Andhra Pradesh High Court – Amravati
Smt. Balantrapu Vara Lakshmi @ vs Sajjan Singh And Others on 11 September, 2024
1
* THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
*THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
+ MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 3373/2017
% 11.09.2024
#1. Smt. Balantrapu Vara Lakshmi @
Lakshmi & 2 others
......Appellants
And:
$1. Karra Ramesh & 2 others
....Respondents.
!Counsel for the petitioners : Sri Kambhampati Ramesh Babu
Rep. By Smt. Ch.S.N.Meena Kumari
^Counsel for the respondent : Sri C. Prakash Reddy
Rep. By Sri M.V.Vijayaditya Reddy
Head Note:
? Cases referred:
1. (2019) 15 SCC 260
2. (2011) 14 SCC 639
3. SLP (C) No. 5044 of 2019 decided on 05.02.2024
4. 2007(10) SCC 643
5. (2013) 7 SCC 476
6. MACMA.36 of 2024, APHC, decided on 18.12.2023
7. (2016) 9 SCC 627
8. (2019) 17 SCC 465
9. (2022) 14 SCC 712
10. (2009) 6 SCC 121
11. (2015) 1 SCC 539
12. (2021) 6 SCC 188
13. (2021) 2 SCC 166
2
HIGH COURT OF ANDHRA PRADESH
****
MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 3373/2017
DATE OF JUDGMENT PRONOUNCED: 11.09.2024
SUBMITTED FOR APPROVAL:
THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
&
THE HON'BLE SRI JUSTICE NYAPATHY VIJAY
1. Whether Reporters of Local newspapers Yes/No
may be allowed to see the Judgments?
2. Whether the copies of judgment may be Yes/No
marked to Law Reporters/Journals
3. Whether Your Lordships wish to see the fair Yes/No
copy of the Judgment?
___________________
RAVI NATH TILHARI, J
________________
NYAPATHY VIJAY,J
3
HONOURABLE SRI JUSTICE RAVI NATH TILHARI
HONOURABLE SRI JUSTICE NYAPATHY VIJAY
MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO.3373 of 2017
JUDGMENT:
(per Ravi Nath Tilhari, J)
Heard Smt. Ch.S.N.Meena Kumari, learned counsel representing
Sri Kambhampati Ramesh Babu, learned counsel for the appellants as
well as Sri M.V.Vijayaditya Reddy, learned counsel representing Sri
C.Prakash Reddy, learned counsel for respondent No.3 – Insurance
Company.
2. This appeal under Section 173 of the Motor Vehicles Act (in short
MV Act) has been filed by the claimants for enhancing of the
compensation as awarded by the Motor Accident Claims Tribunal – cum
– II Additional District Judge, West Godavari District, Eluru (in short ‘the
Tribunal’) in MVOP.No.297 of 2015.
3. The claimants/appellants filed MVOP.No.297 of 2015 under
Section 166 of MV Act claiming compensation of Rs.17 lakhs for the
death of Balantrapu Satyanarayana Murthy in road accident dated
10.03.2015 at 01.45 P.M. on NH 165 road, opposite Adarsh Public
School, Kaikaluru. Their case was that the deceased was aged about 57
years. He was working as Chief Manager (Rural), Regional Business
Office, State Bank of India, Bhimavaram. He started from Bhimavaram
to go to Vijayawada to attend the meeting, in Tata Indica Car bearing
4
No.AP 31 BV 426B which met with an accident with lorry bearing No. AP
27 X 0757 which was being driven by the driver in a rash and negligent
manner. He died and the driver of the car also sustained injuries. His
monthly income from salary was Rs.1,10,000/-. He was an income tax
assessee.
4. The appellant No.1 herein is the widow and appellant Nos.2 & 3
are the daughters of the deceased.
5. The respondent No.1 herein is the driver of the lorry and
respondent No.2 is the owner. Respondent No.3 is the insurer of the
offending vehicle.
