Puspalata Sahu, Jajpur And Others vs Jagdish Prasad Mohanty And ... on 3 May, 2012

Orissa High Court

ORISSA HIGH COURT: CUTTACK.

From a common Award dated 10.12.2007 passed by the 2nd Motor Accident Claims Tribunal, Cuttack in Misc. Case Nos.231 and 232 of 2002. ---------

M.A.C.A. NO.169 OF 2008

Puspalata Sahu,Village: Sarangapur,PO:Baimsaria,PS : Binjharpur, Dist : Jajpur and others.

M.A.C.A. NO.171 OF 2008

Tapaswini Bindhani,Village: Kalindrabad, PO:Adhanga Purushottampur, Dist : Jajpur, At present Qr.No.5, Tyupe-II, CPWD Colony, Unit-4, Bhubaneswar, Dist: Khurda and others.

... Appellants

-Versus-

Jagdish Prasad Mohanty ... Respondents & another (In both the appeals) For Appellants : M/s. A.K.Choudhury, S.R.Das, K.K.Das, & Bhagirathi Dash

(In both the appeals)

For Respondents : M/s.G.P.Dutta, A.Ghose & S.K.Mohanty (For R-2)

(In both the appeals)

---------

M.A.C.A. NO.350 OF 2008 & M.A.C.A. NO.349 OF 2008 (Cross Appeals of MACA Nos.169 and 171 of 2008) M/s Oriental Insurance Co. Ltd., Bhubaneswar ... Appellant -versus-

Puspalata Sahu and others

(M.A.C.A. NO.350 OF 2008)

Tapaswini Bindhani and others

(M.A.C.A. NO.349 OF 2008)

... Respondents

For Appellants : M/s.G.P.Dutta, A.Ghose & S.K.Mohanty

For Respondents : M/s. A.K.Choudhury, S.R.Das, K.K.Das, & Bhagirathi Dash

----------

P R E S E N T:

THE HONOURABLE MR. JUSTICE B.N.MAHAPATRA

Date of disposal: 03.05.2012

--------------------------------------------------------------------------------------------- B.N.MAHAPATRA, J. The above appeals arise out of a common judgment dated 10th December, 2007 passed by the 2nd MACT, Cuttack in Misc. Case Nos.231 and 232 of 2002. Since the issues involved in these appeals are common, they were taken up together for hearing and are disposed of by this common judgment.

2. MACA Nos.169 and 171 of 2008 were filed by the claimant- appellants Puspalata Sahoo and others, and Tapaswini Bindhini and another respectively for enhancement of the amount of compensation awarded by the learned Tribunal whereas MACA Nos.350 and 349 of 2008 have been filed by the Oriental Insurance Company to reduce the amount of compensation on the ground that the same is high and excessive.

3. Claimant-Appellants' case in a nutshell is that on 06.02.2002 at about 7.45 AM while both the deceased persons (Ramachandra Sahoo and Ajaya Charan Bindhani) were going in a Scooter from Bhubaneswar to Cuttack keeping themselves to the left side of the road, near Flora Petrol Pump, the offending Bus bearing registration No.OSP 4939 coming from 3

Bhubaneswar being driven in rash and negligent manner at a high speed dashed against the said Scooter from its behind. As a result, both the deceased persons fell down and sustained grievous injuries. Deceased Ajay Charan Bindhani, who was riding the Scooter died at the spot and the deceased Ramachandra Sahoo, who was pillion rider, died in S.C.B. Medical College and Hospital, Cuttack.

4. Further case of the appellants in MACA No.169 of 2008 is that deceased Rama Chandra Sahoo was 41 years at the time of death. He was working as a Khalasi under the Executive Engineer, C.P.W.D. Electrical Division, Bhubaneswar and was getting monthly gross salary of Rs.5,106/- at the time of accident. He died leaving behind his widow, daughters and parents. Case of the petitioners in MACA No.171 of 2008 is that deceased Ajay Charan Bindhani was a young man of 37 years and his monthly income was Rs.5,981/- as the Serviceman-cum-Air Conditioner Mechanic under the Executive Engineer, CPWD Electrical Division, Bhubaneswar. A criminal case vide Balianta PS Case No.14 of 2002 was registered for the alleged accident. Accordingly, charge sheet was submitted against the driver. The further case of the petitioners is that the bus was duly insured with Oriental Insurance Company Limited and driver of the offending bus had a valid driving licence on the relevant date of accident. The petitioners- appellants in MACA No.169 of 2008 filed the claim petition claiming compensation of Rs.9.0 lakhs and the petitioners in MACA No.171 of 2008 4

filed the claim petition for compensation to the tune of Rs.12.0 lakhs from the opposite parties making them jointly and severally liable for the same.

