Amit Kumar minor son of Bimal Kumar and Bimal Kumar son of Satya Parkash son of Lala Raghunath Sahai V. Charan Dass son of Darshan Lal and The New India Assurance Company and United India Insurance Company Limited

FAO/1370/1995

AI Insights

The case involves four appeals related to the deaths of Saroj Rani, her son, and her daughter, who were members of the same family. The appeals were filed against the compensation amounts awarded by the Tribunal, seeking enhancement based on the actual income of the deceased as reflected in their income tax returns. The court examined the method of calculating compensation for the deaths, considering factors such as the income of the deceased, personal expenses, and appropriate multipliers. The court's decision aimed to provide a fair compensation reflecting the actual financial loss suffered by the dependents due to the deaths.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 799636 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 10-12-2010
• Assessment Year: misc
• Other Referred Cases: Rani Gupta Vs. United India Insurance Company Limited
• Laws Referred To: Rani Gupta Vs. United India Insurance Company Limited 2009(13) SCC 498
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: R C GUPTA; INDERJIT SHARMA; PRADEEP BEDI
• Assessee Lawyers: C B GOEL
• Keywords: Compensation Enhancement; Income Tax Return; Multiplier method; Notional income; Death of family members

Judgement Text

"FAO No.1367 of 1995 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.1367 of 1995 Date of Decision.10.12.2010 Amit Kumar minor son of Bimal Kumar, through his father as natural guardian and next friend resident of Jakholi Adda, Jind Road, Kaithal ......Appellant Versus Charan Dass son of Darshan Lal, Caste Khatri co-owner of Truck No.HR-01-A-7817 and others ......Respondents 2. FAO No.1368 of 1995 Bimal Kumar son of Satya Parkash son of Lala Raghunath Sahai, Resident of Jakholi Add, Jind Road, Kaithal ......Appellant Versus The New India Assurance Company Kaithal, the insurer of Maruti Car No.DNB-1617 and others ......Respondents 3. FAO No.1369 of 1995 Bimal Kumar son of Satya Parkash son of Lala Raghunath Sahai, Resident of Jakholi Add, Jind Road, Kaithal ......Appellant Versus Chaman Lal son of Darshan Lal other co-owner of truck No.HR-01-A- 7817 and others ......Respondents 4. FAO No.1370 of 1995 Bimal Kumar son of Satya Parkash son of Lala Raghunath Sahai, Resident of Jakholi Add, Jind Road, Kaithal ......Appellant Versus Charan Dass son of Darshan Lal, Caste Khatri, Co-owner driver of truck No.HR-01-A-7817 and others ......Respondents Present: Mr. C.B. Goel, Advocate for the appellants. FAO No.1367 of 1995 -2- None for respondent Nos.1 and 2. Mr. R.C. Gupta, Advocate for United India Insurance Company Limited. Mr. Inderjit Sharma, Advocate for Mr. Pradeep Bedi, Advocate for the New India Assurance Company Limited. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? -.- K. KANNAN J.(ORAL) 1. All the four cases relate to death of three persons, who were members of the same family namely mother, son and daughter. All these appeals are for enhancement of compensation over what was assessed in the respective cases by the Tribunal. 2. FAO No.1367 & 1368 of 1995 address the claim for compensation for death of Saroj Rani where the claimant was the husband. The deceased was a proprietor of Mohria Trading and she had been assessed to tax for the year 1991-92. The income tax return showed that she had an income of Rs.56,750/- in the year 1991-92 and for 1993-94, income tax return showed that she earned Rs.66,550/-. The Tribunal took the income as Rs.50,000/- per annum, adopted a multiplier of 12 and determined the compensation. The learned counsel appearing for the appellant would contend that the Tribunal was in error both as regards the choice of the multiplicand and the multiplier for even when there was definite documentary evidence available, the Tribunal had not taken the same. Normally while assessing compensation for death of a FAO No.1367 of 1995 -3- businessman, we will factor only the managerial skills of a person and not take the entire income in a case where it is capital intensive and the capital assets themselves leave appropriate asset for generating income in future. The method of assessment of compensation is laid down by the Hon'ble Supreme court in relation to death of person in Rani Gupta Vs. United India Insurance Company Limited 2009(13) SCC 498. A businessman's income would again be seen in the context of the nature of business. In a trading company, I would understand that the income is generated by the individual skills of the person to the trading and there is nothing like a fixed asset yielding the income. Learned counsel appearing for the insurance company would contend that the husband himself was a young person and perhaps the business is still being run by the husband. If the business is still being run by the husband probably it is his own skills that generates the income but as it had observed earlier, unless it is shown that the business assets remained and there was very little element of personal skill, there is no need for even making any reduction of