IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS WEDNESDAY, THE 17TH JUNE 2009 / 27TH JYAISHTA 1931 MACA.No. 673 of 2004() ---------------------- OPMV.270/2001 of MOTOR ACCIDENT CLAIMS TRIBUNAL, NORTH PARAVUR .................... APPELLANT(S): APPELLANTS/PETITIONERS IN O.P.M.V.270/2001. --------------------------------------------------------- 1. RAPHEL AGED 64 YEARS, S/O.VARUNNI, VADAKKAL, KUTTIKATTUKARA, ALUPURAM, ELOOR VILLAGE. 2. MARY RAPHEL AGED 56 YEARS, W/O.RAPHEL DO. DO. 3. JULIE CLEATUS, AGED 314 YEARS, D/O.LATE CLEETUS, DO. 4. TWINKLE CLEATUS AGED 14 YEARS (DATE OF BIRTH 3/4/1999) D/O.CLEETUS, DO. DO. 5. TINU CLETUS, AGED 8 YEARS, (DATE OF BIRTH 1/7/1996), S/O.LATE CLETUS DO. DO. BY ADV. SRI.V.K.GOPALAKRISHNA PILLAI SRI.GOPAKUMAR.G. RESPONDENT(S): RESPONDENTS IN O.P.M.V.270/2001. ----------------------------------------------- 1. K.V.KUNJU BAPPU, KARIMBINAKATTIL HOUSE, ELOOR, YDOGAMANDAL P.O. 683 501. 2. ASHIJU S/O.KURIAKOSE, AREEKKAL VEEDU, NEAR OLIVE MOUNT CHURCH, CHULLY P.O. AYYAMPUZHA 682 002.DRIVER OF KL.7/F-2012 BUS. 3. UNITED INDIA INSURANCE CO.LTD., KALAMASSERY 683 104, INSURER OF KL/7/F-2012 BUS. 4. NATIONAL INSURANCE CO.LTD., MANAPPAT CENTRE, H.M.T. JUNCTION, KALAMASSERY, 683 104. INSURER OF KL/7C-2526 MOTOR CYCLE. ADV. SRI.RAJAN P.KALIYATH FOR R3 SMT.P.A.REZIYA FOR R4 THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 17/06/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: K.M. JOSEPH & M.L. JOSEPH FRANCIS, JJ. ```````````````````````````````````````````````````` M.A.C.A. No. 673 OF 2004 C ```````````````````````````````````````````````````` Dated this the 17th day of June, 2009 J U D G M E N T Joseph, J. The appellants are the father, mother, wife and two children of a person who died in a motor cycle accident which took place on 2.2.2001. They filed the appeal feeling aggrieved by the quantum fixed. 2. We heard the learned counsel for the parties. Learned counsel for the appellants would essentially assail the award by pointing out that this is a case where the Tribunal has erred in reckoning the monthly income of the deceased at Rs.4,500/-. According to him, Exts.A6 and A7 would show that interference of the award is warranted. Ext.A6 is the certificate of salary issued by the employer of the deceased, namely Indian Aluminium Co. Ltd., Kalamassery. Ext.A7 is the pay slip. He would point out that going by the pay slip, the total emoluments due to the deceased was Rs.9,206/-. The total deduction is shown as Rs.5,017/-. According to him, therefore, the Tribunal erred in fixing the income MACA.673/04 : 2 : at Rs.4,500/- and providing for dependency at Rs.3,000/- per month after providing for personal expenses at 1/3rd. Learned counsel for the appellants also points out that the deceased was in receipt of bonus as evident from Ext.A6 certificate and it should have been included in the income. In this context, he enlists the support of the apex court by a decision reported in National Insurance Co. Ltd. Vs. Indira Srivastava and others 2008 (2) SCC 763]. Therein, the apex court, according to him, has taken the view that the amounts which are shown as deductions towards PF, Pension, LIC and repayment of loans are to be included in the income. In this context, it is necessary to refer paragraphs 14, 15, 16, 17, 20 and 21 of the apex court decision. It reads as follows: “14. The question came for consideration before a learned Single Judge of the Madras High Court in National Insurance Co. Ltd. Vs. Padmavathy wherein it was held: “ ..... Income tax, professional tax which are deducted from the salaried person goes to the coffers of the Government under specific head and there is no return. Whereas, the general provident fund, special provident fund, LIC contribution are amounts paid under specific heads and the contribution is always repayable MACA.673/04 : 3 : to an employee at the time of voluntary retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. The Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if the legal representatives are entitled to lump sum payment under the contractual liability. If the contributions made by the employees made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependency compensation, then the legal representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can make only statutory deductions such as income tax and professional tax and any other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependency compensation. Any contributions made by the employee during his lifetime, form MACA.673/04 : 4 : part of the salary and they should be included in the monthly income, while computing the dependency compensation.” 