Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Adarsh Goel and Mr. Janardhan
  • P. P. Malhotra
Judges
  • RAJINDAR SACHAR AND S.B WAD, JJ.
Acts
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Click here to upload
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Adarsh Goel and Mr. Janardhan
  • P. P. Malhotra
Judges
  • RAJINDAR SACHAR AND S.B WAD, JJ.
Acts
See more information ...
Smart Summary

Judgment Summary — Rajindar Sachar, J.

Factual and Procedural Background

This is an appeal against the order of a learned single Judge awarding Rs. 38,522/- by way of compensation under the Motor Vehicles Act, with interest at 6% till realisation and costs to the appellants, for the death of their son Ramesh Chander. The accident occurred on 25-8-1970. The bus involved was driven by Ajit Singh (respondent No. 3) and belonged to the DTC (respondent No. 2). Both the trial Court and the learned single Judge found that the accident occurred due to rash and negligent driving by the driver, a finding which the present Court affirmed as a finding of fact.

The deceased was 24 years old. The claimants were his father (aged 53 at the time) and mother (aged 49). The learned single Judge calculated dependency for a period of 16 years, a period upheld by this Court. The deceased ran a Commission Agent's shop assessed as a joint Hindu family business; the assessment and accounting of income from that shop, deductions from that income, and treatment of proceeds realised on sale of the shop after death were principal issues on appeal. The appeal also raised the question of the appropriate period for awarding interest.

Legal Issues Presented

  1. Whether the finding that the accident was caused by rash and negligent driving by the driver (respondent No. 3) should be interfered with on appeal.
  2. What annual income from the deceased's commission agent shop should be taken for computation of dependency (contention between Rs. 7,000/- and an income-tax assessment of Rs. 8,670/-).
  3. Whether deduction of Rs. 100 per month (Rs. 1,200 per annum) for the deceased's personal expenses was appropriate.
  4. Whether a one-third deduction (as the elder brother's share) from the available income was permissible in absence of evidence of actual outgo to that brother.
  5. Whether proceeds realised on the sale/closure of the shop after the deceased's death (Rs. 35,000/- realised) could be treated as a benefit to the dependents and deducted from the compensation payable.
  6. What period interest should run for the amounts awarded by the trial Court, the learned single Judge, and this Court (including the appellant's claim that interest should run from the date of application).

Arguments of the Parties

Appellant's Arguments

  • Mr. Goel (counsel for the appellant) pointed to an income-tax assessment on the shop showing an income of Rs. 8,670/- per annum and urged acceptance of that figure instead of Rs. 7,000/- adopted by the learned single Judge.
  • The appellants' counsel argued that interest should be awarded from the date of the application (14-12-1970) to the date of the trial Court's award (17-2-1977) on the amount awarded by the trial Court.

Respondents' Arguments

  • Mr. Malhotra (counsel for the respondents) did not dispute the existence of the income-tax assessment of Rs. 8,670/- per annum (as recorded in the opinion).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bhagat Singh Sohan Singh v. Smt. Om Sharma, AIR 1983 Punj and Har 94 (Full Bench) Principle that receipts such as insurance, provident fund, pension or gratuity benefits received by dependents of a victim must be excluded from consideration in awarding compensation under Section 110-B of the Motor Vehicles Act. The Court relied on this precedent by parity of reasoning to hold that proceeds realised on sale/closure of the deceased's business (capital realisation) could not be treated as a benefit to reduce compensation; consequently, no deduction was to be made on account of the Rs. 35,000/- realised on sale.

Court's Reasoning and Analysis

The Court proceeded step-by-step, applying the facts shown in evidence to established legal principles:

  1. On negligence: The trial Court and the learned single Judge had both found that the accident resulted from rash and negligent driving by respondent No. 3 (the driver). The present Court treated that as a factual finding and affirmed it, noting there was no occasion to interfere.
  2. On dependency period: The learned single Judge had calculated dependency as 16 years. The appellants did not seriously challenge this figure and the Court found the period reasonable and upheld it.
  3. On annual income for calculation of dependency: The learned single Judge used Rs. 7,000/- per annum because the father had given a range of Rs. 7,000/- to Rs. 9,000/-. The appellants produced an income-tax assessment showing Rs. 8,670/- per annum. The Court accepted the documentary assessment figure (which lies within the range the father gave) and modified the annual income figure to Rs. 8,670/- per annum.
  4. On personal expenses deduction: The trial Court had allowed Rs. 66/- per month; the learned single Judge raised this to Rs. 100/- per month. The Court found no evidence to the contrary and accepted Rs. 100/- per month (Rs. 1,200/- per annum) as the amount the deceased spent on himself.
  5. Computation of loss: With annual income accepted at Rs. 8,670/- and deducting Rs. 1,200/- personal expenses, the balance available to the family was Rs. 7,470/- per annum. Multiplying by 16 years' dependency produced a loss figure of Rs. 1,19,520/-.
  6. On deduction of one-third share for elder brother: The learned single Judge had deducted one-third of income on the assumed basis that the family business was a joint family enterprise and one-third belonged to the elder brother. The present Court found no evidence that any amount from the shop's income was actually being given to the elder brother. The brother was in government service, married, and living separately; there was no proof of any outgo to him. The Court held that deduction could be made only for actual outgo and not on the basis of a notional partition or hypothetical share. Therefore the one-third deduction was rejected.
  7. On deduction for sale proceeds of the shop: The learned single Judge had deducted Rs. 23,334/- (on the basis that the shop was sold for Rs. 35,000/- and that two-thirds representing the share of the deceased and father accrued to the father). The present Court strongly disagreed. It held the Rs. 35,000/- was realisation of capital (sale of stock/closure proceeds) necessitated by the death and not a benefit arising from the death that could be used to reduce the liability of the negligent respondent. Quoting the established principle (as in Bhagat Singh Sohan Singh v. Smt. Om Sharma) that certain post-death receipts should be excluded from consideration, the Court held that capital realisation could not be used to scale down compensation. The deduction was therefore set aside.
  8. On interest: The trial Court had awarded Rs. 11,520/- and directed recovery of interest at 6% from the date of the award (17-2-1977). The appellants argued interest should run from the date of the application (14-12-1970) to the date of the award. The Court found this submission to have sufficient force and allowed interest at 6% on Rs. 11,520/- from the date of the application to the date of the trial Court's award.
  9. On interest relating to enhanced awards and adjustments: The learned single Judge had enhanced the award to Rs. 38,522/- and allowed interest at 6% till realisation; that had been interpreted to permit interest only from the date subsequent to the learned single Judge's order. The Court held that because the learned single Judge enhanced the award, the enhanced amount should carry interest from the date of the trial Court's order to the date of the learned single Judge's order (with adjustment for any interest already paid on the amount initially awarded by the trial Court). For the additional amount ordered by the present Court (i.e., the modified award), interest will run from the date of this Court's order until realisation.

Holding and Implications

Core Holding: The appeal is allowed. The Court modified the compensation calculation and held that the appellants are entitled to Rs. 1,19,520/- as loss of dependency.

Specific consequential directions given by the Court (as stated in the opinion):

  • The figure of annual income for the deceased is fixed at Rs. 8,670/- per annum (instead of Rs. 7,000/- as taken by the learned single Judge).
  • Personal expenses of the deceased are fixed at Rs. 100/- per month (Rs. 1,200/- per annum).
  • No deduction is to be made on account of a notional one-third share of the elder brother where there is no evidence of actual outgo to him.
  • No deduction is to be made for the Rs. 35,000/- realised on sale/closure of the shop; such capital realisation cannot be treated as a benefit reducing compensation.
  • Interest at 6% is allowed on Rs. 11,520/- from the date of application (14-12-1970) to the date of the trial Court's award (17-2-1977).
  • The enhanced amount awarded by the learned single Judge should carry interest from the date of the trial Court's order to the date of the learned single Judge's order (with adjustments for any interest already paid on amounts previously awarded).
  • The amount awarded by this Court will carry interest from the date of this Court's order until realisation.
  • The appeal was allowed with costs in favour of the appellants (final line: "Appeal allowed").

Implications: The direct effect is a modification of the compensation awarded to the appellants to Rs. 1,19,520/-, together with the specific interest directions summarized above and costs to the appellants. The opinion applied extant authority (cited) to exclude certain post-death receipts from consideration; the Court did not purport to lay down a new precedent beyond applying existing principles to the facts before it.

