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Saturday, April 26, 2014

Accident claim - M.V.Act- what is net salary or take home salary ?-- Voluntary savings deductions can not be considered as expenses - While ascertaining salary, the trail court deducted various heads shown in the salary certificate like GPF, HRA and Income tax etc., - High court confirmed the same - Apex court held that except contribution towards Income Tax, the other voluntary contributions made by the deceased, which are in the nature of savings, cannot be deducted from the monthly salary of the deceased to decide his net salary or take home salary. = MANASVI JAIN … APPELLANT VERSUS DELHI TRANSPORT CORPORATION … RESPONDENTS = 2014 ( April.Part ) judis.nic.in/supremecourt/filename=41452

Accident claim - M.V.Act- what is net  salary  or  take  home salary ?- Voluntary savings deductions can not be considered as expenses - While ascertaining salary, the trail court deducted various heads shown in the salary certificate like GPF, HRA and Income tax etc., - High court confirmed the same - Apex court held that except contribution towards Income Tax, the other voluntary contributions  made  by the deceased, which are in the nature of savings, cannot  be  deducted  from the monthly salary of the deceased to decide his net  salary  or  take  home salary. =
It is not  in  dispute  that  the
deceased was  getting  an  amount  of  Rs.26,924/-  as  monthly  salary  and
Rs.11,140/- was being deducted under various heads such as GPF, House  Rent,
G.I.S. and Income Tax. After  taking  into  account  these  deductions,  the
tribunal arrived at a conclusion that the net  salary  of  the  deceased  is
Rs.15,784/- and awarded a total compensation  of  Rs.10,25,176/-,  including
Rs.5,000/- towards funeral expenses and Rs.10,000/-  towards  mental  agony.
The High Court did not interfere with the judgment of the Tribunal.
12.   This Court in Shyamwati Sharma & Ors. Vs. Karam Singh  &  Ors.  (2010)
12  SCC  378,   while  considering  the  issues  of  deduction   of   taxes,
contributions etc., for arriving at the figure of net monthly  income,  held
that “while ascertaining the income of the deceased,  any  deductions  shown
in  the  salary  certificate  as  deductions  towards  GPF,  life  insurance
premium, repayments of loans etc., should not be excluded from  the  income.
The deduction towards income tax / surcharge alone should be  considered  to
arrive at the net income of the deceased.
13.   In the present case, there is no dispute about of the  salary  of  the
deceased. As per salary certificate, his monthly income and  deductions  are
as under:
|Monthly Income                        |Rs. 26,950-00        |
|Deductions                            |                     |
|Provident Fund                        |8,000-00             |
|House Rent                            |525-00               |
|G.I.S.                                |120-00               |
|Income Tax                            |2,500-00             |

So, from the above table, it is clear that except an  amount  of  Rs.2,500/-
towards Income Tax, rest of the amounts were voluntarily contributed by  the
deceased for the welfare of his family. Considering  the  decision  of  this
Court  in  Shyamwati  Sharma  &  Ors.,  (supra),  in  our  opinion,   except
contribution towards Income Tax, the other voluntary contributions  made  by
the deceased, which are in the nature of savings, cannot  be  deducted  from
the monthly salary of the deceased to decide his net  salary  or  take  home
salary. Hence, the take home salary of the  deceased  comes  to  Rs.24,450/-
which can be rounded to Rs.25,000/-
14.   Accordingly,  we  determine  the  monthly  take  home  salary  of  the
deceased as Rs.25,000/-. Applying multiplier 8, the  appellant  is  entitled
to the compensation as under:

      Financial Loss                          Rs. 16,00,000-00
      2/3rd of 25,000 x 12 x 8
      Funeral Expense                   Rs.        5,000-00
      Towards mental agony                    Rs.       10,000-00
                                              ---------------------------
      Total compensation                      Rs. 16,15,000-00
                                             -----------------------
The appellant is also entitled to an interest @ 6% p.a.  from  the  date  of
filing of the petition before the Tribunal till the date of payment.
15.   We therefore set aside the judgments of the  Courts  below  and  allow
the appeal in the above terms with no order as to costs.

