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Accident claim – M.V.Act- what is net salary or take home salary ?– Voluntary savings deductions can not be considered as expenses – While ascertaining salary, the trail court deducted various heads shown in the salary certificate like GPF, HRA and Income tax etc., – High court confirmed the same – Apex court held that except contribution towards Income Tax, the other voluntary contributions made by the deceased, which are in the nature of savings, cannot be deducted from the monthly salary of the deceased to decide his net salary or take home salary. = MANASVI JAIN … APPELLANT VERSUS DELHI TRANSPORT CORPORATION … RESPONDENTS = 2014 ( April.Part ) judis.nic.in/supremecourt/filename=41452

 

Accident claim – M.V.Act- what is net  salary  or  take  home salary ?- While ascertaining salary, the trail court deducted various heads shown in the salary certificate like GPF, HRA and Income tax etc., – High court confirmed the same – Apex court held that except contribution towards Income Tax, the other voluntary contributions  made  by the deceased, which are in the nature of savings, cannot  be  deducted  from the monthly salary of the deceased to decide his net  salary  or  take  home salary. =

It is not  in  dispute  that  the

deceased was  getting  an  amount  of  Rs.26,924/-  as  monthly  salary  and

Rs.11,140/- was being deducted under various heads such as GPF, House  Rent,

G.I.S. and Income Tax. After  taking  into  account  these  deductions,  the

tribunal arrived at a conclusion that the net  salary  of  the  deceased  is

Rs.15,784/- and awarded a total compensation  of  Rs.10,25,176/-,  including

Rs.5,000/- towards funeral expenses and Rs.10,000/-  towards  mental  agony.

The High Court did not interfere with the judgment of the Tribunal.

12.   This Court in Shyamwati Sharma & Ors. Vs. Karam Singh  &  Ors.  (2010)

12  SCC  378,   while  considering  the  issues  of  deduction   of   taxes,

contributions etc., for arriving at the figure of net monthly  income,  held

that “while ascertaining the income of the deceased,  any  deductions  shown

in  the  salary  certificate  as  deductions  towards  GPF,  life  insurance

premium, repayments of loans etc., should not be excluded from  the  income.

The deduction towards income tax / surcharge alone should be  considered  to

arrive at the net income of the deceased.

13.   In the present case, there is no dispute about of the  salary  of  the

deceased. As per salary certificate, his monthly income and  deductions  are

as under:

|Monthly Income                        |Rs. 26,950-00        |

|Deductions                            |                     |

|Provident Fund                        |8,000-00             |

|House Rent                            |525-00               |

|G.I.S.                                |120-00               |

|Income Tax                            |2,500-00             |

 

So, from the above table, it is clear that except an  amount  of  Rs.2,500/-

towards Income Tax, rest of the amounts were voluntarily contributed by  the

deceased for the welfare of his family. Considering  the  decision  of  this

Court  in  Shyamwati  Sharma  &  Ors.,  (supra),  in  our  opinion,   except

contribution towards Income Tax, the other voluntary contributions  made  by

the deceased, which are in the nature of savings, cannot  be  deducted  from

the monthly salary of the deceased to decide his net  salary  or  take  home

salary. Hence, the take home salary of the  deceased  comes  to  Rs.24,450/-

which can be rounded to Rs.25,000/-

14.   Accordingly,  we  determine  the  monthly  take  home  salary  of  the

deceased as Rs.25,000/-. Applying multiplier 8, the  appellant  is  entitled

to the compensation as under:

 

      Financial Loss                          Rs. 16,00,000-00

      2/3rd of 25,000 x 12 x 8

      Funeral Expense                   Rs.        5,000-00

      Towards mental agony                    Rs.       10,000-00

                                              —————————

      Total compensation                      Rs. 16,15,000-00

                                             ———————–

The appellant is also entitled to an interest @ 6% p.a.  from  the  date  of

filing of the petition before the Tribunal till the date of payment.

15.   We therefore set aside the judgments of the  Courts  below  and  allow

the appeal in the above terms with no order as to costs.

 

2014 ( April.Part ) judis.nic.in/supremecourt/filename=41452

P SATHASIVAM, RANJAN GOGOI, N.V. RAMANA

REPORTABLE

 

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7642 OF 2009
MANASVI JAIN … APPELLANT

VERSUS
DELHI TRANSPORT CORPORATION … RESPONDENTS

 

JUDGMENT

 

