National Insurance Company Ltd vs. Meena Devi And Ors

NEUTRAL CITATION NO: 2022/DHC/004951

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Reserved on: 14.10.2022
Pronounced on: 17.11.2022
+ MAC.APP. 289/2013
NATIONAL INSURANCE COMPANY LTD...... Appellants
Through: Mr. Manoj Ranjan Sinha,
Advocate.
versus

MEENA DEVI AND ORS ..... Respondents
Through: Mr. S.N. Parashar, Advocate.
CORAM:
HON’BLE MR. JUSTICE GAURANG KANTH
J U D G M E N T

GAURANG KANTH, J.

1. The Appellant has preferred the present Appeal challenging the
award dated 21.12.2012 (“ impugned award ”) passed by the
learned Presiding Officer, Motor Accidents Claims Tribunal-II,
Dwarka Courts, New Delhi whereby the learned Claims Tribunal
was pleased to award a compensation of Rs. 21,44,916/- in favour
of the Claimants (Respondent Nos.1-5) with an interest at the rate
of 7.5% per annum from the date of filing of the claim petition till
its realisation.
2. On 25.05.2011, Mr. Krishnan Nandan Kumar, the deceased, was
travelling in a motorcycle as a pillion rider with his friend
Mr.Yatender Kumar when a Maruti car bearing number DL-9CQS-
0498 driven by Mr. Arvind Kumar Jain (Respondent No.6)
collided with the motorcycle, as a result of which the motorcycle
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toppled and Mr. Krishnan Nandan Kumar came under the fore
wheel of the offending vehicle. The owner of the offending car was
Elecon Cargo Pvt. Ltd. (Respondent No. 7) and the car was insured
by National Insurance Company Ltd.
3. Mr. Krishnan Nandan Kumar was taken to AIIMS Trauma Centre
where he succumbed to his injuries. He was 25 years old at the
time of his death and was employed with T. M. Inputs & services
Private Ltd. as a shop demonstrator/promotor where he was
receiving a CTC of Rs. 11,778/-. He was survived by his mother,
father, two unmarried sisters and a minor brother.
4. The Tribunal has awarded compensation under the following
heads:-

S UBMISSION ON BEHALF OF THE A PPELLANT
5. Mr. Manoj Ranjan Sinha, learned counsel appearing on behalf of
the Appellant seeking setting aside of the impugned Award on 3
major grounds. Firstly, the learned counsel submits that the
calculation of „ Loss of Dependency‟ was inapposite on several
levels due to the complete lack of congruence with the prevailing
law as substantiated in Sarla Verma & Ors vs Delhi Transport
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Corp.& Anr . reported as 2009 (6) SCC 121 . Learned counsel for
the Appellant further submits that the father and the siblings of the
deceased were not his dependents by virtue of which they will not
be entitled to any compensation. It was further contended that only
the mother of the deceased was his dependent as the other
members of the family would be dependent on their father.
6. Secondly, the learned counsel for the Appellant argued that the
learned Claims Tribunal had erred in its appraisal of the income
of the deceased. It was averred that the learned Claims Tribunal
had assessed the income from the Income Tax Return for the
assessment year 2010-2011, which constitutes his previous
income instead of the income earned at the time of death. Learned
counsel for the Appellant challenged the income assessment by
the learned Claims Tribunal to state that the previous income of
the deceased is extraneous to the income of the deceased at the
time of his demise.
7. Thirdly, the learned counsel for the Appellant contended that in
view of the dicta of the Hon‟ble Supreme Court in Sarla Verma
(Supra) , the learned Claims Tribunal ought to have deducted 50%
of the income towards personal expenses as the deceased was a
bachelor. In order to buttress this contention, learned Counsel
relied upon the following Para of Sarla Verma (Supra) :-
“14. Though in some cases the deduction to be made towards
personal and living expenses is calculated on the basis of
units indicated in Trilok Chandra, the general practice is to
apply standardized deductions.
Having considered several subsequent decisions of this
Court, we are of the view that where the deceased was
married, the deduction towards personal and living
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expenses of the deceased, should be one-third (1/3rd) where
the number of dependent family members is 2 to 3, one-
fourth (1/4th) where the number of dependant family
members is 4 to 6, and one-fifth (1/5th) where the number
of dependant family members exceed six .
15. Where the deceased was a bachelor and the claimants
are the parents, the deduction follows a different principle.
In regard to bachelors, normally, 50% is deducted as
personal and living expenses, because it is assumed that a
bachelor would tend to spend more on himself. Even
otherwise, there is also the possibility of his getting married
in a short time, in which event the contribution to the
parent/s and siblings is likely to be cut drastically. Further,
subject to evidence to the contrary, the father is likely to have
his own income and will not be considered as a dependant
and the mother alone will be considered as a dependent. In
the absence of evidence to the contrary, brothers and sisters
will not be considered as dependents, because they will
either be independent and earning, or married, or be
dependant on the father.
Thus even if the deceased is survived by parents and
siblings, only the mother would be considered to be a
dependant, and 50% would be treated as the personal and
living expenses of the bachelor and 50% as the contribution
to the family. However, where family of the bachelor is
large and dependant on the income of the deceased, as in a
case where he has a widowed mother and large number of
younger non-earning sisters or brothers, his personal and
living expenses may be restricted to one-third and
contribution to the family will be taken as two-third . ”

