THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR M.A.C.M.A.Nos.2218 and 2509 of 2009 Dated:- 30th April, 2011 M.A.C.M.A.No.2218 of 2009 Between:- United India Insurance Company Ltd., …Appellant AND Vantaru Prathap Reddy and others …Respondents M.A.C.M.A.No.2509 of 2009 Between:- Vantaru Prathap Reddy and others …Appellants AND 1.Leading School and 2.United India Insurance Company Ltd., …Respondents THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR M.A.C.M.A.Nos.2218 & 2509 of 2009 COMMON JUDGMENT:- Since both these appeals are directed against the same order and decree dated 26.09.2007 passed in O.P.No.1288 of 2005 by the Motor Vehicle Accidents Claims Tribunal – cum – II Additional Chief Judge, City Civil Courts at Hyderabad (‘the Tribunal’, for brevity), both these appeals are being disposed of by this common judgment. 2. M.A.C.M.A.No.2218 of 2009 is preferred by the second respondent – Insurance Company, questioning the quantum of compensation awarded by the Tribunal to the claimants and M.A.C.M.A.No.2509 of 2009 is preferred by the claimants contending that the amount of compensation awarded by the Tribunal is less and seeking enhancement of the amount of compensation. 3. The parties will be hereinafter referred to as they were arrayed before the Tribunal, for the sake of convenience. 4. The brief facts that lead the parties to file both these appeals are as follows:- On 06.03.2005, the deceased – Somi Reddy was proceeding on his motorcycle bearing registration No.AP 28 AG 5254 along with one Mr.Raghu as a pillion rider from Vikrampuri Bata Show Room road towards Secunderabad. When they reached Ratnadeep Super Market, Karkhana Road, Secunderabad, at about 07:10 P.M., one DCM mini bus bearing registration No.AP 12 T 6900, being driven by its driver in rash and negligent manner came from opposite direction in wrong side at a high speed and dashed against the motorcycle. The deceased sustained severe injuries and when he was shifted to Apollo Hospital, Kharkhana Road, Secunderabad, doctors declared that he was brought dead. The police, Kharkhana, registered a case in Crime No.50 of 2005 against the driver of the DCM Mini Bus. 5. The claimants are the parents of the deceased. The deceased was aged about 28 years and doing business as Proprietor of M/s.Yanchor Wire Industries at IDA, Uppal. He was also doing business as Commission Agent at V.M.Laboratories, manufacturers of Animal Food Supplements, and also poultry medicine business and earning a total sum of Rs.1,50,000/- per annum. He was an income tax assessee with a PAN account allotted by the Income Tax Department. The deceased was unmarried. Alleging that the accident occurred due to rash and negligent driving of the driver of the DCM Mini Bus and that the claimants have lost their sole source of income and love and affection of the deceased and only support in their old age, they claimed a total compensation of Rs.15,00,000/-. 6. The first respondent – owner of the DCM Mini Bus remained ex parte. The second respondent – Insurance Company contested the matter and filed counter denying the material averments made by the claimants. It is their contention that the claimants have to prove that the accident occurred due to rash and negligent driving of the driver of the DCM Mini Bus. It is also their contention that the first respondent has violated the terms and conditions of the insurance policy. 7. On behalf of the claimants, the first claimant – V. Prathapa Reddy himself was examined as P.W.1 and P.Ws.2 and 3 were examined and Exs.A.1 to A.19 were marked. No oral and documentary evidence has been adduced on behalf of the respondents except marking Ex.B.1 – Copy of the Insurance Policy. 8. The Tribunal framed the following issues for consideration:- 1. Whether the accident took place on 06.03.2005 at about 07:10 P.M. due to rash and negligent driving of the DCM Mini Bus bearing registration No.AP 12 T 6900 by its driver? 2. Whether the petitioners are entitled to claim compensation from the respondents? If so, to what amount and from whom? 3. To what relief. 9. On issue No.1, the Tribunal, on appreciation of oral and documentary evidence available on record, came to the conclusion that the accident occurred due to rash and negligent driving of the driver of the DCM Mini Bus. On issue No.2, the Tribunal, considering Ex.A.13 – Saral Form No.2 wherein the deceased had shown his income as Rs.50,000/- per annum as commission income from V.M.Laboratories and Rs.25,191/- per annum from the job works contract, estimated the income of deceased at Rs.75,000/- per annum and after deducting 1/3r d towards personal expenditure and by applying multiplier 15, awarded a sum of Rs.7,50,000/- towards loss of dependency and further awarded Rs.2,000/- towards funeral expenses. Thus, the Tribunal awarded a total compensation of Rs.7,52,000/- to the claimants. 10. Sri P.Ramakrishna Reddy, learned counsel for the claimants submitted that the deceased was a B.Sc., graduate and that he had certificates issued by Indian Institute of Computer Informatics in Exs.A.18 and A.19 and that he was doing business in the partnership firm namely M/s.Yanchor Wire Industries and that he was also earning salary from V.M.Laboratories and also doing independent business of supplying of poultry medicines and that the Tribunal ought to have taken the income of the deceased at least at Rs.1,50,000/- per month. It is also submitted that the deceased was in his prime age and, therefore, the Tribunal ought to have taken the future prospects and increase in the business of the deceased. 