Citation Codes

Equivalent Citations

citation codes

Case Number

A.A.O No. 1443 of 1996

Advocates

For the Appellant: C.V.Ramulu, K.Venkata Reddy, Advocates.

Judges

N.V Ramana, J.

Acts

provisions of Section 110-B of the Motor Vehicles Act, 1939 (Old Act) or Section 168 (1) of the Motor Vehicles Act, 1988 (New Act)
provisions of Motor Vehicles Act, 1939 (Old Act), the Fatal Accidents Act, 1855 and Section 7 of the Insurance Act, 1938,
Section 110-B of the Motor Vehicles Act, 1939 (Old Act)
SECTION 166 MOTOR VEHICLES ACT 1988
MOTOR VEHICLES ACT
Section7 of the Insurance Act, 1939,
FATAL ACCIDENTS ACT
Section 110-B of the 1939 Act,
Section 110-B of the Old Act
Section 110-B,

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This appeal arises from the order and decree in O.P. No. 628 of 1994 before the Motor Accidents Claims Tribunal, Hyderabad.

On 13-7-1994 at about 7:30 p.m., S. Mallikharjuna (a Junior Assistant in SETWIN, Puranahaveli, Hyderabad) was riding a luna bearing No. AP-12-2376 towards Mushirabad when, near Subash Talkies at Mushirabad, an Allwyn Nissan Van (No. AIS 8015) belonging to the Telecommunications Department and driven by the 3rd respondent struck his motorcycle. As a result, Mallikharjuna sustained grievous injuries and died on the spot.

The deceased's wife, children and parents filed O.P. under Section 166 of the Motor Vehicles Act, 1988 claiming Rs. 3,00,000/- against respondents 1 to 3 (the Secretary to Government of India, Ministry of Telecommunications; the Chief General Manager, Telecommunications Department, Hyderabad; and the driver who was driving the van).

The 2nd respondent filed a counter denying rash and negligent driving. The tribunal framed three issues: (1) whether the accident was due to rash and negligent driving of the van (No. AIS 8105 as recorded in the issues); (2) whether the petitioners were legal heirs and entitled to compensation; and (3) the relief to be granted.

At trial, the claimants examined P.W.1 (wife of the deceased) and P.W.2 (eyewitness Mohd. Shahbuddin) and produced Exhibits A-1 to A-9. The respondents examined the driver as R.W.1 and marked no documents. The tribunal found on Issue No.1 that the accident was due to the rash and negligent driving of the Allwyn Nissan Van and on Issue No.2 that the claimants were legal heirs.

The tribunal calculated the net salary as Rs. 1,401/-, after deductions, fixed monthly contribution as Rs. 934/-, applied multiplier 15 (age of deceased taken as 34 years) and awarded Rs. 1,68,120/- as loss of dependency plus Rs. 10,000/- for loss of consortium, totaling Rs. 1,78,120/-, with interest at 12% p.a., payable jointly and severally by respondents 1 to 3. The claimants appealed only against the quantum of compensation.

Legal Issues Presented

Whether the gross salary of the deceased must be taken into consideration for determining compensation payable to the claimants or whether deductions from gross salary are permissible to ascertain the deceased's contribution to the claimants.
Whether the Motor Accidents Claims Tribunal was justified in fixing the monthly salary of the deceased as Rs. 1,401/- (after deductions) for purposes of computing compensation.
Whether the compensation awarded by the tribunal constituted "just compensation" within the meaning of the Motor Vehicles Act and related principles.

Arguments of the Parties

Appellants' Arguments

The tribunal erred in fixing the deceased's monthly contribution as Rs. 934/- after deducting one-third from a net salary figure of Rs. 1,401/-.
When determining monthly salary, the tribunal should not have treated deductions such as contributions to EPF, LIC, Group Insurance, Bank Loan, and benefit fund contributions as reductions to assessible income; these items ought to be treated as part of the deceased's income (or otherwise beneficial to the family/estate) and not excluded.

