Karnataka High Court
B R Saraswathamma vs Laxman Rao C A on 18 August, 2023
1 M.F.A.No.403/2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF AUGUST 2023
PRESENT
THE HON'BLE MRS. JUSTICE K.S.MUDAGAL
AND
THE HON'BLE MR.JUSTICE RAMACHANDRA D. HUDDAR
MISCELLANEOUS FIRST APPEAL No.403/2015 (MV-D)
BETWEEN:
1. B R SARASWATHAMMA
W/O LATE B. RANGANATH
SINCE DECEASED BY LR'S
APPELLANT NOS.2 TO 4
2. B.D. SHOBHA DEVI
W/O LATE B.R. DINESH
AGED ABOUT 50 YEARS
3. B.D. SHRUSHUTHA
S/O LATE B.R. DINESH
AGED ABOUT 26 YEARS
4. B.D. DEEPIKA
D/O LATE B.R. DINESH
AGED ABOUT 21 YEARS
A2 TO A4 ARE
R/AT "SHIRINIKETAN"
NEHRU ROAD, DURGIGUDI
SHIMOGA - 577 201 ...APPELLANTS
(BY SRI SRINIVASA MURTHY S, ADVOCATE)
2 M.F.A.No.403/2015
AND:
1. LAXMAN RAO C A
S/O PRAHLAD RAO
AGED ABOUT 55 YEARS
R/AT 6TH CROSS, A BLOCK,
"PARIMALA NILAYA"
SHIMOGA - 577 201
2. THE ORIENTAL INSURANCE COMPANY LIMITED
VINAYAKA COMPLEX
P.B. NO. 107, GARDEN AREA
SHIMOGA - 577 201 ...RESPONDENTS
(BY SRI B.S.UMESH, ADVOCATE FOR R2;
NOTICE TO R1 DISPENSED WITH V/C/O DTD:07.12.2015)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION
173(1) OF MV ACT PRAYING TO MODIFY THE JUDGMENT AND AWARD
DATED 11.04.2014 PASSED BY 2ND ADDITIONAL DISTRICT JUDGE,
ADDITIONAL MACT-2, SHIVAMOGGA IN MVC NO.2038/2006 PARTLY
ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING
ENHANCEMENT OF COMPENSATION.
THIS MISCELLANEOUS FIRST APPEAL HAVING BEEN HEARD
AND RESERVED ON 14.07.2023 COMING ON FOR PRONOUNCEMENT
OF JUDGMENT THIS DAY, K.S.MUDAGAL J., DELIVERED THE
FOLLOWING:
JUDGMENT
Questioning the adequacy of the compensation awarded to them, the claimants in M.V.C.No.2038/2006 on the file of 2nd Additional District Judge and Additional MACT-2, Shivamogga have preferred this appeal.
3 M.F.A.No.403/2015
2. This case relates to the death of one B.R.Dinesh in motor accident which took place on 10.04.1999. Appellant Nos.1 to 4 were claimant Nos.2 to 5 and B.V.Ranganath the father of the deceased B.R.Dinesh was claimant No.1 in M.V.C.No.2038/2006 on the file of 2nd Additional District Judge and Additional MACT-2, Shivamogga. B.V.Ranganath died pending the claim petition. Therefore he is not arrayed as the appellant in this case.
3. Claimant Nos.1 and 2 are the parents, claimant No.3 is the widow and claimant Nos.4 and 5 are the minor children of the deceased B.R.Dinesh. For the purpose of convenience, the parties will be referred to henceforth according to their ranks before the Tribunal.
4. Respondent No.1 was the chartered accountant of B.R.Dinesh. On 11.04.1999 at about 1.00 a.m. when B.R.Dinesh was travelling in Fiat Car bearing No.KA-17/M-252 driven by respondent No.1, the said car met with accident within the limits of Malavagoppa Village, Suburb of Shivamogga Town. B.R.Dinesh succumbed to the accidental injuries. At the relevant 4 M.F.A.No.403/2015 time, respondent Nos.1 and 2 were the registered owner and insurer of car in question.
