Karnataka High Court
Smt Manjula vs The Managing Director on 18 August, 2020
Bench: Aravind Kumar, Pradeep Singh Yerur
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF AUGUST, 2020
PRESENT
THE HON'BLE MR. JUSTICE ARAVIND KUMAR
AND
THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR
MISCELLANEOUS FIRST APPEAL NO. 4783/2015 (MV)
BETWEEN:
1. SMT. MANJULA
W/O LATE SREERAMULU SHIVAKUMAR
AGED ABOUT 39 YEARS
PRESENTLY RESIDING AT VITTAL TOWERS
FLAT NO.301, 4TH CROSS, K.R. LAYOUT
J.P. NAGAR, 6TH PHASE
BANGALORE - 560 078.
2. KUMARI PREETHI
D/O LATE SREERAMULU SHIVAKUMAR
AGED ABOUT 15 YEARS
PRESENTLY RESIDING AT VITTAL TOWERS
FLAT NO.301, 4TH CROSS, K.R. LAYOUT
J.P. NAGAR 6TH PHASE
BANGALORE - 560 078.
3. MASTER YESHWIN
S/O LATE SREERAMULU SHIVAKUMAR
AGED ABOUT 9 YEARS
PRESENTLY RESIDING AT VITTAL TOWERS
FLAT NO.301, 4TH CROSS, K.R. LAYOUT
J.P. NAGAR 6TH PHASE
BANGALORE - 560 078.
2
PETITIONER 2 AND 3 BEING MINORS ARE
REPRESEENTED BY THEIR
NATURAL GUARDIAN
APPELLANT NO.1 SMT. MANJULA.
...APPELLANTS
(BY MS. MEGHA, ADVOCATE FOR
SRI. MENTO ISSAC, ADVOCATE)
AND:
1. THE MANAGING DIRECTOR
BMTC, BANGALORE-560 027
OWNER OF THE VEHICLE
BEARING NO.KA-01/F-1563.
2. UNITED INDIA INSURANCE CO. LTD.,
BRANCH OFFICE AT NO.40, 1ST FLOOR
OPP VANI VILAS HOSPITAL,
K.R. ROAD, FORT
BANGALORE - 560 020.
...RESPONDENTS
(BY SRI. M.S. SRIRAM, ADVOCATE FOR R-2;
V/O DATED 14.12.2015 NOTICE TO R-1 IS
DISPENSED WITH)
THIS APPEAL IS FILED UNDER SECTION 173(1) OF
MV ACT AGAINST THE JUDGMENT AND AWARD
DATED:03.02.2015 PASSED IN MVC NO.3991/2009 ON
THE FILE OF THE XII ADDITIONAL SMALL CAUSES
JUDGE, MEMBER, MACT, BANGALORE, PARTLY
ALLOWING THE CLAIM PETITION FOR COMPENSATION
AND SEEKING ENHANCEMENT OF COMPENSATION.
THIS APPEAL COMING ON FOR ADMISSION THIS
DAY, ARAVIND KUMAR J., DELIVERED THE FOLLOWING:
3
JUDGMENT
Claimants are in appeal not being satisfied with the quantum of compensation awarded by the Motor Accidents Claims Tribunal, Bangalore (for short 'Tribunal') by judgment and award dated 03.02.2015 in MVC No.3991/2009.
2. On account of a road traffic accident that occurred on 05.08.2008, husband of the first claimant
- late Sri Sreeramulu Shivakumar had sustained injuries and expired on account of same. Hence, a claim petition came to be filed by the wife and children of deceased Sri Sreeramulu Shivakumar under Section 166 of the Motor Vehicles Act, 1988 seeking compensation of Rs.2,50,00,000/-. Tribunal after issuing notice to the respondents-insurer and the insured, considered pleadings of the parties, evaluated the evidence tendered by them and by judgment and award dated 03.02.2015 allowed the claim petition in 4 part and awarded total compensation of Rs.62,05,240/- and deducted a sum of Rs.25 lakhs which first claimant had received from the employer of deceased towards Group Insurance policy. Hence, this appeal is filed by the claimants seeking enhancement of compensation awarded and also for modification.