8. With these submissions, learned counsel for the Appellant prays
for the modification of the impugned Award.
S UBMISSION ON BEHALF OF THE R ESPONDENTS
9. Mr. S.N. Parashar, learned counsel for Respondent Nos.1-5
submitted that in view of the law laid down by the Hon‟ble
Supreme Court in National Insurance Company Limited vs
Pranay Sethi reported as (2017) 16 SCC 680, the Respondents
are entitled for the future prospects. In order to substantiate his
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argument, relied upon the following para of Pranay Sethi
(Supra) :-
“59.3. While determining the income, an addition of 50% of
actual salary to the income of the deceased towards future
prospects, where the deceased had a permanent job and was
below the age of 40 years, should be made. The addition
should be 30%, if the age of the deceased was between 40 to
50 years. In case the deceased was between the age of 50 to
60 years, the addition should be 15%. Actual salary should
be read as actual salary less tax.
59.4. In case the deceased was self-employed or on a fixed
salary, an addition of 40% of the established income should
be the warrant where the deceased was below the age of 40
years. An addition of 25% where the deceased was between
the age of 40 to 50 years and 10% where the deceased was
between the age of 50 to 60 years should be regarded as the
necessary method of computation. The established income
means the income minus the tax component.”

10. With this submission, learned counsel for Respondent Nos.1-5
prays for the modification of the impugned Award as per the
prevailing law of the land.
L EGAL A NALYSIS
11. Learned counsel for the Appellant submitted that the learned
Claims Tribunal erred in considering the father, 2 unmarried sisters
and one minor brother as dependents of the deceased. According to
the Appellant, only the mother can be treated as dependent of the
deceased.
12. PW-1/Mr. Rajender Singh (Respondent No.2), the father of the
deceased, in his chief examination categorically stated that „ I say
that my son used to pay his entire earning to me for household
were fully dependent on the income of the deceased
expenses. We
and have no any other source of income. After the untimely death of
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my son the entire family has been rendered shelterless and the
unmarried sister and Brother have been deprived of the guidance
for their future prospects‟ . In his cross-examination, PW-1
reiterated that „ Presently I am jobless. Earlier I was an
agriculturist‟ . This fact was not rebutted or disproved by the
Appellant. The younger brother of the deceased, Aditya Raj, was a
class 10 student at the time of the demise of Mr. Krishna Nandan
Kumar. The school ID card of Aditya Raj and a letter from the
school management attesting to the fact that he was a bonafide
student of the school was exhibited before the learned Claims
Tribunal. The college library ID card of his unmarried sister
Anupam Kumari and the college ID card of the other sister/Anjali
Kumari were also exhibited.
13. It is thus cardinal to determine the contours of „dependency‟ in
relation to all the legal representatives of the deceased. The
Hon‟ble Supreme Court in the case of Magma General Insurance
Co. Ltd. Vs Nanu Ram Alias Chuhru Ram & Ors., Civil Appeal
No. 9581 of 2018 decided on 18.09.2018, held as follows:-
“8.2. With respect to the issue of deduction from the income of
the deceased, the Insurance Company contended that the
deduction ought to have been ½, and not 1/3rd, since the
deceased was a bachelor.

This issue has been dealt with in paragraph 32 of the
judgment in Sarla Verma (supra) wherein this Court
took the view that where the family of the bachelor
is large and dependent on the income of the deceased, as in a
case where he has a widowed mother and large number of
younger non-earning sisters or brothers, his personal and
living expenses may be restricted to one-third, as
contribution to the family will be taken as two-third.

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Considering that the deceased was living in a
village, where he was residing with his aged father who was
about 65 years old, and Respondent No. 2 - an unmarried
sister, the High Court correctly considered them to be
dependents of the deceased, and made a deduction of 1/3rd
towards personal expenses of the deceased.

The judgment of the High Court is, therefore,
affirmed on this count.”
(emphasis supplied)

14. In the present case, the father of the deceased was approximately
aged 52 years at the time of the accident and claimed to be
unemployed. The deceased left behind his mother, unemployed
father, 2 unmarried sisters and one minor brother, who was
studying at the time of the unfortunate demise of the deceased.
Since there is no proof adduced to the contrary, this Court is
inclined to accept the contention of the Claimants that the father
and siblings were also dependents of the deceased. Thus, entitling
Respondent Nos. 1-5 to claim compensation as the dependents of
the deceased.