5. The claimants filed claim petition against the respondents claiming compensation of Rs.45,00,000/- on the ground that the accident occurred due to actionable negligence on the part of respondent No.1. The said case was initially registered in M.V.C.No.739/1999 before the Principal District Judge & MACT, Shivamogga. On assignment, the said case was transferred to the Principal Civil Judge (Senior Division) Additional MACT, Shivamogga and renumbered as M.F.A.No.404/1999. Again that was transferred to II Additional Civil Judge (Senior Division) and Additional MACT, Shivamogga. The said case was then transferred to Fast Track Court-III, Additional MACT-IV, Shivamogga and renumbered as M.V.C.No.2038/2006.
6. Respondent Nos.1 and 2 contested the matter. The Tribunal on recording the evidence and hearing the parties by the impugned award partly allowed the petition awarding compensation of Rs.15,22,340/- with interest at 6% per annum payable by respondent No.2 insurer.
5 M.F.A.No.403/2015
7. The claimants challenged the said order before this Court in M.F.A.No.7222/2010 (MV). The records show that before this Court they sought to adduce additional evidence. This Court by judgment dated 11.02.2013 allowed M.F.A.No.7222/2010 on the ground that the Tribunal has not considered payment of future prospects on the income of the deceased and remanded the matter permitting the parties to adduce additional evidence.
8. On remand of the matter, the claimants adduced further evidence by further examining PW.1, PWs.3 and 4 as additional witnesses and produced Exs.P26 to P51. In the meantime, M.V.C.No.2038/2006 was transferred to the II Additional District & Sessions Judge, Additional MACT-II, Shivamogga. The said Court on hearing the parties by the impugned judgment and order again partly allowed the petition granting compensation of Rs.25,50,000/- with interest at 6% per annum.
9. The Tribunal assessed the individual income of the deceased at Rs.1,34,201/- p.a. and his share of income from 6 M.F.A.No.403/2015 Hindu Undivided Family (for short 'HUF') at Rs.12,000/- p.a. The Tribunal considered his total income at Rs.1,46,201/- p.a. Out of that the Tribunal deducted 1/4th (Rs.36,550) towards his personal expenses and considered the loss of dependency at Rs.1,09,651/- rounded off to Rs.1,10,000/- p.a., added 50% to the same by way of future prospects, applied 15 multiplier and awarded compensation of Rs.24,75,000/- on the head of loss of dependency.
10. The Tribunal in all awarded compensation of Rs.25,50,000/- on different heads as per the table below:
Sl. Particulars Compensation
No. Amount in Rs.
1 Loss of dependency 24,75,000/-
2 Love and affection & consortium 25,000/-
3 Loss of estate 35,000/-
4 Funeral expenses 15,000/-
Total 25,50,000/-
11. The claimants have preferred this above appeal challenging adequacy of the compensation awarded to them under the impugned award.
7 M.F.A.No.403/2015Submissions of Sri S.Srinivasa Murthy, learned Counsel for the claimants:
12. The evidence on record shows that the deceased was having very bright career in his business. The income tax returns at Exs.P21 to P29 and the evidence of PWs.1 and 2 show that the gross total income of the deceased for the assessment year 1999-2000 as per Ex.P26 was Rs.2,07,887/-. The deceased had a bigger HUF with his parents and another smaller HUF with his son. Exs.P28 and P29 were the income tax returns of those HUFs. The income from the smaller HUF was Rs.71,232/- and in bigger HUF was Rs.37,017/-. Therefore his income from HUF was Rs.1,08,249/-. As per his income tax returns for the assessment year 1999-2000 he had paid advance tax of Rs.5,000/-. Thus his total annual income at the relevant time was Rs.2,07,887/-, less advance tax paid at Rs.5,000/-, plus two incomes from HUFs at Rs.1,08,239/-. Therefore the total income comes to Rs.3,11,136/-. The Tribunal ought to have awarded 50% of income towards future prospects which comes to Rs.1,55,568/-. Therefore his net income comes to Rs.4,66,704/-. On deducting 1/4th out of the same for his personal expenses (4,66,704x1/4th = Rs.1,16,676/-), his income was Rs.3,50,028/- and on 8 M.F.A.No.403/2015 applying 15 multiplier, the compensation payable on the head of loss of dependency comes to Rs.52,50,420/-. Therefore the compensation awarded by the Tribunal on the said head is on the lower side. The compensation awarded on the head of loss of consortium and other conventional heads is also on the lower side.
