# Poonam Agarwal & Anr v. The United India Insurance Company Limited & Anr

- **Citation:** FAFO No. 4430 of 2012
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-02-12
- **Case number:** FAFO No. 4430 of 2012
- **Bench:** Ramesh Sinha, Ajit Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/poonam-agarwal-anr-v-the-united-india-insurance-company-limited-anr-46348
- **Pages:** 8

## Headnote

A. Civil Law- Motor Vehicle Act, 1988 -
Norms
to
determine
Compensation
-
Consideration of only Basic pay and D.A. not
Medical Allowance and others, while computing
the income of salaried person - Legality - Held,
Computation of income of the deceased for the
purposes of determination of compensation shall
include the basic pay, dearness allowance,
medical allowance, transport allowance and
annual bonus and the deduction could be only
of professional tax as well as the income tax -
However, it is to be borne in mind that there
may be several allowances awarded in a salary
of a particular month which might have been
awarded due but all such allowances may not
constitute monthly salary otherwise. (Para 10)
Appeal allowed (E-1)
Cases relied on :-

## Text

3-5 All. Poonam Agarwal & Anr. Vs. The Union India Insurance Company Limited & Anr.
1497
lakhs twenty one thousand seven hundred
and fifty six rupees) awarded by learned
claims tribunal.

27. This amount will be appropriated
in the same ratio as has been directedby
learned claims tribunal. The claim amount
will carry interest @ 7% from the date of
filing of the claim petition till the date of
actual payment.

28. In above terms appeal is disposed
off.
----------
(2020)03-05ILR A1497
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.02.2020

BEFORE

THE HON'BLE RAMESH SINHA, J.
THE HON'BLE AJIT KUMAR, J.

FAFO No. 4430 of 2012

Poonam Agarwal & Anr. ...Appellants
Versus
The United India Insurance Company
Limited & Anr. ...Respondents

Counsel for the Appellants:
Sri Abhijit Banerjee, Sri Sudeep Agarwal

Counsel for the Respondents:
Sri Vibhuti Narain, Sri Vishesh Kumar
Gupta, Sri Hemant Kumar

A. Civil Law- Motor Vehicle Act, 1988 -
Norms
to
determine
Compensation
-
Consideration of only Basic pay and D.A. not
Medical Allowance and others, while computing
the income of salaried person - Legality - Held,
Computation of income of the deceased for the
purposes of determination of compensation shall
include the basic pay, dearness allowance,
medical allowance, transport allowance and
annual bonus and the deduction could be only
of professional tax as well as the income tax -
However, it is to be borne in mind that there
may be several allowances awarded in a salary
of a particular month which might have been
awarded due but all such allowances may not
constitute monthly salary otherwise. (Para 10)
Appeal allowed (E-1)
Cases relied on :-
1. Sunil Sharma vs. Bachinder Pal, 2011 LAWS
SC 2 73
2. National Insurance Company ltd. vs. Indira
Srivastava 2007 LAWS SC 12
3. Laxmi Devi & ors. v. Mohammad Tabbar &
anr., (2008)
12 SCC 165
4. Sarla Verma & ors. v. Delhi Tranpsort
Corporation & anr. (2009) 6 SCC 121
5. National Insurance Company Ltd.. vs. Pranay
Sethi & ors. (2017) 16 SCC 680

(Delivered by Hon'ble Ramesh Sinha, J.
 Hon'ble Ajit Kumar, J.)

1. Heard Sri Sudeep Agarwal, learned
counsel for the appellants, Sri Vibhuti
Narain, learned counsel for respondent no.
1, Sri Hemant Kumar, Advocate holding
brief of Sri V.K. Gupta, learned counsel for
respondent no. 2 and perused the record.

2. This first appeal from order is
directed against the award dated 29th
September, 2012 passed by the Claim
Tribunal/District
Judge,
Azamgarh
allowing the claim petition of the claimants
bearing no. 840 of 2009 for a compensation
of Rs. 6,89,336/- @ 7% simple interest per
annum, for the purposes of enhancement.

3. Assailing the award on the issue of
computation of compensation, it has been
argued that while making the assessment of
income of the deceased son of the
1498 INDIAN LAW REPORTS ALLAHABAD SERIES
claimants, the tribunal has manifestly erred
in taking into consideration only the basic
pay and the dearness allowance and then
deducting the tax from that. He submits
that in view of the authority pronounced by
the Supreme Court in the case of Sunil
Sharma vs. Bachinder Pal, 2011 LAWS
SC 2 73, the house rent allowance, city
compensatory allowance and the medical
allowance are also to be added towards the
computation of the income. He has also
placed reliance upon another authority of
the Supreme Court in the case of National
Insurance Company Limited vs. Indira
Srivastava 2007 LAWS SC 12 95.

