NARESH CHAUHAN vs. PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO No. 63 of 2016 Decided on: 4.1.2020. United India Insurance Company Ltd. .…Appellant. Versus Smt. Raj Rani and others. … Respondents. …………………………………………………………………………………… Coram The Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting?1 Yes For the appellant. : Mr. Ashwani K. Sharma, Sr. Advocate with Mr. Ishan Sharma, Advocate. For respondent. : Mr. Karan Veer Singh, Advocate, for respondents No. 1 to 5. Ms. Poonam Gehlot, Advocate, for respondent No.6. Sandeep Sharma, J (Oral) By way of present appeal filed under Section 173 of the Motor Vehicles Act, 1988( for short ‘Act’), challenge has been laid to award dated 20.11.2015, passed by learned Motor Accident Claims Tribunal, Una, District Una, Himachal Pradesh, (hereinafter referred to as ‘Tribunal’,) in MACP No. 58/2014, titled as Raj Rani and others Vs Satnam Singh and another, whereby learned Tribunal below while allowing the claim petition, having been filed by respondents-claimants No.1 to 5 (hereinafter ‘claimants’), saddled 1 Whether reporters of the local papers may be allowed to see the judgment? 2 appellant-Insurance Company with liability to pay compensation to the tune of Rs. 25,40,600/- along with interest @ 7.5% per annum from the date of filing of the petition i.e. 30.4.2014 till the payment is made. 2. Precisely the facts of the case, as emerge from the record are that the claim petition under Section 166 of Motor Vehicles Act, came to be filed at the instance of the claimants on account of death of Santosh Dass, being widow, daughters and sons of the deceased, who died in a motor vehicle accident, which took place on 5.4.2014 involving vehicle bearing registration No. PB-01-1893 owned and driven by respondent No.6 and insured with appellant-Insurance Company. On 5.4.2014, at about 10:00 AM deceased, who was working as a ‘Safai Karamchari’ in Municipal Council/Nagar Parishad, Una, was hit by white colored Scorpio bearing registration No. PB-01-1893 coming from the red light Chowk, Una in a very high speed, as a consequence of which, deceased Santosh Dass after having suffered multiple injuries on his person died at the spot. Claimants alleged that the deceased died on account of the rash and negligent driving of the driver driving the ill-fated vehicle. Since deceased was the only bread winner of the family, they being their dependents are entitled to compensation to the tune of Rs. 60,00,000/-. Claimants claimed that deceased was getting salary of Rs. 24,400/- per month 3 and besides this, he was also earning Rs, 10,000/- per month from part time job as skilled Band Master. 3. Respondent No.6 refuted the aforesaid claim of the claimants by stating that he was driving the vehicle at the relevant time in a very careful manner, but accident occurred on account of the negligence on the part of the deceased, who without noticing the vehicle coming from opposite side hurriedly crossed the road, as a consequence of which, he struck against the vehicle and died on account of his own negligence. 4. Appellant-Insurance Company opposed the aforesaid claim of the claimants on the ground that the driver of the ill-fated vehicle was not holding valid and effective driving licence and vehicle in question was being driven in violation of the terms and conditions of insurance policy and as such, it is not liable to indemnify the insured. 5.   Learned   Tribunal   below,   on   the   basis   of   the pleadings adduced on record by the respective parties, framed following issues on9.9.2014:- “1. Whether deceased Santosh Dass died on 5.4.2014 bear bus stand, Una due to rash and negligent driving of vehicle i.e. Scorpio No.PB-01-1893 by respondent No.1 as alleged ? OPP 2. if issue No.1 is proved in affirmative, whether the petitioners are entitled to compensation, if so, to what amount and from whom? OPP. 3. Whether the respondent No.1 was not holding a valid and effective driving licence at the time of accident in question, if so, its effect? OPR-2. 4 4. Whether the vehicle in question was being driven in violation of terms and conditions of insurance policy, as alleged? OPR2 5. Relief. 6. Subsequently, learned Tribunal below vide award dated 20.11.2015 allowed the aforesaid claim petition and directed the appellant-Insurance Company to pay a sum of Rs. 25,40,600/- as compensation along with interest @ 7.5% per annum from the date of filing of the petition till the payment is made. In the aforesaid background, appellant-Insurance Company has approached this Court in the instant proceedings, praying therein to set aside the impugned award. 7. Having heard learned counsel representing the parties and perused the material available on record, vis-a-vis reasoning assigned in the impugned award, this Court finds that challenge to the impugned award by way of instant appeal is primarily on three grounds:(i) No sufficient opportunity was granted to the Insurance Company to prove that the driver of ill-fated vehicle was not possessing valid and effective driving licence at the time of accident (ii) learned Tribunal has erred while computing the loss of dependency as it omitted to deduct such allowance from the salary of deceased, which were personal to him and even the amount on account of Income Tax deductible from salary i.e. 10%;(iii) learned Tribunal has erred while awarding excessive amount under certain conventional heads. 