KALPANARAJversusTAMIL NADU STATE TRANSPORT CORPORATION

                    [2014] 6 S.C.R. 577


                    KALPANARAJ                                A
                          v.
   TAMIL NADU STATE TRANSPORT CORPORATION
           (Civil Appeal No.3461 of 2003)

                      APRIL 22, 2014
                                                              B
 [GYAN SUDHA MISRA AND V. GOPALA GOWDA, JJ.]

      Motor Vehicles Act, 1988 - s. 166 - Fatal Accident -
Compensation - Determination of - Deceased aged 46 years
- Claimants-wife and two minor children - Tribunal awarded    c
compensation of Rs. 20. 90 lacs while High Court reduced it
to Rs. 5. 76 lacs by determining monthly income on the basis
of income tax return of the deceased - Appeal for
enhancement of compensation - Held: High Court was
correct in determining the monthly income on the basis of the o
income tax return, however, erred in making deductions under
various heads to arrive at the net income instead of
ascertaining the gross income of the deceased - Moreover,
since deceased was 46 years of age at the time of death,
compensatiOn ought to have been determined by taking 30% E
increase in the future prospects of income and by adopting a
multiplier of 13 .:. . Award of Rs. 30, 0001- towards loss of
consortium and Rs. 20, 0001- each towards loss of love and
affection by the minor children awarded by High Court was on
the lower side - Accordingly, compensation of Rs. 1 lakh each F
awarded towards loss of consortium and towards loss of love
and affection - Apart from this, Rs. 1 lakh awarded towards
loss of estate and Rs. 1 lakh towards loss of expectation of the
life of the deceased - Further, ·Rs. 50, 0001- also awarded for
funeral expenses and cost of litigation - Thus, total sum of
Rs. 14. 51 lakh awarded to appellants-claimants as G
compensation alongwith interest@ 9% p.a ..

    A 46 year old person died when the motor cycle
                                                          '
                            577
                                                              H
    578       SUPREME COURT REPORTS         [2014] 6 S.C.R.


A   driven by him collided with the bus of respondent-
    Corporation. His wife and two minor children filed claim
    petition before the MACT. The MACT hel·d that the
    accident occurred due to rash and negligent driving of
    the driver of the bus of the respondent-corporation. lt
s   further determined monthly income of the deceased at
    Rs.15,000 and adopting a multiplier of 18, assessed
    compensation at Rs.32.40 lacs, however awarded
    Rs.20.90 lacs since that was the amount claimed by
    appellants.
c     On appeal by respondent-corporation, the High
  Court held that the Tribunal erred in determining monthly
  income of the deceased at Rs.15,000 instead of taking the
  income shown in income tax return and further erred in
  not deducting 1/3rd towards personal expenses of the
D deceased. Accordingly, the High Court took monthly
  income of the deceased as Rs.3, 115 on the basis of net
  average income of the deceased calculated as per
  income tax return and reduced the compensation under
  the head of loss of income, funeral expenses, loss of love
E and affection by the children, loss of income and loss of
  consortium by wife. The High Court awarded a total
  amount of Rs.5.76 lacs as compensation to the
  appellants. Hence the present appeal for enhancement of
  cor:npensation.
F
          Allowing the appeal, the Court

       HELD: 1. The only a.vailable documentary evidence
  on record of the monthly income of the deceased was the
  income tax return filed by him with the Income Tax
G 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
H
 KALPANARAJ v. TAMIL NADU STATE TRANSPORT 579
                CORPORATION

the light of the principle of law laid down in *Indira          A
Srivastava case, 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         B
for th~ relevant financial year 1994-1995. [Paras 7, 8] [583-
G-H; 584-A; 586-D]

