Madras High Court
The National Insurance Company Limited vs G.Krishnaveni on 27 September, 2021
CMA(MD).No.25 of 2021,
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on : 14.07.2021
Pronounced on : 27.09.2021
CORAM
THE HONOURABLE MR.JUSTICE K.MURALI SHANKAR
C.M.A. (MD).No.25 of 2021
and
C.M.P(MD).No.588 of 2021
The National Insurance Company Limited,
Rep. by its Branch Manager, Nagercoil,
D.No.112, Anguvilas Building First Floor,
North Car Street, Nagercoil,
Kanyakumari District. : Appellant / 3rd Respondent
Vs.
1. G.Krishnaveni
2. Kalaivani
3. Sankarraj :1st to 3rd respondents/petitioners
4. Rameshkumar :4th respondent/1st respondent
5. Sasikumar :5th respondent/2nd respondent
(R4 & R5-remained exparte in Tribunal : Notice dispensed with)
PRAYER: Civil Miscellaneous Appeal filed under Section 173 of the
Motor Vehicles Act against the Judgment and Decree, dated 23.01.2020
1/14
https://www.mhc.tn.gov.in/judis/
CMA(MD).No.25 of 2021,
made in M.C.O.P.No.166 of 2019 on the file of the Motor Accidents
Claims Tribunal, Additional District Court (Fast Track Court), Tenkasi.
For Appellants : Mr.J.S.Murali
For Respondents : Mr.D.Venkatesh
1 to 3
JUDGMENT
The Civil Miscellaneous Appeal is directed against the award passed in M.C.O.P.No. 166 of 2019, dated 23.01.2020, on the file of the Motor Accidents Claims Tribunal/Additional District Court, Tenkasi.
2.The appellant / insurer, who was directed to pay compensation of Rs.38,85,856/- with interest at 7.5% per annum to the respondents 1 to 3 / claimants 1 to3 for the death of one Manoharan, who died in an accident occurred on 01.07.2016, challenged the quantum of compensation awarded by the Tribunal.
3.The only contention and objection of the insurer to the impugned award is that the though the deceased was aged 58 years at the time of 2/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, accident, the Trial Court had erred in adopting regular multiplier instead of split multiplier method.
4. Before entering into further discussion, let us consider the legal position with respect to application of split multiplier method in computing the compensation. The learned Counsel for the appellant/insurer has cited as many as eight decisions in support of his contention that the Tribunal ought to have adopted the split multiplier formula. The learned Counsel has relied on the judgments of the Division Bench of this Court reported in 2019 (2) TN MAC 39 (Branch Manager, National Insurance Company Limited Vs. Subban and others);
(ii) 2015 (2) TN MAC 449 (Reliance General Insurance Company Limited Vs. K.Meena and others);
(iii) 2014 (1) TN MAC 334 (Branch Manager, National Insurance Company Limited Vs. M.Arul Mozhi and others);
(iv) 2013 (2) MWM (Civil) 729 (R.Leelavathy Vs. Sheik Dawood and another);
(v) 2008 (1) TN MAC 510 (K.Rangasamy and another Vs. Revathi and others); and 3/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021,
(vi) the Judgment passed in C.M.A(MD)No.248 of 2018, (Bajaj Allianz General Insurance Company Limited Vs. Thangam and others),
(vii) C.M.A(MD)No. 2049 of 2013 (National Insurance Company Limited Vs. Malarvili and others) and
(viii) C.M.A(MD)No.320 and 321 of 2013 (National Insurance Company Limited Vs. Murugammal and others).
5.The learned Counsel for the claimants has relied on the judgments of the Honourable Supreme Court reported in 2014 (1) TN MAC 481, Puttamma and others Vs. K.L.Narayana Reddy and another and in that decision, the Hon'ble Apex Court has referred to its earlier decision reported in 2011 (1) TN MAC 161 and the relevant paragraphs are extracted hereunder:
“33. In K.R. Madhusudhan and others Vs. Administrative Officer and another, 2001 (1) TN MAC 161 (SC) : 2011 (4) SCC 689, this Court held as follows:
14. In the Appeal which was filed by the Appellants before the High Court, the High Court instead of maintaining the amount of 4/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, compensation granted by the Tribunal, reduced the same. In doing so, the High Court had not given any reason. The High Court introduced the concept of Split Multiplier and departed from the Multiplier used by the Tribunal without disclosing any reason therefor. The High Court has also not considered the clear and corroborative evidence about the prospect of future increment of the deceased. When the age of the deceased is between 51 & 55 years the Multiplier is 11, which is specified in the 2nd column in the Second Schedule to the Motor Vehicles Act, and the Tribunal has not committed any error by accepting the said Multiplier. This Court also fails to appreciate why the High Court chose to apply the Multiplier of 6.