5 8. Mr. Ashwani K. Sharma, learned Senior Counsel representing the appellant-Insurance Company, while making this Court to peruse Zimni Orders passed by learned Tribunal below made serious attempt to persuade this Court to agree with his contention that no reasonable opportunity ever came to be afforded to the appellant- Insurance Company to prove that driver of ill-fated vehicle was not possessing the valid and effective driving licence, but aforesaid submission having been made by learned counsel for the appellant- Insurance Company appears to be totally misconceived and contrary to the record. Careful perusal of Zimni Orders passed by learned Tribunal below reveal that repeatedly matter came to be adjourned, enabling the appellant-Insurance Company to produce evidence. It is apparent from the record of the learned Tribunal below that as many as nine times matter came to be adjourned, enabling respondents including respondent-Insurance Company to lead evidence, especially with regard to verification of DL No. 2045/REN in the name of respondent No.1. Since despite repeated notices, witnesses proposed to be examined by appellant Insurance Company failed to put in appearance, learned Tribunal below with a view to secure their presence also issued bailable warrants. Despite repeated opportunities Insurance Company failed to produce DTO, Jalandhar and as such, it cannot be said that no reasonable opportunity was afforded by learned 6 Tribunal below to the appellant-Insurance Company to prove that driver of the vehicle was not possessing valid and effective driving licence. Perusal of order dated 5th October, 2015 passed by learned Tribunal below reveals that even on that day neither evidence on behalf of the Insurance Company nor steps led/were taken. In the aforesaid order, learned Tribunal below has specifically recorded that “though sufficient opportunities have already been given to the respondents for their evidence but on the request of learned counsel for respondents, one more opportunity is granted for their evidence on 30.10.2015. It is made clear to the learned counsel for both the respondents that in case they failed to lead evidence on that date, their evidence will be closed by the order of the Court.” Even after passing of aforesaid order, respondents failed to produce evidence and as such, Court below had no option, but to close the evidence of the respondents. Moreover, order closing evidence of the respondents was passed on 30.10.2015, but no challenge ever came to be laid to the aforesaid order passed by the learned Tribunal and it attained finality. Hence, in view of the above, this Court finds no force in the aforesaid submission/argument of learned Senior Counsel representing the appellant-Insurance Company. 9. In the case at hand, though appellant-Insurance Company filed verification Report mark ‘RY’ to the effect that driving licence 7 No. R-43338/J/99-2000 was renewed in the name of one Jaswinder son of Mohinder and not in the name of Satnam Singh, but such report never came to be proved on record, in accordance with law. Appellant-Insurance Company neither produced the relevant record pertaining to the aforesaid report nor produced in the Court any official of the concerned DTO. 10. To the contrary, respondent No.6 driver of the offending vehicle produced report Mark ‘X’, as per which driving licence was properly renewed by DTO, Hoshiarpur. Besides this, respondent No.6 also also appeared in the witness box and deposed that his driving licence was lying in the criminal case pertaining to this accident. He also filed copy of his driving licence Mark ‘G’ on the record. Since appellant-Insurance Company failed to discharge onus, which was upon it to prove that respondent No.6 was not holding valid and effective driving licence, learned tribunal below has rightly held that it cannot be said that there was violation of the terms and conditions of the insurance policy qua the driving licence of respondent No.6. 11. Similarly this Court finds from the record that deceased was working as ‘Safai Karamchari’ in Municipal Council/Nagar Parishad, Una, District Una, H.P., and he was drawing salary of Rs. 24,400/- per month. To prove aforesaid fact, petitioner examined PW- 2, Karam Singh, who successfully proved the salary certificate of 8 deceased Ext. PW2/A, perusal whereof reveals that deceased was getting gross salary of Rs 24,403/-. Though, respondents disputed the genuineness of certificate, but failed to lead evidence to rebut the same or to prove that the certificate is not genuine. 12. To the contrary, PW2, PW3 and PW4 categorically deposed in unison that deceased was working as ‘Safai Karamchari’ in Municipal Council/Nagar Parishad, Una. Evidence led by petitioner remained totally unrebutted and as such, learned Tribunal below rightly held that on the basis of salary certificate, Ext. PW2/A, coupled with the evidence of PW2 to PW4, it can be safely inferred that deceased was working as ‘Safai Karamchari’ in Municipal Council/Nagar Parishad, Una and he was getting salary of Rs. 24,400/- per month. Though in the appeal at hand argument has been raised that learned Tribunal erred while computing the loss of dependency by omitting to deduct such allowances from the salary of the deceased which were personal to him but no evidence worth the name on record suggestive of the fact that the salary as has been taken into consideration by learned Tribunal while computing the loss of dependency also included certain allowances which were personal to the deceased, rather the record reveals that the salary certificate stands proved on record in accordance with law, which suggests that the gross salary of the petitioner at the time of accident was Rs. 24.403/- 9 per month. Similarly no evidence has been led on record by appellant insurance company suggestive of the fact that 10% of Income Tax from the salary of deceased was being deducted or was liable to be deducted. Last pay certificate, Ext. PW2/A nowhere suggests that amount, if any, on account of income tax was being deducted from the salary of deceased. Moreover the allowances which are claimed to be personal in nature i.e. Uniform Allowance, HRA, Conveyance Allowance and Special Allowance are part of the gross salary, which has been taken into consideration by learned Tribunal while assessing the loss of dependency. 