Case: Vimal Kanwar  Vs. Kishore Dan

on 14th September, 1996 one Mr. Sajjan Singh Shekhawat was sitting on his scooter which was parked on the side of the road and was waiting for one Junior Engineer, N. Hari Babu and another whom he had called for discussion. At that time, the non-applicant No.1, driver of the Jeep No.RJ-10C-0833 came driving from the Railway Station side with high speed, recklessly and negligently and hit the scooter. Sajjan Singh along with his scooter came under the Jeep and was dragged with the vehicle. Due to this accident fatal injuries was caused to him and on reaching the Hospital he expired. The scooter was also damaged completely.  3. Appellant no. 1, the wife of the deceased was aged about 24 years; appellant no. 2, the daughter was aged about 2 years and appellant no. 3, the mother was aged about 55 years at the time of death of the deceased. They jointly filed an application to the Tribunal alleging that negligent and rash driving by non-applicant no. 1 caused the death of Sajjan Singh and claimed compensation of Rs.80,40,160/-. It was brought to the notice of the Tribunal that non-applicant no. 1, the jeep driver was in the employment of the non-applicant no. 2 and the non-applicant no. 3, the United India Insurance Co. Ltd. was the insurer of the vehicle.  4. The non-applicant No.3, Insurance Company on appearance filed written statement and alleged that the vehicle owner has violated the conditions of the Insurance Policy by not informing them about the accident. Further, according to the Insurance Company the vehicle owner should prove the fact that at the time of accident, the Jeep driver, non-applicant No.1 was holding a valid and effective driving licence.  5. Altogether five issues were framed by the Tribunal:?1. Whether due to the vehicle in question Jeep No. RJ 10C 0833 being driven by driver, non-applicant No.1 on 14.09.1996, in front of Assistant Engineer Office, PWD, within the jurisdiction of Police Station Churu, negligently and recklessness and caused accident and injuries due to which Sajjan Singh Shekhawat S/o Bhanwar Singh expired.  2. Whether above said vehicle driver at the time accident was in employment of non-applicant No.2 and was working for his benefit and profit.  3. Whether the non-applicant No.3, Insurance Company in view of the preliminary objections and preliminary statement in their reply, are relieved of their liability and if not what is the effect thereon.  4 Whether the applicant are entitled to get the claim amount or any other justified amount, and if yes which applicant is entitled to how much compensation and from which non-applicant.  5. Relief.?6. The first issue was answered by the Tribunal in an affirmative manner. It was held that the reckless and negligent driving of the driver of Jeep No.RJ 10C 0833 caused the accident which resulted in the death of Sajjan Singh Shekhawat. Issue Nos. 2 and 3 were also decided in favour of the applicants.  7. Issue Nos. 4 and 5 were related to the entitlement of appellants towards the claims and the relief to be granted. The Tribunal determined the compensation to be granted in favour of the appellants at Rs.14,93,700/- jointly.  8. The actual salary of the deceased was reduced by the Tribunal by deducting certain amounts towards Provident Fund, Pension and Insurance. Without any reason, the Tribunal also reduced the salary at Rs. 8,000/- per month though actual salary of the deceased as per Last Pay Certificate (for short ‘LPC?) was Rs. 8,920/-. Out of such reduced salary of Rs. 8,000/-, the Tribunal further deducted a sum of Rs.1,000/- per month towards Provident Fund, Pension and Insurance and thereby considered the actual salary of deceased to be Rs.7,000/- per month. An amount of Rs. 4500/- was added to it towards future income and, thereby the net income of deceased was assessed at 11,500/- per month (Rs.7,000/- + Rs.4,500/-).  9. Admittedly, Sajjan Singh died at the age of 28 years and 7 ½ months. He was in the services of the State Government posted as an Assistant Engineer. In the normal course, he would have continued in the services of the State Government upto February, 2026, until attaining 58 years or upto February, 2028, until attaining 60 years. As per the decision of this Court in the case of Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. (2009) 6 SCC 121 , Sajjan Singh having died at the age of 28 years 7 1/2 months, the multiplier of 17 is applicable in calculating the compensation. But the Tribunal applied the lower multiplier of 15 on the ground that the wife would be getting family pension and would get job on the compassionate ground and the daughter, aged about 2 years would get married in future.  