Advocates:
['ARCHANA MANTRI', 'DINESH KALA', 'R N DIXIT/RAUNAK DIXIT', 'GOVIND GUPTA']

HIGH COURT OF JUDICATURE FOR RAJASTHAN

BENCH AT JAIPUR

S.B. Civil Miscellaneous Appeal No. 2363/2016

United India Insurance Company Limited through Manager,

Sahara Chambers, Tonk Road, Jaipur

----Appellant/Non-Claimant No.3

Versus

1. Smt Lalita Fothedar Wife of Shri Maharaj Krishna Fothedar,

aged 57 years.

2. Ishan Fothedar Son of Late Shri Maharaj Krishna Fothedar,

aged 28 years.

3. Babby Nisha Fothedar Daughter of Late Shri Maharaj Krishnba

Fothedar, aged 25 years.

(All resident of House No. 128 Lalpath Nagar Kanaar Road

Jammu.

----Respondents/Claimants

4. Kismat Singh @ Toni Son of Bhagwan Sigh, age 45 years

resident of Mali Mohall Pushkar District Ajmer (Driver Mini Bus

No. R.J.01-P-2970)

5. Vasudev Sharma Son of Shri Murlidhar Sharma resident of

behind Ragunath Bhawan Agra Gate Ganj Ajmer (Rajasthan)

(Owner Mini Bus No. R.J.01-P2970)

6. Arjun Phokraj Son of Shri Tak Singh, Resident of K-5,-95

Green Park Quince Road Jaipur (Driver Ambassador Car No.

R.J.14-T1411)

7. Cornel R.Hartiya Son of V.D. Haritya, resident of House No.95

Green Park Khatipura Road Jaipur (Owner Ambassador Car No.

R.J.14-T1411)

8. National Insurance Company Ltd. Through Regional Manager

Regional office Near Ambedkar Circle LIC Building Jaipur.

Respondents/Non-Claimants

For Appellant(s)

:

Ms. Archana Mantri

For Respondent(s)

:

Mr. Dinesh Kala, for respondent no.8

Mr. Dharmendra Gurjar, for

Mr. Raunak Dixit, for

respondents/claimants

Mr. Govind Gupta, for respondent no.

7

HON'BLE MR. JUSTICE MAHENDAR KUMAR GOYAL

Order

(2 of 6)

[CMA-2363/2016]

21/01/2021

This appeal is preferred against the judgment dated

03.03.2016 passed by learned MACT no.1, Jaipur Metropolitan,

Jaipur in claim petition no. 459/2001 whereby, partly allowing the

claim petition filed by the respondents-claimants, a compensation

of Rs.20,74,680 has been awarded to the claimants on account of

death of Shri Maharaj Krishna Fothedar.

Learned counsel for the appellant, assailing the findings of

the learned Tribunal vide Issue no.4, relying on the judgments of

the Hon’ble Apex Court of India in case of National Insurance

Company Limited vs. Indira Srivastava and Ors.- 2008(1)

T.A.C. 424(S.C.) and Vimal Kanwar & Ors. vs. Kishore Dan

& Ors.- 2013 R.A.R. 118 (SC) contended that the learned

Tribunal has erred in not deducting the income tax on the

compensation payable to the claimants. She submitted that in

spite of deduction of income tax from source as the deceased was

salaried person, the law mandates further deduction of income tax

on the total amount of compensation also.

Learned counsel appearing for the respondents-claimants,

supporting the findings reported by the learned Tribunal,

submitted that law does not stipulate deduction of income tax

twice; once at the stage of payment of salary i.e. deduction at

source in terms of Section 192(1) of the Income Tax Act, 1961

and again on the amount of compensation. He, therefore, prayed

that the appeal be dismissed.

Heard the learned counsels for the parties and perused the

record.

It is well established principle of law that while awarding

compensation, amount of income tax, if payable, has to be

(3 of 6)

[CMA-2363/2016]

deducted while assessing the loss of dependency. The Hon’ble

Apex Court of India in case of Vimal Kanwar & Ors. (Supra) has

held as under:-

“21. The third issue is ”whether the income

tax is liable to be deducted for determination

of compensation under the Motor Vehicles

Act”.

In the case of Sarla Verma & Anr.

(Supra), this Court held “generally the actual

income of the deceased less income tax should

be the starting point for calculating the

compensation.”

This Court further observed that “where

the annual income is in taxable range, the

word “actual salary” should be read as “actual

salary less tax”. Therefore, it is clear that if

the annual income comes within the taxable

range income tax is re