V. Gopala Gowda, J.— This appeal is filed by the appellants questioning the correctness of the judgment and final order dated 30-1-2002 passed by the High Court of Judicature of Madras in T.N State Transport Corpn. v. Kalpanaraj Civil Misc. Appeal No. 1487 of 1999, urging various facts and legal contentions in justification of their claim.
2. Necessary relevant facts are stated hereunder to appreciate the case of the appellants and also to find out whether the appellants are entitled for the relief as prayed for in this appeal.
3. The deceased, while going on his motorcycle from Vellore to Kannamangalam, collided with the bus of the respondent Corporation as a result of which he sustained fatal injuries and died on the spot. The legal representatives of the deceased viz. his wife and two minor children filed MCOP No. 539 of 1994 contending that the accident occurred solely because of the rash and negligent driving of the bus of the respondent Corporation. If the driver of the bus had driven the bus carefully, there might have been no possibility of dragging the deceased along with the motorcycle for a distance of 120 ft. The appellant claimants claimed an amount of Rs 20 lakhs as compensation for the death caused by the respondent.
4. The Tribunal, after considering the material evidence on record of PW 1 and PW 2 and RW 1 and the ten exhibits filed on behalf of the appellant claimants, found that the accident had occurred only due to rash and negligent driving of the driver of the bus of the respondent Corporation. Therefore, the learned Judge, holding the monthly income of the deceased at Rs 15,000 and adopting the multiplier of 18, determined a sum of Rs 32,40,000 as compensation. However, he restricted the sum of compensation to Rs 20,90,000, since that was the amount claimed by the appellant claimants. The Tribunal further awarded interest @12% per annum on the said amount.
5. Aggrieved by the award of the Tribunal, the respondent Corporation filed an appeal challenging the order of the Tribunal. The High Court, however, only restricted itself to ascertain as to whether the compensation awarded by the Tribunal was excessive. And if so, then what is the amount to which the appellant claimants are entitled to?
6. The High Court opined that the Tribunal erred in relying upon the statement of evidence of the wife of the deceased to determine the monthly income of the deceased at Rs 15,000 instead of relying upon the income shown in the income tax return. Further, the High Court opined that the Tribunal erred in not deducting 1/3rd for personal expenses of the deceased. Further, according to the High Court, the Tribunal erred in determining the multiplier of 18 instead of 13 considering the age of the deceased which was 46 at the time of the accident.
7. Accordingly, the High Court held that the unsubstantiated oral evidence alone of PW 1 cannot be taken into consideration in the light of Exts. A-8, A-9 and A-10. The monthly income of the deceased is therefore taken as Rs 3115 per month for computation of the multiplicand on the basis of net average income of the deceased calculated as per the income tax return produced as evidence on record. Therefore, the compensation determined under the head of “loss of income” of the deceased was determined by the High Court at Rs 4,86,000. Further, the High Court has reduced compensation under the head of funeral expenses from Rs 25,000 to Rs 10,000. The Tribunal awarded a consolidated amount for loss of love and affection to the children, loss of income and loss of consortium by the wife at Rs 19,55,000. The High Court reduced the compensation under the head of “loss of love and affection” to the minor children at Rs 20,000 each. Also, the amount awarded towards loss of consortium to the wife was reduced by the High Court to Rs 30,000. Therefore, in total, the High Court awarded a total amount of Rs 5,76,000 as compensation to the appellant claimants. The interest rate was also reduced to 9% per annum by the High Court from 12% awarded by the Tribunal.
8. It is pertinent to note that the only available documentary evidence on record of the monthly income of the deceased is the income tax return filed by him with the Income Tax Department. The High Court was correct therefore, to determine the monthly income on the basis of the income tax return. However, the High Court erred in ascertaining the net income of the deceased as the amount to be taken into consideration for calculating compensation, in the light of the principle laid down by this Court in National Insurance Co. Ltd. v. Indira Srivastava (2008) 2 SCC 763. The relevant paragraphs of the case read as under:
“14. The question came for consideration before a learned Single Judge of the Madras High Court in National Insurance Co. Ltd. v. Padmavathy 2007 AIHC 1921 (Mad) wherein it was held: (AIHC pp. 1927-28, para 7)
‘7. … Income tax, professional tax which are deducted from the salaried person goes to the coffers of the Government under specific head and there is no return. Whereas, the general provident fund, special provident fund, LIC contribution are amounts paid under specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason. Such contributions made by the salaried person are deferred payments and they are savings. The Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if the legal representatives are entitled to lump sum payment under the contractual liability. If the contributions made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependency compensation, then the legal representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can make only statutory deductions such as income tax and professional tax and any other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependency compensation. Any contribution made by the employee during his lifetime, form part of the salary and they should be included in the monthly income, while computing the dependency compensation.’
