The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK MACA No.611 of 2020 Divisional Manager, United India Insurance Co. Ltd., Divisional Office-II, Bhubaneswar …. Appellant Mr. Ramesh Chandra Sahoo-1, Advocate -Versus- Panchanan Panigrahi & others Respondents Mr. P.K. Mishra, Advocate for respondent Nos.1 to 4 …. CORAM: JUSTICE R.K. PATTANAIK DATE OF JUDGMENT:06.05.2024 1. Instant appeal under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to ‘the M.V. Act’) is filed by the appellant Insurance Company primarily challenging the quantum of compensation awarded in M.A.C. No.66 of 2014 by the learned 1st M.A.C.T, Puri on the ground that the same is liable to be interfered with and set aside since the compensation includes allowances being a part of gross salary. 2. In fact, the claimants respondent Nos.1 to 4 filed an application under Section 166 of the M.V. Act demanding compensation of Rs.1,01,00,000/-(Rupees one crore and one lac) on account of death of the deceased, a victim of road accident payable by the appellant Insurance Company and respondent No.5, namely, the owner of the offending vehicle bearing registration No. OR-02- BF-1688. According to the claimants respondent Nos.1 to 4, the alleged vehicle, a mini truck was being driven in rash and negligent manner and dashed the deceased travelling in a MACA No.611 of 2020 Page 1 of 10 motorcycle, as a result of which, the latter sustained grievous injuries and succumbed to it on the spot itself and soon thereafter, though he was shifted to the District HQ Hospital at Puri but was declared dead and then, the incident having been reported with the local police, Satyabadi P.S. Case No. 31 of 2014 was registered under Sections 279, 337,338 and 304-A I.P.C. against the driver of the alleged truck. According to the pleading on record, the deceased was 29 years old and was earning a good amount working as a System Analyst in TCS, Bhubaneswar and as the driver of the mini truck was responsible for the accident and the vehicle was insured with the appellant Insurance Company by the insured, namely, respondent No.5, both to be jointly and severally liable to pay the compensation with interest. 3. Considering the claim application filed under Section 166 of the M.V. Act, learned Tribunal received evidence and finally, allowed compensation for a sum of Rs.83,42,000/- payable to the claimants, namely, respondent Nos.1 and 2 only along with interest at the rate of 7% per annum payable from the date of such application filed i.e. on 20th March, 2014 till realization of the same with other directions. The learned Tribunal framed the following issues; (i) Is the claim application under Section 166 of the M.V. Act is maintainable? (ii)Whether the deceased died due to a vehicular accident on 1st February, 2014 involving the offending vehicle and the same is on account of rash and negligence of the driver? and the (iii)Whether to claimants compensation and if so, to what extent and payable by which of the opposite parties? entitled are 4. Learned Tribunal held that the driver of the offending mini truck was responsible for the accident in absence of any such MACA No.611 of 2020 Page 2 of 10 material elicited by the appellant Insurance Company during trial to the contrary. Thereafter, while dealing with the other issue regarding the income and amount of compensation payable, considering the letter of appointment i.e. Ext.10 and salary slip (Ext.11) of the deceased for the month of January, 2014, learned Tribunal held an amount of Rs.6,48,000/- as the annual income and after deducting an amount of 50% of the income towards personal living expenses, annual loss of dependency was worked out at Rs.4,86,000/- and applying a multiplier of 17, total loss of dependency at Rs.82,62,000/- and ultimately, determined the compensation for an amount of Rs.83,42,000/-. The compensation amount including the allowances is under challenge at the behest of the appellant Insurance Company.
