High Court of KeralaDivision Bench2015-02-09Appeal allowed; final award recalculated and de...

Cholamandalam MS General Insurance Company Limited v Sharon W/o Johnson, Josna D/o Johnson and Rohan Johnson S/o Johnson

Case / Petition Number:MACA No. 781 of 2014

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: T. R. Ramachandran Nair
P. V. Asha Monday
Judgment Date: 2015-02-09
Court Decision / Holding: The appeal is allowed. The Tribunal’s compensation is recalculated, applying Rs 12,000 as monthly income (per Ext. A6) with tax deduction of Rs 3,502 and a 1/3 personal expense deduction, yielding a dependency amount of Rs 8,000 per month. The Court adopts a multiplier of 14 and excludes any 30% enhancement, noting no evidence of permanent/periodic increments. Total compensation is revised to Rs. 17,71,392 (rounded to Rs. 17,71,390) with 9% interest from the date of petition pursuant to Supe Dei (Smt.) & Ors. v. National Insurance Co. Ltd. and Anr. The insurer is directed to deposit the award amount (less any amount already deposited) within three months. Parties bear their own costs in the appeal.
Final Disposition: Appeal allowed; final award recalculated and deposited; each party bears its own costs in the appeal.

Parties to the Case

Appellants / Petitioners

CHOLAMANDALAM MS GENERAL INSURANCE COMPANY LIMITED

Respondents

SHARON W/o JOHNSON
JOSNA D/o JOHNSON
ROHAN JOHNSON S/o JOHNSON

Legal Representation & Advocates

Counsels for Petitioners

• SRI. MATHEWS JACOB (SR.)
• SRI.P.JACOB MATHEW

Counsels for Respondents

• SRI.REJI GEORGE
• SRI.P.S.GOPALAKRISHNAN NAIR
• SMT.ANUPAMA JOHNY
• SRI.GOPAKUMAR G

Case Synopsis & Summary

This Motor Accidents Claims Appeal arises from an award of compensation under the Motor Vehicles Act by the Claims Tribunal at North Paravur in OPMV 577/2008, dated 28-11-2013, in which the deceased Johnson, a motorcyclist, died following a collision with a Toyota Innova on 25.4.2008. The Insurance Company, as appellant, challenged the Tribunal’s substantial compensation to the widow, two minor children and the parents (the petitioners) who filed the claim. The central dispute revolved around the deceased’s monthly income and the consequential calculation of dependency compensation. The Tribunal fixed the monthly income at Rs 12,000 based on Ext. A6 and PW2 evidence, applied the standard 1/3 deduction for dependency, and adopted a multiplier of 14, leading to a high dependency loss figure. The insurer argued for deductions of tax and for limiting the income uplift; it also challenged the applicability of a 30% salary increment under the Sarala Verma principle, on grounds of lack of evidence of permanence in the job. The Court, while acknowledging the documentary evidence, held that tax components must be deducted and rejected the 30% enhancement as unsupported by evidence. The result was a modified total compensation of Rs 17,71,392, with a direction to deposit the amount within three months and to bear own costs on appeal. The judgment carries 9% interest from the petition date following Supe Dei and related authority.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant Insurance Company contends that the deceased’s income was fixed at Rs 12,000 per month on Ext. A6 based evidence, with PW2 supporting earnings through commissions; tax liability must be considered, and the 1/3 deduction for personal expenses should be applied; it opposes the 30% income-increase for permanent employment as per Sarala Verma, arguing lack of evidence of permanency; it submits a recalculation resulting in a dependency figure of Rs 12,94,792 and contests the Tribunal’s higher overall award.