4. On the question of multiplier, it has
been argued that multiplier of 12 has
wrongly
been
applied
whereas
the
multiplier of 17 should have been applied
as per the IInd schedule of the The Motor
Vehicles Act, 1989 and the Rules. It is also
argued that on count of future prospects
nothing has been added nor, any amount
has been paid towards the loss of
consortium even towards the funeral
expenses only a meager amount has been
directed to be paid. He has also placed
reliance upon the judgment of the Apex
Court in the case of Laxmi Devi & others
v. Mohammad Tabbar & Another (2008)
12 SCC 165 and Sarla Verma & Ors. v.
Delhi Tranpsort Corporation & Anr. (2009)
6 SCC 121 and also finally in the case of
National Insurance Company Limited. vs.
Pranay Sethi and others (2017) 16 SCC 680
and this is how it has been claimed that the
amount of compensation awarded by the
tribunal needed to be enhanced.

5. Learned counsel appearing for the
respondent-Insurance Company though has
sought to defend the order of the tribunal
for the reasons assigned therein and has
thus defended the compensation awarded.

6. Having heard learned counsel for
the parties and their arguments across the
bar, we now proceed to examine the
correctness of assessment of income of the
deceased by the tribunal and consequential
determination of compensation. In the
matter of assessment of income of salaried
or non-salaried person, the legal position
has now come to be settled by the decisions
of the Apex Court of this country in a series
of its judgment and, therefore, it is proper
to examine the award in question, in the
light of the authorities on this aspect of the
Apex Court.

7. The Apex Court in the case of
Sunil Sharma Sharma v. Bachitar Singh,
2011-LAWS (SC)-2-73 vide paragraphs 8
and 9 has held thus:-

"8 In the case of National
Insurance Co. Ltd. v. Indira Srivstava and
Ors. [AIR 2008 SC 845], SB. Sinha, J. has
observed that "The term 'income' has
different
connotations
for
different
purposes. A Court of law, having regard to
the change in societal conditions must
consider the question not only having
regard t pay packet the employee carries
home at the end of the month but also other
perks which are beneficial to the members
of the entire family. Loss cause to the
family on a deth of a near and dear one can
hardly be compensated on monitory terms."
His Lordship also stated that if some
facilities were being provided whereby the
entire family stood to benefit, the same
must be held to be relevant for the purpose
of computation of total income on the basis
of which the amount of compensation
payable for the death of the kith and kin of
the
applicants
was
required
to
be
determined.
This
Court
held
that
superannuation
benefits,
contributions
towards gratuity, insurance of medical
3-5 All. Poonam Agarwal & Anr. Vs. The Union India Insurance Company Limited & Anr.
1499
policy for self and family and education
scholarship were beneficial to the members
of the family. This Court clarified that by
opining that 'just compensation' must be
determined having regard to the facts and
circumstances of each case. The basis for
considering the entire pay packet is what
the dependents have lost in view of death
of the deceased. It is in the nature of
compensation for future loss towards the
family income" and that " 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 contra-distinguished 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
deducted."

9. In Raghuvir Singh Matolys and
Ors. v. Hari Singh Malviya and Ors. [JT
2009 (7) SC 597: 2009 (15) SCC 363], this
Court has observed that dearness allowance
and house rent allowance should be
included for computation of income of the
deceased."

8. In National Insurance Company
Ltd. vs. Indira (supra) the Apex Court vide
paragraphs 17 to 20 has held thus:-

17. 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.

18. The term 'income' in P.
Ramanatha Aiyar's Advanced Law Lexicon
(3rd Ed.) 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."

It has also been stated :

'INCOME' signifies 'what comes in'
(per Selborne, C., Jones v. Ogle, 42 LJ Ch.336).
'It is as large a word as can be used' to denote a
person's receipts '(per Jessel, M.R. Re Huggins,
51 LJ Ch.938.) income is not confined to
receipts from business only and means
periodical receipts from one's work, lands,
investments, etc. AIR 1921 Mad 427 (SB). Ref.
124 IC 511 : 1930 MWN 29 : 31 MLW 438
AIR 1930 Mad 626 : 58 MLJ

337."

19. 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 profession 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.