5. Opposite Party No.1, the owner of the offending bus was set ex parte before the Tribunal. Opposite Party, M/s Oriental Insurance Company Limited contested the case by filing written statement disputing the averments made in the claim petitions. It has also denied its liability to pay any compensation to the petitioners as claimed by them. The opposite party-Insurance Company was allowed to take defence available to it as envisaged under Section 170 of the M.V. Act.

6. On the pleadings of the parties, the following issues have been settled for determination.

(i) Is the claim maintainable?

(ii) Whether the death of the deceased persons was caused due to the rash and negligent driving of the vehicle bearing registration No.OSP 4939 (Bus) by its driver? (iii) If the petitioners are entitled to get any compensation and if so, to what extent and from whom?

(iv) To what reliefs, if any, are the petitioners entitled?

7. After taking into consideration the oral and documentary evidence adduced/produced, the learned Tribunal came to the conclusion that the alleged accident resulting in injuries and death of the deceased persons took place due to rash and negligent driving of the offending bus 5

by its driver. In the case of MACA No.169 of 2008, the Tribunal awarded compensation of Rs.3,92,000/- which includes Rs.5,000/- towards loss of consortium. In MACA No.171 of 2008, learned Tribunal awarded compensation of Rs.4,62,720/- which includes Rs.5,000/- towards loss of consortium. Apart from the above compensation, the learned Tribunal also awarded a cost of Rs.200/- in each of both the claim petitions. The Tribunal directed opposite party No.2-Insurance Company to pay the awarded amount along with 6% interest per annum from the date of filing of the claim petition, i.e., 16.04.2002 till the date of realization. The Tribunal further directed to keep a portion of the awarded amount in shape of fixed deposit in the names of the claimants.

8. Mr.A.K.Choudhury, learned counsel appearing on behalf of the appellants submitted that the amount of compensation awarded by the Tribunal is extremely low. It was vehemently argued that the learned Tribunal is wrong in taking the average of gross and net salary of the deceased persons for the purpose of determination of the compensation. It is further submitted that the learned Tribunal is not justified to deduct the payments made towards G.P.F., LIC premium and repayment of loan to determine the net income. Considering the number of dependants, deduction of 1/3rd of the income towards personal expenses is not correct and 1/5th of the gross salary should have been deducted towards personal expenses. The order of the Tribunal is vitiated for non-consideration of the future income of the deceased.

9. Mr.G.P.Dutta, learned counsel appearing for the Oriental Insurance Company vehemently argued that finding of the Tribunal that the vehicle was driven in rash and negligent manner is without any basis. The learned Tribunal should have computed the amount of compensation on the basis of net income of Rs.1,334/- per month in MACA No.169 of 2008 and net income of Rs.1,249/- per month in MACA No.171 of 2008. Learned Tribunal has committed error in taking average of net and gross salary for the purpose of computation of compensation.

10. On the rival contentions urged by the parties, the following questions arise for consideration by this Court. (i) Whether due to rash and negligent driving of the driver of the offending vehicle the accident took place in which Rama Chandra Sahoo and Ajay Charan Bindhani died? (ii) Whether the Tribunal is justified to take average of gross and net income for the purpose of determining the amount of compensation?

(iii) Whether the learned Tribunal is justified to deduct the payment towards GPF, LIC premium and repayment of loan to assess monthly net income of the deceased persons for the purpose of computation of compensation? (iv) Whether deduction towards personal expenses @ 1/3rd of the gross income is just and proper in the facts and circumstances of the case?

(v) Whether non-consideration of the future prospects of the deceased persons by the learned Tribunal for the purpose of determining compensation is just and proper?

11. So far the first question is concerned, the learned Tribunal vide its order in the impugned judgment has elaborately dealt with it with reference to issue No.2 therein and came to the conclusion that the accident took place resulting in death of the deceased persons due to rash and negligent driving of the driver of the offending bus. Mr.Dutta learned counsel appearing for the Insurance Company has not adduced/produced any evidence oral or documentary to show that the finding of the learned Tribunal to this effect is wrong and based on no material. Therefore, this Court is not inclined to interfere with the finding of learned Tribunal with regard to question No.1.

12. Question Nos. 2 and 3 being common, those are dealt with together. No valid and cogent reason has been given by the learned Tribunal for taking average of gross and net salary for the purpose of computation of just compensation. Law is no more res integra that for the purpose of computation of just compensation, no deduction towards GPF, LIC premium and repayment of loan shall be made from the gross salary. Hon'ble Supreme Court in Shyamwati Sharma and others vs. Karan Singh and others, reported in 2010 (5) Supreme 215 held as under:-

"We however make it clear that while

ascertaining the income of the deceased any deduction shown in the salary certificate as deduction towards GPF, life Insurance Premium repayment of loan etc., should not be excluded from the income. The

deduction towards income tax / surcharge alone should be considered to arrive at the net income of the deceased."

