Case: Oriental Insurance Company Limited Vs. Smt.Archana Bhupendra Jahagirdar & Others

Oral Judgment:By order dated 22nd August 2012, we directed that the appeal will be taken up for final hearing at admission stage.2. On 14th September 2012, when we had taken up the appeal for final hearing, the learned counsel for the first and second respondents on instructions stated that the said respondents do not intend to prefer either cross objections or a cross appeal for challenging the impugned Judgment and Award.3. This appeal preferred by the appellant-insurer takes an exception to the Judgment and Award dated 21st November 2011 passed by the Motor Accidents Claim Tribunal, Mumbai. The first and second respondents are the claimants in the claim petition under section 166 of the Motor Vehicles Act,1988 (hereinafter referred to as the said Act). The compensation is claimed on account of death of one Bhupendra in motor accident occurred on 10th May 2003. The deceased succumbed to the injuries on 11th May 2003. There is no dispute that at the time of accident, the offending vehicle was validly insured with the appellant-in-surer. The claim for compensation made by the first and second respondents was in the sum Rs.1,50,00,000/- with interest. The first and the second respondents are respectively the widow and minor son of the deceased. It is not necessary to make a reference to the factual aspects regarding the allegations of negligence in as much as the only dispute raised in this appeal is as to the quantum of compensation fixed under the impugned Judgment and Award. By the impugned Judgment and Award, compensation of Rs.74,28,330/- with interest @ 8.5% per annum has been granted by the Tribunal.4. The main submission of the learned counsel for the appellant is that income of the deceased taken at the rate of Rs.11,09,000/- per annum is on the higher side in as much as the substantial part of it consist of bonus which cannot form a part of the income. He invited our attention to the documentary evidence on record in the form of income tax return of the deceased at Exhibit-31. He submitted that out of the income of more than Rs.15 lacs disclosed by the said return, the component of bonus is Rs.8,50,949/-. He submitted that there is no evidence adduced to show that payment of bonus had any nexus with the performance of the deceased and that is the reason why the same cannot form part of the income for the purpose of calculating the multiplicand. He invited our attention to the evidence of Shri Mangesh Sawant, Human Resourses Manager of M/s.S.G.S. Pvt.Ltd. (employer of the deceased). He submitted that even the said witness has not proved that bonus of Rs.8,50,949/- received by the deceased was on the basis of his performance. Thus, his submission is that the Tribunal has committed a blatant error by taking the yearly income of the deceased at Rs.11,09,000/-. He, therefore, submitted that the compensation granted by the Tribunal is exorbitant. The learned counsel for the first and second respondents not only supported the impugned Award but he submitted that the multiplier of only 10 has been applied by the Tribunal though in terms of settled law laid down by the Apex Court in case of Sarla Verma (Smt.) and others vs. Delhi Transport Corporation and another (2009) 6 SCC 121 ), multiplier could not have been less than 15. Thus, his submission is that in fact, first and second respondents were entitled to compensation which is higher than what was granted by the Tribunal.5. We have carefully considered the submissions. We have perused the record. It is not disputed that the date of birth of the deceased was 22nd June 1967 as reflected from the School Leaving Certificate at Exhibit-29. Thus, on the date of the accident, his age can be safely taken as about 36 years. The document at Exhibit-30 shows that the deceased had obtained a degree of Bachelor of Engineering in Computer Science from University of Dharwad. A letter dated 23rd March 1994 addressed by the employer of the deceased shows that by the said letter he was appointed as a Junior Executive on probation for a period of six months. Further letter dated 1st October 1994 sent by the employer discloses that the deceased was confirmed in the employment with effect from 1st October 1994 as a Junior Executive at the consolidated salary of Rs.5100/- per month together with Rs.225/- per month as conveyance allowance. The letter of appointment of the deceased shows that he was entitled to Contributory Provident Fund, LTA, Medical, Bonus and Casual leave etc.6. The first and second respondents examined Shri Mangesh Sawant who was at the relevant time employed as Human Resources Manager of M/s.S.G.S. India Private Limited (employer of the deceased). He stated that as per the record, at the time of his death, the deceased was employed as a Divisional Manager of the said company and initially on 1st April 1994, he was employed as a Junior Executive. He disclosed that the gross monthly salary of the deceased was Rs.67188/- and he received bonus of Rs.8,50,949/- in the year. Apart from that, the witness claimed that the deceased was entitled to Leave Travel Allowance of Rs.30,000/- and medical expenses of Rs.25,000/- during the relevant year. He also deposed that the deceased was a permanent employee of his company. In the cross examination, he admitted that the bonus depends upon the profit of the company and the same is not fixed. The pay slip for