10. Though the High Court noticed the aforesaid mistake it upheld the compensation. A notional deduction of income tax was made by the High Court from the salary of the deceased apart from the deduction of annual pension and came to the conclusion that the award passed by the Tribunal was just and proper as apparent from paragraph 11 of the judgment which reads as under:?11. If calculate according to the rate of tax in the year 1996, we find that in the assessment year 1996-97 on Rs.40,000/- no tax was payable. On further income of Rs.20,000/-, 20% was payable, on further income of Rs.60,000/-, 30% of income was taxed. 1/3rd of the salary or Rs.15,000/- which ever was less was standard deduction. Accordingly deducting Rs.15,000/- as standard deduction taking into account the savings and on applying rebate of Rs.12,000/- under Section 80C of the Income Tax Act, the amount which remains, on that Rs.5812/- is payable as tax. Thus, deducting taxable amount out of income is Rs.1,01,228/-. The appellant Vimal Kanwar has herself stated that after death of her husband she receives Rs.1460/- per month as pension. The pension received on death of husband should also be deducted. Thus, on deducting annual pension of Rs.17,520/- the income is Rs.1,83,708/- per annum. According to Sarla Verma judgment increasing 50% for future prospects the amount becomes Rs.1,25,562/- per annum, out of this deducting 1/3rd for personal expenses of the deceased and applying multiplier of 17 according to age of the deceased this amount is Rs.14,23,036/-. The tribunal on account of being deprived of income the deceased has granted Rs.14,78,700/- to the deceased.?11. The High Court noticed that the Tribunal wrongly applied the multiplier of 15 but refused to interfere with the award on the following grounds:?12. IT is correct, that despite the revise LPC being on record and showing salary to be Rs.8920/- the tribunal has accepted salary to be Rs.8000/- only out of this on account of GPF and State Insurance Rs.1000/- has been deducted and monthly income is assessed as Rs.7,000/-. Thereafter, taking into account increasing income in future etc. Rs.4500/- has been added and monthly income is assessed to be Rs.11500/- this assessment according to evidence on record and established law, does not appear to be proper. It is also worth mentioning that the tribunal for granting compensation to the appellants has taken unit method has basis but while doing so the amount that the deceased would have spent on his personal expenses which is deductable as per judgment of the Hon?ble Supreme Court in the Sarla Verma case and other cases has not been deducted, because of which the dependency is not properly assessed. Thereafter, the multiplier of 15 applied by the tribunal also does not seen to be in accordance to law. It is also worth mentioning that assessing amount in the said manner the tribunal had not deducted the payable income tax and the amount of pension received by Smt. Vimal Kanwar due to death of deceased. Similarly, while assessing dependency deduction for GPF and State Insurance, addition of Rs.4,500/- in monthly income and multiplier of 15 etc. is not in accordance with law. But it is worth mentioning that taking income of the deceased at the time of the accident is Rs.8,920/-, deducting payable income tax and amount of pension received by the wife of the deceased, the amount on account of loss of income to be given to the appellant comes to Rs.14,23,036/-. It appears that the tribunal on account of loss of income has granted Rs.14,78,700/- and for all the remaining heads a total of Rs.15,000/- only, which is definitely too less. All the three appellants should be granted proper compensation under heads of cooperation from the deceased, loss of love and affection and service, protection, last rites, lost of estate and on doing this the situation that emerges is that, the total amount of Rs.14,93,700/- awarded by tribunal as compensation is justified and therefore, any interference in the amount of awarded compensation is not proper desirable or necessary.?12. Two appeals, one preferred by the appellants-claimants and another by the Insurance Company, were dismissed by the High Court by common impugned judgment dated 29th July, 2011.  13. From the facts and circumstances of the case, the grievance of the appellants can be summarized as follows:-(i) No amount can be deducted towards Provident Fund, Pension and Insurance amount from the actual salary of the victim for calculating compensation.  (ii) In the absence of any evidence, the Court suo motu cannot deduct any amount towards income tax from the actual salary of the victim.  (iii) On the facts of the present case, the Tribunal and the High Court should have doubled the salary by allowing 100% increase towards the future prospects and  (iv) The Tribunal and the High Court failed to ensure payment of just and fair compensationReliance was also placed on decisions of this Court which will be discussed later in this judgment.  14. The respondents have appeared but no counter affidavit has been filed by them. Learned counsel for the respondents merely justified the award passed by the Tribunal and affirmed by the High Court.2. The factual matrix of the case is thaton 14th September, 1996 one Mr. Sajjan Singh Shekhawat was sitting on his scooter which was parked on the side of the road and was waiting for one Junior Engineer, N. Hari Babu and another whom he had called for discussion. At that time, the non-applicant No.1, driver of the Jeep No.RJ-10C-0833 came driving from the Railway Station side with high speed, recklessly and negligently and hit the scooter. Sajjan Singh along with his scooter came under the Jeep and was dragged with the vehicle. Due to this accident fatal injuries was caused to him and on reaching the Hospital he expired. The scooter was also damaged completely.  3. Appellant no. 1, the wife of the deceased was aged about 24 years; appellant no. 2, the daughter was aged about 2 years and appellant no. 3, the mother was aged about 55 years at the time of death of the deceased. They jointly filed an application to the Tribunal alleging that negligent and rash driving by non-applicant no. 1 caused the death of Sajjan Singh and claimed compensation of Rs.80,40,160/-. It was brought to the notice of the Tribunal that non-applicant no. 1, the jeep driver was in the employment of the non-applicant no. 2 and the non-applicant no. 3, the United India Insurance Co. Ltd. was the insurer of the vehicle.  4. The non-applicant No.3, Insurance Company on appearance filed written statement and alleged that the vehicle owner has violated the conditions of the Insurance Policy by not informing them about the accident. Further, according to the Insurance Company the vehicle owner should prove the fact that at the time of accident, the Jeep driver, non-applicant No.1 was holding a valid and effective driving licence.  5. Altogether five issues were framed by the Tribunal:?1. Whether due to the vehicle in question Jeep No. RJ 10C 0833 being driven by driver, non-applicant No.1 on 14.09.1996, in front of Assistant Engineer Office, PWD, within the jurisdiction of Police Station Churu, negligently and recklessness and caused accident and injuries due to which Sajjan Singh Shekhawat S/o Bhanwar Singh expired.  2. Whether above said vehicle driver at the time accident was in employment of non-applicant No.2 and was working for his benefit and profit.  3. Whether the non-applicant No.3, Insurance Company in view of the preliminary objections and preliminary statement in their reply, are relieved of their liability and if not what is the effect thereon.  4 Whether the applicant are entitled to get the claim amount or any other justified amount, and if yes which applicant is entitled to how much compensation and from which non-applicant.  5. Relief.?6. The first issue was answered by the Tribunal in an affirmative manner. It was held that the reckless and negligent driving of the driver of Jeep No.RJ 10C 0833 caused the accident which resulted in the death of Sajjan Singh Shekhawat. Issue Nos. 2 and 3 were also decided in favour of the applicants.  7. Issue Nos. 4 and 5 were related to the entitlement of appellants towards the claims and the relief to be granted. The Tribunal determined the compensation to be granted in favour of the appellants at Rs.14,93,700/- jointly.  8. The actual salary of the deceased was reduced by the Tribunal by deducting certain amounts towards Provident Fund, Pension and Insurance. Without any reason, the Tribunal also reduced the salary at Rs. 8,000/- per month though actual salary of the deceased as per Last Pay Certificate (for short ‘LPC?) was Rs. 8,920/-. Out of such reduced salary of Rs. 8,000/-, the Tribunal further deducted a sum of Rs.1,000/- per month towards Provident Fund, Pension and Insurance and thereby considered the actual salary of deceased to be Rs.7,000/- per month. An amount of Rs. 4500/- was added to it towards future income and, thereby the net income of deceased was assessed at 11,500/- per month (Rs.7,000/- + Rs.4,500/-).  