13. In support of his submissions, he relies on the following judgments:
1. Anupama Ketan Shah v. Hameed Mohammad Pathan1
2. Oriental Insurance Co. Ltd. v. Kanika Arora2
3. The National Insurance Company Ltd. v. Anima Srivastava3
4. Shashikala v. Gangalakshmamma4
5. Smt.Somabai @ Shyama Bai v. B.M. Ashwathkumar5
6. Mamta v. Dilip6
7. Airport Authority of India v. Bhartiben Randhikumar Mehta7
8. C.I.T. v. Rameshwari Lal Sanwarmal8
9. Income Tax Officer, A-Ward, Lucknow v. Bachu Lal Kapoor9
10. Satyanarayan Kanhaiyalal Gagrani v. Commissioner of Income Tax10 1 2014 SCC Online Guj 13596 2 2012 SCC Online Del 4399 3 2015 SCC Online Jhar 3507 4 (2015) 9 SCC 150 5 2015 SCC Online Kar 7228 6 (2020) 2 MP LJ 256 7 2009 SCC Online Guj 9743 8 (1972) 4 SCC 342 9 (1966) 3 SCR 68 10 (2008) 215 CTR (MP) 521 9 M.F.A.No.403/2015
11. Commissioner of Income Tax, Bombay City I v.
M.M.Khanna11
12. United India Insurance Co. Ltd. v. Satinder Kaur 12
13. Jai Prakash v. National Insurance Co. Ltd.13
14. Concord of India Insurance Co. Ltd. v. Nirmala Devi 14
15. Nagappa v. Gurudayal Singh15
16. Smt.Suvarna & Ors. vs. Manager, IFFCO-TOKIO General Insurance Co. Ltd. Maharastra & Anr.16 Submissions of Sri B.S.Umesh, learned Counsel for respondent No.2/insurer:
14. The claimants in their own claim petition contended that they claim compensation of Rs.45,00,000/-. Now for the first time in this appeal, they contend that the total compensation payable is Rs.54,31,920/-. That itself goes to show that the claimants are inflating the compensation from time to time and making improvements in the case. The income tax returns submitted and relied on by the claimants were submitted subsequent to filing of the claim petition. When PW.1 was examined for the first time, there was no whisper about the income from HUF or income tax returns of the bigger or the smaller HUFs. Ex.P21 the income tax returns of the deceased for 11 (1963) 49 ITR 232 (Bom) 12 (2021) 11 SCC 780 13 (2010) 2 SCC 607 14 (1979) 4 SCC 365 15 (2003) 2 SCC 274 16 ILR 2021 KAR 581 10 M.F.A.No.403/2015 the assessment year 1997-1998 and the financial year 1996-
1997 show that GIR number was not allotted to him while submitting the said returns which indicates that was his first income tax returns. As per the said document his income was Rs.1,18,165/- per annum. If really the deceased had two HUFs and they had fabulous income, there should have been income tax returns for the preceding years also. Therefore there is no merit in the contention that there were two HUFs and he had income from the same etc. The compensation awarded is just and fair one. That does not warrant interference of this Court. The judgments relied on by learned Counsel for the claimants are not applicable to the facts and circumstances of this case.
15. On considering the submissions of both side and on examining the materials on record, the question that arises for consideration is "whether the compensation awarded under the impugned award is just and fair one"?