3. We have heard Ms.Megha, learned Advocate appearing on behalf of Sri Mento Issac for appellants- claimants. Notice to respondent-1 has been dispensed with vide order dated 14.12.2015. Sri Janardhana Reddy, learned advocate was permitted to accept notice on behalf of respondent-2. Subsequently, on 19.04.2019, Sri M.S.Sriram, learned Advocate has filed vakalathnama on behalf of insurer - respondent-2. His name is printed in the cause list. However, there is no representation on his behalf. We have perused the records secured from the tribunal.
5
4. Though the matter is listed for admission, taking into consideration that accident is of the year 2008 and widow is aged about 33 years with two minor daughters aged 8 and 3 years and the fact that claimants are prosecuting their claim for grant of just and reasonable compensation by knocking at the doors of Tribunal and this Court for the past 12 years, we are not inclined to adjourn this matter on account of the absence of learned Advocate appearing for the insurance company and as such we have taken up the appeal for final disposal.
5. Accident in question, death of husband of first claimant i.e., late Sri Sreeramulu Shivakumar due to the injuries sustained in the road traffic accident that occurred on 05.08.2008, the offending vehicle being insured with second respondent - Insurance Company and the policy issued to the said vehicle being in vogue 6 as on the date of accident, are all undisputed facts which have been accepted by the Tribunal.
6. That apart, records of the Tribunal would also indicate that insurer has deposited the compensation awarded by the Tribunal and a part of award amount has already been withdrawn by the claimants under the orders of the tribunal. No appeal has been preferred by the insurer against award passed by the Tribunal, which in effect, would indicate that insurer has accepted the liability. Hence, we deem it fit and proper to dispose of this appeal on merits and not to allow this appeal languish for years to come. In fact, this appeal has been pending for the past 5 years before this Court.
7. Learned Advocate appearing for appellants would contend that compensation awarded by the tribunal is abysmally on the lower side; tribunal has not 7 appreciated the evidence tendered by the parties in proper perspective; tribunal erred in deducting a sum of Rs.25 lakhs which is a component relating to the Group Insurance Scheme made by the deceased as an employee of Wipro Technologies, which amount would have accrued to the benefit of the claimants even in the absence of road traffic accident and as such, tribunal could not have deducted the said amount from the amount awarded and it ought to have directed the insurer to indemnify the entire award amount. Hence, he prays for enhancement of compensation and modification of award.
8. Having heard the learned Advocate appearing for appellants, we are of the considered view that following points would arise for our consideration in this appeal:
8
(i) Whether tribunal was right and correct in deducting Rs. 25 lakhs from out of the compensation awarded?
(ii) Whether compensation awarded by the tribunal in MVC No.3991/2009 is just and reasonable or requires to be enhanced? If so, to what extent?
(iii) What order?
9. As already noticed herein above, accident in question, husband of first claimant succumbing to the accidental injuries as well as offending vehicle having been insured by second respondent and said policy being in vogue as on date of accident are undisputed facts and as such, they have not been delved upon by this Court in this appeal as undertaking such an exercise would only burden this order. Hence, we desist from doing so. Tribunal, after evaluating the evidence 9 tendered by parties, has awarded compensation of Rs.62,05,240/- under the following heads:
Sl.No. Heads Amount
1 Loss of dependency Rs.61,35,240.00
2 Loss of consortium Rs. 10,000.00
3 Loss of love and affection Rs. 30,000.00
4 Loss of estate Rs. 10,000.00
5 Transportation of dead body and Rs. 20,000.00
Funeral expenses
Total Rs.62,05,240.00
RE: POINT NO.(i):
10. At the outset, we have considered the submissions of learned Advocate appearing for appellants with regard to deduction of Rs.25 lakhs by the Tribunal on the ground that said amount had been received by the claimants towards Group Insurance Scheme on the death of Sri Sreeramulu Shivakumar.