20. In N. Sivammal & Ors. v.
Managing Director, Pandian Roadways
Corporation & Ors. [(1985) 1 SCC 18], this
Court took into consideration the pay
packet of the deceased.
(Emphasis added)
1500 INDIAN LAW REPORTS ALLAHABAD SERIES

9. This above issue has come to be
discussed in Pranay Sethi's case (supra)
vide paras-30, 31, 32 and 33 thus.

30. While
adverting
to
the
addition of income for future prospects, it
stated thus:-

"24. In Susamma Thomas this
Court increased the income by nearly
100%, in Sarla Dixit the income was
increased only by 50% and in Abati
Bezbaruah the income was increased by a
mere 7%. In view of the imponderables and
uncertainties, we are in favour of adopting
as a rule of thumb, an addition of 50% of
actual salary to the actual salary income of
the deceased towards future prospects,
where the deceased had a permanent job
and was below 40 years. (Where the
annual income is in the taxable range,
the words "actual salary" should be read
as "actual salary less tax"). The addition
should be only 30% if the age of the
deceased was 40 to 50 years. There should
be no addition, where the age of the
deceased is more than 50 years. Though the
evidence
may
indicate
a
different
percentage of increase, it is necessary to
standardise the addition to avoid different
yardsticks being applied or different
methods of calculation being adopted.
Where the deceased was self-employed or
was on a fixed salary (without provision for
annual increments, etc.), the courts will
usually take only the actual income at the
time of death. A departure therefrom
should
be made
only
in
rare
and
exceptional
cases
involving
special
circumstances."

31. Though we have devoted
some space in analyzing the precedential
value of the judgments, that is not the thrust
of the controversy. We are required to
keenly dwell upon the heart of the issue
that emerges for consideration. The seminal
controversy before us relates to the issue
where the deceased was self-employed or
was a person on fixed salary without
provision for annual increment, etc., what
should be the addition as regards the future
prospects. In Sarla Verma, the Court has
made it as a rule that 50% of actual salary
could be added if the deceased had a
permanent job and if the age of the
deceased is between 40 - 50 years and no
addition to be made if the deceased was
more than 50 years. It is further ruled that
where deceased was self-employed or had a
fixed salary (without provision for annual
increment, etc.) the Courts will usually take
only the actual income at the time of death
and the departure is permissible only in rare
and exceptional cases involving special
circumstances.

32. First, we shall deal with the
reasoning
of
straitjacket
demarcation
between the permanent employed persons
within the taxable range and the other
category
where
deceased
was
selfemployed or employed on fixed salary
sans annual increments, etc.

33. The submission, as has been
advanced on behalf of the insurers, is that
the distinction between the stable jobs at
one end of the spectrum and self-employed
at the other end of the spectrum with the
benefit of future prospects being extended
to the legal representatives of the deceased
having a permanent job is not difficult to
visualize, for a comparison between the
two categories is a necessary ground
reality.
It
is
contended
that
guaranteed/definite income every month
has to be treated with a different parameter
than the person who is self-employed
inasmuch as the income does not remain
constant and is likely to oscillate from time
to time. Emphasis has been laid on the date
of expected superannuation and certainty in
permanent job in contradistinction to the
3-5 All. Poonam Agarwal & Anr. Vs. The Union India Insurance Company Limited & Anr.
1501
uncertainty on the part of a self- employed
person. Additionally, it is contended that
the permanent jobs are generally stable and
for an assessment the entity or the
establishment where the deceased worked
is identifiable since they do not suffer from
the inconsistencies and vagaries of selfemployed persons. It is canvassed that it
may not be possible to introduce an
element of standardization as submitted by
the claimants because there are many a
category in which a person can be selfemployed and it is extremely difficult to
assimilate entire range of self-employed
categories
or
professionals
in
one
compartment. It is also asserted that in
certain professions addition of future
prospects to the income as a part of
multiplicand
would
be
totally
an
unacceptable concept. Examples are cited
in respect of categories of professionals
who are surgeons, sports persons, masons
and carpenters, etc. It is also highlighted
that the range of self-employed persons can
include unskilled labourer to a skilled
person and hence, they cannot be put in a
holistic whole. That apart, it is propounded
that experience of certain professionals
brings in disparity in income and, therefore,
the view expressed in Sarla Verma (supra)
that has been concurred with Reshma
Kumari (supra) should not be disturbed.
(emphasis added)

9. Learned counsel appearing for the
respondent-Insurance Company could not
give any explanation as to why in
computing the income of the deceased, who
was a salaried person, only basic pay and
the
dearness
allowance
have
been
considered.

