# The New India Assurance Co. Ltd v. Smt. Shail Kumar & Ors. 634 INDIAN LAW REPORTS ALLAHABAD SERIES

- **Citation:** (2022) 4 ILRA 633
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-03-02
- **Case number:** First Appeal From Order No. 1333 of 2000
- **Bench:** Dr. Kaushal Jayendra Thaker
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-new-india-assurance-co-ltd-v-smt-shail-kumar-ors-634-indian-law-reports-48281
- **Pages:** 7

## Headnote

(A) Torts Law - Motor vehicle Act,1988 -
Section
173
-
enhancement
of
compensation - Principle of " res ipsa
loquitur" - " the things speak for itself" .

(B) Torts law - Principle of Contributory
negligence
-
a
person
who
either
contributes or is co author of the accident
would be liable for his contribution to the
accident
having
taken
place
-
that
amount
will
be
detected
from
the
compensation payable to him if he is
injured - to legal representative if he dies
in the accident .(Para - 8)

(C) Tax Law - The Income Tax Act, 1961-
Section 194A (3) (ix) - 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' - if the amount of
interest does not exceeds Rs.50,000/- in
any financial year - registry of Tribunal is
directed to allow the claimants to withdraw
the
amount
without
producing
the
certificate from the concerned Income-Tax
Authority.(Para - 14)

Accident occurred - causing death - deceased
aged about 46 years of age - left behind him,
widow and two children - Tribunal has assessed
the income of the deceased to be Rs.96,000/-
per annum - awarding a sum of Rs.8,06,000/-
with
interest
at
the
rate
of
12%
as
compensation - aggrieved by order - hence
appeal.

HELD:-Total compensation : Rs.13,19,652/- .
Direction to respondent-Insurance Company to
deposit the amount along with 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.
Amount
already
deposited
be
deducted
from
the
amount
to
be
deposited.(Para - 12,18)

Appeal partly allowed. (E-7)

List of Cases cited:-

## Text

4 All. The New India Assurance Co. Ltd. Vs. Smt. Shail Kumar & Ors.
633

(ix)Amount
after
20%
deduction
towards
contributory
negligence
:
Rs.1,08,20,645
-
21,64,129/-
=
Rs.
86,56,516/-

29. 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 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."

30. Learned Tribunal has awarded rate
of interest as 6% per annum but we are fixing
the rate of interest as 7.5% in the light of the
above judgment.

31. In view of the above, the appeal
preferred by the claimants bearing F.A.F.O.
1164 of 2015 is partly allowed. The appeal
preferred by the Insurance company bearing
F.A.F.O. No. 1053 of 2015 is, accordingly,
dismissed. Judgment and award passed by
the learned Tribunal shall stand modified to
the
aforesaid
extent.
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. The amount already deposited be
deducted from the amount to be deposited.

32. In view of the ratio laid down by
Hon'ble Gujarat High Court, in the case of
Smt. Hansagori P. Ladhani v/s The Oriental
Insurance Company Ltd., reported in
2007(2) GLH 291 and this High Court in
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 claimants to withdraw the amount without
producing the certificate from the concerned
Income- Tax Authority. The aforesaid view
has been reiterated by this High Court in
Review Application No.1 of 2020 in First
Appeal From Order No.23 of 2001 (Smt.
Sudesna and others Vs. Hari Singh and
another) and in First Appeal From Order
No.2871 of 2016 (Tej Kumari Sharma v.
Chola Mandlam M.S. General Insurance Co.
Ltd.) decided on 19.3.2021 while disbursing
the amount.
----------

(2022)04ILR A633
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.03.2022

BEFORE

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

First Appeal From Order No. 1333 of 2000

The New India Assurance Co. Ltd.
 ...Appellant
Versus
Smt. Shail Kumar & Ors. ...Respondents
634 INDIAN LAW REPORTS ALLAHABAD SERIES
Counsel for the Appellant:
Sri Rajiv Chaddha

Counsel for the Appellants:
Sri A.K. Singh, Sri G.K. Pandey, Sri Hari Manish
Bahadur Sinha, Sri R.O.V.S. Chauhan, Sri Satya
Deo Ojha, Sri Yashpal Chaturvedi

(A) Torts Law - Motor vehicle Act,1988 -
Section
173
-
enhancement
of
compensation - Principle of " res ipsa
loquitur" - " the things speak for itself" .

