HDFC ERGO General Insurance Company Limited v. Sajitha and others

MACA 1010 of 2017 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR** **TUESDAY, THE 06TH DAY OF AUGUST 2019 / 15TH SRAVANA, 1941** ## **MACA.No.1010 OF 2017** **AGAINST THE AWARD IN OPMV 312/2015 DATED 29-09-2016 OF ADDITIONAL DISTRICT & SESSIONS COURT IV/ADDITIONAL MACT-II, THODUPUZHA** ## **APPELLANT/3RD RESPONDENT :** **HDFC ERGO GENERAL INSURANCE COMPANY LIMITED, REPRESENTED BY ITS MANAGER (LEGAL), 2ND FLOOR, CHICAGO PLAZA, RAJAJI ROAD, NEAR TO KSRTC BUS STAND, ERNAKULAM, PIN- 682 035** **BY ADVS.** **SRI.GEORGE CHERIAN (SR.) SMT.LATHA SUSAN CHERIAN SMT.K.S.SANTHI** ## **RESPONDENTS/CLAIMANTS:** **1 SAJITHA W/O SAJEEVAN, ERUTHIPARA HOUSE,MANAKKADU P.O. MANAKKADU VILLAGE, THODUPUZHA TALUK, KUNNATHUPARA, PIN- 685 608** **2 SANJAY SAJEEVAN (MINOR), S/O SAJEEVAN, REP. BY MOTHER AND NEXT FRIEND SAJITHA, W/O SAJEEVAN,ERUTHIPARA HOUSE, MANAKKADU P.O. MANAKKADU VILLAGE, THODUPUZHA TALUK, KUNNATHUPARA PIN- 685 608** **3 MALAVIKA SAJEEVAN (MINOR), D/O SAJEEVAN, REP. BY MOTHER AND NEXT FRIEND SAJITHA, W/O SAJEEVAN,ERUTHIPARA HOUSE, MANAKKADU P.O. MANAKKADU VILLAGE, THODUPUZHA TALUK, KUNNATHUPARA PIN- 685 608** **4 OMANA D/O NARAYANAN, ERUTHIPARA HOUSE, MANAKKADU P.O. MANAKKADU VILLAGE, THODUPUZHA TALUK, KUNNATHUPARA PIN- 685 608** MACA 1010 of 2017 2 **R1 TO R3 BY ADV. SRI.MATHEW JOHN (K) R1 TO R3 BY ADV. SRI.MATHEW DEVASSI R4 BY ADV. SRI.MANUEL KACHIRAMATTAM R4 BY ADV. SMT.MERRY GEORGE** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 06.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** MACA 1010 of 2017 3 ## **P.B.SURESH KUMAR, J.** ## **-----------------------------------------------** ## **M.A.C.A. No.1010 of 2017** ## **-----------------------------------------------** ## **Dated 6[th] August, 2019.** ## **J U D G M E N T** The insurer of a vehicle involved in an accident which was the subject matter of a proceedings for compensation before the Motor Accidents Claims Tribunal has come up in this appeal challenging the quantum of compensation fixed by the Tribunal. 2. One Sajeevan aged 43 years died in a motor accident took place on 22.6.2015. He was an Overseer in the service of the Kerala State Electricity Board Limited. The wife, two children and the unmarried sister of the deceased were the claimants in the proceedings. A sum of Rs.1,30,00,000/- was the compensation claimed in the proceedings. As against the said claim, the Tribunal has granted to the claimants a sum of Rs.83,07,360/-. It is aggrieved by the said decision of the Tribunal that the insurer has come up in this appeal. 3. Heard the learned senior counsel for the appellant as also the learned counsel for the claimants. 4. Ext.A9 is the copy of the salary bill of the deceased for MACA 1010 of 2017 4 the month of May, 2015. Ext.A9 indicates that the gross salary of the deceased for the said month was Rs.52,251/-. The said document also indicates that a sum of Rs.3,000/- was being deducted per month from the salary of the deceased towards income tax payable at source. In the circumstances, the Tribunal has computed the compensation payable to the claimants for loss of dependency reckoning the monthly income of the deceased at Rs.49,251/-. 5. The learned senior counsel for the appellant submitted that the amount deducted at source from the salary of the deceased towards income tax is only tentative and the same need not be the correct amount payable by the deceased towards income tax. It was contended by the learned senior counsel that the deceased being a person earning more than Rs.6,00,000/- per annum, when compensation for loss of dependency is computed having regard to future prospects of the deceased also, the Tribunal should have deducted at least 20% of the income towards income tax. It was also contended by the learned senior counsel that the materials on record do not indicate that the fourth claimant, viz, the unmarried sister of the deceased was a dependant of the deceased. According to the learned senior counsel, such a person was shown as one of the claimants in the proceedings with a view to enable the remaining claimants to claim more amount than what they are entitled to. The learned senior counsel has elaborated the said contention pointing out MACA 1010 of 2017 5 that but for the presence of the fourth claimant in the array of parties in the claim petition, the Tribunal would have deducted one third of the income of the deceased towards personal expenses, in the place of one fourth of the income as done, while computing the compensation payable for loss of dependency. It was also contended by the learned senior counsel that the compensation granted by the Tribunal for loss of consortium to the wife of the deceased and for funeral expenses are excessive. Per contra, the learned counsel for the claimants contended that the compensation granted by the Tribunal under various heads are in order. Placing reliance on Exts.A8 and A17 certificates issued by the Village Officer, the learned counsel for claimants also contended that the fourth claimant was a dependant of the deceased and she was not arrayed falsely as a claimant as contended by the learned senior counsel for the appellant. 