15. We are, thus, of the opinion that the Judgment of the High Court deserves to be set aside for it is perverse and clearly contrary to the evidence on record, for having not considered the future prospects of the deceased and also for adopting a Split Multiplier method.
34. We, therefore, hold that in absence of any specific reason and evidence on record the Tribunal or the Court should not apply Split 5/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, Multiplier in routine course and should apply Multiplier as per decision of this Court in the case of Sarla Verma (supra), as affirmed in the case of Reshma Kumari (supra)”
6. The learned Counsel for the claimant has also relied on a recent decision of the Division Bench of this Court in C.M.A(MD)No.821 of 2018, dated 01.03.2021, (Malar and others Vs. Hakkim and another) whereunder, this Court has held in paragraph No. 11, that the application of split multiplier method is unsustainable, as per the principle laid down by the recent judgment of the Hon'ble Supreme Court and that therefore, the compensation calculated by the Tribunal applying split multiplier method cannot be accepted.
7. The learned Counsel for the claimants has also cited two other judgments of this Court in C.M.A(MD)No.2921 of 2017, dated 22.11.2017, (Nallammal and others Vs. Thirunanasambandam and another); and C.M.A(MD)No.1057 of 2011, dated 15.12.2020 (P. Jamuna Rani and others Vs. S.A.Nataraj and others), whereunder, this Court by relying on the Judgment of the Hon'ble Apex Court in 6/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, K.R.Madhu Sudhan's case reported in 2011, (1) TN MAC 161, has re- structured the compensation by adopting regular multiplier method.
8. Considering the above, it is very much clear that simply because, the deceased was approaching the retirement age at the time of accident, split multiplier method cannot be applied automatically and the same would depend on various factors such as age of the deceased at the time of accident, his avocation, retirement age and the stand taken by the parties to the lis.
9. In the case on hand, the deceased was aged 58 years at the time of accident. Moreover, the deceased was an Ex.Service Man and was getting military pension of Rs.16,633/- per month. It is also not in dispute that the deceased was employed as a Driver in ISRO, Mahendragiri and was getting monthly salary of Rs.29,453/-. The Tribunal by adding both the pension and salary and also the future prospects at 15%, has fixed the monthly income at Rs.52,998/-. As rightly contended by the learned Counsel for the claimants, the insurer has not taken such a plea that the split multiplier method was to be applied and the insurer has not produced 7/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, any materials or evidence in support of the same. Considering the facts and circumstances of the present case and also the facts that the deceased was a Driver and was getting Ex.Service Man pension and on applying the legal position above referred, the decision of the Tribunal in applying a regular multiplier cannot be found fault with. As per the legal dictum laid down by the Hon'ble Supreme Court in Smt. Sarala Varma Vs. Delhi Transport Corporation and another reported in AIR 2009 SC 3104, the Tribunal has rightly deducted 1/3rd towards personal expenses of the deceased.
10. The learned Counsel for the insurer has also taken an another stand that the Tribunal has failed to deduct any amount towards income-tax and that the same is liable to be deducted. To counter the said argument, the learned Counsel for the claimants, has relied on the decision of the Honourable Supreme Court in Vimal Kanwar and others vs. Kishore Dan and others reported in (2013) 7 Supreme Court Cases 476, wherein, it is held as follows:
“22. In the present case, none of the respondents brought to the notice of the Court that the income-tax payable by 8/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, the deceased Sajjjan Singh was not deducted at source by the employer-State Government. No such statement was made by Ram Avtar Parikh, PW-2 an employee of Public Works Department of the State Government who placed on record the Last Pay Certificate and the Service Book of the deceased. The Tribunal or the High Court on perusal of the Last Pay Certificate, have not noticed that the income-tax on the estimated income of the employee was not deducted from the salary of the absence of such evidence, it is presumed that the salary paid to the deceased Sajjan Singh as per Last Pay Certificate was paid in accordance with law i.e. by deducting the income- tax on the estimated income of the deceased Sajjjan Singh for that month or the Financial Year. The appellants have specifically stated that Assessment Year applicable in the instant case is 1997-98 and not 1996-97 as held by the High Court. They have also taken specific plea that for the Assessment year 1997-98 the rate of tax on income more than 40,000/- and upto Rs.60,000/- was 15% and not 20% as held by the High Court. The aforesaid fact has not been disputed by the respondents.