6. The respondent No.1 – driver of the lorry filed written statement.
The same was adopted by the respondent No.2-owner. They denied the
averments in the claim petition. It was contended that the driver of the
lorry was having valid driving license and vehicle had valid insurance
policy. The claim was very excessive. The respondents were not liable
to pay the amount and in case of any liability it was for the insurance
company to pay the compensation.
7. Respondent No.3 – insurance company also filed the written
statement. It was pleaded inter-alia that the offending vehicle was
insured with the said respondent. The insurance policy was valid from
13.02.2015 to 12.02.2016. After the accident, respondent No.2
transferred the vehicle to one Khambhampati Maruthi Rama Mohana
Rao. The driver was neither rash nor negligent in driving lorry. The
5
accident occurred only on account of negligence on the part of the driver
of the Tata Car. The petition was bad for non – joinder of the driver,
owner and insurer of the Tata Indica car. The insurance company
pleaded that the claimants be put to strict proof of the averments
regarding age, income and occupation of the deceased etc.
8. The Tribunal framed the following issues:
1. Whether the pleaded accident dated 10-03-2015 occurred
due to rash and negligent driving of 1st respondent of lorry
bearing No.AP 27 X 0757 and whether the deceased Balantrapu
Satyanarayana Murthy died in the said accident?
2. Whether the crime vehicle Lorry bearing No.AP 27 X 0757
was owned by R.2 and insured with R.3 at relevant time?
3. Whether there are any violations of conditions of policy?
Whether the petition is maintainable for non-joinder of driver,
owner and insurer of Indica Car bearing No.AP 31 BV
4268?
4. Whether the petitioners are entitled for compensation, if so, to
what quantum and what is the liability of respondents?
5. What relief?
9. The claimants to prove their case examined the claimant
No.1/appellant No.1 as P.W.1 and three independent witnesses as
P.Ws.2 to 4. They relied upon Exs.A1 to A7 and Exs.X1 to X7. The
6
respondents did not examine any witness. The respondent No.3 got
marked Ex.B1 insurance policy with consent.
10. The Tribunal returned the finding that due to rash and negligent
driving of the respondent No.1 i.e., the driver of the lorry, the accident
occurred. The insurance policy was in force on the date of the accident.
Respondent No.1 had valid driving license and valid documents for the
vehicle. There was no violation of the terms and conditions of the policy.
It held that the accident occurred only due to rash and negligent driving
of the driver of the lorry; so, the driver, owner and insurer of Tata Indica
car were not necessary parties. Respondent Nos. 2 & 3 i.e., owner and
insurer of the offending vehicle were jointly & severally liable to pay the
compensation amount. The Tribunal determined the compensation as
Rs.43,98,236/- with interest @ 7.5% per annum from the date of filing of
the claim petition till the date of deposit of amount. Thus the claim
petition was allowed in part.
11. The Tribunal determined the income of the deceased as Rs.
93,995/- as per the Ex. X2 and deducted Rs.5,000/- towards income tax.
Towards future prospects it added 15% and thus the income of the
deceased was taken as Rs.1,03,090/-. Deduction of 1/3 rd was made
towards personnel expenses. It applied the multiplier of ‘9’. Thus, the
loss of income was calculated as Rs.68,726/- x 12 x 9 = Rs.74,22,408/-.
It deducted 30% towards income tax and on such deduction, the amount
came to Rs. 51,95,736/-. It further reduced Rs.10,00,000/- (Rupees Ten
7
Lakhs), which was paid as compensation to the appellant No.1 by the
employer of the deceased, out of the compensation as determined under
the award.
12. Learned counsel for the appellants submitted that as per Ex.X2
the income tax that was deducted from the deceased was Rs. 4,254/-
and consequently only that amount ought to have been deducted while
determining monthly income i.e., out of Rs.93,995/- – Rs.4,254/- =
Rs.89,741/- and not Rs.5,000/-. He further submitted that once that
amount of tax was deducted from the monthly salary, further deduction
towards income tax @ 30% could not have been made.
