KALPANARAJ Vs TAMIL NADU STATE TRANSPORT CORPORATION
Bench: GYAN SUDHA MISRA,V. GOPALA GOWDA
Case number: C.A. No.-003461-003461 / 2003
Diary number: 7135 / 2002
Advocates: Vs
T. HARISH KUMAR
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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3461 of 2003
KALPANARAJ & ORS. ………APPELLANTS VS.
TAMIL NADU STATE TRANSPORT CORPN. ……RESPONDENT
J U D G M E N T
V.GOPALA GOWDA, J.
This appeal is filed by the appellants questioning
the correctness of the judgment and final Order dated
30.01.2002 passed by the High Court of Judicature at
Madras in Civil Misc. Appeal No. 1487 of 1999, urging
various facts and legal contentions in justification of
their claim.
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2. Necessary relevant facts are stated hereunder to
appreciate the case of the appellants and also to find
out whether the appellants are entitled for the relief
as prayed in this appeal.
3. The deceased, while going on his motorcycle from
Vellore to Kannamangalam, collided with the bus of the
respondent-Corporation as a result of which he
sustained fatal injuries and died on the spot. The
legal representatives of the deceased viz, his wife and
two minor children filed M.C.O.P. No. 539 of 1994
contending that the accident occurred solely because of
the rash and negligent driving of the bus of the
respondent-Corporation. If the driver of the bus had
driven the bus with carefulness, there might have been
no possibility of dragging the deceased along with the
motorcycle for a distant of 120 feet. The appellants-
claimants claimed an amount of 20 lakhs compensation
for the death caused by the respondent.
The Tribunal, after considering the material evidence
on record of P.W.1 and P.W. 2 and R.W.1 and the ten
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C.A. No. 3461 of 2003
exhibits filed on behalf of the appellant- claimants,
found that the accident has occurred only due to rash
and negligent driving of the driver of the bus of the
respondent-Corporation. Therefore, the learned judge,
holding the monthly income at 15,000/- and adopting the
multiplier of 18, determined a sum of 32,40,000/- as
compensation. However, he restricted the sum of
compensation to 20,90,000/-, since that was the amount
claimed by the appellants-claimants. The Tribunal
further awarded interest @12% per annum on the said
amount.
4. Aggrieved by the Award of the Tribunal, the
respondent-Corporation filed an appeal challenging the
Order of the Tribunal. The High Court, however, only
restricted itself to ascertain as to whether the
compensation awarded by the Tribunal was excessive. And
if so, then what is the amount to which the appellants-
claimants are entitled to.
5. The High Court opined that the Tribunal erred in
relying upon the statement of evidence of the wife of
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C.A. No. 3461 of 2003
the deceased to determine the monthly income of the
deceased at 15,000/- instead of relying upon the income
shown in the Income Tax return. Further, the High Court
opined that the Tribunal erred in not deducting 1/3rd
for personal expenses of the deceased. Further,
according to the High Court, the Tribunal erred in
determining the multiplier of 18 instead of 13
considering the age of the deceased which was 46 at the
time of the accident.
6. Accordingly, the High Court held that the
unsubstantiated oral evidence alone of P.W.1 cannot be
taken into consideration in the light of Exhs. A.8, A.9
and A.10. The monthly income of the deceased is
therefore taken as 3,115/- per month for computation of
the multiplicand on the basis of net average income of
the deceased calculated as per the income tax return
produced as evidence on record. Therefore, the
compensation determined under the head of loss of
income under the head of ‘loss of income’ of the
deceased was determined by the High Court at
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C.A. No. 3461 of 2003
4,86,000/-. Further, the High Court has reduced
compensation under the head of funeral expenses from
25,000/- to 10,000/-. The Tribunal awarded a
consolidated amount for loss of love and affection by
the children, loss of income and loss of consortium by
the wife at 19,55,000/-. The High Court reduced the
compensation under the head of ‘loss of love and
affection’ by the minor children at 20,000/- each.
Also, the amount awarded towards loss of consortium to
the wife was reduced by the High Court to 30,000/-.
Therefore, in total, the High Court awarded a total
amount of 5,76,000/- as compensation to the appellants-
claimants. The interest rate was also reduced to 9% per
annum by the High Court from 12% awarded by the
Tribunal.
7. It is pertinent to note that the only available
documentary evidence on record of the monthly income of
the deceased is the income tax return filed by him with
the Income Tax Department. The High Court was correct
therefore, to determine the monthly income on the basis
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C.A. No. 3461 of 2003
of the income tax return. However, the High Court erred
in ascertaining the net income of the deceased as the
amount to be taken into consideration for calculating
compensation, in the light of the principle laid down
by this Court in the case of National Insurance Company
Ltd. v. Indira Srivastava and Ors.1 The relevant
paragraphs of the case read as under:
“14. The question came for consideration before a learned Single Judge of the Madras High Court in National Insurance Co. Ltd. v. Padmavathy and Ors. wherein it was held:
‘7…..Income tax, Professional tax which are deducted from the salaried person goes to the coffers of the government under specific head and there is no return. Whereas, the General Provident Fund, Special Provident Fund, L.I.C., Contribution are amounts paid specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. The Supreme Court as well as
1 (2008) 2 SCC 763
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C.A. No. 3461 of 2003
various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if the Legal Representatives are entitled to lump sum payment under the contractual liability. If the contributions made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependency compensation, then the Legal Representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can make only statutory deductions such as Income tax and professional tax and any other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependency compensation. Any contribution made by the employee during his life time, form part of the salary and they should be included in the monthly income, while computing the dependency compensation.’