11. The Hon'ble Apex Court in the case of SEBASTIANI LAKRA & OTHERS vs NATIONAL 10 INSURANCE COMPANY reported in AIR 2018 SC 5034 has held:
"6. The traditional view was that while assessing compensation, the Court should assess the loss of income caused to the claimants by the death of the deceased and balance it with the benefits which may have accrued on account of the death of the deceased. However, even when this traditional view was being followed, it was a well settled position of law that the tort-feasor cannot not take benefit of the munificence or gratuity of others."
In fact, their lordships have followed the earlier dicta laid down in HELEN C REBELLO vs MAHARASHTRA STATE ROAD TRANSPORT CORPORATION reported in (1999)1 SCC 90 and UNITED INDIA INSURANCE COMPANY LIMITED vs PATRICIA JEAN MAHAJAN reported in (2002)6 SCC 281.
12. In the matter of HELEN C REBELLO cited supra, issue was whether amount received by the deceased by way of provident fund, pension, life 11 insurance policies and amount received in cash, bank balance, shares, fixed deposits etc., are 'pecuniary advantages' received by the heirs on account of death of the deceased and are liable to be deducted from the compensation. The Hon'ble Apex Court held those amounts have no co-relation with the compensation receivable by the dependents under the Motor Vehicles Act. It was observed by the Hon'ble Apex Court as under:
"35. Broadly, we may examine the receipt of the provident fund which is a deferred payment out of the contribution made by an employee during the tenure of his service. Such employee or his heirs are entitled to receive this amount irrespective of the accidental death. This amount is secured, is certain to be received, while the amount under the Motor Vehicles Act is uncertain and is receivable only on the happening of the event, viz., accident, which may not take place at all. Similarly, family pension is also earned by an employee for the benefit of his family in the form of his contribution in the service in terms of the service conditions receivable by the heirs after his death. The heirs receive family pension even otherwise than the accidental death. No corelation between the two. Similarly, life insurance policy is received either by the 12 insured or the heirs of the insured on account of the contract with the insurer, for which the insured contributes in the form of premium. It is receivable even by the insured if he lives till maturity after paying all the premiums. In the case of death, the insurer indemnifies to pay the sum to the heirs, again in terms of the contract for the premium paid. Again, this amount is receivable by the claimant not on account of any accidental death but otherwise on the insured's death. Death is only a step or contingency in terms of the contract, to receive the amount. Similarly any cash, bank balance, shares, fixed deposits, etc. though are all a pecuniary advantage receivable by the heirs on account of one's death but all these have no corelation with the amount receivable under a statute occasioned only on account of accidental death. How could such an amount come within the periphery of the Motor Vehicles Act to be termed as "pecuniary advantage" liable for deduction. When we seek the principle of loss and gain, it has to be on a similar and same plane having nexus, inter se, between them and not to which there is no semblance of any corelation. The insured (deceased) contributes his own money for which he receives the amount which has no corelation to the compensation computed as against the tortfeasor for his negligence on account of the accident. As aforesaid, the amount receivable as compensation under the Act is on account of the injury or death without making any contribution towards it, then how can the fruits of an amount received through contributions of the insured be deducted out of the amount receivable under the Motor 13 Vehicles Act. The amount under this Act he receives without any contribution. As we have said, the compensation payable under the Motor Vehicles Act is statutory while the amount receivable under the life insurance policy is contractual."
