National Insurance Company Ltd. v. Rani & Ors.

9. This court deems it appropriate to recapitulate the penultimate paragraphs of Chella Bharathamma (supra) case which reads as under:-

10. In the above mentioned case, the Hon‟ble Supreme Court has observed that plying of a vehicle without a permit is an infraction and in terms of Section 149(2) of the Motor Vehicles Act, a defence is available to the insurer on this aspect, however, the Apex Court further held that since Motor Vehicles Act is a beneficial legislation, the insurer would be the proper person to pay the awarded compensation to the claimants. Following the decision of the Hon‟ble Supreme Court in Chella Bharathamma (supra) case, this Court is in agreement with the decision rendered by the learned Tribunal and adjudges that the Insurance Company would be the proper person to pay the awarded compensation to the claimants. Accordingly, the plea of Insurance Company for exoneration of liabilities is rejected.

11. As far as argument of learned counsel for the Insurance Company that the learned Tribunal erred in relying on the sole testimony of PW-3 (eye witness) who was a planted witness, as neither his statement was recorded by the police nor was his name shown as an eye witness in the FIR is concerned, this Court has gone through the testimony of PW- 3/Mr.Mukesh Chand Raza. PW-3 during his examination in chief deposed as under:- “…..That on 13.2.2011 at about 5.15 AM. I was traveling in Truck No. RJ-01-GA-7286 alongwith my goats. When truck reached at Red Light, NH-24, Mayur Vihar Phase-2, in front of East Vinod Nagar, Delhi. When I saw our truck bearing no.RJ-Ol-GA- 7286 driven by its driver at a high speed driven most rashly and negligently and the driver side of the truck hit the Motorcyclist and thereafter dragged the Motorcycle upto 20 feet as result of which the Motorcyclist died due the injuries received in the accident. The said accident was caused due to the negligent driving on the part of driver of truck no. RJ- Ol-GA-7286....”

12. During cross examination the witness deposed as under:- “….I was accompanied with twenty five goats in the truck. Ido not have any documentary proof to show that I was being carrying goats in truck. Police has not recorded my statement. It is incorrect to suggest that Iwas not present at the spot of alleged accident or that I am deposing falsely. I am not a summoned witness. I was informed by Shok at Ali again said Sh. Sahid Khan…..”

13. A perusal of the aforesaid statements clearly depicts that he was travelling in the offending vehicle at the time of the incident. During cross-examination, he deposed corroborating his statement made during the examination-in-chief. There is no reason to disbelieve the testimony of PW-3 especially when his statements are in conformity with the contents of the FIR no. 69/2011 registered under Section 279/304A IPC as well as the testimony of PW-1 Smt. Rani (wife of the deceased). Accordingly, the doubt casted on the testimony of the PW-3 by the Insurance Company is also rejected.

14. Another limb of the argument raised by the learned counsel for the Insurance Company was that the learned Claims Tribunal erred in ascertaining the income of the deceased and ignored the fact that the deceased was employed on probation basis. In this context, the claimants produced PW-2, Mr. Arun Kalra, Assistant Manager, Human Resources, City Max Hospitality (India) Ltd. to prove the employment of the deceased. PW-2 deposed that:- “…..I have not worked with deceased. The deceased has joined the company on 20/09/2010. I cannot tell how many leaves the deceased has availed during his tenure with the company. At the time of accident the deceased was on probation period and he was not confirmed. It is correct that it is in the discretion of the company to retain the employee after probation…...”

15. The condition laid down in the Appointment letter dated 20.09.2010, with regard to the probation period, reads as under:- “20.Sep.10 Mukesh Chandra Gurgaon Dear Mukesh We have pleasure in appointing you in our Company Sr. Executive-Maintenance, Grade A6-2 based at Gurgaon. Date of Appointment Your appointment is effect from 20.Sep.10 and you will be on probation for a period of 6 months from the date of joining.

XXX XXX XXX XXX Compensation & Benefits Program You shall be paid an annual basic salary of Rs. 77520/- (Rupees Seventy Seven Thousand Five Hundred Twenty Only per annum). Other perquisites and benefits applicable to your grade shall be payable as per company policy in force. Probation/Confirmation of Services You will be on probation for a period of 6 months, which may be extended or reduced at the sole discretion of the Management. During the period of probation, the services may be terminated either by the Company or by yourself by giving one month notice or payment of salary in lieu thereof. On completion of initial probation period you shall continue to be on probation, till such time it is intimated to you in writing regarding your confirmation.

XXX XXX XXX XXX. Please confirm that the above terms are acceptable to you by signing a copy of this letter. Yours truly, For Citymax Hospitality (India) Pvt. Ltd., -sd- N PHANI KRISHNA HEARD-HR & ADMIN”

16. Perusal of the aforementioned testimony of PW-2/Mr. Arun Kalra, Assistant Manager, Human Resources, City Max Hospitality (India) Ltd. and appointment letter issued by the employer of the deceased, it is emphatically clear that the deceased was serving on probation basis at the time of alleged incident. However, it is necessary to adjudicate whether employment on probation basis would prohibit this Court to take into consideration the income of the deceased employee for the purposes of calculation of the compensation. The answer to this question is in negative. The decision whether an employee should be confirmed or his probation be extended should be taken soon after the expiry of the initial probationary period. In the instant case the deceased was in employment on probation basis and died before the completion of probation period. The Motor Vehicles Act is a beneficial legislation. The object and purpose of the Act is to grant adequate compensation to the victims and their dependents. It cannot be deemed that the employment on probation basis cannot be considered for calculating the income of the deceased for the purpose of grant of compensation. The deceased was in employment at the time of the alleged incident and as such it would be abstract to rule that after completion of period of probation, the services of the deceased would be terminated. Accordingly, this Court is of the considered view that the claimants were successfully able to prove the income of the deceased and there is no infirmity in the decision rendered by the learned Claims Tribunal with regard to the income of the deceased.

17. As far as the aspect whether the parents of the deceased were dependent upon the deceased is concerned, this Court has carefully gone through the testimony of PW-1/Smt. Rani (wife of the deceased). PW-1 in her testimony has stated that the parents in-law were dependent on the deceased. She has further stated in her crossexamination that „I am residing with my in-laws at their house. It is correct that my parent in-law are residing with my dewar’. The content in the deposition cannot be treated that her parents in-law were permanently residing with her Dewar and were not dependents upon the deceased. No evidence has been produced by the Insurance Company to disprove the assertion made by PW-1 in her affidavit that her parents in-law were dependents on the deceased. As such it can safely be inferred that parents in-law of PW-1 were dependents on the deceased.

18. Since it has been observed above that the deceased was having a regular job, Income Tax ought to have been deducted while calculating the compensation under the head „Loss of Dependency‟. As per the Salary Statement, the gross pay of the deceased was Rs. 1,80,771/- per annum and in view of the tax slabs for individuals for the financial year 2010-2011, there was no levy of tax on income of the individuals, upto Rs.1,60,000/- per annum. However, the annual income beyond Rs.1,60,000/- falls under the 10% tax bracket. The income of the deceased falls under 10% tax slab and as such 10% of the amount exceeding Rs. 1,60,000/- is liable to be taken into consideration for the purpose of taxation i.e. 10% of Rs. 20,771/which comes to Rs. 2,077/-. Accordingly, Income Tax of Rs. 2,077/was to be deducted from the annual gross salary of the deceased i.e. Rs. 1,80,771/- minus Rs. 2,077/- which comes to Rs. 1,78,694/-.

19. The other arguments raised by the learned counsel for the parties are purely legal and based on the law settled by the Hon‟ble Apex Court in the case of National Insurance Co. Ltd Vs Pranay Sethi & Ors reported as (2017) 16 SCC 680 and in the case of Sarla Verma & Ors. Vs DTC & Anr. reported in (2009) 6 SCC 121.

20. In terms of dicta laid down in case of Sarla Verma (Supra) which is upheld in the judgment of Pranay Sethi (Supra) whereby it was held that for the purposes of selection of multiplier the age of the deceased has to be taken into account. Since the deceased was of the age of 35 years at the time of alleged incident, multiplier of 15 is to be taken into consideration. Further in the case of Pranay Sethi (Supra), the Hon‟ble Supreme Court has held that for the conventional heads, namely, „Loss of Estate‟, Loss of Consortium‟ and „Funeral Expenses‟ amount of compensation is fixed at Rs. 15,000/-, Rs. 40,000/- and Rs.15,000/-, respectively with an increase of 10% after a period of 3 years.

21. As far as future prospect is concerned, admittedly the deceased was 35 years of age at the time of alleged incident and accordingly in terms of Pranay Sethi (Supra), an addition of 40% of the established income of the deceased should be granted under the head „Future Prospects’. The Hon‟ble Apex Court in the case of Pranay Sethi (Supra) with regard to grant of compensation under the head „Future Prospects’ has held as under:- “….The degree-test has to have the inbuilt concept of percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.

58. The controversy does not end here. The question still remains whether there should be no addition where the age of the deceased is more than 50 years. Sarla Verma thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari. Judicial notice can be taken of the fact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to one reason or the other. To lay down as a thumb Rule that there will be no addition after 50 years will be an unacceptable concept. We are disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of selfemployed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach by the tribunals and the courts.” (emphasis supplied)

22. With regard to deduction to be made towards „Personal and Living Expenses‟, the Hon‟ble Supreme Court in Pranay Sethi (Supra) upholds the deduction ascertained in the case of Sarla Verma & Ors. Vs DTC & Anr. (Supra). As per the Judgment passed by the Hon‟ble Supreme Court in the case of Sarla Verma (Supra) deduction are to be calculated as under:-

23. It is borne out from the records that the deceased was married and as discussed above the deceased was having six dependents accordingly, in terms of the aforesaid judgments deduction towards personal and living expenses of the deceased, should be one fourth (1/4).

24. In view of the above discussion, the impugned Award dated 15.05.2013 is modified to the following extent: i. „Loss of dependency‟ is calculated as

1. Rs. 1,78,694/- + 40% (Rs. 71,478/-) = Rs.2,50,172/-

2. Rs. 2,50,172/- less 1/4 deduction (Rs. 62,543/-) =Rs. 1,87,629/-

3. Rs. 1,87,629/-X 15 = Rs. 28,14,435/ii. „Loss of Consortium‟ is computed as Rs. 44,000 X 6 = Rs. 2,64,000/- to be paid to the claimants. iii. „Loss of Estate‟ is quantified as Rs. 16,500/- to be paid to the claimants. iv. „Funeral Expenses is quantified as Rs. 16,500/- to be paid to the claimants. v. Compensation under the head „Care and Guidance‟ i.e. „Love and Affection.‟ = Nil. vi. Total compensation to be paid to claimants is; Rs. 28,14,435/-+ Rs. 2,64,000+ Rs. 16,500/- + Rs. 16,500/- = Rs. 31,11,435/-.

25. Accordingly, the compensation granted by the learned Claims Tribunal is reduced from Rs. 32,75,505/- to Rs. 31,11,435/-.

26. The Appellant/Insurance Company has already deposited the entire awarded amount with the Registrar General of this Court. Out of which, 80% of the awarded amount has already been released to the Claimants. Balance 20% is lying with the Register General of this Court in the form of FDR. Registry is directed to deduct the differential amounts with proportionate interest from the said FDR and release the same to the Appellant/Insurance Company. The balance, if any may be released to the Claimants. Statutory amount, if deposited, be released to the Appellant/Insurance Company.

27. There would no change in the rate of interest awarded by the learned Tribunal.

28. Appeals stands disposed of. No order as to costs.

GAURANG KANTH (JUDGE) OCTOBER 17, 2022