AI Structured Summary
Not yet generated for this judgment
Judgment
G.M. Akbar Ali, J.—The Review petition is filed under Order 47 of Rules 1 and 2 r/w 114 of C.P.C., by the claimants to review the order
made in C.M.A. No. 1976 of 2003 dated 26.08.2010 passed by this Court. The claimants have filed a claim petition before the Tribunal, claiming
compensation for the death of one Palanisamy, aged about 36 years at the time of accident. He was the proprietor of a Hosiery Unit at Thirupur.
According to the claimants, he was earning a sum of Rs. 3,00,000/- per annum. The claimants are wife, two minor children and parents of the
deceased. A total sum of Rs. 60,00,0000/- was claimed as compensation against the driver, owner and the Insurance Company of the lorry
bearing registration No. TDQ-2854.
The third respondent/Insurance Company alone resisted the claim in all aspects and suffice to state that after enquiry, the Tribunal found that the
negligence is on the part of the driver of the lorry and therefore, vicarious liability was fixed on the owner of the vehicle and the statutory liability
was fastened on the third respondent/Insurance Company.
As far as the compensation is concerned, elaborate oral and documentary evidences were let in to prove the income of the deceased. The
Tribunal analyzed various documentary evidences for income and had applied the unit theory. But, however, fixed the annual income at Rs.
4,14,278/-. After deducting 50% for personnel expenses, the loss of earning was fixed at Rs. 3,64,278/- and multiplier ""16"" was applied and
arrived at a sum of Rs. 58,28,448/- as loss of income of the deceased. It has also granted compensation to the other conventional heads and total
sum of Rs. 58,69,500/- with 9% interest per annum was granted as compensation.
The third respondent/Insurance Company preferred an appeal before this Court in C.M.A.(MD) No. 1976 of 2003. On hearing the appellants,
this Court framed two points for consideration:
Whether the compensation awarded by the Tribunal is just and reasonable?
Whether a deduction of 30% from the annual income is to be made towards income tax?
When the appeal was taken up the learned counsel for the Insurance Company, at the outset, pointed out that the Tribunal had awarded a
staggering sum of Rs. 58,68,500/- as against a claim of Rs. 60,00,000/- and that too for the deceased person who has not been an assessee. The
learned counsel pointed out that the Tribunal had relied on Exs. A.5 to A.9 which are the audit report under Sec. 44(a)(b) of Income Tax Act,
1961, and has relied on the balance sheet of the business concern namely, M/s. Speer Tax, Thirupur. The learned counsel pointed out that all these
exhibits would show the annual turnover and the net profit of the company and the Tribunal had taken into consideration the highest profit for the
year 31.03.1997 and has fixed the same as the income of the deceased which is totally wrong. The learned counsel further pointed out that even
according to the pleadings the claimants have stated that the income of the deceased was between Rs. 2,00,000/- and Rs. 3,00,000/- and after
deducting one third, the income would be between Rs. 1,50,000/- and Rs. 2,00,000/- and applying the multiplier 16. The loss of income of the
claimants would be only Rs. 32,00,000/-.
The learned counsel submitted that the Tribunal had not even deducted one third towards personal expenses while considering the annual
income. The learned counsel further stated that after arriving of the annual income, the Tribunal ought to have deducted 30% towards income tax.
However, the claimants filed additional documents before this Court under Order 41 of Rule 21 of C.P.C. These additional documents relate to
the income tax returns for the years 1994 to 1997. To prove the income before the Tribunal, the claimants have already filed Exs. A5 to A9. Since
the accident had occurred on 17.07.1997, the income of the deceased during the period 1996-1997 was considered. According to the auditor
report and the balance sheet, the total turn over of the company earned by the deceased was Rs. 23,01,009.88 and net profit was Rs. 4,14,278/-.
This Court rejected the additional documents by observing as follows:
In our considered view, that will not be necessary as the accounts and income produced under Exs. A.5 to A.9 reflects the same statement as
in the additional documents produced before this Court. The respondents have produced the income tax returns along with the accounts. Except
that no purpose will be served by entertaining the additional evidence and therefore, the application filed under Order 41 Rule 27 of C.P.C. is
liable to be dismissed.
In the result, the annual income as per the audit report and the balance sheet, was fixed at Rs. 4,14,278/- and 30% towards income tax was
deducted as per the principles laid down in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, and an order passed by
the Hon''ble Supreme Court in C.A. No. 3483 of 2008 arising out of SLP(C) No. 8648 of 2007 and calculated the compensation and reduced
the award to Rs. 32,98,264/-.
Now, the claimants have filed the present review application on the ground that, on filing additional evidence under Order 41 of Rule 27 of
C.P.C., this Court ought to have followed the provisions under Rule 28 of C.P.C., following the principles laid down in Meenaben Pankajkumar
Joshi and Others Vs. New India Assurance Co. Ltd., wherein, the Apex Court has remitted the matter back to Tribunal for considering the
additional documents. It is also submitted that additional documents reflect payment of income tax by the deceased and because of the non-
consideration of the same, this Court has applied the principle of deduction of 30% income tax, which is error apparent on the face of the record.
We have heard Mr. R.S. Anandan, learned counsel for the for Mr. D. Balachandran, learned counsel for the petitioners and Mr. N. Vijaya
Raghavan, learned counsel for the respondents and perused the materials on record.
The learned counsel submitted that if the annual income of the deceased has be taken as Rs. 4,14,278/-, then the taxable income is only Rs.
1,26,680/- (as per the income tax returns filed before this Court). For this amount, the tax to be paid is only Rs. 23,672/-. Therefore, on deduction
of Rs. 23,672/- from Rs. 4,14,278/-, the annual income of the deceased would be Rs. 3,96,606/- and applying multiplier ""16"", the income would
be Rs. 3,90,606/- x 16 = Rs. 62,49,696/- and even after deducting one third for the personal expenses, the loss of earning would be Rs.
41,66,464/-. Therefore, the learned counsel pointed out that there is a calculation error and thereby, the review has to be allowed.
On the other hand, Mr. Vijaya Raghavan, learned counsel for the Insurance company at the out set pointed out that there cannot be a review
of the judgment passed by this Court and this Court cannot rewrite its own judgment. The learned counsel contended that reviewing the order will
amount to enhancement of the compensation and there is no error apparent on the face of the record.
Heard and perused the materials available on record. Order 47 Rules 1 and 2 of C.P.C. read as follows:
Application for review of judgment-
(1) Any person considering himself aggrieved-
(a) by a decree or order from which an appeal is allowed, but, from which no appeal has been preferred,
(b) by a decree or order from which no appeal is allowed, or
(c) by a decision on a reference from a Court of Small causes.
and who, from discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or
could not be produced by him at the time when the decree was passed or order made, or on account of some mistake or error apparent on the
face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a
review of judgment to the Court which passed the decree or made the order.
(2) A party who is not appealing from a decree or order may apply for a review of judgment notwithstanding the pending of an appeal by some
other party except where the ground of such appeal is common to the applicant and the appellant, or when, being respondent he can present to the
Appellate Court the case on which he applies for the review.
This Court has rejected C.M.P.(MD) No. 1169 of 2010 on the ground that the income tax returns only reflect the audit account and the
balance sheet. Therefore, the net profit of the deceased was taken into consideration at Rs. 4,14,278/-. According to the income tax returns, after
deducting the depreciation admissible for deduction at Rs. 2,89,721/- the taxable income was shown as Rs. 1,26,682/-. This was shown as
income of the assessee for the year ending 31.03.1997. For this amount, the tax payable is Rs. 26,672/-. If this amount is deducted from the
taxable income of Rs. 1,26,682 - Rs. 26,672 then the income of the deceased would be only 1,00,010/-. In fact, this Court has considered the
highest income before deduction of the depreciation at Rs. 4,14,278/- and arrived the income at Rs. 2,89,994/-, which is the highest.
By way of review, the review petitioner is trying to impress upon this Court that the income of the deceased was Rs. 4,14,278/- and the tax
payable on the taxable income is only Rs. 26,672/- and the balance Rs. 3,36,606/- has to be construed as annual income. For income tax
purposes, the claimants had taken advantage of admissible deduction of depreciation on the buildings and machineries and having availed such
benefits, the claimants wants to show that the income remains at Rs. 4,14,278/-. But after deducting depreciation the income of the deceased
would be Rs. 1,26,682/-, which is net taxable income. There cannot be two advantages for the claimants. Either we take Rs. 1,26,682/- as
income and no further deduction for tax or Rs. 4,14,278/- as income and deduct 30% tax. We have followed the later which is more beneficial to
the claimants.
The scope of review is very limited. As per the provisions under Order 47 Rules 1 and 2 of Civil Procedure Code, review petitioners have not
shown any discovery of new or important matter or evidence which was not within his or their knowledge and there is no error apparent on the
face of the record and there is no other sufficient reason to review.
However, taking into consideration the vital aspect that the loss of the sole bread winner, that too, in a young age, has left the bereaved family
in a difficult situation and might have pushed them into further penury, this Court has to relook into the compensation awarded in the appeal.
It is well settled that the compensation must be ""just"". There is no other limitation or restriction on the power of the Court for awarding just
compensation. In Oriental Insurance Co. Ltd. Vs. Mohd. Nasir and Another, and Ningamma and Another Vs. United India Insurance Co. Ltd., it
is held that the duty of the court is to fix a just compensation and it has now become settled law that the Court should not succumb to niceties or
technicalities in such matters.
There is no manner of doubt that the Motor Vehicles Act, 1988 is beneficial and social welfare legislation. It is well settled that in construing
social welfare legislation, the Courts should adopt a beneficial rule of construction and in any event, that construction should be preferred which
fulfills the policy of legislation. The construction to be adopted on a statue should be such so as to achieve the purposes for which it is enacted and
in favour of those in whose interest the Act has been passed. Accordingly the Courts have also acted upon it and the same is clear from the
following observations in the case laws given below:
(i) In Mrs. Helen C. Rebello and Others Vs. Maharashtra State Road Transport Corpn. and Another, the Apex Court has held as follows:
As we have observed the whole scheme of the Act, in relation of the payment of compensation to the claimant, is beneficial legislation, the intention
of the legislature is made more clear by the change of language from what was in Fatal Accidents Act, 1855 and what is brought u/s 110-B of
1939 Act. This is also visible through the provision of Section 168(1) under the Motor Vehicles Act, 1988 and Section 92-A of 1939 Act which
fixes the liability on the owner of the vehicle even on no fault. ....
(ii) An unreported judgment of Punjab and Haryana High Court in the case of National Insurance Co. Ltd. vs. Smt. Raj Bala, it is held as follows:
There is no manner of doubt that Section 140 of the Act is a beneficial and social welfare piece of legislation. It is well settled that in construing
social welfare legislation, the Courts should adopt a beneficial rule of construction and in any event, that construction should be preferred which
fulfillls the policy of legislation. The construction to be adopted on a statue should be such so as to achieve the purposes for which it is enacted and
in favor of those in whose interest the Act has been passed.
A reading of the above judgments clearly self speaks that the beneficial rule of construction shall not be restrained in applying to the deserving
cases like the one on hand.
Though the review is not allowed, having regard to the clear position outlined in the above case laws on the aspect of beneficial legislation, we
are constrained to interfere with the compensation and enhance the same to the extent stated below:
Normally 20% - 30% deduction has to be made from the total income. But in the present case, the total income of the business concerned is
shown at Rs. 4,14,278/- and there is no standard deduction given. Under these circumstances, we feel that tax has to be deducted only at 10%.
By deducting the income tax at 10% (Rs. 41,428/-) from Rs. 4,14,278/-, the amount comes to Rs. 3,72,850/- and applying multiplier 16, thereto
the sum comes to Rs. 59,65,600/- and thereafter by deducting 1/3 towards personal expenses, the loss of income would come to Rs. 39,77,067/-
. With that, by adding the following four heads viz.,
Therefore, we are enhancing the compensation from Rs. 32,98,264/- to Rs. 41,82,067/- and this review application is disposed of to that
extent. The enhanced award amount shall carry 7.5% interest from the date of filing of review petition. It is made clear that out of the enhanced
amount of Rs. 8,83,803/-, a sum of Rs. 5,00,000/-(Rupees five lakhs only) shall be payable to the wife of the deceased/1st petitioner and the
balance amount of Rs. 3,83,803/-(Rupees three lakhs eighty three thousand eight hundred three only), which is payable to the petitioners 2 and 3
in equal apportionment, shall be paid to them, on obtaining necessary orders from the Tribunal declaring them as major, as observed in the earlier
order dated 26.8.2010. It is submitted that though the earlier compensation amount fixed by this Court has already been deposited by the
Insurance Company, the claimants have not received the same. Claimants are permitted to withdraw the already deposited amount, immediately
after the receipt of copy of this order. Claimants are also permitted to withdraw the enhanced compensation along with accrued interest on such
deposit by the Insurance Company. No costs.