Respondents' Arguments

Learned Standing Counsel for the Union of India submitted that there were no valid grounds to interfere with the tribunal's order and decree on the quantum of compensation.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Helen C. Rebello v. Maharashtra State Road Transport Corporation (Supreme Court)	Section 110-B of the Motor Vehicles Act, 1939 (Old Act) empowers the tribunal to determine compensation which appears to be "just". The word "just" widens the tribunal's discretion beyond the strict rules of the Fatal Accidents Acts; the Motor Vehicles Act provisions are beneficial and should be interpreted to confer benefit to claimants.	The court relied on this authority to stress that compensation must be "just" (equitable, reasonable, and not niggardly) and to criticize the tribunal's narrow deductions. It applied the principle that beneficial items (EPF, LIC, group insurance, benefit funds, and non-permanent loan repayments) should not be deducted from gross salary when assessing dependency.
Concord of India Insurance Co. v. Nirmaladevi and Ors., 1980 ACJ 55 (SC)	The determination of quantum must be liberal and not niggardly; the law values life and limb in a generous scale.	Cited to support a liberal approach in computing compensation and to justify enhancing the tribunal's award as the tribunal's calculation was considered unduly restrictive.
Hardeo Kaur v. Rajasthan State Road Transport Corporation (Supreme Court)	There was no basis for the tribunal to conclude that the deceased was spending half his salary on personal expenses; the court corrected an arbitrary finding and fixed a higher monthly contribution to family.	Used to show that tribunals must not make unsupported inferences about large personal expenditures of the deceased and to support the principle that a significant portion of salary should be reckoned as contributing to dependents.
S. Chandra v. Pallavan Transport Corporation (Supreme Court)	In a particular fact situation the court held that two-thirds of the deceased's salary could be regarded as available for family maintenance.	Cited as an example supporting the court's approach to adopt a liberal fraction of salary (rather than the lower net figure used by the tribunal) for computation of dependency.
Sarah Dixit v. Balwant Yadav (Supreme Court)	Where future prospects are relevant, the court considered them and fixed an average monthly contribution (example given: Rs.1,500/-) based on the deceased's rank and prospects.	Employed to support the methodology of considering future prospects and arriving at a reasonable monthly contribution rather than mechanically accepting post-deduction net pay.

Court's Reasoning and Analysis

The court's analysis proceeded from established statutory purpose and precedent: under the Motor Vehicles Act (Old Act Section 110-B and New Act Section 168(1)) the tribunal must award compensation that appears to be "just". The court emphasized that "just" allows a broader discretion, to be exercised fairly and generously in favour of claimants because the Act is beneficial in nature.

Factual findings by the tribunal (negligence of the van driver; claimants as legal heirs) were not disturbed. The core dispute on appeal concerned the appropriate salary figure to be used in calculating loss of dependency and what deductions (if any) should be permitted from gross salary.

The court found that the tribunal had improperly deducted items such as vehicle loan instalments, festival advances and similar recoveries from the deceased's salary when computing net monthly earnings. The court explained that:

Contributions to EPF, LIC, Group Insurance, and Benefit Fund are beneficial to the family or estate and therefore should not be deducted from gross salary when ascertaining income for dependency purposes.
Loan repayments (e.g., vehicle loan) are not permanent deductions and are not to be treated as reducing the earning capacity available to dependents.
House Rent Allowance is a family-beneficial allowance and should not be excluded from computation; conversely, vocation-linked allowances (travel allowance, telephone, servant, club-fee, car maintenance) that are not for family maintenance may be excluded.

The tribunal's finding that the deceased's net monthly income was Rs. 1,401/- was therefore held to be unsustainable because it included deductions which, in the court's view, should not have been made.

The court then turned to the salary particulars in Ex.A-7. Although earlier in the record a figure of Rs. 2,800/- appears, the court treated Ex.A-7 as showing gross salary Rs. 2,489/- and net after deductions Rs. 1,401/-. On the basis of Ex.A-7 the court deducted only Compensatory Allowance (C.A. Rs.45) and Professional Tax (P.T. Rs.20) from the gross salary of Rs. 2,489/-, arriving at Rs. 2,424/- (i.e., 2,489 - 65).

Applying the conventional one-third deduction for the deceased's personal expenses, the court deducted one-third of Rs. 2,424/- (i.e., Rs. 808/-), leaving a monthly contribution of Rs. 1,616/-, which the court rounded to Rs. 1,600/-. The annual dependency loss was computed as Rs. 19,200/- (Rs. 1,600 x 12). With the multiplier 15 applied (deceased aged about 34 years), the loss of dependency became Rs. 2,88,000/- (Rs. 19,200 x 15).

