# Lal Bahadur Patel v. Mr. Murad Ali & Ors

- **Citation:** (2021) 5 ILRA 67
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-03-26
- **Case number:** FAFO No. 2517 of 2017
- **Bench:** Dr. Kaushal Jayendra Thaker, Ajit Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/lal-bahadur-patel-v-mr-murad-ali-ors-46985
- **Pages:** 7

## Headnote

(A) Civil Law - Motor Vehicles Act, 1988 -
Compensation
enhancement
-total
amount
of
interest,
accrued
on the
principal amount of compensation is to be
apportioned on financial year to financial
year basis - if the interest payable to
68 INDIAN LAW REPORTS ALLAHABAD SERIES
claimant for any financial year exceeds
Rs.50,000/-,
insurance
company/owner
is/are
entitled
to
deduct
appropriate
amount under the head of 'Tax Deducted at
Source' as provided u/s 194A (3) (ix) of the
Income Tax Act, 1961 - if the amount of
interest does not exceeds Rs.50,000/- in
any financial year, registry of this Tribunal is
directed to allow the claimant to withdraw
the
amount
without
producing
the
certificate from the concerned Income-Tax
Authority (Hon'ble Gujarat High Court, in
the case of Smt. Hansaguti P. Ladhani v/s
The Oriental Insurance Company Ltd.,
reported in 2007(2) GLH 291).
(Para - 15)

Claimants moved Motor Accident Claim Petition
before Motor Accident Claim Tribunal claiming
Rs.60,00,000/- with interest as compensation -
Tribunal, awarded a sum of Rs.5,11,000/- along
with 7% simple interest from the date of filing
the claim petition till the date of actual payment
thereof .(Para - 3,4)

HELD:- Tribunal may release the money with
certain stipulations and that guidelines have to
be followed but not rigidly followed as
precedents . Compensation payable to the
appellants is Rs.7,12,600/- . Judgment and
decree passed by the Tribunal shall stand
modified. The respondent-Insurance Company
shall deposit the amount within a period of 12
weeks from today with interest at the rate of
7.5% from the date of filing of the claim petition
till the amount is deposited. (Para - 9,14,16)

Appeal partly allowed. (E-6)

List of Cases cited:-

## Text

5 All. Lal Bahadur Patel Vs. Mr. Murad Ali & Ors.
67

I. On depositing the amount in
the Registry of the Tribunal, Registry is
directed to first deduct the amount of deficit
court fees, if any.

II. Considering the ratio laid
down by the Hon'ble Apex Court in the case
of A.V. Padma V/s. Venugopal, Reported in
2012 (1) GLH (SC), 442, the order of
investment
is
not
passed
because
applicants/claimants
are
neither
not
illiterate and in New India Assurance Co.
Ltd. Vs. Hussain Babulal Shaikh and
others, 2017 (1) TAC 400 (Bom.).

III. View of the ratio laid down by
Hon'ble Gujarat High Court, in the case of
Smt. Hansaguti P. Ladhani v/s The
Oriental Insurance Company Ltd., reported
in 2007(2) GLH 291, total amount of
interest, accrued on the principal amount
of compensation is to be apportioned on
financial year to financial year basis and if
the interest payable to claimant for any
financial
year
exceeds
Rs.50,000/-,
insurance company/owner is/are entitled to
deduct appropriate amount under the head
of 'Tax Deducted at Source' as provided u/s
194A (3) (ix) of the Income Tax Act, 1961
and if the amount of interest does not
exceeds Rs.50,000/- in any financial year,
registry of this Tribunal is directed to allow
the claimant to withdraw the amount (as
directed in para No. II) without producing
the certificate from the concerned IncomeTax Authority."

48. In view of the above, the appeals
preferred by the claimants are partly allowed
and the appeal preferred by the Insurance
Company is dismissed. Award and decree
passed by the Tribunal shall stand modified
to the aforesaid extent. The respondents shall
jointly and severally liable to pay additional
amount within a period of 12 weeks from
today with interest at the rate of 7.5% from
the date of filing of the claim petition till the
amount is deposited.

