THE HON’BLE SRI JUSTICE K.S.APPA RAO M.A.C.M.A. No. 3788 of 2008 DATE: 16-03-2011 Between: The New India Assurance Co. Ltd. .. Appellant And D.Laxmi Devi and 4 others .. Respondents THE HON’BLE SRI JUSTICE K.S.APPA RAO M.A.C.M.A. No. 3788 of 2008 JUDGMENT: Being aggrieved against the judgment and decree dated 30.12.2005 passed in M.V.O.P.No.959 of 2004 on the file of the Motor Accidents Claims Tribunal-cum-IV Additional District Judge, Kurnool, the present Motor Accident Civil Miscellaneous Appeal is filed urging that the lower Court granted interest @7.5% per annum, which is erroneous and it has to be scaled down to 6% per annum by placing reliance on SARLA VERMA (SMT) AND OTHERS vs. DELHI TRANSPORT CORPORATION AND ANOTHER[1]. Learned counsel appearing for the appellant further urged that the lower Court failed to deduct the income tax payable by the deceased on his income, therefore, the finding of the lower Court granting compensation is erroneous. Learned counsel appearing for the respondents urged that the lower Court while discussing the evidence on record granted compensation and that there are no grounds to interfere with the finding of the lower Court and also the interest granted by the lower Court is reasonable. Now the point for consideration is whether the judgment and decree of the lower Court is sustainable? The petitioners filed claim petition before the lower Court claiming compensation of Rs.8,00,000/- on account of the death of the deceased by name D.Sreenivasulu in a motor vehicle accident. Admittedly, the petitioners are the legal representatives of the deceased. The lower Court held that the accident occurred due to rash and negligent driving of the driver of the offending vehicle, which was insured with respondent No.2 and fixed the liability against respondents 1 and 2 jointly and severally. The lower Court granted compensation of more than Rs.8,00,000/- as claimed by the petitioners and restricted the award to Rs.8,00,000/-. As seen from the impugned judgment, the lower Court did not deduct the income tax payable by the deceased out of the earnings. Further the lower Court granted interest @ 7.5% per annum. While applying the principles laid down in SARLA VERMA’s case, the interest that has to be awarded on the award of compensation shall be @ 6% per annum. Therefore, the petitioners are entitled to claim interest at the rate of 6% per annum only on the amount of compensation granted in the award. With regard to deduction of income tax payable on the earnings of the deceased, the lower Court while computing the income of the deceased, granted compensation more than what the petitioners have claimed. However, while restricting the award of Rs.8,00,000/- by the lower Court, the deduction of income tax payable by the deceased in the case on hand, does not arise in view of the circumstances of the case. With this modification the appeal is allowed by reducing the rate of interest from 7.5% per annum to 6% per annum from the date of petition till date of realization. In the result, the Motor Accident Civil Miscellaneous Appeal is partly allowed. _______________ K.S.APPA RAO, J 16-03-2011 MR THE HON’BLE SRI JUSTICE K.S.APPA RAO M.A.C.M.A. No. 3788 of 2008 DATE: 16-03-2011 MR [1] (2009) 6 Supreme Court Cases 121