13. Similarly, in PATRICIA JEAN MAHAJAN's case referred supra, Hon'ble Apex Court found that the deceased therein was a Doctor practicing in the United States of America and while on a visit to India, he died on account of injuries sustained in motor vehicle accident. His wife in the United States of America, had received amount of compensation on account of life insurance policies of the deceased and also she had received unemployment allowance for 8 or 9 months and it was urged by the insurer that said amounts should be deducted from the compensation assessed. After referring to the catena of judgments, the Hon'ble Apex Court noticed the decision in HELEN C. REBELLO cited supra and held to the following effect: 14
"36. We are in full agreement with the observations made in the case of Helen Rebello that principle of balancing between losses and gains, by reason of death, to arrive at the amount of compensation is a general rule, but what is more important is that such receipts by the claimants must have some correlation with the accidental death by reason of which alone the claimants have received the amounts. We do not think it would be necessary for us to go into the question of distinction made between the provisions of the Fatal Accidents Act and the Motor Vehicles Act. According to the decisions referred to in the earlier part of this judgment, it is clear that the amount on account of social security as may have been received must have a nexus or relation with the accidental injury or death, so far to be deductible from the amount of compensation. There must be some correlation between the amount received and the accidental death or it may be in the same sphere, absence (sic) the amount received shall not be deducted from the amount of compensation. Thus, the amount received on account of insurance policy of the deceased cannot be deducted from the amount of compensation though no doubt the receipt of the insurance amount is accelerated due to premature death of the insured. So far as other items in respect of which learned counsel for the Insurance Company has vehemently urged, for example some allowance paid to the children, and Mrs Patricia Mahajan under the social security system, no correlation of those receipts with the accidental death has been shown much less established. Apart from the fact that contribution comes from different sources for constituting the fund 15 out of which payment on account of social security system is made, one of the constituents of the fund is tax which is deducted from income for the purpose. We feel that the High Court has rightly disallowed any deduction on account of receipts under the insurance policy and other receipts under the social security system which the claimant would have also otherwise been entitled to receive irrespective of accidental death of Dr Mahajan. If the proposition "receipts from whatever source" is interpreted so widely that it may cover all the receipts, which may come into the hands of the claimants, in view of the mere death of the victim, it would only defeat the purpose of the Act providing for just compensation on account of accidental death. Such gains, may be on account of savings or other investment etc. made by the deceased, would not go to the benefit of the wrongdoer and the claimant should not be left worse off, if he had never taken an insurance policy or had not made investments for future returns."
14. Hon'ble Apex Court in the matter of VIMAL KANWAR vs KISHORE DAN reported in (2013)7 SCC 476 held that amounts received by the legal heirs by way of provident fund, pension and insurance cannot be termed as 'pecuniary advantage' and same is not liable for deduction. It was also held by the Hon'ble Apex 16 Court that salary received on compassionate appointment cannot be deducted.
15. In conclusion, Hon'ble Apex Court in SEBASTIANI LAKRA's case referred to herein supra has held:
"12. The law is well settled that deductions cannot be allowed from the amount of compensation either on account of insurance, or on account of pensionary benefits or gratuity or grant of employment to a kin of the deceased. The main reason is that all these amounts are earned by the deceased on account of contractual relations entered into by him with others. It cannot be said that these amounts accrued to the dependents or the legal heirs of the deceased on account of his death in a motor vehicle accident. The claimants/dependents are entitled to 'just compensation' under the Motor Vehicles Act as a result of the death of the deceased in a motor vehicle accident. Therefore, the natural corollary is that the advantage which accrues to the estate of the deceased or to his dependents as a result of some contract or act which the deceased performed in his life time cannot be said to be the outcome or result of the death of the deceased even though these amounts may go into the hands of the dependents only after his death.17
13. As far as any amount paid under any insurance policy is concerned whatever is added to the estate of the deceased or his dependents is not because of the death of the deceased but because of the contract entered into between the deceased and the insurance company from where he took out the policy. The deceased paid premium on such life insurance and this amount would have accrued to the estate of the deceased either on maturity of the policy or on his death, whatever be the manner of his death. These amounts are paid because the deceased has wisely invested his savings. Similar would be the position in case of other investments like bank deposits, share, debentures etc.. The tort-feasor cannot take advantage of the foresight and wise financial investments made by the deceased."