49. In view of the above, it is directed
that on deposit of the amount, the Tribunal
shall disburse the entire amount by way of
account payee cheque or by way of RTGS to
the account of the claimants within 12 weeks
from the date the amounts are deposited by
the respondents. Record be sent back to the
Tribunal.

50. We modified the apportionment as
60% to the parents and 40% to the young
widow of the additional amounts.
----------
(2021)05ILR A67
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.03.2021

BEFORE

THE HON'BLE DR. KAUSHAL JAYENDRA
THAKER, J.
THE HON'BLE AJIT SINGH, J.

FAFO No. 2517 of 2017

Lal Bahadur Patel ...Appellant
Versus
Mr. Murad Ali & Ors. ...Respondents

Counsel for the Appellant:
Sri Ram Singh, Sri Amit Kumar Singh

Counsel for the Respondents:
Sri Ashutosh Vaish

(A) Civil Law - Motor Vehicles Act, 1988 -
Compensation
enhancement
-total
amount
of
interest,
accrued
on the
principal amount of compensation is to be
apportioned on financial year to financial
year basis - if the interest payable to
68 INDIAN LAW REPORTS ALLAHABAD SERIES
claimant for any financial year exceeds
Rs.50,000/-,
insurance
company/owner
is/are
entitled
to
deduct
appropriate
amount under the head of 'Tax Deducted at
Source' as provided u/s 194A (3) (ix) of the
Income Tax Act, 1961 - if the amount of
interest does not exceeds Rs.50,000/- in
any financial year, registry of this Tribunal is
directed to allow the claimant to withdraw
the
amount
without
producing
the
certificate from the concerned Income-Tax
Authority (Hon'ble Gujarat High Court, in
the case of Smt. Hansaguti P. Ladhani v/s
The Oriental Insurance Company Ltd.,
reported in 2007(2) GLH 291).
(Para - 15)

Claimants moved Motor Accident Claim Petition
before Motor Accident Claim Tribunal claiming
Rs.60,00,000/- with interest as compensation -
Tribunal, awarded a sum of Rs.5,11,000/- along
with 7% simple interest from the date of filing
the claim petition till the date of actual payment
thereof .(Para - 3,4)

HELD:- Tribunal may release the money with
certain stipulations and that guidelines have to
be followed but not rigidly followed as
precedents . Compensation payable to the
appellants is Rs.7,12,600/- . Judgment and
decree passed by the Tribunal shall stand
modified. The respondent-Insurance Company
shall deposit the amount within a period of 12
weeks from today with interest at the rate of
7.5% from the date of filing of the claim petition
till the amount is deposited. (Para - 9,14,16)

Appeal partly allowed. (E-6)

List of Cases cited:-

1. National Insurance Co. Ltd. Vs Mannat Johal
& ors., 2019 (2) T.A.C. 705 (S.C.)

2. A.V. Padma & ors. Vs R. Venugopal, (2012) 3
SCC 378

3.
General
Manager,
Kerala
State
Road
Transport Corporation, Trivandrum Vs Susamma
Thomas & ors., AIR 1994 SC 1631

4. Zeemal Bano & ors. Vs Insurance Company,
2020 TAC (2) 118
5. Smt. Sudesna & ors. Vs Hari Singh & anr.,
F.A.F.O. No.23 of 2001

(Delivered by Hon'ble Dr. Kaushal
Jayendra Thaker, J. &
Hon'ble Ajit Singh, J.)

1. Heard learned counsel for the
parties and perused the record.

2. The claimants being dissatisfied
with the awarded amount preferred this
appeal for enhancement of the amount of
compensation.

