FA/685/2001 1/10 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 685 of 2001 For Approval and Signature: HONOURABLE MR.JUSTICE A.L.DAVE HONOURABLE MR.JUSTICE SHARAD 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 ? ========================================================= ORIENTAL INSURANCE CO. LTD. - Appellant(s) Versus MANALABEN RAGHAVBHAI MIYANI & 5 - Defendant(s) ========================================================= Appearance : MR SHALIN N MEHTA for Appellant(s) : 1, MR SANDIP C SHAH for Defendant(s) : 1 - 2. RULE SERVED for Defendant(s) : 3 - 5. MR PV NANAVATI for Defendant(s) : 6, MR VIBHUTI NANAVATI for Defendant(s) : 6, ========================================================= CORAM : HONOURABLE MR.JUSTICE A.L.DAVE and HONOURABLE MR.JUSTICE SHARAD D.DAVE Date : 16/01/2008 FA/685/2001 2/10 JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE A.L.DAVE) 1. This appeal arises out of the judgment and award rendered by the Motor Accident Claims Tribunal (Aux.), Court No.20, Ahmedabad in Motor Accident Claim Petition No.1655 of 1998. The said claim petition was preferred before the Tribunal by the present respondent Nos.1 and 2 against rest of the respondents and the present appellant claiming compensation for accidental death of Raghavbhai – husband of claimant No.1 and the father of claimant No.2. The unfortunate accident occurred on 23.10.1998 involving Fiat Car No.GJ 2A 8268 which was driven by respondent No.4 herein and tanker No.GTS 8834. Deceased Raghavbhai was occupant of the car. The undisputed fact is that tanker was parked on the road and fiat car dashed into it from behind. The accident occurred at about 7.45 p.m. 1.1. The case of the claimants is that the deceased was working as General Manager with Dudh Sagar Dairy and was drawing gross salary of Rs.24,000/- and odd per month. He was aged 51 and that he would have retired on attaining the age of 58 years. He would have retired as General Manager and his income would have been Rs.50,000/- per month and the claimants, therefore, claimed compensation of Rs.25,00,000/-. 2. The case of the opponents before the FA/685/2001 3/10 JUDGMENT Tribunal in the written statement was more or less in the form of denials. A plea was taken that since the tanker was parked on the road, there was either no negligence on the part of the driver of the tanker or his negligence would be lesser. The claimants were put to strict proof on other aspects. 3. The claimant led oral evidence by examining herself at Exh.50 and examining Labour Officer of Dudh Sagar Dairy at Exh.55 to prove the income of the deceased. On negligence aspect, the car driver Amishkumar was examined at Exh.73 and Harishankar Shukla – owner/driver of the tanker at Exh.69. 3.1. The applicant also led documentary evidence to show that the deceased was working with Dudh Sagar Dairy, that his gross income was Rs.24,038=84 ps., and that prosecution was initiated for the mishap. 4. The Tribunal, after considering the evidence led by the parties, came to a conclusion that both the drivers were negligent and it was a case of composite negligence so far as the claimants were concerned. The Tribunal, however, did not apportion the quantum of negligence on the part of two drivers. 4.1. While considering quantum of compensation, the Tribunal considered prospective rise in the income of the deceased and took up datum figure of Rs.30,000/- per month as income of the deceased and deducted Rs.8,000/- therefrom as expenditure by the FA/685/2001 4/10 JUDGMENT deceased on himself and took rest of the amount as dependency benefit of the claimants. The Tribunal adopted multiplier of 7 years and awarded total amount of Rs.18,58,000/- by way of compensation, while awarding Rs.10,000/- as compensation as loss to estate etc. 5. Learned advocate Mr.Mehta for the appellant and learned advocate Mr.Nanavati for respondent no.6 contended that the Tribunal has committed error in calculating prospective rise in the income of the deceased by considering the income of the deceased at Rs.40,000/-. It was contended that the amount paid on income tax has not been deducted from the salary and the amount deducted as expenditure on self by the deceased is also on lower side which two factors ultimately add to dependency benefit of the claimants which is an error on the part of the Tribunal. It was contended that gross income could not have been taken into consideration while calculating dependency loss and only net income has to be taken into consideration. In the instant case, net income of the deceased was Rs.17,020/- which ought to have been taken into consideration by the Tribunal. In support of this, learned advocate Mr.Mehta has relied on the decision in the case of The Managing Director, TNSTC V/s K.I.Bindu and others, reported in 2005(8) Scale 173. 6. On the other hand, learned advocate Mr.Shah for the claimants has opposed this appeal. According FA/685/2001 5/10 JUDGMENT to him, the Tribunal has addressed itself on all relevant aspects and has arrived at just and legal compensation. Mr.Shah submitted that for the purpose of calculating dependency loss, the basic salary plus all other allowances have to be taken into consideration and deduction may not be taken into consideration as that is ultimately savings by the deceased for the benefit of the family. Mr.Shah placed reliance on the decision in the case of Oriental Insurance Company Ltd. V/s Minor Vatsal Timirbhai Shah and others reported in 2007(1) GLR 890. He submitted that the Tribunal has committed an error in adopting lesser multiplier. However, the original claimants have accepted the compensation and have not preferred any appeal against the award. 