Case: New India Assurance Company Limited Vs. Rajni Harshwardhan Sharma &amp; Others

1. Rule. Rule returnable forthwith with the consent of the parties. Vide order dated 8th June, 2015, it was noted that the Appeal deserves to be disposed of finally at the stage of admission. Accordingly, the matter was taken up for final disposal.Before we deal with the two issues raised by the learned counsel for the appellant, it will be necessary to set out the factual matrix out of which the issues arise.4. On 18th August, 2004, at about 9.15 a.m., when the deceasedHarshwardhan Sharma, was traveling in an auto rickshaw bearingnear Rohini Nagar, Bharuch, one truck bearingdashed into the said auto rickshaw. The truck is stated to have come from the opposite side in a fast speed and in a rash and negligent manner. As a result of the severe impact, the deceased sustained serious injuries and ultimately succumbed to the same.5. Harshwardhan Sharmas wife, son and mother preferred a claim petition under section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as the said Act) claiming compensation of Rs.60 lacs. The appellantInsurance Company sought leave to defend under section 170 of the said Act and contested the claim as the owner of the offending vehicle despite service, failed and neglected to appear and defend the claim. The accident nor the insurance coverage has been disputed. The claimants examined two witnesses ; i.e. first respondentclaimant and Mr.Manoj Bhanushankar Trivedi, the employer of the deceased. The documents which were tendered below Exhibit12 were true copies of the passport (for date of birth), Income Certificate, HSC Certificate, Degree Certificate (Bachelor of Technology in Electrical Engineering) and other documents like police papers etc. No oral or documentary evidence was led by the appellant.6. The Tribunal, after considering the material on record i.e. oral and documentary held that the offending truck was being driven in a rash and negligent manner, resulting in the accident in which the deceased sustained injuries and succumbed to the same. The said finding on negligence has not been challenged by the appellant and hence is not required to be dealt with.7. On the point of compensation, the Tribunal accepted the salary of the deceased as Rs.35,000/per month and after granting 15% increase towards future prospects and after making the required deductions by applying the dependency formula, came to a conclusion that the monthly income of the deceased was Rs.26,833/per month, (Rs.26,833 X 12 = Rs.Considering the age of the deceased i.e. 51 years it applied the multiplicand of 11 and after granting compensation for loss of consortium, loss of love and funeral expenses, awarded compensation of Rs.37,67,000/along with interest @ 7.5% per annum.8. The respondentclaimants, in particular, the first respondentclaimant in support of the Claim Petition filed her evidence on affidavit (Exhibit13). She has stated that her husband at the time of the incident, was 51 years old. She has placed on record, the certified copies of the deceaseds HSC Certificate, Degree Certificate of IIT, Madras, passport and salary certificate. She has produced certified copies of the FIR, Panchanama, Inquest Panchanama, P.M.Report etc., which came to be exhibited. She further stated that at the time of the accident her deceasedhusband was working as a ManagerElectrical/ Instrumentation with Tricon International, Andheri (E), Mumbai and that he was earning a salary of Rs.35,000/per month. She relied on the salary certificate/slip. She has further stated that her deceasedhusband would contribute Rs.25,000/per month towards household expenses and maintenance of her family which consisted of herself, her young sonsecond respondent and her widowedthird respondent. She has further stated that they were the only legal heirs of the deceased and as such all of them were totally dependent on him ; that her husband was in good health at the time of his death and due to his sudden death they had lost the sole bread earner and were suffering great financial hardships and mental agony ; and that they had no other source of income.9. As noted earlier, as the owner of the offending vehicle failed to appear despite service, the appellantcompany sought leave to defend under Section 170 of the Motor Vehicles Act, which was granted. Accordingly, the appellant cross examined the witnesses. As far as the cross examination of the first respondentclaimant is concerned, the only cross examination with respect to the challenge in the present petition is as under ;"My husband had gone to Bharuch for official work. I have filed income tax returns of my husband. The company has not given any compensation".10. The suggestions made by the appellant that the contents of para no.7 and 8 of the claim affidavit filed by the first respondent, with respect to the degree and salary of her husband ; that she had filed a false claim; and that her husband was not getting a salary of Rs.35,000/per month were denied by the first respondentclaimant. These were the only questions put to the first respondent in thes the challenge in this appeal.11. The respondentclaimants also examined Mr.Manoj B. Trivedi, the proprietor of Tricon International, where the deceased was working at the relevant time. The said witness has stated ; that he is the proprietor of Tricon International since 1987 ; that the deceased was employed in his company for about three years ; and that the deceased was working as the ManagerElectrical/Instrumentation with Tricon International, Andheri (E), Mumbai. He has further stated that the monthly salary of the deceased was Rs.The said witness has accepted that the letter at Exhibit19 is issued by him and that its contents were correct and that the same bears his signature. It may also be noted here, that the letter dated 1st July, 2004 issued by the said witness certifies that the deceased was drawing a salary of Rs.35,000/per month. It also certified that the deceased was found to be hardworking and sincere in his work. The said witness has also deposed that the deceased was an Electrical Engineer from IIT. In his cross examination, the said witness has stated that the payments were made by cheques and that there was a statutory deduction of professional tax and TDS at the end of the year. The said witness has denied the suggestion that the deceased was not drawing a salary of Rs.35,000/per month.12. The Tribunal, after considering the evidence on record held the owner of the offending truck and the appellantinsurance company as being jointly and severally liable to pay compensation. The Tribunal, accordingly directed the Insurance Company and the owner of the offending vehicle to jointly and severally pay an amount ofwith an interest of Rs.7.5% p.a. from the date of the application till the realization of the entire amount to the respondentclaimants. The apportionment under which the compensation was to be distributed was ; 60% amount was to be paid to the first respondentclaimant (out of which 50% was to be paid by A/c payee cheque and 50% was to be deposited in any Nationalized bank in her name under a Fixed Deposit Scheme for 3 years) ; the balance 40% was to be distributed between the second and third respondents equally i.e. 20% each respectively by A/c payee cheque.

