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Monday, August 4, 2014

M.V.Act - Fixation of income - LIC premium not to be deducted from his net income while fixing net income of deceased - when dependents are 5- deduction should 1/4th of income - their Lordships held that Whether the life insurance money of the deceased is to be deducted from the claimants' compensation receivable under the Motor Vehicles Act, 1939? Answering the above question, the Apex Court held that the LIC policy amount was not a pecuniary advantage, liable for deduction. It observed thus: The insured (deceased) contributes his own money for which he receives the amount has no co-relation to the compensation computed as against tortfeasor for his negligence on account of accident. As aforesaid, the amount receivable as compensation under the Act is on account of the injury or death without making any contribution towards it, then how can fruits of an amount received through contributions of the insured be deducted out of the amount receivable under the Motor Vehicles Act. The amount under this Act, he receives without any contribution. As we have said the compensation payable under the Motor Vehicles Act is statutory while the amount receivable under the life insurance policy is contractual. In K. Pushpalathas case (3 supra) also, this High Court expressed a similar view in respect of the contributions made by a deceased employee towards P.F, group insurance and like. a) Since the amount of Rs.5,000/- is not liable for deduction, compensation has to be reassessed. The net annual income of the deceased comes to Rs.1,05,000/- (Rs.1,20,000/- minus Rs.15,000/- towards income tax). Then multiplier is concerned, it is true that in Sarla Vermas case (4 supra), 15 is provided for the persons in the age group of the deceased, whereas the Tribunal selected multiplier 14. Since the difference being only one digit, multiplier 14 is accepted. Then deduction towards personal expenditure is concerned, the Tribunal deducted 1/3rd. However, in Sarla Vermas case (4 supra), Apex Court laid down that 1/4th has to be deducted when number of dependent family members is 4 to 6. = M.A.C.M.A No.516 of 2009 07-07-2014 Smt. Bandameedi Suvarna and others.... Appellants A. Jairuddin and another.. Respondents = 2014 -July-Part- http://judis.nic.in/judis_andhra/filename=11600

M.V.Act - Fixation of income - LIC premium  not to be deducted from his net income while fixing net income of deceased - when dependents are 5 ,  deduction should 1/4th of  income -  their Lordships held that Whether the life insurance money of the deceased is to be deducted from the claimants' compensation receivable under the Motor Vehicles Act, 1939? Answering the above question, the Apex Court held that the LIC policy
amount was not a pecuniary advantage, liable for deduction.  It observed thus: The insured (deceased) contributes his own money for which he receives the amount has no co-relation to the compensation
computed as against tortfeasor for his negligence on account of accident. As aforesaid, the amount receivable as compensation under the Act is on account of the injury or death without making
any contribution towards it, then how can fruits of an amount received through contributions of the insured be deducted out of the amount receivable under the Motor Vehicles Act. The amount under this Act, he receives without any contribution. As we have said the compensation payable under the Motor Vehicles Act is statutory while the amount receivable under the life insurance
policy is contractual. In K. Pushpalathas case (3 supra) also, this High Court expressed a similar view in respect of the contributions made by a deceased employee towards P.F, group insurance and like.
a)      Since the amount of Rs.5,000/- is not liable for deduction,
compensation has to be reassessed. The net annual income of the deceased  
comes to Rs.1,05,000/- (Rs.1,20,000/- minus Rs.15,000/- towards income 
tax). 
Then multiplier is concerned, it is true that in Sarla Vermas case
(4 supra), 15 is provided for the persons in the age group of the deceased,
whereas the Tribunal selected multiplier 14.  
Since the difference being
only one digit, multiplier 14 is accepted.   
Then deduction towards personal
expenditure is concerned, the Tribunal deducted 1/3rd.  However, in Sarla
Vermas case (4 supra), Apex Court laid down that 1/4th has to be deducted
when number of dependent family members is 4 to 6.  =

The claimants who are the wife,
minor son and daughter and parents of the deceased laid the claim in
O.P.No.344 of 1998
against respondents 1 and 2, who are the owner and
insurer of the offending lorry and claimed Rs.20,00,000/- as compensation
under different heads.=

the Tribunal awarded Rs.8,70,000/- as
compensation under different heads as follows:

        Loss of dependency                      Rs. 8,40,000-00
        Non-pecuniary damages                   Rs.    15,000-00    
        Loss of consortium                      Rs.    15,000-00
---------------------
                                                     Total     Rs. 8,70,000-00
---------------------
        Dissatisfied with the quantum, the claimants preferred the instant
appeal.

