Supreme Court: Whether Motor accident claim tribunal can deduct compensation granted to dependents of workman under workman Compensation Act?

 The Motor Accidents Claims Tribunal, as also, the High Court, ordered a deduction therefrom of a sum of ` 3,26,140 (paid to the claimants under the Workmen's Compensation Act, 1923). The said deduction gives full effect to Section 167 of the Motor Vehicles Act. 1988, inasmuch as it awards compensation to the respondents-claimants under the enactment based on the option first exercised, and also ensures that the respondents-claimants are not allowed dual benefit under the two enactments.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 937 of 2013.

Decided On: 05.02.2013

Oriental Insurance Company Ltd. Vs. Dyamavva and Ors.

Hon'ble Judges/Coram:

B.S. Chauhan and J.S. Khehar, JJ.

Citation: AIR 2013 SC 1853, MANU/SC/0108/2013.

Read full judgement here: Click here.

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LLM Notes: Ten Bullet Points on Legal Reasoning and Judicial Decision-Making:

 1.       Definition of Legal Reasoning: Legal reasoning is the process of providing reasons for legal decisions, acts, or opinions about the meaning and relevance of law. It involves applying legal rules to specific situations.

2.       Purpose: Legal reasoning helps resolve conflicts by setting precedents in past, present, and future cases, enabling logical conclusions and informed legal judgments.

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LLM Notes: What is meaning and importance of induction and deduction in legal research?

 Induction and deduction are two fundamental methods of reasoning used in legal research, each serving distinct purposes and offering unique benefits.

involves drawing general conclusions from specific instances or observations. It is a "bottom-up" approach where researchers start with particular cases or data and move towards broader generalizations or theories. In legal research, induction is used to develop new legal theories or principles by analyzing past cases and identifying patterns.

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LLM Notes: Legal Reasoning and Judicial Decision-Making

 Legal reasoning is the process of providing reasons for legal decisions, acts, or opinions about the meaning of law and its relevance. It is a method of thought and argument used by legal professionals when applying legal rules to specific situations.

Legal reasoning is a method of thought and argument used by lawyers and judges when applying legal rules to specific interactions among legal persons. Legal reasoning is thinking which the learners and researchers should use in order to reach a legal conclusion and make further decisions. Law enables to provide solution to conflicts that may arise by setting precedents in past, present and future. The practice of law is about experience and through experience we understand the logic. It is the tool that empowers the user to understand and come to  conclusion about legal judgments.

Legal reasoning reveals why and how the court, lawyer or judge came to their decision or argument on the case.

There are core elements that must appear and be addressed in the reasoning:

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Supreme Court: Claimants in case of motor accident Can't Be Doubly Benefited, Benefits From Govt To Deceased Employee Must Be Deducted

We find that the observations of this Court in Sebastiani Lakra (supra) distinguishing the case of Shashi Sharma (supra) clearly applies to the case in hand. It is observed that the amount of Rs. 31,37,665/- (Rupees Thirty One Lakhs, Thirty Seven Thousand and Six Hundred and Sixty Five only) was paid to the dependents of the deceased-employee who are the Petitioners herein under the aforesaid Rules since the said Rule was by way of compassionate assistance owing to the sudden death of the employee in harness for any reason whatsoever including as a result of a road traffic accident. This is in order to compensate the loss of the bread earner of the family who dies in harness. {Para 6}

In the case of a motor vehicle accidents, when negligence is proved, loss of dependency is compensated for the very same reason. In our view, there cannot be a duplication in payments or a windfall owing to a misfortune. In another words, on the death of the person in harness, owing to a road traffic accident the dependents of a deceased cannot be doubly benefited as opposed to those who are dependents of a deceased who dies owing to illness or any other reason under the Rules formulated by the Haryana Government.

 IN THE SUPREME COURT OF INDIA

Special Leave Petition (C) No. 5044/2019

Decided On: 05.02.2024

Krishna and Ors. Vs. Tek Chand and Ors.

Hon'ble Judges/Coram:

B.V. Nagarathna and Augustine George Masih, JJ.

Citation:  : MANU/SC/0373/2024.

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Supreme Court: Where the annual income is in the taxable range, appropriate deduction should be made towards income tax while computing compensation in case of motor accident

The submission of the respondents that the deduction of 30% from the salary is not warranted in view of the decision in Sarla Verma, is not sound. In Sarla Verma, the monthly salary of the deceased was only Rs. 4004/- and the annual income even after taking note of future prospects was Rs. 72072/-. The income was in a range which was exempt from tax, if the permissible deductions were applied. Therefore, this Court did not make any deduction towards income-tax. But this Court made it clear that where the annual income is in the taxable range, appropriate deduction should be made towards tax. In this case as the annual income has been worked out as Rs. 2,48,292/-, appropriate deduction has to be made towards income-tax. The rate of income tax is a varying figure, with reference to taxable income after permissible deductions and the year of assessment. The High Court has assessed the deduction as 30% and on the facts, we do not propose to disturb it. We however make it clear 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. {Para 8}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5316 of 2010.

