The Commissioner of Income Tax (Central) vs. K.V.Rmakrishna Rao

IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA FAO No. 135 of 2019 a/w FAO No. 138 of 2018 and FAO No. 442 of 2017 Reserved on : 2.8.2019 Date of decision: 13.8.2019

…..Appellant Versus Ashraf Khan & others

….Respondents. 2. FAO No. 138 of 2018 Sudershan Sharma …..Appellant Versus Ashraf Khan & others

….Respondents. 3. FAO No. 442 of 2017 Reliance General Insurance co. Ltd. ….Appellant versus Swati Sharma & others. ….Respondents. Coram: The Hon’ble Mr. Justice Sureshwar Thakur, Judge. Whether approved for reporting?1 Yes. 1 Whether reporters of the local papers may be allowed to see the judgment?

-2- For the appellant: Mr.   R.S.   Gautam,   Advocate,   for   the appellant in FAO No. 135 of 2019 and for respondent No.1 in FAO No. 442 of 201 and for respondent No.3 in FAO No. 138 of 2018

For the respondents: Mr.   P.S.   Goverdhan,   Advocate,   for respondent No.1 in FAO No. 135 of 2019 and   FAO   No.   138   of   2018   and   for respondent   No.3   in   FAO   No.   442   of 2017. Mr.   J.   L.   Bhardwaj,   Advocate,   for   the appellant in FAO No. 138 of 2018 and for respondent No. 3 in FAO No. 135 of 2019 and for respondent No.2 in FAO No. 442 of 2017. Mr.   Jagdish   Thakur,   Advocate,   for respondent No.2 in FAO No. 135 of 2019 and FAO No. 138 of 2018 and for the appellant in FAO No. 442 of 2017. _______________________________________________________________ Sureshwar Thakur, Judge: All  these appeals, bearing  FAO No. 135 of 2019, FAO No. 138 of 2018, and, FAO No. 442 of 2017, arise, from a common   verdict,   rendered,   by   the   learned   Motor   Accident Claims   Tribunal­III,   Solan,   District   Solan,   H.P.   in   MACT petition   No.   15ADJ­11/2   of   2014,   titled,   Swati   Sharma   & another   vs.   Ashraf   Khan   &   another,   (i)   wherethrough,   the learned   MACT   concerned,   on,   15.6.2017,   assessed, compensation   amount,   borne   in   a   sum   of   Rs.   61,36,440/­,

-3- along   with   interest,   levied   thereon   at   the   rate   of   7%   per mensem, and, commencing, from, the date of filing the petition, till, realization.   The compensation amount was apportioned amongst the co­claimants, in the manner, comprised in the operative part, of, the impugned verdict, and, the apposite 50% idemnificatory  liability, stood fastened, upon, the insurer of the offending vehicle. 2. The   claimants,   contest,   the   validity   of   findings, returned, in the impugned award, upon, issues No. 1 and 3. The findings returned, upon, the issues No. 1 and 3, unfold, vis­a­vis, the learned Tribunal, on, an analysis of the evidence on   record,   proceeding   to   make   a   conclusion,   vis­a­vis,   the deceased,   while   atop   his   motorcycle,   being   along   with respondent No.1, also hence negligent rather in driving it or his being a co­tortfeaser, (i)    and thereafter, though, proceeded to, in   paragraph­31,   of,   the   impugned   award,   compute   a   total compensation   amount,   of   Rs.   1,22,72,880/­,   yet,   from,   the afore awarded amount, it, proceeded to make a 50%, deduction and, proceeded, to, saddle the apposite thereto, 50 per centum, indemnificatory liability qua therewith, vis­a­vis, the insurer, of,

-4- the offending truck. Since the effect, of, the afore inference, of, contributory negligence, drawn, by the learned Tribunal,  visits, rather   apposite   ill­effects,   upon,   the   quantum,   of, compensation,   (ii)   thereupon   the   counsel   appearing   for   the claimants, has, contended with much vigor, before this Court qua   the   findings   returned   thereon,   hence   warranting interference by this Court. Obviously, the counsel appearing, for the insurer, of, the offending truck, has made submissions, before this Court rather for sustaining the findings, recorded thereon, hence by the learned Tribunal. 3. For   determining   the   validity,   of,   the   findings, returned upon issues No. 1 and 3, it is imperative to bear in mind, the factum (i) qua the learned Tribunal proceeding to irrevere, the deposition, of, an eye witness to the occurrence, who, stepped into witness box, as PW­5, and, who during the course of his examination­in­chief, had tendered into evidence, his affidavit, borne in Ext. PW­5/A, (i) and, wherein, he had ascribed   commission,   of,   tort   of   negligence,   vis­a­vis, respondent   No.1,   hence   in   the   latter,   driving   the   offending truck, (ii) also the learned Tribunal, not meteing apt deference,

