Hiralben W/D of Rajivbhai Prabodhchand V. Aryan Forwarding Corporation

FA/2890/2008

AI Insights

The case involves an appeal against the judgment and award passed by the Tribunal in MACP No.882 of 1997, where compensation was awarded following a fatal accident. The deceased, Rajivbhai, was traveling in a car driven by his employer's driver, which collided with a trailer container, resulting in Rajivbhai's death. His family filed a claim for Rs.30,00,000, but the Tribunal awarded Rs.10,54,600. The appellants contended that the compensation was insufficient, arguing for a higher multiplier and consideration of prospective income based on Supreme Court precedents. The respondents defended the Tribunal's decision, emphasizing the proper application of tax considerations and the adequacy of the awarded amount. The High Court found merit in the appellants' arguments, adjusting the compensation accordingly.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 808847 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 10-03-2015
• Assessment Year: misc
• Other Referred Cases: Smt. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr.
• Laws Referred To: Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MAULIK SHELAT; HINA DESAI
• Assessee Lawyers: Y N RAVANI
• Keywords: Compensation; Income Tax Liability; Multiplier; Negligence; Rash Driving; Prospective income
• Section: MACP No.882 of 1997

Judgement Text

"C/FA/2890/2008 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL NO. 2890 of 2008 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE JAYANT PATEL and HONOURABLE MR.JUSTICE G.B.SHAH ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? ================================================================ HIRALBEN W/D OF RAJIVBHAI PRABODHCHANDR & 3....Appellant(s) Versus ARYAN FORWARDING CORPORATION & 3....Defendant(s) ================================================================ Appearance: MR YN RAVANI, ADVOCATE for the Appellant(s) No. 1 - 3 DELETED for the Defendant(s) No. 1 MR MAULIK J SHELAT, ADVOCATE for the Defendant(s) No. 3 MS HINA DESAI, ADVOCATE for the Defendant(s) No. 4 SERVED BY AFFIX.-(R) for the Defendant(s) No. 2 ================================================================ CORAM: HONOURABLE MR.JUSTICE JAYANT PATEL and Page 1 of 9 C/FA/2890/2008 JUDGMENT HONOURABLE MR.JUSTICE G.B.SHAH Date : 10/03/2015 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE JAYANT PATEL) 1. The present appeal is directed against the judgement and award passed by the Tribunal in MACP No.882 of 1997, whereby the Tribunal has awarded compensation of Rs.10,54,600/- with interest at the rate of 9% per annum from the date of petition till realization. 2. The short facts of the case appear to be that the deceased Rajivbhai, when was traveling on 21.6.1997 in the Maruti Car bearing Registration No.MH-02-L-8032 with his employer, the said car was being driven by the driver of the Maruti Car in a rash and negligent manner and it dashed with one trailor container bearing Registration No.MH- 04-C-6268. Such resulted into serious accident and the deceased Rajivbhai had sustained injuries and he succumbed to his injuries. In view of the aforesaid accident, the dependent family members of the deceased Rajivbhai preferred Claim Petition being MACP No.882 of 1997 before the Page 2 of 9 C/FA/2890/2008 JUDGMENT Tribunal for the compensation of Rs.30,00,000/-. The Tribunal, at the conclusion of the petition, passed the above referred judgement and award. Under these circumstances, the present appeal before this Court. 3. We have heard Ms.Renu Singh, learned Counsel for Mr.Ravani for the appellants, Mr.Maulik Shelat, learned Counsel for respondent No.3 – Insurance Company, Ms.Heena Desai, learned Counsel for respondent No.4. So far as respondent No.1 is concerned, it has been deleted and respondent No.2 is served by affixing the notice. 4. The learned Counsel for the appellants mainly contended that the quantum of compensation awarded by the Tribunal is much on the lower side. In her submission, the Tribunal ought to have considered the prospective income as well as appropriate multiplier as per the decision the Apex Court in the case of Smt. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr., reported in (2009) 6 SCC, 121 and it was also submitted that the amount of consortium awarded is also on a much lower side. As per the learned Counsel for Page 3 of 9 C/FA/2890/2008 JUDGMENT the appellants, if the aforesaid aspects are considered, the appellants would be entitled to higher amount of compensation and, therefore, this Court may consider the matter in the present appeal. 5. Whereas, Mr.Shelat, learned Counsel for the main contesting respondent No.3 contended that it is true that as per the decision of the Apex Court in the case of Smt. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr. (supra) the multiplier may be available of 15 and the question may also arise for prospective income, but in the very decision of the Apex Court in the case of Smt. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr. (supra) the Court has observed for consideration of the amount of income tax liability of the person concerned, which has been totally lost sight of by the Tribunal. He submitted that, therefore, taking into consideration the aforesaid aspects, it can be said that the Tribunal has awarded just compensation and no interference may be called for in the present appeal. Page 4 of 9 C/FA/2890/2008 JUDGMENT 6. The examination of the facts of the present case shows that the Tribunal has assessed the income at Rs.10,700/- per month and thereafter has deducted 1/3rd income towards personal expenses, 2/3rd amount has been considered for dependency benefits and multiplier of 12 has been applied. In the decision of the Apex Court in the case of Smt. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr. (supra), on the aspect of prospective income, it has been observed by the Apex Court at paragraph 24 in the said decision that there should be addition of 30% towards prospective income if the age of the deceased was 40 to 50 years. In the present case, the deceased was aged more than 37 years and, therefore, we find that the addition of 30% of the income towards prospective income was required to be considered by the Tribunal, which has not been considered. 7. On the aspect of multiplier, as observed by the Apex Court in the very decision of Smt. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr. (supra) appropriate multiplier, as per the Page 5 of 9 C/FA/2890/2008 JUDGMENT observations made by the Apex Court in the said decision at paragraph 42, would be 15 for the deceased of the age group of 36 to 40 years, whereas the Tribunal has given multiplier of 12, which can be said as erroneous and hence, the multiplier should be treated as that of 15. 8. As per the very decision of the Apex Court in the case of Smt. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr. (supra) and more particularly the observations made at paragraph 20, it has been observed that the income should be assessed minus income tax and, therefore, the said aspect was required to be considered, by the Tribunal, but the Tribunal has not considered the said aspect. 9. In our view, as the deceased had expired in the year 1997, but his total annual income, even if considered with the prospective income, would be less than Rs.1,50,000/- and, therefore, the income tax liability can be considered to the extent of 10% on the amount of compensation exceeding Rs.40,000/- per year. Page 6 of 9 C/FA/2890/2008 JUDGMENT 10. If the aforesaid legal position is applied to the facts of the present case, the compensation for the deceased can be computed as under:- The dependency benefits per year (Rs.7,150/- per month multiplied by 12) would be Rs.85,800/- plus 30% towards prospective income (Rs.25,740/-), the total amount would come to Rs.1,11,540/-. Out of the said amount, if the amount of Rs.40,000/- is deducted, it would be Rs.71,540/-. Hence, roughly Rs.7,000/- may be towards income tax liability. In this manner, the net amount towards dependency benefits per year would come to Rs.1,04,540/- and it can be rounded off as Rs.1,05,000/- per year. Thereafter, if the multiplier of 15 is applied, the total amount would come to Rs.15,75,000/- towards dependency benefits – cum – future loss of income. Further, the loss of consortium and expectation of life is assessed on a much lower side, keeping in view the age of the deceased and the income of the deceased. We Page 7 of 9 C/FA/2890/2008 JUDGMENT find it appropriate to award Rs.50,000/- as against Rs.20,000/- awarded by the Tribunal. Hence, the amount of Rs.50,000/- will be available as compensation towards loss of consortium plus Tribunal has awarded Rs.5,000/- towards funeral expenses, which appears to be reasonable. Hence, the total compensation would come to Rs.15,75,000/- plus Rs.50,000/- towards consortium plus Rs.5,000/- towards funeral expenses, total amount comes to Rs.16,30,000/-. Out of the aforesaid amount, Rs.10,54,600/- has already been awarded as compensation by the Tribunal and consequently, the appellants would be entitled to additional compensation of Rs.5,75,400/-. The Tribunal has awarded interest at the rate of 9% per annum, which appears to be reasonable. 11.Under these circumstances, it is observed and held that the appellants – original claimants shall be entitled to the compensation of Rs.16,30,000/- plus interest at the rate of 9% per annum from the date of petition until the amount is actually paid Page 8 of 9 C/FA/2890/2008 JUDGMENT or if deposited, with accrued interest thereon. Out of the aforesaid amount, 50% of the amount with interest shall be proportionately disbursed to each of the claimants in equal share, whereas the remaining 50% of the amount shall be invested by the Tribunal in the FDR for a period of three years with a nationalized bank with the condition that the original claimants/appellants shall be entitled to periodical interest on such investments as and when it becomes due and upon maturity of the investment at the end of three years, the original claimants - appellants shall be entitled to withdraw the remaining of the amount, which has been invested. 12. The appeal is allowed to the aforesaid extent. The judgement and award of the Tribunal is modified to the aforesaid extent. R & P be returned to the Tribunal. (JAYANT PATEL, J.) (G.B.SHAH, J.) vinod Page 9 of 9 "