13. Learned counsel for the appellant further submitted that the
payment of ex-gratia compensation of Rs.10,00,000/- by the employer,
was not to be deducted from the compensation granted under the award
under MV Act to which the claimants were held entitled.
14. Learned counsel for the appellant placed reliance in the case of
National Insurance Company Limited v. Mannat Johal1.
15. Learned counsel for the respondent – insurance company
submitted that the deduction of 30% income tax is justified. He placed
reliance in the case of Ranjana Prakash v. Divisional Manager2.
16. Learned counsel for the respondent – insurance company further
submitted that the Tribunal rightly adjusted the amount of compensation
1
(2019) 15 SCC 260
2
(2011) 14 SCC 639
8
of Rs.10,00,000/- granted by the employer, by reducing the
compensation under the MV Act. He submitted that the claimants could
not be doubly benefited. He placed reliance in the case of Krishna v.
Tek Chand3.
17. Learned counsel for the respondent – insurance company further
submitted that the married daughters, the appellant Nos. 2 & 3 would not
be the dependents of the deceased. Though, they may be entitled for
compensation being the legal heir, but not being the dependents, in
deducting the amount towards personal expenses of the deceased, they
should not be counted in the number of the dependents. He placed
reliance in Manjuri Bera v. Oriental Insurance Company Ltd4.
18. We have considered the aforesaid submissions and perused the
material on record.
19. The following points are for our consideration:
A) Whether the Tribunal rightly considered the income of the
deceased as Rs. 88,995/- per month?
B) Whether the Tribunal is right in deducting income tax @
30%, even after taking the monthly income of the deceased
after deduction of income tax? In other words, whether, once
the income tax was deducted, the Tribunal is justified in
making further deductions of income tax @30%?
3
SLP (C) No. 5044 of 2019 decided on 05.02.2024
4
2007(10) SCC 643
9
C) Whether the amount of Rs. 10,00,000/- as ex-gratia,
granted to the claimants by the employer could be deducted
from the amount of compensation determined by the Tribunal
under the MV Act ?
D) Whether the award of the Tribunal deserves to be
modified in view of the submissions made that the claimant/
appellant Nos. 2 & 3 are not dependant of the deceased ?
E) To what just and fair compensation the appellants are
entitled?
Analysis
Points A & B
20. While computing the monthly income of the deceased, from Ex.X2
it is evident that towards income tax an amount of Rs.4,254/- was
deducted. The monthly income of the deceased after such deduction
would come to Rs.89,741/- (i.e., Rs.93,995/- – Rs. 4,254/-).
21. In Shyamwati Sharma (supra), the Hon’ble Apex Court held that
in determination of the annual income, appropriate deduction has to be
made towards income tax. However, while ascertaining the income of
the deceased, any deductions shown in the salary certificate as
deductions towards GPF, life insurance premium, repayment of loan,
etc., should not be excluded from the income.
22. In Manasvi Jain (supra) also, the Hon’ble Apex Court held that
except contribution towards income tax, the other voluntary contributions
10
made by the deceased, which are in the nature of savings, cannot be
deducted from the monthly salary of the deceased to decide his net
salary or take home salary.
23. In Ranjana Prakash (supra) the contention raised by the insurer
was that in the absence of any evidence as to the actual income tax
paid, the Tribunal ought to have made 30% deduction of income tax.
The contention of the claimants was that they were not awarded future
prospects @ 30%. The High Court therein deducted 30% income tax in
the absence of any evidence about the actual amount paid as income
tax. The Hon’ble Apex Court held that 30% increase on account of future
prospects and 30% deduction on account of income tax would cancel
each other. The distinguishing feature for non-applicability of the
judgment in Ranjana Prakash (supra) to the facts of this case is that,
that was a case of ‘absence of evidence about the income tax paid’,
whereas in the present case there is evidence of the actual amount paid
as income tax. Ranjana Prakash (supra) referred to Sarla verma (smt)
v. Delhi Transport Corporation5 to observe that income tax paid
should be deducted from the annual income to arrive at the ‘income’. In
Sarla verma (supra) any percentage of income tax to be deducted, we
are not able to find.
