Karnataka High Court
Smt. Roopa. N. C. vs Managing Director on 11 January, 2018
Bench: B.S Patil, Aravind Kumar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11th DAY OF JANUARY, 2018
PRESENT
THE HON'BLE MR.JUSTICE B S PATIL
AND
THE HON'BLE MR.JUSTICE ARAVIND KUMAR
M.F.A. NO. 6161/2016 (MVC)
BETWEEN:
1. SMT. ROOPA N.C.
W/O LATE ADARSH C.R.
D/O CHANDRU K.V
AGED ABOUT 25 YEARS
R/AT NO.07, GOVINDAPPA
BUILDING, CHIKKATHOGURU
CROSS, HOSUR MAIN
ROAD, HOSA ROAD
ELECTONIC POST
BANGALORE-560 100.
2. SRI. M.N. RAVIPRAKASH
S/O LATE V.S. NAGARAJA
AGED ABOUT 59 YEARS
3. SMT. H.S. SUJANYA
W/O RAVI PRAKASH
AGED ABOUT 54 YEARS
THE APPELLANTS NO.2 & 3 ARE
R/AT NO.69, SUJANYA NILAYA
2
SIRAGUNDA, MUGUTHIHALLI
POST, CHIKAMAGALUR-577 133.
... APPELLANTS
(BY SRI VASANTHAPPA FOR SRI. SUDHANVA D.S,
ADVOCATES)
AND:
MANAGING DIRECTOR
BANGALORE METROPOLITAN
TRANSPORT CORPORATION
K.H. ROAD, SHANTHINAGAR
BANGALORE-560 027.
... RESPONDENT
(BY SRI VIJAYAKUMAR, ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 173(1) OF
MV ACT AGAINST THE JUDGMENT AND AWARD DATED
03.02.2016 PASSED IN MVC NO.3474/2014 ON THE FILE
OF THE 19TH ADDITIONAL SMALL CAUSE JUDGE & MACT,
BENGALURU, PARTLY ALLOWING THE CLAIM PETITION
FOR COMPENSATION AND SEEKING ENHANCEMENT OF
COMPENSATION.
THIS APPEAL BEING HEARD AND RESERVED,
COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS
DAY, ARAVIND KUMAR J., DELIVERED THE FOLLOWING:
3
JUDGMENT
This is a claimants appeal for enhancement of compensation, on the ground that compensation awarded by 19th Additional Small Cause Judge & Motor Accidents Claims Tribunal, Bengaluru in MVC No.3474/2014 in a sum of ` 17,99,000/- is on the lower side.
2. The parents and the wife of the deceased Sri Adarsh C.R. filed a claim petition seeking compensation of `3 Crores contending inter-alia that on 11.4.2014 at about 8.30 p.m. deceased Sri Adarsh was proceeding as a pedestrian on footpath near Kanaminike Colony, Mysuru Bengaluru road and at that time, a bus belonging to Bengaluru Metropolitan Transport Corporation (for short, 'Corporation') bearing registration No.KA-50-123 came in a rash and negligent manner and dashed against the deceased and as a 4 result of injuries sustained, he died at the spot. It was further contended that deceased was a B.Com. graduate running business in "human resources services" under the name and style of 'Novell Solutions' and said business was run under partnership and he had a bright future. It was also contended that he was earning `1,00,000/- p.m. and paying income tax at the time of his death. Respondent - Corporation filed its written statement and denied the averments made in the petition and contended that deceased without observing traffic regulations had abruptly crossed the road and as such he exposed himself for the accident. Hence, it was contended that Corporation was not liable to pay any compensation.
3. On the basis of the pleadings of the parties, Tribunal framed issues and wife of the deceased entered the witness box as PW-1 and in all produced 27 documents and got them marked as Ex.P1 to P27. 5
4. Respondent - Corporation examined the driver of the offending vehicle as RW-1, the partner of the firm M/s. Novell Solutions as RW-2 and Divisional Security Inspector as RW-3 and got marked 8 documents as Ex.R1 to R8.
5. Tribunal after evaluating the oral and documentary evidence, arrived at a conclusion that accident in question occurred on account of negligence of the driver of the Corporation and not on account of any negligence on the part of the deceased. While computing the compensation towards 'loss of dependency', tribunal held that even after the death of her husband, PW-1 had continued business in the partnership firm and there has been no loss of income. However, while determining the compensation payable to the claimants, tribunal has discarded the income tax returns of the firm in which deceased was a partner and has considered the income of the claimant on notional 6 basis namely, at ` 8,000/- p.m. as on the date of the accident i.e. 2014 and by adding 50% towards 'future prospects', a sum of `12,000/- was considered as income of the deceased. Accordingly, Tribunal has assessed the 'loss of dependency' to the claimants and has awarded the compensation.