3. The claimants moved Motor
Accident Claim Petition No. 628 of 2016
before
Motor
Accident
Claim
Tribunal/Additional District Judge/F.T.C.,
Allahabad (hereinafter referred to as the
Tribunal) claiming Rs.60,00,000/- with
interest as compensation. It was averred
therein that deceased was carrying on
animal husbandry and income of the
deceased was Rs.20,000/- p.m.. She was
hale and hearty and aged about 28 years at
the time of accident. Facts as culled from
the record are that On 2.7.2016 at about 8
a.m. deceased riding pillion seat of
motorcycle bearing Registration No. UP 70
CJ 6608 was going to Bade Hanuman
Temple Dam, Allahabad and when the
vehicle reached Rahimapur Petrol Pump,
driver of Truck bearing Registration No.
UP 72 T 4339 driving rashly and
negligently without blowing horn, dashed
the said motorcycle as a result of which the
deceased suffered severe and fatal injuries
and she died on the spot itself.

4. The Tribunal after recording
evidence and after hearing the learned
advocates for the parties, the Tribunal, vide
Judgment and award dated 26.4.2017,
awarded a sum of Rs.5,11,000/- along with
5 All. Lal Bahadur Patel Vs. Mr. Murad Ali & Ors.
69
7% simple interest from the date of filing
the claim petition till the date of actual
payment thereof.

5. The accident is not in dispute. The
insurance company has accepted their
liability. The only issue to be decided is,
the quantum of compensation awarded.

6. Learned counsel for the appellant
submitted that the deceased was earning
income of Rs. 20,000/- from the milk
business but the Tribunal assessed Rs.
3000/- per month as her income. The
Tribunal wrongly deducted 1⁄2 in place of
1/3rd and also assessed less amount under
the head of future loss of income. It is
further submitted that the Tribunal has
granted Rs.10,000/- for loss of estate and
Rs.5,000/-
for
funeral
expenses
and
Rs.10,000/- as loss of consortium of the
spouse which are on lower side and
inadequate.

7. Per contra, learned counsel for the
respondent-Insurance Company submits
that the quantum of compensation awarded
by the Tribunal is just and proper and does
not call for any interference of the Court.
The learned counsel for the respondent has
contended that the claimant is the husband
of the deceased. It cannot be said to be
dependent having his own income. It is
further
submitted
that
being
own
profession, the income assessed by the
tribunal need not be interfered with.

8. After hearing the counsels for the
parties and after perusing the award and
order
impugned, notional
income
of
deceased
can
be
considered
to
be
Rs.4,500/- per month as occupation of the
deceased was not proved by any cogent
evidence, to which as the deceased was
below 40 years of age, 40% will have to
be added. Looking to the dependants of the
deceased and the fact that the claimant is
the husband of the deceased, deduction
towards personal expenses of the deceased
should be 1/2. As deceased was in the age
bracket of 26-30, multiplier of 17 is
applicable

9. Hence, the compensation payable
to the appellants in view of the decision of
the Apex Court in Pranay Sethi (Supra) is
computed as herein below:

i. Income Rs.4500/-

ii. Percentage towards future
prospects: 40% namely Rs.1800/-

iii. Total income: Rs.4500 +
1800= Rs. 6,300/-

iv. Income after deduction of 1/2:
Rs.3,150/-

v. Annual income: Rs.3150 x 12=
Rs.37,800/-

vi. Multiplier applicable:17

vii.
Loss
of
dependency:
Rs.37,800 x 17=Rs.6,42,600/-

viii. Amount under non pecuniary
heads: Rs.70,000/-

x.
Total
compensation:
Rs.7,12,600/-

10. As far as issue of rate of interest is
concerned, it should be 7.5% in view of the
latest decision of the Apex Court in
National Insurance Co. Ltd. Vs. Mannat
Johal and Others, 2019 (2) T.A.C. 705
(S.C.) wherein the Apex Court has held as
under :-

"13.
The
aforesaid
features
equally apply to the contentions urged on
behalf of the claimants as regards the rate
of interest. The Tribunal had awarded
interest at the rate of 12% p.a. but the same
70 INDIAN LAW REPORTS ALLAHABAD SERIES
had been too high a rate in comparison to
what is ordinarily envisaged in these
matters. The High Court, after making a
substantial enhancement in the award
amount, modified the interest component at
a reasonable rate of 7.5% p.a. and we find
no reason to allow the interest in this
matter at any rate higher than that allowed
by High Court."