5
(2009) 6 SCC 121
11
24. In Vimal Kanwar v. Kishore Dan6 on the point of deduction of
the income tax, the Hon’ble Apex Court held as under:
22. The third issue is “whether the income tax is liable to be deducted for
determination of compensation under the Motor Vehicles Act”.
23. In Sarla Verma this Court held: (SCC p. 133, para 20)
“20. Generally the actual income of the deceased less income tax
should be the starting point for calculating the compensation.” This
Court further observed that: (SCC p. 134, para 24)
“24. … Where the annual income is in taxable range, the words
‘actual salary’ should be read as ‘actual salary less tax’.” Therefore,
it is clear that if the annual income comes within the taxable range,
income tax is required to be deducted for determination of the actual
salary. But while deducting income tax from the salary, it is
necessary to notice the nature of the income of the victim. If the
victim is receiving income chargeable under the head “salaries” one
should keep in mind that under Section 192(1) of the Income Tax
Act, 1961 any person responsible for paying any income chargeable
under the head “salaries” shall at the time of payment, deduct
income tax on estimated income of the employee from “salaries” for
that financial year. Such deduction is commonly known as tax
deducted at source (“TDS”, for short). When the employer fails in
default to deduct the TDS from the employee’s salary, as it is his
duty to deduct the TDS, then the penalty for non-deduction of TDS is
prescribed under Section 201(1-A) of the Income Tax Act, 1961.
Therefore, in case the income of the victim is only from
“salary”, the presumption would be that the employer under
Section 192(1) of the Income Tax Act, 1961 has deducted the
tax at source from the employee’s salary. In case if an objection
is raised by any party, the objector is required to prove by
producing evidence such as LPC to suggest that the employer
failed to deduct the TDS from the salary of the employee.
However, there can be cases where the victim is not a salaried
person i.e. his income is from sources other than salary, and the
annual income falls within taxable range, in such cases, if any
objection as to deduction of tax is made by a party then the claimant
is required to prove that the victim has already paid income tax and
no further tax has to be deducted from the income.
25. In M/s.ICICI Lombard General Insurance Co.Ltd. v. Dasari
Nagalakshmi7 a coordinate Bench, observed on the point of deduction
of income tax as per the slab applicable from time to time in different
6
(2013) 7 SCC 476
7
MACMA.36 of 2024, APHC,
Decided on 18.12.2023
12
financial years that certain exemptions like HRA, Transport allowance,
medical reimbursements, Home loans / study loans etc., are provided
under the Income Tax Act. In that scenario, it would be difficult to
visualize the amount of tax payable by the deceased as a lot of it would
depend on the tax planning and exemptions claimed by the individual.
26. In our view, once the monthly income is taken after deduction of
income tax, further income tax could not be deducted @ 30%. It shall be
presumed that, whatever income tax was deducted, as per Ex.X2, was
deducted as per the applicable rates. In Vimal Kanwar (supra), the
Hon’ble Apex Court held that in case the income of the victim was only
from ‘salary’ the presumption would be that the employer under Section
192 (1) of the Income Tax Act, 1961 had deducted the tax at source
from the employee’s salary. In case, if an objection is raised by any
party, the objector is required to prove by producing evidence to suggest
that the employer failed to deduct the TDS from the salary of the
employee. In the said case, it was held that the High Court was wrong
in deducting 20% from the salary of the deceased towards income tax
for calculating the compensation. As per law, the presumption will be
that the employer State Government at the time of payment of salary
deducted income tax on the estimated income of the deceased
employee from the salary. In the absence of any evidence, it was held
that the salary as shown in the Last Pay Certificate should be accepted
for calculating the compensation payable to the dependents.
13
27. For the reasons recorded above, we are of the view that the
income tax once deducted at source and the net salary being taken after
such deduction, the Tribunal was not justified in again deducting the
income tax @ 30% from the amount of loss of the dependency.
