Reliance General Insurance Co. Ltd. v. Devi Arunkumar and others (MACA Nos. 2662/2015 and 3080/2015)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A. WEDNESDAY, THE 25[TH] DAY OF OCTOBER 2023 / 3RD KARTHIKA, 1945 MACA NO. 2662 OF 2015** **AGAINST THE ORDER/JUDGMENT OP(MV) 1357/2013 OF MOTOR ACCIDENT** **CLAIMS TRIBUNAL ,ERNAKULAM** ## **APPELLANT/3rd RESPONDNET:** RELIANCE GENERAL INSURANCE CO. LTD KOCHI, REPRESENTED BY ITS DEPUTY MANAGER, REGIONAL OFFICE, ERNAKULAM. BY ADVS. SRI.GEORGE CHERIAN (SR.) SMT.LATHA SUSAN CHERIAN SMT.K.S.SANTHI ## **RESPONDENT/CLAIMANTS:** 1 DEVI ARUNKUMAR W/O. ARUNKUMAR, CHALIL HOUSE, PULINCHOD BHAGOM, KADAYIRUPPU KARA, AIKKARANAD NORTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT 683544 2 ARAVINDAKSHAN NAIR S/O. KRISHNAN NAIR, CHALIL HOUSE, PULINCHOD BHAGOM, KADAYIRUPPU KARA, AIKKARANAD NORTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT.683544 3 SAROJINI AMMA P. W/O. ARAVINDAKSHAN NAIR, CHALIL HOUSE, PULINCHOD BHAGOM, KADAYIRUPPU KARA, AIKKARANAD NORTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT.683544 4 ANJU ARAVIND D/O. ARAVINDAKSHAN NAIR, CHALIL HOUSE, PULINCHOD BHAGOM, KADAYIRUPPU KARA, AIKKARANAD NORTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT.683544 BY ADVS. SRI.P.M.JOSHI SMT.SIJI K.PAUL ## **OTHER PRESENT:** SRI.GEORGE CHERIAN (SR.) THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 25.10.2023, ALONG WITH MACA.3080/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **M.A.C.A Nos.2662 and 3080 OF 2015** 2 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A. WEDNESDAY, THE 25[TH] DAY OF OCTOBER 2023 / 3RD KARTHIKA,** ## **1945** ## **MACA NO. 3080 OF 2015** **AGAINST THE ORDER/JUDGMENT OP(MV) 1357/2013 OF MOTOR** ## **ACCIDENT CLAIMS TRIBUNAL ,ERNAKULAM** ## **APPELLANT/PETITIONERS:** 1 DEVI ARUNKUMAR, AGED 27 YEARS W/O.ARUNKUMAR, CHALIL HOSUE, PULINCHOD BHAGAM, KADAYIRUPPU KARA, AIKKARANAD NOARTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT. 2 ARAVINDASKHAN NAIR,AGED 61 YEARS S/O.KRISHNAN NAIR, CHALIL HOSUE, PULINCHOD BHAGAM, KADAYIRUPPU KARA, AIKKARANAD NOARTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT 3 SAROJINI AMMA P., W/O.ARAVINDASKHAN NAIR, CHALIL HOSUE, PULINCHOD BHAGAM, KADAYIRUPPU KARA, AIKKARANAD NOARTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT 4 ANJU ARAVIND, AGED 18 YEARS D/O.ARAVINDASKHAN NAIR, CHALIL HOSUE, PULINCHOD BHAGAM, KADAYIRUPPU KARA, AIKKARANAD NOARTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DISTRICT BY ADVS. SRI.P.M.JOSHI SMT.SIJI K.PAUL ## **RESPONDENT/3RD RESPONDENT:** RELIANCE GENERAL INSURANCE COMPANY LIMITED KOCHI, REPRESENTED BY ITS DEPUTY MANAGER, REGIONAL OFFICE, ERNAKULAM. THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 25.10.2023, ALONG WITH MACA.2662/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **M.A.C.A Nos.2662 and 3080 OF 2015** 3 ## **JUDGMENT** These appeals arise from the award passed by the Motor Accidents Claims Tribunal, Ernakulam, in OP(MV) 1357/2013. M.A.C.A No. 2662/2015 is filed by the 3[rd] respondent/insurer, whereas M.A.C.A No. 3080/2015 is filed by the petitioners in the aforesaid claim petition. For convenience, the parties herein are referred to as per their respective ranks in the claim petition. 2. The said claim petition was submitted by the petitioners seeking compensation for the death of one Arunkumar in a motor accident that occurred on 28.12.2012. The 1[st] petitioner is the wife, the 2[nd] and 3[rd] petitioners are the parents, and the 4th petitioner is the unmarried sister of the deceased. He was 29 years old at the time of the accident and was working as Senior Assistant-Stores in M/s United Breweries Ltd, Cherthala. The monthly income claimed was Rs.25,064/-. 3. The accident occurred when the motorcycle ridden by the deceased was hit by a tanker lorry bearing registration No. KL-64/7866 driven by the 2[nd] respondent. The said vehicle was **M.A.C.A Nos.2662 and 3080 OF 2015** 4 owned by the 1[st] respondent, and was insured with the 3[rd] respondent/insurance company. 4. The 3[rd] respondent alone contested the matter by filing a written statement wherein they admitted the coverage of the insurance policy for the tanker lorry. However, they denied the liability on various grounds. They also disputed the negligence and the quantum of compensation. The aforesaid claim petition was tried along with O.P(M.V) No.1343/2013, which arose from the same accident. 