11. No other grounds are urged orally
when the matter was heard.

12. At this stage, it has been
submitted by learned counsel for the
claimants that several years have elapsed,
this Court may not direct deposit of said
amounts in fixed deposits and though this
Court has time and again directed the
Insurance Companies not to deduct TDS,
the same is being deducted.

13. We deem it fit to rely on the
judgment of the Apex Court in the case of
A.V.
Padma
and
others
Vs.
R.
Venugopal, 2012 (3) SCC 378 wherein the
Apex Court has considered the judgment
rendered in General Manager, Kerala
State
Road
Transport
Corporation,
Trivandrum Vs. Susamma Thomas and
others, AIR 1994 SC 1631. Paras 5 and 6
of A.V. Padma's Judgment read as under:-

"5. Thus, sufficient discretion has
been given to the Tribunal not to insist on
investment of the compensation amount in
long term fixed deposit and to release even
the whole amount in the case of literate
persons. However, the Tribunals are often
taking a very rigid stand and are
mechanically ordering in almost all cases
that the amount of compensation shall be
invested in long term fixed deposit. They
are taking such a rigid and mechanical
approach
without
understanding
and
appreciating the distinction drawn by this
Court in the case of minors, illiterate
claimants and widows and in the case of
semi- literate and literate persons. It needs
to be clarified that the above guidelines
were issued by this Court only to safeguard
the interests of the claimants, particularly
the minors, illiterates and others whose
amounts are sought to be withdrawn on
some fictitious grounds. The guidelines
were not to be understood to mean that the
Tribunals were to take a rigid stand while
considering an application seeking release
of the money. The guidelines cast a
responsibility on the Tribunals to pass
appropriate orders after examining each
case on its own merits.

However, it is seen that even in
cases when there is no possibility or chance
of the feed being frittered away by the
beneficiary owing to ignorance, illiteracy
or susceptibility to exploitation, investment
of the amount of compensation in long term
fixed deposit is directed by the Tribunals as
a matter of course and in a routine manner,
ignoring the object and the spirit of the
guidelines issued by this Court and the
genuine requirements of the claimants.
Even in the case of literate persons, the
Tribunals
are
automatically
ordering
investment of the amount of compensation
in
long
term
fixed
deposit
without
recording that having regard to the age or
fiscal background or the strata of the
society to which the claimant belongs or
such other considerations, the Tribunal
thinks
it
necessary
to
direct
such
investment in the larger interests of the
claimant and with a view to ensure the
safety of the compensation awarded to him.
The Tribunals very often dispose of the
claimant's application for withdrawal of
the
amount
of
compensation
in
a
mechanical manner and without proper
5 All. Lal Bahadur Patel Vs. Mr. Murad Ali & Ors.
71
application of mind. This has resulted in
serious injustice and hardship to the
claimants. The Tribunals appear to think
that in view of the guidelines issued by this
Court, in every case the amount of
compensation should be invested in long
term
fixed
deposit
and
under
no
circumstances the Tribunal can release the
entire amount of compensation to the
claimant even if it is required by him.
Hence a change of attitude and approach
on the part of the Tribunals is necessary in
the interest of justice.

6. In this case, the victim of the
accident died on 21.7.1993. The award was
passed by the Tribunal on 15.2.2002. The
amount of compensation was enhanced by
the High Court on 6.7.2006. Neither the
Tribunal in its award nor the High Court in
its order enhancing compensation had
directed
to
invest
the
amount
of
compensation in long term fixed deposit.
The Insurance Company deposited the
compensation amount in the Tribunal on
7.1.2008. In the application filed by the
appellants
on
19.6.2008
seeking
withdrawal of the amount without insisting
on investment of any portion of the amount
in long term deposit, it was specifically
stated that the first appellant is an educated
lady who retired as a Superintendent of the
Karnataka Road Transport Corporation,
Bangalore. It was also stated that the
second appellant Poornachandrika is a
M.Sc. degree holder and the third appellant
Shalini was holding Master Degree both in
Commerce and in Philosophy. It was stated
that they were well versed in managing
their lives and finances. The first appellant
was already aged 71 years and her health
was not very good. She required money for
maintenance
and
also
to
put
up
construction on the existing house to
provide dwelling house for her second
daughter who was a co-owner along with
her. The second daughter was stated to be
residing
in
a
rented
house
paying
exorbitant rent which she could not afford
in view of the spiralling costs. It was
further stated in the application that the
first appellant was obliged to provide a
shelter
to
the
first
daughter
Poornachandrika. It was pointed out that if
the money was locked up in a nationalised
bank, only the bank would be benefited by
the deposit as they give a paltry interest
which could not be equated to the costs of
materials which were ever increasing. It
was further stated that the delay in payment
of compensation amount exposed the
appellants
to
serious
prejudice
and
economic ruin. Along with the application,
the second and third appellants had filed
separate affidavits supporting the prayer in
the application and stating that they had no
objection to the amount being paid to the
first appellant.