9. Admittedly, Sajjan Singh died at the age of 28 years and 7 ½ months. He was in the services of the State Government posted as an Assistant Engineer. In the normal course, he would have continued in the services of the State Government upto February, 2026, until attaining 58 years or upto February, 2028, until attaining 60 years. As per the decision of this Court in the case of Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. (2009) 6 SCC 121 , Sajjan Singh having died at the age of 28 years 7 1/2 months, the multiplier of 17 is applicable in calculating the compensation. But the Tribunal applied the lower multiplier of 15 on the ground that the wife would be getting family pension and would get job on the compassionate ground and the daughter, aged about 2 years would get married in future.  10. Though the High Court noticed the aforesaid mistake it upheld the compensation. A notional deduction of income tax was made by the High Court from the salary of the deceased apart from the deduction of annual pension and came to the conclusion that the award passed by the Tribunal was just and proper as apparent from paragraph 11 of the judgment which reads as under:?11. If calculate according to the rate of tax in the year 1996, we find that in the assessment year 1996-97 on Rs.40,000/- no tax was payable. On further income of Rs.20,000/-, 20% was payable, on further income of Rs.60,000/-, 30% of income was taxed. 1/3rd of the salary or Rs.15,000/- which ever was less was standard deduction. Accordingly deducting Rs.15,000/- as standard deduction taking into account the savings and on applying rebate of Rs.12,000/- under Section 80C of the Income Tax Act, the amount which remains, on that Rs.5812/- is payable as tax. Thus, deducting taxable amount out of income is Rs.1,01,228/-. The appellant Vimal Kanwar has herself stated that after death of her husband she receives Rs.1460/- per month as pension. The pension received on death of husband should also be deducted. Thus, on deducting annual pension of Rs.17,520/- the income is Rs.1,83,708/- per annum. According to Sarla Verma judgment increasing 50% for future prospects the amount becomes Rs.1,25,562/- per annum, out of this deducting 1/3rd for personal expenses of the deceased and applying multiplier of 17 according to age of the deceased this amount is Rs.14,23,036/-. The tribunal on account of being deprived of income the deceased has granted Rs.14,78,700/- to the deceased.?11. The High Court noticed that the Tribunal wrongly applied the multiplier of 15 but refused to interfere with the award on the following grounds:?12. IT is correct, that despite the revise LPC being on record and showing salary to be Rs.8920/- the tribunal has accepted salary to be Rs.8000/- only out of this on account of GPF and State Insurance Rs.1000/- has been deducted and monthly income is assessed as Rs.7,000/-. Thereafter, taking into account increasing income in future etc. Rs.4500/- has been added and monthly income is assessed to be Rs.11500/- this assessment according to evidence on record and established law, does not appear to be proper. It is also worth mentioning that the tribunal for granting compensation to the appellants has taken unit method has basis but while doing so the amount that the deceased would have spent on his personal expenses which is deductable as per judgment of the Hon?ble Supreme Court in the Sarla Verma case and other cases has not been deducted, because of which the dependency is not properly assessed. Thereafter, the multiplier of 15 applied by the tribunal also does not seen to be in accordance to law. It is also worth mentioning that assessing amount in the said manner the tribunal had not deducted the payable income tax and the amount of pension received by Smt. Vimal Kanwar due to death of deceased. Similarly, while assessing dependency deduction for GPF and State Insurance, addition of Rs.4,500/- in monthly income and multiplier of 15 etc. is not in accordance with law. But it is worth mentioning that taking income of the deceased at the time of the accident is Rs.8,920/-, deducting payable income tax and amount of pension received by the wife of the deceased, the amount on account of loss of income to be given to the appellant comes to Rs.14,23,036/-. It appears that the tribunal on account of loss of income has granted Rs.14,78,700/- and for all the remaining heads a total of Rs.15,000/- only, which is definitely too less. All the three appellants should be granted proper compensation under heads of cooperation from the deceased, loss of love and affection and service, protection, last rites, lost of estate and on doing this the situation that emerges is that, the total amount of Rs.14,93,700/- awarded by tribunal as compensation is justified and therefore, any interference in the amount of awarded compensation is not proper desirable or necessary.?12. Two appeals, one preferred by the appellants-claimants and another by the Insurance Company, were dismissed by the High Court by common impugned judgment dated 29th July, 2011.  