Point C:
28. So far as deduction/adjustment of ex-gratia amount from
compensation under Motor Vehicles Act is concerned, we may refer
Mannat Johal (supra).
29. In Mannat Johal (supra) the Hon’ble Apex Court considered the
point of deduction for ex-gratia as to when it was warranted. In the said
case, the High Court had made upward revision of the amount of
compensation. In the appeal before the Hon’ble Apex Court, the
insurance company questioned the quantum of compensation, basically
on the ground that while making assessment of pecuniary loss, the ex-
gratia received by the claimants, from the employer of the deceased
deserved to be deducted. The insurer placed reliance in Reliance
Genera Insurance Co. Ltd. V. Shashi Sharma 8. The Hon’ble Apex
Court observed that in Shashi Sharma (supra), a three-Judge Bench of
the Hon’ble Apex Court was dealing with the payment received by the
legal heirs of the deceased in terms of Rule 5 of the Haryana
Compassionate Assistance to the Dependents of Deceased Government
Employees Rules, 2006 (in short ‘the 2006 Rules’), whereunder, on the
8
(2016) 9 SCC 627
14
death of a government employee, the family would continue to receive
as financial assistance a sum equal to the pay and other allowance, that
was last drawn by the deceased employee for the periods specified in
the Rules and after the said period, the family would be entitled to
receive family pension. The family would also be entitled to retain the
government accommodation for a period of one year in addition to
payment of Rs.25,000/- as ex gratia. The Hon’ble Apex Court observed
that the decision in Shashi Sharma (supra) was explained and
distinguished in Sebastiani Lakra v. National Insurance Company
Limited9. It was observed that the said case dealt with the payments
made to the legal heirs of the deceased in terms of Rule 5 (1) of the
2006 Rules. In Mannat Johal (supra), the Hon’ble Apex Court observed
that it could not be shown if the ex gratia amount received by the
claimants therein had been under any Rules of service or would be of
continuous assistance as per the case of Shashi Sharma (supra). In an
overall analysis, the Hon’ble Apex Court observed that the decision in
Shashi Sharma (supra) would not apply to the facts of that case and
any deduction, in the amount awarded by the High Court, was not
necessary.
30. Para-12 of Mannat Johal (supra) is extracted as under:
“12. Taking up the question of ex gratia payment received by the
claimants from the employer of the deceased, it is noticed that an
amount of Rs 3,21,801 was paid by the employer to the claimants,9
(2019) 17 SCC 465
15being one year’s gross salary of the deceased. While relying on the
decision in Shashi Sharma, it is contended on behalf of the insurer that
the ex gratia amount so received by the claimants is required to be
deducted. Noticeable it is that in Shashi Sharma case, a three-Judge
Bench of this Court was dealing with the payment received by the legal
heirs of the deceased in terms of Rule 5 of the Haryana
Compassionate Assistance to the Dependents of Deceased
Government Employees Rules, 2006 (the 2006 Rules) whereunder, on
the death of a government employee, the family would continue to
receive as financial assistance a sum equal to the pay and other
allowances that was last drawn by the deceased employee for periods
specified in the Rules and after the said period, the family would be
entitled to receive family pension. The family would also be entitled to
retain the government accommodation for a period of one year in
addition to payment of Rs 25,000 as ex gratia lo.
12.1. The aforesaid decision in Shashi Sharma has been explained
and distinguished by another three-Judge Bench of this Court in
Sebastiani Lakra in the following: (Sebastiani Lakra case, SCC paras
9-10)
“9. In Shashi Sharma case, this Court was dealing with the
payments
made to the legal heirs of the deceased in terms of Rule 5(1) of the
Haryana Compassionate Assistance to the Dependants of
Deceased Government Employees Rules, 2006 (for short “the said
Rules”). Under Rule 5 of the said Rules on the death of a
government employee, the family would continue to receive as
financial assistance a sum equal to the pay and other allowances
that was last drawn by the deceased employee for periods set out
in the Rules and after the said period the family was entitled to
receive family pension. The family was also entitled to retain the
government accommodation for a period of one year in addition to
payment of Rs 25,000 as ex gratia.
