2016 (7) TMI 1576 - HC - Indian Laws

Compensation on account of death caused by rash driving - enhanced income shown by dependent of deceased for claiming enhanced compensation - HELD THAT - From the first three income-tax returns, it is obvious that the deceased did not show the income earned by these package tours of taxies to the Income Tax Department, but revealed the income of his salary only and when he passed away, his dependants without discerning the implications of such disclosure presented the incometax return for the year 2006-07 to the tune of ₹ 98,500/-, which was almost double than the last three income-tax returns filed by the deceased. Therefore, the income which might have been earned by the dependants out of these two cabs could not at all be taken into consideration for evaluating the compensation - It is for yet another reason that even after the death of such owner of vehicles, the income of the dependents out of these vehicles would not have lost and they would have continued to earn the income from these vehicles even after the death of Mr. Arya. Thus, only the average of first three income-tax returns would have been the base for evaluating the compensation. Such average income comes to ₹ 52,635/-. Looking to the status of the family, I would not like to deduct 1/4th towards the personal expenses, but it must have been 1/3rd and considering such standards, the total dependency come to ₹ 35,090/- and applying the multiplier of 16 thereon, the amount of compensation comes to ₹ 5,61,440/- - Again considering the financial status of the family, I further reduce the amount from ₹ 20,000/- to ₹ 10,000/- towards the loss of consortium. The amount awarded for the loss of love and affection is also reduced from ₹ 10,000/- to ₹ 5,000/-. However, the amount of ₹ 5,000/-, awarded for the funeral expenses, is left intact - This way the total compensation comes to ₹ 5,61,440 10,000 5000 5000 5,81,440/-. The quantum of compensation is reduced to the extent indicated - the appeal of the insurance company is hereby allowed.

Summary

Issues:
Evaluation of compensation for the deceased based on income-tax returns and ownership of vehicles.

Analysis:
The judgment revolves around the evaluation of compensation for the deceased based on his income-tax returns and ownership of vehicles. The deceased was involved in a fatal accident caused by a rashly driven vehicle, leading to his demise. The dependents of the deceased filed a claim petition seeking compensation, which was initially granted by the Tribunal at a higher amount than requested. The insurance company, the appellant, contested the quantum of compensation awarded to the claimants.

The main contention raised by the insurance company was regarding the deceased's income-tax returns. It was argued that the Tribunal erred in evaluating the compensation based on the deceased's total income for the year 2006-07, which was deemed inappropriate. The Tribunal considered the deceased's ownership of two vehicles and the income derived from them to justify the awarded compensation. However, it was highlighted that the deceased did not disclose the income earned from these vehicles in his income-tax returns, which raised doubts about the accuracy of the compensation evaluation.

The Court pointed out that the deceased, being a Class IV employee of the Motor Transport Department, was not allowed to engage in a parallel business, such as owning and operating vehicles for package tours. The Court emphasized that the income derived from these vehicles should not have been considered for calculating the compensation amount. It was noted that even after the deceased's death, the dependents could have continued to earn income from the vehicles.

Ultimately, the Court recalculated the compensation amount based on the average of the deceased's first three income-tax returns, amounting to ?52,635. After adjusting for personal expenses and applying a multiplier, the revised compensation was determined to be ?5,61,440. Additionally, the Court reduced the amounts awarded for loss of consortium and love and affection while maintaining the funeral expenses amount.

In conclusion, the Court allowed the appeal of the insurance company and modified the quantum of compensation to ?5,81,440. The revised compensation amount was directed to be released to the claimants, with the excess amount to be returned to the insurance company.