2015 (5) TMI 824 - HC - Indian Laws

Government Liability Upheld for Fatal Accident Compensation

The Court upheld the liability of the Government to pay compensation in a fatal accident involving government employees on duty. The State government's ... Liability to pay compensation - motor vehicle accident - whether once the vehicle was insured, the Government would not be liable to pay the compensation? - Held that:- As per the evidence placed before the Tribunal, no proof was produced to effect the service of requisition order. The Tribunal on facts found that the requisition order was not served upon the owner. Under these circumstances, if the owner had not paid the amount and the vehicle was under the requisition and in possession of the Government, if the Tribunal has fastened the liability upon the Government, such approach on the part of the Tribunal could not be said to be erroneous on the ground sought to be canvassed. - Decided against revenue. Higher amount of compensation awarded - Held that:- In Accounting Year 2005 – 2006, the exemption limit was up to ₹ 1,00,000/- and, therefore, upto ₹ 1,00,000/- there was no question of making any deduction of income tax. So far as the amount of income above ₹ 1,00,000/- i.e. ₹ 1,48,161/-, the tax would be ₹ 48,461/- on the basis of tax slab of 10%. It would be roughly ₹ 4,800/- per year and if multiplier of 14 is considered, the said amount would be ₹ 67,200/- towards deduction of income tax. At the same time, another relevant aspect is that the Tribunal has awarded a meager amount of ₹ 10,000/- towards loss of consortium, ₹ 10,000/- towards loss of love and affection and ₹ 10,000/- towards loss of estate totaling to ₹ 30,000/-. Thus for the conjoint heads of loss of estate, loss of love and affection and loss of consortium, the amount of ₹ 1,00,000/- was required to be awarded by the Tribunal. If the difference is considered, it is less by ₹ 70,000/-. As against the same, as observed earlier, towards income tax deduction, such amount would come to ₹ 67,00/- and hence, both the aforesaid aspects if considered, ultimately, there will not be any substantial difference in the total amount awarded by the Tribunal. Hence, we find that the amount already awarded by the Tribunal would meet with principle of just compensation and, therefore, we find that on such ground, no interference would be called for and the said contention, therefore, would fail. - Decided against revenue. Issues:- Liability of the Government for compensation in a fatal accident involving government employees on duty- Consideration of income tax deduction while calculating compensation amountIssue 1: Liability of the Government for compensationThe case involved two deceased government employees who met with a fatal accident while on duty. The Tribunal awarded compensation in two claim petitions, one for a higher amount and the other for a lower amount. The State government filed appeals challenging the liability to pay compensation. The Assistant Government Pleader argued that since the vehicle was insured, the liability should be on the vehicle owner and the insurance company. However, it was revealed that the vehicle was requisitioned by the State for election duty, and the owner had not paid the additional premium as required. The Tribunal found that the requisition order was not served upon the owner, and the vehicle was in possession of the Government at the time of the accident. Therefore, the liability was rightly fastened upon the Government, and the contention of the State government failed.Issue 2: Consideration of income tax deductionThe Assistant Government Pleader raised a contention regarding the calculation of compensation amount, specifically mentioning the deduction towards income tax. Referring to a Supreme Court decision, it was argued that the Tribunal had not properly considered the income tax deduction. However, the Court analyzed the exemption limit under Income Tax during the relevant period and calculated the potential deduction. It was noted that the Tribunal had awarded a smaller amount for certain aspects like loss of consortium, love and affection, and loss of estate, which could have been higher based on recent court trends. After a detailed calculation, the Court concluded that the amount awarded by the Tribunal already accounted for just compensation, and hence, no interference was warranted on this ground. Consequently, the Court found that the appeals were meritless and dismissed them, leading to the disposal of related Civil Applications.