10. In this case, the three-Judge Bench adverted to the principles
laid down in Helen C. Rebello casel!, followed in Patricia Jean
Mahajun case 2, and came to the conclusion that the decision in
Vimal Kanwar case 13, did not take a view contrary to Helen C.
Rebello! or Patricia Jean Mahajan 2 cases. The following
observations are relevant: (SCC p. 641.para 15)
15. The principle expounded in this decision in Helen C. Rebello
case!! that the application of general principles under the
common law to estimate damages cannot be invoked for
computing compensation under the Motor Vehicles Act. Further,
the “pecuniary advantage” from whatever source must correlate
to the injury or death caused on account of motor accident. The
view so taken is the correct analysis and interpretation of the
relevant provisions of the Motor Vehicles Act, 1939, and must
apply proprio vigore to the corresponding provisions of the
Motor Vehicles Act, 1988. This principle has been restated in
the subsequent decision of the two-Judge Bench in Patricia
16
Jean Mahajan case 2, to reject the argument of the Insurance
Company to deduct the amount receivable by the dependants of
the deceased by way of “social security compensation” and “life
insurance policy”?
However, while dealing with the scheme the court held that applying
a harmonious approach and to determine a just compensation payable
under the Motor Vehicles Act it would be appropriate to exclude the
amount received under the said Rules under the Head of “Pay and
Other Allowances” last drawn by the employee. We may note that on
principle this Court has not disagreed with the proposition laid down in
Helen C. Rebello or in Patricia Jean Mahajan, but while arriving at a
just compensation, it had ordered the deduction of the salary received
under the statutory Rules”.
12.2. In the present case too, it has not been shown if the ex gratia
amount received by the claimants had been under any Rules of service
and would be of continuous assistance, as had been the case in
Shashi Sharma as per the Rules of 2006 considered therein. In an
overall analysis and with reference to the decision in Sebastiani Lakra’,
we are clearly of the view that the decision in Shashi Sharma would
not apply to the facts of the present case and no deduction in the
amount awarded by the High Court appears necessary.
12.3. Apart from the above, as noticed, the High Court has even
otherwise provided for enhancement towards future prospects only at
40% though the deceased was in a settled job and was not self-
employed or on fixed salary. If at all an assertion is made that the
assistance received by the claimants or a part of allowances received
by the deceased need to be taken into consideration for making certain
deductions, the enhancement by way of future prospects at 50% would
be effectively setting off any such proposed deduction. In other words,
in the ultimate analysis, the amount of pecuniary loss as assessed by
the High Court remains reasonable and cannot be said to be either
exorbitant or too low so as to call for any interference.”
31. From the aforesaid judgment we are of the view that if the ex-
gratia amount has been received by the claimants under any Rules of
services and as of continuous assistance, like in Shashi Sharma
(supra) where ex-gratia payment was under Rule 5 of the 2006 Rules,
then those deductions can be made while determine just and fair
compensation.
17
32. In the present case any such Rule, as in line with Rule 5 of the
2006 Rules, under which the employer granted ex-gratia payment to the
claimants, has not been brought to our notice. In the absence of any
such rule, merely because the ex-gratia payment was made, that would
not make it liable to be deducted or adjusted in the compensation
determined under MV Act. The case of Shashi Sharma (supra), in our
view, would not get attracted in the facts of the present case. The
Shashi Sharma (supra) is on a particular Rule i.e., the 2006 Rules.
33. The Krishna (supra) relied upon by the learned counsel for the
respondent, is also the case in which the Ex-gratia payment was made
under Rule 5 of the 2006 Rules. The Hon’ble Apex Court followed the
previous judgment in the case of Shashi Sharma (supra). For the same
reasons, as aforesaid, we are of the view that Krishna (supra) has also
no application. It is of no help, in the facts of this case, to the insurance
company. The Krishna (supra) is to be considered when the Ex-gratia
payment is made under Rule 5 of the 2006 Rules or/and if there is some
rule, to the affect of Rules 2006.
