Commissioner of Income Tax - III vs. Cyber Towers

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Appeal From Order No. 190 of 2014

Aadesh Agarwal & another ……. Appellants

Versus

Manpal Singh and another …..... Respondents

Mr. S.K. Posti, Sr. Advocate assisted by Mr. Ashutosh Posti, Advocate for the appellants. Mr. Sarvesh Agarwal, Advocate for respondent no. 2.

Hon’ble Lok Pal Singh, J.

This appeal, preferred under Section 173 of the Motor Vehicles Act, 1988, is directed against the judgment/award dated 10.02.2014, passed by the Motor Accident Claims Tribunal / IV Addl. District Judge, Haridwar, in M.A.C.T. case no. 66 of 2011, Aadesh Agarwal Vs Manpal Singh and others, whereby said Tribunal has awarded compensation of Rs.3,39,000/- to the claimants to be paid by insurance company along with interest at the rate of 7% per annum.

Brief facts of the case, are that on 07.03.2010, at 06:30 A.M., when Vaibhav Agarwal, Paras Agarwal, Rohit Agarwal and Ramandeep were going from Shivalik Nagar, Bahadrabad, Haridwar to Ambala by Swift car no. HR 36AT / 6363, which was being driven by Vaibhav Agarwal they met with an accident at Bahadabad-Roorkee road near Crystal World with a Tavera Car no. HR 38L / 2200, whose driver was driving the vehicle rashly and negligently at a high speed. Vaibhav Agarwal

2 (deceased), who was driving the Swift Car, was the elder son of the claimants / appellants. It is stated in the claim petition that the deceased was a regular income tax payee and his annual income was Rs.1,50,000/- which he used to earn by taking tuitions. It is further stated that the deceased was doing PG diploma course in Financial Management and also doing the preparation for taking admission in M.B.A. courses. It is also stated that the deceased earn his expenses on his own and also used to contribute to the income of family. The claimants sought compensation to the tune of Rs.42,80,000/-. Manpal Singh, owner of the Tavera car (offending vehicle) and Reliance General Insurance Co. Ltd., with whom the offending vehicle was insured. The owner and insurance company filed their separate written statements and denied the averments made in the claim petition.

On the pleadings of the parties, learned Tribunal framed following issues: i) Whether the accident in question took place on 07.03.2010, at about 06:30 A.M., near Crystal World near Hindustan Petrol Pump due to rash and negligent driving of vehicle no. HR 38L / 2200 Tavera Car by its driver, who was driving the vehicle rashly and negligently and dashed with the Swift car no. HR 26AT / 6363 due to which Vaibhav Agarwal sustained grievous injuries resulting into his death on the spot? ii) Whether the accident which occurred on the said date, time and place was the result of contributory negligence on the part of the driver of Swift care no. HR 26AT / 6363? iii) Whether the claim petition is bad due to misjoinder of necessary party? iv) Whether the vehicles involved in the accident were being plied with valid and effective documents and as per the terms of the insurance policy? v) Whether the driver of the vehicles involved in the accident were having valid and effective

3 driving license at the date, time and place of accident? vi) To what amount of compensation are the claimants entitled and from whom?

The Motor Accident Claims Tribunal after hearing the parties decided issue nos. (i) and (2) holding that drivers of both the vehicles involved in the accident were equally negligent in driving their respective vehicles. Issue no. (iii) was decided holding that the claim petition is bad due to misjoinder of necessary party. Issue no. (iv) and (v) were decided against the insurance company. Issue no. (vi) was decided in favour of the claimants and a compensation to the tune of Rs. 3,39,000/-was granted to them which is to be paid by both the respondents in equal proportion (50 per each) of the awarded amount along with simple interest at the rate of 6 per cent per annum from the date of filing of claim petition till the date of actual payment. Aggrieved against the same, present appeal has been preferred by the appellants / claimants.

Heard learned counsel for the parties and perused the lower court record.

