Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2050 OF 2009
[Arising out of SLP (Civil) No. 24394 of 2007]
Raghuvir Singh Matolya & Ors. …Appellants
Versus
Hari Singh Malviya & Ors. …Respondents
J U D G M E N T
S.B. SINHA, J :
1. Leave granted.
2. Whether dearness allowance and house rent allowance payable to a
deceased should be taken into consideration for the purpose of computing
the amount of compensation payable in terms of the provisions of Section
166 of the Motor Vehicles Act, 1988 (for short “the Act”) is the question
involved in this appeal which arises out of a judgment and order dated
2
14.02.2007 passed by the High Court of Madhya Pradesh in M.A. No. 2177
of 2005.
3. The basic fact of the matter is not in dispute.
The deceased Puspa Matolya was travelling in a Tata Sumo on the
fateful day, viz., 30.11.2002 at about 11.00 a.m. It dashed against a mango
tree. She died on the spot.
Indisputably, the deceased was an Assistant teacher in a primary
school. The said school was a State-run one. She was to superannuate on
28.02.2011. She at the time of her death was aged about 52 years and 9
months. The salary certificate produced on behalf of the claimants –
appellants showed that she was drawing a monthly salary of Rs.8611/-
(Rs.6050/- basic pay, Rs.2481/- dearness allowance and Rs.80/- house rent)
per mensum.
The Tribunal, however, taking into consideration only the basic pay
passed an award awarding compensation for a sum of Rs. 3,38,000/-. For
the said purpose, the Tribunal applied the multiplier of 7.
3
An appeal in terms of Section 173(1) of the Act was preferred by the
appellants. The High Court, by reason of the impugned judgment, enhanced
the amount of compensation to Rs. 5,28,000/- by applying the multiplier of
11.
Still not satisfied with the quantum of compensation awarded in their
favour, the appellants are before us.
4. Ms. Pragati Neekhra, learned counsel appearing on behalf of the
appellants would contend that the Tribunal as also the High Court
committed a serious error as they failed to take into consideration that in
computing the net income of the deceased, dearness allowance as also the
house rent allowance should be taken into consideration.
5. Mr. Atul Nanda, learned counsel appearing on behalf of the
respondents, on the other hand, would support the impugned judgment.
6. Before the learned Tribunal, salary as also a pension certificate was
produced.
4
7. Dearness allowance, in our opinion, should form part of income.
House rent allowance is paid for the benefit of the family members and not
for the employee alone. What would constitute an income, albeit in a
different fact situation, came up for consideration before this Court in
National Insurance Co. Ltd. v. Indira Srivastava and Others [(2008) 2 SCC
763] wherein it was held:
“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 contradistinguished to the ones
which were for his benefit. We may, however,
hasten to add that from the said amount of income,
the statutory amount of tax payable thereupon
must be deducted.
20. The term “income” in P. Ramanatha Aiyar’s
Advanced Law Lexicon (3rd Edn.) has been
defined as under:
“The value of any benefit or perquisite whether
convertible into money or not, obtained from a
company either by a director or a person who has
substantial interest in the company, and any sum
paid by such company in respect of any obligation,
which but for such payment would have been
payable by the director or other person aforesaid,
occurring or arising to a person within the State
from any profession, trade or calling other than
agriculture.”
5
It has also been stated:
“ ‘Income’ signifies ‘what comes in’ (per
Selborne, C., Jones v. Ogle). ‘It is as large a word
as can be used’ to denote a person’s receipts (per
Jessel, M.R., Re Huggins). Income is not confined
to receipts from business only and means
periodical receipts from one’s work, lands,
investments, etc. Secy. to the Board of Revenue,
Income Tax v. Al. Ar. Rm. Arunachalam Chettiar
& Brothers. Ref. Vulcun Insurance Co. Ltd. v.
Corpn. of Madras.”
21. If the dictionary meaning of the word
“income” is taken to its logical conclusion, it
should include those benefits, either in terms of
money or otherwise, which are taken into
consideration for the purpose of payment of
income tax or professional tax although some
elements thereof may or may not be taxable or
would have been otherwise taxable but for the
exemption conferred thereupon under the statute.”
To the same effect is the decision of this Court in Oriental Insurance
Co. Ltd. v. Ram Prasad Varma & Ors. [2009 (1) SCALE 598].
8. We, therefore, are of the opinion that ‘Dearness Allowance’ and
‘House Rent Allowance’ payable to the deceased should have been included
for determining the income of the deceased and consequently the amount of
compensation.
6
9. For the reasons aforementioned, we direct that in calculating the
amount of compensation, the dearness allowance as also the house rent
allowance should also be taken into consideration.
10. The matter is remitted to the trial court. An award may be passed
accordingly. The appeal is allowed with the aforementioned directions.
There shall, however, be no order as to costs.
………………………….J.
[S.B. Sinha]
..…………………………J.
[Dr. Mukundakam Sharma]
New Delhi;
March 31, 2009