Analysis Reg. Quantum of compensation:
16. As per the written arguments and the evidence produced subsequent to remand of the matter, the claimants 11 M.F.A.No.403/2015 contended that the deceased formed two HUFs called bigger HUF with his father and a smaller HUF with his minor son. Such case was not made out in the claim petition itself. The pleadings play an important role in any cases. As rightly pointed out by the respondents' Counsel in page No.2 Clause No.6 of their claim petition, the claimants contended that the monthly income of the deceased from all source was Rs.35,000/-. Further in para 21 of the claim petition they pleaded regarding loss of dependency, as follows:
"21. Amount of compensation claimed. ..................................................accordingly contribution of the deceased to his dependants/petitioners as to the loss of Rs.1,50,000/- per year. ..............................................."
17. In that pleading, by applying 20 multiplier they claimed Rs.30,00,000/- on the head of loss of dependency. In page 6 para 2 of the claim petition, the claimants contended that in addition to the remuneration of Rs.1.5 lakhs per annum, the deceased was getting monthly rents, invested lakhs of rupees in shares of Blue Chip company, constructing a residential bungalow investing Rs.20,00,000/- on the site purchased by him and he had the insurance policies worth Rs.15,00,000/-. Taking into consideration all those things and consortium in the prayer 12 M.F.A.No.403/2015 column of the claim petition they had claimed compensation of Rs.45,00,000/-. Now overgrowing the same, they claim compensation of Rs.54,31,920/-. That itself goes to show that the claimants are exaggerating the claim. They are bound by their admissions in the claim petition.
18. The claimants in the first round of the proceedings had submitted the income tax returns Exs.P21 to P25. Ex.P21 income tax returns for the assessment year 1997-1998 submitted by the deceased on 31.03.1998 shows that GIR number was not allotted to the deceased. That goes to show that he had no permanent account number prior to 31.03.1998. As per Ex.P21 the income of the deceased for that year was Rs.1,18,165/-. His net taxable income was Rs.1,12,257/- rounded of to Rs.1,12,260/-.
19. As per Ex.P23 on 22.12.1998 the deceased had submitted the said income tax returns for the assessment year 1998-1999. In that also, GIR number was not allotted. There is seal for having received the same in the office. Since Ex.P23 was 13 M.F.A.No.403/2015 submitted prior to the death of B.R.Dinesh, the said document is more credible and can be safely relied.
20. Exs.P26 and P27 are the alleged income tax returns of the deceased for the assessment years 1999-2000 and 2000- 2001 and financial years 01.04.1998 to 31.03.1999 and 01.04.1999 to 31.03.2001 respectively. Both of them were allegedly submitted by claimant No.3 the wife of the deceased on 20.09.2001. They are said to be the individual tax returns of the deceased. According to Ex.P26 the total income of the deceased from his salary and other sources was Rs.2,07,887/-. Admittedly, B.R.Dinesh died on 11.04.1999. As per Ex.P27 his ten days income that is from 01.04.1999 to 11.04.1999 was Rs.3,154/-. Ex.P28 is purportedly the income tax returns of HUF of B.R.Dinesh for the assessment year 1999-2000 and financial year 01.04.1998 to 31.03.1999. As per that document, the income of the said HUF was Rs.1,42,463/-. Similarly, Ex.P29 is the alleged income tax returns of smaller HUF of the deceased for the assessment year 1999-2000 submitted on 07.10.1999. As per the said document, the total income of the said HUF was Rs.1,48,127/-. All the income tax returns in addition to Exs.P26 14 M.F.A.No.403/2015 to P29 produced and relied by the claimants were not submitted during the life time of the deceased. They were all submitted subsequent to filing of the claim petition that too after the matter was remanded.
