Post-Death ITRs Cannot Be Ignored: Karnataka HC Enhances MACT Compensation

Ravikumar Vs Nachi Enterprises (Karnataka High Court)

Material Facts

The appeal was filed by the claimants seeking enhancement of the compensation awarded by the XII Additional Small Causes Judge and Motor Accident Claims Tribunal (MACT), Bengaluru, in the judgment and award dated 08.08.2023 in MVC No.1784/2021. The claim arose from the death of Vinay H.R. in a road traffic accident on 24.03.2021. The claimants contended that the accident occurred due to the rash and negligent driving of a tipper lorry bearing registration No. KA-41/C-7104.

The Tribunal awarded compensation as follows:

• • Loss of dependency – Rs.27,21,600

• Love and affection – Rs.70,000
• Funeral expenses – Rs.15,000
• Conveyance – Rs.5,000

Total: Rs.28,11,600, with interest at 6% per annum from the date of petition until realisation, directing the insurer to satisfy the award.

Procedural History

The claimants appealed before the Karnataka High Court seeking enhancement of compensation. With the consent of the parties, the appeal was taken up for final disposal at the admission stage.

Legal Issue(s)

• Whether the monthly income of the deceased adopted by the Tribunal required enhancement for computing compensation.
• Whether the compensation awarded under the conventional heads required modification.

Relevant Statutory Provisions

No statutory provisions were expressly discussed in the supplied material.

Parties’ Submissions

Claimants

The claimants submitted that:

• The deceased worked as a Purohith and had completed several religious courses, including Veda Pravesh, as evidenced by Exhibits P15 to P21.
• Income tax returns for the assessment years 2020–2021 and 2021–2022 (Exhibits P14 and P38) showed an annual income of Rs.3,60,000, equivalent to Rs.30,000 per month.
• The Tribunal’s assessment of monthly income at Rs.18,000 was too low.
• The Tribunal had awarded only loss of love and affection and had not awarded consortium.
• The claimants sought consortium with 10% escalation and funeral expenses and loss of estate with 10% escalation.

Insurer

The insurer submitted that:

• The income tax returns were filed after the deceased’s death and the income disclosed therein was exaggerated to claim higher compensation.
• The Tribunal had rightly adopted the notional income of Rs.18,000 per month based on the Legal Services Authority chart for 2021.
• The compensation awarded under all heads was just and proper and required no enhancement.

Court’s Findings and Reasoning

The High Court observed that:

• The claimants were the parents of the deceased, who was a bachelor.
• Exhibits P15 to P21 established that the deceased had completed various courses, including Veda Pravesh, and was a qualified Purohith.
• Exhibits P23 to P32 showed that he was working as a Purohith.
• Although the income tax returns (Exhibits P14 and P38) were filed after the deceased’s death and disclosed an annual income of Rs.3,60,000 (Rs.30,000 per month), considering his qualifications and occupation, the Tribunal’s assessment of Rs.18,000 per month was on the lower side.
• The Court assessed the monthly income at Rs.20,000.
• The Tribunal had correctly:
  • deducted 50% towards personal expenses;
  • added 40% towards future prospects; and
  • applied multiplier 18.

Accordingly, the Court recalculated loss of dependency at Rs.30,24,000.

Regarding conventional heads, the Court found that:

• The Tribunal had awarded Rs.70,000 towards love and affection but had not awarded consortium.
• The two parents were entitled to consortium of Rs.40,000 each with 10% escalation, amounting to Rs.88,000.
• Since consortium was awarded, the amount awarded towards love and affection could not be retained.
• The claimants were entitled to funeral expenses and loss of estate of Rs.15,000 each with 10% escalation, i.e., Rs.16,500 each.
• As funeral expenses were awarded, the separate amount of Rs.5,000 awarded towards conveyance was not payable.

The Court determined compensation as follows:

• Loss of dependency – Rs.30,24,000
• Consortium – Rs.88,000
• Funeral expenses – Rs.16,500
• Loss of estate – Rs.16,500

Total: Rs.31,45,000.

Final Ruling

The High Court allowed the appeal in part.

It held that the claimants were entitled to total compensation of Rs.31,45,000 instead of Rs.28,11,600 awarded by the Tribunal, resulting in enhanced compensation of Rs.3,33,400 with interest at 6% per annum from the date of the petition until realisation.

The insurer was directed to deposit the enhanced compensation with interest before the Tribunal within six weeks. If the amount was not deposited within that period, the insurer would be liable to pay interest at 9% per annum from that day until payment.

The claimants were held entitled to release of the entire enhanced compensation according to the shares awarded by the Tribunal.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

The appeal is filed by claimants seeking enhancement of compensation awarded in the Judgment and Award dated 08.08.2023 passed in MVC No.1784/2021 by XII Additional Small Causes Judge and MACT Bangalore (SCCH-8).

2. Even though the appeal is listed today for admission, with the consent of learned counsel for the appellant and learned counsel for respondent No.2 it is taken up for disposal.

