Orissa High Court
Branch Manager vs Susama Behera & Others on 22 April, 2024
Author: R.K. Pattanaik
Bench: R.K. Pattanaik
IN THE HIGH COURT OF ORISSA AT CUTTACK MACA No.955 of 2018 Branch Manager, M/s New India .... Appellant Assurance Company Limited, Angul Mr. G.P. Dutta, Advocate & Associates -Versus- Susama Behera & others .... Respondents
Mr. P.K. Mishra, Advocate for respondent Nos.1 & 2 Mr. P.K. Behera, Advocate for respondent No.3
CORAM:
JUSTICE R.K. PATTANAIK
DATE OF JUDGMENT:22.04.2024
1. Instant appeal is filed by the appellant Insurance Companychallenging the quantum of compensation directed by learned 1stMotor Accidents Claims Tribunal, Angul with an award dated19th May, 2018 in MAC Case No.60 of 2017 on the grounds interalia that the same is on the higher side without deduction ofseveral personal perquisites received by the deceased and otherbenefits by the claimants (respondent Nos.1 and 2) under theNALCO Employee's Financial Assistance and RehabilitationScheme.
2. The claimants filed an application under Section 166 of theMotor Vehicles Act for award of compensation ofRs.1,10.00,000/- (rupees one crore and ten lac) on account ofdeath of the deceased in a motor vehicular accident dated 1st
MACA No.955 of 2018 Page 1 of 8 April, 2017. As per the case of the claimants, who are the wife(respondent No.1) and son (respondent No.2) on the deceased,the accident took place on the said date at about 11.45 AM whilehe was walking on the left side of the road and the offendingmotorcycle bearing registration No.OR-19-J-2628 running at ahigh speed in a rash and negligent manner dashed him, as a resultof which, he sustained grievous injuries and during treatmentsuccumbed to it. A report was lodged at the local PS registered asAngul P.S. Case No.180 dated 1st April, 2017 under Section 279and 304-A IPC which finally led to the submission of chargesheetafter completion of investigation against the rider of the allegedmotorcycle. The Tribunal considering the pleading on record,framed issues and thereafter, directed the appellant InsuranceCompany to pay a sum of Rs.1,08,73,694/- (rupees one croreeight lac seventy three thousand six hundred ninety four) to theclaimants with the interest @ 6% per annum from the date of theclaim application filed with penal interest @ 7.5% per annumfollowed by other directions with a cost of Rs.5000/- levied. Thesaid amount of compensation is under challenge at the behest ofthe Insurance Company with a plea that the same is not just andreasonable.
3. Heard Mr. Dutta, learned counsel for the appellant InsuranceCompany and Mr. Mishra, learned counsel for claimantsrespondent Nos.1 and 2. None appeared for respondent No.3.
4. Initially, the appellant Insurance Company raised the followingpoints for consideration, such as:
(i) Whether the learned Tribunal was justified in holding the monthly income of the deceased to be Rs.1,32,119/-
referring to the pay slip (Ext.5) which includes other items of perquisites personal in nature and not taxable?
MACA No.955 of 2018 Page 2 of 8
(ii) Whether it was justified on the part of the learned Tribunal to hold that the claimants are entitled to future prospects, particularly, when one of them, namely, son (respondent No.2) examined as P.W.1 admitted to have received benefits under NALCO Employee's Financial Assistance and Rehabilitation Scheme after death of the deceased?
(iii) Whether a multiplier of 11 applied by the learned Tribunal is justified when the deceased was supposed to superannuate after five years and five months?
5. Resting the argument primarily on point Nos. (i) and (ii),according to Mr. Dutta, learned counsel for the InsuranceCompany, on a perusal of Ext.5, it would be evident that thedeceased was receiving taxable and non-taxable amounts andsince non-taxable sums are perquisites, learned Tribunal could nothave included the same as the part of the monthly incomereceived by him. With a calculation made excluding the non-taxable items, Mr. Dutta would submit that the monthly incomeof the deceased becomes of Rs.98,534/- and annual income beingRs.11,82,408/- and the total compensation payable stands atRs.87,10,992/- and since the family of the deceased has availedthe benefit under the NALCO Employee's Financial Assistance andRehabilitation Scheme, the claimants respondent Nos.1 and 2 arenot entitled to any sum on future prospects in view of thedecision of the Apex Court in Sebastiani Lakra and others Vrs.National Insurance Company Limited and another AIR 2018 SC5034 and that apart, the compensation should not carry anypenal interest. For the purpose of the perusal of the Court, thecopies of pay slips with the certified copies of the depositions ofP.W.1, namely, claimant respondent No.2 are produced by Mr.Dutta, learned counsel for the appellant Insurance Company.
