Sangita Arya vs Oriental Insurance Company Limited

CIVIL APPEAL NO. 2612 OF 2020 (Arising out of SLP (Civil) No. 28724 of 2018)

Smt. Sangita Arya & Ors. … Appellants

versus

Oriental Insurance Co. Ltd. & Ors. … Respondents

JUDGMENT

INDU MALHOTRA, J.

Leave granted.

1. The present civil appeal has been filed by the

Claimants/Dependents of one Harish Singh Arya, who died

at the age of 35 years in a motor vehicle accident on

18.06.2007.

2. On 18.06.2007, the deceased Harish Singh Arya had taken

his uncle Govind Lal Arya, an Enforcement Officer for

Passenger Tax, Champawat for inspection in his taxi. The Signature Not Verified Digitally signed by MAHABIR SINGH Date: 2020.06.16 taxi had stopped on the side of the road at Village Chandini 17:06:00 IST Reason:

near Tanakpur – Khatema Road, Uttarakhand. The deceased

1 had gone to answer nature’s call on the side of the road,

when at about 2:30 p.m., one Tata Sumo bearing No. UP­

02D­5208, being driven at a high speed from the wrong side

of the road, hit the deceased, and seriously injured him. The

Enforcement Team was able to stop the offending vehicle,

however the driver of the vehicle fled from the spot. While

Harish Singh Arya was being taken to Bareilly for

hospitalization, he succumbed to his injuries. The F.I.R. of

the accident was lodged by Mr. Govind Lal Arya, the uncle of

the deceased, at P.S. Banbasa.

3. The Claimants filed a Claim Petition before the Motor

Accident Claims Tribunal, Haldwani – Court of First Fast

Track, Additional District Judge, Haldwani, District Nainital

(MACT) being Compensation Claim No. 158 of 2007 for

compensation on behalf of five dependents i.e. the widow, two

minor daughters, and the parents of the deceased.

The Claimants submitted that the deceased owned two

taxis from which he earned approximately Rs. 1,00,000 p.a.

after deduction of all expenses.

The road accident was proved by the oral testimony of

the eye­witness Shri Govind Lal Arya (PW­2), who was

accompanying the deceased, and had lodged the F.I.R. 2 With respect to payment of compensation, the Claimants

submitted that the deceased owned two taxis, which

generated an income of Rs. 1,00,000 p.a. The R.T.O., Motor

Vehicles Department, Haldwani produced certificates of both

the vehicles bearing No. UP­02D­5111 and UP­04D­0111

before the MACT, which showed that the vehicles were

purchased by the deceased Harish Singh Arya, and were

registered in his name.

The Claimants filed four Income Tax Returns (ITRs) of

the deceased for the years 2002­03, 2003­04, 2004­05, and

2006­07. The ITR for the year 2006­07 was Rs. 98,500 p.a. A

photocopy of the ITR bearing the stamp of receipt from the

Income Tax Department, was placed on record.

4. The MACT vide Award dated 22.12.2009 held that on the

date of the accident, the deceased was 35 years of age, and

his income was Rs. 1,00,000 p.a. The deceased had left

behind five dependents i.e. his wife, parents and two minor

daughters. The MACT deducted 1/4 th of his income towards

personal expenses, and adopted the multiplier of 16.

Accordingly, the loss of dependency was computed at Rs.

12,20,000.

3 The MACT further awarded Rs. 20,000 to the widow

towards loss of consortium, Rs. 10,000 to the minor

daughters towards loss of love and affection, and Rs. 5,000

towards funeral expenses. The total compensation awarded

to the Claimants worked out to Rs. 12,55,000 with Interest

@6% p.a.

The Respondent No. 1 – Insurance Company was held

liable for payment of compensation to the Claimants.

5. Aggrieved by the aforesaid Award, the Insurance Company

filed Appeal from Order No. 117 of 2010 before the High

Court of Uttarakhand at Nainital.

The learned Single Judge of the High Court vide the

impugned judgment dated 22.07.2016 erroneously assumed

that the deceased was a Government servant, and observed

that he was running a parallel business by plying taxis.

There is no basis for finding that the deceased was a

Government employee. We do not know as to on what basis

the learned Single Judge has arrived at this factually

incorrect conclusion, and made it the basis for awarding

compensation.

The High Court further held that the ITRs for the years

2002­03, 2003­04 and 2004­05 showed that the average 4 income of the deceased for these three years was Rs. 52,635

p.a. The ITR for the year 2006­07 revealed an income of Rs.

98,500 p.a., which was almost double the income of the

preceding three years. The High Court held that the ITR for

the year 2006­07 could not be taken into consideration.

The learned Single Judge further held that the income

which may have been generated from the two taxis, could not

be taken into consideration for determining the income of the

deceased. Accordingly, the High Court took the average of the

ITRs for years 2002­03, 2003­04 and 2004­05, for

determining the income of the deceased at Rs. 52,635 p.a.

The Court deducted 1/3rd of the income towards personal

expenses, and applied the multiplier of 16. The loss of

dependency was assessed at Rs. 5,61,440.

