FA/7913/1999 1/9 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 7913 of 1999 For Approval and Signature: HONOURABLE MS. JUSTICE R.M.DOSHIT HONOURABLE MR.JUSTICE C.K.BUCH ========================================================= 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 ? ========================================================= RAKSHABEN KISHANKUMAR PATEL & 3 - Appellant(s) Versus VRIJBIHARI GIRDHARLAL YADAV & 2 - Respondent(s) ========================================================= Appearance : MR SANDIP C SHAH for Appellant(s) : 1 - 4. Respondent(s) : 1 - 2 SERVED . MR DAKSHESH MEHTA for Respondent(s) : 3, ========================================================= CORAM : HONOURABLE MS. JUSTICE R.M.DOSHIT and HONOURABLE MR.JUSTICE C.K.BUCH Date : 11/01/2008 ORAL JUDGMENT (Per : HONOURABLE MS. JUSTICE R.M.DOSHIT) FA/7913/1999 2/9 JUDGMENT This Appeal preferred under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as, “the Act”) arises from the judgment and award dated 25th August, 1999 passed by the Motor Accidents Claims Tribunal, Ahmedabad (Rural) (hereinafter referred to as, “the Tribunal”) in Motor Accident Claim Petition No.1370/1994. The appellants are the claimants, the widow, minor children and the mother of the deceased Kishankumar Patel. The respondent no.1 is the driver and the respondent no.2 is the owner of the offending vehicle, the respondent no.3 is the National Insurance Company Limited (hereinafter referred to as, “the Insurance Company”), insurer of the offending vehicle. On 14th August, 1994 the deceased Kishankumar Patel was travelling in a Maruti Van bearing Registration No.MH-2-K-1068 on highway from Bhopal to Sagar in the state of Madhya Pradesh. At around 9 O'clock in the evening the Maruti Van had a head-on collision with the offending Truck bearing Registration No.MP-15-D-0275. The deceased received FA/7913/1999 3/9 JUDGMENT fatal injuries. The claimants filed the above referred Claim Petition No.1370/1994 for compensation in the sum of Rs.75,40,000=00. According to the claimants the deceased was 41 years of age. He was a partner in a business firm M/s.Dahyabhai Joitaram Patel. The said firm was engaged in manufacturing tobacco bidies. The deceased was earning around Rs.6 lakhs every year. The claim was contested by the respondent no.2, the owner of the offending truck by written statement Exh.23 and by the Insurance Company by written statement Exh.18. In support of their claim, the claimants produced copies of birth certificate and the school leaving certificate to prove the age of the deceased and the minor children. They produced audit report of the firm and other documents to prove the turnover of the firm at Exhibits 35 to 39, 42 to 44, 47 to 49, 51 and 52. To prove the income of the deceased the claimants produced copies of statement of income of the deceased for various accounting years and income FA/7913/1999 4/9 JUDGMENT tax returns at Exhibits 40, 41, 45, 46 and 50. The claimants also produced post-mortem report (Exh.53), partnership deed (Exh.54) and panchnama of the scene of accident (Exh.55). The claimants examined one Rakshaben, the widow of the deceased (Exh.29), the chartered accountant one Hemantbhai Vora (Exh.60) and the truck driver one Mohanlal Maganlal (Exh.59), an eye-witness. Considering the evidence on record, the Tribunal held that the unfortunate accident occurred due to sole negligence on the part of the driver of the offending truck. To calculate the dependency loss, the Tribunal has considered the income of the deceased reflected from the above referred documents produced on record. The Tribunal has observed that the income of the deceased from business was on the downward trend i.e. the income of Rs.7,04,000=00 in the year 1990-91 was reduced to Rs.2,78,000=00 in the year 1992-93. On the basis of the income returned by the deceased, the Tribunal has estimated his annual average income at Rs.2,78,860=00. After deducting FA/7913/1999 5/9 JUDGMENT 1/3rd amount for his personal expenses, the dependency loss is calculated at Rs.1,85,907. The Tribunal has adopted a multiplier of 11 years and calculated the total dependency loss at Rs.20,44,977=00. To that the Tribunal has added the conventional sum of Rs.30,000=00. The Tribunal has thus awarded a total compensation in the sum of Rs.20,74,977=00 with interest @ 12% and the