The Branch Manager, New India Insurance Company Ltd. v. Sunitha and others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MRS. JUSTICE SHIRCY V. FRIDAY, THE 2ND DAY OF FEBRUARY 2018 / 13TH MAGHA, 1939 RP.No. 60 of 2018 IN MACA. 265/2014 AGAINST THE ORDER/JUDGMENT IN MACA 265/2014 of HIGH COURT OF KERALA DATED 07-12-2017. REVIEW PETITIONER(S) THE BRANCH MANAGER, NEW INDIA INSURANCE COMPANY LTD. KAYAMKULAM-690502. BY ADVS.SRI.VIJU THOMAS SMT.M.MEENA JOHN RESPONDENT(S): 1. SUNITHA - LAKSMI NIVAS, PERINGANADU, NELLIMUKAL.P.O, ADOOR-691551. ## 2. DEVIKA(MINOR0 LAKSMI NIVAS, PERINGANADU, NELLIMUKAL.P.O, ADOOR 691551 REP BY HER MOTHER 1ST PETITIONER, SUNITHA. 3. THANKAMONY, LAKSMI NIVAS, PERINGANADU, NELLIMUKAL.P.O, ADOOR-691551. 4. OMANAKUTTAN, LAKSMI NIVAS, PERINGANADU, NELLIMUKAL.P.O, ADOOR-691551 5. PRAKASH, MULLAPPALLIL KIZHAKKEKARA, THUVAYOOR NORTH, MANAKKALA, ADOOR-691551. R BY SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 02-02-2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.K.ABDUL REHIM & SHIRCY V, JJ. ----------------------------------------------RP. No. 60 of 2018 in MACA.265/2014 ----------------------------------------------Dated this the 2nd day of February, 2018 ## ORDER ## Abdul Rehim,J. Since the counsel appearing for respondents 1 to 4/ appellants had entered appearance, we are proposing to dispose of the review petition itself without issuing notice to the 5[th] respondent, as he will not be affected by the result of this order. 2. The above review petition is filed by the 2[nd] respondent in the appeal, seeking to review the judgment dated 7.12.2017, specifically on the ground that, while computing the compensation under the head of 'loss of dependency' this court had failed to deduct the income tax component from the multiplicand fixed. It is also contended that, interest for the period of 871 days ought to have been exempted, since the delay in filing the appeal 2 RP.60/2018 in MACA.265/2014 was condoned subject to such a condition. Further contention raised against the grant of compensation under the head of 'loss of love and affection', as it is not permissible under the decision of the hon'ble Supreme Court in **National Insurance Company Ltd. vs. Pranay Sethi and others (2017 (4) KLT 662).** 3. While allowing the appeal, this court had taken note of the fact that the Tribunal had failed to add anything towards future prospects in the income of the deceased, in fixing the multiplicand. Therefore this court, by following the decision of the hon'ble Supreme Court in **Pranay Sethi's case (supra)** added 50% to the gross salary, which the deceased was drawing at the time of his death. The gross salary proved through Ext.P12 certificate was Rs.12,757/- and this court allowed 50% addition towards future prospects. It is true that any deduction towards the income tax component was not considered at that time. We find merit in the contention of the review petitioner that, RP.60/2018 in MACA.265/2014 3 had the deceased been alive, he might have drawn much higher amount than the multiplicand fixed by this court and definitely he would have been liable for payment of income tax out of such income. We could not have an exact calculation with respect to the percentage at which he would have been made liable for payment of income tax, had he been alive. So also we could not ascertain as to how much amount out of his gross income would have been exempted under allowable deductions and exemptions. 4. Learned Standing counsel appearing for the Review Petitioner contended that, the deduction of the tax component should be made from the total salary drawn by the deceased at the time of his death and the 50% addition need to be computed from the amount so arrived after deducting the tax component. For canvassing such a method, the learned Standing counsel is relying upon the decision of the Honorable Supreme Court in _**Reshma kumari and others v. Madan Mohan and another (2013**_ RP.60/2018 in MACA.265/2014 4 _**(9) SCC 65)**_ . It is held therein that, where the annual income is in the taxable range, the actual salary shall mean actual salary less tax. It is held therein that the addition of 50% is to be made on the actual salary of the deceased, towards future prospects, where the deceased had a permanent job and was below the age of 40 years. Based on the said observation, which was upheld by the constitution bench in _**Pranay Sethi's case (supra),**_ it was contended that for the purpose of making the addition towards future prospects, the actual salary need to be arrived by deducting the tax component. The addition of 50% need to be made on such figure arrived, is the contention. 