15. Similar view was expressed by a learned Single Judge of the Andhra Pradesh High Court in S.Narayanamma Vs. Secy. to Govt. of India, Ministry of Telecommunications holding: “ In this background, now we will examine the present deductions made by the Tribunal from the salary of the deceased in fixing the monthly contribution of the deceased to his family. The Tribunal has not even taken proper care while deducting the amounts from the salary of the deceased, at least the very nature of deductions from the salary of the deceased. My view is that the deductions made by the Tribunal from the salary such as recovery of housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the deceased cannot be deducted while computing the net monthly earnings of the deceased. These advances or loans are part of his salary. So far as house rent allowance is concerned, it is beneficial to the entire family of the deceased during his tenure, but for his untimely death the claimants are deprived of such benefit which they would have enjoyed if MACA.673/04 : 5 : the deceased were alive. On the other hand, allowances, like travelling allowance, allowance for newspapers/periodicals, telephone, servant, club fee, car maintenance, etc., by virtue of his vocation need not be included in the salary while computing the net earnings of the deceased. The finding of the Tribunal that the deceased was getting Rs.140 as net income every month is unsustainable as the deductions made towards vehicle loan and other deductions were also taken into consideration while fixing the monthly income of the deceased. The above finding of the Tribunal is contrary to the principle of ' just compensation' enunciated by the Supreme Court in the judgment in Helen case. The Supreme Court in Concord of India Insurance Co. Ltd. Vs. Nirmala Devi held that determination of quantum must be liberal and not niggardly since law values life and limb in a free country 'in generous scales'.” 16. We may, however, notice that a Division Bench of this Court in Asha Vs. United India Insurance Co. Ltd. whereupon reliance has been placed by Mr.Satija, was considering a case where, like the present one, several perks were included in salary. We may reproduce the salary certificate heretobelow: “ This is to certify that Mr.A.M.Raikar, MACA.673/04 : 6 : working as AG III in this organisation has been paid the following pay and allowances for the month of May 1995: Earnings Amount Deductions Amount Basic Rs.3420.00 CPF(S) Rs.488.00 Special pay Rs.70.00 CPF(Add) FDA Rs.350.00 GIS Rs.3.75 VDA Rs.1040.00 LIC/GIS Rs.509.10 CCA Rs.100.00 HRR HRA Rs.1047.00 MSPI Rs.60.00 Washing all. Rs.75.00 Society Rs.576.00 Conv. Rs.225.00 Union Rs.3.00 Cant. sub. Rs.265.00 HBA Rs.340.00 CEA Rs.2040.00 B.fund Rs.10.00 Total Rs.8632.00 Total Rs.1989.85 Net payable Rs.6642.00(Rupees six thousand six hundred and forty-two only)”. In that case, this Court held: “ Lastly it was submitted that the salary certificate shows that the salary of the deceased was Rs.8632. It was submitted that the High Court was wrong in deducting the allowances and amounts paid towards LIC, society charges and HBA, etc. We are unable to accept this submission also. The claimants are entitled to be compensated for the loss suffered by them. The loss suffered by them is the amount which MACA.673/04 : 7 : they would have been receiving at the time when the deceased was alive. There can be no doubt that the dependants would only be receiving the net amount less 1/3rd for his personal expenses. The High Court was therefore rights in so holding.” 17. This Court in Asha did not address itself the questions raised before us. It does not appear that any precedent was noticed nor the term “just compensation” was considered in the light of the changing societal condition as also the perks which are paid to the employee which may or may not attract income tax or any other tax. What would be “just compensation” must be determined having regard to the facts and circumstances of each case. The basis for considering the entire pay-packet is what the dependants have lost due to death of the deceased. It is in the nature of compensation for future loss towards the family income. 