NATIONAL INSURANCE COMPANY LIMITED Vs. M.PAPPA

JUDGEMENT

(1.) NATIONAL Insurance company is the appellant in this Civil Miscellaneous appeal. The only point raised in this Civil Miscellaneous Appeal is that the Tribunal had committed a manifest error in taking into consideration the gross salary of the deceased as the base for computing the dependency compensation, instead of net salary drawn by him at the time of accident. Mr. C.R. Krishnamoorthy, learned Counsel for the appellant, submitted that when P.W.1 in his cross - examination has admitted that the net salary drawn by the deceased was Rs. 5854/ -. The Tribunal has erred in taking the gross salary for the purpose of computing the loss of future income. The respondent is on record.

(2.) THE issue as to whether the gross salary of the deceased should be taken or not has already been decided by this Court in a decision in The Manager, National Insurance Company Limited V/s. Padmavathy and Ors. reported in 2007(1) TN MAC 507, wherein this Court in para 13 held as follows: 13. Income tax, Professional tax which are deducted from the salaried person goes to the coffers of the Government under specific head and there is no return. Whereas, the General Provident Fund, Special Provident Fund, L.I.C., Contribution are amounts paid specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. The Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles is statutory and that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if the Legal Representatives are entitled to lump sum payment under the contractual liability. If the contributions made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependency compensation, then the Legal Representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can make only statutory deductions such as Income tax and professional tax and other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependency compensation. Any contribution made by the employee during his life time, form part of the salary and they should be included in the monthly income, while computing the dependency compensation.

(3.) THE judgment of this Court and the Andhra pradesh High Court have been approved by the Supreme Court in National Insurance Company Limited V/s. Indira Srivastava and Ors. reported in 2008(1) TN MAC 166(SCC) at para Nos. 17,19, 23 it is held as follows: 17. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contra -distinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted. 19. If the dictionary meaning of the word 'income ' is taken to its logical conclusion, it 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 profession tax although some elements thereof may or may not be taxable or would have been otherwise taxable but for the exemption conferred thereupon under the statute. 23. The expression 'just ' must also be given its logical meaning. Whereas it cannot be a bonanza or a source of profit but in considering as to what would be just and equitable, all facts and circumstances must be taken into consideration.