6. It is the contention of Sri Sudhanva D.S., learned Advocate appearing for the appellant that tribunal erred in not considering the income tax returns of the firm in which deceased - Sri Adarsh C.R. was a partner with 50% of share in profit of the firm as per partnership deed - Ex.P-16 and merely because first claimant namely, wife of the deceased had continued the business, that by itself was not a ground to disallow the claim for award of compensation on the basis of income tax returns of the firm i.e., Exs.P-23 to P-26. He would also elaborate his submission by contending that, Tribunal having held that first claimant was not 7 deprived of any income, yet construed notional income of the deceased at `8,000/- per month and by adding 50% as 'future prospects' awarded compensation of `16,32,000/- towards 'loss of dependency'. He urges that same requires to be modified by taking into consideration Exs.P-23 to P-27. He would submit that there has been total non-appreciation of evidence tendered by the claimants and documents tendered by the claimants have not been considered in proper perspective thereby resulting in miscarriage of justice.
7. Per contra, Sri D Vijayakumar, learned Advocate appearing for respondent would submit that compensation awarded by the Tribunal itself is on the higher side and there is no error whatsoever committed by the Tribunal in arriving at a conclusion that there was no loss of income to the first claimant. Hence, he prays for dismissal of the appeal.
8
8. Having heard the learned Advocates appearing for parties, having bestowed our careful and anxious consideration to the rival contentions raised and having perused the records secured from the Tribunal, we are of the considered view that following points would arise for our consideration:
(1) Whether compensation awarded by the Tribunal is just and reasonable?
Or it requires to be enhanced? If so, to what extent?
(2) Whether Tribunal was justified in ignoring or rejecting the income tax returns - Exs.P-23 to P-27 produced by the claimants to establish the income of the deceased?
These two points being interlinked with each other and finding recorded on one point is likely to overlap 9 with each other, they are taken up together for adjudication.
RE: POINT Nos.(1) & (2):
9. Exs.P-10 to P-15 are the certificates issued by the respective Universities which establish that deceased was a B.Com graduate; shortly after completing his education, he had commenced a business under the name and style of 'M/s.Novell Solutions' in partnership with one Sri M.S.Swamy. The partnership deed which came to be marked as Ex.P-16 would disclose that it was a duly constituted partnership firm carrying on business in providing human resources and said firm also came to be registered with the Department of Labour, Government of Karnataka vide Exs.P-18 and P-19. Said firm was assessed to income tax and was paying income tax. Acknowledgments for having filed return of income for 10 the financial years 2010-11, 2011-12, 2012-13 and 2013-14 came to be produced and marked as Exs.P-23 to P-26. The said return of income also contain details of annual tax statement after TDS for the respective years. The gross income of the firm for the respective financial years as reflected in the return of income is as under:
Ex.P-23 -- ` 7,69,114/-
Ex.P-24 -- ` 7,85,325/-
Ex.P-25 -- `18,96,241/-
Ex.P-26 -- `26,01,098/-
Total -- `60,51,778/-
10. As could be seen from the award, Tribunal has not taken into consideration these exhibits on the ground that claimants had contended in the petition that deceased used to pay income tax in his personal account and to establish the same, they had produced the acknowledgment for having filed the income tax return for the assessment year 2009-10 - Ex.P-27 only, 11 though business in partnership had been commenced during February, 2008. It has been further held by the Tribunal that claimants though contended that deceased used to pay income tax individually and produced Ex.P-27 (I.T.Return acknowledgment for the assessment year 2009-10), the partnership business had been commenced in the year 2008 February, no explanation is forthcoming as to why the firm had not filed the income tax return. As could be seen from the acknowledgment for having filed the income tax return - Ex.P-27, it is for the assessment year 2009-10 and the financial year would be 2008-09. In view of the fact, partnership business having commenced in the year 2008 i.e., from 2nd February, 2008 and the business was yet to take off, in all probabilities, return of income of the firm for said assessment year had not been filed. To put it differently, if there was no income of the firm immediately after its commencement or there being no 12 taxable income, the non-filing of the return of income before the authorities would not be a justifiable ground to arrive at a conclusion that there was no income of the firm at all. This would not also be a ground to doubt or dispute the bonafides of the claimants with regard to the deceased having established a partnership business. Yet another factor which cannot go unnoticed is that return of income of the partnership firm for the assessment years 2010-11 to 2013-14 as per Exs.P-23 to P-26 had come into existence at an undisputed point of time.
