United India Insurance Co Ltd Vs Sonia & Ors (Delhi High Court)
Delhi High Court held that income of the deceased, and not taxable income of the deceased, is relevant while determining loss of dependency. Thus, merely because certain allowances are not taxable in nature, the same would not warrant their deduction from the annual income of the deceased for the purposes of determining the compensation.
Facts-
The appellant (United India Insurance Co. Ltd.) has challenged the Award passed by the Motor Accidents Claims Tribunal-02, Delhi in MAC Petition No. 6109/2016 titled Smt. Sonia & Ors. v. Sh. Satish Kumar & Ors.
The Claim Petition was registered on the Detailed Accident Report (DAR) filed by the police corresponding to the investigation carried out in FIR No. 1484/15 u/s. 279/304A Indian Penal Code, 1860 registered at PS Narela.
As per the DAR, on 21.11.2015, the deceased-Arun Kumar was going on his motorcycle and at about 1:15 pm, when he reached Singhu Border Road in front of the Deepak Apartments, Narela, Delhi, one Maruti Van bearing registration no. HR-55-L-6792 (Offending Vehicle), which was being driven at high speed and in a rash and negligent manner, came and hit his motorcycle. As a result of the accident, the deceased fell from his motorcycle and he and his motorcycle came under the Offending Vehicle. The deceased was rushed to the SRHC Hospital where he was medically examined and was declared as brought dead.
The Tribunal, by way of the Impugned Award, has held that the deceased sustained fatal injuries in the road accident due to the Offending Vehicle being driven in a rash and negligent manner. The Tribunal awarded Rs.69,56,000/- along with interest at the rate of 9% per annum with effect from the date of the filing of the petition, that is 28.01.2016, till the date of its realization, in favour of the Legal Representatives of the deceased.
Conclusion-
Held that merely because certain allowances are not taxable in nature, the same would not warrant their deduction from the annual income of the deceased for the purposes of determining the compensation payable to the claimants towards Loss of Dependency. It is to be remembered that for determining the Loss of Dependency, what is relevant is the ‘income’ of the deceased and not the ‘taxable income’ of the deceased.
Delhi High Court in the case of Indrawati v. Ranbir Singh has held that even if the parents are not dependent on their children at the time of the accident, they will certainly be dependent, both financially and emotionally, upon their children at the later stage of their life, as the children were dependent upon their parents in their initial years. It would therefore be unfair as well as inequitable to deny compensation for loss of dependency to a parent, who may not be dependent on his/her child at the time of accident per se but would become dependent at his/her later age. Accordingly, the challenge of the Insurance Company to the deduction from the income of the deceased towards his personal expenses, is rejected.
The Supreme Court in United India Insurance Company Ltd. v. Satinder Kaur alias Satwinder Kaur & Ors., explained that loss of consortium can be loss of ‘filial consortium’, ‘spousal consortium’ or ‘parental consortium’. Therefore, each of the claimants are entitled to loss of consortium of Rs.40,000/- in their own right. Accordingly, compensation towards loss of consortium is enhanced to Rs.2 lakhs.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. These appeals have been filed challenging the Award dated 05.02.2019 (hereinafter referred to as ‘Impugned Award’) passed by the learned Motor Accidents Claims Tribunal-02, (North-District) Rohini Courts, Delhi (hereinafter referred to as ‘Tribunal’) in MAC Petition No.6109/2016 (Old MAC Petition No. 74/2016) titled as Smt. Sonia & Ors. v. Sh. Satish Kumar & Ors..
2. The above Claim Petition was registered on the Detailed Accident Report (in short, ‘DAR’) filed by the police corresponding to the investigation carried out in FIR No. 1484/15 under Sections 279/304A Indian Penal Code, 1860 registered at PS Narela.
3. As per the DAR, on 21.11.2015, the deceased-Arun Kumar was going on his motorcycle and at about 1:15 pm, when he reached at Singhu Border Road in front of the Deepak Apartments, Narela, Delhi, one Maruti Van bearing registration no. HR-55-L-6792 (hereinafter referred to as the ‘Offending Vehicle’), which was being driven at high speed and in a rash and negligent manner, came and hit his motorcycle. As a result of the accident, the deceased fell from his motorcycle and he and his motorcycle came under the Offending Vehicle. They were dragged by the Offending Vehicle for a considerable distance. The deceased was rushed to the SRHC Hospital, Narela, Delhi, where he was medically examined and was declared as brought dead.
4. The learned Tribunal, by way of the Impugned Award, has held that the deceased sustained fatal injuries in the road accident due to the Offending Vehicle being driven in a rash and negligent manner. The learned Tribunal awarded Rs.69,56,000/- along with interest at the rate of 9% per annum with effect from the date of the filing of the petition, that is 28.01.2016, till the date of its realization, in favour of the Legal Representatives of the deceased.
