The Commissioner of Income tax-IV vs. M/S. Natco Pharma Limited

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 15TH DAY OF JULY 2014,

: PRESENT :

THE HON’BLE MR. JUSTICE N.K. PATIL

AND

THE HON’BLE MR. JUSTICE B.SREENIVASE GOWDA

M.F.A.NO.442 OF 2013 (MV)

Between:

United India Insurance Company Limited, Jayadeva Complex, B H Road, Tumkur, now represented by its Regional Manager, United India Insurance Company Limited, 5th & 6th Floor, Krishi Bhavan, Nrupathunga Road, Bangalore – 560 001 ... Appellant

(By Shri. A.N.Krishna Swamy, Advocate)

And:

2 All are residing at No.571, Bidara, Krishnappa Road, Mysore

(By Shri.D.V.Narendra Gowda, Advocate for R1 to R3; Shri.M.H.Prakash, Advocate for R5; Notice to R4 dispensed with v/o. dated 15/07/2014)

******

This MFA is filed U/S 173(1) of MV Act against the Judgment and Award dated: 30/04/2012 passed in MVC No.1122/2010 (Old MVC No.659/2005) on the file of the II Additional Sessions Judge, & MACT, Mysore, awarding a compensation of `15,32,000/- with interest at 9% p.a. from the date of petition till realization.

This MFA coming on for Orders, this day, N.K. PATIL. J., delivered the following:

J U D G M E N T

Though this appeal is posted for Orders, the same is taken up for final disposal, with the consent of the learned counsel appearing for both the parties.

3 2. This appeal by the Insurer is directed against the judgment and award dated 30th April 2012, passed in MVC No.1122/2010 (Old MVC No.659/2005), by the II Additional Sessions Judge, & Motor Accident Claims Tribunal, Mysore, (for short, ‘Tribunal’), seeking reduction of compensation, on the ground that, the compensation awarded by Tribunal is excessive and on the higher side. 3. The facts of the case as stated in the claim petition are that, at about 8-45 P.M., on the ill-fated day, i.e. on 09-12-2004, when the deceased was travelling on his Kinetic KB 100 vehicle, from Hunsur side, he met with an accident, on account of rash and negligent driving by the driver of the Bus bearing Registration No.KA-06/A-3128. Due to the impact, the deceased sustained grievous injuries and unfortunately, died on the spot. 4. On account of the death of the deceased, the claimants/respondents 1 to 3 herein filed the claim petition before the Tribunal, seeking compensation of a

4 sum of `19,82,000/- against the appellant/Insurer and two others. The said claim petition had come up for consideration before the Tribunal on 30th April, 2012. The Tribunal, after considering the relevant material available on file and after appreciation of the oral and documentary evidence, allowed the claim petition in part, awarding a sum of `15,57,000/- under different heads, with 9% interest per annum, (but wrongly shown as `15,32,000/- in the operative portion of the judgment of Tribunal) from the date of petition till the date of deposit. Being aggrieved by the quantum of compensation awarded by the Tribunal, the Insurer is in appeal before this Court, seeking reduction of compensation, on the ground that the compensation awarded by Tribunal is exorbitant and on the higher side and also disproportionate to the source of income of the deceased and the rate of interest awarded is also on the higher side. 5. We have gone through the grounds urged in the memorandum of appeal carefully, perused the

5 impugned judgment and award passed by Tribunal and heard the learned counsel for Insurer and also learned counsel appearing for claimants/respondent Nos.1 to 3. 6. Shri A.N. Krishna Swamy, learned counsel appearing for appellant/ Insurer vehemently submits at the outset that, the Tribunal grossly erred in assessing the monthly income of the deceased at `10,000/- , which cannot be sustained and the monthly is liable to be re-assessed reasonably on the ground that the the deceased was working at S.K. Continental Hotel and the accident is of the year 2004. He further submitted that the Tribunal further erred in deducting 1/3rd towards the personal and living expenses of deceased instead of 50% as he was a bachelor. Further, the Tribunal also erred in adopting the multiplier of ‘15’ instead of ‘14’ for the reason that, having assessed the age of the mother of the deceased as 43 years and for the age group between 41 and 45 years, the proper multiplier applicable is ‘14’ as per the decision of the Hon’ble Apex Court in Sarla Verma’s case. He also submitted that

6 the accident is of the year 2004, but the Tribunal has awarded rate of interest at the rate of 9%, which cannot be sustained and therefore, he submitted that, the income may be re-assessed and deducting 50% towards personal expenses of deceased and adopting proper multiplier, reasonable compensation be awarded towards loss of dependency as also under conventional heads by modifying the impugned judgment and award passed by Tribunal. 7. As against this, learned counsel appearing for claimants/respondents inter alia contended and sought to substantiate the impugned judgment and award passed by Tribunal, stating that the same is passed after due consideration of the entire material available on file including the age, avocation, documentary evidence produced by claimants in support of the income taken by Tribunal and also considering the fact that the deceased was the sole earning member in the family and the entire family was dependent on his income.

7 However, after going through the records available on file, the reasoning given by the Tribunal, and after noting the contention of the learned counsel appearing for Insurer and also the judgment of the Hon’ble Apex Court in Sarla Verma’s case, he fairly submitted that 50% may be deducted towards the personal and living expenses of deceased and taking the age of the mother of the deceased, reasonable compensation be awarded towards loss of dependency and also conventional heads. 8. After hearing the learned counsel appearing for the appellant/Insurer and also the learned counsel appearing for claimants/respondents 1 to 3 herein, after perusal of the impugned judgment and award passed by Tribunal and after re-appreciation of the oral and documentary evidence available on file, the only point that arise for our consideration in this appeal is: Whether the quantum of compensation awarded is excessive and liable to be reduced?