MACA No.955 of 2018 Page 3 of 8
Hence, it is contended that the compensation amount on arevision stands at Rs.87,10, 992/-.
6. On the contrary, Mr. Mishra, learned counsel for the claimantssubmits that the deceased was aged about 54 years and at therelevant point of time, when he died, was working as a JuniorTechnician at NALCO, CPP. As per the last month salary slip i.e.Ext.5, according to Mr. Mishra, income of the deceased wasRs.1,32,119/- and in order to assess the actual income, the amounthe received deducting the statutory taxes only is to be consideredbut in support of such contention, he relies on a decision in thecase of National Insurance Company Limited Vrs. IndiraSrivastava and others 2008 (I) TAC 424 (SC). Hence, Mr. Mishra,learned for the claimants submits that with the calculation madeon the gross earnings for the month of March, 2017 with thedeductions toward professional and income taxes and 2/3rdcontribution to family on the annual income at Rs.12,81,072/-,applying a multiplier of 11, the amount is arrived atRs.93,94,928/- and adding the general damages for a sum ofRs.1,10,000/-, it becomes Rs.95,04,528/- without future prospectswhich is admittedly not permissible in view of the decision inSebastiani Lakra (supra). Thus, therefore, Mr. Mishra wouldsubmit that the claimants are entitled to the above amount alongwith 6% interest from the date of the claim application filed i.e.on 7th April, 2017.
7. The deduction which is claimed by the appellant InsuranceCompany relates to the non-taxable items as indicated in Ext.5.The said allowances are on the heads of liveries (Rs.522/-),conveyance (Rs.900/-), transport (Rs.1600/-) and washing charges(Rs.3000/-) besides professional tax (Rs.300/-) and income tax
MACA No.955 of 2018 Page 4 of 8 (Rs.25,063/-). The contention of the appellant InsuranceCompany is that the perquisites are no part of the income of thedeceased, hence, the amount on the respective heads should havebeen excluded while calculating the total income.
8. In Indira Srivastava (supra), the Apex Court had the occasion toconsider whether the allowances to be included as income. It hasbeen held therein that the term 'income' has differentconnotations and a Court of law having regard to the change insocietal conditions must consider the question not only havingregard to pay packet the employee carries home at the end of themonth but also other perks which are beneficial to the membersof the entire family and loss caused to the family on a death of anear and dear one can hardly be compensated on monetaryterms. In the said decision, it is also held that Section 168 of theMotor Vehicles Act has a word 'just compensation' which shouldbe assigned a broad meaning and one cannot ignore the fact thatthe private sector companies in place of introducing a pensionscheme take recourse to payment of Contributory ProvidentFund, Gratuity and other perks which may either for the benefitof the employee himself or the entire family and if some facilitiesare being provided whereby the family stands to benefit, thesame must be held to be relevant for the purpose of computationof total income on the basis whereof the amount ofcompensation payable is required to be determined referring tothe other decisions, such as, National Insurance Company LimitedVrs. Padmavathy & others of the Madras High Court dated 29thJanuary, 2007, S. Narayanamma and others Vrs. Secretary toGovernment of India, Ministry of Telecommunications and others2002 ACC 582 of Andhra Pradesh High Court and Asha and
MACA No.955 of 2018 Page 5 of 8 others Vrs. United India Insurance Company Limited and another2004 ACC 533.