20. The term “income” in P.Ramanatha Aiyar's Advanced Law Lexicon has been defined as under: “ The value of any benefit or perquisite whether convertible into money or not, obtained from a company either by a director or a person who has substantial interest in the company, and any sum paid by such company in respect MACA.673/04 : 8 : of any obligation, which but for such payment would have been payable by the director or other person aforesaid, occurring or arising to a person within the State from any profession, trade or calling other than agriculture.” It has also been stated: “ ' Income' signifies 'what comes in'. 'It is as large a word as can be used' to denote a person's receipts. Income is not confined to receipts from business only and means periodical receipts from one's work, lands, investments, etc. Secy. to the Board of Revenue, Income Tax Vs. Al. Ar. Rm. Arunachalam Chettiar & Brothers. Ref. Vulcun Insurance Co. Ltd. Vs. Corpn. of Madras.” 21. If the dictionary meaning of the word “income” is taken to its logical conclusion, it should include those benefits, either in terms of money or otherwise, which are taken into consideration for the purpose of payment of income tax or professional tax although some elements thereof may or may not be taxable or would have been otherwise taxable but for the exemption conferred thereupon under the statute.” No doubt, we notice that in paragraph 26, the Court has given the following reasons and finally the appeal itself was MACA.673/04 : 9 : dismissed. “ Firstly, the accident had taken place as far back as on 1.9.1997 and secondly, the Tribunal as also the High Court failed to take into consideration rise in income of the deceased by way of promotion or otherwise”. In this case, the accident took place on 2.2.2001. The amount shown as deduction towards PF is Rs.1,000/-. Deduction towards pension is shown as Rs.40/- and deduction towards LIC is shown as Rs.837.40. Thereafter, various amounts are shown as deduction towards repayment of loans taken by the deceased. Learned counsel for the Insurance company would submit that if the amount which has been awarded is put in a deposit with interest at the rate of 10%, it would yield an income of Rs.4,500/-. Therefore, no interference is called for. 3. If we go by the principle laid down by the apex court, it would appear that the amounts which are shown as deducted towards PF, Pension and LIC are amounts which have to be repaid by the employer at some stage in the future. As far as the amounts which are shown as deductions towards repayments for loans availed by the deceased, we do not think the appellants are MACA.673/04 : 10 : entitled to get the relief. We are not sure as to the total amount of loan taken and the period of time over which the deductions would have to be maintained for repaying the loans. After all, the whole purpose of indulging in the exercise of determining compensation is to put the claimants in the same position as far as possible as money can as if the deceased did not pass away. This would mean that reference to such amounts which are to be repaid by the deceased compulsorily without any obligation for payment by the employer at some point cannot be included in the income. We are also not inclined to accept the case based on accretion to income on the basis of the bonus declared on yearly basis which we are told is done on the basis of the profit which the company makes on a yearly basis. We do not think that any amount can be claimed as bonus by the employee without reference to facts which vary from year to year. In such circumstances, we would think that the appellants 3 to 5, who are the widow and children of the deceased, would be entitled to the enhancement on the following basis. Taking the total deduction towards PF, Pension and LIC, the amount would be Rs.1,877/-. The 1/3rd of the MACA.673/04 : 11 : amount would be Rs.625/- approximately. This would mean that the 2/3rd dependency on a monthly basis would be Rs.1,250/-. We notice that the Tribunal has taken the income at Rs.4,500/- but actually the income after deduction would come to Rs.4,189/-. If that be so, taking one third of the same as the income and after computing the income as we have noted, the appellant would be entitled to Rs.1,99,000/-. Accordingly, there will be an award against respondents 1 to 3 for a sum of Rs.2 lakhs (rounded of from Rs.1,99,000/-) more with interest at the rate of 7.5% from the date of petition till the date of payment in favour of appellants 3 to 5. The appeal is allowed as above. (K.M.JOSEPH, JUDGE) (M.L. JOSEPH FRANCIS, JUDGE) aks