Case: SMT. SANGITA ARYA &amp; ORS Vs. ORIENTAL INSURANCE CO. LTD. &amp; ORS

The Claimants submitted that the deceased owned two taxis from which he earned approximately Rs. 1,00,000 p.a. after deduction of all expenses. The road accident was proved by the oral testimony of the eye-witness Shri Govind Lal Arya (PW-2), who was accompanying the deceased, and had lodged the F.I.R. With respect to payment of compensation, the Claimants submitted that the deceased owned two taxis, which generated an income of Rs. 1,00,000 p.a. The R.T.O., Motor Vehicles Department, Haldwani produced certificates of both the vehicles bearing No. UP-02D-5111 and UP-04D-0111 before the MACT, which showed that the vehicles were purchased by the deceased Harish Singh Arya, and were registered in his name. The Claimants filed four Income Tax Returns (ITRs) of the deceased for the years 2002-03, 2003-04, 2004-05, and 2006-07. The ITR for the year 2006-07 was Rs. 98,500 p.a. A photocopy of the ITR bearing the stamp of receipt from the Income Tax Department, was placed on record. 4. The MACT vide Award dated 22.12.2009 held that on the date of the accident, the deceased was 35 years of age, and his income was Rs. 1,00,000 p.a. The deceased had left behind five dependents i.e. his wife, parents and two minor daughters. The MACT deducted 1/4 th of his income towards personal expenses, and adopted the multiplier of 16. Accordingly, the loss of dependency was computed at Rs. 12,20,000. The MACT further awarded Rs. 20,000 to the widow towards loss of consortium, Rs. 10,000 to the minor daughters towards loss of love and affection, and Rs. 5,000 towards funeral expenses. The total compensation awarded to the Claimants worked out to Rs. 12,55,000 with Interest @6% p.a. The Respondent No. 1 – Insurance Company was held liable for payment of compensation to the Claimants. 5. Aggrieved by the aforesaid Award, the Insurance Company filed Appeal from Order No. 117 of 2010 before the High Court of Uttarakhand at Nainital. The learned Single Judge of the High Court vide the impugned judgment dated 22.07.2016 erroneously assumed that the deceased was a Government servant, and observed that he was running a parallel business by plying taxis. There is no basis for finding that the deceased was a Government employee. We do not know as to on what basis the learned Single Judge has arrived at this factually incorrect conclusion, and made it the basis for awarding compensation. The High Court further held that the ITRs for the years 2002-03, 2003-04 and 2004-05 showed that the average income of the deceased for these three years was Rs. 52,635 p.a. The ITR for the year 2006-07 revealed an income of Rs. 98,500 p.a., which was almost double the income of the preceding three years. The High Court held that the ITR for the year 2006-07 could not be taken into consideration. The learned Single Judge further held that the income which may have been generated from the two taxis, could not be taken into consideration for determining the income of the deceased. Accordingly, the High Court took the average of the ITRs for years 2002-03, 2003-04 and 2004-05, for determining the income of the deceased at Rs. 52,635 p.a. The Court deducted 1/3 rd of the income towards personal expenses, and applied the multiplier of 16. The loss of dependency was assessed at Rs. 5,61,440. The consortium payable to the widow was reduced by the High Court from Rs. 20,000 (as awarded by the MACT) to Rs. 10,000; the amount awarded towards loss of love and affection to the minor daughters was reduced from Rs. 10,000 to Rs. 5,000. However, the amount of Rs. 5,000 awarded by the MACT towards funeral expenses was maintained. The total compensation awarded to the Claimants was reduced from Rs. 12,55,000 to Rs. 5,81,440. 6. Aggrieved by the impugned judgment dated 22.07.2016 passed by the High Court, the Claimants have filed the present civil appeal. This Court while issuing notice to the Respondents on 23.10.2018, recorded the submission made on behalf of the Claimants that the deceased was not a Government employee. 7. We have heard the learned counsel for the parties and perused the material on record. We find that the impugned order passed by the High Court bristles with serious factual inaccuracies :– first, the learned Single Judge wrongly assumed that the deceased Harish Singh Arya was a Government employee. This has nowhere been averred by the Claimants in any of their pleadings. The entire basis of the judgment is hence misconceived. On the basis of the aforesaid erroneous assumption, the High Court has erroneously observed that the deceased was running a parallel business by plying two taxis, and held that the income derived from the same could not be taken into consideration for assessing the compensation. These findings being based on a completely erroneous assumption, are liable to be set aside. Second, the High Court determined the income of the deceased by taking the average of the ITRs filed for the years 2002-03 at Rs. 54,000 p.a., 2003-04 at Rs. 52,405 p.a., and 2004-05 at Rs. 51,500 p.a. The learned Single Judge disregarded the ITR for the year 2006-07, wherein the income of the deceased was shown as Rs. 98,500 p.a. on the ground that it was allegedly filed almost one year after the death of the deceased. This finding also is factually incorrect. A photocopy of the original ITR for the year 2006-07 was filed before this Court, bearing the rubber stamp of the Income Tax Department. It shows that the date of filing the ITR was 20.04.2007, which is prior to the death of the deceased which occurred on 18.06.2007. Hence, the High Court was not justified in disregarding the ITR for the year 2006-07 while assessing the income of the deceased. The Appellants have also placed on record a copy of the ITR for the year 2005-06, which bears the rubber stamp of the Income Tax Department, and reveals the income of the deceased at Rs. 98,100 p.a. during the previous assessment year.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. We have heard the learned counsel for the parties and perused the material on record. We find that the impugned order passed by the High Court bristles with serious factual inaccuracies :– first, the learned Single Judge wrongly assumed that the deceased Harish Singh Arya was a Government employee. This has nowhere been averred by the Claimants in any of their pleadings. The entire basis of the judgment is hence misconceived.On the basis of the aforesaid erroneous assumption, the High Court has erroneously observed that the deceased was running a parallel business by plying two taxis, and held that the income derived from the same could not be taken into consideration for assessing the compensation. These findings being based on a completely erroneous assumption, are liable to be set aside.Second, the High Court determined the income of the deceased by taking the average of the ITRs filed for the years 2002-03 at Rs. 54,000 p.a., 2003-04 at Rs. 52,405 p.a., and 2004-05 at Rs. 51,500 p.a. The learned Single Judge disregarded the ITR for the year 2006-07, wherein the income of the deceased was shown as Rs. 98,500 p.a. on the ground that it was allegedly filed almost one year after the death of the deceased. This finding also is factually incorrect.A photocopy of the original ITR for the year 2006-07 was filed before this Court, bearing the rubber stamp of the Income Tax Department. It shows that the date of filing the ITR was 20.04.2007, which is prior to the death of the deceased which occurred on 18.06.2007. Hence, the High Court was not justified in disregarding the ITR for the year 2006-07 while assessing the income of the deceased.The Appellants have also placed on record a copy of the ITR for the year 2005-06, which bears the rubber stamp of the Income Tax Department, and reveals the income of the deceased at Rs. 98,100 p.a. during the previous assessment year.