MACA Nos.966 & 1243 of 2023 IN THE HIGH COURT OF ORISSA AT CUTTACK MACA Nos.966 & 1243 of 2023 (In the matter of application under Section-173 of M.V. Act, 1988). MACA No.966 of 2023 Ramakrishna Upadhyay & another … Appellants Mr. D.C. Dey, Advocate -versus- Rajesh Kumar Pandey & Another … Respondents Mr. B. Dasmohapatra, Advocate(R-2) MACA No.1243 of 2023 Sr. Divisional Manager, M/S. the New India Assurance Co. Ltd., … Appellant Mr. B. Dasmohapatra, Advocate -versus- Ramakrishna Upadhyay & another … Respondents Mr. D.C. Dey, Advocate(R-1 & 2) CORAM: JUSTICE G. SATAPATHY DATE OF HEARING & JUDGMENT: 06.03.2026 G. Satapathy, J. 1. Since these two appeals involve common question of facts and law, the same are taken up and heard together and disposed of by this common judgment. 2. The impugned judgment dated 16.09.2023 passed by learned 3rd Motor Accident Claims Tribunal, Cuttack (hereinafter referred to as “the learned tribunal) in MAC Case No.1258 of 2019 is under challenge in both MACA Nos.966 & 1243 of 2023 these appeals filed U/S.173(1) of the Motor Vehicles Act, 1988 (in short “the Act”). 2.1 By the impugned judgment, the Insurance Company-M/S. New India Assurance Co. Ltd. (in short the “insurer”) is directed to pay a sum of Rs. 1,14,51,118/- together with simple interest @ 6% per annum w.e.f. 14.10.2019 till its actual realization to the claimants- applicants as compensation for the death of one Suryakant Upadhyay (hereinafter referred to as “the deceased”) in a motor vehicular accident with further stipulation of payment of penal interest @ 12% per annum on the compensation amount so assessed, if the same is not paid within two months from the date of passing of the impugned judgment. 3. These two appeals arise out of one proceeding for compensation before learned tribunal for the death of the deceased in vehicular accident that took place on 03.09.2019 at about 10.50 AM when the deceased was coming from NTPC Darlipali to Sundargarh along with his colleague namely Susmita Kaviraj on a scooty bearing Registration No.TS-22A-7481, suddenly a trailer bearing Registration No. OD-16-D-3941 MACA Nos.966 & 1243 of 2023 (hereinafter referred to as the “offending vehicle”) coming in a rash and negligent manner and dashed the scooty at Sadar Chowk, Bandhapali, Sundargarh resulting in death of the deceased. The accident was in fact registered vide Sundargarh Sadar PS Case No. 170 of 2019 which culminated in submission of charge sheet, but the legal representatives(claimants) of the deceased approached the learned tribunal in an application U/S. 166 of the Act, for grant of compensation towards death of the deceased by impleading the owner and the insurer of the offending vehicle and claiming the deceased to be earning Rs. 70,439/- per month from his salary and the accident causing loss of not only the life of their sole bread earner, but also for losing the amount so contributed by the deceased to the family. Accordingly, the claim of the applicants was registered vide MAC Case No. 1258 of 2019. 4. In response to the notice in MAC Case No. 1258 of 2019, the owner of the offending vehicle did not appear and he was accordingly set exparte, but the insurer of the offending vehicle contested the claim by filing written statement denying its liability and inter-alia MACA Nos.966 & 1243 of 2023 asserting the claim to be not maintainable either in law or facts on the ground of deceased dying in the motor vehicular accident due to his own negligence. In addition, the insurer in its written statement had not only disputed the age, occupation and income the deceased, but also had disowned its liability to indemnify the owner of the offending vehicle for the driver being not in possession of a valid and effective driving license. 5. On inter se pleadings between the parties, the learned tribunal stuck as many as five issues and allowed the parties to lead the evidence. The claimant accordingly examined three witnesses vide PW1 to PW3 and relied upon 23 documents under Ext.1 to Ext.23 as against no evidence whatsoever by the insurer. After analyzing the evidence on record upon hearing the parties, the learned tribunal passed the impugned judgment directing the insurer to pay the compensation amount as indicated supra. Being aggrieved with the impugned judgment, the claimants-applicants preferred appeal in MACA No.966 of 2023 challenging the quantum of compensation, whereas the insurer challenged such impugned judgment in the appeal in MACA No.1243 of 2023 on various grounds MACA Nos.966 & 1243 of 2023 including grant of compensation to the claimant ignoring the rehabilitation assistance employment provided to one of the claimants; imposition of penal interest and last but not the least, the quantum of compensation awarded by ignoring to deduct the income tax amount required to be paid by the Deceased. 6. Heard, Mr. Durga Charan Dey, learned counsel for the claimants-appellants in MACA No.966 of 2023 and Respondent No.1 & 2 in MACA No.1243 of 2023 and Mr. Bijoy Dasmohapatra, learned counsel for the Insurer- appellant in MACA No.1243 of 2023 and Respondent No.2 in MACA No.966 of 2023. None appears for the owner- respondent despite being duly noticed in the appeals. 