FA/295/2008 1/10 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 295 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE A. L. DAVE HONOURABLE MR.JUSTICE S. D.DAVE =============================================== ========== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? =============================================== MAGANBHAI GOVINDJI KATARIYA & Others. Versus MUKESHBHAI BHIKHABHAI RATHOD & Others. =============================================== Appearance : MR ARPIT A KAPADIA for the Appellants. RULE SERVED BY DS for Respondents Nos. 1 & 2. MR HEMANT S SHAH for Respondent No. 3. =============================================== CORAM : HONOURABLE MR.JUSTICE A. L. DAVE and HONOURABLE MR.JUSTICE S. D. DAVE Date : 21/04/2008 FA/295/2008 2/10 JUDGMENT ORAL JUDGMENT : (Per : A. L. DAVE, J.) 1. This appeal arises out of a judgment and award rendered by Motor Accident Claims Tribunal (Aux.) & F.T.C. No.3, Bharuch, in Motor Accident Claim Petition No.432 of 2005. The claim application arose out of an accident that occurred on 16th April, 2005, at about 18.00 hours on National Highway No.8, near G.I.D.C. Estate, Panoli. The vehicles involved were Motorcycle No.GJ-5-J 5795 and Luxury Bus No.GJ-16-U 0027. One Ashokkumar Maganbhai Katariya and his wife, Meenakshiben, were proceeding from Kosamba to Bharuch side on the said motorcycle. The luxury bus came from behind and hit them. Because of the impact, both the riders were thrown off the motorcycle and were crushed to death under the bus. 1.1 The claimants are the parents of deceased-Ashokbhai and his minor son, Yashkumar, who had preferred Motor Accident Claim Petition No.432 of 2005 for the death of Ashokbhai Katariya and Motor Accident Claim Petition No.304 of 2005 for the death of Meenakshiben. 2. The claimants claimed Rs.19,00,000/- as compensation for the death of Ashokbhai and Rs.4,50,000/- as compensation for the death of Meenakshiben. FA/295/2008 3/10 JUDGMENT 2.1 The Tribunal awarded a compensation of Rs.7,78,624/- for the death of Ashokbhai and Rs.3,85,072/- for the death of Meenakshiben with proportionate costs and interest at the rate of 9 per cent in both the cases. 2.2 The parties have accepted the award so far as it relates to death of Meenakshiben and no appeal is preferred. However, the claimants are not satisfied with the compensation awarded for the death of Ashokbhai and have, therefore, preferred this First Appeal. The original opponents have not preferred any appeal or cross-objections. 3. The claimants challenged the award only on quantum aspect on the ground that the Tribunal has not considered the prospective rise in income of the deceased and has awarded compensation only on the basis of the income of the deceased at the time of his death, that too, after deducting certain allowances, which could not have been deducted by the Tribunal. Since the only question involved was that of quantum, at the time of admitting the appeal, notice for final disposal was issued and that is how the matter is heard by us finally today. 4. Learned Advocate, Mr. Arpit Kapadia, appearing for the FA/295/2008 4/10 JUDGMENT appellants original claimants submitted that, though there is evidence to show that the gross income of the deceased was Rs.7358/- per month, the Tribunal has deducted certain allowances and has assessed the income of the deceased at Rs.5233/-. He submitted that the view taken by the Tribunal is against the view taken by the Apex Court in the case of National Insurance Company v. Indira Srivastava, 2008 AIR SC Weekly 1432. He submitted that the appeal may, therefore, be accordingly allowed. 5. The appeal is opposed to by learned Advocate, Mr. Shah, appearing for respondent No.3. Mr. Shah submitted that the Tribunal was justified in deducting the allowances and not considering prospective rise in income as there is no evidence to show the prospects of the deceased and, in absence of such evidence, the Tribunal could not have considered prospective rise in income. In support of his submission, he relied on the decision in the case of Bijoy Kumar Dugar v. Bidya Dhar Dutta & Others, (2006) 3 SCC 242. Mr. Shah also relied on decision in the case of Oriental Insurance Company v. Jashuben, 2008 (2) SCALE 474. He submitted that the appeal may, therefore, be dismissed. 6. We have considered rival side submissions. FA/295/2008 5/10 JUDGMENT 7. It is clear that since the original opponents-present respondents have not preferred any appeal, the finding of the Tribunal on negligence has attained finality. The appellants do not challenge that finding either. 8. The question that remains to be considered by us is whether the Tribunal erred in not considering the prospective rise in income and whether while considering the dependency loss, the Tribunal could have deducted the allowances. The answers have to be in affirmative and negative respectively for the reasons stated hereinafter. 9. So far as the evidence on income aspect is concerned, the claimants adduced evidence of employees of the company with which the deceased was working. They have stated that the income of the deceased, at the time of the accident, was Rs.7358/-. There is documentary evidence in the form of salary slips of the deceased and the certificates in the form of 16AA under the Income Tax Act to show the income earned by the deceased from the company and tax deducted at source, if any. The last pay slip of the deceased is for the month of March, 2005 because the accident occurred in April, 2005. That pay slip indicates that his basic pay was Rs.3622.00 and considering other FA/295/2008 6/10 JUDGMENT allowances, etc., his gross pay was Rs.7358/. The pay slip for the month of March, 2004 indicates that the basic pay of the deceased was Rs.3333/- and his gross pay was Rs.5856/-. It has come in evidence of the co-employees of the deceased that the gross salary of the deceased was variable because of variation in certain allowances, overtime, etc. The pay slips for the months of March, 2004 to March, 2005 have been produced on record and they all show that the income of the deceased was never less than the income for the month of March, 2004. The graph has gone upward only. There is only a difference in degrees. It is, therefore, not possible to accept the contention raised by learned Advocate, Mr. Shah, that there is no evidence to show that the deceased had prospects of rise in income. 