Appeal against R.1 was dismissed for default on
15.12.2008.  
However, in view of the fact that R.1 remained ex parte and
suffered decree before the Tribunal, his absence will not have any effect in
the appeal in the light of decision 
reported in Meka Chakra Rao vs. Yelubandi Babu Rao @ Reddemma and others =

Whether the life insurance money of the deceased is to be
deducted from the claimants' compensation receivable under the
Motor Vehicles Act, 1939?
     Answering the above question,
the Apex Court held that the LIC policy
amount was not a pecuniary advantage, liable for deduction.  It observed
thus:
The insured (deceased) contributes his own money for which he
receives the amount has no co-relation to the compensation
computed as against tortfeasor for his negligence on account of
accident.
As aforesaid, the amount receivable as compensation
under the Act is on account of the injury or death without making
any contribution towards it, then how can fruits of an amount
received through contributions of the insured be deducted out of
the amount receivable under the Motor Vehicles Act. The amount
under this Act, he receives without any contribution. As we have
said the compensation payable under the Motor Vehicles Act is
statutory while the amount receivable under the life insurance
policy is contractual.
        In K. Pushpalathas case (3 supra) also, this High Court expressed a
similar view in respect of the contributions made by a deceased employee
towards P.F, group insurance and like.
a)      Since the amount of Rs.5,000/- is not liable for deduction,
compensation has to be reassessed. The net annual income of the deceased  
comes to Rs.1,05,000/- (Rs.1,20,000/- minus Rs.15,000/- towards income 
tax). Then multiplier is concerned, it is true that in Sarla Vermas case
(4 supra), 15 is provided for the persons in the age group of the deceased,
whereas the Tribunal selected multiplier 14.  Since the difference being
only one digit, multiplier 14 is accepted.   Then deduction towards personal
expenditure is concerned, the Tribunal deducted 1/3rd.  However, in Sarla
Vermas case (4 supra), Apex Court laid down that 1/4th has to be deducted
when number of dependent family members is 4 to 6.  In the instant case,
dependants being 5 in number, 1/4th is to be deducted.  So the compensation
for loss of dependency comes to Rs.11,02,500/- (Rs.1,05,000/- x 14 x 3/4th).
Thus the total compensation payable to the claimants under different heads is
detailed as below:
     Loss of dependency                 Rs.11,02,500-00
        Non-pecuniary damages                   Rs.     15,000-00    
        Loss of consortium                      Rs.     15,000-00
---------------------
                                                     Total     Rs.11,32,500-00
---------------------
     So, the compensation is enhanced by Rs.2,62,500/- (Rs.11,32,500/-
minus Rs.8,70,000/-).
9)      In the result, this appeal is partly allowed and ordered as follows:
a)      The compensation is enhanced by Rs.2,62,500/- with proportionate
costs.
b)      The enhanced compensation amount shall carry interest at 6% p.a
from 26.02.2009 (i.e, when the delay in filing the appeal was
condoned as per orders in CMA MP No.1249 of 2003) till the date
of realization.
c)      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.
d)      No order as to costs.
        As a sequel, miscellaneous applications pending, if any, shall stand
closed.
2014 -July-Part- http://judis.nic.in/judis_andhra/filename=11600
THE HONBLE SRI JUSTICE U. DURGA PRASAD RAO        

M.A.C.M.A No.516 of 2009

07-07-2014

Smt. Bandameedi Suvarna and others.... Appellants

A. Jairuddin and another.. Respondents

Counsel for Appellants          : Sri P. Laxma Reddy

Counsel for Respondent No.2     : Sri E. Venu Gopal Reddy

<Gist:

>Head Note:

? Cases referred:
1)2001 (1) ALT 485
2)1999 ACJ 10(SC) = (1999) 1 SCC 90
3)2006(5) ALD 614
4)AIR 2009 SC 3104


HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO          
M.A.C.M.A. No.516 of 2009

JUDGMENT:
        This appeal is an offshoot of the award dated 24.08.2001 in OP No.344
of 1998 passed by the MACT-cum-Additional District and Sessions Judge,
Medak at Sangareddy (for short the Tribunal), whereby the Tribunal, for
the death of one B. Rajeshwar, awarded compensation of Rs.8,70,000/- and
his disgruntled LRs. preferred the instant MACMA.
2)      The facts in brief are thus:
a)      The deceased was said to aged 36 years, a MBA Graduate and doing  
variety of businesses like commission agency, running oil and dal mill and
real estate etc., besides holding the posts Director, District Cooperative Bank,
Medak, Chairman, Eppepally Cooperative Society, President, Grain
Merchants Association, Zaheerabad and President, Adarsha Vidyalaya
Zaheerabad to name a few. While-so, on 19.07.1998 when the deceased
along with his friends was going from Zaheerabad to Hyderabad in
connection with his business in his car bearing No. AP 9 F 3700 and when
they crossed Pothireddypally cross roads on N.H.No.9 at about 11-30 am, a
lorry bearing No. KA 01 9104 came in the opposite direction being driven by
its driver in a rash and negligent manner and dashed the car and thereby, the
deceased who was driving the car sustained grievous injuries and died on the
spot and other passengers suffered injuries.  It was averred that the lorry
driver was solely responsible for the accident and due to sudden death of the
deceased, his family became forlorned.  The claimants who are the wife,
minor son and daughter and parents of the deceased laid the claim in
O.P.No.344 of 1998 against respondents 1 and 2, who are the owner and
insurer of the offending lorry and claimed Rs.20,00,000/- as compensation
under different heads.
b)      Respondent No.1 remained ex parte.
c)      Respondent No.2/Insurance Company denying the petition averments,
mainly contended that the accident was occurred due to the fault of the
deceased himself and not the lorry driver and further, the lorry driver had no
valid and effective driving licence.  Incidentally, R.2 denied the age,
avocation and income of the deceased and urged to put the claimants in strict
proof of the same.  Finally, R.2 contended that the claim is highly excessive
and arbitrary and liable for dismissal.
d)      During trial, PWs.1 to 3 were examined and Exs.A.1 to A.19 were
marked on behalf of claimants.  Policy copy filed by R.2 was marked as
Ex.B.1.
e)      Award shows, issue No.1 is concerned, the Tribunal believing the
evidence of PW.3K. Ravi Kumar, a passenger in the car and an eye witness
to the accident coupled with Exs.A.1FIR and Ex.A.2charge sheet, has
held that the lorry driver was responsible for the accident. Issue No.2 the
compensation is concerned, the Tribunal awarded Rs.8,70,000/- as
compensation under different heads as follows:

        Loss of dependency                      Rs. 8,40,000-00
        Non-pecuniary damages                   Rs.    15,000-00      
        Loss of consortium                      Rs.    15,000-00
---------------------
                                                     Total     Rs. 8,70,000-00
---------------------
        Dissatisfied with the quantum, the claimants preferred the instant
appeal.
3)      Heard arguments of Sri P. Laxma Reddy, learned counsel for
appellants/claimants and Sri E. Venu Gopal Reddy, learned counsel for R.2/
Insurance Company.  Appeal against R.1 was dismissed for default on
15.12.2008.  However, in view of the fact that R.1 remained ex parte and
suffered decree before the Tribunal, his absence will not have any effect in
the appeal in the light of decision reported in Meka Chakra Rao vs.
Yelubandi Babu Rao @ Reddemma and others .  
4 a)    Challenging the award, learned counsel for appellants firstly argued
that the Tribunal committed error in fixing the annual income of the deceased
only at Rs.1,20,000/- despite claimants projecting cogent evidence in the
form of his income tax returns and other record showing much higher
income.
b)      Secondly, he argued that while fixing the annual income at
Rs.1,20,000/-, the Tribunal committed another blunder by deducting
Rs.5,000/- towards LIC premium on the premise that the family of deceased
would get benefit i.e, policy amount from the Insurance Company.  Learned
counsel took a strong objection to this observation and argued that the
probable LIC policy amount receivable by his family has nothing to do with
his income since the policy amount is not a pecuniary advantage that accrued
directly and solely out of the accidental death of deceased in a motor vehicle
accident and hence same is not liable for deduction.  On this point, he relied
on the following decisions:
1)      Mrs. Helen C.Rebello and others vs. Maharashtra State Road
Transport Corporation and another
2)      State of A.P vs. K. Pushpalatha .
c)      Thirdly, he argued that though the Tribunal was right in deducting 1/3rd
from the gross income of the deceased towards his personal expenditure,
however, in view of the dictum laid down by the Supreme Court in a
subsequent decision reported in Sarla Verma vs. Delhi Transport
Corporation , 1/4th only has to be deducted since the number of dependents
of the deceased is 5.
d)      Fourthly, he contended that as per Sarla Vermas case (4 supra), the
correct multiplier for a person in the age group of deceased is 15 but not
14 as chosen by the Tribunal.
        He thus prayed to revise the compensation considering his above
submissions.
5 a)    Per contra, opposing the appeal, learned counsel for R.2/ Insurance
Company firstly argued that the Tribunal has rightly taken the annual income
of the deceased as Rs.1,20,000/- by taking an average from the income tax
returns produced by the claimants and hence there is no need to review the
same.
b)      In respect of other arguments raised by the appellants also he submitted
that the findings of the Tribunal were right  and hence there is no need to
enhance the compensation.
c)      Finally, he argued that in this case there was some delay in filing the
appeal and hence if compensation is enhanced, interest on such enhanced
amount may be ordered from the date of registration of main appeal only.
6)      In the light of above rival arguments, the point for determination in this
appeal is:
Whether the compensation awarded by the Tribunal is just and reasonable
or needs enhancement?
7)    POINT: The first argument is concerned, as per claimants, the deceased
was 36 years old and he was a MBA Graduate and doing different businesses
viz., commission agency, oil and dal mill business and real estate business
besides officiating as Director of District Cooperative Bank, Medak,
Chairman of Eppepally Cooperative Society, President of Grain Merchants
Association, Zaheerbad and President of Adarsha Vidyalaya Zaheerabad and
that he was earning not less than Rs.20,000/- p.m.  Be that it may, in proof of
his educational qualification and income, the claimants produced Exs.A.5,
A.6 and A.8 to A.18.  Ex.A.8 is the SSC marks certificate showing his date of
birth as 09.09.1962, whereas Ex.A.9 is his MBA certificate.  So regarding his
educational qualification, there is no demur.
a)      Then coming to his income, Ex.A.5 is the order passed by the I.T.O on
returns filed by the deceased for the Assessment year 1997-98 (financial year
1996-97) whereby excess tax paid was refunded.  The total income shown by
the deceased was Rs.1,14,590/-.  Then Ex.A.6 is the I.T returns for the
financial year 1997-98  (Assessment year 1998-99) showing his income as
Rs.1,10,000/-. Ex.A.10 is the certificate issued by Secretary, PACS,
Eppepally stating that the deceased officiated as President of PACS,
Eppepally and Director of DCC Bank, Medak during 1995-98.  Ex.A.11 is
the certificate issued by General Secretary, Grain and Seeds Merchants
Association, Zaheerabad stating that the deceased served as President from