16. In the light of principles enunciated by the Hon'ble Apex Court, when the facts on hand are examined, it would indicate that deceased was employed in Wipro Technology and was a permanent employee. All the employees of the company were insured by the employer under Group Insurance Scheme and on account of his demise due to accidental injuries sustained in the road traffic accident, said amount payable on account of his death to the legal 18 representatives in a sum of Rs.25 lakhs was paid. In fact, deceased had paid premium on the said insurance and this amount would have accrued to the estate of the deceased either on maturity of the policy or on his death, for any other reason also and irrespective of the cause or manner in which he died. This amount as noticed by the Hon'ble Apex Court in the case of SEBASTIANI LAKRA, was paid because deceased had wisely invested salary by taking insurance policy and payment of premium. Thus, tort feasor cannot take advantage of the foresight and wise financial investments made by the deceased. In that view of the matter, deduction of Rs.25 lakhs paid by the employer to the legal representatives of the deceased employee is not the amount which could have been deducted from out of the compensation which was being paid to legal representatives of an employee. Thus, finding recorded by the tribunal to the effect that a sum of Rs.25 lakhs 19 paid to claimants by the employer of deceased has to be deducted from out of the total compensation determined under the head 'loss of income to the dependents' was alien to the principle of awarding just and reasonable compensation. As such, we are of the firm view that tribunal committed a serious error in deducting sum of Rs.25 lakhs from out of the compensation awarded and same cannot be sustained. Hence, point No.(i) is answered in the negative and in favour of claimants/appeals.
RE: POINT NO.(ii)
17. This takes us to the next issue as to whether Tribunal has awarded just and reasonable compensation based on the evidence tendered by the claimants?
18. Tribunal, as could be seen from the judgment and award in question, has considered the 20 income of the deceased at Rs.51,127/- vide paragraph -19. To arrive at this figure, learned trial Judge has relied upon Exs.P-32 to P-36 which reflects the salary drawn by the deceased and according to the learned trial Judge - Ex.P-36 reflected the salary at Rs.51,127/- whereas, in the said bank statement extract, it is reflected that in the month of 1st August, 2008, salary that was credited to the account of deceased employee was Rs.70,267/-. Obviously, this figure has been arrived at by the employer after deducting amounts towards income tax, med claim, professional tax and MBS. Undisputedly, as per Ex.P- 30, salary drawn by the deceased employee in the month of April, 2008 was Rs.79,868/-. Salary certificate which has been produced through P.W.3 which is marked as Ex.P-34 would indicate that deceased was working in Wipro Technologies from 25.06.2007 to 05.08.2008 as Consultant and was 21 drawing monthly salary of Rs.81,900/-. Last drawn salary of the deceased as per Ex.P-33 (salary certificate
- pay slip) was Rs.80,678/-. Suggestion made to P.W.1 (wife of the deceased) in her cross examination that deceased was not drawing salary of Rs.81,900/- has been denied by her. She has also denied that she and her children were not dependent on the income of the deceased. Deceased was working in a multinational company called IGATE for six years prior to his joining Wipro Technologies.
19. P.W.3 - author of the salary certificate, Ex.P-33 has reiterated the contents of the documents produced by him. He has stated that he has been working as Manager in Human Resources Department of Wipro Technologies and was serving even as on the date he tendered evidence. Documents produced through P.W.3 namely, Ex.P-32, P-35, P-36 cannot be disbelieved as they are computer generated extracts and 22 it is duly certified by the employer - P.W.3 - HR Manager of Wipro Technologies. As such, we are of the considered view that tribunal committed a serious error in ignoring this evidence available on record to arrive at a conclusion that deceased was getting monthly income of Rs.51,127/- as against his monthly income being Rs.80,678/-. However, he being an income tax assessee, amount of income tax deducted by the employer as well as professional tax of Rs.200/- being paid by the deceased, has to be deducted from out of the total gross income of the deceased and compensation towards 'loss of income' to be awarded to the