National Insurance Co. LTD. vs. Mamta Kumari & Ors.

Facts

The National Insurance Co. Ltd. (Appellant) appealed against an award dated May 26, 2022, by the Claim Tribunal, which granted compensation of Rs. 90,26,424/- with 9% interest to the claimants (Respondents 1-3) for the death of Shri N.K. Jha in a road accident on January 9, 2013. The accident involved a motorcycle and a cab. The claimants are the wife, son, and mother of the deceased. The appeal's sole ground was that the deceased's annual income was assessed too high by the Tribunal. The appellant argued that the deceased's wife continued his business, and its income increased, implying no loss of income to the family.

Held

The Court held that the assessment of the deceased's annual income at Rs. 6,34,316/- by the learned Claim Tribunal was correct, based on the deceased's last Income Tax Returns for Assessment Year 2013-14. The Court found that while the deceased's wife, Mamta Kumari (PW3), subsequently continued and prospered the business, this did not negate the initial financial loss suffered by the family due to the deceased's demise. PW3 was a housewife and solely dependent on the deceased's earnings prior to his death. Her subsequent success through personal efforts could not be used to defeat the bona fide claim of loss of dependency. The Court also noted that future prospects were granted at 40% in line with the Supreme Court's decision in National Insurance Company vs. Pranay Sethi, and the multiplier of 15 was applied as per Sarla Verma v. DTC. The deduction of 1/3rd income towards personal expenses was also deemed correct given the three dependents. Therefore, there was no infirmity in the impugned award.

Key Issues

1. Whether the learned Claim Tribunal erred in assessing the annual income of the deceased at Rs. 6,34,316/- per annum, considering the Appellant's contention that the deceased's wife continued the business and experienced increased income? (Question of mixed law and fact, turning on the assessment of income and loss of dependency). Contentions: Petitioner/Appellant (National Insurance Co. Ltd.): Argued that the deceased's wife continued the same business after his demise, and the income from this business increased over time. Therefore, the family did not suffer a loss of income. They also contended that personal and living expenses, multiplier application, and future prospects were not considered in light of Supreme Court decisions. Respondent/Claimants: Contended that the deceased's income was rightly assessed by the Claim Tribunal and the award should not be interfered with. They presented Income Tax Returns and other documentary evidence to prove the deceased's income and business flourishing.