1995-98.  Ex.A.12 is another certificate issued by Secretary, Adarsha
Vidyalaya stating that the deceased served as President during 1995-98.
Ex.A.13 is an agreement of sale under which the deceased and some others
purported to have purchased agricultural land.  Whereas Exs.A.14 to A.16
relate to the assessment orders and self-assessment made by the deceased for
the assessment year 1996-97.  As per Ex.A.16, his total income was assessed
at Rs.1,26,990/-.  Ex.A.17 is the extract of accounts of Venkatesh Industries,
Zaheerabad.  As rightly observed by the Tribunal, it does not show the
interest of the deceased in that concern.  Ex.A.18 is the challan for the
deposit of income tax for the assessment year 1997-98.
b)      When the above record is perused, Exs.A.10 to A.12 would only show
the social status of the deceased but not the income and hence they are not
useful. When the I.T returns and orders covered by other exhibits are perused,
as rightly observed by the Tribunal, they would not exceed the average
income of Rs.1,20,000/- and so the Tribunal was right in fixing his annual
income as Rs.1,20,000/- for the relevant period.
8)      The second argument of the appellants is that the Tribunal erred in
deducting Rs.5,000/- towards LIC premium.  I find force in this argument.
As rightly argued, payment of LIC premium and subsequent receiving of LIC
policy amount due to death of deceased have nothing to do with the
accidental death of the deceased in a motor vehicle accident.  Hence the
policy amount cannot be said to be a pecuniary advantage received only on
account of the accidental death of the deceased.  This point was clearly laid
down by Honble Apex Court in Helen C. Rebellos case (2 supra).  In that
caseApex Court was dealing with the question as to
Whether the life insurance money of the deceased is to be
deducted from the claimants' compensation receivable under the
Motor Vehicles Act, 1939?
     Answering the above question, the Apex Court held that the LIC policy
amount was not a pecuniary advantage, liable for deduction.  It observed
thus:
The insured (deceased) contributes his own money for which he
receives the amount has no co-relation to the compensation
computed as against tortfeasor for his negligence on account of
accident. As aforesaid, the amount receivable as compensation
under the Act is on account of the injury or death without making
any contribution towards it, then how can fruits of an amount
received through contributions of the insured be deducted out of
the amount receivable under the Motor Vehicles Act. The amount 
under this Act, he receives without any contribution. As we have
said the compensation payable under the Motor Vehicles Act is
statutory while the amount receivable under the life insurance
policy is contractual.
        In K. Pushpalathas case (3 supra) also, this High Court expressed a
similar view in respect of the contributions made by a deceased employee
towards P.F, group insurance and like.
a)      Since the amount of Rs.5,000/- is not liable for deduction,
compensation has to be reassessed. The net annual income of the deceased  
comes to Rs.1,05,000/- (Rs.1,20,000/- minus Rs.15,000/- towards income 
tax). Then multiplier is concerned, it is true that in Sarla Vermas case
(4 supra), 15 is provided for the persons in the age group of the deceased,
whereas the Tribunal selected multiplier 14.  Since the difference being
only one digit, multiplier 14 is accepted.   Then deduction towards personal
expenditure is concerned, the Tribunal deducted 1/3rd.  However, in Sarla
Vermas case (4 supra), Apex Court laid down that 1/4th has to be deducted
when number of dependent family members is 4 to 6.  In the instant case,
dependants being 5 in number, 1/4th is to be deducted.  So the compensation
for loss of dependency comes to Rs.11,02,500/- (Rs.1,05,000/- x 14 x 3/4th).
Thus the total compensation payable to the claimants under different heads is
detailed as below:
     Loss of dependency                 Rs.11,02,500-00 
        Non-pecuniary damages                   Rs.     15,000-00       
        Loss of consortium                      Rs.     15,000-00
---------------------
                                                     Total     Rs.11,32,500-00
---------------------
     So, the compensation is enhanced by Rs.2,62,500/- (Rs.11,32,500/-
minus Rs.8,70,000/-).
9)      In the result, this appeal is partly allowed and ordered as follows:
a)      The compensation is enhanced by Rs.2,62,500/- with proportionate
costs.
b)      The enhanced compensation amount shall carry interest at 6% p.a 
from 26.02.2009 (i.e, when the delay in filing the appeal was
condoned as per orders in CMA MP No.1249 of 2003) till the date
of realization.
c)      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.
d)      No order as to costs.
        As a sequel, miscellaneous applications pending, if any, shall stand
closed.
_________________________  
U. DURGA PRASAD RAO, J    
Date: 07.07.2014

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