8 9. After careful perusal of the impugned judgment and award passed by Tribunal, it emerges that, occurrence of accident and the resultant death of deceased H.N. Srikantha are not in dispute. It is further not disputed that the deceased was aged about 24 years and working at S.K. Continental Hotel. It is further not in dispute that the deceased was a bachelor and the claimants are none other than the parents and sister of deceased. Issuance of Insurance Policy and its validity as on the date of accident is also not disputed. It is stated that the deceased was aged about 24 years and working at S.K. Continental Hotel. The Tribunal has assessed the income of the deceased at `10,000/- per month. It is the specific contention of the learned counsel appearing for Insurer that the said income assessed by Tribunal is on the higher side and liable to be re-assessed. The said submission of the learned counsel cannot be accepted for the reason that, to substantiate the said income of the deceased, the claimants have led the evidence of PW1, the wife of the

9 deceased who has stated in unequivocal terms that the deceased was getting salary of `10,000/- per month by working as a Receptionist at S.K. Continental Hotel. Further, they have also produced the documentary evidence as salary certificate at Ex.P9. After going through the same, the Tribunal observed that not withstanding the non examination of the author of the Salary Certificate is not fatal as the evidence of PW1 is sufficient to prove the income and assessed the monthly income of the deceased at `10,000/-. The said reasoning and finding given by Tribunal is just and proper and we accept the same, considering the age, avocation and the fact that he was the only son to his parents and the family was entirely dependent on his income. Further, it can be seen that the claimants are also entitled for 30% towards future prospects of the deceased in the light of the ratio of law laid down by the Hon’ble Apex Court in Santhosh Devi’s case (AIR 2012 SCW 2892). Accordingly, if 30% is added to

10 Rs.10,000/-, the net income comes to Rs.13,000/- per month and per annum, it works out to Rs.1,56,000/-, out of which, if a sum of Rs.20,800/- is deducted towards income tax, the net annual income comes to Rs.1,35,200/-. Further, as rightly pointed out by the learned counsel appearing for Insurer, the Tribunal has erred in deducting 1/3rd towards the personal and living expenses of deceased instead of 50%. Accordingly, if 50% (i.e. `67,600/-) is deducted from `1,35,200/- towards his personal and living expenses, the net income would be `67,600/- per annum. It is further seen that the multiplier adopted by Tribunal is also incorrect, for the reason that the Tribunal has assessed the age of the mother of the deceased as 43 years, as on the date of accident and for the said age, the proper multiplier applicable is ‘14’ as per the decision of the Hon’ble Apex Court Sarla Verma’s case (2009 ACJ 1298) and not ‘15’ as adopted by Tribunal. Accordingly, we adopt the multiplier of ‘14’ as against ‘15’ adopted by Tribunal. Thus, the compensation towards loss of

11 dependency would work out to `9,46,400/- (i.e. `67,600/- x ’14’) as against `12,00,000/- awarded by Tribunal. 10. Further, so far as the compensation awarded by Tribunal towards the other heads is concerned, the same cannot be sustained in the light of the ratio of law laid down by the Hon’ble Apex Court and this Court in catena of decisions. Therefore, having regard to the facts and circumstances of the case, we deem it fit to award a sum of `25,000/- towards loss of estate, `30,000/- towards loss of love and affection at the rate of `10,000/- to each claimant and `25,000/- towards transportation and funeral expenses as against the compensation awarded by Tribunal towards the other heads. 11. Thus, the total compensation would come to `10,26,400/- as against `15,57,000/- awarded by Tribunal, from the date of petition till the date of realization. There would be reduction of compensation by `5,30,600/-.

12 12. However, so far as the rate of interest awarded at 9% per annum by the Tribunal is concerned, we are not inclined to interfere in the same, as we have made substantial reduction in the compensation awarded by Tribunal. Therefore, we hereby confirm the rate of interest awarded by Tribunal at 9% per annum from the date of petition till the date of realization. 13. In the light of the facts and circumstances of the case, as stated above, the appeal filed by the Insurer is allowed in part. The impugned judgment and award dated 30th April 2012, passed in MVC No.1122/2010 (Old MVC No.659/2005), by the II Additional Sessions Judge, & Motor Accident Claims Tribunal, Mysore, is hereby modified, awarding compensation of `10,26,400/- as against `15,57,000/- awarded by Tribunal, (but wrongly shown as `15,32,000/- in the operative portion of the judgment of Tribunal) from the date of petition till the

13 date of realization. There would be reduction of compensation by `5,30,600/-. Accordingly, the appellant/Insurer is directed to deposit the remaining compensation, with interest thereon at 9% per annum on the total compensation awarded by this Court, after deducting the amount if any, deposited by it, within four weeks from the date of receipt of copy of the judgment and award. The apportionment of compensation made by Tribunal gets proportionately reduced to the extent of reduction of compensation made by this Court. The statutory amount in deposit by the Insurer is directed to be transmitted to the jurisdictional Tribunal, forthwith. Office to draw award, accordingly. SD/-

JUDGE

SD/-

JUDGE BMV*