The Commissioner of Income Tax, vs. M/s. Durga Wines

IN THE HIGH COURT OF JHARKHAND AT RANCHI M. A. No. 290 of 2010 1. Gurmeet Kaur, W/o Late Pyara Singh, R/o Aamaghata (Radha Swami Satsang Vyas), P.O-KG Ashram, P.S.-Govindpur, Dist.- Dhanbad, Jharkhand 2. Major Singh, S/o Late Pyara Singh, R/o Aamaghata (Radha Swami Satsang Vyas), P.O-KG Ashram, P.S.-Govindpur, Dist.-Dhanbad, Jharkhand 3. Santosh Singh, S/o Late Pyara Singh, Aamaghata (Radha Swami Satsang Vyas), P.O-KG Ashram, P.S.-Govindpur, Dist.-Dhanbad, Jharkhand

.... ... Appellants Versus 1. M/s United India Insurance Co. Ltd. through its Divisional Manager, Dhanbad 2. Jiyalal Sahu, S/o Sheo Bilash Prasad, R/o Madhuban, Shikharji, P.O & P.S.-Giridih, Dist.-Giridih

… ... Respondents

With M. A. No. 321 of 2009 Jiyalal Sahu, S/o Sheo Bilash Prasad, R/o Madhuban Shikharjee, P.O Giridih, P.S.-Giridih, Dist.-Giridih, Jharkhand

.... .. ... Appellant Versus 1. Gurmeet Kaur, W/o Late Pyara Singh, R/o Aamaghata (Radha Swami Satsang Vyas), P.O-KG Ashram, P.S.-Govindpur, Dist.- Dhanbad, Jharkhand 2. Major Singh, S/o Late Pyara Singh, R/o Aamaghata (Radha Swami Satsang Vyas), P.O-KG Ashram, P.S.-Govindpur, Dist.-Dhanbad, Jharkhand 3. Santosh Singh, S/o Late Pyara Singh, Aamaghata (Radha Swami Satsang Vyas), P.O-KG Ashram, P.S.-Govindpur, Dist.-Dhanbad, Jharkhand 4. United India Insurance Company Ltd. at Rajhans Mansion, Bank More, P.O-Dhanbad, P.S.-Bankmore, Dist.-Dhanbad

... ... Respondents

........... CORAM :HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY ......... For the Appellants : Mr. Saibal Kr. Laik, Advocate (in M.A. No. 290/2010) M/s. P. C. Roy, Abhiram Anand & Gobind Prasad Gupta Advocates (in M.A. No. 321/2009)

For the Insurance Co.: Mr. Arun Kr. Pandey, Advocate For the Respondents : Mr. P. C. Roy, Advocate (in M.A. 290/2010)

…... 16 / 29.01.2025 Heard, learned counsel for the parties. 1. Both the aforesaid Misc. Appeals arise out of the Award dated 21.07.2009 passed by learned Addl. District Judge-cum-MACT

Judge, FTC-V, Dhanbad in Title (M.V.) Claim Case No.186 of 2004, whereby and whereunder, an Award of compensation of Rs.7,38,020/- along with interest @ 6% per annum has been awarded.

M.A. No. 321 of 2009 2. M.A. No.321 of 2009 has been preferred by the appellant/ owner of the vehicle against the liability being fastened on him, although the vehicle, in question, was under a comprehensive insurance policy. 3. It is submitted by learned counsel for the owner/ appellant in M.A. No.321 of 2009 that altogether five witnesses were examined on behalf of the claimants and it was the consistent statement of the witnesses that they were travelling in the vehicle as friends of the owner and that it was not on hire or reward. No contrary evidence was led on behalf of the Insurance Company. Despite this, learned Tribunal recorded a finding in Para-14 that the accident was caused by the driver of the vehicle and that it was being used as a hire vehicle and not that the occupants of the vehicle were friends of the owner. 4. It is further argued that in case of comprehensive package policy in a private car, the occupants are covered under the policy of insurance and that there is no need for the Motor Vehicle Accident Claims Tribunal to enter into the question as to whether the Insurance Company was liable to compensate for the death or injury of the occupants of the vehicle. In fact, in view of the TAC’s directives and those of the IRDA, such a plea was not permissible and ought not to have been raised. Where the owner or gratuitous passenger is travelling in a vehicle under comprehensive insurance policy, the occupants will be covered under the policy. In this regard, reliance is placed in the case of National Insurance Co. Ltd. Vs. Balakrishnan & Anr., reported in AIR 2013 SC 473 and the same has been followed in the case of in Jagtar Singh v.