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C.A. No. 3461 of 2003
15. Similar view was expressed by a learned Single Judge of Andhra Pradesh High Court in S. Narayanamma and Ors. v. Secretary to Government of India, Ministry of Telecommunications and Ors. holding:
13….In this background, now we will examine the present deductions made by the tribunal from the salary of the deceased in fixing the monthly contribution of the deceased to his family. The tribunal has not even taken proper care while deducting the amounts from the salary of the deceased, at least the very nature of deductions from the salary of the deceased. My view is that the deductions made by the tribunal from the salary such as recovery of housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the deceased cannot be deducted while computing the net monthly earnings of the deceased. These advances or loans are part of his salary. So far as House Rent Allowance is concerned, it is beneficial to the entire family of the deceased during his tenure, but for his untimely death the claimants are deprived of such benefit which they would have enjoyed if the deceased is alive. On the other hand, allowances, like Travelling
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Allowance, allowance for newspapers/periodicals, telephone, servant, club-fee, car maintenance etc., by virtue of his vocation need not be included in the salary while computing the net earnings of the deceased. The finding of the tribunal that the deceased was getting Rs.1,401/- as net income every month is unsustainable as the deductions made towards vehicle loan and other deductions were also taken into consideration while fixing the monthly income of the deceased. The above finding of the tribunal is contrary to the principle of 'just compensation' enunciated by the Supreme Court in the judgment in Helen's case (1 supra). The Supreme Court in Concord of India Insurance Co. v. Nirmaladevi and Ors. 1980 ACJ 55 (SC) held that determination of quantum must be liberal and not niggardly since law values life and limb in a free country 'in generous scales'.”
(Emphasis laid down by this Court)
8. In the light of the principle of law laid down by
this Court in the Indira Srivastava case mentioned
supra, we are of the opinion that the High Court erred
in making deductions under various heads to arrive at
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C.A. No. 3461 of 2003
the net income instead of ascertaining the gross income
of the deceased out of the annual income earned from
his occupation mentioned in the income tax return
submitted for the relevant financial year 1994-1995.
9. As per the Income Tax return of the financial year
1994-1995 produced on record, the deceased was earning
88,660/- per annum or 7330/- per month. Further, the
deceased being 46 years of age at the time of death, he
is entitled to 30% increase in the future prospects of
income as per the legal principle laid down by this
Court in Santosh Devi v. National Insurance Company
Ltd. and Ors.2
10. Also, since the deceased was 46 years of age at the
time of the accident, a multiplier of 13 seems
appropriate for determining the quantum of compensation
as per the principle laid down by this Court in the
case of Sarla Verma and Ors. v. Delhi Transport
Corporation and Anr.3
2 (2012) 6 SCC 421 3 (2009) 6 SCC 121
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C.A. No. 3461 of 2003
11. Therefore, the total amount of compensation the
appellants- claimants are entitled to under the head of
loss of income is:
[( 7330+30/100 x 7330) x 12 x 13] = 14,86,524/-.]
12. Further, since the deceased has left behind his
wife and two children, the amount to be deducted under
the head of personal expenses is 1/3rd of the total
income in the light of the principle laid down in Sarla
Verma case (supra) which was reiterated in Santosh Devi
case (supra). Therefore, the amount to be awarded as
compensation to the appellant is = ( 14,86,524/- - 1/3 x
14,86,524/-) = 9,91,016/-.
13. The appellant-claimants sought an amount of
10,000/- towards damage to the motorcycle. Since, the
claim has neither been rebutted with evidence by the
respondent, we grant compensation of 10,000/- towards
the damage caused to the bike.
14. Further, the High Court awarded a sum of
30,000/- towards loss of consortium and 20,000/- each
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towards loss of love and affection by the minor
children. This amount awarded by the High Court is on
the lower side in the light of the principle laid down
in Rajesh and Ors. v. Rajbir Singh and Ors.4 wherein the
Court awarded 1,00,000/- towards loss of consortium
and 1,00,000/- towards loss of care and guidance to the
minor children. Accordingly, we award a compensation of
1,00,000/- each towards loss of consortium and towards
loss of love and affection.
15. Apart from this, we award 1,00,000/- towards loss
of estate and 1,00,000/- towards loss of expectation of
the life of the deceased. We also award a sum of
50,000/- for funeral expenses and cost of litigation.
Therefore, a total sum of 14,51,016/- which is rounded
off at 14,51,000/- is awarded to the appellants-
claimants.
16. Further, the High Court has awarded the
compensation with interest @9% per annum. We concur
with this holding of the High Court in the light of the
4 (2013) 9 SCC 54
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decision of this Court in Municipal Corporation of
Delhi, Delhi v. Uphaar Tragedy Victims Association & Ors.5 Accordingly, we award an interest @ 9% per annum
on the compensation to be awarded to the appellants-
claimants. The compensation awarded shall be
apportioned between the appellants equally with
proportionate interest. We direct the Insurance Company
to deposit 50% of the awarded amount with proportionate
interest in any of the Nationalized Bank of the choice
of the appellants for a period of 3 years. The rest of
50% amount awarded with proportionate interest shall be
paid to the appellants by way of a demand draft within
six weeks from the date of receipt of a copy of this
order after deducting the amount if already paid.
During the said period, if they want to withdraw a
portion or entire deposited amount for their personal
or any other expenses, including development of their
asset, then they are at liberty to file application
before the Tribunal for release of the deposited
amount, which may be considered by it and pass 5 (2011) 14 SCC 481
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appropriate order in this regard. We set aside the
impugned judgment and order of the High Court and
modify the judgment in the aforesaid terms by allowing
this appeal. In the facts and circumstances of the
case, no order as to costs.
………………………………………………………………………J. [GYAN SUDHA MISRA]
………………………………………………………………………J. [V. GOPALA GOWDA] New Delhi, April 22, 2014
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