N.V. RAMANA, J.
This appeal by special leave arises out of the Judgment and order
dated 26th March, 2008 passed by the High Court of Uttarakhand in a Motor
Accidents Claims Appeal No. 484 of 2006.
2. The appellant-claimant is the son of deceased Suresh Chandra Jain who
died in a road accident. He filed a claim petition before the Motor
Accidents Claim Tribunal, Dehradun seeking compensation of an amount of
Rs.36,00,000/- on the basis that the deceased who was aged 55 years on the
date of accident, was working as Executive Engineer with the Public Works
Department of the Government of Uttarakhand and was earning a salary of
Rs.26,950/- per month.
3. The Tribunal, after taking into account the evidence on record and
also the evidence of one eyewitness to the accident, namely, Ajay Bansal
(PW 2), came to the conclusion that the accident took place due to rash
and negligent driving of the bus driver—Respondent No. 2 and as such, the
appellant is entitled for compensation. According to the original salary
certificate of the deceased issued by the Executive Engineer, Public Works
Department, Uttarakhand, the gross salary of the deceased was found to be
Rs.26,950/- and after various deductions towards GPF, House Rent, GIS and
Income Tax, the take home salary was determined as Rs.15,784/- p.m. The
Tribunal considering the fact that the deceased was 55 years old, as
evidenced by the documentary evidence, applied the multiplier 8. Thus,
taking into consideration his age and monthly salary at Rs.15,784/-, the
Tribunal calculated the loss of dependency as Rs.10,10,176/- (2/3rd of
Rs.15,784 x 12 x 8). In addition to that Rs.5,000/- was granted towards
funeral expenses and Rs.10,000/- towards mental agony and finally awarded
Rs.10,25,176/- as compensation with interest payable @ 5% p.a. from the
date of institution of claim petition till the date of payment. The
Tribunal also fastened the liability of making payment of compensation on
the Delhi Transport Corporation-Respondent No. 1 as the bus which caused
accident belongs to them.
4. Against the aforesaid order of the Tribunal, both Delhi Transport
Corporation as well as the appellant herein have filed their respective
appeals before the High Court. The Delhi Transport Corporation pleaded that
the bus was insured with National Insurance Company, therefore, the
liability of making payment of compensation lies on the Insurance Company.
On the other hand, the appellant’s appeal was for enhancement of
compensation.
5. The High Court allowed the appeal of the Delhi Transport Corporation
and directed the National Insurance Company to pay the compensation amount.
6. As far as the appeal filed by the appellant herein is concerned, the
High Court was of the view that the amount awarded by the Tribunal as
compensation was perfectly justified. It accordingly dismissed the
appellant’s appeal.
7. The appellant, not satisfied with the quantum of compensation and the
rate of interest awarded by the Courts below, filed this appeal.
8. The contention of the counsel for the appellant is that in deciding
the ‘take home salary’ of the deceased, the Tribunal as well as the High
Court erroneously deducted from the salary an amount of Rs.11,140/-
contributed by the deceased towards various heads such as General Provident
Fund, house rent, insurance, income tax etc. He submitted that these
contributions should also be treated as the income of the deceased.
9. On the other hand, learned counsel for the respondent-Insurance
Company supported both the judgments of the Tribunal and the High Court.
10. In view of the contentions raised on behalf of either side and the
material placed before us, the main question that arises for consideration
is whether for the purpose of deciding net monthly income of the deceased,
the amount of voluntary contributions he made towards General Provident
Fund etc., should be included or excluded from his salary?
11. We have heard learned counsel for the parties and perused the orders
passed by the Tribunal and the High Court. It is not in dispute that the
deceased was getting an amount of Rs.26,924/- as monthly salary and
Rs.11,140/- was being deducted under various heads such as GPF, House Rent,
G.I.S. and Income Tax. After taking into account these deductions, the
tribunal arrived at a conclusion that the net salary of the deceased is
Rs.15,784/- and awarded a total compensation of Rs.10,25,176/-, including
Rs.5,000/- towards funeral expenses and Rs.10,000/- towards mental agony.
The High Court did not interfere with the judgment of the Tribunal.
12. This Court in Shyamwati Sharma & Ors. Vs. Karam Singh & Ors. (2010)
12 SCC 378, while considering the issues of deduction of taxes,
contributions etc., for arriving at the figure of net monthly income, held
that “while ascertaining the income of the deceased, any deductions shown
in the salary certificate as deductions towards GPF, life insurance
premium, repayments of loans etc., should not be excluded from the income.
The deduction towards income tax / surcharge alone should be considered to
arrive at the net income of the deceased.
13. In the present case, there is no dispute about of the salary of the
deceased. As per salary certificate, his monthly income and deductions are
as under:
|Monthly Income |Rs. 26,950-00 |
|Deductions | |
|Provident Fund |8,000-00 |
|House Rent |525-00 |
|G.I.S. |120-00 |
|Income Tax |2,500-00 |

So, from the above table, it is clear that except an amount of Rs.2,500/-
towards Income Tax, rest of the amounts were voluntarily contributed by the
deceased for the welfare of his family. Considering the decision of this
Court in Shyamwati Sharma & Ors., (supra), in our opinion, except
contribution towards Income Tax, the other voluntary contributions made by
the deceased, which are in the nature of savings, cannot be deducted from
the monthly salary of the deceased to decide his net salary or take home
salary. Hence, the take home salary of the deceased comes to Rs.24,450/-
which can be rounded to Rs.25,000/-
14. Accordingly, we determine the monthly take home salary of the
deceased as Rs.25,000/-. Applying multiplier 8, the appellant is entitled
to the compensation as under:

Financial Loss Rs. 16,00,000-00
2/3rd of 25,000 x 12 x 8
Funeral Expense Rs. 5,000-00
Towards mental agony Rs. 10,000-00
—————————
Total compensation Rs. 16,15,000-00
———————–
The appellant is also entitled to an interest @ 6% p.a. from the date of
filing of the petition before the Tribunal till the date of payment.
15. We therefore set aside the judgments of the Courts below and allow
the appeal in the above terms with no order as to costs.
…………………………………………CJI.
(P. SATHASIVAM)

 
……………………………………………J.
(RANJAN GOGOI)

 
……………………………………………J.
(N.V. RAMANA)
NEW DELHI,
APRIL 23, 2014

 

 

———————–
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