11. These documents would clearly disclose that in the partnership firm deceased was a partner and it was agreed between the partners to share the profit and loss or the income of the firm in the ratio of 50:50. There is also no dispute that partnership firm was earning good and sufficient income and it was taxable income. In fact, Form No.26AS appended to the return 13 of income - Exs.P-23 to P-26 which are annual tax statements issued by the Income Tax Department would clearly disclose the income earned by the partnership firm.
12. Tribunal having considered the evidence of R.W.2 who was examined by the respondent has held that in view of the partnership business which was carried on by the deceased having been dissolved as per Ex.R-3 and partnership firm having been reconstituted as per Ex.R-2, an adverse inference had to be drawn against claimants since they had not produced any positive and cogent evidence to establish the loss of income to the claimants-petitioners. It has also been held that on account of first claimant (wife of deceased) having commenced a new business as per Ex.R-9, she had continued the partnership business hence there was no loss of income to her. Yet another fact which weighed in the mind of the Tribunal to arrive at a 14 conclusion that there has been no loss of income on account of death of Sri Adarsh C.R, Tribunal has very heavily relied on the evidence of R.W.2 and R.W.3 namely, partner of the firm "M/s.Novell Solutions" and Divisional Security Inspector of the Corporation who produced Exs.R-4 to R-9. A perusal of the evidence tendered by these two witnesses examined on behalf of respondent - Corporation would disclose that R.W.2 was one of the partners of the partnership firm M/s.Novell Solutions of which deceased was a partner. He has stated that he did not know the income of partnership firm because it was carried on by Sri C.R.Adarsh. He also admits that he did not personally know about profit and loss of the partnership firm. In other words, the statement made on oath in Examination - in - Chief that partnership firm M/s.Novell Solutions was running under loss cannot be accepted, since he pleads ignorance of this fact.
15
13. R.W.3 who deposed that on the demise of Sri C.R.Adarsh, first petitioner had established her own business under the name and style "M/s.Aditya Enterprises" by producing the registration certificate as per Ex.R-9, has admitted in his cross examination dated 11.01.2016 that he has not produced any document to show that from the said business of M/s.Aditya Enterprises income was being generated. He has also admitted that claimants-2 and 3 were not the partners of the firm M/s.Aditya Enterprises. In that view of the matter, much reliance cannot be placed on the evidence of R.W.2 and R.W.3 for ignoring the income tax returns of the firm - Exs.P-23 to P-27. Said documents produced by the claimants namely, Exs.P-23 to P-27 would clearly establish that deceased was a partner of the firm M/s.Novell Solutions at the time of his death; said business was a profit making business and the firm had declared its income and had also paid the 16 income tax on the income (profit) earned from the said business of which the deceased was having 50% share.
14. The fact that partnership business had obtained registration certificate of its establishment from the Department of Labour, Government of Karnataka as per Ex.P-18 and 19: the partnership deed
- Ex.P-16 disclosed that said registered firm was run under partnership by the deceased Sri C.R.Adarsh along with Sri M.S.Swamy - R.W.2 and also the oral evidence of R.W.2 disclosed that they had together commenced the partnership firm, would clearly establish the existence of the partnership firm as on the date of the accident and death of Sri C.R.Adarsh.
15. In view of the findings recorded by us herein above to the effect that Tribunal was not justified in rejecting or ignoring the income tax returns of the partnership firm in which deceased was a partner or the 17 Tribunal was not justified in construing the income of the deceased on notional basis, the quantum of compensation to which the claimants would be entitled to, requires to be re-computed.
16. As per Ex.P-23 to P-26 which is the return of income of the partnership firm - M/s.Novel Solutions in which the deceased was a partner with 50% share in profit/loss and the firm for the assessment years 2010 - 11 to 2013-14 i.e., financial years 2009-10 to 2012-13 the income of the partnership firm for these four years in average requires to be construed or taken into consideration. When said exercise is undertaken, the sum total of the income of the partnership firm for these four years i.e., assessment years 2010-11 to 2013-14 would be ` 60,51,778/-. Undisputedly, deceased Sri C.R.Adarsh was having 50% share in the profit or share in the income of the partnership firm. The said firm was discontinued immediately on the demise of Sri 18 C.R.Adarsh. When 50% of income of the partnership firm is construed as income of the deceased, it would be a sum of `30,25,889/- in average for four assessment/financial years, preceding his death. Thus, the annual income profit share of the deceased would be `7,56,472.25.
17. However, in the instant case, as rightly contended by the learned Advocate appearing for respondent, income of the partnership firm had not been established, inasmuch as, the corresponding profit and loss account statement, balance sheet of the firm and other accounts relating to the drawings of the partners from the firm and also the percentage of profit which was withdrawn from the respective accounts of the partners had not been produced. Thus, in the absence of any positive evidence in this regard, the contention raised by the learned Advocate appearing for the claimants that Tribunal ought to have assessed the 19 loss of dependency by taking into consideration income of the deceased at 50% of the income of the partnership firm as reflected in Exs.P-23 to P-26 cannot be accepted.