Similarly, , the Hon'ble Supreme Court in the case of National Insurance Co. Ltd. Vrs. Indira Srivastava and others, reported in 2008(1) TAC 424 (SC) held as under:

"However, therein although the words "net-

income" has been used but the same itself would ordinarily mean gross income minus the statutory deduction."

Following the aforesaid principle laid down, this Court in the case of Sabitri Panigrahi vs. Sri Bharat Kumar Swain and another, reported in 2011 (1) OJR 838 held as under:- "....This Court is of the view that while

determining the monthly income of the deceased, payment towards GPF, Life Insurance Premium

repayment of loan should not be deducted from the gross income. Only statutory deduction towards tax should be deducted from the gross salary." Therefore, the learned Tribunal is not justified to work out net salary deducting payments made towards GPF, LIC premium and repayment of house building loan. Learned Tribunal is wholly unjustified to take average of gross and net salary for the purpose of computing just compensation. 9

13. So far question No.(iv) with regard to deduction towards personal expenses is concerned, the learned Tribunal deducted 1/3rd towards personal expenses. Deduction towards personal expenses depends upon the size of the dependant family members. If the size of dependant family members is less, the personal expenses of a person will be more and vice versa. The Hon'ble Supreme Court in Sarala Verma and others Vs. Delhi Transport Corporation and another, reported in 2009(2) TAC 677 (SC) held as under:-

"...We are of the view that where the deceased was married the deduction towards personal and living expenses of the deceased should be one third (1/3rd), where the number of dependant family members is 2 to 3, one fourth (1/4th), where the number of the dependent family members is 4 to 6, and 1/5th, where the number of dependant family members exceeds six."

In MACA No.169 of 2008, the dependant family members are 7 in number. Therefore, the appropriate deduction towards personal expenses of the deceased would be 1/5th of the income. Since in MACA No.171 of 2008, the number of dependant family members is two, the Tribunal was perfectly justified in deducting 1/3rd of salary towards personal expenses of the deceased.

14. Question No.(v) is with regard to non-consideration of future prospects/income of advancement in life. The Hon'ble Supreme Court in the case of Sarala Verma's case (supra) placing reliance in its earlier 10

decisions in Susama Thomas's case, AIR 1994 SC 1631 and Abati Bezbaruah's case, 2003 (3) SCC 148 held as follows:- "In view of imponderables and uncertainties, we are in favour of adopting as a rule of Thumb, an addition of 50% of the actual salary to the income of the deceased towards future prospects where the deceased had a permanent job and was below 40 years. Where the annual income is in the Taxable range the words "actual salary" should be read as "actual salary less tax". The addition should be only 30% if the age of the deceased was 40 to 50 years." In K.R. Madhusudan and others Vs. Administrative Officer and another, reported in 2011 (1) TAC 874 (SC), the Hon'ble Supreme Court held as under:-

"10. The present case stands on different factual basis where there is clear and incontrovertible evidence on record that the deceased was entitled and in fact bound to get a rise in income in the future, a fact which was corroborated by evidence on record. Thus, we are of the view that the present case comes within the 'exceptional circumstances' and not within the purview of rule of thumb laid down by the Sarala Verma (supra) judgment. Hence, even though the deceased was about 50 years of age, he shall be entitled to increase in income due to future prospects." xx xx xx

14. In view of this evidence the Tribunal

should have considered the prospect of future income while computing compensation but the Tribunal has not done that. In the appeal, which was filed by the appellants before the High Court, the High Court instead of maintaining the amount of compensation, granted by the Tribunal, reduced the same. In doing so, the High Court had not given any reason. The High Court introduced the concept of split multiplier and departed from the multiplier used by the Tribunal without disclosing any reason therefor. The high Court 11

has also not considered the clear and corroborative evidence about the prospect of future increment of the deceased. When the age of the deceased is between 51 and 55 years the multiplier is 11, which is specified in the II Column in the II Schedule in the Motor Vehicles Act, and the Tribunal has not committed any error by accepting the said multiplier. This Court also fails to appreciate why the High Court chose to apply the multiplier of 6."