Learned counsel for the appellants would urge that the learned Tribunal has erred in law in considering the income tax return filed by the deceased only for the Assessment Year 2009-10 and in not taking into consideration the income tax returns of A.Y. 2007-08 and 2008-09. He would also urge that the finding recorded by the learned Tribunal that the claimant filed the return of income tax for A.Y. 2009-10 and no return of income tax

4 was filed for the earlier assessment years is perverse, whereas the income tax return of Vaibhav Agarwal (deceased) for A.Y. 2007-08 and 2008-09 were filed on the record. He would further urge that despite the fact that the income tax return for consecutive three years, i.e., A.Y. 2007-08, 2008-09 and 2009-10 of deceased showing income of Rs.1,50,000/- were on record, the learned Tribunal has assessed the notional income of Rs.36,000/- and further deducted half of amount on account of his personal expenses and calculated the annual income of the deceased at Rs.18,000/-.

This is an appeal for enhancement filed by the appellants / claimants. As the findings recorded by the learned Tribunal on other issues have not been put to challenge by the respondents, thus said findings in regard to the rash and negligent driving, contributory negligence, misjoinder of necessary party, valid & effective driving license, as also valid & effective policy documents are hereby affirmed.

Having gone through the appeal filed by the claimants / appellants, this Court is of the view that the deceased a young lad, who was a brilliant student having qualification of B.Com and certificate in Financial Management, used to earn by taking tuitions. A perusal of the lower court record would reveal that the deceased had filed I.T. return for A.Y. 2007-08 showing total income at Rs.1,03,080/-; I.T. return for A.Y. 2008-09 showing total income at Rs.1,12,110/- and I.T. return for

5 A.Y. 2009-10 showing total income at Rs.1,48,000/- . The learned Tribunal has taken into consideration the I.T. return filed by the deceased only for the Assessment Year 2009-10 and failed to take into consideration the I.T. returns of A.Y. 2007-08 and 2008-09. Thus, in view of this Court the annual income of the deceased should be calculated by taking the total income shown by him in the I.T. return for A.Y. 2007-08, i.e. Rs.1,12,000. This Court agrees with the deduction made by the Tribunal of half the amount which the deceased could have spent on himself if he would have been alive on account of his personal expenses. Thus, the annual income of the deceased comes to (Rs.1,12,000 / 2) i.e. Rs.56,000/-. It appears to this Court that future prospects as well as appropriate compensation towards conventional heads have not been correctly appreciated and awarded to the claimant, in the present case.

In view of the judgment of Hon’ble Apex Court rendered in the case of National Insurance Company vs Pranay Sethi, reported in AIR 2017 SC 5157, The Apex Court has laid down the principle that while determining the income, an addition of 40% of established income to the income towards future prospects, where a person was self employed or on a fixed salary and was below the age of 40 years, should be made. Since the deceased was self employed, in view of Pranay Sethi’s case (supra) while determining income of the deceased, an addition of 40% of the established income should be the warrant for determining future prospects.

6 Thus, the amount of compensation in regard to financial loss is being re-assessed as under:

On account of financial loss:

Sl. No. Head Calculation (amount in rupees)

Assessment of income

1 Annual income of the deceased for the purpose of dependency Rs.56,000/- 2 Annual income by applying 40% towards future prospects (Rs. 56,000 X 40%) Rs. 22,400/- 3 Total annual income (Rs.56,000 + 22,400) Rs.78,400/- 4 on applying multiplier of 18 (Rs.78,400 X 18) Rs. 14,11,400/-

On account of non-financial loss: Sl. No. Head Calculation (amount in rupees) 1 Funeral expenses Rs.15,000/- 2. Loss of estate Rs.15,000/-

10) Thus, total financial and non-financial loss is reassessed at Rs.14,41,400/- to which the claimants are entitled as compensation.

11) No other arguments advanced on behalf of the parties, nor any other point pressed.

12) Having considered the submissions made on behalf of learned counsel for the parties and after going through the aforesaid principles of law laid down by the Apex court, the quantum of compensation is reassessed to Rs.14,41,400/-. The owner of the vehicle and insurance company are held jointly and severely liable to pay the compensation to the claimants along with simple interest at the rate of 6 per cent per annum from the date of filing of claim petition till the date of actual payment.

13) For the reasons, as discussed above, the appeal is partly allowed. The impugned judgment / award dated 10.02.2014 is modified to the extent it relates to the quantum of compensation awarded by the learned Tribunal to the claimants.

14) No order as to costs.

(Lok Pal Singh, J.)

Dt. November 14, 2019. Negi