3. Appellants -claimants made a claim petition for award of compensation for the death of Vinay H R in a road traffic accident occurred on 24.03.2021 contending that the accident occurred due to the rash and negligent driving of the driver of the Tipper Lorry bearing registration No.KA-41/C-7104. The Tribunal after recording the evidence and appreciating the evidence on record has assessed the compensation and awarded compensation under various heads as under:

4. The Tribunal has also awarded interest at the rate of 6% per annum from the date of petition till realisation and directed respondent No.2 –insurer to pay the award amount with interest. Claimants have filed appeal seeking enhancement of compensation.

5. Heard learned counsel for appellants and learned counsel for respondent No.2 –insurer.

6. Learned counsel for appellants would contend that the deceased was working as Purohit and he had undergone several courses including the course of Veda Pravesh and documents have been produced in that regard as per Ex.P15 to P21. The income tax returns for the assessment year 2020-2021 and 2021 -2022 are produced at Ex.P14 and Ex.P38 respectively which indicate that the deceased was getting Rs.30,000/- per month. He further submits that the income taken by the Tribunal at Rs.18,000/- per month is on lower side and prays to take higher income. He further submits that the Tribunal has not awarded consortium and only awarded loss of love and affection in a sum of Rs.70,000/-. The claimants are entitled to consortium with 10% escalation and also funeral expenses and loss of estate in a sum of Rs.15,000/- each with 10% escalation. With these, he prays to allow the appeal and enhancement of compensation.

7. Learned counsel for respondent No.2 –insurer would contend that the income tax returns Ex.P14 and Ex.P38 are filed subsequent to the death of the deceased and income shown in those documents is an exaggeration only to claim higher compensation. Considering the same, the Tribunal has taken the notional income of the deceased at Rs.18,000/- per month as per chart prepared by Legal Services Authority for the year 2021. The compensation awarded on all heads are just and proper and there are no grounds for enhancement. With these, he prays to dismiss the appeal.

8. Having heard learned counsels, this Court has perused impugned judgment and award.

9. The claimants are parents of the deceased. The deceased was a bachelor and he was Purohith and performing pooja. Ex.P15 to 21 indicate that the deceased had undergone different courses including the Veda Pravesh and he was qualified Purohith. Ex.P23 to 32 are the photographs which indicate that the deceased was working as Purohith. Ex.P14 and 38 which are income tax returns for the assessment year 2020-2021 and 2021­2022 are the returns filed after death of the deceased wherein income of the deceased has been shown as Rs.3,60,000/- per annum i.e., Rs.30,000/- per month. Considering the qualification of the deceased and his avocation as Purohith, income taken by the Tribunal at Rs.18,000/- is on lower side and income to be taken is Rs.20,000/- per month. The Tribunal has rightly deducted 50% towards personal expenses of the deceased and taken 40% towards future prospects and applied multiplier 18. In view of the same, the claimants are entitled to loss of dependency as under:

Rs.20,000/- + 40% (Rs.8,000/-) =Rs.28,000/-minus 50%= Rs.14,000/- x12x18 =Rs.30,24,000/-

10. The Tribunal has awarded a sum of Rs.70,000/-towards love and affection and not awarded loss of consortium. The claimants being the two parents of the deceased are entitled to consortium in a sum of Rs.40,000/- each with 10% escalation i.e., Rs.44,000/- x 2 =Rs.88,000/-. In view of award of consortium, the claimants are not entitled to loss of love and affection in a sum of Rs.70,000/- as awarded by the Tribunal. The Tribunal has awarded funeral expenses at Rs.15,000/-, conveyance at Rs.5,000/-. The Tribunal has not awarded the loss of estate. The claimants are entitled to funeral expenses and loss of estate in a sum of Rs.15,000/- each with 10% escalation i.e., Rs.16,500/- each. In view of award of funeral expenses, claimants are not entitled to conveyance as awarded by the Tribunal in a sum of Rs.5,000/-. In view of the above, claimants are entitled to total compensation under various heads as under:

11. The claimants are entitled to total compensation of Rs.31,45,000/- as against Rs.28,11,600/- as awarded by the Tribunal with interest at the rate of 6% per annum from the date of petition till realisation. Consequently, the claimants are entitled to enhanced compensation of Rs.3,33,400/- with interest at the rate of 6% per annum from the date of petition till realisation. Respondent No.2 – insurer is liable to pay the enhanced compensation with interest.

12. In view of the above, the following

ORDER

i) The appeal is allowed in part.

ii) Claimants are entitled to enhanced compensation of Rs.3,33,400/- with interest at the rate of 6% per annum from the date of petition till realisation

iii) Respondent No.2 -insurer shall deposit the enhanced compensation with interest before the Tribunal within a period of 06 weeks from this day, failing which it is liable to pay interest at the rate of 9% per annum from this day till payment.

iv) The claimants are entitled to release of entire enhanced compensation as per their Share as awarded by the Tribunal.