2014 ( April.Part ) judis.nic.in/supremecourt/filename=41452
P SATHASIVAM, RANJAN GOGOI, N.V. RAMANA
                                                                  REPORTABLE



                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 7642 OF 2009


MANASVI JAIN                                  … APPELLANT

                                   VERSUS


DELHI TRANSPORT CORPORATION            … RESPONDENTS



                                  JUDGMENT



N.V. RAMANA, J.


      This appeal by special leave arises out  of  the  Judgment  and  order
dated 26th March, 2008 passed by the High Court of Uttarakhand  in  a  Motor
Accidents Claims Appeal No. 484 of 2006.
2.    The appellant-claimant is the son of deceased Suresh Chandra Jain  who
died in a road  accident.  He  filed  a  claim  petition  before  the  Motor
Accidents Claim Tribunal, Dehradun seeking  compensation  of  an  amount  of
Rs.36,00,000/- on the basis that the deceased who was aged 55 years  on  the
date of accident, was working as Executive Engineer with  the  Public  Works
Department of the Government of Uttarakhand and  was  earning  a  salary  of
Rs.26,950/- per month.
3.    The Tribunal, after taking into account the  evidence  on  record  and
also the evidence of one eyewitness to the  accident,  namely,  Ajay  Bansal
(PW 2),   came to the conclusion that the accident took place  due  to  rash
and negligent driving of the bus driver—Respondent No. 2 and  as  such,  the
appellant is entitled for compensation. According  to  the  original  salary
certificate of the deceased issued by the Executive Engineer,  Public  Works
Department, Uttarakhand, the gross salary of the deceased was  found  to  be
Rs.26,950/- and after various deductions towards GPF, House  Rent,  GIS  and
Income Tax, the take home salary was  determined  as  Rs.15,784/-  p.m.  The
Tribunal considering the fact  that  the  deceased  was  55  years  old,  as
evidenced by the documentary evidence,  applied  the  multiplier  8.   Thus,
taking into consideration his age and monthly  salary  at  Rs.15,784/-,  the
Tribunal calculated the loss  of  dependency  as  Rs.10,10,176/-  (2/3rd  of
Rs.15,784 x 12 x 8).  In addition to that  Rs.5,000/-  was  granted  towards
funeral expenses and Rs.10,000/- towards mental agony  and  finally  awarded
Rs.10,25,176/- as compensation with interest payable  @  5%  p.a.  from  the
date of institution  of  claim  petition  till  the  date  of  payment.  The
Tribunal also fastened the liability of making payment  of  compensation  on
the Delhi Transport Corporation-Respondent No. 1 as  the  bus  which  caused
accident belongs to them.
4.    Against the aforesaid order of  the  Tribunal,  both  Delhi  Transport
Corporation as well as the appellant  herein  have  filed  their  respective
appeals before the High Court. The Delhi Transport Corporation pleaded  that
the  bus  was  insured  with  National  Insurance  Company,  therefore,  the
liability of making payment of compensation lies on the  Insurance  Company.
On  the  other  hand,  the  appellant’s  appeal  was  for   enhancement   of
compensation.
5.    The High Court allowed the appeal of the Delhi  Transport  Corporation
and directed the National Insurance Company to pay the compensation amount.
6.    As far as the appeal filed by the appellant herein is  concerned,  the
High Court was of the view that  the  amount  awarded  by  the  Tribunal  as
compensation  was  perfectly  justified.  It   accordingly   dismissed   the
appellant’s appeal.
7.    The appellant, not satisfied with the quantum of compensation and  the
rate of interest awarded by the Courts below, filed this appeal.
8.    The contention of the counsel for the appellant is  that  in  deciding
the ‘take home salary’ of the deceased, the Tribunal as  well  as  the  High
Court  erroneously  deducted  from  the  salary  an  amount  of  Rs.11,140/-
contributed by the deceased towards various heads such as General  Provident
Fund, house rent,  insurance,  income  tax  etc.  He  submitted  that  these
contributions should also be treated as the income of the deceased.
9.    On the  other  hand,  learned  counsel  for  the  respondent-Insurance
Company supported both the judgments of the Tribunal and the High Court.
10.   In view of the contentions raised on behalf of  either  side  and  the
material placed before us, the main question that arises  for  consideration
is whether for the purpose of deciding net monthly income of  the  deceased,
the amount of voluntary contributions  he  made  towards  General  Provident
Fund etc., should be included or excluded from his salary?
11.   We have heard learned counsel for the parties and perused  the  orders
passed by the Tribunal and the High Court. It is not  in  dispute  that  the
deceased was  getting  an  amount  of  Rs.26,924/-  as  monthly  salary  and
Rs.11,140/- was being deducted under various heads such as GPF, House  Rent,
G.I.S. and Income Tax. After  taking  into  account  these  deductions,  the
tribunal arrived at a conclusion that the net  salary  of  the  deceased  is
Rs.15,784/- and awarded a total compensation  of  Rs.10,25,176/-,  including
Rs.5,000/- towards funeral expenses and Rs.10,000/-  towards  mental  agony.
The High Court did not interfere with the judgment of the Tribunal.
12.   This Court in Shyamwati Sharma & Ors. Vs. Karam Singh  &  Ors.  (2010)
12  SCC  378,   while  considering  the  issues  of  deduction   of   taxes,
contributions etc., for arriving at the figure of net monthly  income,  held
that “while ascertaining the income of the deceased,  any  deductions  shown
in  the  salary  certificate  as  deductions  towards  GPF,  life  insurance
premium, repayments of loans etc., should not be excluded from  the  income.
The deduction towards income tax / surcharge alone should be  considered  to
arrive at the net income of the deceased.
13.   In the present case, there is no dispute about of the  salary  of  the
deceased. As per salary certificate, his monthly income and  deductions  are
as under:
|Monthly Income                        |Rs. 26,950-00        |
|Deductions                            |                     |
|Provident Fund                        |8,000-00             |
|House Rent                            |525-00               |
|G.I.S.                                |120-00               |
|Income Tax                            |2,500-00             |