5. The evidence in this case consists of oral testimony of PW1 and Exts.A1 to A20 from the claimants' side. No evidence was adduced from the respondents' side. 6. After considering the materials placed on record, the Tribunal came to the conclusion that the accident occurred due to the negligence on the part of the driver of the lorry and being the insurer of the said vehicle, the liability to pay the compensation was imposed upon the 3[rd] respondent. The quantum of compensation was fixed as Rs.30,04,000/- and the 3[rd] respondent insurance company was directed to deposit the **M.A.C.A Nos.2662 and 3080 OF 2015** 5 said amount along with interest at the rate of 9% per annum from the date of petition till realisation. M.A.C.A No. 2662/2015 was filed by the insurer, challenging the quantum of compensation, whereas M.A.C.A No.3080/2015 was filed by the petitioners seeking enhancement of compensation. 7. Heard, Sri. P.M. Joshi, the learned counsel appearing for the petitioner and Sri. Gerorge Cherian (Thiruvalla), learned senior counsel appearing for the 3[rd] respondent/insurance company. 8. The learned counsel for the petitioners submits that the amounts awarded by the Tribunal under various heads are grossly inadequate and requires reconsideration, whereas the same is not only objected by the learned counsel for the 3[rd] respondent, but they also contended that the amount already awarded by the Tribunal is on higher side and requires reconsideration. 9. I have carefully gone through the records. The main contention relates to the monthly income fixed by the Tribunal. To determine the monthly income, the Tribunal relied on **M.A.C.A Nos.2662 and 3080 OF 2015** 6 evidence of PW1, the General Manager of United Breweries Ltd, Cherthala, who produced Ext. A14 salary certificate and A20 terms and conditions of employment issued by the said company. The crucial aspect that has come out in evidence is that the deceased was appointed in the said post only on 19.11.2012, and the accident occurred on 28.12.2012, which is after a month of his appointment. 10. The learned senior counsel for the 3[rd] respondent /insurance company would contend that, as on the date of the accident, the probation of the deceased was not declared, and therefore, he was not entitled to the total salary as mentioned in Ext.A14 salary certificate. The learned counsel also relied on the evidence of PW1 wherein he had stated that the salary mentioned therein was applicable to the persons whose probation was declared. 11. On the other hand, the learned counsel appearing for the petitioner would point out that, even though Ext.A14 was properly proved by PW1, the Tribunal has accepted only the **M.A.C.A Nos.2662 and 3080 OF 2015** 7 basic salary and house rent allowance as the monthly income of the deceased which was not at all proper. 12. After evaluating the materials placed on record, I find some force in the contention put forward by the learned counsel for the petitioners. Of course, it is true that the probation of the deceased was not declared. The learned senior counsel appearing for the 3[rd] respondent/insurance company places reliance upon the observations made by the Honourable Supreme Court in **Sarla Verma v. Delhi Transport Corporation** [2010 (2) KLT 802], wherein in paragraph 43 onwards, the question as to the manner in which the monthly income has to be computed was considered. It was pointed out that, in the light of the observations, the salary that can be taken into account, is the salary the deceased was getting at the time of the accident, and not the salary he would have been receiving, if his probation was declared. The observations made by the Honourable Supreme Court in those paragraphs are as follows: **M.A.C.A Nos.2662 and 3080 OF 2015** 8 - “43. In this case as noticed above the salary of the deceased at the time of death was Rs.4,004. By applying the principles enunciated by this Court to the evidence, the High Court concluded that the salary would have at least doubled (Rs.8008/-) by the time of his retirement and consequently, determined the monthly income as an average of Rs.4004/and Rs.8008/- that is Rs.6006/- per month or Rs.72072/- per annum. We find that the said conclusion is in conformity with the legal principle that about 50% can be added to the actual salary, by taking note of future prospects. 