In Shakti Devi Vs. New India Insurance Co. Ltd. and another, 2011(1) TAC 4 (SC), the Hon'ble Supreme Court held as under:- "12. So far as the present case is concerned, at the time of accident, the deceased was 22 years old and not married. He was running a general store from his house and earning about Rs.1,000/- per month from the business. In Sarala Verma (supra), this Court stated that where the deceased was self-employed, the Court shall usually take only the actual income at the time of death; a departure from there should be made only in rare and exceptional cases involving special circumstances. Does the present case involve special circumstances? In our view, it does. The evidence has come that the deceased was to get employment in the forest department after the retirement of his father. Obviously the evidence is based on the Government policy. The deceased, thus, had a reasonable expectation of the Government employment in near future. In the circumstances, the actual income at the time of deceased's death needs to be revised and taking into consideration the special circumstances of the case, in our view, the monthly income of the deceased deserves to be fixed at Rs.2,000/-."

15. In MACA No.169 of 2008, the deceased Rama Chandra Sahoo undisputedly was born on 17.05.1961 and accordingly, he was 41 years at the time of death when he was getting monthly salary of Rs.5,106/- as deposed by PW-3, the Assistant Engineer, CPWD, Electrical Division, in his deposition that the deceased would have retired in the post of Senior 12

Wireman after getting promotion and more financial benefit of Rs.4,000/- to Rs.5,000/- at the time of normal retirement. Since the deceased had a stable job, 30% of the salary should be added to the gross salary towards future prospects for the purpose of determining the amount of compensation.

16. In MACA No.171 of 2008, the learned Tribunal held that the age of Ajay Charan Bindhani at the time of death was 37 years. It is further observed in the impugned judgment of the Tribunal that PW-3, Asst. Engineer, CPWD, Electrical Division, Bhubaneswar has proved his salary certificate and has stated that the deceased was working as a Serviceman in the Department and was drawing a gross salary of Rs.5,981/- per month at the time of accident. He has further stated that a period of 23 years 3 months and 25 days was left for the said employee till his retirement. He further testified that had the deceased Ajay Charan Bindhani been alive and continued in service he would have got all promotions with higher scale of pay and he would have retired in the post of Senior Mechanic and also he would have got more financial benefit by getting higher scale of pay. Learned Tribunal held that the deceased Ajay Charan Bindhani had more or less a stable job which will not be inappropriate to take reasonable liberal view of the prospects of the future. In view of the above, 50% of the salary should be added to the gross salary towards future prospects for the purpose of determining the amount of compensation.

17. In MACA No.169 of 2008, deceased Rama Chandra Sahoo was getting gross salary of Rs.5,106/-. Rs.5,076/- (Rs.5,106-Rs.30/- towards professional tax) is taken for the purpose of computing compensation. This amount is to be increased by 30%, i.e., Rs.1522/- towards future income/prospects which comes to Rs.6,598/-. One fifth of the same which comes to Rs.1,319/- if deducted towards personal expenses, the resultant figure comes to Rs.5,279/-. The age of the deceased being 41 years at the time of death, the multiplier of 15 is applicable.

18. In view of the above, in MACA No.169 of 2008, the Insurance Company is directed to pay compensation amount of Rs.9,55,220/- (Rs.5,279/- x 12 x 15 + Rs.5,000/- towards consortium) along with interest at the rate of 6% per annum from the date of filing of the claim petition till the date of deposit before the Tribunal besides cost of Rs200/- within eight weeks from today.

19. In MACA No.171 of 2008, deceased Ajaya Charan Bindhani was getting Rs.5,981/- per month at the time of accident. Rs.60/-, i.e., Rs.30/- towards professional tax and Rs.30/- towards CGEIS when deducted from the gross salary the resultant figure comes to Rs.5921/- (Rs.5,981/- -- Rs.60/-). This amount is to be increased by 50% of the gross salary, i.e., Rs.2,960/- towards future income/prospects which comes to Rs.8,881/-. One third of the same which comes to Rs.2,960/- when deducted towards personal expenses, the resultant figure comes to 14

Rs.5,921/-. The age of the deceased being 37 years at the time of death, multiplier of 16 is applicable.

20. In view of the above, in MACA No.171 of 2008, the Insurance Company is directed to pay compensation amount of Rs.11,41,832/- (Rs.5,921/- x 12 x 16 + Rs.5,000/- towards loss of consortium) along with interest @ 6% per annum from the date of filing of the claim petition till the date of deposit before the Tribunal besides cost of Rs.200/- within eight weeks from today.

21. On deposit of the said amount of compensation before the Tribunal, the learned Tribunal shall disburse the same to the claimants in the manner it has directed in its order.

22. In the result, MACA No.169 of 2008 is allowed and MACA No.171 of 2008 is allowed in part. Accordingly, MACA No.349 of 2008 and MACA No. 350 of 2008 filed by the Insurance Company are dismissed. ..................................

B.N.Mahapatra,J.

Orissa High Court, Cuttack

The 3rd May, 2012/ss/skj/ssd