6. As rightly pointed out by the learned senior counsel for the appellant, the income tax deducted at source from the salary of the deceased was only a tentative amount and that need not represent the actual amount payable by the deceased towards income tax. What is to be deducted from the income while computing the compensation for loss of dependency is the income tax that the deceased would have paid, had he been alive. There is no straitjacket formula to work out the said liability. It depends on many factors like the salary and emoluments received by the deceased from time to time, the MACA 1010 of 2017 6 threshold limit fixed for payment of income tax and the various benefits extended from time to time etc. In the absence of any formula for arriving at the amount that would have been paid by the deceased by way of income tax, the court can make only an estimation, having regard to the facts and circumstances of each case. Coming to the facts, the threshold limit fixed for payment of income tax during 2015 - 2016 was Rs.2,50,000/-. The tax payable during the relevant year for the income upto Rs.5,00,000/- was 10% and the tax payable for the income exceeding Rs.5,00,000/- is 20%. In the absence of any evidence as regards the income tax remitted by the deceased during the previous years, having regard to the fact that the deceased was earning more than Rs.6,00,000/- per year by way of salary and having regard to the fact that the compensation payable for loss of dependency is worked out by adding 30% of income towards future prospects, I am of the view that 15% of the income can certainly be deducted towards income tax. 7. As noted, the fourth claimant was arrayed as a party to the claim petition stating that she was a dependant of the deceased. Ext.A8 is a certificate issued by the Village Officer to the effect that the fourth claimant was a dependant of the deceased. The Village Officer who issued Ext.A8 has been examined in the proceedings as PW3. He has stated that it was revealed on enquiries that the fourth claimant had no other means of livelihood. It is trite that the expression "legal MACA 1010 of 2017 7 representatives" contained in Section 166 of the Motor Vehicles Act has to be understood in the Indian family background while dealing with motor accidents claims [See **Gujarat State Road Transport** **Corporation, Ahmedabad v. Ramanbhai Prabhatbhai and another** (AIR 1987 SC 1690)]. Unmarried sisters living with their earning siblings after the death of their parents is not uncommon in our society. In the circumstances, in the light of Ext.A8 certificate and the evidence tendered by the Village Officer as PW3, I am inclined to hold that the fourth claimant was a dependant of the deceased. I take this view also having regard to the object of the legislation and the proposition that in case of doubts, the benefits shall go to the claimants. 8. As noted, the salary of the deceased for the month of May, 2015, was Rs.52,251/-, of which Rs.252/- represents conveyance allowance and Rs.55/- represents medical allowance. The aforesaid expenses being personal in nature, according to me, the remaining amount, viz, Rs.51,944/- rounded to Rs.52,000/- can be reckoned as the monthly income of the deceased for computing the compensation payable for loss of dependency. If 15% of the same is deducted towards income tax, the amount would come to Rs.44,200/-. If compensation for loss of dependency is worked out reckoning the monthly income of the deceased at Rs.44,200/- and adding 30% of the same towards future prospects, as the deceased was on a permanent MACA 1010 of 2017 8 Employment in a public sector entity, applying the multiplier '14' and deducting one fourth towards personal expenses, the compensation would come to Rs.72,39,960/- (Rs.44,200x12x130/100x3/4x14). The Tribunal has granted to the claimants Rs.80,67,360/-. The compensation granted by the Tribunal to the claimants towards loss of dependency is therefore in excess by Rs.8,27,400/- It is seen that a sum of Rs.25,000/- has been granted by the Tribunal to the claimants towards funeral expenses and Rs.1,00,000/- to the wife of the deceased towards loss of consortium. In the light of the decision of the Apex Court in **National Insurance Company Ltd v. Pranay Sethi** [2017(4) KLT 662 (SC)], the claimants are entitled to only Rs.15,000/and Rs.40,000/- respectively under the said heads. In other words, Rs.70,000/- granted by the Tribunal under the aforesaid heads is, therefore, in excess. 9. The learned senior counsel for the appellant also contended that the interest on the compensation granted by the Tribunal at the rate of 9% is highly excessive. There is force in the contention raised by the learned senior counsel as regards the interest granted on the compensation payable. In so far as the accident took place in the year 2015, having regard to the rate of interest granted by commercial banks on deposits and other investments, I am of the view that 7.5% would have been the ideal rate of interest. In the result, the appeal is allowed and the compensation MACA 1010 of 2017 9 payable to the claimants is refixed at Rs.74,09,960/-. The claimants will be entitled to interest on the amount of compensation only at the rate of 7.5% per annum. Sd/- **P.B.SURESH KUMAR, JUDGE.** tgs