Holding

The Tribunal must award fair compensation under s.168 and may consider additional evidence, so the case is remanded for a fresh assessment of compensation.

Summary

The widows of Raj Kumar Joshi, a director and proprietor of a clearing and forwarding business, claimed compensation under Section 168 of the Motor Vehicles Act, 1988 after his death in a motor accident. The Motor Accidents Claims Tribunal awarded Rs. 49.25 lakh with interest, which the High Court modified, questioning the income derived from the deceased's proprietorship and the rate of interest. The Supreme Court examined whether the Tribunal had erred in its assessment of the deceased's earnings and whether additional documents could be admitted as evidence. It held that the Tribunal must award a fair compensation and may consider the newly produced documents, directing a fresh assessment while leaving other findings untouched. Consequently, the appeal was partly allowed and the matter remanded to the Tribunal for reconsideration of the compensation award.

Issues considered

Whether the Tribunal correctly assessed the deceased's income from his proprietorship for the purpose of compensation under s.168, Motor Vehicles Act.
Whether the High Court erred in modifying the Tribunal's award and the rate of interest.
Whether additional documents not previously before the Tribunal can be admitted as evidence in compensation proceedings.
Whether the strict rules of the Indian Evidence Act apply to claims before the Motor Accidents Claims Tribunal.

Legislation cited

Subjects

Motor accident compensationSection 168Motor Vehicles ActEvidence admissibilityIncome tax returnsClearing and forwarding businessInterest rateTribunal remand

Judgment

[2009] 12 S.C.R. 596

A MEENABEN PANKAJKUMAR JOSHI & ORS. ' •
v.
NEW INDIA ASSURANCi;: CO. LTD.
(Civil Appei=il No.5194 of 2009)
AUGUST 7, 2009
B
[S.B. SINHA AND DEEPAK VERMA, JJ.)

Motor Vehicles Act, 1988 - s. 168 - Compensation - ~ ....
Award of - Claimant's husband, director of a company and
c also running proprietorship concern - Death in motor vehicle
accident -- Claim of compensation - Filing of income tax
returns for assessment year disclosing income -
Compensation awarded by tribunal with proportionate costs
- High Court modifying the compensation amount as also
D rate of interest - On appeal held : In terms of s. 168, it is
necessary for the tribunal to award fair compensation ,... • •
Additional documents have been produced before this Court
- In the interest of justice, matter remitted back to tribunal to
consider the additional documents as aqditional evidence for
E awarding compensation.
CIVIL APPELLATE JURISDICTION : Civil Appeal Nq.
!?194 of ;mo~.

From the Judgment & Order dated 27.2.2007 of the High
F Court of Gujarat at Ahmedabad in First Appeal No. 2140 of
2006.

K.V. Vishwanathan, Abhisehk Kaushik, Janak Shah, Rauf
Rahim Yadunandan Bansal for the Appellants.
G Salil Paul, Manjeet Chawla for the Respondents. ...

The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted.
H 596
ME;~NABEN PANKAJKUMAR JOSHI & ORS. v. NEW 597
INDIA ASSURANCE CO. LTD. [S.B. SINHA, J.]
• "' 2. The claimants in a rnotor accid~nt claims are before us A
aggrieved by and qissatisfied with the j4cjgment and a,wa.rd
passed by a Division Bench of the Hi~h Court of Guja.ra.t
whereby and whereunder a judgment ard award dated
13.122005 passed by the Motor Accidents Claims Tribunal,
Fast Track Court-4, Gandhidham - Kutch in MAC Petition B
No.297 of 2005 (original No.2 of 1998) wa~ modified.

3. The deceased Raj Kumar Joshi was a Director of a
~ Company commonly known as Kandla Clearing Agency Private
Limited. He was drawing a salary of Rs.7,500/- per month. He
was, however, also running a proprietorship concern carrying c
on business in 'Clearing and Forwarding' in the name of Ultra
Clearing and Forwarding Company.

Appellants filed a claim petition before the Tribunal claiming
...,,
, • a sum of Rs.90 lakhs as compensation in respect of the death
of the said Raj Kumar Joshi who died in a motor vehicle
D

accident and with a view to prove their case, appellants, inter
i'llia, filed income tax returns for the assessment years 1996-
97 and 1!397-98 disclosing the income from salary from the
Directorship in Ki'!ndla Clearing Agency Private Limited at E
Rs.66,000/- and Rs.90,000/- respectively. The sciid returns were
accompanied by a certificate issued by the Manager/
~· r
Accountant of the C0.rnp<;1ny. In the said incgm~ tax return§, a
sum of Rs.12.73 lakhs was also shown as turnover of the
business for eight months in respect of the said proprietorship
F
concern. ihe Tribun(:ll passec;! an award for a sum of
Rs.49,25,000/- with proportionate costs 1'!nQ interest at the rate
of 12% per annum from the d~te of claim petition till December
2000 and thereafter at the rate of 9% per annum. Respondent
No.1 herein preferred an appeal thereagainst before the High
""'i G
Court questioning the correctness of the said judgment and
award.

