Supreme Court of India
VIJAY KUMAR RASTOGIversusUTTAR PRADESH STATE ROADWAYS TRANSPORT CORPORATION
- Citation
- 2018 INSC 129
- Decided
- 9 February 2018
- Disposal
- Appeal(s) allowed
- Bench
- DIPAK MISRA
Holding
Loss of income for compensation must be computed on the taxable income disclosed in the income‑tax return, including income from other sources.
Summary
Vijay Kumar Rastogi suffered severe injuries in a bus accident in 2005 and claimed compensation under the Motor Vehicles Act. The Motor Accident Claims Tribunal awarded compensation but calculated loss of income only on his net salary of Rs 44,511, ignoring income from bank interest and commission disclosed in his income‑tax return. The High Court upheld the Tribunal’s award, merely increasing the interest rate, and rejected the appellant’s claim for additional car‑damage compensation due to lack of documentary evidence. The Supreme Court held that loss of income must be based on the taxable income shown in the income‑tax return, which included other sources, and therefore the Tribunal’s award was deficient. Consequently, the Court enhanced the compensation for loss of income and loss of future income by Rs 2,85,966 and ordered interest at 9% per annum, while leaving the car‑damage claim dismissed.
Issues considered
- Whether the Tribunal and the High Court erred in computing loss of income by excluding income from other sources such as bank interest and commission.
- Whether the appellant is entitled to additional compensation for damage to his car.
Legislation cited
- Motor Vehicles Act, 1988s. 166
Subjects
Motor Accident Claims Tribunalloss of incomejust compensationtaxable incomeinterest ratecar damagecompensation enhancement
Judgment
620 [2018]REPORTS
SUPREME COURT 2 S.C.R. 620 [2018] 2 S.C.R.
A VIJAY KUMAR RASTOGI
v.
UTTAR PRADESH STATE ROADWAYS TRANSPORT
CORPORATION
B (Civil Appeal Nos. 11011-11012 of 2017)
FEBRUARY 09, 2018
[DIPAK MISRA, CJI, A. M. KHANWILKAR AND
DR. D. Y. CHANDRACHUD, JJ.]
Motor Vehicles Act, 1988 – s.166 – Just compensation – Loss
C
of taxable income – Consideration of, while determining
compensation – Held: Income should include those benefits which
are taken into consideration for payment of income tax – Tribunal
erred in not considering income from other sources namely bank
interest and commission over and above his salary as disclosed in
D the income tax return filed by claimant-appellant on the ground
that commission and interest could not be considered for computation
of loss of income.
Allowing the appeals, the Court
HELD: 1. The High Court noted the taxable income
E disclosed in tax return of the appellant for the relevant period as
Rs.77,480/- and tax deduction of Rs.4,496/-, yet proceeded to
hold that the net income of the appellant has been rightly taken
into consideration by the Tribunal. It is unfathomable that the
High Court, despite having accepted the claim of the appellant
F founded on his tax return for the relevant period, disclosing the
taxable income of the appellant as Rs.77,480/- and deduction of
tax of Rs.4,496/-, could have affirmed the conclusion of the Tribunal
that the net annual income of the appellant was Rs.44,511/-. It
ought to have reckoned the taxable income for computing the
head towards loss of income. This is the manifest error committed
G by the High Court. The computation of taxable income as
disclosed by the appellant in his tax return for the assessment
year 2004-2005 for the previous year ended on 31st March, 2004,
unambiguously reinforces the claim of the appellant that his annual
taxable income was Rs.77,480/- (rounded off) and income tax due
H
620
VIJAY KUMAR RASTOGI v. U.P. STATE ROADWAYS 621
TRANSPORT CORPORATION
thereon was Rs.4,496/-. After providing deduction of the income A
tax payable by the appellant, the amount towards the head ‘loss
of income’ of the appellant would be Rs.72,984/- and not
Rs.44,511/- as assumed by the Tribunal. [Paras 11, 12][626-H;
627-A-B, E]
2. The appellant has also claimed further compensation B
towards damage to his Maruti Car which, according to the
appellant, was completely damaged. The Tribunal did not analyse
this claim at all. That grievance was made by the appellant before
the High Court, claiming compensation of Rs.80,000/- towards
the same. The High Court however, rejected the claim on the
finding that the appellant had failed to invite its attention to any C
document indicating that the appellant had incurred the expenses
of Rs.80,000/- towards car repair. Even in these appeals, the
appellant failed to invite attention of this Court to any document
on record in support of the said claim. There is no reason to
interfere with the opinion expressed by the High Court on the D
issue under consideration. [Para 14][628-C-F]
Sayed Sadiq v. Divisional Manager United India
Insurance Co. Ltd. (2014) 2 SCC 735 ; National
Insurance Co. Ltd. v. Indira Srivastava and Ors.