The consortium payable to the widow was reduced by the

High Court from Rs. 20,000 (as awarded by the MACT) to Rs.

10,000; the amount awarded towards loss of love and

affection to the minor daughters was reduced from Rs.

10,000 to Rs. 5,000. However, the amount of Rs. 5,000

awarded by the MACT towards funeral expenses was

maintained.

5 The total compensation awarded to the Claimants was

reduced from Rs. 12,55,000 to Rs. 5,81,440.

6. Aggrieved by the impugned judgment dated 22.07.2016

passed by the High Court, the Claimants have filed the

present civil appeal.

This Court while issuing notice to the Respondents on

23.10.2018, recorded the submission made on behalf of the

Claimants that the deceased was not a Government

employee.

7. We have heard the learned counsel for the parties and

perused the material on record. We find that the impugned

order passed by the High Court bristles with serious factual

inaccuracies :– first, the learned Single Judge wrongly

assumed that the deceased Harish Singh Arya was a

Government employee. This has nowhere been averred by the

Claimants in any of their pleadings. The entire basis of the

judgment is hence misconceived.

On the basis of the aforesaid erroneous assumption, the

High Court has erroneously observed that the deceased was

running a parallel business by plying two taxis, and held that

the income derived from the same could not be taken into

consideration for assessing the compensation. These findings 6 being based on a completely erroneous assumption, are liable

to be set aside.

Second, the High Court determined the income of the

deceased by taking the average of the ITRs filed for the years

2002­03 at Rs. 54,000 p.a., 2003­04 at Rs. 52,405 p.a., and

2004­05 at Rs. 51,500 p.a. The learned Single Judge

disregarded the ITR for the year 2006­07, wherein the income

of the deceased was shown as Rs. 98,500 p.a. on the ground

that it was allegedly filed almost one year after the death of

the deceased. This finding also is factually incorrect.

A photocopy of the original ITR for the year 2006­07 was

filed before this Court, bearing the rubber stamp of the

Income Tax Department. It shows that the date of filing the

ITR was 20.04.2007, which is prior to the death of the

deceased which occurred on 18.06.2007. Hence, the High

Court was not justified in disregarding the ITR for the year

2006­07 while assessing the income of the deceased.

The Appellants have also placed on record a copy of the

ITR for the year 2005­06, which bears the rubber stamp of

the Income Tax Department, and reveals the income of the

deceased at Rs. 98,100 p.a. during the previous assessment

year.

7 As a consequence, the impugned judgment dated

22.07.2016 passed by the High Court is hereby set aside.

8. On a perusal of the documentary evidence on record i.e.

the ITRs for the assessment years 2005­06 and 2006­07,

filed prior to the death of the deceased, which reflect the

income of approximately Rs. 1,00,000 p.a. (as assessed by

the MACT in its Award dated 22.12.2009), we make this the

basis for computing the compensation payable to the

Claimants.

We find that the Courts below have not awarded any

amount towards future prospects, as mandated by the

judgment of the Constitution Bench in National Insurance

Company Limited v. Pranay Sethi & Ors.1 Accordingly, we

award future prospects @40% of the income of the deceased.

Given the fact that the deceased left behind five

dependents, the deduction towards his personal expenses

would be 1/4th as per the judgment of this Court in Sarla

Verma & Ors. v. Delhi Transport Corporation & Anr.2

The multiplier adopted by the MACT and the High Court

at 16 is appropriate.

1 (2017) 16 SCC 680.

2 (2009) 6 SCC 121.

8 With respect to payment of compensation under the

conventional heads, we direct that same be awarded in

consonance with the judgment in Pranay Sethi (supra).

Accordingly, the compensation payable to the

Claimants/Appellants herein is determined as :

i) Income : Rs. 1,00,000 p.a. ii) Future Prospects : 40% iii) Deduction towards personal 1/4 expenses : iv) Total income : Rs. 1,05,000 p.a. v) Multiplier : 16 vi) Loss of dependency : Rs. 16,80,000 vii) Loss of estate : Rs. 15,000 viii) Funeral expenses : Rs. 15,000 ix) Loss of consortium : Rs. 40,000 Total compensation : Rs. 17,50,000

9. Even though the Claimants/Appellants herein did not file

an Appeal against the Award dated 22.12.2009 passed by the

MACT before the High Court, we deem it appropriate to

enhance the compensation by exercising our jurisdiction

under Article 142 of the Constitution of India in order to do

complete justice between the parties.

10. The Respondent – Insurance Company is directed to pay

the compensation awarded to the Appellants within a period

of twelve weeks’ from the date of this judgment, after

adjusting any amount which may have been paid. The

9 amount payable to the Appellants shall carry Interest @ 7.5%

p.a. from the date of filing the claim petition till the date of

realization.

11. The Civil Appeal is allowed in the aforesaid terms.

All pending Applications, if any, are accordingly disposed of.

Ordered accordingly.

...…...............………………J. (R. BANUMATHI)

...…...............………………J. (INDU MALHOTRA)

...…...............………………J. (ANIRUDDHA BOSE)

June16, 2020;

New Delhi.

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