15. Similar view was expressed by a learned Single Judge of the Andhra Pradesh High Court in S. Narayanamma v. Govt. of India 2002 AIHC 2633, (2002) 1 APLJ 473 holding: (AIHC p. 2636, para 12)
‘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, at least 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 were 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 1401 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 case (1999) 1 SCC 90. Concord of India Insurance Co. Ltd. v. Nirmala Devi (1979) 4 SCC 365 held that determination of quantum must be liberal and not niggardly since law values life and limb in a free country “in generous scales”.’”
(emphasis supplied)
9. In the light of the principle of law laid down by this Court in the Indira Srivastava case (2008) 2 SCC 763 mentioned supra, we are of the opinion that the High Court erred in making deductions under various heads to arrive at the net income instead of ascertaining the gross income of the deceased out of the annual income earned from his occupation mentioned in the income tax return submitted for the relevant Financial Year 1994-1995.
10. As per the income tax return of the Financial Year 1994-1995 produced on record, the deceased was earning Rs 88,660 per annum or Rs 7330 per month. Further, the deceased being 46 years of age at the time of death, he is entitled to 30% increase in the future prospects of income as per the legal principle laid down by this Court in Santosh Devi v. National Insurance Co. Ltd. (2012) 6 SCC 421
11. Also, since the deceased was 46 years of age at the time of the accident, a multiplier of 13 seems appropriate for determining the quantum of compensation as per the principle laid down by this Court in Sarla Verma v. DTC (2009) 6 SCC 121.
12. Therefore, the total amount of compensation the appellant claimants are entitled to under the head of loss of income is: [(Rs 7330 + 30/100 × Rs 7330) × 12 × 13] = Rs 14,86,524.]
13. Further, since the deceased has left behind his wife and two children, the amount to be deducted under the head of personal expenses is 1/3rd of the total income in the light of the principle laid down in Sarla Verma case (2009) 6 SCC 121 which was reiterated in Santosh Devi case (2012) 6 SCC 421. Therefore, the amount to be awarded as compensation to the appellant is = (Rs 14,86,524-1/3 × Rs 14,86,524) = Rs 9,91,016.
14. The appellant claimants sought an amount of Rs 10,000 towards damage to the motorcycle. Since, the claim has neither been rebutted with evidence by the respondent, we grant compensation of Rs 10,000 towards the damage caused to the bike.
15. Further, the High Court awarded a sum of Rs 30,000 towards loss of consortium and Rs 20,000 each towards loss of love and affection to the minor children. This amount awarded by the High Court is on the lower side in the light of the principle laid down in Rajesh v. Rajbir Singh (2013) 9 SCC 54 wherein the Court awarded Rs 1,00,000 towards loss of consortium and Rs 1,00,000 towards loss of care and guidance to the minor children. Accordingly, we award a compensation of Rs 1,00,000 each towards loss of consortium and towards loss of love and affection.
16. Apart from this, we award Rs 1,00,000 towards loss of estate and Rs 1,00,000 towards loss of expectation of the life of the deceased. We also award a sum of Rs 50,000 for funeral expenses and cost of litigation. Therefore, a total sum of Rs 14,51,016 which is rounded off at Rs 14,51,000 is awarded to the appellant claimants.
17. Further, the High Court has awarded the compensation with interest @ 9% per annum. We concur with this holding of the High Court in the light of the decision of this Court in MCD v. Uphaar Tragedy Victims Assn. (2011) 14 SCC 481 Accordingly, we award an interest @ 9% per annum on the compensation to be awarded to the appellant claimants. The compensation awarded shall be apportioned between the appellants equally with proportionate interest. We direct the Insurance Company to deposit 50% of the awarded amount with proportionate interest in any of the nationalised banks of the choice of the appellants for a period of 3 years. The rest of 50% amount awarded with proportionate interest shall be paid to the appellants by way of a demand draft within six weeks from the date of receipt of a copy of this order after deducting the amount if already paid. During the said period, if they want to withdraw a portion or entire deposited amount for their personal or any other expenses, including development of their asset, then they are at liberty to file application before the Tribunal for release of the deposited amount, which may be considered by it and pass appropriate order in this regard. We set aside the impugned judgment and order Civil Misc. Appeal No. 1487 of 1999 of the High Court and modify the judgment in the aforesaid terms by allowing this appeal. In the facts and circumstances of the case, no order as to costs.