7. There cannot be any dispute on the principle that while calculating dependency loss, deduction towards compulsory savings etc., in the form of premium of insurance policy, contribution to provident fund, contribution to superannuation annuity etc., are not to be deducted from the gross income of the deceased for arriving at net income but those deductions which are of permanent nature and which are never to come back to the claimants i.e., in the form of income tax, professional tax etc., are not to be considered while considering net income. In other words, they have to be deducted from the gross income of the deceased while computing dependency loss. FA/685/2001 6/10 JUDGMENT 8. In the instant case, if we firstly examine the question of negligence, it is clear from the evidence of the drivers, FIR and panchanama that Fiat car ran into the tanker from behind which was stationary. The deceased was occupant of the car and, therefore, qua claimants the death of the deceased occurred because of composite negligence of both the drivers. The case of the driver of the car is that the tanker was parked in the night hours without any signal on to indicate its existence. We are also of the same view that it is a case of composite negligence so far as claimants are concerned, but negligence has to be apportioned between the drivers of two vehicles for ultimately ascertaining liability of the two set of opponents to pay compensation. We understand from learned advocates of the parties here that appellant and respondent no.6 have, by mutual agreement, deposited awarded amount with the Tribunal with cost and interest by calculating liability equally. In our view, we may not go into the details of observing negligence aspect in view of the fact that so far as original claimants are concerned, it is a case of composite negligence and so far as opponents are concerned, they have mutually accepted to deposit 50% each of the awarded amount and have in fact done so. 9. Now, coming to the question of quantum of compensation, we find from Exh.61 salary slip of the deceased that gross income of the deceased was Rs.24,038.84 ps., and after considering deduction, FA/685/2001 7/10 JUDGMENT his net income is Rs.17,020/-. We notice that various columns indicate various deductions and the amount of Rs.1298/- was deducted from gross income of the deceased as contribution towards provident fund and Rs.3763/- was deducted as contribution towards superannuation annuity. There are some other deductions also towards professional tax, government rent etc. We are, therefore, of the view that for calculating dependency loss, the amount of contribution towards provident fund (Rs.1298/-) and superannuation annuity (Rs.3763/-) have to be added to the net income of the deceased. Therefore, if we add Rs.1298/- and Rs.3763/- to net income of the deceased, net income of the deceased would be Rs.22075/-. 9.1. There is evidence of the Labour Officer of Dudh Sagar Dairy Mr.Bipinchandra Gami (Exh.55) to show that the deceased was earning Rs.24,038.84 ps., in the month of February, 1998 and had he not died in the accident, he would have retired in the year 2007 and his income then would have been Rs.50,000/- as he would have been promoted to the post of Managing Director. It is also emerging from his evidence that sitting Managing Director was then earning Rs.42,000/- per month. There is no cross-examination of this witness. 9.2. Now, if the above stated data is taken into consideration, it is clear that out of gross income of Rs.24,038.84 ps., net income of the deceased was FA/685/2001 8/10 JUDGMENT Rs.22,081/-. If we apply the same ratio (to take care of deductions for income tax etc.) to the income of the deceased which he would have been earning at the time of his retirement, his income can be assessed at Rs.38,500/- per month, out of the income of Rs.42,000/- per month being salary of sitting Managing Director of the dairy. We do not deem it prudent to accept the say of the witness that the deceased would have earned Rs.50,000/- on his retirement as Managing Director in absence of any supporting material. We do not have even details of the information on the basis of which the witness said that income of the deceased would have been Rs.50,000/-. We are, therefore, inclined to accept income of the deceased at the time of superannuation to be Rs.42,000/-. 9.3. For calculating dependency loss, prospective rise in the income is also to be taken into consideration and for doing so, the actual income of the deceased and prospective highest income of the deceased at the time of superannuation are to be added upto and then divided by two to take care of the deduction for the imponderables of life. If that is done, net income of the deceased in the month of February, 1998 was Rs.22,081/-. As calculated above, his gross income at the time of superannuation would be Rs.42,000/- and net income is considered in the same proportion as his last income, his net income at the time of superannuation would have been Rs.38,000/- approximately. If we add Rs.38,000/- and FA/685/2001 9/10 JUDGMENT Rs.22,000/- gross monthly income of the deceased would be Rs.60,000/- which will have to be divided by two by making provision for imponderable which would be Rs.30,000/- per month. 9.4. Out of the said amount, some amount will have to be deducted as expenditure by the deceased on self and applying the Rule of Thumb, considering that claimants are wife and son of the deceased and the amount equivalent to 1/3rd of the said amount will have to be deducted that would be Rs.10,000/-. If we deduct Rs.10,000/- out of Rs.30,000/- prospective income of the deceased, dependency loss would be Rs.20,000/- per month and annual dependency loss would be Rs.2,40,000/-. Considering that the deceased was aged 51 years and would have retired at the age of 58 years, the Tribunal has adopted multiplier of 7 with which we may not interfere. Dependency loss, therefore, would come to Rs.16,80,000/-. Added to it would be the amount of Rs.10,000/- as compensation for loss of expectation of life that would bring the total amount of compensation to Rs.16,90,000/-. The Tribunal instead awarded Rs.18,58,000/-. We, therefore, partly allow this appeal by reducing the amount of compensation from Rs.18,58,000/- to 16,90,000/- as compensation receivable by the original claimants and payable by the appellant and respondent nos.3,4,5 and 6 in the appeal. 10. The compensation as above will be disbursed to the claimants as directed by the Tribunal. Since, FA/685/2001 10/10 JUDGMENT the entire awarded amount with proportionate cost and interest has been deposited by the appellant and respondent no.6 the balance amount, after disbursement, will be receivable by the appellant and respondent no.6 in equal share. ( A.L.DAVE, J )( SHARAD D DAVE, J ) pathan