Decided On: 13.07.2010

Shyamwati Sharma and Ors. Vs. Karam Singh and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran and H.L. Gokhale, JJ.

Author: R.V. Raveendran, J.

Citation: (2010) 12 SCC 378,MANU/MP/2569/2022.

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Delhi HC: Motor accident claim tribunal should not deduct money received by claimant from insurance policy taken by him or his employer

As held by the House of Lords in Parry v. Cleaver MANU/UKHL/0008/1969 : 1970 AC 1 the insurance amount is the fruit of premium paid in the past, pension is the fruit of services already rendered and the wrongdoer should not be given benefit of the same by deducting it from the damages assessed.

{Para 15}

16. Deduction can be ordered only where the tortfeasor satisfies the court that the amount has accrued to the claimants only on account of death of the deceased in a motor vehicle accident.

50. In National Insurance Co. Ltd. v. Mannat Johal, MANU/SC/0589/2019 : 2019:INSC:561 : (2019) 15 SCC 260, the Supreme Court was considering whether the ex-gratia payment received from the employer of the deceased, being one year's gross salary, which was not shown to be under any Rules or Services and overall continuous assistance, can be set off against the compensation payable under the Act. The Court held that the same cannot be deducted.

51. From the above, it is apparent that compensation paid to the claimant is for the wrongful death of her son in the accident. The tortfeasor, who is primarily liable to pay such compensation, cannot claim a benefit in reduction of compensation payable by such tortfeasor, only because the deceased had, himself or through his employer, made an arrangement for providing a security to his legal heirs in case of any unforeseen happening, like an accident. Merely because the deceased himself did not pay the premium, in my opinion, is also not a relevant circumstance. Though such a premium is paid by the employer of the deceased, it is against the service that was being discharged by the deceased in his employment. How the employer frames the pay package to its employees is a matter between the employer and the employee, however, one thing is certain that even if the premium is paid by the employer, it is paid because of the relationship between the employer and the employee and for reason of such employment, it is not for the benefit of the tortfeasor.

 IN THE HIGH COURT OF DELHI

MAC. APP. 160/2019 and CM Appl. 4451/2019

Decided On: 09.01.2024

Iffco Tokio General Insurance Co. Ltd. Vs. Kanchan and Ors.

Hon'ble Judges/Coram:

Navin Chawla, J.

Citation: MANU/DE/0154/2024.

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What deductions are permissible from salary while computing compensation in motor accident claim petition?

An employee who is serving under an employer as

in the instant case, may be having so many personal needs. He

might have availed housing loan, vehicle loan, personal loans etc.,

from the employer and may be effecting timely remittance by way

of monthly installments. That apart, there may be deductions

towards contribution to Provident Fund, Pension fund etc., and all

these deductions clearly reflect the amounts spent by such employee

from his pay packet containing the gross salary. In otherwords, these

amounts, by way of deductions made are part of his hard earned

money and as such, it could not have been deducted to work out the

monthly income. The same should have been reckoned by the

Tribunal for working out the monthly income and for appropriate


multiplicand. In the said circumstance, we deprecate the course

followed by the Tribunal and hold that the entire monthly salary of

Rs.8,802/-, as certified in Ext.A12 should have been accepted by the

Tribunal without effecting any deduction as no deduction is shown

against the income tax.
IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                                      PRESENT:

                MR.JUSTICE P.R.RAMACHANDRA MENON
                                                            &
                     MR. JUSTICE ANIL K.NARENDRAN

             29TH DAY OF FEBRUARY 2016

                                           MACA.No. 1112 of 2006 

            THRESSIAMMA SEBASTIAN,
Vs
         SHOJI RAM, S/O. GANGA RAM,
          

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When assessee is not entitled to get deduction in respect of donation made by him to charitable trust?

 Disallowance of donation to Aparna
Ashram:
Disallowance of donation made to
Aparna Ashram by the assessee was refused
by the Primary and First Appellate
Authority on the ground that the necessary
certificate showing that the donee (Aparna
Ashram) had complied with the conditions
subject to which registration was granted
to it under Section 35(2A) of the Act was
not produced by the assessee so as to
entitle it to the claim of deduction of
the donation made. The learned ITAT took
the view that the aforesaid conditions
were not material. The High Court on due
consideration found that the said
conditions were necessary preconditions to
the grant of statutory registration and
had to be satisfied. There is no dispute
on the fact that no such certificate had
been furnished by the assessee and also
that all Authorities have consistently
held that if and when such certificate is
produced the consequential benefit can be
afforded to the assessee. In the aforesaid
circumstances, we do not see how the view
taken by the High Court that the assessee
was not entitled to the benefit of
donation made to Aparna Ashram can be
faulted.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1964 OF 2008
M/S GANAPATHY & CO.,
BANGALORE ...APPELLANT
VERSUS
THE COMMISSIONER, INCOME TAX
BANGALORE ...RESPONDENT
Citation; AIR 2016 SC 422

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