PRINCIPAL COMMISSIONER OF INCOME TAX-7 vs. M/S RANBAXY HOLDING COMPANY

Impugned Award of 23rd November, 2017 grants compensation of `63,56,000/- with interest @ 9% per annum to injured-Gaurav, aged 27 years, on account of grievous injury suffered by him in a vehicular accident, which took place on 7th September, 2009.

In the above-captioned first appeal, Reliance General Insurance Co Ltd. (hereinafter referred to as the Insurer) seeks reduction in the quantum of compensation by raising plea of contributory negligence. It is submitted that the contributory negligence of the injured was 50% in causing the accident in question, whereas in the above-captioned second appeal, enhancement of compensation is sought by claimants. Since both the appeals arise out of common impugned judgment, therefore, with the consent of learned counsel for the parties, both the appeals have been heard together and are being decided by this common judgment. 3. The factual background of this case, as noticed in the impugned Award, is as under:- “That, briefly stated, that the claim of the petitioner is that on dated 07.09.2009, petitioner Gaurav Kumar was going on his motorcycle bearing no. DL-8S-AL-2529 from Delhi to Sonipat to meet his friend when he reached near village Ladsoli, PS Murthal, Distt. Sonipat and hit by One Haiwa Dumper Bearing Registration No. HR-69-9350 and he sustained multiple grievous injuries and was admitted to Civil Hospital, Sonipat, Haryana was referred to JPN Apex Trauma Centre AIIMS, Delhi and the accident took place because of rash and negligent driving of R-1 and because of the reason the present claim petition has been filed for compensation.”

To render the impugned Award, Motor Accident Claims Tribunal (hereinafter referred to as the “Tribunal”) has relied upon evidence of injured and as per Disability Certificate of 23rd March, 2010, the injured had suffered permanent disability upto 80% in relation to left lower limb.

Insurer’s counsel assails the impugned Award on the ground that the contributory negligence of Injured was to the extent of 50% and it is submitted that the Tribunal has erred in assessing the functional disability at 100%, whereas permanent disability was 80%. It is submitted that the functional disability of Injured ought to be assessed at 40%. It is pointed out by Insurer’s counsel that income of the Injured as per Income Tax Returns (ITRs) for the year 2008-2009 was `3,48,595/- and for the year 2009-10, which is after the accident, it was `5,97,460/- and so, no compensation under the head of „loss of earning capacity on account of disability‟ ought to be granted. It is also submitted by Insurer’s counsel that the Tribunal has erred in granting compensation of `3,98,232/- under the head of „loss of income during the period of treatment‟. It is submitted

Upon hearing and on perusal of impugned Award and the evidence on record, I find that in face of the deposition of Injured and the evidence on record, negligence cannot be attributed to Injured and no case of contributory negligence is made out to deny the compensation to Injured. As regards functional disability, I find that Injured had sustained 80% permanent disability in relation to left leg, i.e. amputation of the left leg above the knee, due to the accident in question. The Tribunal has assessed the functional disability at 100%. The Injured was a businessman and upon scrutiny of his evidence, I find that due to the Injuries suffered by him in this accident and on account of permanent disability, he had to close his business and according to Injured, he is now a liability on his family. There is nothing in cross-examination of the Injured to justify the assessment of functional disability of the Injured at 40%. However, in the facts and circumstances of this case, it is deemed appropriate to assess the functional disability of the Injured at 60%. 9. So far as income of Injured is concerned, I find that the relevant year to assess the income of the Injured is 2008-09 and the ITR for this assessment year was filed by the Injured before the accident in question and as per ITR for the assessment year, 2008-09, his income was `3,48,595/- and after deduction of tax, it is `3,02,384/-. ITRs for subsequent year i.e. 2009-10 cannot be made the basis to alter the quantum of compensation as the said ITR was filed shortly after the accident in question had taken place and so, it cannot be said that income of Injured had increased after the accident. Relevantly, the ITR for the subsequent year reveals that the income of the Injured had decreased.

In the considered opinion of this Court, the Tribunal has correctly assessed compensation under the head of „loss of income‟ due to the injuries suffered as Injured could not work for a period of 13 months. The interest on the compensation granted to obtain artificial limb is nominal and in the facts of the instant case, it is not required to be interfered with. The cost of obtaining artificial limb granted by the Tribunal cannot be said to be exorbitant as it takes care of the maintenance charges as well. However, the cost of replacement of the artificial limb has not been considered by the Tribunal, which needs to be taken care of. 11. So far as the reimbursement of „medical expenses‟ is concerned, I find that it is justified in light of the evidence on record. The „loss of income‟ due to the disability suffered has also been rightly assessed. However, „loss of earning capacity‟ needs to be reassessed on the basis of income of the Injured for the relevant year i.e. Assessment Year 2008-09. The multiplier of 17 applied by the Tribunal is appropriate. However, while computing the compensation payable on account of the disability suffered due to the accident in question, the Tribunal has erred in not making any addition towards „future prospects‟. In view of Supreme Court’s Constitution Bench decision in Pranay Sethi (supra), addition of 40% towards „future prospects‟ is made. Accordingly, „loss of future earning capacity‟ is reassessed as under: - `3,02,384/- p.a. X 60/100 X 17 X 140/100 = `43,18,043/-

As regards compensation granted by the Tribunal under the „non- pecuniary heads‟ is concerned, I find that it to be on lower side. In the facts and circumstances of this case and in light of the evidence on

Attendant charges ` 1,64,000/- Total ` 64,10,308/-

Consequentially, the compensation payable to the Injured stands enhanced from `63,56,000/- to `64,10,308/-, which shall carry interest @ 9% per annum. The enhanced compensation be deposited by Insurer with the Tribunal within four weeks from today. The awarded compensation be disbursed in the ratio and manner as indicated in the impugned Award. Statutory deposit, if any, be refunded to Insurer. 15. With aforesaid directions, the above captioned two appeals are disposed of.