10. In the light of the aforesaid
authorities which could not be disputed by
learned counsel for the respondents, we are
of
the
considered
opinion
that
the
computation of income of the deceased for
the
purposes
of
determination
of
compensation shall include the basic pay,
dearness allowance, medical allowance,
transport allowance and annual bonus and
the deduction could be only of professional
tax as well as the income tax. However, it
is to be borne in mind that there may be
several allowances awarded in a salary of a
particular month which might have been
awarded due but all such allowances may
not constitute monthly salary otherwise. In
the case in hand, we find following salary
details that were provided by the claimant
vide salary slip of the period 01.04.2009 to
30.04.2009:-

Earnings
Deductions
Basic
salary
7,140.00
Dearness
Allowance
1,100.00
House
Rent
Allowance
4,196.00
Medical
Allowance
2,623.00
Transport
Allowance
1,048.00
Leave
Travel
Allowance
2,623.00
Annual
Bonus/Ex-gratia
353.00
TPI
Incentive
2,720.00
Bonus
ExGratia Advance
Pmt.
PF
989.00
Professional
Tax
200.00
Income
Tax
723.00
Infosys Welfare Trust
100.00
GYM
facilities
300.00
Hostel Rent Recovery
2,750.00
Membership
fee
150.00
1502 INDIAN LAW REPORTS ALLAHABAD SERIES
1,566.00
Salary Arrears
11,496.00
Total
34,865.00
Total
5,212.00

In the above details leave travel
allowance, TPI incentive and Bonus ex-gratia
advance payment can not be treated as part of
regular monthly salary. Training Period
Incentive (TPI) is normally given by the
companies in the very first month of after
training especially in case of Infosys Solution
Pvt. Ltd. Further salary arrears are given
annually
for
fixation
of
dearness
allowance/increments and so that will not
form part of regular monthly salary. The
increment will automatically enhance the
basic salary and arrears only indicate dating it
back to the date and time with effect from
which such increment has been awarded and
so the arrears got accumulated. With the
increment/award of Dearness Allowance the
basic salary and/or plus Dearness Allowance
stands mentioned in the salary slip and that
should be taken into account. The hostel rent
is charged for the period when the trainee is
under training and for that he has to
compulsorily stay in the hostel and, therefore,
deduction is shown in regular monthly salary
but once the training period is over and the
Training Period Incentive (TPI) is finally
paid, there can be no further deductions
towards hostel rent. And so also Infosys
Welfare Trust amount and Gym facilities
charges and membership fee are all not liable
to be deducted as the employee, in the case in
hand had passed away.

11. Thus, considering the admitted
position of salary as discussed above
following will be the actual income to be
taken into account for computation of
compensation:

Earnin
g

Deductions
Basic Pay

7,140/-
Professional
Tax 200.00
D.A.

1,100/-
Income
Tax
723.00
H.R.A.

4,196/-

Medical
Allowance

2,623/-

Transport
Allowance

1,048/-

Total

16107
Total
923/-

Net Pay Rs. 15184/-

12. Coming to the question of
multiplier now we refer to paragraphs 42
and 44 of Pranay Sethi's judgment (supra)
that run as under:-

42. As far as the multiplier is
concerned, the claims tribunal and the
Courts shall be guided by Step 2 that finds
place in paragraph 19 of Sarla Verma read
with paragraph 42 of the said judgment.
For the sake of completeness, paragraph 42
is extracted below :-

"42. We therefore hold that the
multiplier to be used should be as
mentioned in Column (4) of the table
above (prepared by applying Susamma
Thomas, Trilok Chandra and Charlie),
which starts with an operative multiplier
of 18 (for the age groups of 15 to 20 and
21 to 25 years), reduced by one unit for
every five years, that is M-17 for 26 to 30
years, M- 16 for 31 to 35 years, M-15 for
36 to 40 years, M-14 for 41 to 45 years,
and M-13 for 46 to 50 years, then reduced
by two units for every five years, that is,
3-5 All. Poonam Agarwal & Anr. Vs. The Union India Insurance Company Limited & Anr.
1503
M-11 for 51 to 55 years, M-9 for 56 to 60
years, M-7 for 61 to 65 years and M-5 for
66 to 70 years."