(2008) 2 SCC 763 : [2007] 13 SCR 352 ; Oriental E
Insurance Company Limited v. Jashuben and Ors.
(2008) 4 SCC 162 : [2008] 2 SCR 930 ; Kavita v.
Deepak and Ors. (2012) 8 SCC 604 – relied on.
Case Law Reference
[2007] 13 SCR 352 relied on Para 11 F
[2008] 2 SCR 930 relied on Para 11
(2012) 8 SCC 604 relied on Para 11
(2014) 2 SCC 735 relied on Para 13
G
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 11011-
11012 of 2017.
From the Judgment and Order dated 06.12.2016 of the High Court
of Delhi at New Delhi in MAC Appeal No. 393 of 2009. H
622 SUPREME COURT REPORTS [2018] 2 S.C.R.
A Ms. Rekha Rastogi, Pranab Kumar Mullick, Mrs. Soma Mullick,
Sebat Kumar Devria, Advs. for the Appellant.
Ms. Garima Prashad, Adv. for the Respondent.
The Judgment of the Court was delivered by
B
A. M. KHANWILKAR, J. 1. The present appeals take
exception to the judgment of the High Court of Delhi in MAC Appeal
No.393/2009 dated 6th December, 2016, whereby the High Court declined
to enhance the compensation amount awarded to the appellant by the
Motor Accident Claims Tribunal and to the order dated 18th January,
C 2017 dismissing the Review Petition No.20 of 2017.
2. The Motor Accident Claims Tribunal (for short, “the Tribunal”)
vide order dated 4th April, 2009, awarded compensation to the appellant
and his father-in-law to the tune of Rs.5,59,584/- and Rs.4,53,131/-,
respectively, against which four appeals were filed before the High Court,
D one each by the appellant and his father-in-law and two cross appeals
by the respondent, all of which were disposed of by the impugned
judgment. The appellant alone has assailed the impugned judgment and
prays for grant of enhanced compensation amount.
3. As can be gleaned from the claim petition, the appellant and his
E
father-in-law suffered serious injuries on 26th January, 2005, when their
car was hit by bus no. UP-25-G-9132, owned by the respondent and
being rashly and negligently driven by one Alam Beg. The extent of the
injuries caused to the appellant included haemorrhage, multiple cuts,
bruises and fractures all over the body and post traumatic optic neuropathy.
F The appellant was treated at several hospitals and operated upon but
suffered disability of 25%. He then filed a claim petition in the Tribunal,
Karkardooma, Delhi, against the driver of bus no. UP-25-G-9132, Alam
Beg, and the respondent on 27th January, 2006.
4. Ultimately, the Tribunal, vide order dated 4th April, 2009, inter
G alia held that bus No. UP-25-G-9132 was rashly and negligently driven
by the driver, Alam Beg, and accordingly, awarded the appellant with
compensation of Rs.5,59,584/- along with interest at 7% p.a. under the
following heads:
H
VIJAY KUMAR RASTOGI v. U.P. STATE ROADWAYS 623
TRANSPORT CORPORATION [A. M. KHANWILKAR, J.]
