IMPORTANT POINT
When a person no more remains a tax payer, Income tax payable from the salary, is required to be deducted.

JUDGMENT

S.B. Sinha, J. —

1. Leave granted.

2. Ram Prasad Varma, respondent No. 1, an Assistant Executive Engineer, was employed with Oil and Natural Gas Corporation (ONGC) at Rajahmundry. On or about 9.9.1998, while he was going to the workshop, he was hit by a lorry bearing registration No. AP-16-W-5839. The lorry ran over his legs. He was admitted in the hospital. Indisputably, both his legs were amputated. The fact that an accident had taken place owing to rash and negligent driving on the part of the driver of the said lorry is not in dispute. It is also not in dispute that, at the relevant time, respondent was aged 55 years and his annual income was Rs.2,27,471.00.

3. Respondent having suffered permanent disability filed a Claim Petition in terms of Section 166 of the Motor Vehicles Act claiming compensation of a sum of Rs.20 lakhs; Rs.50,000/- towards extra nourishment; Rs. 50,000/- towards compensation for mental agony, pain and suffering; Rs. 50,000/- for loss of amenities in life and Rs.2 lakhs for the expenditure of attendant throughout the life and Rs.16.50 lakhs towards loss of future earnings.

4. The Motor Accidents Claims Tribunal awarded a sum of Rs.19,63,000/- with interest at the rate of 12% per annum from the date of filing of the petition till realization.

5. An appeal preferred thereagainst by the Insurance Company before the High Court in terms of Section 173 of the Act has been dismissed by reason of the impugned judgment. The High Court, however, considering the prevailing rate of interest reduced the rate of interest from 12% per annum to 9% per annum.

6. Mr. Pankaj Seth, learned counsel appearing on behalf of appellant would contend:

(i) The learned Tribunal, and consequently the High Court, committed a serious error in applying multiplier of eight although respondent would have retired from services on attaining the age of sixty.

(ii) The Tribunal in determining the amount of compensation should have deducted the amount of income tax from his gross salary as compensation has been granted on the basis of the structured formula.

(iii) The Tribunal in determining the said amount of compensation should have deducted one-third from the total amount of his income by way of miscellaneous expenses.

7. Indisputably, the respondent was an Assistant Executive Engineer. He was an income tax payee. He had submitted income tax return for the year 1998-99 showing his gross salary at Rs.2,27,471.40 and the amount of income-tax deducted at source was Rs.30,748.00.

8. A claimant who had suffered injuries in a motor vehicle accident resulting in amputation of both legs is entitled to 100% compensation in terms of the First Schedule appended to the Workmen’s Compensation Act, 1923. The amount of compensation which represents the loss of income can be calculated either in terms of the structured formula as contained in the Second Schedule appended to the Motor Vehicles Act or on the basis of the other materials brought on record. It is not in dispute that in a case of this nature, the Tribunal cannot be said to have committed any illegality in applying the structured formula.

9. The Second Schedule as such may not have any application as the maximum annual income of a deceased or an injured which could be taken into consideration therefor is Rs.40,000/- per annum. However, keeping in view the peculiar factual circumstances of the case, the proper multiplier which, in our opinion, should be adopted is eight for the purpose of determining fair compensation.

10. Indisputably, he was to retire within a few years, but in view of the injuries suffered he had to give up his job. The life expectancy of an Indian citizen is about 62 years. A person on retirement, in the event if pension scheme is applicable, would be entitled to pensionary benefits. Had the respondent worked for five years more, the amount of pension calculated on the basis of last pay drawn would have been more than what might have become payable in the year 199