Legal Reasoning
Rather Ext. 2 prima facie proved the negligence from the side of the driver of the offending mini truck. In absence of any such material on record, the Court is not in a position to accept the plea of composite negligence as advanced by Mr. Sahoo-1, learned counsel for the appellant Insurance Company. 9. As regards the pay slip and monthly income of the deceased, letter of appointment i.e. Ext.10 proved such employment in TCS, Bhubaneswar supported by pay slip (Ext.11) and the same could not be disputed by the appellant Insurance Company by any rebuttal evidence. Even though, no one was examined from the side of the employer, which could have been demanded by the appellant Insurance Company before learned Tribunal, for any MACA No.611 of 2020 Page 5 of 10 such reason, the Court is not inclined to doubt the genuineness of Ext.10 and also the pay slip (Ext.11). 10. Regarding the amount of compensation, Mr. Sahoo-1, learned counsel for the appellant Insurance Company would submit loss of dependency to be Rs.67,89,069/- which is wrongly determined at Rs.82,62,000/- and hence, the final compensation amount becomes Rs.83,42,000/-. The contention of Mr. Sahoo-1, learned counsel for the appellant Insurance Company, at the cost of repetition, is that the allowances for a sum of Rs.9,712/- was to be deducted from the gross salary of the deceased, which works out the monthly income at Rs.44,373/- with an annual income of Rs.5,32,476/-. The plea of Mr. Sahoo-1 is based on the premise that the aforesaid amount is not a part of salary component, hence, to be excluded. In other words, the demand is to exclude BoB Kitty Allowance, conveyance and miscellaneous with a total sum of Rs.9712/- from the gross salary, which is objected to by Mr. Mishra, learned counsel for the claimants respondent Nos.1 to 4. To under the salary aspect for the purpose of compensation and its determination, the decision In National Insurance Company Limited Vrs. Indira Srivastava and others 2008 (I) TAC 424 (SC) is relevant. The Apex Court in the aforesaid decision had the occasion to consider whether the allowances to be included as income. It has been held therein that the term ‘income’ has different connotations and a Court of law having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family and loss caused to the family on a death of a near and dear one can hardly be compensated on monetary terms. In the said decision, it is also held that Section 168 of the Motor Vehicles Act has a word ‘just compensation’ MACA No.611 of 2020 Page 6 of 10 which should be assigned a broad meaning and one cannot ignore the fact that the private sector companies in place of introducing a pension scheme take recourse to payment of Contributory Provident Fund, Gratuity and other perks which may either for the benefit of the employee himself or the entire family and if some facilities are being provided whereby the family stands to benefit, the same must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable is required to be determined referring to the other decisions, such as, National Insurance Company Limited Vrs. Padmavathy & others of the Madras High Court dated 29th January, 2007, S. Narayanamma and others Vrs. Secretary to Government of India, Ministry of Telecommunications and others 2002 ACC 582 of Andhra Pradesh High Court and Asha and others Vrs. United India Insurance Company Limited and another 2004 ACC 533. 11. In Indira Srivastava (supra), the Apex Court expounded the real import of ‘just compensation’ which are to be determined having regard to the facts and circumstances of each particular case. Citing many other decisions on the point of statutory income and whether, the allowances to be a part of it or otherwise, the Apex Court in the said decision held that amounts beneficial to the family shall have to be included for computing income but in the case at hand, the deduction is claimed in respect of the allowances received by the deceased towards liveries, conveyance, transport and washing on the ground that the same are the perquisites. On a proper reading of the aforesaid decision, though, it has been held by the Apex Court that the perks of the deceased payable by the employer should be included in the monthly income for the purpose of calculation of compensation but it depends on the premise that such benefit was MACA No.611 of 2020 Page 7 of 10 meant for the entire family, which is, however, deprived of the same due to untimely death of the deceased. In other words, if some facilities are being provided whereby the entire family is or would have benefited, in that case, it must be held to be relevant for computation of total income, otherwise not. If allowances have been received by the deceased on non-taxable head and it was exclusively meant for the employee himself and not to benefit the family, if cannot be included in the total income for calculation of the compensation. Besides the professional and income taxes, the allowances or perquisites vis-(cid:224)-vis the deceased are on the heads of liveries, conveyance, transport etc. which were meant for him and hence, could not be said as the amount relevant for computation of total income. 12. The deceased had a basic salary of Rs.16,800/- per month as revealed from Ext.10. As per Ext.10 at Annexure-I, BoB includes House Rent Allowance, Conveyance Allowance, Sundry Medical Reimbursement, Leave Travel Allowance, Food Coupons and Personal Allowance besides performance fee and other benefits. Annexure-II thereto indicates the compensation details at Table-1 and defined structure FOR BoB at Table-2. On a reading and examination of Ext.10, it is realized that the BoB is the extra amount payable to a TCS employee apart from the basic salary and the same includes House Rent Allowance, Conveyance Allowance, Personal Allowance etc. In fact, it is a part of component with adjustment of allowances subject to option of the employees. So to say, BoB is a variable component and it includes taxable and non-taxable classified salary structure. 