the income which is shown as being generated by particular business. In this case, I would understand the business income which is earned was an income, which the deceased herself was earning in her capacity as an individual, as the IT return would show and take the entire income as found in the income tax return as the loss arising out of her death. I would, therefore, take the income to be Rs.66,550/-, make a deduction of 1/3rd as going towards personal expenses and take the contribution to the family at Rs.44,366/-. She was aged 33 years and the appropriate multiplier would be 16. The total loss of FAO No.1367 of 1995 -4- dependence would come to Rs.7,09,856/-. I would also add Rs.5,000/- towards loss of consortium for the husband and provide for another Rs.5,000/- towards loss to estate and Rs.2500/- towards funeral expenses. In all, the total compensation that will become payable would be Rs.7,22,356/-. The amount in excess over what has been awarded by the Tribunal shall bear interest @6% from the date of the petition till the date of payment. The amount shall be distributed between the husband of Saroj Rani and the son Amit equally. 3. FAO Nos.1367 and 1368 of 1995 are allowed to the above extent. 4. FAO No.1369 of 1995 is with reference to death of a 13 year old daughter of Saroj Rani and the claimant is the father. She was taking treatment for six days before she succumbed to injuries and the Tribunal had provided for Rs.7500/- towards medical expenses and provided for Rs.40,000/- as compensation including the medical expenses. The Tribunal had found that the compensation could be given only on the basis of no fault liability. I do not think it will be appropriate to make an assessment in the manner it was done and I would apply the formula set out in Schedule II as governing the situation of a person, who was still not an earning member and I would take the notional income to be Rs.15,000/-, provide for 1/3rd deduction for personal expenses and take the contribution to Rs.10,000/- and take a multiplier of 15 and take the loss of dependence at Rs.1,50,000/-. In addition, an amount of Rs.7500/- towards medical treatment will have to be provided. In all, the total FAO No.1367 of 1995 -5- compensation that will become payable would be Rs.1,57,500/-. The amount in excess over what has been awarded by the Tribunal shall bear interest @6% from the date of the petition till the date of payment. It is contended by the learned counsel for the insurance company that Schedule II itself was operational only from 14.11.1994 and the same formula cannot be adopted. It is a formula depicting fairness and justness in compensation under a strict liability regime. There is no inherent bar about applying the principle in the present case. 5. FAO No.1369 of 1995 is allowed to the above extent. 6. FAO No.1370 of 1995 relates to the death of Rajesh, who was the son of Bimal Kumar through Saroj Rani. He was 15 years old boy and he was also assessed to income tax. The Tribunal had provided for the income of Rs.40,000/-, provided for 50% deduction and took Rs.20,000/- as the extent of dependence and applied a multiplier of 12. The appropriate multiplier ought to have been in relation to the age of the claimant's father and I would take 16 to be the multiplier instead of 12. 7. Learned counsel for the insurance company would state that he was only 15 years of age and the income which he was said to have earned could not have been the result of any of his personal capabilities. The learned counsel would, therefore, urge that only the notional income must be taken and compensation should be worked out on that. I cannot accede to such a plea in a case where even a person, who could be otherwise not an earning member, he is seemed to be an income earner and income tax is assessed on such FAO No.1367 of 1995 -6- earning. The law while it provides for a national income for persons, who do not earn, it does not rule out the possibility of even a minor to be earning. The entire edifice of income tax law would come standstill if it ever be presumed that minors cannot earn. The source of income for a State on the basis that minors are also capable of generating income, cannot be only for the purpose of tax. It must be taken to its logical end in every other regime as well. I will, therefore, take the income as found in the income tax return as a tenable basis for assessment of compensation and take the income at Rs.40,000/-, provide for a deduction at 50%, take the extent of dependence at Rs.20,000/-, adopt a multiplier of 16 and take the extent of loss of dependence at Rs.3,20,000/-. I would also add towards conventional heads of claim another Rs.10,000/- and take the amount of compensation payable at Rs.3,30,000/-. The amount in excess over what has been awarded by the Tribunal shall attract interest @6% from the date of the petition till the date of payment. 8. FAO No.1370 of 1995 is allowed to the above extent. 9. The apportionment of liability amongst the insurers shall be in the same manner as determined by the Tribunal namely 75% for the insurer of the truck and 25% for the insurer of the car. (K. KANNAN) JUDGE December 10, 2010 Pankaj* "