18. The Hon'ble Apex Court in NATIONAL INSURANCE CO. LTD. v. PRANAY SETHI AND OTHERS reported in 2017 SCC online SC 1270 has held that income of the deceased will have to be taken into consideration based on the established income, would apply in all force to the facts on hand. In instant case, Tribunal has considered the income of deceased on notional basis. This exercise undertaken by the Tribunal also cannot be accepted for reasons more than one. Firstly, deceased was a B.Com. graduate as per the records Exs.P-12 to P-15 and he had commenced a business in 'human resource labour contract' as per partnership deed - Ex.P-16 which was also registered with the Labour Department as per Exs.P-18 and P-19 20 and the income received by the partnership firm as per Exs.P-23 to P-26 would also disclose that the customers of partnership firm, after having deducted the tax at source, had paid amounts to said firm towards the labour contract provided by the firm. Secondly, Tribunal having noticed that claimants had produced the individual income tax returns of the deceased for the financial year 2008-09 (assessment year 2009-10) as per Ex.P-27 which reflected the income of deceased at `3,34,125/, yet did not, adopt this as the income of the deceased. In the light of said document available on record and other material on record also disclosing that deceased was having a substantial income, Tribunal ought to have considered the income of deceased as reflected in Ex.P-27, which can be safely concluded as an established income of the deceased.
19. Thus, annual income of the deceased can be safely construed at ` 3,34,125/- or monthly income at 21 `27,843.75. In the light of dicta laid down by Hon'ble Apex Court in PRANAY SETHI's case referred to supra, 40% of the established income requires to be added towards 'future prospects', since the claimants have clearly established the income of deceased at ` 27,843/- per month as per Ex.P-27, 40% of the same has to be added towards 'future prospects' namely, a sum of ` 11,137/- (40% of ` 27,843/-). The loss of dependency will have to be accordingly computed. Since there were three persons depending on the income of the deceased namely, wife and parents, 1/3rd has to be deducted towards personal expenses i.e., a sum of ` 12,993/- from out of the monthly income of the deceased. The said amount requires to be deducted from out of the monthly income of the deceased i.e., out of ` 38,980/-. When so deducted, the loss of monthly income to the dependents would be `25,987/- (`38,980 (-) `12,993/-).
22
20. According to the SSLC marks card - Ex.P-10 of the deceased, his date of birth is reflected as 01.06.1984. Accident in question occurred on 11.04.2014. Thus, age of the deceased as on the date of accident was 30 years 5 months and the appropriate multiplier to be adopted for the age group of 30-35 years as indicated in the case of SARALA VERMA AND OTHERS vs DELHI TRANSPORT CORPORATION AND ANOTHER reported in 2009 ACJ 1298 (SC) would be '16'. Thus, loss of dependency to the claimants would be `25,987 x 12 x 16 = ` 49,89,504/-. Accordingly, we answer point No.1 in the negative and point No.2 partly in the affirmative.
21. In the light of discussion made hereinabove, we are of the considered view that compensation to which the claimant would be entitled to, is as under: 23
Sl. Amount
Heads
No. `
1. Loss of dependency 49,89,504/-
2. Loss of consortium 40,000/-
3. Loss of estate 15,000/-
4. Funeral expenses 15,000/-
TOTAL 50,59,504/-
23. Hence, we proceed to pass the following:
JUDGMENT
(i) Appeal is hereby allowed in part.
(ii) Judgment and award passed by 19th Additional Small Cause Judge & Motor Accidents Claims Tribunal, Bengaluru in MVC No.3474/2014 dated 03.02.2016 is hereby modified and in substitution to the award passed by the Tribunal, a sum of ` 50,59,504/- is hereby awarded with interest at 6% p.a. from date of petition till date of payment or deposit, whichever is earlier.24
(iii) Out of the award amount, 1st claimant -
wife is entitled to compensation to the extent of 50% and claimants 2 and 3 are entitled to the extent of 25% each and 50% of the amount shall be kept in fixed deposit in any nationalized / scheduled bank of claimants' choice for a period of 3 years with liberty to the claimants to withdraw periodical interest. Balance 50% with proportionate interest shall be released by the tribunal in favour of claimants 1 to 3 on proper identification.
(iv) Respondent - Corporation is directed to deposit the award amount with interest before the jurisdictional Tribunal within a period of four weeks from the date of receipt of copy of this order.
25
(v) Registry is directed to re-transmit the records to the jurisdictional tribunal forthwith.
SD/-
JUDGE SD/-
JUDGE RV/sp