THE HON’BLE SRI JUSTICE N.V.RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD M.A.C.M.A.Nos.1037 of 2008 and 4702 of 2008 ORDER: (per the Hon’ble Sri Justice P.Durga Prasad) Both the appeals are directed against the award passed in O.P.No.2368 of 2005 by the Motor Accidents Claims Tribunal -cum - III Additional Chief Judge, Hyderabad on 14.02.2007. The M.A.C.M.A.No.1037 of 2008 is ﬁled by the Insurance Company questioning the quantum of compensation awarded by the Tribunal. The M.A.C.M.A.No.4702 of 2008 is ﬁled by the claimants for enhancement of the compensation awarded by the Tribunal. The Claimants have ﬁled an application under Section 166 of M.V.Act claiming compensation of Rs.30,00,000/- for the death of son of petitioner Nos.1 and 2, brother of petitioner Nos.3 and 4 in a Motor Vehicle Accident. According to them on 18.06.2005 the deceased G.Prashanth Panda was traveling in a car to go to Ongole, which was being driven by his friend and due to the rash and negligent driving of the car by his friend while overtaking a motorcycle he lost control over the vehicle and the car turned turtle. As a result of which, the deceased and his another friend died in the said accident. The owner of the vehicle has remained exparte. The 2nd respondent/Insurance Company has opposed the claim of the petitioners by ﬁling counter contending that there was negligence on the part of the inmates of the car. Since the car was overloaded the accident was occurred and the compensation claimed by the petitioners is highly excessive and exorbitant. The driver of the car had no driving license at the time of the accident. On the above pleadings, the Tribunal has framed the following issues: (1) Whether the accident occurred due to rash and negligent driving of Maruthy Car No.AP 9J 2738 on 18.06.2005? (2) Whether the petitioners are entitled to compensation? If so, to what sum and against whom? (3) To what relief? During the course of enquiry, the 1st petitioner was examined himself as P.W.1 and also examined P.Ws.2 and 3 on their behalf and got marked Exs.A.1 to A.12 and Exs.X.1 to X.4. On behalf of the respondents, R.W.1 was examined and Ex.B.1 was marked. Taking into consideration of the said oral and documentary evidence, the Tribunal held the issue No.1 in favour of the petitioners holding that the accident was occurred due to rash and negligent driving of the driver of the car. With regard to issue No.2, the Tribunal taking into consideration of the income of the deceased as Rs.2,28,000/- as per Ex.A.7 and by taking into consideration of the details of the salary as mentioned in Ex.A.6 and as the hike was 100% on the basic pay and ﬂexi pay and deducted allowances of Rs.76,600/- from the income of Rs.2,28,000/- and arrived at the income of the deceased at Rs.1,51,400/- and deducted 25% towards tax and arrived the contribution to the family at Rs.1,28,550/-. After deducting 1/3rd towards his personal expenses and by applying multiplier ‘15’, awarded an amount of Rs.12,85,500/- towards loss of dependency of the petitioners. The Tribunal further awarded an amount of Rs.2,000/- towards funeral expenses, Rs.10,000/- towards shock sustained by family members. Thus, in total the Tribunal awarded an amount of Rs.12,97,500/-. Questioning the said quantum of compensation, the Insurance Company has ﬁled the M.A.C.M.A.No.1037 of 2008 and the claimants have ﬁled the appeal M.A.C.M.A.No.4702 of 2008 for enhancement of compensation. The insurance company’s counsel has pleaded that the terms and conditions of the policy were violated by allowing the excess number of passengers in the car, as such they are not liable to pay any compensation and the multiplier applied by the Tribunal is on higher side; as such the compensation awarded by the Tribunal is liable to be reduced. The claimants counsel on the other hand has pleaded that the Tribunal has committed an error in deducting Rs.76,600/- towards club charges, food coupons, gift vouchers and medical reimbursement, by taking into consideration of the 100% hike in basic pay and ﬂexi pay. He further pleaded that the Tribunal has failed to take into consideration the future prospects of the deceased as he is aged about 25 years as on the date of accident and he is a software engineer and having bright prospects in life, as such the compensation awarded by the Tribunal has to be increased. The insurance company’s counsel has pleaded that they are not liable to pay any compensation in view of violation of the terms and conditions of the policy as the car was overloaded at the time of the accident by allowing 6 passengers into the car. The Tribunal by taking into consideration of the evidence of P.W.2 held that only 5 persons were traveled in the said car and one of them is the driver and the suggestion put to him that 6 passengers were traveling in the car at the time of the accident was denied by him and the insurance company has not produced any evidence to show that the car was overloaded, rejected the contention of the insurance company that the car was overloaded at the time of accident. There is nothing on record to set aside the finding recorded by the Tribunal in that regard. With regard to quantum of compensation, the counsel for insurance company has pleaded that the multiplier applied by the Tribunal is on higher side. On the other hand, the claimants’ counsel has pleaded that the Tribunal erred in deducting 100% enhancement in the ﬂexi