ICICI Lombard General Insurance Company Limited Vs Sumathi and Others

Pushpa Sathyanarayana, J.@mdashBeing aggrieved by the Award and Decree dated 01.8.2012 passed by the Motor Accidents Claims Tribunal (II Additional District Court), Tindivanam in M.C.O.P. No. 345 of 2009 in respect of the quantum of compensation awarded to the claimants for the injuries sustained by the deceased in a road traffic accident occurred on 01.8.2007, Appellant - ICICI Lombard General Insurance Company Limited has preferred this appeal. Brief facts are that on 01.8.2007 at about 7.00 A.M., while the first claimant Ramamurthy was proceeding in Motorcycle bearing Registration No. PY 01 AG 0024 from JIPMER playground to his house, near the Rajiv Gandhi Statue Signal at Kamarajar Salai, Puducherry, a mini load carrier TATA ACE bearing Registration No. PY-01 AE 0418, belonging to the Fifth Respondent and insured with the Appellant, driven by its driver in a rash and negligent manner in the opposite direction, dashed against the Motorcycle. Due to the impact, Ramamurthy sustained grievous head injuries and was taken to JIPMER Hospital, Puducherry, and was later on, taken to Chennai Apollo Speciality Hospital for further treatment. Subsequently, he died on 21.02.2009 during the pendency of the Petition. At the time of accident, deceased Ramamurthy was aged 47 years and was doing Automobile business. Regarding the accident, a Criminal Case was registered against the mini load carrier driver and subsequently, charge sheet was filed for the offences under Sections 279 and 338 I.P.C. Alleging that the accident was due to rash and negligent driving of the Mini load carrier driver, Claimants, who are wife, children and mother of Ramamurthy, have filed the Claim Petition claiming compensation of Rs. 1,00,09,957/-.

2. Resisting the Claim Petition, Appellant - Insurance Company has filed counter contending that the accident occurred only due to the reckless act of the deceased. Appellant - Insurance Company contended that the quantum of compensation claimed by Claimants is highly excessive and without any basis. Appellant - Insurance Company also denied the income of deceased.

3. Before the Tribunal, Wife of the deceased - Sumathi examined herself as P.W. 1 besides examining Eye-witness Palani as P.W. 2 and Dr. Perumal as P.W. 3. Exs. P. 1 to P. 29 were marked on the side of Claimants. Insurance Company neither examined anybody nor filed any document.

4. Upon consideration of the evidence of P.W. 2 eye-witness and referring to Ex. P. 1 - FIR registered against the lorry driver, Tribunal held that the accident was due to rash and negligent driving of the lorry driver and the deceased subsequently died of the injuries sustained in the accident. The Tribunal further held that the Insurance Company is liable to pay compensation to Claimants. Adding conventional damages, Tribunal has awarded total compensation of Rs. 41,06,294/- as under:-

Feeling aggrieved, the Insurance Company has come up with this Appeal.

5. It is not necessary for us to narrate entire facts in detail as to how the accident occurred and who was negligent and who is liable to pay compensation since all these aspects are recorded in favour of Claimants. They are not in dispute and only the quantum of compensation is under challenge by the Appellant Insurance Company.

6. The points that arise for consideration in this Appeal are:-

(i) Whether the quantum of compensation arrived at by the Tribunal is correct?

(ii) To what relief the claimants, viz., the Respondents 1 to 4, are entitled?

7. From the materials available on record, the deceased was aged about 47 years on the date of accident and he was doing business in the name and style of V.R. and Sons Engineering Workshop. Exs. P. 11 and P. 12 are the Deeds of Partnership of V.R. and Sons Engineering Workshop and Ex. P. 16 is the copy of the PAN Card of the deceased. In proof of the income earned by the deceased, the claimants have filed Ex. P. 23 Series, Income Tax Returns for the years 2004, 2005, 2006, 2007 and 2007 and 2008 and also filed Ex. P. 28 statement of total income for the Assessment Year 2007-2008.

8. Learned counsel appearing for the Appellant Insurance Company contended that the Award passed by the Tribunal is in disproportionate with the evidence adduced by the Claimants and the quantum is huge as the same is not falling in lines with the decisions of the Hon''ble Supreme Court. She would contend that the Tribunal ought to have taken average income at Rs. 91,530/- based on the returns submitted by the deceased which works out to Rs. 91,530/- p.a. to which 20% to be added for future prospects. If 10% is deducted towards tax, the income can be fixed at Rs. 1,09,836/- and if < is deducted towards personal expenses, it works out to Rs. 75,000/- p.a. and for 13 years, the pecuniary loss works out to Rs. 9,75,000/- only.