(B) Torts law - Principle of Contributory
negligence
-
a
person
who
either
contributes or is co author of the accident
would be liable for his contribution to the
accident
having
taken
place
-
that
amount
will
be
detected
from
the
compensation payable to him if he is
injured - to legal representative if he dies
in the accident .(Para - 8)

(C) Tax Law - The Income Tax Act, 1961-
Section 194A (3) (ix) - 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' - if the amount of
interest does not exceeds Rs.50,000/- in
any financial year - registry of Tribunal is
directed to allow the claimants to withdraw
the
amount
without
producing
the
certificate from the concerned Income-Tax
Authority.(Para - 14)

Accident occurred - causing death - deceased
aged about 46 years of age - left behind him,
widow and two children - Tribunal has assessed
the income of the deceased to be Rs.96,000/-
per annum - awarding a sum of Rs.8,06,000/-
with
interest
at
the
rate
of
12%
as
compensation - aggrieved by order - hence
appeal.

HELD:-Total compensation : Rs.13,19,652/- .
Direction to respondent-Insurance Company to
deposit the amount along with 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.
Amount
already
deposited
be
deducted
from
the
amount
to
be
deposited.(Para - 12,18)

Appeal partly allowed. (E-7)

List of Cases cited:-

1. Bajaj Allianz General Insurance Co.Ltd. Vs.
Smt. Renu Singh & ors., F. A. F. O. No. 1818 of
2012

2. Rylands Vs Fletcher, (1868) 3 HL (LR) 330

3. Jacob Mathew Vs St.of Pun., 2005 0 ACJ (SC)
1840).

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

5. Sarla Verma Vs. Delhi Transport Cor., (2009)
6 SCC 121

6. A.V. Padma Vs Venugopal, 2012 (1) GLH
(SC), 442

7. Smt. Hansagauri P. Ladhani Vs The Oriental
Insurance Co. Ltd., 2007(2) GLH 291

8. Smt. Sudesna & ors. Vs. Hari Singh & anr.,
First Appeal From Order No.23 of 2001

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

10. Lakkamma & ors. Vs The Regional Manager
M/S United India Insurance Co. Ltd & anr., AIR
2021 SC 3301

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

1. Heard Shri Rajiv Chaddha, learned
counsel for the appellants, Shri Satya Deo
Ojha, learned counsel for the respondents;
and perused the record.

2. This appeal, at the behest of the
insurance
company,
challenges
the
4 All. The New India Assurance Co. Ltd. Vs. Smt. Shail Kumar & Ors.
635
judgment dated 31.5.2000 passed by Motor
Accident Claims Tribunal/IIIrd Additional
District Judge, Etawah (hereinafter referred
to as 'Tribunal') in Motor Accident Claim
Petition No.290 of 1994 awarding a sum of
Rs.8,06,000/- with interest at the rate of
12% as compensation.

3. The brief facts of this case are that
on 14.02.1994 one deceased (Krishna Kant
Pandey) was going back from Bharthana to
Auraiya by his Ambassador Car No.UHH2100 at about 11.30 p.m. he reached near
Madhupur Satiyapur where truck No.UPG2108 was standing in the middle at the road
without any lights on. As soon as Krishna
Kant Pandey reached near the truck another
truck came from the front with very bright
lights on and his eyes got dazzled and he
hit the truck no.UPG-2018 which resulted
in the death of Sri Krishna Kant Pandey.

4. The submission of Sri Chaddha,
learned counsel for appellant that income
of deceased was considered by the tribunal
without any proof and according to him the
deceased as the lecturer in a Degree
College his income could not be Rs.8000/-
p.m.

5. It is submitted by Shri Ojha,
learned counsel for respondents that cross
objections are filed for enhancement of
compensation and therefore the amount
requires to be recalculated.

