Smt Athika Banu Vs Manasa Rai (Karnataka High Court)
The Karnataka High Court considered an appeal filed by the claimants seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal (MACT), Mangaluru, in its judgment and award dated 20.09.2022 in MVC No.927/2018. The claim arose from the death of Abdul Hameed alias Hameed Kasim in a road traffic accident that occurred on 14.11.2017 due to the rash and negligent driving of a Tempo Traveler. The claimants were the deceased’s wife and son. The Tribunal had awarded total compensation of Rs.11,99,000, comprising Rs.10,89,000 towards loss of dependency, Rs.40,000 towards spousal consortium, Rs.40,000 towards parental consortium, and Rs.30,000 towards loss of estate and funeral expenses, together with interest at 6% per annum from the date of the petition.
Before the High Court, the claimants contended that the deceased, aged 52 years, was running a sticker cutter business under the name “Fami Arts” and had produced income tax returns for three years. They submitted that the Tribunal erred in ignoring the income disclosed in those returns and instead adopting a notional monthly income of Rs.15,000. They further argued that, since the dependants were the wife and son of the deceased, deduction towards personal expenses should have been one-third instead of 50%. They accepted the Tribunal’s application of 10% towards future prospects and multiplier of 11, and sought enhancement accordingly.
The insurer submitted that the Tribunal had correctly assessed the income and that the compensation awarded under all heads was just and proper, contending that no enhancement was warranted.
After examining the record, the High Court observed that the deceased had produced income tax returns for three years showing annual incomes of Rs.2,87,076, Rs.3,47,174, and Rs.2,66,174. The Court held that the Tribunal ought to have taken the average of the incomes reflected in those returns. The average annual income worked out to Rs.3,00,141, corresponding to a monthly income of approximately Rs.25,011, which the Court rounded to Rs.25,000 per month instead of the Rs.15,000 adopted by the Tribunal.
The Court further held that, since the claimants were the wife and son of the deceased, deduction towards personal expenses should have been one-third rather than 50%. It found no error in the Tribunal’s adoption of 10% towards future prospects and multiplier of 11. Recalculating the loss of dependency, the Court computed it as Rs.25,000 plus 10% future prospects (Rs.2,500), less one-third towards personal expenses, resulting in a monthly dependency of Rs.18,333. Applying multiplier 11, the loss of dependency was determined at Rs.24,19,956.
Accordingly, the Court held that the claimants were entitled to loss of dependency of Rs.24,19,956 instead of Rs.10,89,000 awarded by the Tribunal, resulting in enhanced compensation of Rs.13,30,956. The Court directed that the enhanced amount would carry interest at 6% per annum from the date of the petition until realization. It further held that respondent No.2, the insurer, was liable to pay the enhanced compensation with interest.
The High Court partly allowed the appeal and directed the insurer to deposit the enhanced compensation with interest before the Tribunal within six weeks from the date of the order. It further directed that, in the event of failure to deposit the amount within the stipulated period, the insurer would be liable to pay interest at the rate of 9% per annum from the date of the High Court’s order until payment. The Court also directed that claimant No.1 was entitled to release of the entire enhanced compensation.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
This appeal is filed by the claimants seeking enhancement of compensation awarded in the judgment and award dated 20.09.2022 passed in MVC No.927/2018 by the learned Principal Senior Civil Judge and CJM and Member, MACT, Mangaluru.
2. Even though this appeal is listed today for admission, it is taken up for disposal with the consent of learned counsel for appellants and learned counsel for respondent No.2/Insurer.
3. The appellants/claimants made a claim petition praying to award compensation for the death of Abdul Hameed alias Hameed Kasim in a road traffic accident occurred on 14.11.2017 contending that the accident occurred due to rash and negligent driving of driver of Tempo Traveler bearing Regn. No.KA-19-D-8939. The claimants are wife and son of the deceased.
4. The Tribunal after recording evidence of parties, appreciating evidence on record, assessed the compensation and awarded compensation under various heads as under:
| 1 | Towards dependency | Rs.10,89,000.00 |
| 2 | Loss of consortium
a. Spousal consortiu b. Parental consortium |
Rs. 40,000.00
Rs. 40,000.00 |
| 3 | Towards loss of estate & funeral expenses | Rs. 30,000.00 |
| Total compensation | Rs.11,99,000.00 |
5. The Tribunal has also awarded interest at the rate of 6% per annum from the date of petition till realization and directed the respondent No.2/Insurer to pay the award amount with interest. The claimants seeking enhancement of compensation awarded have filed the present appeal.
6. Heard the learned counsel for appellants and learned counsel for respondent No.2/Insurer.
7. The learned counsel for appellants would contend that the deceased was aged 52 years as on the date of accident, and he was running sticker cutter business in the name of Fami Arts at Ullal, Mangaluru. Even though the three years income tax returns are filed, the Tribunal has not taken the income shown in the income tax returns. As the income tax returns for three years are filed, the average income has to be taken into consideration. But the Tribunal has taken the notional income at Rs.15,000/-. The claimants are wife and son of the deceased, and therefore, deductions towards personal expenses of the deceased to be taken at one third as against 50% taken by the Tribunal. The Tribunal has rightly taken future prospects at 10% and applied multiplier 11. He further submits that the compensation awarded under conventional head is just and proper. With this, he prayed to allow the appeal.
8. The learned counsel for respondent No.2/Insurer would contend that the Tribunal has rightly taken the income and the compensation awarded under all heads is just and proper, and there are no grounds for enhancement.
9. Having heard the learned counsel for parties, the Court has perused the judgment and award.
10. The deceased was aged 52 years and he was running sticker cutter business in the name of Fami Arts at Ullal, Mangaluru. The deceased has filed income tax returns for three years as per Exs.P21, 22 and 167. The Tribunal ought to have taken average of the said three years income as shown in the three years income tax returns. The income shown in those three income tax returns are Rs.2,87,076/-, Rs.3,47,174 and Rs.2,66,174/-. The average of those three year income is Rs.3,00,141/-and monthly income comes to Rs.25,011/-. Therefore monthly income of the deceased is to be taken at Rs.25,000/- as against Rs.15,000/- taken by the Tribunal. The claimants are wife and son of the deceased. Therefore, deductions are to be taken at one third as against 50% taken by the Tribunal. The Tribunal has rightly applied multiplier `11′ and taken 10% towards future prospects.
11. Considering the above aspect, the loss of dependency is calculated as under:
Rs.25,000/- + 2,500 (10%) = Rs.27,500/- – 1/3rd = Rs.18,333/- x 12 x 11 = 24,19,956/-.
12. The claimants are entitled to loss of dependency of Rs.24,19,956/- as against Rs.10,89,000/-as awarded by the Tribunal. Consequently the claimants are entitled to enhanced compensation of Rs.13,30,956/-with interest at the rate of 6% per annum from the date of petition till realization.
13. The respondent No.2/Insurer is liable to pay the said enhanced compensation with interest.
In view of the above, the following:
ORDER
i) The appeal is allowed in part.
ii) The appellants/claimants are entitled to enhanced compensation of Rs.13,30,956/- with interest at the rate of 6% per annum from the date of petition till realization.
iii) The respondent No.2/Insurer shall deposit the said enhanced compensation with interest before the Tribunal within a period of six 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 claimant No.1 is entitled to release of entire enhanced compensation.