9.1 In light of what is observed by the Apex Court in the case of Oriental Insurance Company v. Jashuben, it is true that while the determining the dependency loss, it is necessary to consider the earning of the deceased at the time of the accident. But the Apex Court has observed that further prospect is not out of bound for such consideration if it is founded on some legal principle. In the instant case, the deceased was working with a limited company. He was an employee on a regular pay scale and there is evidence to show that the pay scale was increasing so also the gross income of the deceased. Ordinarily, in any employment FA/295/2008 7/10 JUDGMENT when an employee is working on a pay scale, he gets rise in pay and, consequently, there is effect of that rise in the gross salary. Thus, on principle it can be accepted that the deceased had prospects of rise in his income and there is evidence to support this principle. 9.1.2 It is true that, in that very case, the Apex Court has observed that what would have been the income of the deceased on the date of retirement would not be a relevant factor. But, at the same time, prospects of rise in income can be considered. Keeping these principles in mind, we are of the view that while computing the economic loss caused to the claimants, prospective rise in income ought to have been considered by the Tribunal and that having not been done, the Tribunal has erred in law. 9.2 The Tribunal has assessed the income of the deceased at Rs.5233/- for computing economic loss caused to the claimants as against gross salary of Rs.7358/- at the time of the accident. This is because the Tribunal has considered the deductions which are made from the salary. These deductions are contribution towards Provident Fund, T.V. Cable Connection, Professional Tax, Trade Deduction, SBS and Motor Loan. The contribution towards Provident Found cannot be considered as a deduction which would not bring any monetary benefit FA/295/2008 8/10 JUDGMENT to the claimants. Of course, T.V. Cable Connection, Professional Tax, Trade Deduction, Motor Loan, SBS, etc. are the expenditure which the deceased was incurring and the same would be taken care of when deduction under the head of expenditure on self is made while computing dependency loss and, therefore, they could not have been deducted by the Tribunal while assessing the income of the deceased. We may refer to the decision in the case of National Insurance Company v. Indira Srivastava (supra) where it is observed that the amount which was required to be paid to the deceased by his employer by way of perks should be included in computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contra distinct to the ones which were for his benefit. In this set of circumstances, we are of the view that the Tribunal committed an error in assessing the income of the deceased at Rs.5233/- per month. The Tribunal ought to have considered the gross salary of the deceased which was Rs.7358/- per month. 9.2.1 It appears from the certificate issued by the employer as regards Tax Deduction at Source (Form 16AA) that the income of the deceased was not liable to be charged with income tax. The professional tax that was deducted from the income would be taken care of when expenditure on self is deducted at the rate of 1/3rd. An employee would FA/295/2008 9/10 JUDGMENT not be spending much on his vocation nor would he be spending much on his own self at the cost of his family and, therefore, when 1/3rd of the income is deducted, it would take care of petty expenditure like T.V. Cable Connection, Professional Tax, Motor Loan, etc. and, therefore, if those deductions are made from the salary and if once again 1/3rd of the income is deducted, it would amount to duplication of deductions and the compensation that would be awarded would not be a just compensation. 9.3 In our view, therefore, the income of the deceased can be assessed at Rs.7358/-. If the prospective rise in income is considered, two fold the same will have to be added to it and then will have to be divided by two. That would fetch an amount of Rs.11,037/- as prospective income of the deceased. For considering the dependency loss, applying the rule of thumb, if 1/3rd is deducted, an amount of Rs.2679/- will have to be deducted therefrom, which would fetch an amount of Rs.7358/ as the monthly dependency loss to the claimants, namely, the minor son and the parents. The annual dependency loss would be Rs.88,296/-. The age of the deceased was 28 years. The Tribunal has adopted a multiplier of 18. However, when just compensation is to be awarded, multiplier has to be so adopted that, ultimately, the capital sum awarded gets consumed-up over the period FA/295/2008 10/10 JUDGMENT for which the dependency is expected to last [see Tamil Nadu State Transport Corporation Ltd. v. S. Rajapriya, (2005) 6 SCC 236]. In our view, considering the age of the deceased, a multiplier of 17, if adopted, would be just and proper. This would fetch a sum of Rs.15,01,032/- as compensation under the head of dependency loss. 10. No grievance is made so far as compensation awarded under other heads are concerned and that remains the same, i.e. Rs.10,000/- under the head of loss of life, Rs.10,000/- under the head of loss of consortium and Rs.5000/- for funeral expenses and if that amount is added, the claimants would be entitled to a total compensation of Rs.15,26,032/- as against Rs.7,78,624/- awarded by the Tribunal. There shall be no change so far as rate of interest is concerned. The claimants would also be entitled to proportionate costs on the enhanced amount of compensation. There shall be no change so far as orders regarding disbursement are concerned as passed by the Tribunal. The appeal stands partly allowed. 11. Direct service is permitted. [ A. L. DAVE, J. ] [ S. D. DAVE, J. ] gt