6. The issue of negligence has to be
decided from the perspective of the law laid
down by the Courts.

7. The term negligence means failure
to exercise care towards others which a
reasonable and prudent person would in a
circumstance. Negligence can be both
intentional or accidental which can also be
accidental.
More
particularly,
term
negligence connotes reckless driving and
the injured of claimants must always prove
that the either side is negligent. If the injury
rather death is caused by something owned
or controlled by the negligent party then he
is directly liable otherwise the principle of
"res ipsa loquitur" meaning thereby "the
things speak for itself" would apply.

8. The principle of contributory
negligence has been discussed time and
again. A person who either contributes or is
author of the accident would be liable for
his contribution to the accident having
taken place.

9. The Division Bench of this Court
in First Appeal From Order No. 1818 of
2012 ( Bajaj Allianz General Insurance
Co.Ltd. Vs. Smt. Renu Singh And
Others) decided on 19.7.2016 has held as
under :

"16. Negligence means failure to
exercise required degree of care and
caution expected of a prudent driver.
Negligence is the omission to do something
which a reasonable man, guided upon the
considerations, which ordinarily regulate
conduct of human affairs, would do, or
doing something which a prudent and
reasonable man would not do. Negligence
is not always a question of direct evidence.
It is an inference to be drawn from proved
facts. Negligence is not an absolute term,
but is a relative one. It is rather a
comparative term. What may be negligence
in one case may not be so in another.
Where there is no duty to exercise care,
negligence in the popular sense has no
legal consequence. Where there is a duty to
exercise care, reasonable care must be
taken to avoid acts or omissions which
would be reasonably foreseen likely to
636 INDIAN LAW REPORTS ALLAHABAD SERIES
caused physical injury to person. The
degree of care required, of course, depends
upon facts in each case. On these broad
principles, the negligence of drivers is
required to be assessed.

17. It would be seen that burden of
proof for contributory negligence on the
part of deceased has to be discharged by
the opponents. It is the duty of driver of the
offending vehicle to explain the accident. It
is well settled law that at intersection
where two roads cross each other, it is the
duty of a fast moving vehicle to slow down
and if driver did not slow down at
intersection, but continued to proceed at a
high speed without caring to notice that
another vehicle was crossing, then the
conduct of driver necessarily leads to
conclusion that vehicle was being driven by
him rashly as well as negligently.

18. 10th Schedule appended to Motor
Vehicle Act contain statutory regulations
for driving of motor vehicles which also
form part of every Driving License. Clause6 of such Regulation clearly directs that the
driver of every motor vehicle to slow down
vehicle at every intersection or junction of
roads or at a turning of the road. It is also
provided that driver of the vehicle should
not enter intersection or junction of roads
unless he makes sure that he would not
thereby
endanger
any
other
person.
Merely, because driver of the Truck was
driving vehicle on the left side of road
would
not
absolve
him
from
his
responsibility to slow down vehicle as he
approaches
intersection
of
roads,
particularly when he could have easily
seen, that the car over which deceased was
riding, was approaching intersection.

19. In view of the fast and constantly
increasing volume of traffic, motor vehicles
upon roads may be regarded to some extent
as coming within the principle of liability
defined in Rylands V/s. Fletcher, (1868) 3
HL (LR) 330. From the point of view of
pedestrian, the roads of this country have
been rendered by the use of motor vehicles,
highly dangerous. 'Hit and run' cases
where drivers of motor vehicles who have
caused accidents, are unknown. In fact
such cases are increasing in number.
Where a pedestrian without negligence on
his part is injured or killed by a motorist,
whether negligently or not, he or his legal
representatives, as the case may be, should
be entitled to recover damages if principle
of social justice should have any meaning
at all.

20. These provisions (sec.110A and
sec.110B of Motor Act, 1988) are not
merely
procedural
provisions.
They
substantively affect the rights of the parties.
The right of action created by Fatal
Accidents Act, 1855 was 'new in its species,
new in its quality, new in its principles. In
every way it was new. The right given to
legal representatives under Act, 1988 to file
an application for compensation for death
due to a motor vehicle accident is an
enlarged one. This right cannot be hedged
in by limitations of an action under Fatal
Accidents Act, 1855. New situations and
new dangers require new strategies and
new remedies.