dependents requires to be computed. Deceased was aged about 38 years as on the date of accident. He was able bodied, highly qualified and drawing gross salary of Rs.80,678/- on the date of his death. Thus, as held by the Hon'ble Apex Court in SARLA VERMA vs DELHI TRANSPORT CORPORATION reported in 23 [(2009)6 SCC 121] , 50% will have to be added towards his future prospects which aspect has been completely ignored by the tribunal and thereby, it has occasioned miscarriage in the administration of justice. Number of persons dependent on the income of the deceased was his wife and two minor children, as per SARLA VERMA's case, 1/3rd will have to be deducted from out of the total gross income of the deceased towards his personal and living expenses and compensation has to be computed towards "loss of income to the dependents". Thus, compensation payable towards "loss of dependency" would be as under:
(i) Rs.80,678/- (-) Rs.7604/- = Rs.73,074/-
(income tax and Profession tax)
(ii) Rs.73,074/- + Rs.35,037/- = Rs.1,08,111/-
(50% future prospects)
(iii) Less: 1/3rd towards personal and (-) Rs. 36,037/-
Living expenses -------------------- Loss of income to the dependents = Rs.72,074/- per month 24
20. Deceased being aged 38 years and appropriate multiplier required to be adopted is '15' and tribunal has rightly adopted the multiplier of '15' and same does not call for interference. Thus, compensation payable under the head "loss of dependency" to the claimants is computed as under:
Rs.72,074/- x 12 x 15 = 1,29,73,320/-
21. In the light of law laid down by the Hon'ble Apex Court in UNITED INDIA INSURANCE COMPANY LIMITED vs SATINDER KAUR @ SATWINDER KAUR @ OTHERS reported in 2020 SCC ONLINE SC 410, compensation to be awarded under other heads requires to be enhanced. Accordingly, award passed by the Tribunal stands modified. Thus, claimants are entitled to the compensation under the following heads: 25
Sl.No. Heads Amount
1 Loss of dependency Rs.1,29,73,320.00
2 Loss of estate Rs. 50,000.00
3 Loss of spousal Rs. 40,000.00
consortium (wife)
4 Loss of parental Rs. 80,000.00
consortium
(Rs.40,000/- x 2 minor
children )
5 Funeral expenses Rs. 15,000.00
Total Rs.1,31,58,320.00
Accordingly, point No.(ii) is answered in favour of the claimants and against the insurance company. Re: Point No.(iii)
22. For the aforesaid reasons, we proceed to pass the following:
JUDGMENT
(i) Appeal is allowed in part.
(ii) Judgment and award dated
03.02.2015 passed by the Motor
Accidents Claims Tribunal, Bangalore in MVC No.3991/2009 is hereby modified and in substitution to the 26 compensation awarded by the Tribunal, total compensation of Rs.1,31,58,320/- is awarded to the claimants, which shall carry interest @ 6% p.a. from the date of claim petition till date of payment or deposit whichever is earlier.
(iii) Second respondent - insurer is directed to deposit the compensation amount with interest excluding the amount already deposited if any, before the jurisdictional Tribunal, within six weeks from the date of receipt of copy of this order.
(iv) Apportionment made by the Tribunal between claimants 1 to 3 in the ratio of 50:25:25 is affirmed.27
(v) Out of the enhanced compensation, 40% of the amount with proportionate interest shall be kept in a fixed deposit in the name of first claimant in any nationalized or scheduled Bank of her choice, for a period of four years and she would be entitled to draw periodical interest and remaining 60% with proportionate interest is ordered to be released in her favour by the jurisdictional Tribunal on proper identification.
(vi) Out of the enhanced compensation awarded to claimant No.2, 50% of the amount with proportionate interest shall be kept in a fixed deposit in any nationalized Bank or scheduled Bank of her choice, for a period of four 28 years. Since she has attained majority, she would be entitled to draw periodical interest. Remaining 50% with proportionate interest is ordered to be released in her favour on proper identification. .
(vii) The entire enhanced compensation awarded to claimant No.3 shall be kept in a fixed deposit in any nationalized Bank or scheduled Bank of first claimant's choice, till he attains the age of majority. First claimant being mother and natural guardian, would be at liberty to draw periodical interest accrued on the fixed deposit. On attainment of majority, entire fixed deposit amount shall be released in 29 favour of third claimant on proper identification.
(viii) Registry shall transmit the records to the jurisdictional Tribunal forthwith.
SD/-
JUDGE SD/-
JUDGE *sp