APHC010331872015 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NOs: 2106 of 2015 and 2619 of 2017 [3584] Basireddy Venkata Sesha Reddy and others ...Appellant(s) Vs. R Palani Velu and others ...Respondent(s) ********** CORAM :THE CHIEF JUSTICE LISA GILL SRI JUSTICE CHALLA GUNARANJAN DATE : 10th August 2026 Present: Advocate for Claimants: Sivaprasad Reddy Venati Advocate for Insurer: Smt.T.Radha Rani, representing Harinath Reddy Soma COMMON JUDGMENT: (per Hon’ble Sri Justice Challa Gunaranjan) Since both these appeals preferred under Section 173 of M.V.Act, assailing the judgment and decree dated 03.07.2015 in M.V.O.P. No.519 of 2012, passed by learned I Additional District Judge, Nellore, the same are heard together and disposed of by way of common order. 2. For convenience sake, the parties will hereinafter be referred to as they were arrayed before the Tribunal. 2 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 3. M.A.C.M.A. No.2106 of 2015 is preferred by the claimants seeking enhancement of compensation, whereas, M.A.C.M.A. No.2619 of 2017 by the insurer assailing the determination of compensation as such. 4. The brief facts of the case in a nutshell are as follows: (a) The deceased was aged 28 years and working as Analyst Engineer at Verizon Data Services India Private Limited, Chennai and earning about ₹55,000 per month. Father and elder brother of deceased preferred claim petition seeking compensation. (b) The deceased visited his native place to attend personal work. While so, on 06.04.2012, when he was proceeding on two-wheeler, lorry bearing Registration No.TN 34M 8890, driven by its driver in a rash and negligent manner, dashed against the motorbike in opposite direction on Naidupet - Srikalahasti Highway, due to which the deceased sustained severe injuries and succumbed on the spot. The claim has been preferred against the owner of offending lorry and as well as the insurer. The owner remained ex parte and insurer contested the claim, denying the liability and also the quantum of compensation. (c) The Tribunal has ultimately held that the accident had occurred on account of rash and negligent driving of the driver of 3 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 the offending lorry and therefore, negligence was attributed to the driver of the lorry. The income of deceased was arrived at as ₹31,280/- based on Ex.C.1 – pay slip. Tribunal has awarded future prospects at the rate of 50%. Considering the age of father, multiplier of 11 was applied. Half of the earnings were deducted towards personal expenses. Accordingly, loss of earnings was arrived at. The tribunal also awarded ₹25,000/- towards funeral expenses, ₹5,000/- towards loss of estate and ₹5,000/- towards transportation charges and thus, in total, awarded compensation of ₹28,16,570/- along with interest at the rate of 6% per annum from the date of petition till realization. (d) Both the claimants as well as the insurer have challenged the award in respective appeals. 5. Heard Sri Siva Prasad Reddy Venati, learned counsel for claimants and Smt.T.Radha Rani, learned counsel, representing Sri Harinath Reddy Soma, learned counsel for Insurer. 6. (a) Learned counsel for insurer contended that the quantum of compensation determined by Tribunal is excessive and not just and fair. The Tribunal has taken into consideration even medical expenses reimbursement of ₹9,718/- as part of income, 4 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 which is unjustified as the same would not be recurring and perennial in nature. (b) It is also contended that the Tribunal has arrived at the income of deceased merely relying on Ex.C.1 - pay slip, which would be insufficient and does not establish the exact income of the deceased. (c) Further, it is also concluded that the Tribunal has awarded future prospects at the rate of 50% rather than 40%, considering the age and avocation of the deceased. 7. (a) Conversely, learned counsel for claimants contended that the Tribunal has erred in not including conveyance allowance, lunch allowance and special allowance to the income, which are part of salary package and thus qualified to be income of deceased. Further, he also tried to justify inclusion of medical expenses reimbursement to the income while computing income of deceased. (b) Further, it is contended that the Tribunal has awarded meagre amounts towards various components falling under conventional heads, which are not in consonance with the judgment of the Hon’ble Apex Court in National Insurance 5 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 1 (2017) 16 SCC 680 2 (2009) 6 SCC 121 3 2024 SCC OnLine SC 1872 Company Limited v. Pranay Sethi and others1. (c) Further, it is also contended that the interest awarded at the rate of 6% is on very lower side, rather, the Tribunal ought to have awarded reasonable rate of interest. (d) It is further contended that the Tribunal erred in considering the age of father for applying the multiplier rather than the age of deceased, which is not in line with the judgment of Hon’ble Apex Court in Sarla Verma v. Delhi Transport Corporation2. (e) It is also contended that the Tribunal has deducted income tax at the rate of 10% on the income assessed, despite noticing the fact that under Ex.C.1 - pay slip already there was income tax deduction effected. (f) In support of above submissions, he placed reliance on the following judgments: (i) Judgment of Hon’ble Apex Court in Meenakshi v. Oriental Insurance Company Limited3 (ii) Judgment of Hon’ble Apex Court in Manorma Sinha and another v. Divisional Manager, Oriental Insurance Company Limited and another4 6 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 4 2025 SCC OnLine SC 2241 8. We have considered submissions made by respective counsels and also gone through the material on record. 9. Now, the question that falls for consideration of this Court is: 1. Whether there is any error or perversity in the order passed by the Tribunal in awarding compensation to the claimants and, if so, what is the just and fair compensation to be awarded? 