Telangana High Court
V.Dharmavathi vs Mohd Jaffar on 7 June, 2023
Author: Lalitha Kanneganti
Bench: Lalitha Kanneganti
THE HONOURABLE SMT. JUSTICE LALITHA KANNEGANTI
M.A.C.M.A.No.467 of 2007
JUDGMENT:
This appeal is preferred by the claimants aggrieved by the quantum of compensation awarded by the Addl. Metropolitan Sessions Judge for the Trial of Jubilee Hills Car Bomb Blast Case- cum-Addl. Family Court-cum-XXIII Addl. Chief Judge, Red Hills, Nampally, Hyderabad in O.P.No.1252 of 2004 dated 31.08.2006.
2. Having heard Mr. P. Ramakrishna Reddy, learned counsel for the claimants and Mr. T. Ramulu, learned counsel for the insurance company, perused the entire material on record.
3. The claim petition was filed seeking compensation of an amount of Rs.25,00,000/- on account of the death of the deceased in the motor vehicle accident. The deceased is husband of 1st claimant and father of claimant Nos.2 and 3. The case of the claimants is that the deceased was doing business at the time of his death. He was a Diamond Executive with Quantum International Private Ltd., Noida, which is a direct marketing company. He entered into the said company as distributor (agency). He was also consignee agent and proprietor of M/s. Nandu Marketing for Quantum International Marketing. He started his career in the year 1996 as Quantum distributor and he was promoted to the next cadre of executive, silver executive, pearl executive and emerald executive, gold executive, platinum executive and diamond executive within seven years period LK, J MACMA_467_2007 2 and there were only 12 diamond executives in the country and deceased was one of the top diamond executives in the company and earning an amount of Rs.10,00,000/- per annum on an average on his business in the capacity of Diamond executive. On behalf of the claimants, Ex.A1 to A23 were marked. Ex.A11 to A13 are TDS certificates and Ex.A14 is income certificate and Ex.A15 is bank statement of deceased. The court below has granted an amount of Rs.21,55,328/-.
4. Learned counsel for the claimants submitted the court below having appreciated the income tax returns has observed that the income of the deceased is varying from year to year and certainly, there would be fluctuation in his income and in view of the same, the notional income has to be arrived to fix his annual income. It is further submitted that Ex.A14 income tax returns show that the income of the deceased for the year 2000-2001 is Rs.15,67,826/-, for the year 2001-2002 is Rs.10,26,086/- and finally for the year 2002- 2003 is Rs.5,30,431/- and as it is decreasing from year to year, the court below has taken Rs.2,00,000/- per annum as income of the deceased. It is further submitted that the court below ought to have taken Rs.10,00,000/- as annual income of the deceased while computing the compensation. It is further submitted that taking the LK, J MACMA_467_2007 3 annual income at Rs.2,00,000/- is bad and the compensation that was granted is not just and reasonable.
5. Learned counsel for the insurance company submitted that the court below has rightly taken the annual income at Rs.2,00,000/- basing on the income tax returns which show that the income of the deceased is decreasing from year to year. He further submitted that the court below while considering the income at Rs.2,00,000/- ought to have taken 50% as loss of income. He relied on the Judgment of the Hon'ble Apex Court in Sushma H.R. and another v. Deepak Kumar Jha and others1, wherein, it is held as below:
"7. Therefore in the matter of determining the compensation certain larger aspects have to be kept in perspective and even if it is expected that the bakery business is continued, the loss due to the death of the husband and his expertise in such business certainly would be at least to the extent of 50 percent of the normal way in which the business was conducted. If this aspect of the matter is kept in view and in that light the income that was being earned during his lifetime which was almost Rs.50,000 per month is kept in perspective even from the income tax return for the year 2012-2013, the loss of dependency in any event cannot be less than Rs.25,000 per month. Therefore, on reckoning the same for the purpose of determining the loss of dependency, 40 per cent is to be added towards 1 2023 ACJ 331 LK, J MACMA_467_2007 4 future prospects. Thus from the amount of Rs.35,000, if one-third is deducted towards personal expenses, and the remainder is taken into consideration with the multiplier of '17', the amount of loss of dependency will work out of Rs.47,59,993".
6. In response to the same, learned counsel for the claimants submitted that in the said case, it is bakery business and the same can be taken forward by the claimants, whereas in this case, the kind of business, the deceased was doing is solely based on the expertise of the deceased in the said field and his family i.e. the claimants cannot continue the same in his absence. In this circumstances, it cannot be held that the 50% of the income has to be deducted in the light of the law laid down in Sushma's case (stated supra).