9. In Indira Srivastava (supra), the Apex Court expounded the realimport of 'just compensation' which are to be determined havingregard to the facts and circ*mstances of each particular case.Citing many other decisions on the point of statutory income andwhether, the allowances to be a part of it or otherwise, the ApexCourt in the said decision held that amounts beneficial to thefamily shall have to be included for computing income but in thecase at hand, the deduction is claimed in respect of the allowancesreceived by the deceased towards liveries, conveyance, transportand washing on the ground that the same are the perquisites. Ona proper reading of the aforesaid decision, though, it has beenheld by the Apex Court that the perks of the deceased payable bythe employer should be included in the monthly income for thepurpose of calculation of compensation but it depends on thepremise that such benefit was meant for the entire family, whichis, however, deprived of the same due to untimely death of thedeceased. In other words, if some facilities are being providedwhereby the entire family is or would have benefited, in thatcase, it must be held to be relevant for computation of totalincome, otherwise not. If allowances have been received by thedeceased on non-taxable head and it was exclusively meant forthe employee himself and not to benefit the family, if cannot beincluded in the total income for calculation of the compensation.Besides the professional and income taxes, the allowances orperquisites vis-à-vis the deceased are on the heads of liveries,conveyance, transport etc. which were meant for him and hence,could not be said as the amount relevant for computation of totalincome. In other words, the contention of Mr. Dutta, learnedMACA No.955 of 2018 Page 6 of 8 counsel for the appellant Insurance Company is acceptable andwith the allowances being deducted from the gross monthlyincome, the annual income stands Rs.11,82, 408/-. In other words,the perquisites received by the deceased on such heads could nothave been included to determine income of the deceased. The netmonthly income of the deceased after such calculation with thededuction of allowances besides the professional and incometaxes reaches at Rs.1,00,734/-. With the above monthly income,the annual salary of the deceased would be Rs.12,08,808/- andon further calculation of the head of the dependency with 2/3rdcontribution to the family and a multiplier of 11, the same standsat Rs.88,64,592/- and further including the non-pecuniarydamages for a sum of Rs.70,000/-, the total compensationbecomes Rs.89,34,592/-. Such non-pecuniary damages include theloss of love and affection, consortium etc.
10. Referring to the decision in Sebastiani Lakra (supra), it isadmitted by Mr. Mishra, learned counsel for respondent Nos.1and 2 that the claimants are not entitled for future prospects sincethey have availed the benefit under the scheme of NALCO. In theaforesaid decision, the Apex Court held that the claimants, havingreceived benefits under any such scheme, are not entitled to claimadditional amount @ 15% by way of future prospects as in thesaid case, the payment of the amount under the Employee'sFamily Benefit Scheme was found to be more than offsets the lossof future prospects. In view of the above legal position, noamount on the head of future prospects is allowed whilecomputing the compensation. Hence, dealing with the mainchallenge on the quantum since the argument is confined to it, theCourt reaches at a conclusion that the compensation excluding theallowances payable to the claimants respondent Nos.1 and 2MACA No.955 of 2018 Page 7 of 8 should be fixed at Rs.89,34,592/- along with 6% interest from the date of claim application filed. The Court is also the view that the compensation amount should not carry any penal interest, which has been levied by the learned Tribunal.
11. Hence, it is ordered.
12. In the result, the appeal stands partly allowed. As a logical sequitur, the impugned award dated 19th May, 2018 passed in MAC Case No.60 of 2017 by the learned 1st Motor Accident Claims Tribunal, Angul is hereby modified to the extent as aforesaid with a direction to the appellant Insurance Company to deposit an amount of Rs.89,34,592/- along with interest @ 6% per annum from the date of the claim application filed till its realization towards the compensation determined within eight weeks from today and on such deposit being made, it shall immediately be disbursed in favour of claimants respondent Nos.1 and 2. It is further directed that the aforesaid amount shall not carry any penal interest. Furthermore, the Court directs that the statutory deposit along with the accrued interest thereon shall be refunded to the appellant Insurance Company on proof of such deposit of compensation made before the learned Tribunal within the above stipulated period.
(R.K. Pattanaik) Judge
Signature NotTUDU VerifiedDigitally SignedSigned by: THAKURDAS TUDUDesignation: Sr. StenographerReason: AuthenticationLocation: OHC,CTCDate: 23-Apr-2024 12:46:14 MACA No.955 of 2018 Page 8 of 8