The court then added Rs. 15,000/- for loss of estate and Rs. 15,000/- for loss of consortium, resulting in a calculated total of Rs. 3,18,000/-. However, because the original claim in the O.P. was for Rs. 3,00,000/-, the court restricted the enhanced award to Rs. 3,00,000/-.

The court ordered interest at 12% p.a. from the date of filing of the O.P. till realisation on the compensation originally awarded by the tribunal and on the enhanced amount. The court directed respondents 1 to 3 to pay the compensation jointly and severally and directed that apportionment among claimants follow the same mode and ratio fixed by the tribunal. The rest of the tribunal's directions regarding minor claimants remained unaltered.

Note: The order contains two cost-related statements: a sentence allowing the appeal "with costs in the O.P." and a separate concluding sentence stating "There shall be no order as to costs in this appeal." The latter is the explicit closing direction on costs in the text.

Holding and Implications

Holding: The appellate court allowed the appeal on quantum and enhanced the compensation awarded by the tribunal.

Core Ruling: The compensation awarded by the tribunal is enhanced and fixed at Rs. 3,00,000/- (subject to the cap of the original claim), with interest at 12% p.a. from the date of filing of the O.P. until realization; respondents 1 to 3 are jointly and severally liable to pay. The apportionment among claimants remains as determined by the tribunal, and other directions relating to minor claimants remain unchanged.

Implications:

The decision reinforces the principle that tribunals must adopt a liberal and beneficiary-oriented approach when computing compensation under the Motor Vehicles Act and should avoid treating estate-beneficial deductions (e.g., EPF, LIC, group insurance, benefit funds) and non-permanent loan repayments as reductions in the deceased's assessable income for dependency calculations.
The court applied established precedent to correct what it considered an unduly restrictive calculation by the tribunal and to arrive at a higher, "just" figure of compensation. The award was, however, restricted by the amount claimed in the original petition.
The opinion does not purport to lay down a new legal precedent beyond applying existing authorities; its immediate effect is to increase the compensation awarded to the appellants in this matter and to clarify deductions that should not be made when computing dependency in similar factual circumstances.

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Smt. S. Narayanamma & Ors. v. The Secretary To Govt. Of India & Ors.

1. This appeal arises out of the order and decree in O.P. No. 628 of 1994 on the file of Motor Accidents Claims Tribunal, Hyderabad.

2. On 13-7-1994 at about 7.30 p.m. one S. Mallikharjuna, who was working as a Junior Assistant in the Office of SETWN, Puranahaveli, Hyderabad, was proceeding on his luna bearing No. AP-12-2376 towards Mushirabad (Secunderabad) side from R.T.C. Cross roadside. When he reached near Subash Talkies at Mushirabad, Hyderabad, an Allwyn Nissan Van bearing No. AIS 8015 belonging to the Telecommunications Department, being driven by its driver/3rd respondent in the O.P. in a rash and negligent manner and at a high speed came from the same direction (Mushirabad side) and dashed the luna of Mallikharjun. As a result of the said accident, Mallikharjun sustained grievous injuries and died on the spot. Wife, children and parents of the deceased Mallikharjun filed the O.P. Under Section 166 of the Motor Vehicles Act, 1988 claiming a compensation of Rs. 3,00,000/- against respondents 1 to 3 in the O.P. First respondent in the O.P. is Secretary to Government of India, Ministry of Telecommunications, New Delhi and the second respondent in the O.P. is the Chief General Manager, Telecommunications Department, Hyderabad. The 3rd respondent in the O.P. is the driver working in Telecommunications Department, who drove the Allwyn Nissan Van at the time of the accident.

3. Before the tribunal the 2nd respondent in the O.P. filed counter on behalf of all the respondents denying rash and negligent driving of the Allwyn Nissan Van by the 3rd respondent.

4. Based on the pleadings, the tribunal framed the following issues for trial:

(1) Whether the accident was due to the rash and negligent driving of the driver of the Allwyn Nissan Van No.AIS 8105?

