Compensation under Motor Vehicles Act for accident death is not taxable income; no income tax deduction required from deceased's gross income when computing loss of dependency, as it is remedial restitution, affirmed by precedents and recent amendments.

JUDGMENT :

K.K. RAMAKRISHNAN, J.

1. The appellant insurance company filed this appeal challenging the quantum of the award passed in M.C.O.P. No. 48 of 2018, dated 08.02.2023, by the Motor Accident Claims Tribunal, (Subordinate Judge), Kuzhithurai.

2. Facts of the case:

The deceased, Radhakrishnan, was serving as a Havildar in the Indian Army. On 23.02.2008 at about 8.00 p.m., while he was returning from Thiruvananthapuram to his residence on his motorcycle bearing Registration No.TN-75-U-8727, and proceeding along the southern road adhering to traffic Rules, a Mahindra Maxi Cab bearing Registration No.KL-19-4942, insured with the appellant–Insurance Company, came from the opposite direction, in a rash and negligent manner violating the traffic rules, and dashed against the motorcycle of the deceased. Due to the impact, the deceased sustained multiple grievous injuries, including injuries to the head, face, neck, and chest, and succumbed to the same while being taken to the hospital. The dependents of the deceased, namely respondents 1 to 3, filed a claim petition in M.C.O.P. No. 48 of 2018 seeking compensation of Rs.1,00,00,000/-

2.1. The appellant–Insurance Company filed a counter statement denying the manner of accident and disputing the allegation of negligence on the part of the driver of the Maxi Cab. It was contended that the deceased himself was responsible for the accident. It was further pleaded that the deceased was not wearing a helmet and that the income claimed by the claimants was excessive and not supported by evidence. On these grounds, dismissal of the claim petition was sought.

2.2. In support of their claim, the claimants relied upon the First Information Report registered in Crime No.32 of 2008 on the file of the concerned Police Station against the driver of the Maxi Cab. After investigation, a final report was filed against the said driver.

2.3. Before the Tribunal, the claimants examined P.W.1 and marked Exs. P1 to P15. On the side of the Insurance Company, no oral or documentary evidence was adduced.

3. Finding of the Tribunal:

The learned Tribunal Judge, upon appreciation of the entire evidence on record, held that the accident occurred due to the rash and negligent driving of the Maxi Cab driver and awarded a total compensation of Rs.1,00,75,000/- to the claimants by way of the impugned award on the following heads:

3.1. Aggrieved by the quantum of compensation so awarded, the appellant–Insurance Company has preferred the present appeal.

4. Submission of the learned counsel appearing for the appellant:

The learned counsel for the insurance company would submit that the learned Tribunal Judge has committed error in calculating the future prospect in paragraph No.15 of the impugned judgment. Further, the learned counsel would also submit there was no reduction towards the income tax and hence, he seeks to reduce the compensation.

5. Submission of the learned counsel appearing for the respondent:

Learned counsel for the respondent would fairly submit that there was an inadvertent mistake in calculating the future prospects and he produced the recalculation memo which was accepted by the learned counsel appearing for the insurance company. So far as the income tax is concerned, the same is not liable to be deducted. Therefore, he seeks to award the amount on the basis of the recalculation memo without deduction of the income tax.

6. This Court considered the rival submissions made by the learned counsel appearing for the appellant and the learned counsel appearing for the insurance company/third respondent and perused the materials availa