15. The second argument raised by the Appellant was that the learned
Claims Tribunal had erroneously taken the income of the deceased
based on the ITR filed by him during the Assessment year 2010-
2011. According to the Appellant, the said figure does not depict
the correct salary of the deceased.
16. From the perusal of the record, it is evident that the deceased was
under the employment of TM Inputs Services Private Limited at
the time of his demise. The letter of appointment (Ex. PW3/2)
issued by TM Inputs Services Private Limited specifies the joining
date of the deceased as 13.05.2011, i.e, just 12 days prior to his
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unfortunate death. As per the said appointment letter, the salary of
the deceased was Rs.11, 778/- with Rs.2,000/- variables. The father
of the deceased, PW-1 in his evidence categorically stated that „ On
the one hand he was employed with M/s. TM Inputs &Service Pvt
Ltd, Gurgaon, where he was getting salary Rs. 11,778/- p.m.,
which was given against salary slip and besides this he was
running coaching classes at home from which source, he had a set
income of Rs. 12000/- to Rs. 15000/- per month. Thus he was
earning Rs. 24,696/- per month at an average.‟ There is no
evidence adduced by the Appellant to controvert the fact that the
deceased was conducting the coaching classes and earning from
that source also.
17. In any case, the learned Claims Tribunal has taken the income of
the deceased from the ITR filed by him during the assessment year
2010-2011. The deceased in his ITR for the assessment year 2010-
2011 categorically disclosed that his total income of Rs. 1,55,550/-
was from „Private job + Tuition & Coaching‟ . He joined his new
job on 13.05.2011, just 12 days prior to his unfortunate death. His
father categorically stated that the deceased was working with M/s.
TM Inputs & Service Pvt Ltd, Gurgaon, where he was getting a
salary of Rs. 11,778/- p.m., and in addition, he was running
coaching classes at home from which he used to earn Rs. 12000/-
to Rs. 15000/- per month. Hence it is very much evident that after
his new job, his actual income would have been much more than
the income of the previous year. However, since the deceased met
with his unfortunate death on 25.05.2011, the learned Tribunal has
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rightly taken his income from his previous assessment year 2010-
2011.
18. The annual income of the deceased as per the ITR for the
assessment year 2010-2011 was Rs.1,55,550/-. Since his income
was less than the taxable limit, there is no income tax to be paid.
Hence the actual income of the deceased was rightly taken by the
learned Claims Tribunal as Rs.1,55,550/- p.a. and monthly income
as Rs. 12,962.5/- p.m.

19. The next submission of the learned counsel for the Appellant is
th
that the learned Claims Tribunal erred in making 1/4 deduction
towards the personal expenses. Relying upon Sarla Verma
(Supra) , learned counsel for the Appellant submitted that 50% of
the income of the deceased to be deducted towards personal
expenses.
20. This court is conscious of the dicta of Hon‟ble Supreme Court in
Sarla Verma (Supra) , wherein the Hon‟ble Apex Court held that if
the deceased who is a bachelor is survived by parents and siblings,
only the mother would be considered to be a dependant, and 50%
would be treated as the personal and living expenses of the
bachelor and 50% as the contribution to the family . The Hon‟ble
Supreme Court in Sarla Verma (Supra) further held that where
family of the bachelor is large and dependant on the income of the
deceased, as in a case where he has a widowed mother and large
number of younger non-earning sisters or brothers, his personal
and living expenses may be restricted to one-third and contribution
to the family will be taken as two-third .
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21. In the present case, the mother of the deceased is not widowed. Yet
it cannot be ignored that his father was unemployed and dependent
on the earnings of his son. Further, he had 3 younger siblings to
support. A similar stance can be observed in the judgement of N.
Jayasree and ors Vs Cholamandalam MS General Insurance
Company Ltd , Civil Appeal No. 6451 OF 2021 decided on
25.10.2021 , wherein it was held as follows:-
“17. It is settled that percentage of deduction for personal
expenses cannot be governed by a rigid rule or
formula of universal application. It also does not depend
upon the basis of relationship of the claimant with the
deceased. In some cases, the father may have his own
income and thus will not be considered as
dependent. Sometimes, brothers and sisters will not be
considered as dependents because they may either be
independent or earning or married or be dependent on the
father. The percentage of deduction for personal expenditure,
thus, depends upon the facts and circumstances of each
case.”