44. Learned counsel for the appellants contended that when actual figures as to what would be the income in future, are available it is not proper to take a nominal hypothetical increase of only 50% for calculating the income. He submitted that though the deceased was receiving Rs.4004/per month at the time of death, as per the certificates issued by the employer (produced before High Court), on the basis of pay revisions and increases, his salary would have been Rs.32,678/- in the year 2005 and there is no reason why the said amount should not be considered as the income at the time of retirement. It was contended that the income which is to form the basis for calculation should not therefore be the average of Rs.4004/- and Rs.8008/-, but the average of Rs.4004/- and Rs.32,678/-. 9 ## **M.A.C.A Nos.2662 and 3080 OF 2015** 45. The assumption of the appellants that the actual future pay revisions should be taken into account for the purpose of calculating the income is not sound. As against the contention of the appellants that if the deceased had been alive, he would have earned the benefit of revised pay scales, it is equally possible that if he had not died in the accident, he might have died on account of ill health or other accident, or lost the employment or met some other calamity or disadvantage. The imponderables in life are too many. Another significant aspect is the non-existence of such evidence at the time of accident. 46. In this case, the accident and death occurred in the year 1988. The award was made by the Tribunal in the year 1993. The High Court decided the appeal in 2007. The pendency of the claim proceedings and appeal for nearly two decades is a fortuitous circumstance and that will not entitle the appellants to rely upon the two pay revisions which took place in the course of the said two decades. If the claim petition filed in 1988 had been disposed of in the year 198889 itself and if the appeal had been decided by the High Court in the year 1989-90, then obviously the compensation would have been decided only with reference to the scale of pay **M.A.C.A Nos.2662 and 3080 OF 2015** 10 applicable at the time of death and not with reference to any future revision in pay scales.” 13. However, the important aspect to be noticed from the said observations is that, the Honourable Supreme Court made those observations while considering the question as to whether the increments in the salary consequent to the pay revision occurred years after the death of the deceased should be taken into consideration. It is evident from the said observations that the contention raised therein was that, at the time of the death of the deceased, he was receiving an amount of Rs.4,004/- as the monthly salary and by the time the matter came up before the Honourable Supreme Court, consequent to two pay revisions that occurred during the interregnum period, the salary of that particular post became Rs.32,678/-. Therefore, the contention raised was that the enhanced salary ought to have been taken into consideration instead of applying a standard addition of 50% towards the future prospects. The Honourable Supreme Court rejected this contention and took the view that the salary on the date of the death has to be taken with future prospects at the **M.A.C.A Nos.2662 and 3080 OF 2015** 11 rate of 50%. Those observations were made by the Honourable Supreme Court, taking into account the increase in the salary over a long duration of the period after the time of death. It is also discernible from the said observations that the Honourable Supreme Court considered the fact that the benefit of pay revision could be claimed by the claimants, because, by the time the matter came up before the Honourable Supreme Court , due to efflux of time, those pay revision took place. It was further observed that had the claim petition been finally decided before those pay revisions came up, those claims could not have been raised by the claimants. Therefore, it is evident that the question that the Honourable Supreme Court considered with respect to the salary as on the date of the accident, was in a completely different context. 