23. In view of the finding as recorded above and the provisions of the Income-Tax Act, 1961, as discussed, we hold that the High Court was wrong in deducting 20% from the salary of the deceased towards income-tax, for 9/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, calculating the compensation. As per law, the presumption will be that employer-State Government at the time of payment of salary deducted income-tax on the estimated income of the deceased employee from the salary and in absence of any evidence, we hold that the salary as shown in the Last Pay Certificate at Rs.8,920/-
should be accepted which if rounded off comes to Rs. 9,000/- for calculating the compensation payable to the dependents(s)”
11. In the present case, the claimants have produced the copy of the Bank pass-book under Ex.P7 to show the pension payments and pay slip issued by ISRO, Mahendragiri, under Ex.P8 to show his monthly salary. Admittedly, no income-tax was deducted at source from the monthly salary of the deceased under Ex.P8, probably on the ground that there was no taxable income. As rightly contended by the learned Counsel for the insurer, the claimants have not produced Form-16 issued by the employer or the certificate issued by the Canara Bank, Tenkasi Branch, to show that tax was deducted. Moreover, they have also not produced copy of the income-tax return submitted to the department or the acknowledgement for submitting the return. As rightly contended by the insurer's side, when the 10/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, salary and the pension amount are clubbed together, then the total amount would attract the income-tax, but the claimants have putforth their claims separately with respect to the salary and the pension.
12. The appellant in their memorandum of grounds, has deducted income-tax at Rs.1,27,195/-. But the income-tax as per the slab for the financial year 2016–2017, there is no tax upto Rs.2,50,000/- and thereafter, upto Rs.5,00,000/- tax is payable at 10% and in excess of Rs.5,00,000/- upto Rs.10,00,000/- tax is payable at 20%.
13. The Tribunal has taken monthly salary at Rs.46,086/- and the annual income would come to Rs.5,53,032 and after adding 15% of the income towards future prospects, the total annual income would come to Rs.6,35,987/-. After deducting income-tax at Rs.52,197 (10% tax for Rs.2,50,000/- + 20% tax for Rs.1,35,987), it comes to Rs.5,83,790/-. As rightly observed by the Tribunal, 1/3 of the income is to be deducted towards the personal expenses of the deceased and rightly adopted the 11/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, multiplier '9'. The Tribunal has also rightly awarded Rs.70,000/- under conventional heads.
14. Considering the above, the claimants are entitled to get compensation of Rs.35,72,737/-. As already pointed out, the Tribunal has granted total amount of Rs.38,85,856/-. In view of the above findings, the claimants are entitled to get compensation of Rs. 35,72,737 /- with interest at 7.5% per annum from the date of petition till the date of the realisation and costs. The learned counsel for the appellant/insurer would submit that the insurer has already deposited the entire award amount before the Tribunal.
15. In the result, the Civil Miscellaneous Appeal is partly allowed and compensation amount is modified and reduced from Rs.38,85,856/- to Rs.35,72,737/- with interest at 7.5% per annum from the date of claim petition till the date of the realisation and costs. The Appellant is directed to deposit the modified award amount with interest and costs, less the amount already deposited, if any. On such deposit being made, the claimants are permitted to withdraw their share in the award amount with 12/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, proportionate interest and costs, as apportioned by the Tribunal, less amount already withdrawn, if any, by filing necessary application before the Tribunal. The appellant is permitted to withdraw the remaining amount, if any, by filing necessary application before the Tribunal. The parties are directed to bear their own costs. Consequently, the connected Miscellaneous Petition is closed.
27.09.2021 Index : yes / No Internet : yes / No LR To
1.The Motor Accident Claims Tribunal/ Additional District Court (Fast Track Court), Tenkasi.
2.The Section Officer, V.R.Section, Madurai Bench of Madras High Court, Madurai.
13/14 https://www.mhc.tn.gov.in/judis/ CMA(MD).No.25 of 2021, K.MURALI SHANKAR, J.
lr Note:
In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned.
PRE-DELIVERY JUDGMENT MADE IN C.M.A. (MD).No.25 of 2021 and C.M.P(MD).No.588 of 2021 27.09.2021 14/14 https://www.mhc.tn.gov.in/judis/