22. In the present case, the Respondents have established their
dependency on the deceased before the learned Claims Tribunal.
Thus, by applying the inferences in Sarla Verma (Supra) and N.
Jayasree (Supra) , it is pragmatic to deduct 1/3rd of the income of
the deceased towards personal expenses.
23. This Court noticed that the learned Tribunal in the instant case
while calculating the „ Loss of Dependency‟ , failed to consider the
future prospects of the deceased . The decision in Sarla Verma
(Supra) was examined by the Hon‟ble Supreme Court in Pranay
Sethi (Supra ) , where the following was affirmed:-
“59.3. While determining the income, an addition of 50% of
actual salary to the income of the deceased towards future
prospects, where the deceased had a permanent job and was
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below the age of 40 years, should be made. The addition
should be 30%, if the age of the deceased was between 40 to
50 years. In case the deceased was between the age of 50 to 60
years, the addition should be 15%. Actual salary should be
read as actual salary less tax.
59.4. In case the deceased was self-employed or on a fixed
salary, an addition of 40% of the established income should
be the warrant where the deceased was below the age of 40
years. An addition of 25% where the deceased was between the
age of 40 to 50 years and 10% where the deceased was
between the age of 50 to 60 years should be regarded as the
necessary method of computation. The established income
means the income minus the tax component.”

24. The deceased was 25 years at the time of his death and was on a
fixed salary. Thus, future prospects of 40% have to be added to
arrive at the future income of the deceased. Hence the future
income of the deceased for the purpose of the calculation of Loss
of Dependency would be Rs. 12,962.5/- p.m + 40% of
Rs.12,962.5/- = Rs. 18147.5/- p.m
25. The other arguments raised by the learned counsel for the parties
are purely legal and based on the law settled by the Hon‟ble Apex
Court in the case of Pranay Sethi (Supra) and in the case of Sarla
Verma (Supra)
26. In the case of Pranay Sethi (Supra) , the Hon‟ble Supreme Court
has held that for the conventional heads, namely, „ Loss of Estate ‟,
Loss of Consortium ‟ and „ Funeral Expenses ‟ the amount of
compensation is fixed at Rs. 15,000/-, Rs. 40,000/- and Rs.15,000/-
, respectively with an increase of 10% after a period of 3 years.
27. The Hon‟ble Supreme Court, in the case of United India
Insurance Company Ltd Vs Satwinder Kaur reported as (2021) 11
SCC 780, by taking cognisance of the holdings in Pranay Sethi
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(supra) and Magma General Insurance Co. Ltd. (Supra) held that
the sum towards Loss of Consortium must be enured to the benefit
of the dependents of the deceased. Since compensation towards
Loss of Love and Affection is subsumed in Loss of Consortium , no
separate sum shall be awarded under such a head. In view of the
law laid down by the Hon‟ble Apex Court in Magma General
Insurance Co. Ltd. (Supra), this Court is of the considered view
that even the siblings of the deceased are entitled for the
compensation under the head „Loss of consortium‟.
28. In view of the above discussion, the impugned Award dated
21.12.2012 is modified to the following extent:
i. „ Loss of dependency ‟ is calculated as
1. Rs. 12,962.5/- + 40% (Rs. 5185/-) = Rs. 18,147.5/-
2. Rs. 18,147.5/ - less 1/3 deduction (Rs. 6,049.16/-) =
Rs. 12,098.34/-
3. Rs. 12,098.34/-X 12 X18 = Rs. 26,13,241.44/-
ii. „ Loss of Consortium ‟ Rs. 44,000 X 5 = Rs. 2,20,000/-
iii. „ Loss of Estate ‟ = Rs. 16,500/- .
iv. „ Funeral Expenses = Rs. 16,500/-
v. Compensation under the head „Care and Guidance‟ i.e. „ Love
and Affection .‟ = Nil.
vi. Total compensation to be paid to claimants is;
Rs. 26,13,241.44/-+ Rs. 2,20,000 + Rs. 16,500/- + Rs. 16,500/- =
Rs. 28,66,241.44/- rounded as Rs.28,66,241/- .
29. Accordingly, the compensation awarded by the learned Claims
Tribunal is enhanced from Rs. 21,44,916/- to Rs.28,66,241/-.
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30. This Court, vide order dated 01.04.2013 while staying the
operation of the impugned Award in the present Appeal, directed
the Appellant/Insurance Company to deposit the entire decretal
amount with the Registrar General of this Court. This Court
further directed for the release of the 60% of the decretal amount
to the Claimants. Balance 40% was to be kept in an interest-
bearing FDR with UCO Bank, Delhi High Court Branch.
31. The Appellant/Insurance Company is directed to deposit the
entire enhanced amount with interest @ 7.5% p.a. from the date
of filing of the present Appeal till the date of deposit with the
Registrar General of this Court within a period of 4 weeks. On
deposit of the entire enhanced amount with interest thereon, the
said enhanced amount along with the balance 40% of the earlier
deposited amount with up to date interest shall be released to the
Respondents within a period of two weeks thereafter. The
statutory deposit shall also be released to the Appellant.
32. The appeal stands disposed of. No order as to costs.



GAURANG KANTH, J.
NOVEMBER 17, 2022

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