehicle basing on the evidence of PW.2, who was not an eye witness as per charge sheet. Learned counsel vehemently argued that PW.2 was set up by the claimants and omitting him there were none others on behalf of the claimants to speak about the alleged rash and negligent driving by the driver of the offending vehicle. In that view of the matter, he argued, the claimants would not be entitled to compensation under fault liability principle.
b) Secondly, he argued that Ex.A.10-salary certificate would show that the deceased was paid Rs.13,000/- per month including “conveyance”. The conveyance allowance cannot be treated as income and so some reasonable amount has to be deducted towards conveyance charges and compensation has to be re-assessed. He thus prayed to allow the appeal and re- assess the compensation.
6 ) Per contra, learned counsel for the claimants while supporting the Award firstly argued that merely because PW.2 was not shown as eye witness in the charge sheet, that does not mean that he did not witness the accident. The Tribunal having satisfied with the veracity of his evidence decided the guilt of the driver of the offending vehicle. Secondly, learned counsel argued that conveyance is one type of allowance given to an employee and hence it will form part of his income. If conveyance allowance is not paid, the employee has to incur expenditure from his pocket to meet the conveyance charges. To avoid the same, both Government and private employers are providing conveyance allowance to their employees as a sort of incentive and so that must be treated as income only. He thus, argued that there is no need of deducting any amount from the gross income of the deceased and re-assess the compensation. He argued that in fact, the Tribunal held that the claimants entitled to Rs.16,90,000/-, but unfortunately restricted the compensation to Rs.14 lakhs. He would submit that though the claimants had not filed any independent appeal or cross objections, still they can defend the compensation awarded by Tribunal on the submission that whatever already awarded by the Tribunal is a low amount.
7) In the light of the above rival arguments, the point for determination is:
“Whether the Award passed by the Tribunal is factually and legally correct?”
8) POINT: The first argument is that pW2 was not an eye witness and excluding him no other eye witness was examined to prove the guilt of the offending vehicle driver. PW.2- K.Srikanth, deposed that on 30.07.2005 at about 7 PM he went to Karkhana area to meet his friend, whose residence was in Vikrampuri Lane. He said that he saw the accident near Palete Bar and Restaurant at Vikrampuri, Karkhana Road, where the offending vehicle which was going from Secunderabad to Tirumalgiri side came on high speed being driven by its driver in rash and negligent manner and dashed the motor cycle of the deceased from the back side and thereby the deceased fell down and garbage lorry ran over him and he died on the spot. He avouched that accident occurred due to the rash and negligent driving by the garbage lorry driver. In the cross examination, he stated that even though he reached the accident area at 7 PM, he was chitchatting on the road with his friends and witnessed the accident at about 7.45PM. He admitted that he did not give report to the police and take the
victim to hospital. He denied the suggestion that he was not an eye-witness. A perusal of the evidence of PW.2 would show that no doubt he was not cited as witness in the charge sheet by the police. However, that alone is not a ground to discard his evidence. His evidence gives the vital facts touching the accident and there is an element of truth in it. In the cross examination, his evidence could not be shattered. Therefore, I hold that the Tribunal rightly accepted his evidence and decided the guilt of the offending garbage lorry driver. Except harping that the driver was not responsible for the accident the respondents in OP did not examine the lorry driver to prove his innocence, if any. For all these reasons, the first argument of the insurance company is held untenable.
9) The second contention of the insurance company is that in the gross salary f Rs.13,000/- of the deceased, conveyance charges is also included and hence a reasonable amount has to be deducted towards conveyance allowance from the gross salary since conveyance charges do not form part of the income of an employee. The contra argument is that conveyance allowance also forms part of the income of an employee and hence, it cannot be deducted. The additional argument is that though the Tribunal held claimants entitled to RS.16,90,000/-, but reduced the same to Rs.14 lakhs as claimed in OP and thereby compensation was already drastically decreased and the same may not be further reduced to the determent of the claimants.
10) Now in the above context, the point is whether conveyance allowance shall form part of the salary of the deceased or not.
11) In this regard, Hon’ble Apex Court in a decision reported in National Insurance Company Limited vs. Indira Srivastava , and others[1] happened to consider as to what allowances/perks should be included/ deducted from salary. In that case, the Tribunal excluded conveyance allowance from the salary on the premise that it would fall outside the purview of the income of employee. In this regard, considering the several decisions Apex Court 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 for 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.”
12) So from the above observations, it is clear that those allowances and perks which would benefit the entire family, should be included in the income of the employee and in contrast those perks or allowances which benefit the employee alone shall be excluded from the income. Of course, from the amount of income, the statutory deductions like taxes shall be applied. Having regard to the above decision, conveyance allowance can be said to be a benefit to the employee rather than his entire family. So, conveyance allowance need to be excluded from the income of the deceased. However, in the instance case, the fact is that as per Ex.A.10-salary certificate, the deceased was paid the gross salary of Rs.13,000/- including conveyance. We do not know what exact amount was paid as conveyance allowance. Therefore, it is not apt to deduct any amount from the income of the deceased. There is also another reason for not effecting any deductions towards conveyance allowance. As rightly argued by the learned counsel for respondent/claimants, the Tribunal observed that the claimants are entitled to total compensation of Rs.16,90,000/- out of which compensation for loss of income was Rs.16,64,000/-. However, since the claim is only for Rs.14 lakhs, the Tribunal restricted the Award to that amount. Now even if a reasonable amount of 10% of the salary i.e. Rs.1300/- is deducted from the salary towards conveyance allowance and compensation is calculated, it would come to Rs.14,97,600/- (Rs.11,700/- x 12 x 16 x 2/3). As mentioned supra, the Tribunal awarded only Rs.14,00,000/- as total compensation. Therefore, even if a reasonable amount of 10% is deducted towards conveyance allowance, still there would be no change in the total compensation. Therefore, I am unable to accept the second argument of the appellant/insurance company.
13) In the result, I do not find any merits in the appeal and accordingly, this MACMA is dismissed by confirming the compensation awarded by the Tribunal. No costs in the appeal.
As a sequel, miscellaneous applications pending, if any, shall stand closed.
U. DURGA PRASAD RAO, J Date: 08.12.2014
Note: L.R Copy to be marked: Yes / No
kvrm
[1] 2008 ACJ 614 (SC)