14. When coming to the facts of this case, it is evident that the deceased was employed with a specified salary package, and there is no dispute that the package of salary which he was entitled to was the one as certified in Ext.A14 and A20. Therefore, his entitlement to that salary was certain, **M.A.C.A Nos.2662 and 3080 OF 2015** 12 subject to the declaration of probation, even if the contention of the learned counsel for the 3[rd] respondent is accepted. Therefore, in all practical terms, the deceased was entitled to the salary shown in Ext.A14 and A20 upon the declaration of probation. As far as the declaration of probation is concerned, it is discernible from the evidence of PW1 that the service of the deceased in the company was so far satisfactory, and his probation would have been cleared in all probabilities. Besides the same, he also deposed that, normally, probation of every employee would be declared. Therefore, it is evident that the non-declaration of probation or termination of services during the probation period was an exception to the normal rule. Hence, we should proceed with the assessment, on the assumption that probation of the deceased was likely to be declared in his favour. In that event, he would be entitled to the entire salary as shown in Ext. A14 and A20. Therefore, the said salary was his entitlement in the very near future, with certainty, and hence, the salary as shown in Ext.A14 can be accepted. 13 ## **M.A.C.A Nos.2662 and 3080 OF 2015** 15. The next aspect to be considered relates to the elements in the salary that are to be taken into consideration to determine the monthly income. The Tribunal has taken only the basic pay and HRA, which comes to Rs.13,500/- for the purpose of determining the monthly income. However, the learned counsel for the petitioner would place reliance upon the decision rendered by the Honourable Supreme Court in **Shyamwati Sharma and Ors v.Karam Singh and Ors** [2010 (12) SCC 378] and **Manasvi Jain v. Delhi Transport Corporation** [2014 (13) SCC 22] wherein, the question as to the deduction to be made from the monthly salary of an employee was considered. In **Shyamwati Sharma** 's case, it was observed by the Honourable Supreme Court that, while ascertaining the income of the deceased, any deduction shown in the salary certificate as a deduction towards GPF, Life Insurance Premium, the repayments of loan, etc, should not be excluded from the income. It was further observed that the deduction toward income tax/surcharge alone should be considered to arrive at the deceased's net income. Similar view was taken by the **M.A.C.A Nos.2662 and 3080 OF 2015** 14 Honourable Supreme Court in **Manasvi Jain** 's case. Therefore, as observed by the Honourable Supreme Court, those elements of monthly income which basically form part of the savings of the employee should not be deducted. The specific reference made by the Honourable Supreme Court in **Shyamwati Sharma's** case to the deduction toward GPF, Life Insurance premium, repayment of the loan, etc., are clear indicators in that direction. On the other hand, those components of salary which are receivable by the employee upon certain contingency or reimbursement of the actuals cannot form part of the savings, as the said amounts would become receivable only upon happening of such contingency or on the incurring of the expenses which are sought to be reimbursed. When that criteria is applied, the allowances paid towards conveyance, the reimbursement of medical expenses, leave travel expenses, etc, are to be excluded. Similarly, as rightly pointed out by the learned senior counsel for the 3[rd] respondent, the components shown as GTL and GMP are also not properly explained and therefore, the same has to be excluded. ## **M.A.C.A Nos.2662 and 3080 OF 2015** 15 16. Another disputed component in the salary is Rs.3,700/- that is being awarded for personal allowance. The learned senior counsel appearing for the 3[rd] respondent would dispute that as there is no proper explanation for the personal allowances in the evidence, that has to be excluded. On the other hand, the learned counsel for the petitioners would point out that the same represents the dearness allowance; therefore, it forms part of the salary and , has to be accepted. After considering the materials placed on records, I find some force in the contention put forward by the learned counsel for the petitioner in this regard. Of course, it is true that, in the evidence of PW1, nothing has been mentioned about the purpose for which personal allowance is being granted. No cross examination was also made by the learned counsel for the 3[rd] respondent with reference to personal allowances,, even though he was cross examined concerning the components of GTL and GMP. Another crucial aspect to be noticed is that even though the dearness allowance is usually one of the essential components of a person's salary, the same is not specifically **M.A.C.A Nos.2662 and 3080 OF 2015** 16 mentioned in the split-up of the salary as contained in Ext.A20. Thus, the contention of the learned counsel for the petitioner is to be accepted, as in all probabilities, the personal allowance referred to in Ext.A20 is with reference to the dearness allowance, and therefore, the same has to be accepted. Thus, for the purpose of computation of the monthly income, the following components have to be considered. |Component|Per month (Rs.)