2. To what relief? 10. The liability of insurer is not in question. Both the insurer as well as claimants are aggrieved by the quantum of compensation determined by Tribunal. We would first address submissions of counsel for insurer. 11. The primary argument of learned counsel for insurer is regarding the assessment of income of deceased. It is contended that the Tribunal arrived at the income of deceased without there being sufficient evidence on record. To answer the question, the nature of evidence available before Tribunal has to be looked into. Ex.C.1 is pay slip of deceased for the month of March 2012. The HR Manager of Verizon Data Services India Private Limited was examined by P.W.3 - Advocate Commissioner. As per the said 7 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 evidence, it is stated that the deceased was working as Analyst Engineer in the said company from 08.08.2011 till the date of death and that the last drawn salary of the deceased was ₹54,558/- as per Ex.C.1 - payslip. The Tribunal, based on aforesaid evidence, has come to conclusion that deceased was gainfully employed and there is nothing to disbelieve the evidence of P.W.3. Therefore, it proceeded to determine the income of deceased based on Ex.C.1 - salary pay slip. 12. The Tribunal, however, has considered the income of deceased by merely taking into consideration basic salary, house rent allowance and medical expenses reimbursement alone. All these three components work out to ₹31,218/- (Basic salary - ₹14,333/- + House Rent allowance - ₹7,167/- + Medical Expenses Reimbursement - ₹9,718/-). 13. The allowances as per the pay slip i.e., Conveyance Allowance - ₹1,800/-, Lunch Allowance - ₹2,000/- and Special Allowance - ₹4,452/-, which are emoluments and benefits accruing to the deceased under different heads, were left out for the purpose of computation of loss of income. Therefore, we are of the view that Tribunal erred in excluding the said allowances while arriving at the multiplicand. Having said that, the inclusion of Medical 8 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 Expenses Reimbursement (₹9,718/-), to our mind, appears to be not justified, particularly having regard to the nature of the component. Further, there is no other evidence to suggest that the said component is recurring and perennial and forms integral part of the salary package. Therefore, the Income of the deceased would thus translate to ₹29,752/-. 14. As deceased is aged 28 years and in private employment, 40% of the income has to be added towards future prospects. Further, the claimants are entitled to conventional heads in terms of judgment of the Hon’ble Apex Court in Pranay Sethi’s case1. 15. Insofar as deduction of flat rate of tax @10% is concerned, though learned counsel for claimants contended that since there is a deduction reflected in the pay slip, no further deduction of income tax is permissible, we are not impressed with the said submission. The income of the deceased has now been arrived at taking into consideration various components of the salary, and we have not provided any deduction of income tax as per the pay slip, however, we are inclined to apply the deduction based on the relevant period slab rate. Since deceased died on 06.04.2012, we consider it apt to apply the tax rate as applicable for assessment year 2012-13 (Financial Year – 2011-12). 9 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 Income Tax Computation – Assessment Year 2012-2013 Financial Year 2011-2012 Monthly income ₹29,752.00 Annual income (₹29,752 × 12) ₹3,57,024.00 Tax Slab Rate Taxable Amount Tax Up to ₹1,80,000 0% ₹1,80,000.00 ₹0.00 ₹1,80,001 to ₹5,00,000 10% ₹1,77,024.00 ₹17,702.40 16. The Tribunal has taken multiplier of 11 considering the age of father of the deceased, which is incorrect, rather, the multiplier ought to be applied considering the age of deceased himself. 17. Therefore, the compensation stands revised as under: Compensation Heads Amount Awarded In accordance with Monthly Income ₹29,752/- Yearly Income ₹3,57,024/- Less – Income Tax ₹3,57,024/- - ₹17,702/- = ₹3,39,322/- Future Prospects (Age being 28 years) 40% of ₹3,39,322/- = ₹1,35,729/- National Insurance Co. Ltd v. Pranay Sethi (2017) 16 SCC 680 Paras 37, 39, 41, 42 and 59.4 Deduction (1/2) ₹4,75,051/- - ₹2,37,525/- = ₹2,37,526/- Multiplier (17) ₹2,37,526/- x 17 = ₹40,37,942/- Loss of Income of the deceased ₹40,37,942/- Loss of Estate ₹18,150/- (with 10% increase every 3 years from 2017) National Insurance Co. Ltd v. Pranay Sethi (2017) 16 SCC 680 Paras 37, 39, 41, 42 and 59.4 Loss of Funeral Expenses ₹18,150/- (with 10% increase every 10 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 3 years from 2017) Loss of Consortium ₹48,400/- x 2 = ₹96,800/- (with 10% increase every 3 years from 2017) United Insurance Co.Ltd. v. Satinder Kaur (2021) 11 SCC 780 Para 37.12 Rajwati alias Rajjo and Ors v. United India Insurance Company Ltd. And Ors. 2022 SCC OnLine SC 1699 Para 34 Sadhana Tomar & Ors. Ashok Khushwaha & Ors. 2025 SCC OnLine SC 554 Para 17 Total ₹41,71,042/- 18. In the result, both the appeals filed by the claimants and insurer are disposed of in the following terms: i) The claimants/respondents are granted revised compensation of ₹41,71,042/- as just and fair, with interest @ 6.5% per annum thereon from the date of claim petition till realization; ii) Out of the revised compensation amount, the 1st claimant – father is entitled for ₹34,30,600/- and 2nd claimant – elder brother is entitled for ₹7,40,442/-. 11 HCJ & CGR, J MACMA Nos.2106 of 2015 & 2619 of 2017 iii) The insurer is directed to deposit the amount as aforesaid with interest and costs, adjusting the amount already deposited/paid, if any, before the Tribunal within one month. iv) On such deposit being made, the claimants are entitled to withdraw their respective shares as per the apportionment made above. There shall be no order as to costs. As a sequel, miscellaneous petitions pending in these appeals, if any, shall stand closed. LISA GILL, CJ CHALLA GUNARANJAN, J SS