the month of April 2003 has been marked as Exhibit-36. The said document has been marked as Exhibit without any objection from the appellant. The said document discloses that the basic salary for April 2003 was Rs.47,288/-. Apart from the basic salary, deceased received House Rent Allowance of Rs.10,083/-, education allowance of Rs.2625/-, and entertainment allowance Rs.7292/- per month. It is obvious that the benefit of the amounts payable towards the allowances was available to the family of the deceased and therefore, the total earnings can be taken at Rs.67,000/- per month.7. The deceased was well qualified and was a permanent employee of a reputed company who had already worked for 9 years for the said company. Following the decision of the Apex Court in the case of Sarla Verma (supra), 50% of the amount will have to be added to his income towards the future prospects of increase in his earnings. Thus, the total emoluments will be Rs.1,00,500/- per month. 20% of the amount will have to be deducted towards income tax. Thus, the net amount will be Rs.80,400/- . One third deduction will have to be made on account of personal expenditure as number of dependents on the deceased are only two. Thus, after deducting the said amount, monthly dependency will come to Rs.53,600/- and yearly dependency will be Rs.6,50,000/-. Going by the decision of the Apex Court in case of Sarla Verma (supra), multiplier of 14 will have to be adopted. Even if multiplier of 13 is adopted, the compensation of Rs.74,28,330/- fixed by the Tribunal will be on the lower side as the compensation payable will be Rs.84,50,000/-.8. At this stage, an argument canvassed by the learned counsel for the appellant is that as there is no cross appeal or cross objection filed, this Court cannot re-assess the compensation awarded by the Tribunal. We must note here that the claim for compensation under section 166 of the said Act is not a suit. In view of section 168, it is the obligation of the Tribunal to determine what is the just compensation payable to the claimants. It is not in dispute that this is an appeal to which the provisions of Code of Civil Procedure,1908 are applicable. The present appeal is, therefore, continuation of the proceedings of the original claim application. Therefore, it is the duty of this Court to determine what will be the just compensation payable to the first and second respondents in accordance with settled principles of law. If this Court finds that the just compensation is more than what is granted by the Tribunal, in absence of any appeal or cross objection by the claimants, this Court may not grant any enhancement. However, it is the duty of this Court to compute the just compensation and to determine whether the compensation fixed by the Tribunal is proper. We find that after applying the settled principles laid down by the Apex Court including the principles laid down in the case of Sarla Verma (supra), the compensation of Rs.74,28,330/- granted by the Tribunal is not at all unreasonable and in fact the just compensation will exceed that amount.

Decision:
0[ds]7. The deceased was well qualified and was a permanent employee of a reputed company who had already worked for 9 years for the said company. Following the decision of the Apex Court in the case of Sarla Verma (supra), 50% of the amount will have to be added to his income towards the future prospects of increase in his earnings. Thus, the total emoluments will be Rs.1,00,500/per month. 20% of the amount will have to be deducted towards income tax. Thus, the net amount will be Rs.. One third deduction will have to be made on account of personal expenditure as number of dependents on the deceased are only two. Thus, after deducting the said amount, monthly dependency will come to Rs.53,600/and yearly dependency will be Rs.Going by the decision of the Apex Court in case of Sarla Verma (supra), multiplier of 14 will have to be adopted. Even if multiplier of 13 is adopted, the compensation of Rs.74,28,330/At this stage, an argument canvassed by the learned counsel for the appellant is that as there is no cross appeal or cross objection filed, this Court cannotthe compensation awarded by the Tribunal. We must note here that the claim for compensation under section 166 of the said Act is not a suit. In view of section 168, it is the obligation of the Tribunal to determine what is the just compensation payable to the claimants. It is not in dispute that this is an appeal to which the provisions of Code of Civil Procedure,1908 are applicable. The present appeal is, therefore, continuation of the proceedings of the original claim application. Therefore, it is the duty of this Court to determine what will be the just compensation payable to the first and second respondents in accordance with settled principles of law. If this Court finds that the just compensation is more than what is granted by the Tribunal, in absence of any appeal or cross objection by the claimants, this Court may not grant any enhancement. However, it is the duty of this Court to compute the just compensation and to determine whether the compensation fixed by the Tribunal is proper. We find that after applying the settled principles laid down by the Apex Court including the principles laid down in the case of Sarla Verma (supra), the compensation of Rs.74,28,330/granted by the Tribunal is not at all unreasonable and in fact the just compensation will exceed that amount.