2015 (5) TMI 824 - HC - Indian Laws

Liability to pay compensation - motor vehicle accident - whether once the vehicle was insured the Government would not be liable to pay the compensation? - Held that - As per the evidence placed before the Tribunal no proof was produced to effect the service of requisition order. The Tribunal on facts found that the requisition order was not served upon the owner. Under these circumstances if the owner had not paid the amount and the vehicle was under the requisition and in possession of the Government if the Tribunal has fastened the liability upon the Government such approach on the part of the Tribunal could not be said to be erroneous on the ground sought to be canvassed. - Decided against revenue. Higher amount of compensation awarded - Held that - In Accounting Year 2005 2006 the exemption limit was up to Rs. 1, 00, 000/- and therefore upto Rs. 1, 00, 000/- there was no question of making any deduction of income tax. So far as the amount of income above Rs. 1, 00, 000/- i.e. Rs. 1, 48, 161/- the tax would be Rs. 48, 461/- on the basis of tax slab of 10%. It would be roughly Rs. 4, 800/- per year and if multiplier of 14 is considered the said amount would be Rs. 67, 200/- towards deduction of income tax. At the same time another relevant aspect is that the Tribunal has awarded a meager amount of Rs. 10, 000/- towards loss of consortium Rs. 10, 000/- towards loss of love and affection and Rs. 10, 000/- towards loss of estate totaling to Rs. 30, 000/-. Thus for the conjoint heads of loss of estate loss of love and affection and loss of consortium the amount of Rs. 1, 00, 000/- was required to be awarded by the Tribunal. If the difference is considered it is less by Rs. 70, 000/-. As against the same as observed earlier towards income tax deduction such amount would come to Rs. 67, 00/- and hence both the aforesaid aspects if considered ultimately there will not be any substantial difference in the total amount awarded by the Tribunal. Hence we find that the amount already awarded by the Tribunal would meet with principle of just compensation and therefore we find that on such ground no interference would be called for and the said contention therefore would fail. - Decided against revenue.

Summary

Issues:
- Liability of the Government for compensation in a fatal accident involving government employees on duty
- Consideration of income tax deduction while calculating compensation amount

Issue 1: Liability of the Government for compensation
The case involved two deceased government employees who met with a fatal accident while on duty. The Tribunal awarded compensation in two claim petitions, one for a higher amount and the other for a lower amount. The State government filed appeals challenging the liability to pay compensation. The Assistant Government Pleader argued that since the vehicle was insured, the liability should be on the vehicle owner and the insurance company. However, it was revealed that the vehicle was requisitioned by the State for election duty, and the owner had not paid the additional premium as required. The Tribunal found that the requisition order was not served upon the owner, and the vehicle was in possession of the Government at the time of the accident. Therefore, the liability was rightly fastened upon the Government, and the contention of the State government failed.

Issue 2: Consideration of income tax deduction
The Assistant Government Pleader raised a contention regarding the calculation of compensation amount, specifically mentioning the deduction towards income tax. Referring to a Supreme Court decision, it was argued that the Tribunal had not properly considered the income tax deduction. However, the Court analyzed the exemption limit under Income Tax during the relevant period and calculated the potential deduction. It was noted that the Tribunal had awarded a smaller amount for certain aspects like loss of consortium, love and affection, and loss of estate, which could have been higher based on recent court trends. After a detailed calculation, the Court concluded that the amount awarded by the Tribunal already accounted for just compensation, and hence, no interference was warranted on this ground. Consequently, the Court found that the appeals were meritless and dismissed them, leading to the disposal of related Civil Applications.