Matolya & Ors. Vs. Hari Singh Malviya & Ors.  INSC 671 (31 March
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2050 OF 2009 [Arising
out of SLP (Civil) No. 24394 of 2007] Raghuvir Singh Matolya & Ors.
...Appellants Versus Hari Singh Malviya & Ors. ...Respondents
S.B. SINHA, J :
dearness allowance and house rent allowance payable to a deceased should be
taken into consideration for the purpose of computing the amount of
compensation payable in terms of the provisions of Section 166 of the Motor
Vehicles Act, 1988 (for short "the Act") is the question involved in
this appeal which arises out of a judgment and order dated 2 14.02.2007 passed
by the High Court of Madhya Pradesh in M.A. No. 2177 of 2005.
basic fact of the matter is not in dispute.
The deceased Puspa
Matolya was travelling in a Tata Sumo on the fateful day, viz., 30.11.2002 at
about 11.00 a.m. It dashed against a mango tree. She died on the spot.
deceased was an Assistant teacher in a primary school. The said school was a
State-run one. She was to superannuate on 28.02.2011. She at the time of her
death was aged about 52 years and 9 months. The salary certificate produced on
behalf of the claimants - appellants showed that she was drawing a monthly
salary of Rs.8611/- (Rs.6050/- basic pay, Rs.2481/- dearness allowance and
Rs.80/- house rent) per mensum.
however, taking into consideration only the basic pay passed an award awarding
compensation for a sum of Rs. 3,38,000/-. For the said purpose, the Tribunal applied
the multiplier of 7.
3 An appeal in terms
of Section 173(1) of the Act was preferred by the appellants. The High Court,
by reason of the impugned judgment, enhanced the amount of compensation to Rs.
5,28,000/- by applying the multiplier of 11.
Still not satisfied
with the quantum of compensation awarded in their favour, the appellants are
4. Ms. Pragati
Neekhra, learned counsel appearing on behalf of the appellants would contend
that the Tribunal as also the High Court committed a serious error as they
failed to take into consideration that in computing the net income of the
deceased, dearness allowance as also the house rent allowance should be taken
5. Mr. Atul Nanda,
learned counsel appearing on behalf of the respondents, on the other hand,
would support the impugned judgment.
6. Before the learned
Tribunal, salary as also a pension certificate was produced.
allowance, in our opinion, should form part of income.
House rent allowance
is paid for the benefit of the family members and not for the employee alone.
What would constitute an income, albeit in a different fact situation, came up
for consideration before this Court in National Insurance Co. Ltd. v. Indira
Srivastava and Others [(2008) 2 SCC 763] wherein it was held:
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 contradistinguished 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.
20. The term
"income" in P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn.) has
been defined as under:
"The value of
any benefit or perquisite whether convertible into money or not, obtained from
a company either by a director or a person who has substantial interest in the
company, and any sum paid by such company in respect of any obligation, which
but for such payment would have been payable by the director or other person
aforesaid, occurring or arising to a person within the State from any
profession, trade or calling other than agriculture."
5 It has also been
signifies `what comes in' (per Selborne, C., Jones v. Ogle). `It is as large a
word as can be used' to denote a person's receipts (per Jessel, M.R., Re
Huggins). Income is not confined to receipts from business only and means
periodical receipts from one's work, lands, investments, etc. Secy. to the
Board of Revenue, Income Tax v. Al. Ar. Rm. Arunachalam Chettiar &
Brothers. Ref. Vulcun Insurance Co. Ltd. v. Corpn. of Madras."
21. 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
professional 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."
To the same effect is
the decision of this Court in Oriental Insurance Co. Ltd. v. Ram Prasad Varma
& Ors. [2009 (1) SCALE 598].
8. We, therefore, are
of the opinion that `Dearness Allowance' and `House Rent Allowance' payable to
the deceased should have been included for determining the income of the
deceased and consequently the amount of compensation.
9. For the reasons
aforementioned, we direct that in calculating the amount of compensation, the
dearness allowance as also the house rent allowance should also be taken into
10. The matter is
remitted to the trial court. An award may be passed accordingly. The appeal is
allowed with the aforementioned directions.
There shall, however,
be no order as to costs.
[Dr. Mukundakam Sharma]