Smt. Ummed Devi And Ors vs Gopal And Ors

This appeal for enhancement of compensation is directed against the judgment and award dated 06.08.2012 passed by the Motor Accident Claims Tribunal, Kotputli (for short 'the tribunal') in claim petition No.287/2009, whereby, the tribunal awarded a sum of Rs.21,52,536/- as compensation along with interest @ 7.5% per annum from the date of filing of the claim petition till realisation.

It is submitted by the learned counsel for the appellants that the tribunal has grossly erred in deducting 30% from the income of the deceased towards income tax. The income tax should have been deducted as per the prevalent rate for the same at the relevant time.

On the other hand, learned counsel for the respondent No.4-insurance company has opposed the appeal.

I have considered the rival submissions made by the learned counsel for the parties and perused the material available on record.

The claim-petition was filed by the claimants under Section 166/140 of the Motor Vehicles Act, 1988 (for short "The Act of 1988") seeking compensation on account of death of Hansraj in a motor vehicle accident which occurred on 24.05.2009. The tribunal assessed the monthly income of the deceased as Rs.14,137/-. Admittedly, the deceased was aged between 31 to 35 years at the time of accident and had a permanent job. Therefore, in view of the judgment of Hon'ble Apex Court in National Insurance Company Limited Vs. Pranay Sethi & Ors., reported in AIR 2017 SC 5157, an addition of 50% is to be added towards future prospects of the deceased, which comes to Rs.7,069/-. Thus, the income of the deceased comes to Rs.21,205/- (14,137+7,068) i.e. Rs.2,54,460/- per annum. Keeping in view the number of dependents, one fourth of the said income is to be deducted towards personal expenses of the deceased. Keeping in view the age of the deceased, multiplier of 16 is liable to be applied to work out the dependency of the claimants. The tribunal deducted Rs.6,361/- @ 30% towards income tax. However, at the relevant time, rate of income tax to be charged for different income slabs for the financial year 2009-10 was as under:-

Income

Tax Rate

Upto 160,000

Nil

160,000 to 300,000

10% of the amount exceeding 160,000

300,000 to 500,000

Rs.14,000 + 20% of the amount exceeding 300,000

500,000 & above

Rs.54,000 + 30% of the amount exceeding 500,000

As the yearly income of the deceased is assessed as Rs.2,54,460/-, the amount of Rs.1,60,000/- was not taxable according to the table mentioned above. Hence, the taxable amount comes to Rs.94,460/-(254460-160000). As per the table above, 10% of the said income is liable to be deducted towards income tax. Thus, the income of the deceased comes to Rs.2,45,114/- (2,54,560-9,446). In this way, the amount of compensation comes to Rs.29,41,368/- (245114x3/4x16). The claimants would be further entitled to receive a sum of Rs.70,000/- towards conventional heads. Thus, the total amount of compensation receivable by the claimants comes to Rs.30,11,368/-(2941368+70,000).

The appeal filed by the claimants is partly allowed. Impugned award dated 06.08.2012 is modified to the extent that the compensation amount receivable by the claimants is Rs.30,11,368/- instead of Rs.21,52,536/- as awarded by the Tribunal. Remaining terms and conditions of the award shall be the same. The Insurance Company shall deposit the enhanced amount along with the interest @ 7.5% per annum from the date of filing of the claim petition till date of payment with the Tribunal within a period of three months from today. It is ordered that the share of the enhanced amount of the compensation shall be invested in fixed deposit with a nationalised bank initially for a period of 2 years and the interest accrued thereon shall be paid to the claimants on monthly basis.