7. Admittedly, the appeal filed by the insurer seeks to challenge the impugned judgment for ignoring to take into account the rehabilitation assistance employment under NTPC Employees’ Family Economic Rehabilitation Scheme (in short “NEFERS”) by one of the claimants, but such assertion of the appellant appears to be imaginary inasmuch as neither there is any evidence to indicate that any of the claimants has/had availed the benefit under the NEFERS which is meant for providing rehabilitation MACA Nos.966 & 1243 of 2023 assistance employment and the same is in fact confirmed by the letter issued by the Sr. Assistant Officer(HR), NTPC vide reference No. 1070/NTPC DLCMP/2024/HR dated 25.04.2024 in which it is stated that as the deceased was a trainee at the time of accident, he did not meet the eligibility criteria outlined in clause-3.1 of the NEFERS and, therefore, he was not entitled to the benefit under the said scheme. In view of the aforesaid fact and in absence of any evidence, it is made clear that none of the claimants-applicant has availed any benefit under NEFERS so as to dispute the impugned judgment on that score. 8. On coming back to the next challenge of the insurer, it appears that the learned tribunal has imposed penal interest @ 12% per annum, if the award is not satisfied within two months of the passing of the impugned judgment, but such observation of the learned tribunal is unsustainable in the eye of law, since Section 171 of the Act provides for awarding interest on the award, but law does not contemplate about imposition of default penal interest and thereby, the imposition of penal interest on the award appears to be unsustainable in the eye of law and is accordingly, waived out. MACA Nos.966 & 1243 of 2023 9. On coming to the core issues of the quantum of compensation which is challenged by both the insurer and the claimants, it appears that the learned tribunal has computed the compensation to the claimants under issue No.3 at Paragraph-8 of the impugned judgment and the learned tribunal has accordingly took the income of the deceased @ Rs.77,940/- per month and net pay of Rs. 70,439/- after deducting Rs. 7,501/- towards Income tax, professional tax and Sneha Kiran Contribution, but the learned tribunal has erred in deducting income tax from the monthly salary of the deceased inasmuch as income tax is calculated on the annual income of the individual employee. In this case, the claimant has proved the monthly salary of the deceased for the month of July & August-2019 under Exts. 21 and 22 which could not be validly disputed by the insurer and it is found from the impugned judgment that the salary of the deceased for the month of July-2019 was Rs.77,940/- and, therefore, the gross annual income of the deceased would come around Rs. 77,940/-X 12=Rs. 9,35,280/-. Adding 50% to the aforesaid gross annual income of the deceased towards future prospects, it would come around Rs. MACA Nos.966 & 1243 of 2023 9,35,280/- + Rs. 4,67,640/- (50% of 9,35,280/-) =Rs. 14,02, 920/-, but since the deceased died as bachelor, 50% of 14,02, 920/ = Rs.7,01,460/- is to be deducted towards his personal and living expenses and the yearly loss of dependency of the claimants would come to Rs.7,01,460/-. Since the annual income of the deceased was considered for the Financial Year of 2019-20, assessment year of 2020-21 would be considered relevant, but no evidence or material has been produced by either of the parties to show any tax paid by the deceased for the assessment year 2020-21. In absence of any evidence and materials, this Court, however, considers it proper to deduct 10% from the aforesaid amount towards income tax of the deceased and thereby, the net amount would be come around Rs.7,01,460/- (minus)10% of Rs.7,01,460/- = Rs. 6,31,314/- which is further liable for deduction of Rs. 8,400/- (Rs. 2400/- + Rs. 6,000/- which were the amount paid by the deceased annually towards professional tax and Sneha Kiran Contribution in addition to his income tax) and thereby, the net amount come to Rs. 6,31,314/- (minus) Rs. 8,400/- = Rs. 6,22,914/- which amount eligible for MACA Nos.966 & 1243 of 2023 calculation of loss of dependency of the claimants. Accordingly, the loss of dependency of the claimants is calculated at Rs. Rs. 6,22,914/- X 18(multiplier as the deceased was aged about 22 years at the time of his death)=Rs. 1,12,12,452/- and by adding to it, a sum of Rs. 98,000/- which includes 10% increase for every three years for four escalation, towards general damages under conventional heads of loss of estate, loss of consortium and funeral expenses, the net compensation amount payable to the claimants would come around Rs. 1,12,12,452/- + Rs. 98,000/- =Rs. 1,13,10,452/- together with simple interest @ 6 % per annum w.e.f 14.10.2019 till its actual realization. 10. In the result, the appeal by the insurer in MACA No.1243 of 2023 is allowed in part, but the appeal by the claimants in MACA No. 966 of 2023 is dismissed on contest, however, there is no order as to costs. Accordingly, the impugned judgment is modified to the extent indicated above and the insurer is hereby directed to pay the modified compensation amount of Rs. 1,13,10,452/- together with simple interest @6% per annum w.e.f 14.10.2019 till its actual realization to the MACA Nos.966 & 1243 of 2023 claimants-respondents by depositing the same before the learned Tribunal within eight weeks hence. On such deposit of modified compensation amount, the same shall be disbursed to the claimants proportionately in terms of the award and the appellant-insurer be refunded back with the statutory deposit together with the accrued interest thereon. (G. Satapathy) Judge Orissa High Court, Cuttack, Dated the 6th day of March, 2026/Priyajit