Patna High Court
The New India Assurance Company LimitedversusVijaya Kumari and Ors.
- Decided
- Disposal
- DISPOSED
- Bench
- RAJIV ROY
Holding
The High Court dismissed the insurer's appeal, upheld the Tribunal's award, and ordered payment of Rs 41,77,428 with interest.
Summary
On 9 July 2012, Assistant Engineer Kameshwar Mahto was fatally injured when a tractor (Reg. No. BR-07-G-4161) struck his motorcycle from behind. The deceased's family filed a claim against New India Assurance Company Limited, the insurer of the tractor, before the Motor Vehicle Accident Claim Tribunal, which awarded compensation of Rs 42,27,428 (later reduced to Rs 41,77,428 after a prior payment) with interest. The insurer appealed, contending that the seized tractor was not the one involved in the accident and that a 30% income‑tax deduction should reduce the award. The High Court examined the police seizure record confirming the tractor’s involvement and, relying on Supreme Court precedents, held that the 30% future‑prospect addition and the 30% tax deduction cancel each other, leaving the compensation unchanged. Consequently, the appeal was dismissed and the Tribunal’s award was upheld, with the insurer directed to pay the balance by 19‑Feb‑2026.
Issues considered
- Whether the claim is maintainable and the claimants have a cause of action
- Whether the accident occurred on 9 July 2012 involving the tractor bearing Reg. No. BR-07-G-4161
- Whether the driver of the tractor was negligent
- Whether the tractor was insured at the time of the accident
- Whether the insurer is liable to pay compensation
- Whether a 30% income‑tax deduction should be applied to the compensation
- Whether future‑prospect earnings of 30% should be added to the compensation
Subjects
- Motor vehicle accident
- Insurance liability
- Compensation award
- Income tax deduction
- Future prospect earnings
- Claim Tribunal
- High Court appeal
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Miscellaneous Appeal No.702 of 2016
======================================================
The New India Assurance Company Limited Appeal and appellants through
the Manager/authorized signatory, Regional Office, New India Assurance
Company Limited, 6th and 7th Floor, BSFC Building, Frazer Road, Patna - 1.
... ... Appellant/s
Versus
1. Vijaya Kumari w/o Lt. Kameshwar Mahto Deceased
2. Phul Kumari w/o Anand Lal Singh (Mother)
3. Bhawna Raj d/o Lt. Kameshwar Mahto
4. Abhishek Ranjan s/o Lt. Kameshwar Mahto Res. 3 and 4 are minor under
the guardianship of mother , Res.1 All the above are residents of mohalla P
and T Colony, Mithanpura, P S - Mithanpura, Muzaffarpur, District-
Muzaffarpur.
5. Jyoti Devi w/o Ram Prasad Shah (owner) Resident of Mohalla Beta
Sahebganj, P.S. - Laheriasarai, District-Darbhanga.
... ... Respondent/s
======================================================
Appearance :
For the Appellant/s : Mr. Durgesh Kumar Singh, Advocate
: Mr. Abhijeet Kumar Singh, Advocate
For the Respondent/s : Mr. Bal Govind Sharma, Advocate
: Mr. Dhannjay Kumar No.2, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJIV ROY
ORAL JUDGMENT
Date : 22-01-2026
Heard Mr. Durgesh Kumar Singh, learned counsel
for the appellant duly assisted by Mr. Abhijeet Kumar Singh
and Mr. Dhannjay Kumar No.2 for the claimant respondents.
2. The present appeal has been preferred for:
“being aggrieved by and dissatisfied
with the judgment dated 07.11.2015 & award
dated 26.11.2015 passed by the learned 12 th
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Additional District Judge cum Motor Vehicle
Accident Claim Tribunal, Muzaffarpur in Claim
Case No. 326/12 ‘Vijaya Kumar & Ors. vs.
Jyoti Devi & Another’.