21. In the evidence led by the claimants on the first occasion, there was no whisper about the deceased being member of two HUFs and submitting the income tax returns of those HUFs or getting any income from such HUFs. Even otherwise the major part of the income shown in those returns was the income from the house properties by way of rents. PW.1 in her cross-examination dated 27.04.2013 unequivocally admitted that the business of her husband in Comat Technologies had suffered business loss of Rs.79,179.99/- in the year 1999. She admits that prior to 1997-1998 her husband had no permanent account number to submit the income tax returns. She admits that in Ex.P28 an amount of Rs.83,151/- is shown as rental income and those buildings are in her possession and she is getting higher rental income than earlier. She also admits that father-in-law died on 26.11.2001. Even after two years of her husband's death, she has submitted the HUF returns on 15 M.F.A.No.403/2015 20.09.2001. In her cross-examination dated 11.07.2013 she unequivocally admits that she has submitted Ex.P26 to P28 and Ex.P47 after the death of her husband.
22. First of all the respondents disputed the genuineness of the income tax returns submitted subsequent to the death of B.R.Dinesh. PW.3 the Inspector of Income Tax was examined to prove those documents. He deposed that as per the Rules of their department they destroy more than 10 years old documents, therefore those income tax returns are not available in the office. He further deposes that though Exs.P26 to P28 bear the seal of their office, they do not bear the signature of any officer of their department. In the cross-examination he admits that such seal could be concocted. He further admits that the acknowledgement on the income tax returns shall bear the seal and signature both. Therefore he cannot say that Exs.P26 to 28 are the authenticated documents. He further admitted that Exs.P26 to P28 do not bear the seal for the date 20.09.2001.
23. To clarify the above admissions of PW.3 the claimants examined PW.4 the income tax officer of Ward No.1 Shivamogga. Though in the chief examination, he deposed that 16 M.F.A.No.403/2015 in their income tax returns register there is mention of the submissions of income tax returns of B.R.Dinesh at Sl.Nos.3730, 3731, 3733, 3736 and returns of Ranganath (claimant No.1) at Sl.No.3732 and 7735 and of Sarawathamma (claimant No.2) at Sl.No.3734 on 20.09.2001, in the cross-examination he admits that Exs.P26 to P28 were submitted by claimant No.3. He also admits that in Ex.P28, Rs.83.000/- is shown as his income from house property. He also admits that he only had deputed PW.3 to give evidence.
24. The records show that PW.1/claimant No.3 was examined before the Tribunal for the first time on 05.01.2007. As per the above discussed evidence those returns were filed in 2001 itself. But still there was no whisper in the evidence of PW.1 dated 05.01.2007 regarding the submissions of income tax returns Ex.P26 onwards. She deposed only about Exs.P21 to P25. On the first occasion, they examined PW.2 the Inspector of Income Tax Department, Shivamogga to prove that Exs.P22 to 24 are the income tax returns of the deceased alone. The said witness was examined on 05.06.2007. If the income tax returns which are produced subsequently were in existence in 2007, 17 M.F.A.No.403/2015 there should have been some whisper regarding them in the evidence of PWs.1 and 2.
25. According to the claimants the deceased constituted two separate HUFs with his father claimant No.1 and his minor son claimant No.4. Claimant No.1 as admitted by PW.1 died on 26.11.2001. But he was not examined to prove the said contention or the submissions of HUFs income tax returns. Under the aforesaid facts and circumstances, there is force in the contention of respondent No.2/Insurer that those documents are unreliable and unacceptable. Even otherwise, the claimants evidence show that HUF income consisted of rental income and business income. PW.1's admission shows that she is getting higher rental income than earlier. So far as investment in share and debentures, they continue to yield the income. It was argued that they were sold. In that event also the claimants got the returns. Therefore it cannot be said that there was any loss of estate or loss of income. Under the circumstances, only the income declared by the deceased during his life time under Ex.P23 that is Rs.1,56,040/- can be considered as his income to assess the loss of dependency. Suffice it to say that the 18 M.F.A.No.403/2015 judgments relied on by learned Counsel for the claimants regarding acceptance of the income tax returns of the deceased and the alleged HUF of the deceased do not advance their case.