7. Learned counsel for the insurance company has also relied on the Judgment of the Hon'ble Apex Court in K. Ramya and others v. National Insuranec Co. Ltd. and another2, wherein, it is held as below:
"16. As per the audit report and other documents, the income under this part was attributable to the amounts earned from the deceased's multiple business ventures, which included the partnership firms and other investments such as shares and bank interests. On perusal of the documents on record, it is to be 2 2022 (6) ALD 213 (SC) LK, J MACMA_467_2007 5 noticed that almost all business ventures were the result of the initiatives taken by the deceased, and he was actively involved in the day-to-day management of these entries. In fact, the testimony of the deceased's wife points out that the appellants had to sell the buses which were utilized in the transport business because they were not able to take care of the vehicles on account of the demise of the deceased and even the export business was shut down due to the same reason.
17. The mere fact that the deceased's share of ownership in these businesses ventures was transferred to the deceased's minor children just before his death or to the dependents after his death is not a sufficient justification to conclude that the benefits of these business continue to accrue to his dependents. On the contrary, it has come on record that the deceased was actively involved in the day-to- day administration of these businesses from their stage of infancy, had undergone specialized training to administer his business and that the audit reports neatly delineate deceased's share of income from the businesses. These facts necessitate that the entire amount from the business ventures is treated as income. Similarly, the amount earned from the bank interests and remaining investments must also be included as income".
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8. The claimants in support of the income of the deceased have got marked Ex.A11 to A14 i.e. TDS certificates and income tax returns showing the income of the deceased for the year 2000-2001 is Rs.15,67,826/-, for the year 2001-2002 is Rs.10,26,086/- and finally for the year 2002-2003 is Rs.5,30,431/-.
9. The claimants got examined PW3, who is the Regional Manager of Quantum International Private Ltd. with which the deceased was doing business. The court below without any rational has taken Rs.2,00,000/- as the annual income of the deceased. The accident has happened in the year 2003 and for the year 2002-2003, the income of the deceased was Rs.5,30,431/-. The court below ought to have considered the said income and further, question of considering 50% of the income while computing the future prospects as per the judgment relied on by the learned counsel for the insurance company in Sushma's case (stated supra) is not applicable to the facts of the case. But, the judgement of the Hon'ble Apex Court relied on by the learned counsel for the insurance company in Ramya's case (stated supra) applies to the facts of the case as the claimants after the demise of husband of the 1st claimant cannot continue the said business which was conducted by the deceased basing on the expertise he has in the said field.
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10. In view of the same, this court is inclined to consider the income of the deceased at Rs.5,00,000/- per annum. The deduction towards the income tax for the year 2002-2003 as per the slab of that year, an amount of Rs.50,000/- is not amenable to tax and on the remaining amount i.e. Rs.4,50,000/-, 10% tax would apply i.e. Rs.45,000/-. If taxable amount of Rs.45,000/- is deducted from the income of the deceased i.e. Rs.5,00,000/-, the annual income would come to Rs.4,55,000/-.
11. Considering the age of the deceased i.e. 39 years as on the date of accident, future prospects at 40% have to be included in the annual income, which comes to Rs.6,37,000/- (Rs.4,55,000+1,82,000). As the dependants are three members, 1/3rd of the income has to be deducted towards personal expenditure and thereby, the annual contribution of the deceased to the family would come to Rs.4,24,667/- (Rs.6,37,000-2,12,333). If this sum is multiplied with relevant multiplier to the age of the deceased i.e.15, the total amount comes to Rs.63,70,005/-. This amount shall be awarded to the claimants under the head of loss of dependency.
12. In the light of the law laid down in Pranay Sethi's case (2 supra), the claimants are granted Rs.33,000/- towards funeral LK, J MACMA_467_2007 8 expenses and loss of estate, Rs.44,000/- to each of the claimant towards consortium.
13. Therefore, the claimants are eligible for the compensation as below:
Head Compensation awarded
(1) Loss of dependency Rs.63,70,005
(2) Funeral expenses and Rs.33,000
Loss of Estate
(3) Loss of spousal consortium Rs.44,000 for 1st claimant
(4) Loss of parental consortium Rs.88,000 for 2nd and 3rd
claimants
(5) Legal expenses Rs.10,000
Total compensation awarded Rs.65,45,005
14. In the result, the Motor Accident Miscellaneous Appeal filed by the claimants is allowed enhancing the compensation amount awarded by the court below from Rs.21,55,328/- to Rs.65,45,005/- as hereunder:
(a) The enhanced amount shall carry interest at 7.5% p.a. from the date of petition till the date of realization.
(b) The claimants shall pay the court fee on the enhanced amount of compensation.
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(c) The insurance company shall deposit the amount within a period of (8) weeks from the date of receipt of copy of judgment. On such deposit, claimants are entitled to withdraw the entire amount without furnishing the security.
(d) Amounts shall be apportioned in terms of the ratio decided by the court below in the Award.
Pending miscellaneous petitions, if any, shall stand closed.
___________________________ LALITHA KANNEGANTI, J Date: 07.06.2023 gvl/mmr