34. Following the Sebatiani Lakra (supra) as also Mannat Johal
(supra), we hold that the amount of Rs.10,00,000/- granted to the
claimants, as ex-gratia, was not liable to be adjusted against the
compensation amount under the MV Act.
18
Point D:
35. On the point of legal representatives and the dependents, in
N.Jayasree v. Cholamandalam Ms General Insurance Company
Limited10, the Hon’ble Apex Court observed and held that the MV Act
does not define the term “legal representative”. Generally, “legal
representative” means a person who in law represents the estate of the
deceased person and includes any person or persons in whom legal
right to receive compensatory benefit vests. A “legal representative” may
also include any person who intermeddles with the estate of the
deceased. Such person does not necessarily have to be a legal heir. In
the context of the MV Act, the Hon’ble Apex Court held that legal
representatives “should be given a wider interpretation for the purpose of
Chapter XII of the MV Act and it should not be confined only to mean the
spouse, parents and children of the deceased. MV Act is a benevolent
legislation enacted for the object of providing monetary relief to the
victims or their families. Therefore, the MV Act calls for a liberal and
wider interpretation to serve the real purpose underlying the enactment
and fulfill its legislative intent. In order to maintain a claim petition, it is
sufficient for the claimant to establish his loss of dependency. Section
166 of the MV Act makes it clear that every legal representative who
suffers on account of the death of a person in a motor vehicle accident,
should have a remedy for realization of compensation.
10
(2022) 14 SCC 712
19
36. The Hon’ble Apex Court further observed that the percentage of
deduction for personal expenditure cannot be governed by a rigid rule or
formula of universal application. It also does not depend upon the basis
of relationship of the claimant with the deceased. In some cases, with
respect to father, it was observed that the father may have his own
income and thus will not be considered as dependent. Sometimes,
brothers and sisters will not be considered as dependents because they
may either be independent or earning or married or be dependent on the
father. The percentage of deduction for personal expenditure, thus,
depends upon the facts and circumstances of each case. In N.Jayasree
(supra), the question was whether the mother-in-law of the deceased
was dependent. Considering the facts and material on record, it was
established that the mother-in-law was dependent upon her deceased
son-in-law.
37. Para Nos.14 to 16 of N.Jayasree (supra) are as under:
14. The MV Act does not define the term ‘legal representative’.
Generally, ‘legal representative’ means a person who in law represents
the estate of the deceased person and includes any person or persons
in whom legal right to receive compensatory benefit vests. A ‘legal
representative’ may also include any person who intermeddles with the
estate of the deceased. Such person does not necessarily have to be a
legal heir. Legal heirs are the persons who are entitled to inherit the
surviving estate of the deceased. A legal heir may also be a legal
representative.
15. Indicatively for the present inquiry, the Kerala Motor Vehicle Rules,
1989, defines the term ‘legal representative’ as under:
“2.(k) “Legal Representative” means a person who in law is entitled
to inherit the estate of the deceased if he had left any estate at the
20time of his death and also includes any legal heir of the deceased
and the executor or administrator of the estate of the deceased.”
16. In our view, the term ‘legal representative’ should be given a wider
interpretation for the purpose of Chapter XII of the MV Act and it should
not be confined only to mean the spouse, parents and children of the
deceased. As noticed above, the MV Act is a benevolent legislation
enacted for the object of providing monetary relief to the victims or their
families. Therefore, the MV Act calls for a liberal and wider interpretation
to serve the real purpose underlying the enactment and fulfill its
legislative intent. We are also of the view that in order to maintain a
claim petition, it is sufficient for the claimant to establish his loss of
dependency. Section 166 of the MV Act makes it clear that every legal
representative who suffers on account of the death of a person in a
motor vehicle accident should have a remedy for realization of
compensation.