Sanjeev Kumar, (2018) 15 SCC 189. 5. Learned counsel for the Insurance Company has submitted that the learned Tribunal has specifically observed that the witnesses have failed to give the name of the owner and the other details, therefore, the testimony that they were travelling in the vehicle as the friends of owner of the vehicle was rejected. 6. It is submitted that it is not in dispute that comprehensive package policy was taken with respect to the vehicle, in question, however, it is contended that extra-premium was not paid. 7. It is argued by the learned counsel appearing on behalf of Insurance Company that the deceased was travelling on the vehicle as gratuitous passenger as the said vehicle was insured as a private vehicle and not a commercial vehicle. In case of a passenger carrying vehicle. the premium for covering the risk of passenger should have been paid. Reliance in this regard is placed on 2003 (2) SCC 223. FINDING 8. This Court is of the view that, as held in Balakrishnan & Anr case, in cases of comprehensive insurance policy, owner as well the gratuitous passenger travelling in the vehicle shall be covered. However, the same shall not apply when it is a commercial vehicle, whereas the insurance policy is with respect to non-commercial vehicle. 9. Liability of the Insurance Company shall depend on whether the vehicle under the comprehensive insurance policy was being plied for commercial purpose or not. In the present case all the witnesses have consistently deposed that vehicle was not on hire and they were travelling as gratuitous passengers, yet the learned Tribunal has returned a finding that the vehicle was on hire, and the occupants were passengers in it. 10. Having considered the submissions advanced on behalf of both sides, it is apparent that the question whether owner will be liable

to pay the compensation amount or the Insurance Company, turns around the question, if the vehicle was used as hire or demand and the occupants of the vehicle were friends of the owner or they were passengers. Learned Tribunal has not accepted the evidence advanced on behalf of the claimants that the occupants of the vehicle were the friends of the owner. However, no contrary evidence was led on behalf of the Insurance Company to establish that the deceased was travelling as a passenger in the said vehicle. 11. Wife (PW-1) and son of the deceased (PW-3) in their cross- examination have deposed that the offending vehicle was that of the friend of the deceased. Deposition of (PW-5) in para 11 of the cross-examination is also to the same effect. No contrary evidence has been led on behalf of the Insurance Company. The finding of the Tribunal appears to be against the weight of evidence and to be swayed by the number of 5-6 occupants in the Tata Sumo Vehicle which met with the accident. In civil cases a fact is to be proved on preponderance of probability, and therefore in the absence of contrary evidence it was not open to the Tribunal to record a finding that the vehicle was on hire. 12. In view of the fact that vehicle was under a comprehensive package policy, the deceased travelling in the vehicle as a gratuitous passenger will be covered under the policy of insurance and the Insurance Company shall be liable indemnify the owner of the vehicle and pay the compensation amount. M.A. No. 321 of 2009 is accordingly allowed. 13. M.A No.290 of 2010 has been filed by the claimants/appellants for enhancement of the compensation amount of Award. 14. It is argued by the learned counsel for the claimants/ appellants that the ratio laid down by Hon’ble the Supreme Court in the case of National Insurance Company Limited vs. Pranay Sethi, reported in (2017) 16 SCC 680 has not been followed and the claim under the following heads have not been taken care of :-

(i) Future Prospect has not been considered; (ii) The gross salary has not been considered for computation of the compensation of Award rather the net salary after deduction of Income Tax and other deductions has been considered while awarding the compensation. As per the Income Tax Return (Ext.5), the gross income of the deceased was Rs.1,80,383/- per annum, whereas the compensation has been computed by taking the net per month income of the deceased as Rs.7,000/-. Further, it is contended that meagre amount has been awarded under the conventional head. (iii) Interest has been awarded from the date of Award instead from the date of claim application; 15. So far as M.A. No. 290 of 2010 for enhancement of compensation is concerned, the final compensation amount by taking Rs.1,80,383/- as the annual gross income of the deceased, 46 years as his age and 1/3rd as the living expense of the deceased. The final compensation amount will work out as under:

Annual Income Rs.1,80,383/- Income after deducting income Tax Rs. 1,56,835/- Future Prospect Rs.1,56,835 x 25% Rs.39,208/- After adding income and future prospect Rs.1,56,835/- + Rs.39,208/- Rs.1,96,043/- Deduction (1/3rd as total nos. of dependents are 3) Rs.65,347/- Annual dependency after deduction 1,96,043-65,347/- Rs. 1,30,696/- Multiplier x 13 (Rs.1,30,696 x 13) Rs.16,99,048/- Conventional Head Rs.70,000/- Total compensation Rs. 17,69,048/-

The Insurance company is liable to pay total compensation of Rs. 17,69,048/- with interest @ of 6% from the date of claim application. Payment shall be made within one month from the date of the order before the learned Tribunal and the same shall be disbursed to the respective claimants on proper identification as per the terms of disbursement decided by the Tribunal.

Misc. Appeal 290 of 2010 is, accordingly, allowed.

The statutory amount, which was deposited before this Court at the time of filing of this appeal, shall be remitted to the Tribunal for disbursement to the claimants, which will be adjusted against the compensation amount.

(Gautam Kumar Choudhary, J.) Satendra/Sandeep