21. In the light of the above
discussion, we are of the view that even if
courts may not by interpretation displace
the principles of law which are considered
to be well settled and, therefore, court
cannot dispense with proof of negligence
altogether in all cases of motor vehicle
accidents, it is possible to develop the law
further on the following lines; when a
motor
vehicle
is
being
driven
with
reasonable care, it would ordinarily not
meet with an accident and, therefore, rule
of res-ipsa loquitor as a rule of evidence
may be invoked in motor accident cases
with greater frequency than in ordinary
4 All. The New India Assurance Co. Ltd. Vs. Smt. Shail Kumar & Ors.
637
civil suits (per three-Judge Bench in
Jacob Mathew V/s. State of Punjab, 2005
0 ACJ(SC) 1840).

22. By the above process, the burden
of proof may ordinarily be cast on the
defendants in a motor accident claim
petition to prove that motor vehicle was
being driven with reasonable care or that
there is equal negligence on the part the
other side."

10.

Learned
counsel
for
the
respondents, has vehemently objected the
contentions raised by the learned counsel
for the appellants and has submitted that
the compensation awarded by the Tribunal
is calls for enhancement.

11. Having heard learned counsel for
the parties and considered the factual data,
this Court found that the accident occurred
on 14.2.1994 causing death of Krishna
Kant Pandey who was aged about 46 years
of age and left behind him, widow and two
children. The Tribunal has assessed the
income of the deceased to be Rs.96,000/-
per annum. The deceased was lecturer by
profession according to his pay certificate
which is on record. To which as the
deceased was in age bracket of 40 to 50
years and a salaried person, 30% of the
income will have to be added as future
prospects in view of the decision of the
Apex
Court
in
National
Insurance
Company Limited Vs. Pranay Sethi and
Others, 2017 0 Supreme (SC) 1050. As
far as deduction towards personal expenses
of the deceased is concerned, it should be
1/3 as the deceased had three persons to
feed. The multiplier of 13 would be applied
and the rate of interest shall be 9% instead
of 12% as granted by the court below.

12. In this backdrop let us evaluate
the income in view of the judgment of
National Insurance Company Limited
Vs. Pranay Sethi and Others, 2017 0
Supreme (SC) 1050 and Sarla Verma Vs.
Delhi Transport Corporation, (2009) 6
SCC 121 and, the recalculation would be
as follows:

i. Income = Rs.8,000/- per month as
per pay certificate.

ii. Percentage towards future prospects
: 30% namely Rs.2400/-

iii. Total income : Rs. 10,000 + 2400 =
Rs.12,400/-

iv. Income after deduction of 1/3 :
Rs.8,267/-

v. Multiplier applicable : 13 (as the
deceased was in the age bracket of 46-50
years)

vii. Loss of dependency: Rs. 8,267 x
13 = Rs.1,07,471/-

viii. Annual income : Rs.1,07,471 x 12
= Rs.12,89,652/-

ix. Amount under non pecuniary heads
: Rs.30,000/-

x.
Total
compensation
:
Rs.13,19,652/-.

13. On depositing the amount in the
Registry of Tribunal, Registry is directed to
first deduct the amount of deficit court fees,
if any. 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 illiterate or rustic
villagers.

14. In view of the ratio laid down by
Hon'ble Gujarat High Court, in the case of
Smt. Hansagauri 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
638 INDIAN LAW REPORTS ALLAHABAD SERIES
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
without
producing
the
certificate from the concerned Income- Tax
Authority. The aforesaid view has been
reiterated by this High Court in Review
Application No.1 of 2020 in First Appeal
From Order No.23 of 2001 (Smt. Sudesna
and others Vs. Hari Singh and another)
while disbursing the amount.

15.

Fresh
Award
be
drawn
accordingly in the above petition by the
tribunal as per the modification made
herein. The Tribunals in the State shall
follow the direction of this Court as herein
aforementioned as far as disbursement is
concerned, it should look into the condition
of the litigant and the pendency of the
matter and not blindly apply the judgment
of A.V. Padma (supra). The same is to be
applied looking to the facts of each case.