 . *National Insurance Company Ltd. v. Indira Srivastava
and Ors. (2008) 2 sec 763 - relied on.
                                                                c-
      2. As per the Income Tctx return of the financial year
1994-1995 produced on record, the deceased was
earning Rs. 88,6601- per annum or Rs. 73301- per month.
Further, the deceased being 46 years of age at the time
of death, he is entitled to 30% increase in the future          D
prospects of income as per the legal principle laid down
in ** Santosh Devi. Also, since the deceased was 46 years
of age at the time of the accident, a multiplier of 13 is
appropriate for determining the quantum of
compensation as per the principle laid down in the case         E
of ***Sar/a Verma. Therefore, the total amount of
compensation the appellants- claimants are entitled to
under the head of loss of income is: [Rs.7330+30/100 x
rs. 7330) x 12 x 13] = Rs.14186,524/-.] Further, since the
deceased left behind his· wife and two children, the            F
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 ***Sar/a Verma. Therefore, the
amount to be awarded as compensation to the appellant
is= (Rs. 14,86,524/- - 1/3 x Rs. 14,86,524/-) =Rs. 9,91,016/    G
-. [Paras 9 to 12] [586-F-H; 587-A-D]

     **Santosh Devi v. National Insurance Company Ltd. and
Ors. (2012) 6 SCC 421; ***Sar/a Verma and Ors. v_ Delhi
Transport Corporation and Anr (2009) 6 S,CC 121: 2009 (5)
SCR 1098 - relied on.                                           H
     580     SUPREME COURT REPORTS              (2014] 6 S.C.R.

'A       3. The appellant-claimants sought an amount of Rs.
     10,000/- towards damage to the motorcycle. Since, the
     claim was not rebutted with evidence by the respondent,
     compensation of Rs. 10,000/- is granted towards the
     damage caused to the bike. Further, the High Court
 B   awarded a sum of Rs. 30,000/- towards loss of
     consortium and Rs. 20,000/- each towards loss of love
     and affection by the minor children. This amount awarded
     by the High Court was on the lower side in the light of
     the principle laid down in ****Rajesh case wherein the
 c   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, a compensation of Rs.
     1,00,000/- each is awarded towards loss of consortium
     and towards loss of love and affection. Apart from this,
     Rs. 1,00,000/- is awarded towards loss of estate and
 0
     Rs.1,00,000/- towards loss of expectation of the life of the
     deceased. A sum of Rs. 50,000/- is also awarded 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 appellants-claimants. [para
 E   13, 15] [587-D-H; 588-A]

        ****Rajesh and Ors. v. Rajbir Singh and Ors. (2013) 9
     SCC 54: 2013 (5) SCR 961 - relied on.

 F       4. An interest @ 9% per annum on the compensation
     as awarded by High Court is upheld. The compensation
     awarded shall be apportioned between the appellants
     equally with proportionate interest. The Insurance
     Company is directed to deposit 50% of the awarded
     amount with proportionate interest in any of the
 G   Nationalized Bank 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

 H
KALPANARAJ v. TAMIL NADU STATE TRANSPORT                   581
               CORPORATION
receipt of a copy of this order after deducting the amount A.
if already paid. [Para 16] [588-C-E]

     Municipal Corporation of Delhi vs. Uphaar Tragedy
Victim Association (2011) 14 SCC 481 - relied on.
                     Case Law Reference :                        B

     (2008) 2 sec 763         relied on          Para 7, 8
     (2012) 6 sec 421         relied on          Paras 9, 12
     2009 (5) SCR 1098        relied on          Paras 10, 12    c
     2013 (5) SCR 961         relied on          Para 14
     (2011) 14 sec 481        relied on          Para 16

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3461 of 2003.                                                    D

    From the Judgment and Order dated 30.01.2002 of the
High Court of Judicature at Madras in Civil Miscellaneous
Appeal No. 1487 of 1999.
                                                                 E'
    Sriram, Aditya Verma (for Hari Shankar K.) for the
Appellants.