13. Having reached at such a conclusion and keeping in view the settled position of law as enunciated by the Apex Court in Indira Srivastava (supra), the Court finds submission of Mr. Sahoo-1, learned counsel for the appellant Insurance Company to be MACA No.611 of 2020 Page 8 of 10 correct as learned Tribunal could not have included BoB Kitty Allowance besides the allowances on heads of conveyance and miscellaneous. Hence, learned Tribunal fell into error to include BoB Kitty Allowance and other allowances for a total sum of Rs.9,712/-. If the said amount is deducted, monthly income of the deceased is arrived at Rs.44,373/- and annual income becomes Rs.5,32,476/- and adding 50% on account of loss of future prospects, the total amount stands at Rs.7,98,714/- and with a deduction of 50% therefrom towards personal living expenses as he was a bachelor, the annual dependency stands at Rs.3,99,357/- and applying a multiplier of 17, loss of dependency works out to be Rs.67,89,069/-. The Court is not inclined to disturb the amount allowed on the heads of love and affection, loss of estate and towards funeral expenses of the deceased and hence, the compensation is finally arrived at Rs.68,69,069/- instead of Rs.83,42,000/- as has been held by learned Tribunal. 14. Hence, it is ordered. 15. In the result, the appeal stands allowed. As a necessary corollary, the impugned award dated 23rd December, 2019 passed in M.A.C. No.66 of 2014 by the learned 1st MACT, Puri is hereby modified to the extent as aforesaid with a direction to the appellant Insurance Company to deposit a sum of Rs.68,69,069/- along with interest at the rate of 7% per annum thereon from the date of claim application filed within eight weeks from today payable to the claimants respondent Nos.1 and 2 only. It is directed that in the event, such deposit is made, learned Tribunal shall disburse it in favour of the claimants respondent Nos.1 and 2 with any such order regarding fixed deposit etc. completing the exercise at the earliest preferably within a fortnight thereafter. It is further directed that on proof of such deposit made and receipt of the compensation, the statutory amount shall be refunded to the MACA No.611 of 2020 Page 9 of 10 appellant Insurance Company without delay. In the
Arguments
5. Heard Mr. Sahoo-1, learned counsel for the appellant Insurance Company and Mr. Mishra, learned counsel for the claimants respondent Nos.1 to 4. No one represents respondent No.5. 6. According to Mr. Sahoo-1, learned counsel for the appellant Insurance Company, not only the compensation is on the higher side which included the allowances but also there was contributory negligence by the deceased. Mr. Sahoo-1 claims that the alleged accident was the outcome of composite negligence of the deceased and driver of the mini truck and hence, the compensation to be apportioned accordingly. It is submitted that the learned Tribunal committed error in relying upon the chargesheet i.e. Ext.2 while attributing the responsibility on the truck driver only for the alleged accident and furthermore, the witness examined and claimed to be present at spot is highly improbable. The contention is that considering the facts elicited from one of the witnesses examined as P.W.1, it reveals that the road on at the spot was not straight and apparently, the accident occurred with the deceased and the driver of the mini truck while MACA No.611 of 2020 Page 3 of 10 negotiating a curve and hence, both failed to exercise due care and caution, hence, equally negligent and therefore, the finding of the learned Tribunal regarding the sole negligence on the part of the driver of the truck is based on surmise and conjecture. The second limb of argument by Mr. Sahoo-1 is that the pay slip has not been proved by the claimants respondent Nos.1 to 4 and it was marked as an exhibit with objection an in absence of any such evidence in support of the same, learned Tribunal ought not to have accepted it. Lastly, the contention is that learned Tribunal committed gross error in not deducting an amount of Rs.800/- on conveyance and Rs.2000/- on miscellaneous head besides Rs.6,912/- as Bouquet of Benefits (BoB) Kitty Allowance and if the same are excluded applying the calculation with a multiplier of 17 deducting 50% of the income on account of personal living expenses, the compensation amount becomes Rs.67,89,069/- instead of Rs.82,62,000/-. So therefore, as per Mr. Sahoo-1, the deceased as is equally negligent for the accident, for the composite negligence, the above amount of compensation is to be apportioned at 50% each. 7. On the other hand, Mr. Mishra, learned counsel for the claimants respondent Nos.1 to 4 justifies the compensation allowed by the learned Tribunal. It is submitted by Mr. Mishra that the chargesheet is filed against the driver of the mini truck which prima facie proved and established the negligence by him and hence, there is no evidence on record to satisfy any such contributory negligence. It is further submitted that the pay slip was exhibited as evidence supported by a letter of appointment marked as Ext.10 and as such, learned Tribunal did not commit any wrong while accepting the same. According to Mr. Mishra, there is no material on record to suspect the salary or income of the deceased which has rightly been accepted by the learned MACA No.611 of 2020 Page 4 of 10 Tribunal, inasmuch as, the appellant Insurance Company did not lead any rebuttal evidence to challenge it. With respect to the amount of compensation, Mr. Mishra would finally submit that the BoB is a part of salary component and hence, therefore, it was included while calculating the compensation, again, no wrong was committed in that regard. 8. As regards, the composite negligence, which is alleged by the appellant Insurance Company, the same is not established by any such evidence on record. Merely by referring to the evidence of P.W.1 and facts elicited during his cross-examination for an idea about the spot, in the considered view of the Court, it would be incorrect to attribute joint negligence on the part of the deceased and the driver of the mini truck with a conclusion that both were to negotiate a curve and hence, failed to exercise diligence in leaving sufficient space between the vehicles while crossing each other. No evidence is brought to the notice of the Court by referring to any such material on record and referring to the chargesheet i.e. Ext.2 while claiming contributory negligence.
Decision
circumstances, however, there is no order as to costs. (R.K. Pattanaik) Judge Balaram Signature Not Verified Digitally Signed Signed by: BALARAM BEHERA Designation: Personal Assistant Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 08-May-2024 14:43:14 MACA No.611 of 2020 Page 10 of 10