CHALLENGE OF THE INSURANCE COMPANY:
5. As far as the Insurance Company is concerned, it challenges the Impugned Award on the following grounds:
(a) that the learned Tribunal has erred in taking the income of the deceased as Rs.38,996/- per month. The learned counsel for the insurance company submits that from the salary slip of the deceased (Ex.PW-1/2), produced before the learned Tribunal, it would be evident that apart from the Basic Pay and the Grade Pay, the deceased was also drawing Transport Allowance of Rs.3504/-, Washing Allowance of Rs.90/-, Metro Pass Allowance of Rs.180/-, Ration Money of Rs.2,961/-, and Conveyance Allowance of Rs.90/-. He submits that in view of the judgment of the Supreme Court in Kalpanaraj and Ors. v. Tamil Nadu State Transport Corpn., (2015) 2 SCC 764; and of this Court in Asha Devi & Ors. v. Oriental Insurance Co. Ltd., 2015 SCC OnLine Del 7114, the above allowances should have been deducted from the income of the deceased for the purposes of determining the loss of dependency, as these allowances were personal to the deceased.
(b) the learned counsel for the Insurance Company further submits that the learned Tribunal has erred in adding the House Rent Allowance to the income of the deceased, which admittedly was not being paid to the deceased at the time of the accident.
(c) the learned counsel for the Insurance Company further submits that the learned Tribunal has also erred in considering the income of the deceased for 13 months instead of for 12 months for determination of the loss of dependency.
(d) the learned counsel for the insurance company further submits that the parents of the deceased were not living with the deceased and, therefore, cannot be considered as dependants on the deceased. He submits that only the widow and the children of the deceased were dependant on him, and a deduction of 1/3rd should have been made towards his personal expenses instead of 1/4th as has been done by the learned Tribunal.
(e) the learned counsel for the Insurance Company submits that as the deceased was aged 40 years and 9 months as on the date of the accident, multiplier of 14 should have been adopted in terms of the judgment of the Hon’ble Supreme Court in Sarla Verma (SMT) and Others v. Delhi Transport Corporation and Another, (2009) 6 SCC 121, instead of 15 as adopted by the learned Tribunal.
(f) the Insurance Company further challenges the rate of interest awarded in favour of the claimants. The learned counsel for the Insurance Company submits that the same is excessive and should not be more than 6% per annum.
CHALLENGE OF THE CLAIMANTS:
6. As far as the claimants are concerned, they challenge the Impugned Award on the following grounds:
(a) that the learned Tribunal has erred in reducing the income of the deceased by Rs.11,640/- per annum. The learned counsel for the claimants submits that merely because certain allowances received by the deceased are exempted from income tax, the same cannot be deducted from the income of the deceased.
(b) the learned counsel for the appellant further submits that the learned Tribunal has erred in taking the future prospects of income of the deceased at only 30%. He submits that as the deceased was aged 40 years and 9 months as on the date of the accident, future prospects should be determined for the age bracket of up to 40 years as prescribed in the judgment of the Supreme Court in National Insurance Company Limited v. Pranay Sethi and Others, (2017) 16 SCC 680. He submits that, therefore, future prospects of 50% should have been granted. In support of his submission, he places reliance on the judgment of the Supreme Court in H. Uma Maheshwari & Ors. v. United India Insurance Company Limited & Anr., (2020) 6 SCC 400.
(c) the learned counsel for the claimants further submits that the learned Tribunal has erred in granting non-pecuniary compensation of only Rs.40,000/- towards loss of consortium. He submits that as there were five claimants, each of them are entitled to loss of consortium and, therefore, the compensation amount should have been Rs.2,00,000/-.
7. The learned counsels for the parties dispute the contentions of each other.
ANALYSIS AND FINDINGS:
8. I have considered the submissions made by the learned counsels for the parties.
DEDUCTION OF ALLOWANCES:
9. As far as the plea of the learned counsel for the Insurance Company that the allowances received by the deceased should be deleted from his gross income, I find that, apart from the Washing Allowance of Rs.90/- and Metro Pass Allowance of Rs.180/-, no further deduction is to be made from the gross income of the appellant.
10. In Sunil Sharma & Ors. v. Bachitar Singh & Ors., (2011) 11 SCC 425, the Supreme Court, while considering the challenge of the appellants/claimants therein against the deduction of House Rent Allowance (in short, ‘HRA’), City Compensatory Allowance, Employees’ Provident Fund, Group Insurance Scheme and computer advance from the income of the deceased, observed and held as under:
“(a) Computation of income
6. In National Insurance Co. Ltd. v. Indira Srivastava, S.B. Sinha, J. has observed that: (SCC p. 767, para 9)
“9. The term „income‟ has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay-packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on monetary terms.”
7. His Lordship also stated that if some facilities were being provided whereby the entire family stood to benefit, the same must be held to be relevant for the purpose of computation of total income on the basis of which the amount of compensation payable for the death of the kith and kin of the applicants was required to be determined. This Court held that:
“12. … superannuation benefits, contributions towards gratuity, insurance of medical policy for self and family and education scholarship were beneficial to the members of the family.”
8. This Court clarified that by opining that:
“„just compensation‟ must be determined having regard to the facts and circumstances of each case. The basis for considering the entire pay-packet is what the dependants have lost [in view of] death of the deceased. It is in the nature of compensation for future loss towards the family income.”
And that:
“19. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted.”
9. In Raghuvir Singh Matolya v. Hari Singh Malviya (2009) 15 SCC 363, this Court has observed that dearness allowance and house rent allowance should be included for computation of income of the deceased.
10. In the present case, Haryana Women Development Corporation Ltd. certified that the deceased had drawn her salary for the month of July 2006 as under:
