NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2612 OF 2020
(Arising out of SLP (Civil) No. 28724 of 2018)
Smt. Sangita Arya & Ors. … Appellants
versus
Oriental Insurance Co. Ltd. & Ors. … Respondents
J U D G M E N T
INDU MALHOTRA, J.
Leave granted.
1. The present civil appeal has been filed by the
Claimants/Dependents of one Harish Singh Arya, who died
at the age of 35 years in a motor vehicle accident on
18.06.2007.
2. On 18.06.2007, the deceased Harish Singh Arya had taken
his uncle Govind Lal Arya, an Enforcement Officer for
Passenger Tax, Champawat for inspection in his taxi. The
taxi had stopped on the side of the road at Village Chandini
near Tanakpur – Khatema Road, Uttarakhand. The deceased
1
had gone to answer nature’s call on the side of the road,
when at about 2:30 p.m., one Tata Sumo bearing No. UP02D5208, being driven at a high speed from the wrong side
of the road, hit the deceased, and seriously injured him. The
Enforcement Team was able to stop the offending vehicle,
however the driver of the vehicle fled from the spot. While
Harish Singh Arya was being taken to Bareilly for
hospitalization, he succumbed to his injuries. The F.I.R. of
the accident was lodged by Mr. Govind Lal Arya, the uncle of
the deceased, at P.S. Banbasa.
3. The Claimants filed a Claim Petition before the Motor
Accident Claims Tribunal, Haldwani – Court of First Fast
Track, Additional District Judge, Haldwani, District Nainital
(MACT) being Compensation Claim No. 158 of 2007 for
compensation on behalf of five dependents i.e. the widow, two
minor daughters, and the parents of the deceased.
The Claimants submitted that the deceased owned two
taxis from which he earned approximately Rs. 1,00,000 p.a.
after deduction of all expenses.
The road accident was proved by the oral testimony of
the eyewitness Shri Govind Lal Arya (PW2), who was
accompanying the deceased, and had lodged the F.I.R.
2
With respect to payment of compensation, the Claimants
submitted that the deceased owned two taxis, which
generated an income of Rs. 1,00,000 p.a. The R.T.O., Motor
Vehicles Department, Haldwani produced certificates of both
the vehicles bearing No. UP02D5111 and UP04D0111
before the MACT, which showed that the vehicles were
purchased by the deceased Harish Singh Arya, and were
registered in his name.
The Claimants filed four Income Tax Returns (ITRs) of
the deceased for the years 200203, 200304, 200405, and
200607. The ITR for the year 200607 was Rs. 98,500 p.a. A
photocopy of the ITR bearing the stamp of receipt from the
Income Tax Department, was placed on record.
4. The MACT vide Award dated 22.12.2009 held that on the
date of the accident, the deceased was 35 years of age, and
his income was Rs. 1,00,000 p.a. The deceased had left
behind five dependents i.e. his wife, parents and two minor
daughters. The MACT deducted 1/4th of his income towards
personal expenses, and adopted the multiplier of 16.
Accordingly, the loss of dependency was computed at Rs.
12,20,000.
3
The MACT further awarded Rs. 20,000 to the widow
towards loss of consortium, Rs. 10,000 to the minor
daughters towards loss of love and affection, and Rs. 5,000
towards funeral expenses. The total compensation awarded
to the Claimants worked out to Rs. 12,55,000 with Interest
@6% p.a.
The Respondent No. 1 – Insurance Company was held
liable for payment of compensation to the Claimants.
5. Aggrieved by the aforesaid Award, the Insurance Company
filed Appeal from Order No. 117 of 2010 before the High
Court of Uttarakhand at Nainital.
The learned Single Judge of the High Court vide the
impugned judgment dated 22.07.2016 erroneously assumed
that the deceased was a Government servant, and observed
that he was running a parallel business by plying taxis.
There is no basis for finding that the deceased was a
Government employee. We do not know as to on what basis
the learned Single Judge has arrived at this factually
incorrect conclusion, and made it the basis for awarding
compensation.
The High Court further held that the ITRs for the years
200203, 200304 and 200405 showed that the average
4
income of the deceased for these three years was Rs. 52,635
p.a. The ITR for the year 200607 revealed an income of Rs.
98,500 p.a., which was almost double the income of the
preceding three years. The High Court held that the ITR for
the year 200607 could not be taken into consideration.
The learned Single Judge further held that the income
which may have been generated from the two taxis, could not
be taken into consideration for determining the income of the
deceased. Accordingly, the High Court took the average of the
ITRs for years 200203, 200304 and 200405, for
determining the income of the deceased at Rs. 52,635 p.a.
The Court deducted 1/3rd of the income towards personal
expenses, and applied the multiplier of 16. The loss of
dependency was assessed at Rs. 5,61,440.
The consortium payable to the widow was reduced by the
High Court from Rs. 20,000 (as awarded by the MACT) to Rs.
10,000; the amount awarded towards loss of love and
affection to the minor daughters was reduced from Rs.
10,000 to Rs. 5,000. However, the amount of Rs. 5,000
awarded by the MACT towards funeral expenses was
maintained.
5
The total compensation awarded to the Claimants was
reduced from Rs. 12,55,000 to Rs. 5,81,440.
6. Aggrieved by the impugned judgment dated 22.07.2016
passed by the High Court, the Claimants have filed the
present civil appeal.
This Court while issuing notice to the Respondents on
23.10.2018, recorded the submission made on behalf of the
Claimants that the deceased was not a Government
employee.
7. We have heard the learned counsel for the parties and
perused the material on record. We find that the impugned
order passed by the High Court bristles with serious factual
inaccuracies :– first, the learned Single Judge wrongly
assumed that the deceased Harish Singh Arya was a
Government employee. This has nowhere been averred by the
Claimants in any of their pleadings. The entire basis of the
judgment is hence misconceived.
On the basis of the aforesaid erroneous assumption, the
High Court has erroneously observed that the deceased was
running a parallel business by plying two taxis, and held that
the income derived from the same could not be taken into
consideration for assessing the compensation. These findings
6
being based on a completely erroneous assumption, are liable
to be set aside.
Second, the High Court determined the income of the
deceased by taking the average of the ITRs filed for the years
200203 at Rs. 54,000 p.a., 200304 at Rs. 52,405 p.a., and
200405 at Rs. 51,500 p.a. The learned Single Judge
disregarded the ITR for the year 200607, wherein the income
of the deceased was shown as Rs. 98,500 p.a. on the ground
that it was allegedly filed almost one year after the death of
the deceased. This finding also is factually incorrect.
A photocopy of the original ITR for the year 200607 was
filed before this Court, bearing the rubber stamp of the
Income Tax Department. It shows that the date of filing the
ITR was 20.04.2007, which is prior to the death of the
deceased which occurred on 18.06.2007. Hence, the High
Court was not justified in disregarding the ITR for the year
200607 while assessing the income of the deceased.
The Appellants have also placed on record a copy of the
ITR for the year 200506, which bears the rubber stamp of
the Income Tax Department, and reveals the income of the
deceased at Rs. 98,100 p.a. during the previous assessment
year.
7
As a consequence, the impugned judgment dated
22.07.2016 passed by the High Court is hereby set aside.
8. On a perusal of the documentary evidence on record i.e.
the ITRs for the assessment years 200506 and 200607,
filed prior to the death of the deceased, which reflect the
income of approximately Rs. 1,00,000 p.a. (as assessed by
the MACT in its Award dated 22.12.2009), we make this the
basis for computing the compensation payable to the
Claimants.
We find that the Courts below have not awarded any
amount towards future prospects, as mandated by the
judgment of the Constitution Bench in National Insurance
Company Limited v. Pranay Sethi & Ors.1
Accordingly, we
award future prospects @40% of the income of the deceased.
Given the fact that the deceased left behind five
dependents, the deduction towards his personal expenses
would be 1/4th as per the judgment of this Court in Sarla
Verma & Ors. v. Delhi Transport Corporation & Anr.2
The multiplier adopted by the MACT and the High Court
at 16 is appropriate.
1 (2017) 16 SCC 680.
2 (2009) 6 SCC 121.
8
With respect to payment of compensation under the
conventional heads, we direct that same be awarded in
consonance with the judgment in Pranay Sethi (supra).
Accordingly, the compensation payable to the
Claimants/Appellants herein is determined as :
i) Income : Rs. 1,00,000 p.a.
ii) Future Prospects : 40%
iii) Deduction towards personal
expenses :
1/4
iv) Total income : Rs. 1,05,000 p.a.
v) Multiplier : 16
vi) Loss of dependency : Rs. 16,80,000
vii) Loss of estate : Rs. 15,000
viii) Funeral expenses : Rs. 15,000
ix) Loss of consortium : Rs. 40,000
Total compensation : Rs. 17,50,000
9. Even though the Claimants/Appellants herein did not file
an Appeal against the Award dated 22.12.2009 passed by the
MACT before the High Court, we deem it appropriate to
enhance the compensation by exercising our jurisdiction
under Article 142 of the Constitution of India in order to do
complete justice between the parties.
10. The Respondent – Insurance Company is directed to pay
the compensation awarded to the Appellants within a period
of twelve weeks’ from the date of this judgment, after
adjusting any amount which may have been paid. The
9
amount payable to the Appellants shall carry Interest @ 7.5%
p.a. from the date of filing the claim petition till the date of
realization.
11. The Civil Appeal is allowed in the aforesaid terms.
All pending Applications, if any, are accordingly disposed of.
Ordered accordingly.
...…...............………………J.
(R. BANUMATHI)
...…...............………………J.
(INDU MALHOTRA)
...…...............………………J.
(ANIRUDDHA BOSE)
June16, 2020;
New Delhi.
10
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2612 OF 2020
(Arising out of SLP (Civil) No. 28724 of 2018)
Smt. Sangita Arya & Ors. … Appellants
versus
Oriental Insurance Co. Ltd. & Ors. … Respondents
J U D G M E N T
INDU MALHOTRA, J.
Leave granted.
1. The present civil appeal has been filed by the
Claimants/Dependents of one Harish Singh Arya, who died
at the age of 35 years in a motor vehicle accident on
18.06.2007.
2. On 18.06.2007, the deceased Harish Singh Arya had taken
his uncle Govind Lal Arya, an Enforcement Officer for
Passenger Tax, Champawat for inspection in his taxi. The
taxi had stopped on the side of the road at Village Chandini
near Tanakpur – Khatema Road, Uttarakhand. The deceased
1
had gone to answer nature’s call on the side of the road,
when at about 2:30 p.m., one Tata Sumo bearing No. UP02D5208, being driven at a high speed from the wrong side
of the road, hit the deceased, and seriously injured him. The
Enforcement Team was able to stop the offending vehicle,
however the driver of the vehicle fled from the spot. While
Harish Singh Arya was being taken to Bareilly for
hospitalization, he succumbed to his injuries. The F.I.R. of
the accident was lodged by Mr. Govind Lal Arya, the uncle of
the deceased, at P.S. Banbasa.
3. The Claimants filed a Claim Petition before the Motor
Accident Claims Tribunal, Haldwani – Court of First Fast
Track, Additional District Judge, Haldwani, District Nainital
(MACT) being Compensation Claim No. 158 of 2007 for
compensation on behalf of five dependents i.e. the widow, two
minor daughters, and the parents of the deceased.
The Claimants submitted that the deceased owned two
taxis from which he earned approximately Rs. 1,00,000 p.a.
after deduction of all expenses.
The road accident was proved by the oral testimony of
the eyewitness Shri Govind Lal Arya (PW2), who was
accompanying the deceased, and had lodged the F.I.R.