Court's reasoning:
18. Keeping in mind the aforesaid principle, the evidence and the salary certificate in the present case, show that the deceased was drawing a salary of Rs.35,000/per month. Manoj Trivedi, Proprietor of Tricon International in his cross examination has categorically stated that "the payments are made by cheques. The statutory deduction of professional tax and TDS is deducted at the end of the year". There is no further cross on this statement. There is no suggestion that the said statement is false nor is there any suggestion that no records have been produced by him to substantiate the said statement. Infact, in the absence of any suggestion challenging the veracity of the said statement, there was no occasion for the respondentclaimants to bring on record the documents to prove the same. Thus, the statement of the employer Manoj Trivedi, that the statutory deduction of professional tax and TDS were deducted at the end of the year", has gone unchallenged. There is nothing on record to disbelieve the said statement, which has come in theitself. It thus appears that the income of the deceased from salary was Rs.35,000/per month. In light of the evidence of Manoj Trivedi that the TDS and Professional Tax were deducted at the end of the year and keeping in mind the ratio laid down in Vimal Kanwars case by the Apex Court, we do not find any merit in the submission of the learned counsel for the appellant, that the Tribunal has erred in not deducting the TDS and the Professional Tax, whilst quantifying the compensation. Even assuming that deduction of Income Tax ought to have been made fromthe purpose of calculating multiplicand, we must note here that the Tribunal has granted only 15% increase on account of further prospects of increase in earnings. Considering the fact that the deceased was a graduate from IIT, the said increase ought to have been more than 15%. Hence, taking overall view of the case, the Tribunal rightly held that the income of the deceased was Rs.35,000/per month.19. The law regarding award of compensation in applications under Section 166 of the Motor Vehicles Act in fatal accident cases is well settled. The Apex Court in the case of Sarla Verma (Smt) and Others v/s Delhi Transport Corporation and Another, (2009) 6 SCC 121.   has laid down the formula for Tribunals to calculate the compensation. It has also held that in cases of salaried persons additions have to be made depending upon the age of the deceased to the actual income of the deceased while computing future prospects. In Rajesh and Others v/s Rajbir Singh and Others, (2013) 9 SCC 54  , the Apex Court held that the formula set out in Sarla Vermas case, would also apply to cases, where the deceased was either self employed or on fixed wages, while computing future prospects.20. The Tribunal has rightly applied the said formula in arriving at the compensation. It has awarded 15% towards future prospects and after making the necessary deductions and applying the appropriate multiplicand; concluded that the respondentclaimants are entitled to compensation. The Tribunal has also rightly awarded compensation to the first and second respondents for loss of consortium and loss of love respectively and funeral expenses. We do not find any error or infirmity in the compensation awarded.The Apex Court in Abati Bezbaruah v. Deputy Director General, Geological Survey of IndiaAnother, (2003) 3 SCC 148  , noticed the varying rate of interest being awarded by the Tribunals, High Courts and Apex Court itself. In the said case, the Apex Court held that the rate of interest must be just and reasonable depending on the facts and circumstances of the case and should be decided after taking into consideration the relevant factors like inflation, change in economy, policy being adopted by the Reserve Bank of India from time to time, how long the case is pending, loss of enjoyment of life etc.24. In Supe Dei (Smt) and Others v. National Insurance Company LimitedAnother, (2009) 4 SCC 513  , the Apex Court held that the proper interest would be 9% per annum.