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Judgment
Hon’ble Mr. Alok Mahra, J.
This appeal, under Section 173 of the Motor Vehicles Act, 1988 (‘the Act’) has been preferred by the appellant/Insurance Company assailing the judgment and award dated 28.05.2012 passed by the learned M.A.C.T./Additional District Judge/FTC-1st, Dehradun in M.A.C.P. No. 339 of 2026, Smt. Sajida and Others Vs. Rakesh Kumar and Others, whereby the Tribunal partly allowed the claim petition and awarded a total compensation of Rs.89,06,596/- in favour of the claimants.
Since both the appeals arise out of the same accident and challenge different aspects of the same judgment and award, they are being decided by this common judgment.
Brief facts of the case, as per record, are that on 09.10.2026 at about 02:30 P.M., when Lukman (deceased) reached at Thana Biharigarh, District Saharanpur, which is one kilometer before Lalpul from his Tavera Car having registration no. UA-07L-5571, a truck bearing registration no. HR583520, being driven on a wrong side, hit Tavera Car of Lukman (deceased), due to which, Lukman (deceased) suffered injuries and he was taken to Indiresh Hospital, Dehradun, whereby, during his treatment, he succumbed to his injuries. Consequent to his demise, the claimants filed a petition seeking compensation of Rs.90,00,000/-.
Mr. V.K. Kohli, learned Senior Counsel for the appellant would submit that the Tribunal committed a manifest error as the Tribunal without considering the facts and evidence of the case has passed the impugned award; the primary challenge raised by the appellant/Insurance Company is directed against the methodology and quantum of compensation evaluated by the learned Tribunal. It is the case of the appellant/Insurance Company that admittedly the income of the deceased mentioned in the claim petition and also on the basis of the ITRs filed by the claimants, was Rs. 60,000/- per month, but, the MACT has taken the income of the deceased on the higher side, therefore, the impugned award is erroneous and liable to be set-aside.
Per contra, Mr. Tapan Singh, learned counsel for the claimants vehemently argued that the impugned judgment and award passed by the learned Tribunal is well-reasoned and does not call for any interference. He submitted that the learned Tribunal had correctly assessed the income of the deceased based on the evidence adduced on record, including the Income Tax Returns. It was further contended that the compensation awarded is just, fair, and reasonable, keeping in view the large family of six dependents left behind by the deceased. He, therefore, prayed for the dismissal of the appeal filed by the Insurance Company and sought enhancement of the compensation in the connected cross-appeal filed by the claimants being AO No. 426 of 2012.
Heard Mr. V.K. Kohli, learned Senior Counsel assisted by Mr. I.P. Kohli for the Insurance Company, and Mr. Tapan Singh, learned counsel for the claimants and perused the calculations filed by both sides.
The primary grievance of the appellant centers around the assessment of the deceased's annual income and the failure of the Tribunal to properly deduct income tax and personal expenses in line with settled legal precedents. To arrive at a just and fair compensation, this Court finds it imperative to reassess the financial dependencies based on the Income Tax Returns (ITRs) submitted by the Lukman (deceased) prior to his demise.
Assessment of Income: As per the record, the deceased's income for the Assessment Year 2005-2006 stood at Rs. 7,19,273/-, and for the Assessment Year 2006-2007, it was recorded at Rs. 10,95,457/-. Taking the average of these two consecutive assessment years yields a gross annual income of Rs. 9,07,365/-.
Deduction of Income Tax: The learned Tribunal erred in overlooking the mandatory tax liability on the gross assessed income. Applying the relevant slab rates applicable at the time, a total tax deduction of Rs.1,52,209/- is liable to be deducted (comprising Nil tax up to Rs.2,00,000/-, 10% on the slab up to Rs. 5,00,000/-, and 30% on the remaining balance up to Rs.9,07,365/-). Consequently, the actual net annual income of the deceased is quantified at Rs.7,55,156/-.
Deduction for Personal and Living Expenses: Since the deceased has left behind six dependent claimants (Smt. Sajida and 5 children), the statutory deduction towards personal and living expenses must be restricted to 1/4th (one-fourth) of the net income, as mandated by the landmark judgment in Sarla Verma v. Delhi Transport Corporation. Deducting 1/4th of the net income (Rs.7,55,156/-) comes to Rs.1,88,789/-, thus, the annual loss of dependency to the family is assessed at Rs.5,66,367/-.
Application of Multiplier (for total loss of dependency): Taking into account the age of the deceased, a multiplier of 14 is appropriate and legally sound as per the guidelines given in the case of Sarla Verma (supra). Thus, the total loss of dependency is calculated as Rs. 5,66,367/- × 14, which amounts to Rs. 79,29,138/-.
Conventional Heads: In addition to the loss of dependency, the claimants are entitled to consortium of Rs.40,000/- each i.e. 40,000 x 6 = 2,40,000/-, funeral expenses to the tune of Rs. 15,000/- and loss of estate to the tune of Rs. 15,000/- i.e. total conventional head (2,40,000/- + 15,000/- + 15,000/-) comes to Rs.2,70,000/-.
Thus, in view of the calculation framework detailed above, the total just compensation payable to the respondents/claimants is rounded out to Rs.81,99,138/- (Rupees Eighty-One Lakhs, Ninety-Nine Thousand, One Hundred and Thirty-Eight only).
Consequently, the appeal filed by the appellant/Insurance Company is partly allowed. The impugned judgment and award dated 28.05.2012 passed by the learned M.A.C.T./Additional District Judge/FTC-1st, Dehradun in M.A.C.P. No. 339 of 2026 is hereby modified to the extent that the total compensation awarded by the Tribunal is reduced from Rs. 89,06,596/- to Rs. 81,99,138/-.
Concurrently, the connected cross-appeal (A.O. No. 426 of 2012) filed by the claimants for the enhancement of compensation is disposed off in view of the reasons given above.
The modified compensation amount of Rs.81,99,138/- shall carry an interest rate of 6% per annum from the date of filing of the claim petition until actual realization.
The appellant/Insurance Company is directed to deposit the balance or modified amount with the Tribunal within a period of six weeks from today, after adjusting any amount already deposited. The distribution/disbursement of the awarded amount among the claimants shall follow the proportion and terms specified by the learned Tribunal in its original order.
The statutory amount, if any, deposited by the appellant at the time of filing this appeal shall be remitted back to the concerned Tribunal for adjustment/payment to the claimants. No order as to costs.