    B. Balaji, A. Selvin Raja (for T. Harish Kumar) for the
Respondent.
                                                                 F
    The Judgment of the Court was delivered by

     V.GOPALA GOWDA, J. 1. This appeal is filed by the
appellants questioning the correctness of the judgment and final
Order dated 30.01.2002 passed by the High Court of
Judicature at Madras in Civil Misc. Appeal No. 1487 of 1999, G
urgingvarious 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       H
                   /


    582       SUPREME COURT REPORTS                 [2014] 6 S.C.R.


A   whether the appellants are entitled for the relief as prayed in
    this appeal.

         3. The deceased, while going on his motorcycle from
   Vellore to Kannamangalam, collided with the bus of the
8 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 M.C.O.P.
   No. 539 of 1994 contending that the accident occurred solely
   because of the rash and negligent driving of the bus of the
C respondent-Corporation. If the driver of the bus had driven the
   bus with carefulness, there might have been no possibility of
   dragging the deceased along with the motorcycle for a distant
   of 120 feet. The appellants-claimants claimed an amount of Rs.
   2j) lakhs compensation "for the death caused by the
   respondent. the Tribunal, after considering the material
D. evidence on record of P.W.1 and P.W. 2 and R.W.1 and the
   ten exhibits filed on behalf of the appellant-claimants, found that
   the accident has occurred only due to rashand negligent driving
   of the driver of the bus of the respondent-Corporation.
   Therefore, the learned judge, holding the monthly income at
E 15,000/- and adopting the multiplier of 18, determined a sum
   of Rs.32,40,000/- ascompensation. However, he restricted the
   sum of compensation to Rs. 20,90,000/-, since that was the
   amount claimed by the appellants-claimants. The Tribunal
   further awarded interest@12% per annum on the said amount.
F
       4. 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
G Tribunal was excessive. Andif so, then what is the amount to
  which the appellants-claimants are entitled to.

       5. The High Court opined that the Tribunal erred inrelying
  upon the statement of evidence of the wife of the deceased to
  determine the monthly income of the deceased at 15,000/-
H instead of relying upon the in come shown in the Income Tax
 KALPANARAJ v. TAMIL NADU STATE TRANSPORT 583
     CORPORATION [V. GOPALA GOWDA, J.]

return. Further, the High Court opined that the Tribunal erred in     A
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.
                                                                      B
    ..6. Accordingly, the High Court held that the unsubstantiated
oral evidence alone of P .W.1 cannot be taken into consideration
in the light of Exhs. A.8, A.9 and A.10. The monthly income of
the deceased is therefore taken as 3, 115/- per month for
computation of the multipligand on the basis of net average           C
income of the deceased calc~lated as per the income tax return
produced as evidence on record. Therefore, the compensation
determined under the head of loss of income 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.              D
25,000/- to Rs.10,000/-. The Tribunal awarded aconsolidated
amount for loss of love and affection by 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' by the minor children at Rs. 20,000/     E
- each. "Also, the amount awarded towards loss of consortium
to the wife was reduced by the High Court t9 Rs. Rs. 30,000/-
. Therefore, in total, the High Court awarded a total amount of
Rs. 5,76,000/- as compensation to the appellants-claimants.
The interest rate was also reduced to 9% per annum by the             F
High Court from 12% awarded by the Tribunal.

     7. 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                G
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 ccilculating compensation, in the light of the principle laid
                                                                      H
    584        SUPREME COURT REPORTS               [2014] 6 S.C.R.


A   down by this Court in the case of National Insurance Company
    Ltd. v. Indira Srivastava and Ors. 1 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
B
          Insurance Co. Ltd. v. Padmavathy and Ors. wherein it was
          held:

                  '7 ..... Income tax, Professional tax which are
                  deducted from the salaried person goes to the
c                 coffers of the government under specific head and
                  there is no return. Whereas, the General Provident
                  Fund, Special Provident Fund, L.l.C., Contribution
                  are amounts paid specific heads and the
                  contribution is always repayable to an employee at
D                 the time of voluntary retirement, death or for any
                  other reason. Such contribution 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
E                 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
F
                  liability. If the contributions made by the employee
                  which are other wise 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
G                 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

H    1.   (2ooa) 2 sec 763.
 KALPANARAJ v. TAMIL NADU STATE TRANSPORT 585
     CORPORATION [V. GOPALA GOWDA, J.]

           and any other contribution, which is not repayable       A
           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 life
           time. form part of the salary and they should· be        B
           included in the monthly income. while computing
           "the dependency compensation.'