2
With respect to payment of compensation, the Claimants
submitted that the deceased owned two taxis, which
generated an income of Rs. 1,00,000 p.a. The R.T.O., Motor
Vehicles Department, Haldwani produced certificates of both
the vehicles bearing No. UP02D5111 and UP04D0111
before the MACT, which showed that the vehicles were
purchased by the deceased Harish Singh Arya, and were
registered in his name.
The Claimants filed four Income Tax Returns (ITRs) of
the deceased for the years 200203, 200304, 200405, and
200607. The ITR for the year 200607 was Rs. 98,500 p.a. A
photocopy of the ITR bearing the stamp of receipt from the
Income Tax Department, was placed on record.
4. The MACT vide Award dated 22.12.2009 held that on the
date of the accident, the deceased was 35 years of age, and
his income was Rs. 1,00,000 p.a. The deceased had left
behind five dependents i.e. his wife, parents and two minor
daughters. The MACT deducted 1/4th of his income towards
personal expenses, and adopted the multiplier of 16.
Accordingly, the loss of dependency was computed at Rs.
12,20,000.
3
The MACT further awarded Rs. 20,000 to the widow
towards loss of consortium, Rs. 10,000 to the minor
daughters towards loss of love and affection, and Rs. 5,000
towards funeral expenses. The total compensation awarded
to the Claimants worked out to Rs. 12,55,000 with Interest
@6% p.a.
The Respondent No. 1 – Insurance Company was held
liable for payment of compensation to the Claimants.
5. Aggrieved by the aforesaid Award, the Insurance Company
filed Appeal from Order No. 117 of 2010 before the High
Court of Uttarakhand at Nainital.
The learned Single Judge of the High Court vide the
impugned judgment dated 22.07.2016 erroneously assumed
that the deceased was a Government servant, and observed
that he was running a parallel business by plying taxis.
There is no basis for finding that the deceased was a
Government employee. We do not know as to on what basis
the learned Single Judge has arrived at this factually
incorrect conclusion, and made it the basis for awarding
compensation.
The High Court further held that the ITRs for the years
200203, 200304 and 200405 showed that the average
4
income of the deceased for these three years was Rs. 52,635
p.a. The ITR for the year 200607 revealed an income of Rs.
98,500 p.a., which was almost double the income of the
preceding three years. The High Court held that the ITR for
the year 200607 could not be taken into consideration.
The learned Single Judge further held that the income
which may have been generated from the two taxis, could not
be taken into consideration for determining the income of the
deceased. Accordingly, the High Court took the average of the
ITRs for years 200203, 200304 and 200405, for
determining the income of the deceased at Rs. 52,635 p.a.
The Court deducted 1/3rd of the income towards personal
expenses, and applied the multiplier of 16. The loss of
dependency was assessed at Rs. 5,61,440.
The consortium payable to the widow was reduced by the
High Court from Rs. 20,000 (as awarded by the MACT) to Rs.
10,000; the amount awarded towards loss of love and
affection to the minor daughters was reduced from Rs.
10,000 to Rs. 5,000. However, the amount of Rs. 5,000
awarded by the MACT towards funeral expenses was
maintained.
5
The total compensation awarded to the Claimants was
reduced from Rs. 12,55,000 to Rs. 5,81,440.
6. Aggrieved by the impugned judgment dated 22.07.2016
passed by the High Court, the Claimants have filed the
present civil appeal.
This Court while issuing notice to the Respondents on
23.10.2018, recorded the submission made on behalf of the
Claimants that the deceased was not a Government
employee.
7. We have heard the learned counsel for the parties and
perused the material on record. We find that the impugned
order passed by the High Court bristles with serious factual
inaccuracies :– first, the learned Single Judge wrongly
assumed that the deceased Harish Singh Arya was a
Government employee. This has nowhere been averred by the
Claimants in any of their pleadings. The entire basis of the
judgment is hence misconceived.