(2) Whether the petitioners are the legal heirs of the deceased and if so, they are entitled to the compensation and to what amount?

(3) To what relief ?

5. Before the tribunal, the claimants in the O.P. examined the wife of the deceased as P.W.1 and an eyewitness to the accident by name Mohd. Shahbuddin as P.W.2 and marked Exs.A-1 to A-9. On behalf of the respondents the 3rd respondent/driver of the Allwyn Nissan Van was examined as R.W. 1 and no documents are marked.

6. On appreciation of evidence, the tribunal held on issue No. 1 that the accident occurred due to the rash and negligent driving of the Allwyn Nissan Van by the 3rd respondent. On issue No. 2, the tribunal held that the claimants are the legal heirs of the deceased. Taking the net salary of the deceased as Rs. 1,401/- and deducting 1/3rd thereof for his personal expenses the tribunal fixed the monthly contribution of the deceased as Rs. 934/-. Taking the age of the deceased as 34 years and applying the multiplier '15', the tribunal determined the loss of dependency of the claimants as Rs. 1,68,120/-. The tribunal awarded a sum of Rs. 10,000/- to the 1st claimant/wife of the deceased towards loss of consortium. Thus, in all, the tribunal awarded a total compensation of Rs. 1,78,120/- in favour of the claimants with interest at 12% p.a., from the date of filing of O.P. till the date of realisation, directing respondents 1 to 3 to jointly and severally pay the same to the claimants. Dissatisfied with the quantum of compensation awarded by the tribunal, this appeal is preferred by the claimants in the O.P.

7. Learned counsel for the appellants contended that the tribunal erroneously fixed the monthly contribution of the deceased to his family as Rs. 934/- after deducting one-third from Rs. 1,401/- which is the net salary of the deceased. He contended that while determining the monthly salary of the deceased, except the items of compensatory allowance and profession tax, the tribunal ought to have treated the deductions shown towards E.P.F., LIC, Group Insurance, Bank Loan, benefit fund contributions, as the income of the deceased.

7-A. On behalf of the respondents, learned Standing Counsel for the Union of India appeared and contended that there are no valid grounds to interfere with the order and decree of the tribunal.

8. The point for consideration in this appeal is whether the gross salary of the deceased has to be taken into consideration for determining compensation payable to the claimants or any deduction is permissible from the gross salary of the deceased to ascertain the contribution of the deceased to the claimants, and whether the Motor Accidents Claims Tribunal is justified in fixing the monthly salary of the deceased as Rs. 1,401/- and, whether the compensation awarded is 'just compensation'?

9. The deceased Mallikharjun was working as a Junior Assistant in SETWIN and aged about 34 years at the time of his death. He was drawing a salary of Rs. 2,800/- per month according to Ex.A-7 salary certificate. The salary certificate shows that after deductions, he is receiving Rs. 1,401/- per month. One of the deductions is the instalment towards the vehicle loan. In the circumstances, what is the salary to be taken into consideration to ascertain the just compensation, is the question.

10. Points for determining 'just and reasonable' compensation: It is well-settled principle that the compensation determined is neither low nor windfall to the claimants. In this context, it is relevant to refer to the provisions of Section 110-B of the Motor Vehicles Act, 1939 (Old Act) or Section 168 (1) of the Motor Vehicles Act, 1988 (New Act) which clearly indicates that on receipt of application for compensation the claims tribunal shall hold an enquiry into the claim and make an award determining the amount of compensation which appears to be just. As per the provisions of the Motor Vehicles Act, the amount of compensation is expected to be 'just'. The 'justness' of the compensation always needs to be determined with reference to the peculiar facts of each case. As there can be no exact uniform rule of measuring the value of human life by process of mathematical calculations, the life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor for determining suitable multiplier. In assessing the compensation the court must exclude all considerations or matters which rest in speculation or fancy. The mode of ascertainment of compensation depends upon so-many imponderables. The dependency or pecuniary loss to be determined by the court is the loss, which would be sustained in future. The normal nature of calculating the compensation is to assess the net income of the deceased available for support of himself and dependents. Thereafter deductions to be made in regard to the amounts spent by the deceased for his maintenance. The Hon'ble Supreme Court, while considering the scope of compensation Under Section 110-B of the Motor Vehicles Act, 1939 (Old Act) in Helen C. Rebello v. Maharashtra State Road Transport Corporation, held that Section 110-B of the Old Act empowers the tribunal to determine the compensation which appears to it to be 'just'. It was held that the words used in Section 110-B, viz., "which appears to it to be just" widen the scope of determination of compensation which is neither under the Indian Fatal Accidents Act, 1855 nor under the English Fatal Accidents Act, 1846. Thus, it shows that the word 'just' was deliberately brought in section 110 of the old act to enlarge the consideration in computing the compensation. It is held at paragraph-29 of the judgment in Helen C. Rebello's case, :