7. While rejecting the application
of the appellants, the Tribunal did not
consider any of the above-mentioned
aspects mentioned in the application.
Unfortunately, the High Court lost sight of
the said aspects and failed to properly
consider
whether,
in
the
facts
and
circumstances of the case, there was any
need for keeping the compensation amount
in long term fixed deposit. "

14. Thus, it goes without saying that,
in our case, the oral prayer of counsel for
claimant requires to be considered as the
guidelines in A.V. Padma and others
(supra) was in the larger interest of the
claimants. Rigid stand should now be given
way. People even rustic villagers' have
bank account which has to be compulsorily
72 INDIAN LAW REPORTS ALLAHABAD SERIES
linked with Aadhar, therefore, what is the
purpose of keeping money in fixed deposits
in banks where a person, who has suffered
injuries or has lost his kith and kin, is not
able to see the colour of compensation. We
feel that time is now ripe for setting fresh
guidelines as far as the disbursements are
concerned. The guidelines in Susamma
Thomas (supra), which are being blindly
followed, cause more trouble these days to
the
claimants
as
the
Tribunals
are
overburdened with the matters for each
time if they require some money, they have
to move the Tribunal where matters would
remain pending and the Tribunal on its free
will, as if money belonged to them, would
reject the applications for disbursements,
which is happening in most of the cases.
The parties for their money have to come to
court more particularly up to High Court,
which is a reason for our pain. Should
reliance can be placed on Susamma
Thomas (supra) in matters where claimants
prove and show that they can take care of
their money? In our view, the Tribunal may
release the money with certain stipulations
and that guidelines have to be followed but
not
rigidly
followed
as
precedents.
Recently, the Jammu and Kashmir High
Court was faced with similar situation in
the case of Zeemal Bano and others Vs.
Insurance Company, 2020 TAC (2) 118.

15. While sitting in Single Bench of this
Court, one of us (Dr. Justice Kaushal Jayendra
Thaker) has held that the Insurance Company
should not deduct any amount under T.D.S in
the case of Smt. Sudesna and others Vs.
Hari Singh and another, F.A.F.O. No.23 of
2001, decided on 26.11.2020, which should be
strictly adhered to. Relevant part of the said
Judgment is as under:-

" It is further orally conveyed that
even if the amounts will be deposited, the
Insurance company normally deducts TDS.
The judgement is reviewed and at the end.

I. On depositing the amount in
the Registry of the Tribunal, Registry is
directed to first deduct the amount of deficit
court fees, if any.

II. Considering the ratio laid
down by the Hon'ble Apex Court in the case
of A.V. Padma V/s. Venugopal, Reported in
2012 (1) GLH (SC), 442, the order of
investment
is
not
passed
because
applicants/claimants
are
neither
not
illiterate and in New India Assurance Co.
Ltd. Vs. Hussain Babulal Shaikh and
others, 2017 (1) TAC 400 (Bom.).