4. The High Court by reason of the impugned judgment,
so far as the income of the deceased from the aforementioned
proprietorship concern is concerned, opined as under : H
598 SUPREME COURT REPORTS [2009] 12 S.C.R.

A "Even proceeding on the basis that the deceased had set
1
•
up another business in the name of Ultra Clearing and
Forwarding Company in May 1997 and even proceeding
on the basis that there were deposit:? in the bank accounts
of the deceased with State Bank of Bikaner and Jaipur,
B we cannot at all approve of the approach of the Tribunal
in proceeding on the basis that the margin of profit or
margin of commission of the deceased in the said
business was to the extent of 20%. The very nature of the
~
business of the deceased being that of clearing and
c forwarding agent would mean that the deceased would be
acting as an agent of the consignors or consignees and,
therefore, such receipts would to a substantial extent be
the price of the goods being consigned. The very fact that
after the accident the widow of the deceased filed income
tax returns for the salary Income of the deceased for the
D
previous years 1995-96 and 1996-97 but did not file and .' fc

income-tax return for the subsequent year i.e. 1997-98 for
the alleged business income allegedly earned between
May and October 1997 belies the claimants' case that the
deceased was getting substan~ial income from the
E business being carried on by him in the name of Ultra

-
Clearing and Forwarding Company. We are, therefore,
shocked to find that the Claims Tribunal accepted the
claimants' case about the alleged income of the deceased
from the business in the name of Ultra Clearing and
F Forwarding company without making any probe into such
tall claim and without testing the claimants' case even on
the touchstone of commonsense."

(Empnasis supplied)
G ~-
So far as the question with regard to the applicability of
the Indian Evidence Act is concerned, the High Court while
opining that the strict rules of evidence would not apply to the
claim proceedings before the Tribunal, held as under ;

H "The foregoing discussion would show that there was no
MEENABEN PANKAJKl:lMAR JOSHI & ORS. v. NEW 599
INDIA ASSURANCE CO: LTG:l: [S.B. SINHA, J.)

• ~
E:lvidence oh record before the Tribunal to arrive at the A
conclusion that on the credit amount of Rs.12.73 lakhs: the
deceased was getting commission of 20% as held by the
Tribunal. The finding of the Tribunal on this score is,
therefore, not only incorrect and unwarranted, but to say
the least, perverse. No reasonable person instructed in this B
branch of law would ever arrive at such conclusion that the
deceased was getting commission of 20% of the gross
deposits made in his bank accounts. The finding can never
~ be said to be based on judicial considerations.''

The High Court also interfered with the rate of int0rest
c
opining that the rate of interest should be fixed at 9% per annum
from the date of the claim till the date of deposit.

5. Mr. K.V. Vishwanathan, learned senior counsel
appearing on behalf of the appellant, would contend that the D
; r High Court committed a serious error insofar as it held that a
forwarding and clearing agent dealt with goods. It was urged
that the expenditures required to be incurred by a clearing and
forwarding agency will depend upon the expenditures required
to be incurred in terms of the agreement as clearing and E
forwarding agent does not deal with sale of goods and as such
the question of payment of any price of the goods being
> consigned would not arise.

6. Before us, an application has been filed seeking
permission to reply upon additional documents containing F
various bills, debit notes, etc. to show the nature of expenditure
incurred by the said proprietorship concern.

7. Having heard the learned counsel for the parties, we are
.,. of the opinion that keeping in view the provisions of Section G
168 of the Motor Vehicles Act, 1988 in terms whereof the
Tribunal is required to award a fair compensation, the additional
documents sought to be produced before us should be taken
into evidence. We say so because the appellants have
contended that those documents were not available at ·the H
600 SUPREME COURT REPORTS (2009] 12 S.C.R.

A relevant time. Ev~dently, they have not been brought on records • •
before the Tribunal also.

b. We, ~herefore, are of the opinion that the interest of
justice would be subserved if the matter relating to award of
compensation is considered afresh by the Tribunal upon taking
8
additional documents placed before us as additional evidence.
The claimants unless admit or formal proof thereof is dispensed
with, may prove the said documents by examining witnesses.
The respondents, it goes without saying, would be entitled to
cross-examine the said witnesses produced on behalf of the
C appellants and would furthermore be entitled to examine their
witnesses in this behalf. We make it clear that all other findings
arrived at by the Tribunal and as modiified by the High Court
shall remain undisturbed.

D 9. The appeal is allowed to the aforementioned extent and
the matte~ is remanded to the Tribunal with the aforementioned • '
directions and observations. However, in the facts and
circumstances of this case, there shall be no order as to costs.

N.J. Appeal partly allowed.