Contentions of Respondents

The claimants argued for accepting the 12,000 per month as income, supported by Ext. A6 and PW2, with a tax component of Rs 3,502 to be deducted; they relied on the same evidence to justify dependency calculation, and initially urged the 30% enhancement under Sarala Verma; the tax deduction and application of 1/3 deduction were contested to align with the family’s dependency. The respondents contended that family support and the wage structure should be reflected; ultimately the court rejected the 30% uplift due to insufficient evidence of permanence.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Sarala Verma Vs. Delhi Transport Corporation	(2010 (2) KLT 802 (SC))	Distinguished	Swung against applying a blanket 30% salary increase; court found no evidence of permanence in the deceased’s employment to justify such enhancement.
Supe Dei(Smt.) & Ors. v. National Insurance Co. Ltd. and Anr.	(2009) 4 SCC 513	Positive	Used to justify awarding 9% interest from the date of petition as per higher court directive.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR & THE HONOURABLE SMT. JUSTICE P.V.ASHA MONDAY, THE 9TH DAY OF FEBRUARY 2015/20TH MAGHA, 1936 MACA.No. 781 of 2014 () ------------------------ AGAINST THE AWARD IN OPMV 577/2008 ON THE FILE OF THE MOTOR ACCIDENTS CLAIMS TRIBUNAL, NORTH PARAVUR DATED 28-11-2013 APPELLANT/3RD RESPONDENT: ------------------------ CHOLAMANDALAM MS GENERAL INSURANCE COMPANY LIMITED THRISSUR NOW REPRESENTED BY ITS DEPUTY MANAGER-CLAIMS ACEL ESTATE, IYYATTIL JUNCTION, CHITTOOR ROAD KOCHI-11. BY ADVS.SRI.MATHEWS JACOB (SR.) SRI.P.JACOB MATHEW RESPONDENTS/PETITIONERS 1 TO 3: -------------------------------- 1. SHARON W/O.JOHNSON, PALAKKAL HOUSE, VALLUVALLY KARA KOTTUVALLY VILLAGE-683308. 2. JOSNA, D/O.JOHNSON, PALAKKAL HOUSE, VALLUVALLY KARA KOTTUVALLY VILLAGE-683308. 3. ROHAN JOHNSON, S/O.JOHNSON, PALAKKAL HOUSE, VALLUVALLY KARA KOTTUVALLY VILLAGE-683308. (PETITIONERS 4 AND 5 DIED AND THERE IS NO LEGAL HEAIRS TO BE IMPLEADED). R1-3 BY ADV. SRI.REJI GEORGE R1-R3 BY ADV. SRI.P.S.GOPALAKRISHNAN NAIR R1-R3 BY ADV. SMT.ANUPAMA JOHNY R1-R3 BY ADV. SRI GOPAKUMAR G THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 09-02-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AL/- ## **T.R.RAMACHANDRAN NAIR & P.V.ASHA, JJ.,** **- - - - - - - - - - - - - - - - - - - - - - - - - - - -** M.A.C.A. No.781 of 2014 **- - - - - - - - - - - - - - - - - - - - - - - - - - - - -** Dated this the 9[th] day of February 2015 ## **JUDGMENT** ## **Ramachandran Nair , J.,** This appeal is filed by the Insurance Company aggrieved by the total amount awarded as compensation by the Tribunal. 2. We heard learned Senior Counsel Sri. Mathews Jacob for the Insurance Company and learned counsel Sri. Gopakumar for the respondents/claimants. 3. The application was filed consequent on the death of Sri. Johnson in a motor vehicle accident, occurred on 25.4.2008 at 8 p.m. at a place called Madaplathuruth. He was riding the motor cycle bearing registration No. KL-7/BC-4521 on the Moothakunnam -North Paraur national highway. The offending vehicle is a Toyotta Innova car bearing registration No. KL-42/A-4961 which while trying to overtake the motorcycle hit the same. He was immediately taken to the Donbosco Hospital and thereafter referred to Lourdes Hospital, Ernakulam. While undergoing treatment in Lourdes Hospital, Ernakulam, he died on 4.5.2008. M.A.C.A. No.781 of 2014 :2: 4. The claimants before the Tribunal are the widow and two minor children as well as his parents. But it is seen that the parents died after the filing of the application. 5. Learned Senior Counsel for the appellant mainly raised the following contentions. It is submitted that the monthly income claimed in the application was Rs. 6,000/-. But while adducing evidence in the matter they claimed it as Rs. 12,000/-. Ext.A6 is the salary certificate issued by M/s.Athira Associates stating that he was working as a field Officer. It is further submitted that the Managing partner was examined in support of the claim of monthly income at the said rate. PW1 is the wife of the deceased. She claimed that he was getting Rs. 25,000/- per month as income. It is submitted that fixation of the monthly income at the rate of Rs. 12,000/- is not justified. Alternatively, it