Appeal allowed.
Show full summary ...

    Smt. Chameli Wati And Another v. Delhi Municipal Corporation Of Delhi And Others

    RAJINDAR SACHAR, J.:— This is an appeal against the order of the learned single Judge by which he was awarded under the Motor Vehicles Act an amount of Rs. 38,522/- by way of compensation with interest at 6 per cent till realisation with costs to the appellants for the death of their son Ramesh Chander,

    2. The accident took place on 25-8-1970. The bus was being driven by Ajit Singh, Driver. The bus belonged to the DTC, respondent No. 2. It was stated that the Driver was driving the bus rashly and negligently and the accident took place because of the fault of the Driver. The trial Court as well as the learned single Judge have held that the accident occurred due to rash and negligent driving of respondent No. 3, Driver, which resulted in the death of Ramesh Chand. This being a finding of fact there is no occasion to interfere with it in this appeal and the same is affirmed.

    3. The deceased was 24 years of age at the time of his accident. The claim was put in by his father and mother. At the time of accident the age of father was 53 years and that of mother 49 years. The learned single Judge hag calculated dependency at 16 years. This period is not seriously challenged by the learned counsel for the appellant. We are of the view that this was a reasonable period aid we uphold the same.

    4. Ramesh Chand the deceased was running a Commission Agent's shop. It was admitted to be a family business and was being assessed as a joint Hindu family business. The learned single Judge has held that income from the shop should be taken to be Rs. 7,000/-. This he has done because the father of the deceased had stated in his evidence that the income from the shop was between Rs. 7,000/- to Rs. 9,000/- per year and the learned Judge, therefore, thought that Rs. 7,000/- would be a safe figure. The counsel for the appellant, Mr. Goel, however, protests and says that there is on record an income-tax assessment order assessing the income from the shop at Rs. 8,670/- per annum. Mr. Malhotra, counsel for the respondents does not dispute this. In view of the fact that the assessment has been made of the shop at Rs. 8,670/- per annum that being within the range of Rs. 7,000/- to Rs. 9,000/- per year there is no justification not to accept that figure. The father had also given the upper limits of the income at Rs. 9,000/- and, therefore, accepting the lowest figure of Rs. 7,000/- is not justified in view of the documentary record of the assessment order being for at Rs. 8,670/- per annum as the income. We would, therefore, modify this figure of income as found by the learned single Judge and hold that the income from the shop was Rs. 8,670/- per annum instead of Rs. 7,000/- per annum.

    5. The trial Court had held that an amount of Rs. 66/- must have been spent by the deceased on himself out of the income of the shop and the rest was given to the family. The learned single Judge however, has raised this amount to Rs. 100/- per mensem. There is no evidence to say that it was otherwise. The evidence of father was also that the deceased was only keeping Rs. 100/- per month for himself. We see no reason to differ from the view of the learned single Judge. This would mean that accepting the income at Rs. 8,670/- per annum and deducting therefrom Rs. 1,200/- on account of personal expenses of the deceased the balance which was available to the family would come to Rs. 7,470/- per annum. Taking the dependency for 16 years the amount of loss would come to Rs. 1,19,520/-.

    6. The learned single Judge, however, had deducted Rs. 1,200/- out of the income of Rs. 7,000/- per annum in order to work out the income that would be available to the appellants, which comes to Rs. 5,800/- per annum. But the learned single Judge held that this whole amount could not be said to be available to the family. He said so because, according to him, the business being a Joint family one, 1/3rd of the income must be deducted on account of the share belonging to brother of the deceased and thus not available to the appellants. Now there is no evidence at all that any amount out of the income of the family shop was being given to the elder brother of the deceased. It is common case that the elder brother of the deceased was in service of the Railway and was an Assistant Station Master in Northern Railway. It is also not disputed that he is married and lives separately. There is no evidence that any amount was being spent or given to him from the income of the shop. The learned single Judge, however, proceeded on the assumption that being a joint family business 1/3rd of the income was of the elder brother, as not available to family. In this the learned Judge took it as if the partition of the shop had taken place on the death of the deceased, and one-third of the share would automatically have come to the elder brother of the deceased. This was not correct view in law, because to calculate the loss of income from the shop, deduction could only be made if any amount was actually being received by him, (which admittedly it was not). So long as the family was continuing the business elder brother of the deceased could not claim any share of income of the shop, more so, in the presence of father. Be that as it may, the question of deduction could only have arisen in case of actual outgo of income and not of notional partition share which might have fallen to members in case there was a partition. In fact except the amount which was being spent personally on him the rest of the amount the deceased was passing on to the family, that is, his father and mother and he being an unmarried one obviously shared the benefits and comforts of the family house being run by them. We see no justification as to how any deduction could be made on this supposed share of the elder brother of the deceased.