| |---|---| |Basic|10000| |Personal Allowance|3700| |HRA|3500| |PF|1200| |Gratuity|481| |Total|18881| 17. Therefore, the monthly income for the purpose of computation is taken as Rs.18,881/-. Since this comes to the zone of taxation as per the provisions of the Income Tax Act, the tax has to be deducted. The tax prevailing at the relevant time, when the accident occurred, (2012), was 10% of the income over Rs.1,60,000/-. While computing the tax with the above criteria, the tax components would come to Rs.6,657/-. Thus the annual income after tax deduction would come to **M.A.C.A Nos.2662 and 3080 OF 2015** 17 Rs.2,19,950/-. The multiplier applicable is '17'. As the deceased was a regular salaried employee, an addition of 50% has to be made. Since the 4[th] petitioner was the sibling, she cannot be treated as dependent, and hence, the deduction to be made towards personal expenses is 1/3[rd] of the monthly income. Thus, while reassessing the compensation, with the above criteria, the amount would come to Rs.37,38,555/- after deducting Rs.27,54,000/-, which is the amount awarded by the Tribunal, the additional amount would come to Rs.9,84,555/-. 18. The learned counsel for the petitioner would further point out that, toward loss of estate, only an amount of Rs.10,000/- was granted, and therefore, another sum of Rs.5,000/- is to be granted. As the said contention is in tune with the principles laid down by the Honourable Supreme Court in **National Insurance Company Ltd. v. Pranay Sethi** [2017 (4) KLT 662 (SC)], an additional amount of Rs.5,000/- is awarded. 19. At this juncture, the learned counsel for the 3[rd] respondent would point out that, Rs.25,000/- has been awarded **M.A.C.A Nos.2662 and 3080 OF 2015** 18 towards funeral expenses which is in excess by Rs.10,000/-. The said contention is also to be accepted in the light of **Pranay Sethi** (supra); therefore, Rs.10,000/- is deducted. Similarly, another contention put forward by the learned counsel for the 3[rd] respondent is that an amount of Rs.1,00,000/- has been granted towards loss of love and affection in addition to Rs.1,00,000/- granted toward loss of consortium. As far as the compensation under the head of loss of consortium is concerned, the 1st appellant being the wife and 2nd and 3rd petitioners being the parents are entitled to Rs.40,000/- each, thereby making the total amount under the said head as Rs.1,20,000/-. However, as per the principles laid down by the Honourable Supreme Court in **New India Assurance Company Ltd. v. Somwati & Or** _**s**_ [(2020) 9 SCC 644] and **United India Insurance Company Ltd. v. Satinder Kaur @ Satwinder Kaur** [(2021) 11 SCC 780], when compensation is awarded for loss of consortium, no separate compensation needs to be granted for loss of love and affection. Therefore, Rs.1,00,000/- granted towards loss of love and affection is to be **M.A.C.A Nos.2662 and 3080 OF 2015** 19 deducted. Thus, while reworking the compensation payable under both heads together, an amount of Rs.80,000/- has to be deducted. Thus, while reassessing the compensation with the above, the total amount receivable by the appellant would come to Rs.8,99,555/-. [(9,84,555 + 5,000) – (10,000 + 80,000)]. In the light of the aforesaid observations and findings, both these appeals are disposed of by modifying the award dated 08.06.2012 in O.P(M.V) No.1357/2013 passed by the Motor Accidents Claims Tribunal, Ernakulam, by awarding an additional compensation of Rs.8,99,555/- (Rupees eight lakhs ninety nine thousand five hundred and fifty five only) to the petitioners, and the said amount shall be deposited by the 3[rd] respondent/insurance company with the interest at the rate of 7.5% per annum from the date of petition till realisation within a period of three months, with proportionate costs, from the date of receipt of a copy of this judgment. The said amount shall be apportioned as per the proportions mentioned in the award passed by the Tribunal. Sd/- **ZIYAD RAHMAN A.A. JUDGE** rpk