is submitted that if the monthly income is reckoned as Rs. 12,000/-, then the deceased was liable to pay income tax and the said component will have to be deducted. It is also submitted that deduction for personal expenses should have been 1/3 instead of ¼ as there are three claimants. M.A.C.A. No.781 of 2014 :3: 6. Learned counsel for the respondents submitted that it is true that the claim application, the income was shown as Rs. 6,000/-. But later, it was amended as Rs. 12,000/-. It is submitted that he was getting the said income. It is supported by the evidence given by PW2. Learned counsel invited our attention to the evidence of PW2. It is deposed by him that the deceased was a field officer. He was working from the year 2003. It is also stated that he was getting further amount towards commission. According to him, he would have been earning Rs. 15,000/- per month. In the cross examination it is stated that no income tax is deducted at source. 7. Since evidence is there by way of documentary evidence as Ext.A6 coupled with evidence of PW2 the employer, we find no reason to interfere the fixation of income at the rate of Rs. 12,000/-. But the income tax component will have to be deducted. We have been informed by the learned Senior counsel for the appellant that for the said year the total amount by way of income tax and educational cess deductable is at Rs. 3,502/and therefore, by taking the said amount for the whole period, M.A.C.A. No.781 of 2014 :4: when we apply the multiplier, the said component will be Rs. 49,028/- which will have to be deducted for fixing the dependency compensation. We have verified the table for payment of income tax for the year 2008-09. Up to Rs. 1,10,000/- there was exemption and up to Rs. 1,10,000- Rs. 1,50,000/-, the tax will be 10% of the amount by which the total income exceeds Rs. 1,45,000/-. Up to 1,50,000/- to Rs.2,50,000/- Rs.500 plus 20% of the amount by which the total income exceeds Rs. 1,50,000/-. Rs. 2,50,000/- and above, Rs.20,500 plus 30% of the amount by which the total income exceeds Rs. 2,50,000/-. In the light of the above, the compensation awarded by the Tribunal will have to be recomputed. 8. By deducting 1/3 from the total amount Rs. 12,000/the contribution to the family will be Rs. 8,000/- per month. Even though, learned counsel for the claimant submitted that 30% of the amount will have to be increased going by the decision of the Apex court in _**Sarala Verma Vs. Delhi Transport Corporation [(2010 (2) KLT 802 (SC)**_ as rightly M.A.C.A. No.781 of 2014 :5: pointed out by the learned Senior Counsel for the Insurance Company, the employment of the deceased cannot be stated to be a permanent one with additions to salary by way of increment or periodical revision as evidence is not there. We will not therefore be justified in adopting 30% increase to the monthly income as granted by the Tribunal. Therefore, the dependency contribution will be (Rs.8000x12x14-Rs.49028)=Rs. 12,94,792/-. 9. Accordingly we modify the award as follows: |**_Sl.No._**|**_Heads_**|**_Amount Awarded_** **_(in Rs.)_**|**_Amount modified_** **_(in Rs)._**| |---|---|---|---| |1|Damage to clothing|1000|1000| |2|Funeral expenses|25000|25000| |3|Transportation expenses||| |4|Medical expenses|148800|148800| |5|Bystander expenses|1800|1800| |6|Pain & sufferings|50000|50000| |7|Compensation for loss of income|1965600|12,94,792| |8|Compensation for loss of love and affection|100000|100000| |9|Compensation for loss of estate|50000|50000| |10|Compensation for loss of consortium|100000|100000| ||Total|24,42,200|1771392| ||||| 10. Thus the total compensation will be Rs.17,71,392/- M.A.C.A. No.781 of 2014 :6: (Rounded off to Rs. 17,71,390/-) (Rupees Seventeen lakh Seventy One Thousand Three hundred and Ninety) only which will carry interest at the rate of 9% p.a from the date of petition in the light of the judgment of the apex court in **Supe Dei(Smt.) & Ors. v. National Insurance Co. Ltd. and Anr.** [(2009)4 SCC 513]. The Insurance Company is directed to deposit the award amount less the amount already deposited within a period of three months. The appeal is allowed. Parties will suffer their costs in the appeal. **Sd/-** **T.R.RAMACHANDRAN NAIR (JUDGE)** **Sd/P.V.ASHA (JUDGE)** AL/- True copy P.A to Judge M.A.C.A. No.781 of 2014 :7: