AI Structured Summary
Not yet generated for this judgment
Judgment
R. Banumathi, J.—Being aggrieved with the award of compensation of Rs. 1,25,272/-, claimants - wife and daughters of deceased
Nachimuthu have filed this appeal seeking for enhancement of compensation for the death of Nachimuthu in a road traffic accident on 25.06.1999.
Brief facts which are necessary for disposal of this appeal are as follows:- The deceased was working as Driver in State Transport Corporation.
On 25.06.1999 at about 1.00 a.m., the Corporation bus in which he was duty Driver broke down and he was watching the repair done to the bus.
At that time, the lorry bearing Registration No. TN 28 A 8199 which came from Dharmapuri in a rash and negligent manner dashed against the bus
and caused heavy damage to it. Due to the accident, the deceased Nachimuthu sustained fatal injuries and he died on the spot.
At the time of accident, deceased was working as driver in State Transport Corporation [for short, ''STC''] and he was getting salary of Rs.
7,000/- p.m. Alleging that the accident was due to rash and negligent driving of the lorry driver, claimants have filed Petition u/s 166 M.V. Act,
claiming compensation of Rs. 5,00,000/-. Opposing the claim, the Insurance Company has filed counter stating that the deceased had stopped the
bus in front of the road and only the deceased was responsible for the accident and therefore, the Insurance Company is not liable to pay the
compensation. The Insurance Company has also disputed the age, salary of the deceased and loss of dependency of the claimants.
Before the Tribunal, first claimant examined herself as PW-1. Exs.P-1 to P-3 were marked. No evidence was adduced on the side of the
respondents. Upon analysis of oral and documentary evidence, Tribunal has held that the accident was due to the rash and negligent driving of the
lorry driver. Stating that though the gross salary was Rs. 6,841/- and that his net salary was only Rs. 2,958/-. Tribunal has taken the salary at Rs.
2,958/-. Deducting 1/3rd for personal contribution, the Tribunal had taken Rs. 2,464/- towards the contribution to the family and calculated the
annual loss of dependency at Rs. 29,568/- [Rs. 2464 x 12]. At the time of accident, the deceased was aged 55 years and hence the Tribunal has
adopted multiplier 4 and calculated total loss of dependency at Rs. 1,18,272/-. Adding conventional damages, Tribunal has awarded
compensation of Rs. 1,25,275/-.
Challenging the quantum of compensation, the learned Counsel for the Appellant claimants submitted that the Tribunal erred in taking the take
home salary of the deceased was only Rs. 2,958/-. It was submitted that the deceased was getting salary of Rs. 6,841/- at the time of death and
that he was entitled to various other benefits such as Bonus, LTA and other allowances, which have not been taken note of by the Tribunal. The
learned Counsel for the claimants further submitted that in any event, the Tribunal ought to have taken the gross salary as monthly income of the
deceased and seeks for enhancement of compensation on that score.
The learned Counsel for the second respondent Insurance Company has submitted that the Tribunal has rightly taken the ''Take Home Salary''
as the monthly income of the deceased. It was further submitted that the claimants would have received all death benefits from the Corporation and
the compensation amount awarded is just and reasonable and the same need not be enhanced.
In her evidence, PW-1 has stated that her husband was working as driver in STC and that he was getting salary of Rs. 6,841/- p.m. Monthly
deductions were Rs. 3,882.55 and his net salary was Rs. 2,958.45. The Tribunal appears to have taken the net salary as the monthly income
instead of gross salary.
The short point falling for consideration is whether the Tribunal was right in taking the monthly net salary as the monthly income of the deceased.
The connotation of the term ""Income"" for the determination of ""Just Compensation"" envisaged u/s 168 of the M.V. Act is yet another point falling
for consideration.
The Tribunal had taken net salary after giving credit to all deductions. Section 168 of the Act uses the word ""Just Compensation"", which in my
considered view should be assigned a meaningful interpretation. Salary means ""Gross Salary"", i.e. the total monthly emoluments, including any sum
i.e. paid for contribution for Provident Fund, Family Welfare Fund and other contributions. Though these are recovered from the salary, they are
only deferred payments, which would be paid to the employee as per the extant rules. It is fairly well settled that income of victim is pay packet
including all other benefits, contributions towards P.F., Gratuity, Insurance of medical policy for Self and family which are beneficial to members of
the family. The question came for consideration before Justice. S. Manikumar in the Manager, National Insurance Company Ltd. v. Padmavathy
and Ors. C.M.A. No. 1114/2006 decided on 29.1.2007, wherein it was held : ""Income tax, Professional tax which are deducted from the salaried
person goes to the coffers of the government under specific head and there is no return. Whereas, the General Provident Fund, Special Provident
Fund, L.I.C., Contribution are amounts paid specific heads and the contribution is always repayable to an employee at the time of voluntary
retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. The
Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the
deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if
the Legal Representatives are entitled to lumpsum payment under the contractual liability. If the contributions made by the employee which are
otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependancy
compensation, then the Legal Representatives of the victim would lose considerable portion of the income. In view of the settled proposition of
law, I am of the view, the Tribunal can make only statutory deductions such as Income tax and professional tax and any other contribution, which
is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependancy
compensation. Any contribution made by the employee during his life time, form part of the salary and they should be included in the monthly
income, while computing the dependency compensation"".
Similar view was expressed by a learned Single Judge of Andhra Pradesh High Court in 2002 ACC 582 [S. Narayanamma and Ors. v.
Secretary to Government of India, Ministry of Telecommunications and Ors.], holding : ""In this background, now we will examine the present
deductions made by the Tribunal from the salary of the deceased in fixing the monthly contribution of the deceased to his family. The Tribunal has
not even taken proper care while deducting the amounts from the salary of the deceased. My view is that the deductions made by the Tribunal
from the salary such as recovery of housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the
deceased cannot be deducting while computing the net monthly earnings of the deceased. These advances or loans are part of his salary. So far as
House Rent Allowance is concerned, it is beneficial to the entire family of the deceased during his tenure, but for his untimely death the claimants
are deprived of such benefit which they would have enjoyed if the deceased is alive. On the other hand, allowances, like Travelling Allowance,
allowance for newspapers/periodicals, telephone, servant, club-fee, car maintenance etc. by virtue of his vocation need not be included in the
salary while computing the net earnings of the deceased. The finding of the Tribunal that the deceased was getting Rs. 1401/- as net income every
month is unsustainable as the deductions made towards vehicle loan and other deductions were also taken into consideration while fixing the
monthly income of the deceased. The above finding of the Tribunal is contrary to the principle of ''just compensation'' enunciated by the Supreme
Court in the Judgment in Helen''s case AIR 1998 SCW 3103. The Supreme Court in Concord of India Insurance Company v. Nirmaladevi and
Ors. 1980 ACJ 55 (SC), held that determination of quantum must be liberal and niggardly since law values life and limb in a free country ''in
generous scales''.
In N. Sivammal and Others Vs. Managing Director, Pandian Roadways Corporation and Another, , this Court took into consideration the pay
packet of the deceased.
Yet again in New India Assurance Co. Ltd. Vs. Charlie and Another, , the same view was reiterated. However, therein although the words
''net income'' has been used by the same itself would ordinarily mean gross income minus the statutory deductions. It is also to be noticed that the
said decision has been followed in The New India Assurance Company Limited Vs. Smt. Kalpana and Others, .
Referring to the above decisions and Tamil Nadu State Transport Corporation Ltd. Vs. S. Rajapriya and Others, , observing that income of
victim is not only pay packet, but perks which are beneficial to his family, the Supreme Court has held as under:
The term ''income'' has different connotations for different purposes. A Court of law, having regard to the change in societal conditions must
consider the question not only having regard to the pay packet the employee carries home at the end of the month but also other perks which are
beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on
monetary terms.
Section 168 of the Act uses the word ''just compensation'' which, in our opinion, should be assigned a broad meaning. We cannot, in
determining the issue involved in the matter, lose sight of the fact that the private sector companies in place of introducing a pension scheme takes
recourse to payment of contributory Provident Fund, Gratuity and other perks to attract the people who are efficient and hard working. Different
offers made to an officer by the employer, same may be either for the benefit of the employee himself or for the benefit of the entire family. If some
facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the purpose of
computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicants is required
to be determined.
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 contra-distinguished 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.
Applying the ratio of the above decisions, in my considered view, the Tribunal erred in taking the net salary as the income of the deceased. At
the time of accident, the deceased was working as Corporation bus driver and was earning a salary of Rs. 6,841/-. Therefore, his monthly salary is
taken as Rs. 6,750/-. He would have spent 1/3rd for personal expenses i.e. Rs. 2,250/- and would have contributed Rs. 4,500/- to the family. The
annual loss of dependency is calculated at Rs. 54,000/-.
At the time of accident, the deceased was aged 54 years. As per Second Schedule, multiplier 4 could be adopted. The total loss of
dependency is calculated at Rs. 2,16,000/-. The Tribunal has awarded only Rs. 5,000 for loss of consortium and loss of love and affection to
claimants 2 to 4. The first claimant was aged 45 years. She has lost consortium of her husband in her mid forty''s. Therefore, compensation of Rs.
20,000/- is awarded for loss of consortium. Claimants 2 to 4, though grown up daughters, they have lost the love and affection and comfort of
their father. For loss of love and affection, an amount of Rs. 30,000/- is awarded. For funeral expenses, Tribunal has awarded Rs. 2,000/- and the
same is enhanced to Rs. 5,000/-.
Compensation amount of Rs. 1,25,272/- awarded by the Tribunal is enhanced to Rs. 2,71,000/- as under:
Compensation awarded for Amount in Rupees
Loss of Dependency 2,16,000
(Rs. 4,500 x 12 x 4)
Loss of Consortium 20,000
Loss of love and affection 30,000
Funeral expenses 5,000
-----------
2,71,000
-----------
The amount of Rs. 2,71,000/- is to be apportioned amongst the claimants as follows:- First claimant would be entitled to Rs. 2,11,000/-.
Claimants 2 to 4 would be entitled to Rs. 20,000/-.
In the result,
The compensation amount of Rs. 1,25,272/- is enhanced to Rs. 2,71,000/- and this C.M.A. is partly allowed;
Enhanced compensation of Rs. 1,45,728/- is payable with interest @ 7.5.% from the date of Petition till the date of deposit;
The compensation amount of Rs. 1,25,272/- awarded by the Tribunal is payable with interest @ 9% from the date of Petition;
The enhanced amount along with accrued interest shall be deposited within a period of three months from the date of receipt of copy of this order;
On such deposit, the claimants are entitled to withdraw the entire compensation amount payable to them.
The amount of compensation shall be apportioned amongst the claimants as stated in paragraph 17.
There is no order as to costs in this appeal.