38. In Manjuri Bera (supra) it was held that the liability under Section
140 of Act, did not cease because of absence of dependency. Where a
legal representative who is not a dependant files an application for
compensation, the quantum cannot be less than the liability referable to
Section 140. Therefore, even if there was no loss of dependency the
claimant being the legal representative will be entitled to compensation.
In the concurring judgment Hon’ble Sri Justice S.H. Kapadia, also
observed that the statutory compensation could constitute part of the
estate of deceased father and his legal representative, the married
daughter was entitled to receive such compensation.
39. The daughter/claimants are the dependents of the deceased or
not, is a question of fact. Depending upon the various factors, even
married daughters may be dependent on father. If it was the case of the
insurance company that the claimants-daughters were married or that
they were not dependent on the deceased, they ought to have pleaded
21
and proved it by discharging the burden of proof, on them. They could
have proved any independent source of livelihood or on husband, in
case they were married, and not so dependent on father, or to some
extent and not totally. But the insurance company did not lead any
evidence to prove that.
40. Even, if it be taken that the claimant daughters were not
dependant, though we are not holding so, it shall have no effect on the
deductions made towards personal expenses of the deceased. There
were three (03) claimants. If out of them two are not the dependants,
then also 1/3rd deduction towards personal expenses shall be made. The
tribunal has made 1/3rd deduction, which is as per Sarla verma (supra)
i.e., upto 3 dependants 1/3 rd deduction.
Point E:
41. In our view, as per the consideration made, the total amount of
just and fair compensation to which the claimants/appellants are entitled
would come to as in the table below:
Sl.No. Head Compensation awarded
1. Net Annual Income Rs. 10,76,892/-
(93,995 - 4,254 = 89,741 x12)
2. Future prospects Rs. 12,38,425/-
(@ 15% = Rs.1,61,533/-) (i.e., 10,76,892 + 1,61,533)
3. Deduction towards Rs. 4,12,808/-
personal expenditure
(1/3rd)
4. Total annual loss Rs. 8,25,617/-
5. Multiplier of 9 at the Rs.74,30,554/-
Age of 57
22
6. Conventional Heads:
i) Loss of Consortium Rs. 1,44,000/-
(Rs. 48,000/- x 3)
ii) Loss of Estate Rs. 18,000/-
iii) Funeral expenses Rs. 18,000/-
7. Total Compensation Rs. 76,10,554/-
42. The Tribunal granted interest @ 7.5% p.a. In Kumari Kiran vs.
Sajjan Singh and others,11 the Hon’ble Apex Court set aside the
judgment of the Tribunal therein awarding interest @ 6% as also the
judgment of the High Court awarding interest @7.5% and awarded
interest @ 9% p.a. from the date of the claim petition. In Rahul Sharma
& Another vs. National Insurance Company Limited and
Others,12the Hon’ble Apex Court awarded @ 9% interest p.a. from the
date of the claim petition. In Kirthi and another vs. Oriental Insurance
Company Limited,13 the Apex Court allowed interest @ 9% p.a.
Accordingly, on the aforesaid amount of compensation the
claimants are granted interest @ 9 % p.a. from the date of the claim
petition till realisation.
43. RESULT:
In the result,
i) The appeal of Claimants is partly allowed;
11
(2015) 1 SCC 539
12
(2021) 6 SCC 188
13
(2021) 2 SCC 166
23
ii) The claimants are granted enhanced compensation of
Rs.76,10,554/- as just and fair, with interest @ 9% per annum
thereon from the date of claim petition till realization;
iii) The respondent No.3 – Insurance Company shall deposit the
amount as aforesaid, adjusting the amount already deposited if
any, before the Tribunal within one month;
iv) The cost throughout is awarded to the claimants/appellants
against the respondents to be paid by the insurance company.
As a sequel thereto, miscellaneous petitions, if any pending, shall
also stand dismissed.
_____________________
RAVI NATH TILHARI, J
__________________
NYAPATHY VIJAY, J
Date: 11.09.2024
Note: L.R. copy be marked
B/o.
AG