Case Note & Summary
The New India Assurance Co. Ltd. appealed against the Judgment and Award dated 23.12.2021 passed by the Motor Accident Claims Tribunal, Alibaug in MACP No. 138 of 2017, which awarded Rs.1,06,94,116/- with interest at 9% to the claimant, Vivek Niwas Patil, for the death of his wife Deepali in a road accident on 04.03.2017. The claimant was driving an Activa scooter with his wife as pillion when a tractor hit them from behind, causing her death. The tribunal held the offending vehicle's owner and insurer jointly liable. The insurance company raised two main contentions: first, that since the claimant himself was earning (Rs.45,000/- per month) and admitted he was not dependent on his wife's income, the deduction for personal expenses should be 2/3rd instead of 1/3rd; second, that Hill Station Allowance (Rs.2,292/-) and Travelling Allowance (Rs.1,200/-) should be excluded from the deceased's income as they were for her personal use. The claimant argued that as per Sarla Verma and Pranay Sethi, the deduction should be 1/3rd. The court noted that the facts were peculiar: only the husband and wife were involved, both were earning, and the husband was not dependent. Relying on the Karnataka High Court case of A. Manavalagan v. A. Krishnamurthy, the court held that in such circumstances, the deduction should be 2/3rd. Regarding allowances, the court found no evidence that they were exclusively for the deceased's personal use and thus declined to exclude them. The court modified the award by applying 2/3rd deduction instead of 1/3rd, reducing the compensation accordingly, and directed the insurance company to pay the modified amount with interest.
Headnote
A) Motor Accident Claims - Deduction for Personal Expenses - Earning Spouse - Where both husband and wife are earning and living together without children, the deduction for personal expenses of the deceased should be 2/3rd instead of 1/3rd, as the surviving spouse is not dependent on the deceased's income. (Paras 6-12)
B) Motor Accident Claims - Income Computation - Allowances - Hill Station Allowance and Travelling Allowance paid to the deceased are part of her income and cannot be deducted as they are not proven to be exclusively for her personal use. (Paras 7, 12)
Issue of Consideration
Whether the deduction for personal expenses should be 1/3rd or 2/3rd when the claimant (husband) is also earning and not dependent on the deceased wife's income, and whether Hill Station Allowance and Travelling Allowance should be excluded from income.
Final Decision
The appeal is partly allowed. The impugned Judgment and Award is modified by applying 2/3rd deduction towards personal expenses instead of 1/3rd. The compensation amount is recalculated accordingly. The insurance company is directed to pay the modified amount with interest at 9% per annum from the date of claim application till realization. The award regarding allowances is upheld.
Law Points
- Motor Accident Claims
- Deduction for Personal Expenses
- Dependency
- Earning Spouse
- Future Prospects
- Allowances
Case Details
2024 LawText (BOM) (10) 6
First Appeal No. 168 of 2024 with Interim Application No. 19753 of 2022
Mr. Devendra Joshi for the Appellant, Mr. Abhishek Jha a/w Nishant Mokal i/b Jha Legal Associates for Respondent No.1
The New India Assurance Co. Ltd.
Vivek Niwas Patil and Gursahib Singh Kullar
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Nature of Litigation
Appeal under Section 173 of the Motor Vehicles Act, 1988 against the Judgment and Award of the Motor Accident Claims Tribunal awarding compensation for accidental death.
Remedy Sought
The appellant/insurance company sought reduction of the compensation amount awarded by the tribunal.
Filing Reason
The insurance company challenged the award on the grounds that the deduction for personal expenses should be 2/3rd instead of 1/3rd and that certain allowances should be excluded from income.
Previous Decisions
The Motor Accident Claims Tribunal, Alibaug in MACP No. 138 of 2017 awarded Rs.1,06,94,116/- with interest at 9% from the date of claim application till realization, holding the insurance company jointly and severally liable with the owner.
Issues
Whether the deduction for personal expenses should be 1/3rd or 2/3rd when the claimant is also earning and not dependent on the deceased's income.
Whether Hill Station Allowance and Travelling Allowance should be excluded from the deceased's income for computing compensation.
Submissions/Arguments
Appellant/Insurance Company: The claimant admitted he was earning and not dependent on his wife's income; therefore, deduction should be 2/3rd as per A. Manavalagan v. A. Krishnamurthy. Also, Hill Station Allowance and Travelling Allowance were for the deceased's personal use and should be deducted.
Respondent/Claimant: As per Sarla Verma and Pranay Sethi, deduction should be 1/3rd. The allowances are part of income and cannot be deducted.
Ratio Decidendi
In motor accident claims where both spouses are earning and living together without children, and the surviving spouse is not dependent on the deceased's income, the deduction for personal expenses should be 2/3rd of the deceased's income, not 1/3rd. The deduction depends on the facts and circumstances of each case and cannot be governed by a rigid rule.
Judgment Excerpts
In the present case, only husband and wife are involved, who were admittedly living together and one of them (wife) is deceased and the Husband (living spouse) has claimed compensation. Also, the Claimant (Husband - living spouse) himself is admittedly earning almost equal to the deceased. These are the peculiar facts, in which Insurance Company is arguing for increasing deduction towards personal expenses.
There is absolutely no dispute about the propositions and guidelines laid down by the Hon’ble Supreme Court in the cases of both Sarla Verma and Pranay Sethi (supra). However, learned counsel for the Insurance Company is right in pointing out that deduction depends on the facts and circumstances of each case and it can not be governed by a rigid rule or formula of universal application, as reiterated by the Hon’ble Supreme Court in the recent case of N. Jayasree (Supra).
Procedural History
The claimant filed MACP No. 138 of 2017 before the Motor Accident Claims Tribunal, Alibaug, which was allowed on 23.12.2021. The insurance company filed First Appeal No. 168 of 2024 before the Bombay High Court challenging the award. The appeal was heard and disposed of on 01.10.2024.
Acts & Sections
- Motor Vehicles Act, 1988: Section 166, Section 173
