1 / 8 2025:CGHC:29597 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1050 of 2020 • Branch Manager, Oriental Insurance Company Ltd, Divisional Office, Ambikapur, District - Sarguja (Chhattisgarh), Through In-Charge, T.P. Hub, T.P. Hub Office, Rama Trade Centre, 1st Floor, Opp. Rajeev Plaza, Near Old Bus Stand, Bilaspur (Chhattisgarh), Pin - 495001. --- Appellant/ Non-applicant No. 3 versus 1. Smt. Urmila W/o Late Balram Rajwade, Aged About 45 Years Occupation - House-Wife, Residents of House No. 125, Ward Number-11, Nawapara, Jhumarpara, District - Surajpur (Chhattisgarh) 2. Ramjit Rajwade, S/o Late Balram Rajwade, Aged About 25 Years Occupation - Agriculture, Residents of House No. 125, Ward Number-11, Nawapara, Jhumarpara, District - Surajpur (Chhattisgarh) 3. Sita Kumari, D/o Late Shri Balram Rajwade, Aged About 23 Years Occupation - Student, Permanent Residents House No. 125, Ward No. - 11, Nawapara, Jhumarpara, District - Surajpur (Chhattisgarh) Present Address Gandhinagar, Thana - Gandhinagar, Tehsil - Ambikapur, District - Surguja (Chhattisgarh) 4. Sopari Lal Rajwade, S/o Late Shri Balram Rajwade Aged About 22 Years Occupation - Student, Permanent Residents House No. 125, Ward No. - 11, Nawapara, Jhumarpara, District - Surajpur (Chhattisgarh) Present Address Gandhinagar, Thana - Gandhinagar, Tehsil - Ambikapur, District - Surguja (Chhattisgarh) ----Claimants/ applicants 5. Sant Kumar Aayam S/o- Hulas Aayam, Aged About 24 Years R/o - Barpara, Thana - Bhatgaon, District - Surajpur (Chhattisgarh)....(Driver) 6. Rambilas Aayam, S/o Sudhan Ram Aged About 37 Years R/o - Barpara, Thana - Bhatgaon, District - Surajpur (Chhattisgarh) .....(Owner) --- Respondents ____________________________________________________________ For Appellants : Mr. Akash Shrivastava, Advocate on behalf of Mr. R.N. Pusty, Advocate For Respondents No. 1 to 4 : Mr. Nishi Kant Sinha, Advocate PAWAN KUMAR JHA Digitally signed by PAWAN KUMAR JHA 2 / 8 Hon'ble Shri Justice Parth Prateem Sahu Order On Board 01/07/2025 1. Appellant-Insurance Company has filed this appeal under Section 173 of the Motor Vehicles Act, 1988 (for short “Act of 1988”) challenging the award dated 03.10.2019 passed by Learned Motor Accident Claims Tribunal, Ambikapur, District Surguja, Chhattisgarh (for short “Claims Tribunal”) in Claim Case No. 55/2019, whereby learned Claims Tribunal allowed the application filed under Section 166 of the Act, 1988 in part and awarded total sum of ₹ 68,94,983/- as compensation in death case and fastened liability to satisfy the amount of compensation upon appellant/ non-applicant No. 3- insurance company. 2. Facts of the case relevant for disposal of this appeal are that on 29.09.2018 at about 06.30 p.m., Balram Rajwade was returning home after grazing cattle. When he reached near Navapara Chowk, non-applicant No. 1/ Respondent No. 5/ driver of motorcycle coming from Datima, while driving his motorcycle (henceforth “offending vehicle”) negligently and rashly, hit Balram Rajwade and caused an accident. In the said accident, Balram Rajwade suffered serious head injuries and died during treatment on 30.09.2018. 3. Appellants-claimants who are widow and children of deceased filed an application under Section 166 of the Act of 1988 seeking compensation of ₹ 1,10,50,000/- pleading therein that on the date of accident deceased was about 48 years of age, was an able bodied person. He was the sole earner in the family. At the time of the accident he was employed in South Eastern Coalfields Limited (SECL), Vishramapur and was earning ₹ 61,894.28/- per month. 4. Respondent No. 5 & 6 / Non-applicant No. 1 & 2 -driver and owner of the offending vehicle submitted their joint reply to the claim application. While 3 / 8 denying the adverse pleadings made therein it was further pleaded that on the date of accident, no accident has been caused by the offending vehicle, deceased Balram Rajwade was going on the middle of the road, a pickup coming from Datima near Navapara Chowk hit Balram Rajwade, causing accident and fled from the spot. At the same time, non-applicant No. 1 also reached the accident spot, while trying to control and stop his motorcycle, he fell down and report was lodged against him. Non-applicant No. 1 has not caused any accident. It is further stated that on the date of accident, non- applicant No. 1 was having all the requisite documents of the vehicle and also the valid and effective driving licence. 5. Respondent No. 6/ Non-applicant No. 3/ Insurance Company filed its reply to the claim application, while denying all the adverse pleadings made in the application, it was further pleaded that applicants have presented a highly exaggerated claim for compensation on false and fabricated grounds. Non- applicant No. 1/ driver of offending vehicle has not caused any accident, but was caused by some unknown vehicle. Apart from this, on the date of accident, the driver of the motor cycle, non-applicant No. 1, was not having a valid and effective driving license. 