-5- vis­a­vis, PW­5, during, the course of his cross­examination, conducted, by the counsel for the insurer, wherein, rather he meted   dis­affirmative   answers,   vis­a­vis,   the   thereto,   put suggestion to him, by the afore counsel, (iii) qua their being, a, headon   collision,   inter­se,   the   offending   truck,   and,   the motorcycle, driven by the deceased. (iv) Since obviously, PW­5 meted hence an affirmative answer, qua, the, afore  facet, hence obviously rather  absolute deference, was, enjoined to be meted thereto.  However, the learned Tribunal, despite, PW­5, besides his being, an ocular witness qua the occurrence, his also being the informant, of FIR, borne in Ext. PW­2/A, and,  with candid echoings,   borne   therein,   vis­a­vis,   commission,   of,   tort,   of, negligence rather by respondent No.1, it, contrarily proceeded to   mete   deference,   vis­a­vis,   the   echoings   made,   by   the Investigating Officer concerned, who, stepped into the witness box,   as   RW­3,   (iii)   and,   who   in   his   examination­in­chief, rendered   articulations,   therein,   vis­a­vis,   apt   contributory negligence, being ascribable, vis­a­vis, respondent No.1, and, the   deceased,   in,   the   latter   driving   the   motorcycle.   Also,   it proceeded, to, from the reflections cast in the site plan, and,

-6- embodied   in   Ext.   R­1,   hence,   recorded,   a,     suo   moto conclusion, qua given the width of the road, at the relevant site, being   23   feet,   (iv)   qua   hence   given   their   being   evident contributory negligence, ascribable, vis­a­vis, respondent No.1, in   driving   the   offending   truck,   and,   also,   vis­a­vis,   the deceased, in, the latter driving his motorcycle.   However the effect   of   the   afore   conclusion,   warrants   interference,   (i)     as there,   is,   palpable   gross   over   looking(s),   by   the   learned Tribunal,   vis­a­vis,   the   afore   uneroded   ocular   echoings, rendered by PW­5, and, who also as aforestated, is also the informant, (ii) and, thereupon, in, rather the learned Tribunal, proceeding to untenably mete deference, to, the afore solitary echoing,   borne,   in   examination­in­chief   of   RW­3,   who,   was neither, the, informant nor  an ocular witness, vis­a­vis, the occurrence, (iii) also though in his examination­in­chief, he has echoed, vis­a­vis, the relevant mishap being attributable, vis­a­ vis,   bothrespondent   No.1,   and,   the   deceased,   both   being negligent, in, driving the respective vehicle(s), (iv) nonethless, upon making a commulative reading of, the echoings, occurring in the cross­examination, of RW­3, and, the echoings borne in

-7- PW­5/A, conspicously, whenRW­3 makes echoings, vis­a­vis, in respondent   No.1,   hence   driving   the   offending   truck,   at   the relevant   site   of   occurrence,   his   driving   the   truck,   rather negligently, visibly   has   committed   an   error,   of,   mis appreciation, of, the afore evidence,  (iv) thereupon even when the width, of, the mettled portion of the road, existing at the site,   is,   23   feet,   yet,   the   afore   width,   is,   rendered inconsequential, (v) given, the site plan, embodied in Ext. R­1, making   trite   echoings,   vis­a­vis,   the   relevant   collision, occurring in the middle of the road, and, it, occurring hence trite at the apposite divider, rather separating, the, two portions of the road, (vi) thereupon besides when the offending truck is larger   in   seize,   vis­a­vis,   the   motorcycle,   and,   when   hence respondent No.1, could easily sight, the motorcycle concerned, to, arrive from the opposite direction, (vii) thereupon it was enjoined, upon, respondent No.1 to ensure his steering, the, truck onto, the, abundant space, available, for, stationing the offending   truck.   Contrarily,   respondent   No.1,   despite,   hence abundant   space,   existing,   on,   the   apposite   appropriate   site rather,   for,   the   offending   truck,   being   stationed   thereat,

-8- hismaneuvering, it,  onto the divider, hence separating the two portions, of, the road, and, whereat, a, headon collision  inter­ se, it, and,  the motorcycle, driven at the relevant site, by the deceased, hence occurred, rather makes, open bespeakings qua commission   of,   tort,   of,   negligence   by   respondent   No.1,   (ix) thereupon   the   findings   recorded   upon   issues   No.   1   and   3 warrant   interference,   and,   it   is   concluded   qua   the compensation amount, borne in a sum, of,  Rs. 1,22,72,880/­, determined,   vis­a­vis,   the   claimants,   being   in   totality disbursable   qua   the   claimant,   and,   the   apposite   absolute indemnificatory liability, being fastenable, upon, the insurer, of, the offending vehicle. 5. The   learned   counsel,   appearing   for  the   claimants contend, (i) that, the salary certificates of the deceased, are, embodied in Ext. PW­4/A, in Ext. PW­4/B, and, in Ext. PW­ 4/C.  The gross salary depicted thereon, is Rs. 1,57,850.  The components of the   afore gross salary, are, the basic salary drawn,   in   the   sum   of   Rs.   63,140/­,   House   Rent   Allowance 31,570/­,   special   Allowance   of   Rs.   61,090/­,   Conveyance Allowance of Rs. 800/­ along with Medical Allowance of Rs.

