The Commissioner of Income Tax-III, vs. M/S Volth Turbo Pvt., Ltd.,

1 FAO-184-2006 (O&M) IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH 101 FAO-184-2006 (O&M) Date of Decision: August 23, 2024 Kamal Sushma and others ......Appellant(s) Vs. Desh Raj and others ......Respondent(s) CORAM: HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Sagar Aggarwal, Advocate for the applicants-appellants. Mr. Suvir Dewan, Advocate for respondent No.3. ---- SUDEEPTI SHARMA

J. (ORAL)

CM-13439-CII-2024 The present application has been filed seeking early hearing of the main appeal. The respondents have no objection, if the application is allowed and the main appeal is taken up on Board today itself. In view of the above, and for the reasons mentioned in the application, the same is allowed and the main appeal is taken on Board today. FAO-184-2006 1. The present appeal has been preferred against the award dated 03.05.2005 passed in the claim petition filed under Section 166 of the Motor Vehicles Act, 1989 by the learned Motor Accident Claims Tribunal, Hoshiarpur (for short, 'the Tribunal') for enhancement of compensation granted to the appellants, who are the family members of the deceased. Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

2 FAO-184-2006 (O&M) FACTS NOT IN DISPUTE 2. The brief facts of the case are that on 06.12.2002, deceased Sudesh Kumar was going from his house to his factory Laxmi Oil and Ceral Mills, Sansrpur Terries, District Kangra, on his scooter bearing Registration No. HP-36- 5961 on the correct side of the road, at a normal speed. One Bhupinder Kumar and Vikas Mehta were following him, on their separate scooter At about 2 pm, when they reached near Talwara Bridge on Talwar Terries Road, a vehicle bearing registration No HP-36-1831 driven by respondent No.1 Desh Raj, in a rash and negligent manner came from the opposite side on wrong side of the road and struck against the scooter of the deceased Sudesh Kumar As a result, due to the impact of the accident, deceased-Sudesh Kumar fell down alongwith scooter and received multiple simple as well as grievous injuries on his person. He was taken to the BBMB Civil Hospital, Talwara, where he succumbed to the injuries received by him in the accident. 3. On notice of the claim petition, respondents appeared and denied the factum of compensation. 4. From the pleading of the parties, the Tribunal framed the following issues:- 1) Whether death of Sudesh Kumar has taken place as result of accident on 6.12.2002 near Talwara Bridge, as a result of rash and negligent driving of respondent No. 1 of truck No. HP-36- 1831? OPA 2) Whether claimants are only legal heirs and dependent on the income of the deceased? OPA 3) Whether claim petition is bad for non-joinder of necessary parties? OPR Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

3 FAO-184-2006 (O&M) 4) Whether driver of the truck in question was not having a valid and effective driving licence at the time of accident? OPR 5) Whether claimants are entitled to compensation, if so to what amount and from whom? OPA 6) Relief 5. After taking into consideration the pleadings and the evidence on record, the learned Tribunal awarded compensation to the tune of Rs.4,40,000/- alongwith interest @ 9% per annum. Hence the claimants/appellants filed the present appeal for enhancement of compensation awarded by the Tribunal. SUBMISSIONS OF THE COUNSELS 6. The learned counsel for the claimants-appellants contends that the amount assessed by the learned Tribunal is on the lower side. He further submits that the learned Tribunal has erroneously taken the income of deceased as Rs.4500/- per month, although the income tax return was proved on record as Mark ‘A’. Therefore, the income should have been assessed as per the income tax return. He further submits that the learned Tribunal erroneously applied multiplier of 12 instead of 15 and failed to include future prospects in its calculation. He further contends that no amount was awarded for loss of consortium and for loss of estate and compensation awarded for funeral charges was also on the lower side. Therefore, he prays that the present appeal be allowed and compensation should be enhanced as per latest law. 7. Per contra, learned counsel for the respondents, however, vehemently argues that the award has rightly been passed and the amount of compensation as assessed by the learned Tribunal has rightly been granted. 8. I have heard learned counsel for the parties and perused the whole record of this case. Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