3. The facts leading to the present appeal is/are as
follows:
4. On 09.07.2012, the deceased, Kameshwar Mahto
who was an Assistant Engineer with the Rural Works
Department, Bihar, Patna, was going to Darbhanga on his
motorcycle. As he reached near Taralahi, a Tractor bearing
Registration No. BR-07-G-4161 in a rash and negligent
manner hit the motorcycle from behind, Kameshwar Mahto
sustained grievous injuries, taken to the Darbhanga Medical
College, Darbhanga where he died in course of treatment on
09.07.2012.
5. The usual F.I.R./investigation/submission of
charge-sheet followed the present Claim case no.329 of 2012
by the deceased’s family members including the wife and the
children (Vijaya Kumari & Ors. vs. Jyoti Devi & Anr.). The
second respondent is/was the New India Assurance
Company Limited (henceforth for short ‘the Insurance
Company’) with which the Tractor was insured.
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6. The matter went up before ‘the Tribunal’ and the
issues were framed as under:
(i) whether the claim case as framed is
maintainable?
(ii) whether claimants have got cause of
action and right to sue?
(iii) whether the accident had taken place
on 09.07.2012 at 9:30 AM at near Taralahi P.S.
Bahadurpur, District-Darbhanga by attending
vehicle bearing registration No. BR-07-g-4161;
(iv) whether the driver of offending vehicle
was driving the said vehicle very rashly and
negligently at the time of alleged accident;
(v) whether offending vehicle was insured
at the time of alleged accident;
(vi) whether the driver of offending vehicle
had legal valid driving license at the time of
accident?
(vii) what should be quantum, if
compensation is granted and who is liable to
pay the same?
(viii) are the claimants entitled to get any other
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reliefs or reliefs?”
7. The parties put forward their respective
submissions whereafter to ‘the Tribunal’ vide an order and
judgment dated 07.11.2015 and 26.11.2015 came to the
conclusion that:
(i) Kameshwar Mahto was moving on the
motorcycle on the said date (09.07.2012). As he
stopped and was in conversation with a friend,
the Tractor bearing registration no.BR-07-G-
4161 came from behind and in a rash and
negligent manner hit him causing injuries. He
was shifted to the Darbhanga Medical College
& Hospital, Darbhanga but as recorded above,
he died in course of the day;
(ii) the Tribunal further came to the
conclusion that the said Tractor was insured
with ‘the Insurance Company’ with valid
insurance certificate (from 29.05.2012 to
28.05.2013) and as such, ‘the Insurance
Company’ also has the responsibility towards
the payment.
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8. The admitted fact that ‘the Tribunal’ recorded
is/was that the deceased was employed with the Rural Works
Department, Bihar, Patna. He was who was 54-55 years of age
at the time of accident and considering that his salary
statement shows the income as Rs.47,941/-, thus multiplying
the same and deduction towards personal expenses; it was held
that the claimants are entitled to Rs.42,27,428/-.
9. As already compensation of Rs.50,000/- was paid
earlier, it came down to Rs.41,77,428/- with interest of six
percent per annum from the date of filing of the appeal till the
payment is made. This order came to be passed by the learned
12th Additional District Judge cum Motor Vehicle Accident
Claim Tribunal, Muzaffarpur on 07.11.2015/Award dated
26.11.2015.
10. Aggrieved, the present appeal.
11. Learned counsel representing the appellant
Company submits that the Bahadurpur P.S. Case No. 252 of
2012 was lodged on 09.07.2012 against the unknown Tractor
Driver and as such, it cannot be said that the Tractor bearing
Registration No. BR-07-G-4161 was involved in the said
accident. In that background, ‘the Insurance Company’ is not
liable to make any payment.
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12. The alternative submission is that the salary
amount was shown without the income tax deduction and as
such, 30 percent income tax deduction should have been there
in the final payment.
13. Mr. Dhannjay Kumar No.2, representing the
claimants on the other hand has taken this Court to the copy of
the case diary to show that though the lady claimant who was
not present at the spot rightly lodged the F.I.R. against
unknown Tractor the fact remains that the Police seized the
aforesaid Tractor Registration No. BR-07-G-4161 alongwith
Tailor BR-07-G-4197 on 09.07.2012 itself. Subsequently, a
request was also made to the Motor Vehicle Inspector for its
inspection. Learned counsel submits that in that background,
the first point raised by ‘the Insurance Company’ has to be
rejected.