5. On the facts of the case at hand, we notice that, the total salary of Rs.12,757/- include various allowances like, Dearness pay, HRA, Spread Over allowances, Medical allowances, Permanent Conveyance allowance etc. It is pointed out by learned counsel appearing for the RP.60/2018 in MACA.265/2014 5 respondents/appellants that, those allowances are not taxable income. So also, it is pointed out that, Ext.A12 would indicate that there were deductions from the salary towards General Provident Fund, LIC and Welfare Fund etc. It is contended that those deductions are eligible to be exempted from the taxable income. 6. Considering the rival contentions, we are of the opinion with respect to deduction of the tax component, an accurate arithmetic calculation is not possible. Further, we take note of the fact that, the addition of 50% made towards future prospects in the salary also will be a taxable income. Therefore, a reasonable estimation need to be made with respect to the deduction of the tax component. We think it appropriate to deduct 10% from the multiplicand fixed, towards the component of income tax. 7. We think it appropriate to deduct 10% from the multiplicand fixed, towards the income tax component. Hence we are inclined to modify the judgment by refixing RP.60/2018 in MACA.265/2014 6 compensation under the head of the loss of dependency. When recalculated on the above said basis, the amount of compensation for which respondents 1 to 4/appellants are entitled on that count will work out to Rs.26,34,958/( 12757 + 50% - 10% x 12 x 17 x ¾). Therefore, there will be a deduction of Rs.2,92,773/- from the amount of compensation allowed by this court in the appeal. Consequently, the enhancement awarded by this court will be reduced to Rs.7,23,958/- 8. The Review petitioner contended that, the insurance company need not be made liable for payment of interest for the period of 871 days for which the delay in filing the appeal was condoned by this court. We take note of the fact that the delay in filing the appeal was condoned by this court through a specific order passed on 5.3.2015 in CMA.302/2014 . In the said order it is specifically mentioned that the delay was condoned subject to condition that if ultimately the appeal is allowed the insurance RP.60/2018 in MACA.265/2014 7 company will not be held liable to pay interest for the period for which the delay condoned. Hence we are inclined to modify the judgment by exempting the direction issued for payment of interest, for the period of 871 days, for which the delay was condoned with respect to filing of the appeal. Hence the observations contained in para 8 of the judgment in the appeal that the amount of enhancement awarded will carry interest at the same rate as ordered by the Tribunal, from the date of the claim petition till realisation, will stand modified to the extent of exempting the period 871 days. 9. The review petitioner also contended that the award of compensation under the head of loss of love and affection is unsustainable in view of the decision in **Pranay Sethi's case (supra).** It is contended that the hon'ble Supreme Court has not specifically mentioned about awarding of any compensation under the head 'loss of love and affection' in the decision in **Pranay Sethi's case (supra).** This court had occasion to consider the matter in 8 RP.60/2018 in MACA.265/2014 the decision in **Valsamma and another vs. V.A.Baiju and others( 2018 (1) KHC 153 (DB).** It was observed that, on a reading of para 54 of the judgment in **Pranay Sethi's case (supra),** it is evident that, what was prohibited is awarding of separate compensation under the head of 'care to minor'; and not under the head of 'loss of love and affection'. It is held that, compensation under the head of loss of love and affection is akin to 'loss of consortium'. Consortium is a compensation paid to the spouse taking into consideration of the loss of companionship,care, help, comfort, guidance, society, solace, affection and sexual relationship with his or her mate. In the case of children, or siblings or parents of the deceased, there will be loss of all the above said emotions and feelings, except the sexual relationship. Therefore it was held that, at no stretch of imagination it can be held that the hon'ble Supreme Court had intended to hold that no head under 'loss of love and affection' exists. 9 RP.60/2018 in MACA.265/2014 10. Considering the principle as mentioned above, we do not think that any interference with the amount of compensation awarded under the head of loss of love and affection is warranted for review. In the result the review petition is allowed and the judgment in MACA 265/14 dated 7.12.2017 shall stand modified to the extent as mentioned above. C.K.ABDUL REHIM, JUDGE ## SHIRCY V, JUDGE Pmn/ The figure “Rs.7,23,958/-” mentioned in the last line of paragraph 7 at page No.6 of the order dated 02.02.2018 in R.P. 60/2018 in M.A.C.A. 265/2014 is corrected and substituted as “Rs.11,23,958/-” as per order dated 19/7/2018 in I.A. No.1562/2018 in R.P.60/2018 in M.A.C.A.265/2014. ## Sd/- Registrar(Judicial).