4 FAO-184-2006 (O&M) 9. A perusal of the award indicates that the Tribunal has assessed the income of the deceased at Rs.4500/- per month without taking into consideration the income tax return filed by him which was proved on the record as Mark ‘A’. As per Mark ‘A’, annual income of the deceased from business or profession is Rs.2,14,646/-. After deducting the tax payable, which is Rs. 21133/- and surcharge of Rs.423/-, net annual income of the deceased comes out to be Rs.1,93,090/-. Therefore, the monthly income of the deceased is assessed as Rs.16,090/- (Rs.1,93,090÷12). Further the Tribunal applied a multiplier of 12, however, according to the law settled by Hon’ble Apex Court in Sarla Verma Vs. Delhi Transport Corporation and Another, the appropriate multiplier should be 15. Furthermore, no amount was calculated for future prospects, loss of consortium and loss of estate and the sum awarded for funeral charges is also on the lower side. SETTLED LAW ON COMPENSATION 10. Hon’ble Supreme Court in the case of Sarla Verma Vs. Delhi Transport Corporation and Another [(2009) 6 Supreme Court Cases 121], laid down the law on assessment of compensation and the relevant paras of the same are as under:- “30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having a considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

5 FAO-184-2006 (O&M) family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six. 31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father. 32. Thus even if the deceased is survived by parents and siblings, only d the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where the family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third. * * * * * * Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

6 FAO-184-2006 (O&M) 42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above (prepared by applying Susamma Thomas³, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years. 11. Hon’ble Supreme Court in the case of National Insurance Company Ltd. Vs. Pranay Sethi & Ors. [(2017) 16 SCC 680] has clarified the law under Sections 166, 163-A and 168 of the Motor Vehicles Act, 1988, on the following aspects:- (A) Deduction of personal and living expenses to determine multiplicand; (B) Selection of multiplier depending on age of deceased; (C) Age of deceased on basis for applying multiplier; (D) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses, with escalation; (E) Future prospects for all categories of persons and for different ages: with permanent job; self-employed or fixed salary. The relevant portion of the judgment is reproduced as under:- “52. As far as the conventional heads are concerned, we find it difficult to agree with the view expressed in Rajesh². It has granted Rs.25,000 towards funeral expenses, Rs 1,00,000 towards loss of consortium and Rs 1,00,000 towards loss of Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

7 FAO-184-2006 (O&M) care and guidance for minor children. The head relating to loss of care and minor children does not exist. Though Rajesh refers to Santosh Devi, it does not seem to follow the same. The conventional and traditional heads, needless to say, cannot be determined on percentage basis because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified. Any quantification must have a reasonable foundation. There can be no dispute over the fact that price index, fall in bank interest, escalation of rates in many a field have to be noticed. The court cannot remain oblivious to the same. There has been a thumb rule in this aspect. Otherwise, there will be extreme difficulty in determination of the same and unless the thumb rule is applied, there will be immense variation lacking any kind of consistency as a consequence of which, the orders passed by the tribunals and courts are likely to be unguided. Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs.15,000, Rs.40,000 and Rs.15,000 respectively. The principle of revisiting the said heads is an acceptable principle. But the revisit should not be fact-centric or quantum-centric. We think that it would be condign that the amount that we have quantified should be enhanced on percentage basis in every three years and the enhancement should be at the rate of 10% Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

8 FAO-184-2006 (O&M) in a span of three years. We are disposed to hold so because that will bring in consistency in respect of those heads. * * * * * 59.3. 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 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. 59.4. In case the deceased was self-employed (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. 59.5. For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paras 30 to 32 of Sarla Verma⁴ which we have reproduced hereinbefore. 59.6. The selection of multiplier shall be as indicated in the Table in Sarla Verma¹ read with para 42 of that judgment. Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

9 FAO-184-2006 (O&M) 59.7. The age of the deceased should be the basis for applying the multiplier. 59.8. Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs 15,000, Rs 40,000 and Rs 15,000 respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.” 12. Hon’ble Supreme Court in the case of Magma General Insurance Company Limited Vs. Nanu Ram alias Chuhru Ram & Others [2018(18) SCC 130] after considering Sarla Verma (supra) and Pranay Sethi (Supra) has settled the law regarding consortium. Relevant paras of the same are reproduced as under:- “21. A Constitution Bench of this Court in Pranay Sethi² dealt with the various heads under which compensation is to be awarded in a death case. One of these heads is loss of consortium. In legal parlance, "consortium" is a compendious term which encompasses "spousal consortium", "parental consortium", and "filial consortium". The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse. 21.1. Spousal consortium is generally defined as rights pertaining to the relationship of a husband-wife which allows compensation to the surviving spouse for loss of "company, Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