11. Per contra, Sri Somanchi Venkateswarlu, learned counsel for the Insurance Company submitted that the Tribunal ought to have deducted 50% of the income of the deceased since the deceased was only a bachelor. It is also his submission that the Tribunal grossly erred in taking the income of the deceased at Rs.75,000/- per annum. 12. In view of the above rival contentions, the only point that arises for consideration in both these appeals is as to what is the just and reasonable compensation to be awarded to the claimants, in the facts and circumstances of the case. 13. Admittedly, the age of the deceased is shown as 28 years in Ex.A.3 – C.C. of the Inquest Report. The documents filed by the claimants, viz., Ex.A.6 – Original rectification by way of partnership deed, dated 29.07.2002, reveals that the deceased was one of the partner of the firm, namely, M/s.Yanchor Wires Limited, which was issued the certificate of registration from the Commercial Taxes Department. Ex.A.10 – Certificate dated 15.04.2005 issued by the Andhra Bank, SSI Branch, Uppal, also reveals that the deceased was one of the partner of M/s.Yanchor Wire Industries which was enjoying credit facilities with them. Ex.A.11 is the salary certificate of the deceased, dated 07.07.2004, issued by V.M.Laboratories which shows that the deceased was drawing a salary of Rs.8,000/- per month. Ex.A.12 shows that the deceased was an income tax assessee with PAN No.ADDPV9782A. Ex.A.13 is Saral Form No.2 submitted by the deceased to the Income Tax Department, wherein, he had shown his total income as Rs.75,191, of course, in which he had shown the income at Rs.25,191 from all the works and as the income from V.M.Laboratories at Bangalore at Rs.75,000/-. The certificates filed by the deceased also show that he was a Bachelor in Sciences and had also obtained proficiency certificates from Indian Institute of Computer Informatics which shows that he underwent training from June, 1995 to June, 1996 and from January, 1997 to July, 1997. The deceased was also issued as certificate of proficiency by VJ Info, a computer institute. All these documents clinchingly establish that the deceased had obtained several certificates and he was young, energetic, continuously enriching his knowledge and developing in his business. Of course, he has shown his total income at Rs.75,191/- in Ex.A.13 – Saral Form No.2 for the assessment year 2004 – 05. 14. Though the deceased was not doing any Government job, but it is clear that the deceased was doing business. The Tribunal did not accept the evidence of P.W.3 – General Manager of V.M.Laboratories, mainly on the ground that he has not produced the relevant records. The Tribunal ought to have taken into consideration the age of the deceased, his educational qualifications, his academic certificates and the trainings undergone by him and the business he was doing at the time of his death and the fact that he was a partner in M/s.Yanchor Wires Limited. Merely because the deceased had shown his income at Rs.75,000/- per annum in Ex.A.13 – Saral Form No.2, it does not mean that his income would be the same in future. The deceased, who was an income tax assessee, had bright future. The Tribunal ought to have considered all the relevant factors and future prospects of the development of the deceased in his business and career. 15. Having regard to the facts and circumstances of the case, I consider it just and reasonable to take the income of the deceased at Rs.1,20,000/- per annum. Leaned counsel for the Insurance Company was right in saying that as per the decision of the Apex Court in Sarla Verma Vs. Delhi Transport Corporation[1], 50% of income has to be deducted towards personal expenses of an unmarried person. Thus, the annual loss of dependency comes to Rs.60,000/- (Rs.1,20,000 – 50%) and the appropriate multiplier applicable to the persons of the age group of the deceased as per the decision of the Apex Court in Sarla Verma’s case supra, is 14. Thus, the total loss of dependency comes to Rs.8,40,000/- (Rs.60,000/- X 14). The claimants are also entitled to Rs.10,000/- towards loss of love and affection and an amount of Rs.2,000/- towards funeral expenses. Thus, the claimants are entitled to a total compensation of Rs.8,52,000/- (Rs.8,40,000/- + Rs.10,000/- + Rs.2,000/-). I am not inclined to interfere with the rate of interest awarded by the Tribunal (7.5%) and the same stands confirmed, but however, on enhanced compensation, the rate of interest shall only be 6% per annum. It is made clear that both the claimants are entitled to equal shares, i.e., Rs.4,26,000/- each out of the amount awarded as compensation and both the claimants are permitted to withdraw Rs.2,00,000/- each along with the interest accrued thereon and their respective amounts shall be kept in Fixed Deposit in any nationalised Bank for a period of three (03) years. 16. In the result, the appeal preferred by the Insurance Company, i.e., M.A.C.M.A.No.2218 of 2009 stands dismissed and the appeal preferred by the claimants, i.e., M.A.C.M.A.No.2509 of 2009 is partly allowed. There shall be no order as to costs. ___________________________ Justice B.Chandra Kumar 30th April, 2011 Bvv [1] AIR 2009 SC 3104