Raghuvir Singh Matolya & Ors vs Hari Singh Malviya & Ors

Raghuvir Singh Matolya & Ors. ...Appellants

Versus

Hari Singh Malviya & Ors. ...Respondents

JUDGMENT

S.B. SINHA, J :

1. Leave granted.

2. Whether dearness allowance and house rent allowance payable to a

deceased should be taken into consideration for the purpose of computing

the amount of compensation payable in terms of the provisions of Section

166 of the Motor Vehicles Act, 1988 (for short "the Act") is the question

involved in this appeal which arises out of a judgment and order dated 2

14.02.2007 passed by the High Court of Madhya Pradesh in M.A. No. 2177

of 2005.

3. The basic fact of the matter is not in dispute.

The deceased Puspa Matolya was travelling in a Tata Sumo on the

fateful day, viz., 30.11.2002 at about 11.00 a.m. It dashed against a mango

tree. She died on the spot.

Indisputably, the deceased was an Assistant teacher in a primary

school. The said school was a State-run one. She was to superannuate on

28.02.2011. She at the time of her death was aged about 52 years and 9

months. The salary certificate produced on behalf of the claimants -

appellants showed that she was drawing a monthly salary of Rs.8611/-

(Rs.6050/- basic pay, Rs.2481/- dearness allowance and Rs.80/- house rent)

per mensum.

The Tribunal, however, taking into consideration only the basic pay

passed an award awarding compensation for a sum of Rs. 3,38,000/-. For

the said purpose, the Tribunal applied the multiplier of 7. 3

An appeal in terms of Section 173(1) of the Act was preferred by the

appellants. The High Court, by reason of the impugned judgment, enhanced

the amount of compensation to Rs. 5,28,000/- by applying the multiplier of

11.

Still not satisfied with the quantum of compensation awarded in their

favour, the appellants are before us.

4. Ms. Pragati Neekhra, learned counsel appearing on behalf of the

appellants would contend that the Tribunal as also the High Court

committed a serious error as they failed to take into consideration that in

computing the net income of the deceased, dearness allowance as also the

house rent allowance should be taken into consideration.

5. Mr. Atul Nanda, learned counsel appearing on behalf of the

respondents, on the other hand, would support the impugned judgment.

6. Before the learned Tribunal, salary as also a pension certificate was

produced.

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7. Dearness allowance, in our opinion, should form part of income.

House rent allowance is paid for the benefit of the family members and not

for the employee alone. What would constitute an income, albeit in a

different fact situation, came up for consideration before this Court in

National Insurance Co. Ltd. v. Indira Srivastava and Others [(2008) 2 SCC

763] wherein it was held:

"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.

20. The term "income" in P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn.) has been defined as under:

"The value of any benefit or perquisite whether convertible into money or not, obtained from a company either by a director or a person who has substantial interest in the company, and any sum paid by such company in respect of any obligation, which but for such payment would have been payable by the director or other person aforesaid, occurring or arising to a person within the State from any profession, trade or calling other than agriculture."

5 It has also been stated:

" `Income' signifies `what comes in' (per Selborne, C., Jones v. Ogle). `It is as large a word as can be used' to denote a person's receipts (per Jessel, M.R., Re Huggins). Income is not confined to receipts from business only and means periodical receipts from one's work, lands, investments, etc. Secy. to the Board of Revenue, Income Tax v. Al. Ar. Rm. Arunachalam Chettiar & Brothers. Ref. Vulcun Insurance Co. Ltd. v. Corpn. of Madras."

21. If the dictionary meaning of the word "income" is taken to its logical conclusion, it should include those benefits, either in terms of money or otherwise, which are taken into consideration for the purpose of payment of income tax or professional tax although some elements thereof may or may not be taxable or would have been otherwise taxable but for the exemption conferred thereupon under the statute."

To the same effect is the decision of this Court in Oriental Insurance

Co. Ltd. v. Ram Prasad Varma & Ors. [2009 (1) SCALE 598].

8. We, therefore, are of the opinion that `Dearness Allowance' and

`House Rent Allowance' payable to the deceased should have been included

for determining the income of the deceased and consequently the amount of

compensation.

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9. For the reasons aforementioned, we direct that in calculating the

amount of compensation, the dearness allowance as also the house rent

allowance should also be taken into consideration.

10. The matter is remitted to the trial court. An award may be passed

accordingly. The appeal is allowed with the aforementioned directions.

There shall, however, be no order as to costs.

...............................J. [S.B. Sinha]

................................J. [Dr. Mukundakam Sharma]

New Delhi;

March 31, 2009