10 FAO-184-2006 (O&M) society, cooperation, affection, and aid of the other in every conjugal relation". 21.2. Parental consortium is granted to the child upon the premature death of a parent, for loss of "parental aid, protection, affection, society, discipline, guidance and training". 21.3. Filial consortium is the right of the parents to compensation in the case of an accidental death of a child. An accident leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued for their love, affection, companionship and their role in the family unit. 22. Consortium is a special prism reflecting changing norms about the status and worth of actual relationships. Modern jurisdictions world-over have recognised that the value of a child's consortium far exceeds the economic value of the compensation awarded in the case of the death of a child. Most jurisdictions therefore permit parents to be awarded compensation under loss of consortium on the death of a child. The amount awarded to the parents is a compensation for loss of the love, affection, care and companionship of the deceased child. 23. The Motor Vehicles Act is a beneficial legislation aimed at providing relief to the victims or their families, in cases of genuine claims. In case where a parent has lost their minor child, or unmarried son or daughter, the parents are entitled to Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

11 FAO-184-2006 (O&M) be awarded loss of consortium under the head of filial consortium. Parental consortium is awarded to children who lose their parents in motor vehicle accidents under the Act. A few High Courts have awarded compensation on this count. However, there was no clarity with respect to the principles on which compensation could be awarded on loss of filial consortium. 24. The amount of compensation to be awarded as consortium will be governed by the principles of awarding compensation under "loss of consortium" as laid down in Pranay Sethi². In the present case, we deem it appropriate to award the father and the sister of the deceased, an amount of Rs 40,000 each for loss of filial consortium. CONCLUSION 13. In view of the law laid down by the Hon’ble Supreme Court in the above referred to judgments, the present appeal is allowed. The award dated 03.05.2005 is modified accordingly. The appellants-claimants are entitled to enhanced compensation as per the calculations made here-under:- Sr. No. Heads Compensation Awarded 1 Monthly Income Rs.16000/-(rounded of 16090) 2 Future prospects @ 40% Rs.6400/- (40% of 16000) 3 Deduction towards personal expenditure Rs.5600/- [1/4 of (16000+6400)] 4. Total Income Rs.16,800/- (22,400-5600) 4 Multiplier 15 5 Annual Dependency Rs.30,24,000/-(16,800 x 12 x 15) 6 Loss of Estate Rs.18,000/- Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document

12 FAO-184-2006 (O&M) 7 Funeral Expenses Rs.18,000/- 8 Loss of Consortium Parental : Rs.48,000/- x 2 Spousal : Rs. 48,000/-x1 Filial : Rs. 48,000/-x1 Rs.1,92,000/- Total Compensation Rs.32,52,000/- Amount Awarded by the Tribunal Rs.4,40,000/- Enhanced amount Rs.28,12,000/- 14. So far as the interest part is concerned, as held by Hon’ble Supreme Court in Dara Singh @ Dhara Banjara Vs. Shyam Singh Varma 2019 ACJ 3176 and R.Valli and Others VS. Tamil Nandu State Transport Corporation (2022) 5 Supreme Court Cases 107, the appellant-claimant is granted the interest @ 9% per annum on the enhanced amount from the date of filing of claim petition till the date of its realization. 15. The Insurance Company is directed to deposit the enhanced amount of compensation along with interest with the Tribunal within a period of two months from today. The Tribunal is further directed to disburse the enhanced amount of compensation along with interest in the accounts of all the claimants/appellants as per ratio settled in the award dated 03.05.2005. The claimants/appellants are directed to furnish the bank account details to the Tribunal. 16. Disposed off accordingly. 17. Pending applications, if any, also stand disposed of.

(SUDEEPTI SHARMA)

JUDGE August 23, 2024 A.Kaundal/sonia arora

Whether speaking/non-speaking : Speaking

Whether reportable : Yes Sonia Arora 2024.09.05 14:04 I attest to the accuracy and integrity of this document