14. So far as the second submission regarding the
deduction of income tax in concerned, learned counsel for the
claimants has taken this Court to an order of the Hon’ble Apex
Court in the case of Ranjana Prakash and Ors. vs.
Divisional Manager & Anr. reported in 2011 (5) SC 382 with
reference to paragraph no.9 to show that ‘the Tribunal’ failed
to include the future prospect of 30 percent and as such, 30%
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income tax deduction as claimed by ‘the Company’ will bring
the total deduction to zero. Thus, the appellant Company’s case
is fit to be rejected.
15. Having heard the parties and perusing the record,
the Court has taken note of the facts that:
(i) the deceased was working as an
Assistant Engineer with the Rural Works
Department, Bihar, with a fixed salary;
(ii) he was moving on a motorcycle which
was hit by the Tractor bearing Registration No.
BR-07-G-4161;
(iii) the aforesaid Tractor was seized by the
Police on 09.07.2012 itself as per the case
diary of the case and a request was made to the
Motor Vehicle Inspector for its inspection;
(iv) the Tractor in question was insured
with ‘the Insurance Company’ with validity
period from 29.05.2012 to 28.05.2013;
(v) in that background, the claim against
first point raised by ‘the Insurance Company is
rejected.
16. So far as the second point regarding the 30
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percent income tax deduction is concerned, this Court has gone
through the Hon’ble Apex Court in the case of Ranjana
Prakash & Ors. (supra). In that case, the High Court had
passed an order for the deduction of 30 percent income tax
amount on the appeal preferred by ‘the Insurance Company’.
The Hon’ble Apex Court while setting aside the said order in
paragraph nos. 9 and 10 held as under:
“9. In Sarla Verma, this Court held that
where the deceased had a permanent job with a
regular salary with provisions for periodic
increases, 30% of the current income could be
added towards future prospects if the deceased
was aged between 40 to 50 years. In Sarla
Verma, this Court also stated that income tax
paid should be deducted from the annual
income to arrive at the 'income' which will form
the basis for calculating the compensation. The
Tribunal did neither of these two things. If both
are done, the result would be that there would
be no change in the income arrived by the
Tribunal for calculating the compensation.
The 30% increase on account of future
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prospects and the 30% deduction on account
of income tax would cancel each other,
resulting in the ‘income’ remaining
unchanged. As a result, the compensation
awarded by the Tribunal also would remain
unaltered.
10. In view of the above, we allow this
appeal, set aside the order of the High Court
and restore the award of the Tribunal, though
for other reasons.”
(emphasis added)
17. Having taken note of the said paragraphs, it is
clear that even if the claim of the appellant company of 30%
Tax deduction is taken into account and if the future prospect
of 30% is added, the deduction would come to zero as the
adding of the future prospect of 30% and deduction of 30%
Income Tax deduction of 30 percent will cancel each other
resulting in the total income remaining unchanged. In that
background, the compensation awarded by ‘the Tribunal’ shall
remain unaltered. Thus, the second contention also goes.
18. No other point has been raised by the appellant
Company.
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19. In that background, no interference in the order is
required. The M.A. No. 702 of 2016 is dismissed. As the
Rs.50,000/- has already been paid, the amount of
Rs.41,77,428/- along with 6 percent interest has to be cleared
to the lady by 19.02.2026.
20. If the payment is not made by ‘the Insurance
Company’ by 19.02.2026, the lady claimant shall be entitled to
Rs.25,000/- as cost which can be realised from the erring
official which delays the payment.
21. Needless to add, if there has been any statutory
violation, ‘the Insurance Company’ always has the right to
agitate the matter in accordance with law.
22. The statutory amount if any, has to be returned.
(Rajiv Roy, J)
vinayak/-
AFR/NAFR AFR
CAV DATE NA
Uploading Date 27.01.2026
Transmission Date NA
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