13. From the facts and circumstances of the case, the grievance of the appellants can be summarized as follows:-(i) No amount can be deducted towards Provident Fund, Pension and Insurance amount from the actual salary of the victim for calculating compensation.  (ii) In the absence of any evidence, the Court suo motu cannot deduct any amount towards income tax from the actual salary of the victim.  (iii) On the facts of the present case, the Tribunal and the High Court should have doubled the salary by allowing 100% increase towards the future prospects and  (iv) The Tribunal and the High Court failed to ensure payment of just and fair compensationReliance was also placed on decisions of this Court which will be discussed later in this judgment.  14. The respondents have appeared but no counter affidavit has been filed by them. Learned counsel for the respondents merely justified the award passed by the Tribunal and affirmed by the High Court.17. Smt. Vimal Kanwar, PW-3 (appellant no.1 herein), who is the wife of the deceased has stated in her examination in chief that her husband obtained BE Degree from Jodhpur University in First Class and he was directly appointed to the post of Assistant Engineer in the year 1994. At the time of accident he was 28 years old and was getting salary of Rs.9,000/- per month. If he had been alive he would have got promoted upto the rank of Chief Engineer.  18. Ram Avtar Parikh, PW-2 is an employee of Public Works Department, where the deceased was working. He stated that Sajjan Singh was working on the post of Assistant Engineer and at that time his monthly salary was Rs.8,920/-. In support of his statement he produced the Last Pay Certificate and the Service Book (Exh. 1.) of the deceased.

Court's reasoning:
22. In the present case, none of the respondents brought to the notice of the Court that the income-tax payable by the deceased Sajjan Singh was not deducted at source by the employer- State Government. No such statement was made by Ram Avtar Parikh, PW-2 an employee of Public Works Department of the State Government who placed on record the Last Pay Certificate and the Service Book of the deceased. The Tribunal or the High Court on perusal of the Last Pay Certificate, have not noticed that the income-tax on the estimated income of the employee was not deducted from the salary of the employee during the said month or Financial Year. In absence of such evidence, it is presumed that the salary paid to the deceased Sajjan Singh as per Last Pay Certificate was paid in accordance with law i.e. by deducting the income-tax on the estimated income of the deceased Sajjan Singh for that month or the Financial Year. The appellants have specifically stated that Assessment Year applicable in the instant case is 1997-98 and not 1996-97 as held by the High Court. They have also taken specific plea that for the Assessment Year 1997-98 the rate of tax on income more than 40,000/- and upto Rs.60,000/- was 15% and not 20% as held by the High Court. The aforesaid fact has not been disputed by the respondents23. In view of the finding as recorded above and the provisions ofthe Income-tax Act,, as discussed, we hold that the High Court was wrong in deducting 20% from the salary of the deceased towards income-tax, for calculating the compensation. As per law, the presumption will be that employer-State Government at the time of payment of salary deducted income-tax on the estimated income of the deceased employee from the salary and in absence of any evidence, we hold that the salary as shown in the Last Pay Certificate at Rs.8,920/- should be accepted which if rounded off comes to Rs.9,000/- for calculating the compensation payable to the dependent(s)29. Admittedly, the date of birth of deceased Sajjan Singh being 1st February, 1968; the submission that he would have continued in service upto 1st February, 2026, if 58 years is the age of retirement or 1st February, 2028, if 60 years is the age of retirement is accepted. He was only 28 years 7 ½ month old at the time of death. In normal course, he would have served the State Government minimum for about 30 years. Even if we do not take into consideration the future prospect of promotion which the deceased was otherwise entitled and the actual pay revisions taken effect from 1st January, 1996 and 1st January, 2006, it cannot be denied that the pay of the deceased would have doubled if he would continued in services of the State till the date of retirement. Hence, this was a fit case in which 100% increase in the future income of the deceased should have been allowed by the Tribunal and the High Court, which they failed to do.