"The word 'just', as its nomenclature, denotes equitability, fairness and reasonableness having large peripheral field. The largeness is, of course, not arbitrary; it is restricted by the conscience which is fair, reasonable and equitable, if it exceeds; it is termed as unfair, unreasonable, unequitable, not just. Thus, this field of wider discretion of the Tribunal has to be within the said limitations and the limitations under any provisions of this Act or any other provisions having force of law."

11. of Helen C. Rebello's case, Hon'ble Supreme Court, while considering the provisions of Motor Vehicles Act, 1939 (Old Act), the Fatal Accidents Act, 1855 and Section 7 of the Insurance Act, 1938, held that the provisions of the Motor Vehicles Act are beneficial in nature, and so they should be interpreted which confers benefits and not which usurp its benefit. In that context, it was held:

"Thus, we have no hesitation in concluding that the Tribunal, while computing the compensation Under Section 110-B of the 1939 Act, thus has a wider discretion, than what it had under the 1855 Act. Various provisions of this Act indicate legislature's intend conferring visible benefit to the claimant by securing compensation through casting obligation on the tortfeasor and the insurer. Section 94 makes it obligatory to insure a vehicle against third party risk before putting on road. Statutory obligation and the limit of the insurer is provided Under section 95. under section 95-aa in addition to the deposits under Section7 of the Insurance Act, 1939, the insurer has to deposit with the Reserve Bank of India or State Bank of India a security of thirty thousand for discharging any liability covered by the insurance policy. Then, Section 96 casts obligation on the insurers to satisfy judgments in respect of third party risks. No settlement between insurer and insured in respect of any claim to which the third party is entitled, is valid unless third party is a party to such settlement Under Section 97. All these and such other provisions are clearly beneficial legislation, hence should be interpreted which confers benefit and not which usurp its benefit."

12. In this background, now we will examine the present deductions made by the tribunal from the salary of the deceased in fixing the monthly contribution of the deceased to his family. The tribunal has not even taken proper care while deducting the amounts from the salary of the deceased, atleast the very nature of deductions from the salary of the deceased. My view is that the deductions made by the tribunal from the salary such as recovery of housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the deceased cannot be deducted while computing the net monthly earnings of the deceased. These advances or loans are part of his salary. So far as House Rent Allowance is concerned, it is beneficial to the entire family of the deceased during his tenure, but for his untimely death the claimants are deprived of such benefit which they would have enjoyed if the deceased is alive. On the other hand, allowances, like Travelling Allowance, allowance for newspapers/periodicals, telephone, servant, club-fee, car maintenance etc., by virtue of his vocation need not be included in the salary while computing the net earnings of the deceased. The finding of the tribunal that the deceased was getting Rs. 1,401/- as net income every month is unsustainable as the deductions made towards vehicle loan and other deductions were also taken into consideration while fixing the monthly income of the deceased. The above finding of the tribunal is contrary to the principle of 'just compensation' enunciated by the Supreme Court in the judgment in Helen's case (1 supra). The Supreme Court in Concord of India Insurance Co. v. Nirmaladevi and Ors., 1980 ACJ 55 (SC) held that determination of quantum must be liberal and not niggardly since law values life and limb in a free country 'in generous scales'.

13. In Hardeo Kaur v. Rajasthan State Road Transport Corporation, the Hon'ble Supreme Court held that there was no basis or justification before the tribunal to have reached the finding that the deceased was spending half of the salary on himself for his personal expenses and fixed the monthly contribution of the deceased to his family as contribution as Rs. 1,400/- per month out of his monthly salary of Rs. 2,200/-.