So, from the above table, it is clear that except an  amount  of  Rs.2,500/-
towards Income Tax, rest of the amounts were voluntarily contributed by  the
deceased for the welfare of his family. Considering  the  decision  of  this
Court  in  Shyamwati  Sharma  &  Ors.,  (supra),  in  our  opinion,   except
contribution towards Income Tax, the other voluntary contributions  made  by
the deceased, which are in the nature of savings, cannot  be  deducted  from
the monthly salary of the deceased to decide his net  salary  or  take  home
salary. Hence, the take home salary of the  deceased  comes  to  Rs.24,450/-
which can be rounded to Rs.25,000/-
14.   Accordingly,  we  determine  the  monthly  take  home  salary  of  the
deceased as Rs.25,000/-. Applying multiplier 8, the  appellant  is  entitled
to the compensation as under:

      Financial Loss                          Rs. 16,00,000-00
      2/3rd of 25,000 x 12 x 8
      Funeral Expense                   Rs.        5,000-00
      Towards mental agony                    Rs.       10,000-00
                                              ---------------------------
      Total compensation                      Rs. 16,15,000-00
                                             -----------------------
The appellant is also entitled to an interest @ 6% p.a.  from  the  date  of
filing of the petition before the Tribunal till the date of payment.
15.   We therefore set aside the judgments of the  Courts  below  and  allow
the appeal in the above terms with no order as to costs.


                            …………………………………………CJI.
                            (P. SATHASIVAM)




                            ……………………………………………J.
                            (RANJAN GOGOI)




                            ……………………………………………J.
                            (N.V. RAMANA)
 NEW DELHI,
 APRIL 23,  2014





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