26. Out of the aforesaid income of Rs.1,56,040/-, 10% has to be deducted towards income tax. 10% of the same comes to 15,604/-. That can be rounded to Rs.15,000/-. Therefore his annual income comes to Rs.141,040/-. Admittedly, the deceased had 5 dependants. As per the judgment of the Hon'ble Supreme Court in Sarla Varma v. Delhi Transport Corporation17 in such cases 1/4th of the income of the deceased has to be deducted towards his personal expenses therefore, 3/4th of income remains as his contribution to the family which comes to Rs.1,41,040/- x 3/4th = Rs.1,05,780/-.
27. As per Ex.P8 the SSLC certificate of the deceased his date of birth was 24.08.1960. Therefore the Tribunal rightly considered his age as 39 years. The Tribunal added 50% of the income of the deceased by way of future prospects considering him to be permanently employed person and that finding is not challenged by the insurer. Therefore 50% of Rs.1,05,780/- has 17 AIR 2009 SC 3104 19 M.F.A.No.403/2015 to be super added to the income which comes to Rs.52,890/-. Therefore his total income comes to Rs.1,58,670/- (Rs.1,05,780 + Rs.52,890/-). The applicable multiplier is 15. Therefore the compensation payable on the head of loss of dependency comes to Rs.23,80,050/- (Rs.1,58,670/- x 15).
28. As per the judgment of the Hon'ble Supreme Court in National Insurance Company Limited vs. Pranay Sethi18, and Magma General Insurance Company Ltd. v. Nanu Ram19 each of the claimants are entitled to compensation of Rs.40,000/- on the head of consortium with escalation of 10% for every three years. Claimant No.1 died before the impugned award. Therefore the principle of Actio personalis moritur cum persona applies in considering consortium for claimant No.1 and compensation on that head cannot be awarded. Claimant Nos.2 to 5 are entitled to the compensation of (48,000 x 4) Rs.1,92,000/- on the head of consortium.
29. As per the judgment of the Hon'ble Supreme Court in Pranay Sethi's case referred to supra the claimants are entitled 18 AIR 2017 SC 5157 19 2018 (18) SCC 130 20 M.F.A.No.403/2015 to compensation of Rs.15,000/- on the head of loss of estate and Rs.15,000/- on the head of funeral expenses with escalation of 10% for every three years. Therefore the compensation payable on both heads together is Rs.36,000/-. Therefore the just compensation payable is as follows:
Sl. Particulars Compensation
No. Amount in Rs.
1. Loss of dependency 23,80,050/-
2. Loss of consortium 1,92,000/-
3. Loss of estate & funeral 36,000/-
expenses
Total 26,08,050/-
Reg. Interest:
30. It was contended that the matter is pending since 1999, therefore the respondents are liable to pay interest at 12% per annum on the award amount. As rightly pointed out by the Tribunal, the matter was remanded at the instance of the claimants themselves. Otherwise, the aspect of future prospects and conventional heads could have been decided in M.F.A.No.7222/2010 itself. Therefore there is no merit in that contention. The interest awarded by the Tribunal needs no 21 M.F.A.No.403/2015 interference. Respondent No.2 being the insurer is liable to indemnify the damages.
31. For the aforesaid reasons, the appeal deserves to be allowed in part. Hence the following:
ORDER The appeal is partly allowed. The impugned award is modified as follows:
i) Claimant Nos.2 to 5 are entitled to compensation of Rs.26,08,050/- with interest thereon at 6% per annum from the date of the petition till its realization.
ii) Respondent No.2 shall deposit the said amount before the Tribunal on adjusting the amount already deposited if any within four weeks from the date of receipt of copy of this judgment.
iii) The award of the Tribunal with regard to apportionment and investment is maintained. 22 M.F.A.No.403/2015
iv) Since claimant No.2 died pending this appeal, the Tribunal shall disburse her share to her legal representatives on proper identification.
Sd/-
JUDGE Sd/-
JUDGE KSR