-9- 1,250/­.     However,   the   learned   Tribunal,   has   untenably, deducted therefrom, the, components of house rent allowance, special allowance and medical allowance, whereas, the afore benefits, even on the demise of the deceased are accruable, vis­ a­vis, the deceased, except, conveyance allowance, borne in the sum of Rs. 800/­, (ii) thereupon, hence the deductions’, made, by   the   learned   Tribunal,   from,   the   apposite   components, appertaining,     to,   House   Rent   Allowance   of   Rs.   31,570/­, Special   Allowance   of   Rs.   61,090/­,   along   with   Medical Allowance of Rs. 1,250/­. are set, aside, (iii) and, after adding the afore sums, of, money, vis­a­vis, the basic salary of Rs. 63,140/­ the total per mensem salary, is, computed, in, the sum of Rs.1,57,050/­.  However, as reflected in Ext. PW­4/C, the deductions, of, Rs. 26,964/­, towards, the, per mensem income tax liability, are necessitated and, after deducting, the, afore   per   mensem   amount,   of,   income   tax,   from,   the   afore assessed monthly salary, of, the deceased, the, apposite per mensem salary, of, the deceased, is, computed, in, a sum of Rs.1,30,086/­.

-10- 6. Furthermore, the learned tribunal, in not granting the requisite hikes or accretions towards future prospects, vis­ a­vis, the per mensem income, of, the deceased, in a 50% per centum, rather has committed, a, gross legal fallacy, given the law laid down by the Hon’ble Apex Court, and, encapsulated in a case titled as National Insurance Co. Ltd. vs. Pranay Sethi and   others,  reported   in  2017   ACJ   2700,   the   relevant paragraph No.61, extracted hereinafter, hence, permitting, the, meteings, of, afore hikes:­ “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

-11- 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. (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 with paragraph 42 of that judgment. (vii) The age of the deceased should be the basis for applying the multiplier. (viii)   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- thereupon, and, in consonance therewith the afore deceased, is entitled for meteing(s), of, 50% increase(s), in his apposite per mensem   income,   as,   borne   in   a   sum   of   Rs.   1,30,086/­, increases whereof, are, computed to stand borne, in a sum of Rs.65,043/­,   hence,   the   total   per   mensem   salary   of   the deceased is computed in a sum of Rs.1,95,129/­.  Significantly, the  number  of dependents, of,  the deceased,  are, 2, hence, 1/3rd   deduction,   is,   to   be   visited,   upon,   a   sum   of Rs.1,95,129/­,   hence,   after     making,   the,   aforesaid   apt deduction,   vis­a­vis,   the   afore   sum,   the   per   mensem dependency,   hence   comes   to   Rs.   1,30,086/­.     In   sequel whereto, the annual dependency, of the dependents, upon, the income  of  the  deceased,  is  computed,  at    Rs.  1,30,086/­  x 12=Rs.15,61,032/­.     After   applying   thereto,   the   apposite multiplier of 16, thereupon, the total compensation amount, is assessed in a sum of Rs.15,61,032/­ x 16= Rs.2,49,76,512/­ (Rs.   Two   crore,   forty   nine   lakh,   seventy   six   thousand,   five hundred twelve only).

-13- 5. In addition to the afore, and, in consonance with the mandate   of   the   Hon’ble   Apex   Court   in   Pranay   Sethi’s   case (supra), the claimants are also entitled for quantification, of, compensation under conventional heads, namely, loss to estate, loss of consortium, vis­a­vis the widow of the deceased, and, funeral expenses, in, a sum of Rs.15,000/­, Rs.40,000/­, and Rs.15,000/­ respectively, whereupon, the total compensation wheretowhich, the claimants, are, entitled to, comes to Rs.1, 2,49,76,512/­+   Rs.15,000/­   +   Rs.40,000/­   +   Rs.15,000/­= Rs.2,50,46,512/­ (Rs. two crore, fifty lakh, forty six thousand five hundred twelve only). 6. For the foregoing  reasons, FAO No.442 of 2017, is dismissed, whereas, FAO No.135 of 2019, and, FAO 138, of, 2018, are allowed.   In sequel, the impugned award, is, in the aforesaid   manner,   hence   modified. Consequently,   the claimants are held entitled to a compensation borne in a sum of Rs.2,50,46,512/­ (Rs. two crore, fifty lakh, forty six thousand five hundred twelve only) along with interest, at the rate of 7% per annum, from, the date  of petition till the date, of, deposit or realization, of, the compensation amount.

-14- 7. The   indemnificatory   liability,   vis­a­vis,   the   afore compensation   amounts,   shall   be   saddled,     vis­a­vis,   the, insurer   of   the   offending   vehicle.     The   amount   of   interim compensation, if already awarded, be adjusted in the aforesaid compensation   amount,   at   the   time   of   final   payment.     The aforesaid   amount   of   compensation,   be   apportioned,   in   the manner   as   ordered   by   the   learned   tribunal.   All   pending applications   also   stand   disposed   of.     Records   be   sent   back forthwith.

(Sureshwar Thakur), 13th August, 2019 Judge. (kck)