13. At this stage, it would be profitable to take note of the judgment rendered by Hon’ble Apex Court in National Insurance Company Limited vs. Pranay Sethi and others, AIR 2017, SC 5157, wherein it has been held as under :  “47.  In our considered opinion, if the same is followed, it shall   subserve   the   cause   of   justice   and   the unnecessary   contest   before   the   tribunals   and   the courts would be avoided. 48. Another aspect which has created confusion pertains to grant of loss of estate, loss of consortium and funeral expenses. In Santosh Devi (supra), the two­Judge Bench followed the   traditional   method   and   granted  `  5,000/­   for transportation   of   the   body,  `  10,000/­   as   funeral expenses   and  ` 10,000/­   as   regards   the   loss   of consortium. In Sarla Verma, the Court granted  ` 5,000/­ under the head of loss of estate,  `  5,000/­ towards funeral expenses and ` 10,000/­ towards loss of   Consortium.   In   Rajesh,   the   Court   granted  ` 1,00,000/­ towards loss of consortium and ` 25,000/­ 10 towards   funeral   expenses.   It   also   granted  ` 1,00,000/­   towards   loss   of   care   and   guidance   for minor children. The Court enhanced the same on the principle   that   a   formula   framed   to   achieve uniformity and consistency on a socioeconomic issue has to be contrasted from a legal principle and ought to   be   periodically   revisited   as   has   been   held   in Santosh Devi (supra). On the principle of revisit, it fixed different amount on conventional heads. What weighed with the Court is factum of inflation and the price index. It has also been moved by the concept of loss of consortium. We are inclined to think so, for what it states in that regard. We quote:­  “17. … In legal parlance, “consortium” is the right of the   spouse   to   the   company,   care,   help,   comfort, guidance,   society,   solace,   affection   and   sexual relations with his or her mate. That non­pecuniary head of damages has not been properly understood by our courts. The loss of companionship, love, care and protection, etc., the spouse is entitled to get, has to be compensated appropriately. The concept of non pecuniary damage for loss of consortium is one of the major heads of award of compensation in other parts of the world more particularly in the United States of America, Australia, etc. English courts have also recognised the right of a spouse to get compensation even during the period of temporary disablement. By loss of consortium, the courts have made an attempt to compensate the loss of spouse’s affection, comfort, solace,   companionship,   society,   assistance, protection,   care   and   sexual   relations   during   the future years. Unlike the compensation awarded in other   countries   and   other   jurisdictions,   since   the legal heirs are otherwise adequately compensated for the pecuniary loss, it would not be proper to award a major amount under this head. Hence, we are of the view that it would only be just and reasonable that the courts award at least rupees one lakh for loss of consortium.”    11 60.  The controversy does not end here. The question still remains whether there should be no addition where the age of the deceased is more than 50 years. Sarla Verma thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari. Judicial notice can be taken of the fact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to one reason or the other. To lay down as a thumb rule that there will be no addition after 50 years will be   an   unacceptable   concept.   We   are   disposed   to think,   there   should   be   an   addition   of   15%   if   the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of self employed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there   can   be   consistency   in   the   approach   by   the tribunals and the courts.  61.  In   view   of   the   aforesaid   analysis,   we   proceed   to record our conclusions:­  (i)  The two­Judge Bench in Santosh Devi should have been well advised to refer the matter to a larger Bench as it was taking a different view   than   what   has   been   stated   in   Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength  cannot   take   a   contrary   view   than what   has   been   held   by   another   coordinate Bench.  (ii)  As Rajesh has not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent.  (iii)  While determining the income, an addition of 50%   of   actual   salary   to   the   income   of   the deceased towards future prospects, where the deceased had a permanent job and was below the   age   of   40   years,   should   be   made.   The addition   should   be   30%,   if   the   age   of   the 12 deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years,   the   addition   should   be   15%.   Actual salary should be read as actual salary less tax.  (iv)  In case the deceased was self­employed or on a   fixed   salary,   an   addition   of   40%   of   the established   income   should   be   the   warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary   method   of   computation.   The established income means the income minus the tax component.  (v)  For   determination   of   the   multiplicand,   the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced hereinbefore.  (vi)  The   selection   of   multiplier   shall   be   as indicated in the Table in Sarla Verma read