pay and not considering the future prospects of the deceased while ﬁxing the loss of dependency of the claimants. The deceased was working as Software engineer. P.W.3, who is the H.R. Executive in the software company, has stated about the deceased working as Software engineer from 08.09.2004 to till this death i.e. 18.06.2005 and his job was conﬁrmed from 08.03.2005 and his salary was revised from Rs.1,20,000/- P.A. to Rs.2,28,000/- with eﬀect from 01.06.2005. Ex.A.6 is the appointment letter. Ex.A.7 is the conﬁrmation letter issued by the company IAXIS Limited, Hyderabad. As per Ex.A.6 appointment letter, the compensation package on a cost to company basis will be Rs.1,20,000/- P.A. consisting of Rs.53,760/- basic pay and Rs.66,240/- flexi pay. The same was also mentioned in annexure-II attached to the said letter. Annexure-I attached to the said letter shows the details of ﬂexi pay components, which are house rent allowance, conveyance allowance, medi-claim and personal accident policy, medical reimbursement, food coupons, gift vouchers, LTA, special allowance. Ex.A.7 is the conﬁrmation letter, which shows that the appointment of the deceased was conﬁrmed with eﬀect from 08.03.2005 and the revised annual compensation package will be eﬀective from 01.06.2005. As per the revised compensation, the base pay is Rs.1,02,600/-, ﬂexi pay is Rs.1,25,400/-, in total Rs.2,28,000/-. The Tribunal has taken into consideration the total pay of the deceased as Rs.2,28,000/- as per Ex.A.7 and as there is hike in the base pay and ﬂexi pay from the date of initial appointment i.e. 08.09.2004 to the date of conﬁrmation 03.03.2005 at 100%, deducted Rs.76,600/- towards club charges, gift vouchers, medical reimbursement, conveyance allowance and house rent allowance. When compared Exs.A.6 with A.7, in Ex.A.6 the base pay was shown as Rs.53,760/- and in Ex.A.7 it was shown as Rs.1,02,600/-. In A.6 the ﬂexi pay was shown as Rs.66,240/- and in Ex.A.7 it was shown as Rs.1,25,400/-. Therefore, from the date of appointment to the date of conﬁrmation, there is about 90% enhancement in the base pay and flexi pay. In annexure-I attached to Ex.A.6 the details of ﬂexi pay were given and out of ﬂexi pay components, the medical reimbursement of Rs.15,000/-, food coupons of Rs.13,200/- and gift vouchers of Rs.5,000/- are liable to be deducted from the total salary, which comes to Rs.33,200/- P.A. Since there is hike of 90% in the ﬂexi pay from the date of appointment to the date of conﬁrmation, there would be 90% hike in the medical reimbursement, food coupons and gift vouchers and if the said hike is taken into consideration, the deductions are liable to be made under the above heads is (Rs.33,200 + Rs.29,800) Rs.63,080/-. The deceased was working as software engineer, within one year there is a hike of 90% of total emoluments. Since he is aged only 24 years as on the date of his death, had he been alive, there would have been bright future for him being a software engineer, as such for arriving at the income of the deceased, the future prospects has to be taken into consideration. Since the annual income of the deceased is Rs.2,28,000/-, after deducting Rs.63,080/- towards medical reimbursement, food coupons and gift vouchers, the income of the deceased comes to Rs.1,64,920/-. Even though the deceased is liable to pay income tax of Rs.17,420/- for the income of Rs.2,28,000/-, as he is entitled for rebate at 20% under Section 88 up to savings of Rs.1,00,000/-, which comes to Rs.20,000/-, therefore, he is not liable to pay any income tax. Hence, no amount is liable to be deducted towards income tax from the income of the deceased. As per the decision rendered in “Smt. Sarla Verma and others v. Delhi Transport Corporation and another (2009 AIR SCW 4992)”, 50% has to be added towards his future prospects. Thus, the income of the deceased comes to (Rs.1,64,920 + Rs.82,460) Rs.2,47,380/-. Since the deceased is unmarried, as per Smt.Sarla Verma’s case (referred supra) 50% has to be deducted towards his personal expenses. After deducting 50% towards his personal expense, the dependency of the petitioners comes (Rs.2,47,380 – Rs.1,23,690) to Rs.1,23,690/-. Since the deceased is unmarried, the age of the mother of the deceased has to be taken into consideration for applying the multiplier. As the age of the mother of the deceased is 45 years, as per Smt. Sarla Verma’s case (referred supra) the proper multiplier is 14. Thus, the dependency of the petitioners comes to (Rs.1,23,690 X 14) Rs.17,31,660/-. Apart from the above, the petitioners are entitled for Rs.10,000/- towards loss of love and aﬀection, Rs.5,000/- towards transportation charges, and Rs.5,000/- towards funeral expenses. Thus, in all the petitioners are entitled for Rs.17,51,660/-. As per Smt.Sarla Verma’s case (referred supra) the claimants are entitled for interest at 6% P.A. on the compensation amount. In the result, the M.A.C.M.A.No.1037 of 2008 is partly allowed only to the extent of reducing the interest to 6% P.A. from 7.5% P.A. on the compensation. In the result, the M.A.C.M.A.No.4702 of 2008 is partly allowed and the compensation awarded by the Tribunal is enhanced to Rs.17,51,660/- from Rs.12,97,500/- with interest at 6% P.A. on the compensation from the date of ﬁling of the petition till the date of realization. _______________________ JUSTICE N.V.RAMANA. _____________________________ JUSTICE P. DURGA PRASAD Dated:25 -11-2011 Ksp