14. In S. Chandra v. Pallavan Transport Corporation, the deceased was an employee aged 42 years and according to Ex.P-4 salary certificate his monthly salary was Rs. 630-08 ps. and it was held that out of that salary the deceased could have provided 2/3rds of it to his family,

15. In Sarah Dixit v. Balwant Yadav, the deceased was a Lieutenant in Army drawing a salary of Rs. 1,543/- per month. The Apex Court by considering the future prospects of the deceased held that Rs. 1,500/- per month would have been the average monthly contribution of the deceased and awarded compensation on that basis.

16. In the instant case, as Per Ex.A-7 salary certificate, the salary of the deceased was Rs. 2,489/- The net salary after deductions towards EPF, LIC, G.I., loan from bank etc., is shown as Rs. 1,401/-. Ex.A-7 salary certificate of the deceased was issued by the Accounts officer, SETWIN, Hyderabad on 31-1-1995 to the wife of the deceased. It contains the particulars of pay and allowances which the deceased was drawing at the time of his death, together with the deductions from his monthly salary. Ex.A-7 reads thus:

"Salary Certificate Late Sri S. Mallikarjun, Jr. Asst. was drawing the following emoluments per month.

17. According to me, the contributions made by the deceased-employee towards Employees' Provident Fund, Life Insurance (LIC), Group Insurance and the deductions shown in the salary certificate of the deceased-employee towards the vehicle loan instalment, benefit fund, and also the amounts received by the deceased-employee towards Interim Relief, Special Pay, Dearness Allowance, House Rent Allowance, need not be deducted from the gross salary of the deceased for ascertaining the income, because the contributions/deductions made towards EPF, LIC, Group Insurance and Benefit Fund would be beneficial to the family of the deceased-employee and it would be the estate of the deceased. The deduction towards vehicle loan is not permanent in nature. In view of the facts and circumstances, after deducting C.A. (Compensatory Allowance of Rs. 45/-) and P.T. (Professional Tax of Rs. 20/-) from the gross salary of the deceased-employee, the net salary of the deceased comes to Rs. 2,424/- (i.e.-, Rs. 2,489 (-) minus Rs. 65/-). Out of the said amount of Rs. 2,424, if we deduct one-third thereof (Rs. 808/- i.e., one-third of Rs. 2,424/-), the monthly contribution of the deceased to his family can be fixed as Rs. 1,616/- (i.e., Rs. 2,424 (-) minus Rs. 808/-), which can be rounded off to Rs. 1,600/-. Then the annual loss of dependency/pecuniary damages comes to Rs. 19,200/- (i.e., Rs. 1,600 x 12). The multiplier applicable to this case is '15'. Then the total loss of dependency/ pecuniary loss comes to Rs. 2,88,000/-(Rs. 19,200 x 15 or Rs. 1,600 x 12 x 15). In addition to that, the claimants are entitled to a sum of Rs. 15,000/- towards loss of estate and Rs. 15,000/- towards loss of consortium. So, the claimants are entitled to total compensation of Rs. 3,18,000/-. Since the claim in the O.P. itself is for Rs. 3,00,000/-, the compensation now enhanced is restricted to Rs. 3,00,000/-.

18. In the result the appeal is allowed, enhancing the compensation from Rs. 1,78,120/- to Rs. 3,00,000/- with costs in the O.P., together with interest at 12% p.a., (on the compensation granted originally by the tribunal and also on the enhanced compensation amount now granted in this appeal) from the date of filing of O.P. till the date of realisation. Respondents 1 to 3 are directed to pay the same jointly and severally to the appellants/claimants. The apportionment of compensation (including the enhanced compensation) amongst the claimants shall be in the same mode and ratio as is fixed by the tribunal while awarding compensation in the O.P. The rest of the directions in the order and decree of the tribunal relating to the minor-claimants/appellants shall stand unaltered.

There shall be no order as to costs in this appeal.

Smt. S. Narayanamma & Ors. v. The Secretary To Govt. Of India & Ors.

Structured Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellants' Arguments

Respondents' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Smt. S. Narayanamma & Ors. v. The Secretary To Govt. Of India & Ors.

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