    15. Similar view was expressed by a learned Single Judge
of Andhra Pradesh High Court in S. NaraY.anamma and Ors. C
v. Secretary to Government of India, Ministry of
Telecommunications and Ors. holding:

    13 .... 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     D
    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,       E
    housing loan. vehicle loan, festival advance and oth~r
    deductions, if any, to the benefit of the estate of the
    deceased cannot be deducted while computing ttie net"
                                                              1
    monthly earnings of the deceased. These advances or
    loans are part of his salary. So far as House Rent              F
    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 ff tpe deceased is alive. On the other
    hand, allowances, like Travelling Allowance, allowance          G
    fornewspapers/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
        586         SUPREME COURT REPORTS                   [2014] 6 S.C.R.


    A          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
    B          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.
               Nirmala devi and Ors. 1980 ACJ 55(SC) held that
               determination of quantum must be liberal and not niggardly
    c          since law values life and limb in a free country 'ingenerous
               scales'."

               (Emphasis laid down by this Court)

               8. In the light of the principle of law laid down by" this Court
    D in the Indira Srivastava case 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
    E   income tax return submitted for the relevant financial year 1994-
        1995.
~


              9. As per the Income Tax return of the financial year 1994-
        1995 produced on record, the deceased was earning Rs.
    F   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 Company Ltd. and Ors. 2
    G        10. 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


    H   2.    (2012) 6 sec 421.
     KALPANARAJ v. TAMIL NADU STATE TRANSPORT 587
         CORPORATION [V. GOPALA GOWDA, J.]
laid down by this Court in the case of Sar/a Verma and'.Ors. v.     A
Delhi Transport Corporation and Anr. 3

    11. Therefore, the total amount of compensati0.11 the
appellants-claimants are entitled to under the h~d 'ofioss of
income is:
                                                                    B
       [( Rs.7330+30/100 x Rs.7330) x 12x13]   =Rs.14;86,524/-]
      12. 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   c
the principle laid down in Sar/a Verma case (supra) which was
reiterated in Santosh Devi case. (supra). Therefore, the amount
to be awarded ascompensation to the appellant is         =(  Rs.
                                     =
14,86,524/- - 1/3 x Rs.14,86,524/-) 9,91,016/-.

    13. The appellant-claimants sought an amount of                 D
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."
                                                                    E
      14. Further, the High Court awarded a sum of Rs. 30,000/
- towards loss of consortium and Rs. 20,000/- each. towards
loss of love an.d affection by 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 and Ors. v. Rajbir Singh and      F
Ors. 4 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.                  G
     15. Apart from this, we award Rs.1,00,000/- tpwards loss
"of estate and Rs. 1,00,000/- towards loss of expectation of the
3.    (2ooei 6 sec 121.
4.    (2013) e sec 54.
    588 .    SUPREME COURT REPORTS                [2014] 6 S.C.R.


A   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 appellants-"claimants. "

B        16. 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
    Municipal Corporation of Delhi, Delhi v. Uphaar Tragedy
    Victims Association & Ors. 5 Accordingly, we award an interest
C @ 9% per annum on the compensation to be awarded to the
    appellants-claimants. The compensation awarded shall be
    apportioned between the appellants (fqually with proportionate
  . interest. We direct the Insurance Company to deposit 50% of
   the awarded amount with proportionate interest in any of the
    Nationalized Bank of the choice of the appellants for a period
D 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 aportion or entire deposited
E 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
F order of the High Court and modify the judgment in the
    aforesaid terms by allo.wing this appeal. In the facts and
    circumstances of the case, no order as to costs.

    Bibhuti Bhushan Bose                               Appeal allowed.