“23. Keeping in view all the relevant factors, principles of A
law laid down in above mentioned cases and evidence on
record, I am of the view that the petitioner is entitled for
compensation as per following details:
1. Cost of medicines :Rs.1,08,883.00
2. Cost of future treatment :Rs. 25,000.00 B
3. Loss of Income :Rs. 40,802.00
4. Loss of future income :Rs.1,78,044.00
5. Loss of income for 15 days :Rs. 1,854.62
C
6. Loss of enjoyment of life & Limb etc: Rs.1,00,000.00
7. Pain and Sufferings :Rs. 50,000.00
8. Compensation for attendant :Rs. 20,000.00
9. Special Diet :Rs. 20,000.00
D
10. Conveyance :Rs. 15,000.00
Total :Rs.5,59,583.62
or say :Rs.5,59,584.00"
5. Be it noted that the Tribunal in paragraph 17 of its judgment
E
has adverted to Ext. PW-6/F, which reveals the date of birth of the
appellant as 7-11-1969 and on that basis, has recorded a finding that on
the date of accident on 26th June, 2005, the appellant was 36 years of
age. Further, the Tribunal in paragraph 16 of its judgment has taken note
of the fact that the appellant on the date of accident was working as
Medical Representative with M/s. Stadmed Private Ltd., and after the F
accident he could not perform his duty because he remained confined to
bed.
6. The Tribunal, while recording that the appellant earned a sum
of Rs.50,556/- from ‘other sources’ namely bank interest and commission,
over and above his salary, did not consider the said income on the ground G
that commission and interest could not be considered for computation of
loss of income. The appellant had annexed his income tax returns for
the year 2004-05 as proof that his taxable income was considerably
higher than the amount considered by the Tribunal, as given
hereunder:
H
624 SUPREME COURT REPORTS [2018] 2 S.C.R.
A “STATEMENT OF INCOME
NAME OF ASSESSEE Vijay Kumar Rastogi
FATHER’S NAME Sh. Nand Kishore Rastogi
DATE OF BIRTH 7th Nov. 1969
B ADDRESS OFFICE Stadmed Private Limited
138-B, Moahammed Pur,
New Delhi – 110066
RESIDENCE C-40, ZI, Dilshad Garden,
Delhi – 110095
C STATUS : Individual
RESIDENTIAL STATUS : Resident & Ordinarily
Resident in India
PA NUMBER STATUS : AEYPR8620R
PREVIOUS YEAR ENDED ON: 31 ST MARCH 2004
D ASSESSMENT : 2004-2005
COMPUTATION OF TAXABLE INCOME
Income From Salary
Gross receipt from salary as per
E
Salary certificate 66,766.50
Less: Standard deduction u/s16(i) 22,225.50 44,511.00
Income from Business or Profession
Income as per Income and
F
Expenditure Account 99,805.00
Less: Income not covered under the
said head
Income from Salaries 66,766.50
G Income from other sources 50,556.50 (17,518.00)
Income from other sources
Bank Interest 72.00
Commission 50,454.00 50,556.50
Gross Total income 77,549.50
H
VIJAY KUMAR RASTOGI v. U.P. STATE ROADWAYS 625
TRANSPORT CORPORATION [A. M. KHANWILKAR, J.]
Less: Exemption U/S 80L A
Bank interest 72.00
Gross Total income 77,477.50
Income Rounded off 77,480.00
Income Tax Due on Rs. 77480/- 4,496.00
Less: Deduction U/s 88 B
EPF contribution 6,491.00
LIP Paid 13,225.00
19,716.00
Amount allowed @ 20% 3,943.00
Tax Due 553.00 C
Tax Paid 553.00
Balance Payable/Receivable NIL
(VIJAY KUMAR RASTOGI)”
7. Aggrieved by the Tribunal’s award, the appellant filed an
D
appeal before the High Court, alleging that while passing the award, the
Tribunal had erroneously calculated his income as Rs. 44,511/- per
annum, disregarding his income from other sources and also reducing
the actual income earned by the appellant by following the standard
deduction method. In the impugned judgment, the High Court while
recording that the appellant’s taxable income was Rs.77,480/- less tax E
paid of Rs.4496/-, and while accepting that the accident had been caused
by the rash driving of the bus driver, Alam Beg and that the appellant
had in no way contributed to the causing of the accident, only enhanced
the rate of interest on the compensation awarded from 7% to 9% as it
felt that the rate of interest awarded was on the lower side but it did not
enhance the compensation itself, on the ground that no case had been F
made out for enhancement. The appellant challenged the aforesaid
judgment by way of a review petition, which was also dismissed.