9. Point No. 1:- A perusal of Ex. P. 23 Series, statement of total income for the Assessment Years 2004, 2005, 2006, 2007 and 2007, 2008 would show that the deceased was earning a taxable income of Rs. 91,530/-, Rs. 90,507.18 and Rs. 91,965.25 for the years respectively. Considering the above documents, the Tribunal has arrived at a conclusion that the monthly income of the first claimant since deceased, as Rs. 20,000/- and the loss of earnings was calculated from 01.8.2007, i.e., the date of accident. Further, adding 20% for the future prospects considering his age and business, the Tribunal fixed the monthly income of the deceased at Rs. 24,000/- and after deducting 1/3rd of the amount towards personal expenses of the deceased, it brought down the monthly income of the deceased at Rs. 16,000/-. As such, his annual income was calculated at Rs. 1,92,000/-. By applying multiplier of 13 and after deducting 10% towards Income Tax, the loss of earnings was worked out as Rs. 22,46,400/-. While going by the Income Tax Returns filed under Ex. P. 23 Series, the average income of the deceased could be Rs. 1,92,000/- approximately, to which, 30% has to be added for the future prospects applying the principles laid down in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, . Though the deceased was an assessee to the Income Tax on the relevant date, his income was not assessable to tax and, therefore, the deduction of 10% towards income tax as held by the Tribunal is not correct.

10. Regarding the personal expenses, the Tribunal had deducted 1/3rd from his income whereas there are four claimants/dependants, viz., wife, two children and mother and the same is contrary to the decision in Sarla Verma''s case (cited supra). Therefore, applying the principles of Sarla Verma''s case (cited supra) which is confirmed in Reshma Kumari and Others Vs. Madan Mohan and Another, , vide paragraph 37, only 1/4th should be deducted. In paragraph 37, the Apex Court has observed as follows:-

37. As regards deduction towards personal and living expenses, in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, , this court considered General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas and others, , U.P. State Road Transport Corporation and Others Vs. Trilok Chandra and Others, and Fakeerappa and Another Vs. Karnataka Cement Pipe Factory and Others, and finally in paras 14 and 15 of the Report held as under:

(14)... Having considered several subsequent decisions of this court, 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 dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of the dependent family members exceeds six.

(15) Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally 50 per cent is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50 per cent would be treated as the personal and living expenses of the bachelor and 50 per cent as the contribution to the family. However, where family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.

11. Therefore, Loss of Dependency will be Rs. 92,000/- + Rs. 27,600/- = Rs. 1,19,600/-/< = Rs. 89,700/-. Since the deceased was admittedly 47 years at the time of accident, the multiplier 13 as adopted by the Tribunal requires no interference. As such, the Loss of Dependency could be arrived at Rs. 11,66,100/- [Rs. 89,700 X 13].

12. Insofar as conventional damages, Tribunal awarded Rs. 10,000/- towards Loss of Consortium. At the time of accident, the wife of the deceased was aged 40 years and she has lost love and affection of her husband for the rest of her life. Having regard to consortium awarded to First Respondent, it is enhanced to Rs. 1,00,000/-. Though the Tribunal has awarded a sum of Rs. 15,000/- towards loss of love and affection to the children, considering the age of the children and that they have lost the love and affection of their father for the rest of their life, it is enhanced to Rs. 1,00,000/-. The amount of Rs. 5,000/- awarded by the Tribunal towards funeral expenses is enhanced to Rs. 25,000/- in view of the decision reported in Rajesh and Others Vs. Rajbir Singh and Others, . Based upon evidence, the Tribunal has awarded Rs. 18,29,894/- towards medical expenses and the same is maintained.

13. Accordingly, the Award of the Tribunal is modified as follows:-

There is no dispute in respect of the interest granted by the Tribunal at 7.5% p.a.. Point No. 2 is answered accordingly.

Point No. 3:-

In the result, the Civil Miscellaneous Appeal is allowed in part as follows:-

(i) The Award of the Tribunal is reduced to Rs. 32,20,994/- from Rs. 41,06,294/-.

(ii) The interest granted by the Tribunal at 7.5% per annum is confirmed.

(iii) The Award amount is apportioned as follows:-

(iv) Eight weeks time is granted to deposit the entire award amount as ordered by this Court, less the amount already deposited as per order dated 22.8.2013 in M.P. No. 1 of 2013.

(v) On such deposit, the claimants 2, 3 and 5, wife, daughter and mother respectively, are permitted to withdraw the amount as ordered by this Court. 50% of the amount was already directed to be withdrawn vide order dated 22.8.2013 in M.P. No. 1 of 2013. The share of the Third Respondent minor son is permitted to be kept in any of the Nationalised Bank till he attains majority and the guardian/First Respondent is permitted to withdraw the interest amount.

(vi) There will no order as to cost in this appeal.

(vii) Consequently, connected Miscellaneous Petition is closed.