16. 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 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."

17. The Apex Court in AIR 2021 SC
3301, Lakkamma & others. v. The
Regional Manager M/S United India
Insurance Co. Ltd & another has
accepted the submission of the insurance
company that for a period when the appeal
is belated, interest shall not be paid. This
Court will adopt the similar mode from the
date of the judgment till the cross objection
is filed. The delay is condoned, interest be
not granted.

18. 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
amount along with 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. The amount already
deposited be deducted from the amount to
be deposited.

19. The Appeal and the Cross
objection are allowed in light of the latest
decisions of the Apex Court. .

20. Record be sent back to court
below forthwith, if any.

21. This Court is thankful to Shri
Rajiv Chaddha and Shri S.D. Ojha, learned
4 All. Smt. Kavita Verma & Ors. Vs. Jogendra Singh & Ors.
639
counsels for the parties for ably assisted the
Court.
----------
(2022)04ILR A639
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.04.2022

BEFORE

THE HON'BLE DR. KAUSHAL JAYENDRA
THAKER, J.
THE HON'BLE AJAI TYAGI, J.

First Appeal from order No. 3087 of 2011
With F.A.F.O.Nos. 3086 of 2011 and 3085 of
2011

Smt. Kavita Verma & Ors. ...Appellants
Versus
Jogendra Singh & Ors. ...Respondents

Counsel for the Appellants:
Sri Ramesh Kumar Shukla

Counsel for the Respondents:
Sri Pranjal Mehrotra, Sri M.K. Maurya

(A) Torts Law - Motor vehicle Act,1988 -
Section 163-A,166,173 - compensation for
death - rate of interest - income tax
returns should be considered as proof of
income. (Para -8,10)

(B) Tax Law - The Income Tax Act, 1961-
Section 194A (3) (ix) - 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' - if the
amount of interest does not exceeds
Rs.50,000/- in any financial year - registry
of Tribunal is directed to allow the
claimants
to
withdraw
the
amount
without producing the certificate from the
concerned Income-Tax Authority. (Para -
16)

Accident caused death of three people -
deceased
(Prashant
Verma),
his
younger
brother (Sandeep Verma) and mother (Smt.
Vimlesh) succumbed to the injuries on the spot -
same accident - three different awards - rate of
interest 7% - dissatisfied with compensation
awarded by Tribunal - hence three appeals.

HELD:-Total
compensation
payable
Rs.7,08,550/- for (DECEASED SMT. VIMLESH
VERMA); Rs.14,98,000/- for (DECEASED
SANDEEP
VERMA)
;
Rs.25,95,000/-
for
(DECEASED
PRASHANT
VERMA).The
respondent-Insurance Company shall deposit
the amount with interest at the rate of 7.5%
from the date of filing of the claim petition till
the amount is deposited. Amount already
deposited be deducted from the amount to be
deposited. (Para -15)

Appeals partly allowed. (E-7)

List of Cases cited:-

1. Smt. Anamika Bhardwaj & ors. Vs Ashok
Gulati & ors. , F.A.F.O. No. 3251 of 2010

2. Malarvizhi & ors. Vs United India Insurance
Company Limited & anr. , AIR (2020) SC 90

3. Sunita & ors. Vs Raj. State Road Transport
Corporation & anr. ,2019 (SC) 994

4. Sarla Verma & ors. Vs Delhi Transport
Corporation & anr., 2009 Lawsuit (SC) 613

5. Lata Wadhwa & ors. , AIR 2001 SC 3218

6. Anita Sharma Vs New India Assurance Co.
Ltd. ,(2021) 1 SCC 171

7. Vimla Devi & ors. Vs National Insurance
Company Ltd. & anr., (2019) 2 SCC 18

8. Puttum & ors. Vs K.N. Narayan Reddy ,AIR
2014 (SC) 706

9. Munna Lal Jain & anr. Vs Vipin Kumar
Sharma & ors. , (2015) 6 SCC 347

10. National Insurance Co. Ltd. Vs Pranay Sethi
& ors., 2017 LawSuit (SC) 1093