8. The short point which arises for our consideration is: whether
the High Court committed manifest error by not considering other sources
of income of the appellant including compensation of Rs.80,000/- on G
account of damage to the Maruti car of the appellant while upholding
the compensation awarded by the Tribunal?
9. We have heard Ms. Rekha Rastogi, learned counsel for the
appellant as also Ms. Garima Prashad, learned counsel for the
respondent. H
626 SUPREME COURT REPORTS [2018] 2 S.C.R.
A 10. The principal issue that needs to be addressed in these appeals
is about the denial of claim in reference to commission and interest
amounts earned by the appellant during the relevant period, as disclosed
in the Income Tax Return filed by the appellant. The appellant claimed
income from other sources under two heads, namely, Bank Interest :
Rs.72/-; and Commission : Rs.50,454/-. The Tribunal opined that
B
commission and interest cannot be considered for computation of loss of
income and confined the claim of the appellant only on the basis of his
net annual salary income to Rs.44,511/-. The Tribunal noted that the
appellant did not file any document of his age, educational qualification
or profession. The High Court, on the other hand, in paragraph 11 of the
C impugned judgment observed thus:
“11. Regarding the deduction of tax paid from the net income
of injured – Vijay Kumar Rastogi is concerned, I find that the
total income of injured – Vijay Kumar Rastogi as per the tax
return (Ex.PW-6/F) is Rs.77477.50 and after deduction of tax
D of Rs.4,496/- the net income has been rightly taken into
consideration by the learned Motor Accident Claims Tribunal.
The disability of 25% suffered by injured Vijay Kumar Rastogi
has been rightly taken to be the functional disability while
keeping in view that the injured – Vijay Kumar Rastogi was
working as the Medical Representative. No case for
E enhancement of compensation while taking the gross income
of injured – Vijay Kumar Rastogi is made out, as net income
has to be taken into consideration while assessing the
compensation in such cases. Regarding the application of
multiplier of 15 is concerned, I do find that in case of injured
F Vijay Kumar Rastogi multiplier of 15 ought to have been
adopted but by adoption of multiplier of 16, the difference in
the compensation worked out is marginal and the same is set
off by the fact that future prospects of injured Vijay Kumar
Rastogi has not been taken into consideration and therefore,
this Court is not inclined to interfere with the awarded
G compensation on this account.”
11. Strikingly, the High Court noted the taxable income disclosed
in tax return of the appellant for the relevant period as Rs.77,480/-
(rounded off) and tax deduction of Rs.4,496/-, yet proceeded to hold
that the net income of the appellant has been rightly taken into
H
VIJAY KUMAR RASTOGI v. U.P. STATE ROADWAYS 627
TRANSPORT CORPORATION [A. M. KHANWILKAR, J.]
consideration by the Tribunal. It is unfathomable that the High Court, A
despite having accepted the claim of the appellant founded on his tax
return for the relevant period, disclosing the taxable income of the
appellant as Rs.77,480/- (rounded off) and deduction of tax of Rs.4,496/-,
could have affirmed the conclusion of the Tribunal that the net annual
income of the appellant was Rs.44,511/-. It ought to have reckoned the
B
taxable income for computing the head towards loss of income. This, in
our opinion, is the manifest error committed by the High Court. The
appellant is justified in relying upon the decisions of this Court which
have taken the view that loss of taxable earning should be reckoned for
the purpose of determining just compensation as enunciated in National
Insurance Co. Ltd. Vs. Indira Srivastava and Ors.1, which has been C
followed in Oriental Insurance Company Limited Vs. Jashuben and
Ors.2, and Kavita Vs. Deepak and Ors.3 It has been held that the
“income” should include those benefits, either in terms of money or
otherwise, which are taken into consideration for the purpose of
payment of income tax or professional tax, although some elements
D
thereof may or may not be taxable due to the exemption conferred
thereupon under the statute.
