New India Assurance Company Limited vs Amit Ghosh & Ors

In view of the good grounds shown, the delay of about 39 days in preferring the appeal is condoned and the appeal is taken on record.

The appeal arises out of an award of January 31, 2019 passed on a claim under Section 166 of the Motor Vehicles Act, 1988 filed upon the respondent-victim being severely injured in an accident of June 8, 2016. The principal grievance of the appellant-insurance company is that there was no evidence before the tribunal for the tribunal to accept the victim's claim that his monthly income at the time of the accident was Rs.22,000/-. The insurance company says that it is the admitted position that the victim worked as a security guard, though the victim also claimed to have had a side business. As to such side business of the victim, the appellant asserts that a drug licence in the name of the victim was produced to claim that the victim dealt in medicines and belated income-tax returns were filed after the accident to try and establish the story of the medicine business.

In the petition lodged by the claimant, he said that he earned Rs.5,000/- per month as a security guard. The insurance company does not contest such part of the claim. The claim petition also asserted that the victim earned a further Rs.6,000/-, though the source of such income was not appropriately indicated. In course of his oral testimony before the tribunal, the victim relied on his income-tax returns for the assessment years 2015-16 and 2016-17. The victim relied on the figures as to his income evident from such returns.

The suggestion put to the victim in course of the cross-examination was pertaining to the victim's income of Rs.16,000/- from the medicine business.

The larger issue that the insurance company raises is as to whether income-tax returns filed after the date of the accident could be given any credence when previous income-tax returns of the victim were not produced to ascertain whether the later returns bore any resemblance to the earlier returns.

It is always possible that a person inflates his income and offers to pay nominal tax thereon. As such, there is sufficient basis to the insurance company's suspicion that the returns for assessment years 2015-16 and 2016-17 were filed for the purpose of creating evidence as to the victim's income, particularly since no previous income-tax return of the victim was produced before the tribunal.

At the same time, particularly since a valid drug licence in the name of the victim was produced before the tribunal, the veracity of such licence cannot be questioned nor can the victim's connection with the business of selling medicine be totally discounted. Indeed, in the balance-sheets appended to the income-tax returns, sales and purchases were shown. Though it is possible to tamper with such figures and show inflated sales and purchases, the insurance company did nothing to disprove that the victim had a business of selling medicines. In such a situation, in the state of the evidence as had panned out before the tribunal, it could not be said that the victim had no medicine business at all. But even if it is accepted that the victim had a medicine business at the time of the accident, the amount of income claimed in the claim petition has to be taken to be the more appropriate figure rather than the exaggerated position sought to be demonstrated in the income-tax returns. Since the claimant admitted in the claim petition that his income other than as a security guard was Rs.6,000/- per month, the claimant has to be satisfied if such amount is taken to have been his income from his medicine business at the time of the accident.

Accordingly, the income of the victim at the time of the accident is reduced from the figure of Rs.22,000/- as attributed by the tribunal to Rs.11,000/- and compensation is assessed accordingly. On the basis of such assessment and without disturbing the other amounts awarded by the tribunal, the gross compensation works out to Rs.22,38,600/- as per the particulars indicated hereinbelow.

Since the victim was aged about 35 years at the time of the accident, 40 per cent of his income at the relevant time has to be taken into account for assessing future prospects. After annualising the notional amount, including future prospects, and applying the appropriate multiplier of 16, the figure arrived at is Rs.29,56,800/-, which has to be weighted down because of the 75 per cent permanent disability suffered by the victim, to reach the net compensation amount to Rs.22,17,600/-. After adding Rs.16,000/- on account of medical expenses and Rs.5,000/- on account of pain and suffering as granted by the tribunal, the gross figure comes to Rs.22,38,600/-.

The victim has filed a cross-objection, primarily on the ground that nothing has been awarded on account of future medical expenses or loss of amenities or loss of opportunities or the poor quality of life that the victim has to lead following the accident. On behalf of the victim it is submitted that if a further amount of Rs.2 lakh is awarded, such sum together with the interest as is usually awarded by this Court will leave a sizeable corpus for the victim to sustain himself for the rest of his life.

By present standards, amounts of Rs.1 lakh on account of future medical expenses and a further Rs. 1 lakh on account of loss of amenities are conservative figures. Accordingly, a further principal sum of Rs.2 lakh is awarded to the victim considering that he suffered permanent disability to the extent of 75 per cent, for the final principal compensation amount to be Rs.24,38,600/-. The victim will be entitled to interest on such amount at the rate of 8 per cent per annum from the date of lodging the claim till the date of receipt of payment.

The insurance company should calculate the amount due in terms of this order, including on account of interest till October 31, 2019, and deposit the entire amount in the victim's bank account by November 15, 2019. For such purpose, Advocate for the victim will furnish the bank account details of the victim to Advocate for the insurance company within a fortnight from date.

Nothing in this order takes away any right from the insurance company to recover the amount paid or to be paid to the victim from the owner of the offending vehicle, as directed by the tribunal.

In view of this order, the pending execution proceedings remain stayed and may be revived after November 15, 2019 in the event any part of the amount due to the victim in terms of this order remains unpaid.

After the entire claim of the victim is discharged by payment by the insurance company, the insurance company will be entitled to take back the deposit made in connection with this appeal, together with any accretion thereto.

FMA 1119 of 2019 together with CAN 5737 of 2019, CAN 5738 of 2019 and COT 62 of 2019 are disposed of.

There will be no order as to costs.

Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.