III. View of the ratio laid down by
Hon'ble Gujarat High Court, in the case of
Smt. Hansaguti P. Ladhani v/s The
Oriental Insurance Company Ltd., reported
in 2007(2) GLH 291, total amount of
interest, accrued on the principal amount
of compensation is to be apportioned on
financial year to financial year basis and if
the interest payable to claimant for any
financial
year
exceeds
Rs.50,000/-,
insurance company/owner is/are entitled to
deduct appropriate amount under the head
of 'Tax Deducted at Source' as provided u/s
194A (3) (ix) of the Income Tax Act, 1961
and if the amount of interest does not
exceeds Rs.50,000/- in any financial year,
registry of this Tribunal is directed to allow
the claimant to withdraw the amount (as
directed in para No. II) without producing
the certificate from the concerned IncomeTax Authority."

16. In view of the above, the appeal is
partly allowed. Judgment and decree
passed by the Tribunal shall stand modified
to the aforesaid extent. The respondentInsurance Company shall deposit the
5 All. Madhuri Singh & Ors. Vs. Hariyana Transport Corp. & Ors.
73
amount within a period of 12 weeks from
today with interest at the rate of 7.5% from
the date of filing of the claim petition till
the amount is deposited.

17. In view of the above, it is directed
that on deposit of the amount, the Tribunal
shall disburse the entire amount by way of
account payee cheque or by way of RTGS
to the account of the claimants within 12
weeks from the date the amounts are
deposited by the respondents. Record be
sent back to the Tribunal.
----------
(2021)05ILR A73
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.03.2021

BEFORE

THE HON'BLE DR. KAUSHAL JAYENDRA
THAKER, J.
THE HON'BLE AJIT SINGH, J.

FAFO No. 3648 of 2018

Madhuri Singh & Ors. ...Appellants
Versus
Hariyana Transport Corp. & Ors.
 ...Respondents

Counsel for the Appellants:
Sri Ram Singh, Sri Amit Kumar Singh

Counsel for the Respondents:
Sri Arun Kumar Shukla

(A) Civil Law - Motor Vehicles Act, 1988 -
The Uttar Pradesh Motor Vehicles Rules,
1998 - Compensation enhancement - total
amount of interest, accrued on the principal
amount
of
compensation
is
to
be
apportioned on financial year to financial
year basis - if the interest payable to
claimant for any financial year exceeds
Rs.50,000/-,
insurance
company/owner
is/are entitled to deduct appropriate
amount under the head of 'Tax Deducted at
Source' as provided u/s 194A (3) (ix) of the
Income Tax Act, 1961 - if the amount of
interest does not exceeds Rs.50,000/- in
any financial year, registry of this Tribunal is
directed to allow the claimant to withdraw
the
amount
without
producing
the
certificate from the concerned Income-Tax
Authority (Hon'ble Gujarat High Court, in
the case of Smt. Hansaguti P. Ladhani v/s
The Oriental Insurance Company Ltd.,
reported in 2007(2) GLH 291). (Para - 15)

The claimants moved Motor Accident Claim
Petition before Motor Accident Claim Tribunal
claiming Rs.1,00,40,000/- as compensation at
the rate of 18% rate of interest - Tribunal
awarded a sum of Rs. 33,32,000/- along with
7% simple interest from the date of filing the
claim petition till the date of actual payment
thereof. (Para - 3,4)

HELD:- Tribunal may release the money with
certain stipulations and that guidelines have to
be followed but not rigidly followed as
precedents . The compensation payable to the
appellants (in view of the decision of the
Apex
Court
in
National
Insurance
Company Limited Vs. Pranay Sethi & ors.,
2017
0
Supreme
(SC)
1050)
is
Rs.53,48,500/-. Judgment and decree passed by
the
Tribunal
shall
stand
modified.
The
respondent-Insurance Company shall deposit
the amount within a period of 12 weeks from
today with interest at the rate of 7.5% from the
date of filing of the claim petition till the amount
is deposited. (Para - 9,14,16)

Appeal partly allowed. (E-6)

List of Cases cited:-

1. Sarla Verma Vs Delhi Transport Corporation,
(2009) 6 SCC 121

2. National Insurance Co. Ltd. Vs Pranay Sethi &
ors., 2017 0 Supreme (SC) 1050

3. National Insurance Co. Ltd. Vs Mannat Johal
& ors., 2019 (2) T.A.C. 705 (S.C.)