44. At this stage, we must
immediately say that insofar as the
aforesaid
multiplicand/multiplier
is
concerned, it has to be accepted on the
basis of income established by the legal
representatives of the deceased. Future
prospects are to be added to the sum on the
percentage basis and "income" means
actual income less than the tax paid. The
multiplier has already been fixed in
Sarla Verma which has been approved
in Reshma Kumari with which we
concur.
(emphasis added)

13. Learned counsel appearing for the
Insurance Company could also not give any
satisfactory
reply
to
the
arguments
advanced by learned counsel for the
appellants that the two judgments of the
Supreme Court in Lalita Devi and Sarla
Verma (supra) still hold the field as these
judgments have not been overruled. These
judgments have found approval of the
Constitution Bench in Pranay Sethi's case
(supra) as well.

14. In view of the above and by
applying the rule laid down in Sarla
Verma's case, in our considered opinion,
the multiplier of 18 would be applicable as
the deceased was 24 years' of age at the
time of accident.

15. The legal position towards
conventional head of future prospects has
been summarized in the case of Pranay
Sethi (supra) vide paragraph-59.3 thus:-

"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."
(Emphasis added)

16. So now, so far as future prospects
are concerned, the claimants are entitled to
50% of the income assessed on the basis of
the principles laid down in Pranay Shetty's
case (supra). Again for loss of state, we
determine the amount as Rs. 15,000 and
also Rs. 10,000 towards funeral expenses.

17. In view of the above, we direct
that the appellants shall be entitled to the
compensation
as
per
the
following
computation.

Income from
salary
15184/-
p.m.
Rs.
1,82,208/-
p.a.
Future
Prospects
50% of
Rs.
1,82,208/-
Rs. 91,104/-
Total Income
Rs.
2,73,312/-
Deduction
towards
personal
expenses
1/2th
of
total
income
Rs.
1,36,656/-
Dependency
2,73,3121,36,656
Rs.
1,36,656/-
Multiplier

18
Compensation 1,36,656/-
x 18
Rs.
24,59,808/-
1504 INDIAN LAW REPORTS ALLAHABAD SERIES
Funeral
Expenses

10,000/-
Loss of Estate
Rs. 15,000/-
Total
Compensatio
n

24,84,808

18. Now coming to the question of
interest, we are of the opinion that in
normal circumstances 6 to 7% only is
admissible in motor accident claim's cases.
However, no straightjacket formula can be
applied and the interest shall be determined
and payable on the facts and circumstances
of each case. The deceased was the only
issue of his parents, and was, thus only
bread earner of the family and it is
unfortunate that he met with fatal accident
and the poor parents had to wait for 3-4
years for the award of compensation and
then more than 7 years before the high
court for enhancement on account of wrong
assessment of income at the end of the
tribunal in spite of settled legal position in
the
matter.
In
such
circumstances,
therefore, we find it proper to award
interest @ 7 % from the date of application
till date of actual payment made under the
award of the tribunal and @ 9% interest on
the enhanced compensation from the date
of payment till enhanced payment is made
under this order and also over and above
the amount if has remained unpaid till date
under the award of the tribunal.

19. Thus the compensation enhanced
from Rs. 6,89,366/- to Rs. 24,84,808/-, i.e.,
by Rs. 17,95,442/- as above shall be paid
@ 9% interest from the date of this
judgment till actual payment is made of the
enhanced compensation including the past
any amount if has remained unpaid, by the
respondents Insurance Company till the
actual enhanced compensation coupled
with unpaid amount, is paid.

18. In view of the above, this appeal
stands allowed in above terms modifying
the award of the Motor Accidents Claims
Tribunal.
----------
(2020)03-05ILR A1504
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 09.03.2017

BEFORE

THE HON'BLE RAKESH SRIVASTAVA, J.

Misc. Single No. 5359 of 2017

Ashok Kumar & Anr. ...Petitioners
Versus
Onkar Prasad & Anr. ...Respondents

Counsel for the Petitioners:
Narendra Bahadur Singh

Counsel for the Respondents:
----

Civil law-Original suit filed for cancelation
of registered will deed-on ground that
some imposter was projected as Bahadur
and
thum
impression
is
forged-Suit
dismissed-
Appeal
filed-In
appealApplication under Order 41 Rule 27 C.P.C.
filed-for opinion of fingerprint expert-as
they were not aware of legal issue and
their counsel never advised them for the
same-lack of proper legal advice-not a
substantial cause-W.P. dismissed.

Held, Admittedly, no application was moved by
the petitioners before the trial Court to seek
expert opinion. It cannot be said that the
petitioners with due diligence could not have
moved such an application to disapprove the
thumb impression of Maggal over the will in
question. In the instant case it was not as if the
additional evidence was required by the Court to
enable it to pronounce judgment and, therefore,