proportionate cost. Feeling aggrieved, the claimants have preferred the present Appeal. In the present Appeal, the challenge is confined to a sum of Rs.7,50,000=00. We are informed that the claimants have been paid Rs.33 lakhs comprising the award amount, interest and cost. Mr.Shah has appeared for the appellants. He has submitted that the Tribunal has committed a manifest error in assessing the income of the deceased and in holding that over the years the income from the business was decreasing. He has submitted that prior to the year 1992, the income received from the business was taxable. However, after 1992 amendment FA/7913/1999 6/9 JUDGMENT to the Income tax Act, the profit from business was taxable at the end of the firm. The share from the profit received by each partner was not taxable. Thus, the income from business reflected in the statement of income after the year 1992 was the income after payment of tax. Though explained by the concerned chartered accountant (Exh.60), the Tribunal has failed to appreciate the change in law and its effect. He has also submitted that the Tribunal has also failed to consider the possible future increase in the income of the deceased. The multiplier of 11 years adopted by the Tribunal is also conservative. Atleast a 15 years' multiplier ought to have been adopted. He has next submitted that the conventional amount of Rs.30,000=00 awarded by the Tribunal is also conservative. A sum of Rs.50,000=00 ought to have been awarded for the loss of expectancy of life, loss of consortium, funeral charges, etc. In support of his submission, Mr.Shah has relied upon the judgments of this Court in the matters of Aminakhatun Wd/o Mahmudusman Gulamrasul and others v/s. Fakrusha Bismillahshah Fakir and another [23(1) GLR 728] and of Lata Wadhwa and others v/s. State of Bihar and FA/7913/1999 7/9 JUDGMENT others [2001 ACJ 1735]. The Appeal is contested by Mr.Mehta. He has supported the impugned award. He has pointed out that the business in question was a family business. There is no gainsaying that the family of the deceased continued to benefit out of the profits of the business. He has also submitted that the claimants have not brought any evidence on record that since the death of the deceased the business had flourished and the higher profits were earned by the partners. In the submission of Mr.Mehta, in absence of any evidence, the annual dependency loss calculated by the Tribunal is appropriate and no interference is warranted. He has also submitted that the rate of interest of 12% awarded by the Tribunal is excessive. We have perused the records, more particularly the copies of the income tax returns filed by the deceased. It is apparent that the main source of income of the deceased was the profit from the business and the interest earned from the capital investment in the business. It has come on record in FA/7913/1999 8/9 JUDGMENT evidence of the widow of the deceased that after the death of the deceased the capital of Rs.30 lakhs was returned to her and that she had invested the said amount. Thus, the dependency loss would be the loss of income earned from the business. As disclosed in the return filed for the Assessment Year 1993-94, the profit from business was Rs.2,93,483=00. We are of the opinion that it can safely be inferred that the deceased was earning around Rs.3 lakhs from business annually. Further, not necessarily the deceased had been spending 1/3rd of his income for his own maintenance and personal expenses. With two school going children, we are of the opinion that the deceased would be spending around Rs.85,000=00 on his personal maintenance and expenses. That leaves us with the annual dependency loss at Rs.2,25,000=00. Considering the multiplier of 13 years, the claimants are entitled to Rs.27,95,000=00 under the head “loss of dependency” and the conventional amount of Rs.30,000=00 as awarded by the Tribunal. Thus, the claimants are entitled to total compensation in the sum of FA/7913/1999 9/9 JUDGMENT Rs.28,25,000=00. In other words, the claimants are entitled to an additional amount of Rs.7,50,023=00. As the claim has been restricted to Rs.7,50,000=00, we direct that the claimants be paid an additional sum of Rs.7,50,000=00 with interest at the rate of 7.5% and the proportionate cost. Appeal is allowed with cost. (Ms. R.M.Doshit, J.) (C.K. Buch, J.) /moin