    7. It may also be noticed that it is a common case that the deceased was alone running the shop. The elder brother was in service and the father being an old man was not able to help at the shop. Income was generated due to the deceased's individual efforts and capacity. This is immediately clear from the fact that soon after his death the business had to be sold and closed down which obviously showed that the income was being generated due to the efforts and capacity of the deceased and not because of the family.

    8. We, therefore, see no justification to make any deduction from Rs. 7,470/- per annum and set asidethe finding of the learned single Judge who held to the contrary.

    9. Another deduction made by the learned single Judge is of the amount of Rupees 23,334/-. This has been done because there is evidence that after the death of the deceased the shop was closed and sold for Rs. 35,000/-. The learned single Judge held that out of this 2/3rd of the amount being the share of the deceased and the father was received by the father. This amount had to be deducted as this benefit was gained by parents on account of the death of Ramesh Chander. We strongly dissent. There is no question of deriving any benefit because of death. This money is not being received by the parents because of the death. This is the amount of realisation for the sale of stock etc. of shop. Tragedy of death forced the appellants to sell the shop. Negligence of the respondent cannot dilute its liability by being allowed to put its soiled hands into the personal capital asset of the family. This amount of Rs. 35,000/- was realised on account of closing the business and for the stock of the firm. The appellant had specifically stated that he did not get anything for the goodwill of the firm. The realisation of the capital from the sale of the shop, which was necessitated by the death of the deceased, can under no circumstances be utilised for lessening the liability. It is now well settled by series of decisions (of this Court) that even the receipt of insurance, provident fund, pension or gratuity benefits by the dependents of the victim of an automobile accident must be altogether excluded front consideration in the award of compensation to them under S. 110-B of the Act. (See Bhagat Singh Sohan Singh v. Smt. Om Sharma, AIR 1983 Punj and Har 94 (FB)). On a parity of reasoning it is impossible to subscribe to the view of the learned single Judge that the realisation by the deceased's family on account of the sale of the capital assets from the shop would justify the scaling down of compensation. This would be adding insult to injury by permitting this deduction for the befit of the respondent who has been found negligent and is responsible for causing the death (it) would be in fact to reward him for his negligence. We would, therefore, set aside this finding and hold no deduction on this account is called for.

    10. We would, therefore, allow the appeal and modify the or of the learned single Judge and hold that the appellant is entitled to Rs. 1,19,520/-.

    11. The trial Court had awarded a sum of Rs. 11,520/- and directed that it will recover interest at 6 per cent from the date of the award which is 17-2-1977. Counsel for the appellant says that interest should have been paid from the date of application, that is, 14-12-1970 to the date of the award. We find sufficient force in this submission and would, therefore, allow interest at the rate of 6 per cent on the said amount of Rupees 11,520/- from the date of the application to the date of the award by the trial Court.

    12. The learned single Judge has raised the amount of compensation to Rs. 38,522.and has allowed the interest at 6% till realisation. This has been interpreted as permitting interest to be given only from the date subsequent to the order of the learned single Judge. Considering that there was an enhancement by the learned single Judge it is only fair that the enhanced amount should carry interest from the date of the order of the trial Court to the date of the order of the learned single Judge. Naturally any adjustment for interest already paid on the amount awarded by the trial Court within that period will be adjusted. As for the amount that we have awarded the same will carry interest from the date of our order of today till the date of realisation. The appeal is, therefore, allowed as above with costs.

    Appeal allowed.
    Use AI to get other relevant cases.
    Try AI Pro free for 7 days Upgrade to AI Pro

    Comments

    Smt. Chameli Wati And Another v. Delhi Municipal Corporation Of Delhi And Others
    (Jul 19, 1983)