6. Learned Claims Tribunal, upon appreciation of pleadings and evidence placed on record by respective parties, held that deceased- Balram Rajwade died because of grievous injuries suffered by him in the accident arising out of rash and negligent driving of offending vehicle owned by non-applicant No. 2, driven by non-applicant No. 1 and insured by non-applicant No.3. Breach of conditions of insurance policy was not found to be proved, calculated the amount of compensation and awarded ₹ 68,94,983/- as total compensation with interest @ 7% p.a. from the date of filing of claim application. 7. Learned counsel for appellant-Insurance Company raised sole ground to challenge the impugned award that Claims Tribunal erred in deducting less 4 / 8 amount towards income tax from the gross salary. He contended that Hon’ble Supreme Court in the case of National Insurance Company Limited vs. Indira Srivastava and others reported in (2008) 2 SCC 763 has considered that the income of deceased is to be assessed including perks. Claims Tribunal though has deducted tax, however, the tax of ₹ 20,591/- deducted by the Tribunal is not in accordance with the tax slab prevailing on the date of accident ie., of the year 2018. He submits that as per the tax slab the income up to ₹ 2.50 Lakh is exempted, income above ₹ 2.50 Lakh upto ₹ 5 Lakh is taxable @ 5% and income above ₹ 5 Lakh to 10 Lakh is taxable @ 20%. Therefore total tax would come to ₹ 60,491. Upon deducting the actual tax payable as per the tax slab fixed by the Income Tax Department, the net income of deceased for the purpose of computing the compensation would reduce and accordingly the compensation which is to be awarded to the claimants is also to be reduced. Hence, the appeal be allowed. 8. Learned counsel or Respondents No. 1 to 4- claimants would submit that no document is produced before the Claims Tribunal showing the rate of tax/ tax slab and accordingly the claims Tribunal has computed the income tax from the salary of the deceased. He however submits that he could not dispute the tax slab issued by the Government of India, Ministry of Finance for the Financial Year 2018-19 as mentioned above and relied by the counsel for appellant. 9. I have heard learned counsel for the respective parties and also perused the record. 10. Hon'ble Supreme Court in case of National Insurance Company Limited vs. Indira Srivastava and others reported in (2008) 2 SCC 763 has considered income of victim for the purpose of calculating amount of 5 / 8 compensation, observed that statutory deduction of tax payable must be deducted, and held thus : “19. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contra-distinguished from the said amount of income, the statutory amount of tax payable thereupon must be deducted.” 11. In the case of Ranjana Prakash v. Divisional Manager, reported in (2011) 14 SCC 639 has held as under: “9. ...In Sarla Verma’s case (2009) 6 SCC 121, this Court also stated that income tax paid should be deducted from the annual income to arrive at the “income” which will form the basis for calculating the compensation. The Tribunal did neither of these two things. If both are done, the result would be that there would be no change in the income arrived at by the Tribunal for calculating the compensation. The 30% increase on account of future prospects and the 30% deduction on account of income tax would cancel each other, resulting in the “income” remaining unchanged. As a result, the compensation awarded by the Tribunal also would remain unaltered.” 12. In the case of Chanderi Devi v. Jaspal Singh, reported in (2015) 11 SCC 703, Hon’ble Supreme Court has held as under: “10. We have heard the learned counsel for the parties and perused the record. The courts below have considered the evidence produced on record by the appellants, particularly the passport, salary certificate, income tax certificates and whether or not the deceased was employed in Germany at the time of the accident to ascertain the annual income of the deceased at the time of his death and the courts below found that the same cannot be assessed on the basis of the documents referred to above. The High Court found it to be just and reasonable to take the income of the deceased at the time of his death at Rs 8333 per month, which in our considered view is definitely on the lower side keeping in view that the deceased was employed as a cook in an Indian restaurant in Germany. At the same time, to consider the income of 6 / 8 the