Sweta Nandi & Anr vs Rajesh Yadav & Anr

The appeal is by the claimants following the death of a 24-year old man in the accident which took place on the night of August 24/25, 2007.

The tribunal has awarded a total amount of Rs.13,05,500/- together with interest at the rate of 6% per annum from the date of the filing of the claim till the date of payment.

The claimants submit that the compensation awarded by the award of June 30, 2015 is abysmally low compared to what the claimants were entitled to. The claimants also suggest that there was no question of the tribunal absolving the respondent-insurance company of its liability under the contract of insurance. The third ground urged by the appellants is on account of the low interest rate of 6% per annum.

It is the second ground which is taken up first. It is evident from the impugned award that the original permit had been filed in course of the proceedings before the tribunal but the insurance company apparently obtained a writing from the relevant regional transport officer to the effect that the permit produced was not one which was issued by the said office of the RTO. However, it does not appear that either the relevant RTO or any person from his office was examined by the insurance company or even summoned to give evidence in such regard.

The claimants rely on a judgment reported at (2010) 12 SCC 488 (Kamala Mangalal Vayani v. United InsuranceC ompany Limited) for the proposition that it was for the insurer who denied its liability under the policy to establish that, in spite of the comprehensive insurance policy, it was not liable since a mandatory provision of the policy had been breached by the owner. In that case a certified copy of the record of the proceedings before the registering authority was filed in the tribunal; but the document did not specifically suggest that as on the date of the accident the vehicle did not have a valid permit. In the present case, the relevant document produced from the office of the RTO indicated that the permit relied upon by the claimants had not been issued by the relevant office. However, no one from the relevant RTO was produced as witness and the tribunal could not have relied on the document said to have been issued by the RTO without the same being proved in accordance with law at the trial.

Though nothing apparently turns on the second ground urged by the appellants to demonstrate that the liability was of the insurance company, it is of some importance since the owner does not appear to have contested before the tribunal and it may be well-nigh impossible for the appellants to chase the owner and realise the money in terms of the award.

As to the first ground of the appellants that the appropriate income of the victim was not taken into consideration, it appears that the tribunal fell into error. It is evident from the impugned award itself that the annual income of the victim was sought to be proved on the basis of three sets of income-tax returns for the years 2005-06, 2006-07 and 2007-08 and the disclosed income of the victim in 2007-08 was Rs.3,48,970/- on which he paid a tax of Rs.4,972/.

The three income returns were marked as exhibits 9, 10 and 11 and even the award records the same. On a careful scrutiny of the exhibits, it appears that there are orders of assessment under Section 143(1) of the Income-tax Act, 1961. However, the tribunal has brushed aside such evidence and has, on some strange ipse dixit, arrived at a monthly income of Rs.9,000/-.

When the evidence was available as to the annual income of the victim and the certified copies of orders of assessment passed under Section 143(1) of the Act of 1961 were produced, the tribunal had only to accept such evidence and take the applicable amount as the notional income of the deceased for the purpose of assessing the compensation due to the claimants. There could not have been any ground, legal or otherwise, for the tribunal to discard such evidence which even the insurance company did not attempt to discredit or dislodge. It is elementary that when the income-tax authorities, who are charged with the duty of the protecting thei nterest of the revenue, pass an order accepting the assessment as furnished by an assessee, the same has to be taken note of by other authorities as a degree of finality attaches to the same.

Finally, as to the quantum of interest, it has now been a practice of this court to award interest at the rate of 8% per annum in every case. The low interest awarded in this case was inappropriate.

FMA 883 of 2019 and CAN 9123 of 2018 are disposed of by modifying the judgment and award impugned as follows:

i) The finding in the award that the owner was liable and the insurer stood absolved of its liability is set aside since no conclusive or cogent evidence in such regard was produced by the insurer.

i) The quantum of compensation is modified. Instead of taking the monthly income of the victim to be Rs.9,000/-, the monthly income of the victim may be ascertained with reference to the income-tax returns filed for the financial year 2007-08. The income in the relevant year was Rs.3,48,970/- and the tax paid was Rs.4,972/-. Thus, the net annual income of the victim was Rs.3,44,298/-. In view of the judgment in Pranay Sethi, the appellants will be entitled to future prospects at the rate of 40% of the net income. Such component would be

Rs.1,37,719/-. Thus, the total income of the victim would have been Rs.3,44,298/- + Rs.1,37,719, or Rs.4,82,017/-. After deducting one-third on account of personal expenses, the balance comes to Rs.3,21,344/- on which the multiplier of 18 is applied since the victim was below 25 years of age. The product comes to Rs.57,84,192/-. To this sum, general damages of Rs.70,000/- have to be added to take the entitlement of the claimant- appellants to be Rs.58,54,192/-

i) Such amount of Rs.58,54,192/-will carry interest at the rate of 8% per annum from the date of filing of the claim till the date of payment.

The insurance company should pay off the entire dues within three months from date by depositing the entire amount due in terms of this order with the tribunal for the tribunal to take appropriate steps to identify the claimants before handing over any money to them.

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.