On the basis of the aforesaid erroneous assumption, the
High Court has erroneously observed that the deceased was
running a parallel business by plying two taxis, and held that
the income derived from the same could not be taken into
consideration for assessing the compensation. These findings
6
being based on a completely erroneous assumption, are liable
to be set aside.
Second, the High Court determined the income of the
deceased by taking the average of the ITRs filed for the years
200203 at Rs. 54,000 p.a., 200304 at Rs. 52,405 p.a., and
200405 at Rs. 51,500 p.a. The learned Single Judge
disregarded the ITR for the year 200607, wherein the income
of the deceased was shown as Rs. 98,500 p.a. on the ground
that it was allegedly filed almost one year after the death of
the deceased. This finding also is factually incorrect.
A photocopy of the original ITR for the year 200607 was
filed before this Court, bearing the rubber stamp of the
Income Tax Department. It shows that the date of filing the
ITR was 20.04.2007, which is prior to the death of the
deceased which occurred on 18.06.2007. Hence, the High
Court was not justified in disregarding the ITR for the year
200607 while assessing the income of the deceased.
The Appellants have also placed on record a copy of the
ITR for the year 200506, which bears the rubber stamp of
the Income Tax Department, and reveals the income of the
deceased at Rs. 98,100 p.a. during the previous assessment
year.
7
As a consequence, the impugned judgment dated
22.07.2016 passed by the High Court is hereby set aside.
8. On a perusal of the documentary evidence on record i.e.
the ITRs for the assessment years 200506 and 200607,
filed prior to the death of the deceased, which reflect the
income of approximately Rs. 1,00,000 p.a. (as assessed by
the MACT in its Award dated 22.12.2009), we make this the
basis for computing the compensation payable to the
Claimants.
We find that the Courts below have not awarded any
amount towards future prospects, as mandated by the
judgment of the Constitution Bench in National Insurance
Company Limited v. Pranay Sethi & Ors.1
Accordingly, we
award future prospects @40% of the income of the deceased.
Given the fact that the deceased left behind five
dependents, the deduction towards his personal expenses
would be 1/4th as per the judgment of this Court in Sarla
Verma & Ors. v. Delhi Transport Corporation & Anr.2
The multiplier adopted by the MACT and the High Court
at 16 is appropriate.
1 (2017) 16 SCC 680.
2 (2009) 6 SCC 121.
8
With respect to payment of compensation under the
conventional heads, we direct that same be awarded in
consonance with the judgment in Pranay Sethi (supra).
Accordingly, the compensation payable to the
Claimants/Appellants herein is determined as :
i) Income : Rs. 1,00,000 p.a.
ii) Future Prospects : 40%
iii) Deduction towards personal
expenses :
1/4
iv) Total income : Rs. 1,05,000 p.a.
v) Multiplier : 16
vi) Loss of dependency : Rs. 16,80,000
vii) Loss of estate : Rs. 15,000
viii) Funeral expenses : Rs. 15,000
ix) Loss of consortium : Rs. 40,000
Total compensation : Rs. 17,50,000
9. Even though the Claimants/Appellants herein did not file
an Appeal against the Award dated 22.12.2009 passed by the
MACT before the High Court, we deem it appropriate to
enhance the compensation by exercising our jurisdiction
under Article 142 of the Constitution of India in order to do
complete justice between the parties.
10. The Respondent – Insurance Company is directed to pay
the compensation awarded to the Appellants within a period
of twelve weeks’ from the date of this judgment, after
adjusting any amount which may have been paid. The
9
amount payable to the Appellants shall carry Interest @ 7.5%
p.a. from the date of filing the claim petition till the date of
realization.
11. The Civil Appeal is allowed in the aforesaid terms.
All pending Applications, if any, are accordingly disposed of.
Ordered accordingly.
...…...............………………J.
(R. BANUMATHI)
...…...............………………J.
(INDU MALHOTRA)
...…...............………………J.
(ANIRUDDHA BOSE)
June16, 2020;
New Delhi.
10