deceased at Rs 62,975 per month (i.e. 1145 Euros) as contended by the appellants to calculate the loss of dependency of the appellants would definitely be on the higher side. Hence, on considering the facts, circumstances of the case and plausibly estimating as to how much a cook of similar nature as the deceased would have earned in India in the year 2006, we are of the view that it would be just and reasonable for us to ascertain the income of the deceased at the time of his death at Rs 15,000 per month. By adding 50% of the actual salary as provision for future prospects, the income of the deceased to be considered for calculation of loss of dependency is Rs 22,500 per month i.e. Rs 2,70,000 p.a. Deducting 10% towards income tax the net income comes to Rs 2,43,000 p.a. Further, deducting 1/3rd towards personal expenses and applying the correct multiplier as per the legal principles laid down by this Court in Sarla Verma (supra)...” 13. The income of the deceased as assessed by the learned Claims Tribunal of ₹ 61,663/- per month and ₹ 7,39,956/- per annum is not disputed by the counsel for the parties and therefore the income as assessed by the Claims Tribunal is affirmed and taken for the purpose of deciding this appeal. According to the tax slab filed by counsel for appellant as Annexure A-2 would show that the income up to ₹ 2.50 Lakh is exempted from tax, income exceeding ₹ 2.50 Lakh up to ₹ 5 Lakh is taxable @ 5%, accordingly the tax for ₹ 2.50 Lakh would be ₹ 12,500/-. The income exceeding ₹ 5 Lakh up to ₹ 10 Lakh is taxable @ 10% and therefore the tax on the income exceeding ₹ 5 Lakh would be ₹ 12,500 plus 20% tax on ₹ 2,39,956/-, therefore, 20% of tax on the said income would be ₹ 47,991.2 rounded off as ₹ 47,991/-. From the above, the total tax payable would come to ₹ 60,491/- and therefore the actual tax to be deducted from the income as assessed by the Claims Tribunal would be ₹ 60,491/-. The net annual income of deceased will come to ₹ 6,79,465/- (₹ 7,39,956-₹ 60,491). 14. For the purpose of computing amount of compensation, learned Claims Tribunal has deducted 1/4 towards personal and living expenses, applied 7 / 8 multiplier of 11 and has also added 15% towards loss of future prospects to the actual income of deceased and further awarded ₹ 40,000/- toward loss of consortium to appellant No. 1, ₹ 15,000/- towards loss of estate and ₹ 15,000/- towards funeral expenses. Except the award of compensation under the head of loss of consortium, other calculation made by the Claims Tribunal is in accordance with the decision of Hon’ble Supreme Court in the case of Sarla Verma & others v. Delhi Transport Corp. & anr. reported in (2009) 6 SCC 121 and National Insurance Company Ltd. vs. Pranay Sethi, reported in (2017) 16 SCC 680. The award of compensation under the head of loss of consortium to children and parents of deceased has been considered by Hon’ble Supreme Court in the case of Magma General Insurance Company vs. Nanu Ram alias Chuhuru Ram and others reported in (2018) 18 SCC 130 and held that the children and parents are also entitled for the compensation under the head of loss of parental consortium and filial consortium to the tune of ₹ 40,000/- each. Claims Tribunal failed to award compensation to the claimants under the head of loss of parental consortium to Respondents No. 2 to 4 children, therefore, they are also entitled for ₹ 40,000/- each towards loss of parental consortium, total of which would be ₹ 1,20,000/-. It is ordered accordingly. 15. For the foregoing discussion, the amount of compensation to be awarded to appellants-claimants requires recomputation, which is as under. Particulars Compensation A) Annual income/ dependency of deceased excluding income tax = ₹ 6,79,465/- B) Addition towards loss of future prospects @ 15% (₹ 6,79,465 x 115% = ₹ 7,81,385) C) Deduction of 1/4 towards personal and living expenses (₹ 10,19,198 x 1/4= ₹ 1,95,346); ₹ 7,81,385 - ₹ 1,95,346 = ₹ 5,86,039/- D) Multiplier of 11 ₹ 5,86,039 x 11 = ₹ 64,46,429/- ₹ 64,46,429/- 8 / 8 Loss of Spousal Consortium to Respondent No. 1 ₹ 40,000/- Loss of parental consortium to Respondents No. 2 to 4 (₹ 40,000 each) ₹ 1,60,000/- Loss of estate ₹ 15,000/- Funeral Expenses ₹ 15,000/- Total ₹ 66,76,429/- 16. Now the claimants shall be entitled for total sum of compensation of ₹ 66,76,429/- instead of ₹ 68,94,983/- as awarded by learned Claims Tribunal. Any amount paid to the appellants-claimants pursuant to the impugned award shall be adjusted from the amount of compensation as calculated above. Other conditions of the impugned award shall remain intact. 17. In the result, appeal is allowed in part and the impugned award is modified to the extent as indicated herein-above. Sd/- (Parth Prateem Sahu) Judge pwn