12. The computation of taxable income as disclosed by the
appellant in his tax return for the assessment year 2004-2005 for the
previous year ended on 31st March, 2004, unambiguously reinforces the
claim of the appellant that his annual taxable income was Rs.77,480/- E
(rounded off) and income tax due thereon was Rs.4,496/-. After
providing deduction of the income tax payable by the appellant, the amount
towards the head ‘loss of income’ of the appellant would be
Rs.72,984/- and not Rs.44,511/- as assumed by the Tribunal.
13. In other words, compensation under the head ‘loss of income F
for 11 months’ would be (Rs.72,984 ÷ 12) x 11 = Rs.66,902. Similarly,
towards the head ‘loss of future income’ computed by the Tribunal on
the basis of disability suffered by the appellant to the extent of 25% in
relation to his lower limb and keeping in mind that the age of appellant
was only 36 years on the date of the accident and the exposition in the G
case of Sayed Sadiq Vs. Divisional Manager United India Insurance
Co. Ltd.4 (paragraphs 10 and 11), the appellant would be entitled to 40%
1
(2008) 2 SCC 763
2
(2008) 4 SCC 162
3
(2012) 8 SCC 604
4
2014 (2) SCC 735 H
628 SUPREME COURT REPORTS [2018] 2 S.C.R.
A of Rs.72,984 i.e. Rs.29,194 (rounded off) x 15 (multiplier), which comes
to Rs.4,37,910. Thus, the appellant would be entitled to receive enhanced
compensation [Rs.66,902 - Rs.40,802 = Rs.26,100 (Rupees twenty six
thousand one hundred) and Rs.4,37,910 - Rs.1,78,044 = Rs.2,59,866
(Rupees two lakh fifty nine thousand eight hundred and sixty six)] under
these two heads, instead of Rs.40,802/- and Rs.1,78,044/- awarded by
B
the Tribunal. In other words, the compensation amount towards these
two heads would stand enhanced by Rs.2,85,966/- (Rupees two lakh
eighty five thousand nine hundred and sixty six only) as indicated above,
to which the appellant would be entitled along with interest at the rate of
9% (nine percent) per annum in terms of our decision.
C 14. The appellant has also claimed further compensation towards
damage to his Maruti Car which, according to the appellant, was
completely damaged, as mentioned in the Mechanical Inspection Report
(Ext. PW-6/D) and the value of the car providing third party insurance
(Ext.PW-6/E). On a careful scrutiny of the judgment of the Tribunal,
D we find that the Tribunal has not analysed this claim at all. That
grievance was made by the appellant before the High Court, as noted in
paragraph 9 of the impugned judgment claiming compensation of
Rs.80,000/- towards the same. The High Court in paragraph 13 of the
impugned judgment, however, rejected the claim on the finding that the
appellant had failed to invite its attention to any document indicating that
E the appellant had incurred the expenses of Rs.80,000/- towards car repair.
Even in the present appeals, the appellant has failed to invite attention of
this Court to any document on record in support of the said claim.
Resultantly, we find no reason to interfere with the opinion expressed by
the High Court on the issue under consideration.
F 15. A priori, the appellant would succeed in getting additional
amount of Rs.2,85,966/- (Rupees two lakh eighty five thousand nine
hundred and sixty six only) as enhanced compensation towards ‘loss of
income’ and ‘loss of future income’, along with interest at the rate of
9% (nine percent) per annum thereon from the date of filing of the claim
G petition before the Tribunal till the date of realization.
16. The appeals are allowed to that limited extent in the above
terms with no order as to costs.
Devika Gujral Appeals allowed.
H
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