REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPEALLATE JURISDICTION

CIVIL APPEAL NO. OF 2009

(Arising out of SLP (C) No.12255 of 2007)

Meenaben Pankajkumar Joshi & Ors. … Appellants

Versus

New India Assurance Co. Ltd. … Respondent

J U D G M E N T

S.B. Sinha, J.

1.Leave granted.

2.The claimants in a motor accident claims are before us aggrieved by

and dissatisfied with the judgment and award passed by a Division Bench of

the High Court of Gujarat whereby and whereunder a judgment and award

dated 13.12.2005 passed by the Motor Accidents Claims Tribunal, Fast

Track Court-4, Gandhidham – Kutch in MAC Petition No.297 of 2005

(original No.2 of 1998) was modified.

3.The deceased Raj Kumar Joshi was a Director of a Company

commonly known as Kandla Clearing Agency Private Limited. He was

drawing a salary of Rs.7,500/- per month. He was, however, also running a

proprietorship concern carrying on business in ‘Clearing and Forwarding’ in

the name of Ultra Clearing and Forwarding Company.

Appellants filed a claim petition before the Tribunal claiming a sum

of Rs.90 lakhs as compensation in respect of the death of the said Raj Kumar

Joshi who died in a motor vehicle accident and with a view to prove their

case, appellants, inter alia, filed income ta returns for the assessment years

1996-97 and 1997-98 disclosing the income from salary from the

Directorship in Kandla Clearing Agency Private Limited at Rs.66,000/- and

Rs.90,000/- respectively. The said returns were accompanied by a certificate

issued by the Manager/Accountant of the Company. In the said income tax

returns, a sum of Rs.12.73 lakhs was also shown as turnover of the business

for eight months in respect of the said proprietorship concern. The Tribunal

passed an award for a sum of Rs.49,25,000/- with proportionate costs and

interest at the rate of 12% per annum from the date of claim petition till

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December 2000 and thereafter at the rate of 9% per annum. Respondent

No.1 herein preferred an appeal thereagainst before the High Court

questioning the correctness of the said judgment and award.

4.The High Court by reason of the impugned judgment, so far as the

income of the deceased from the aforementioned proprietorship concern is

concerned, opined as under :

“Even proceeding on the basis that the deceased

had set up another business in the name of Ultra

Clearing and Forwarding Company in May 1997

and even proceeding on the basis that there were

deposits in the bank accounts of the deceased with

State Bank of Bikaner and Jaipur, we cannot at all

approve of the approach of the Tribunal in

proceeding on the basis that the margin of profit or

margin of commission of the deceased in the said

business was to the extent of 20%. The very

nature of the business of the deceased being that of

clearing and forwarding agent would mean that the

deceased would be acting as an agent of the

consignors or consignees and, therefore, such

receipts would to a substantial extent be the price

of the goods being consigned. The very fact that

after the accident the widow of the deceased filed

income tax returns for the salary income of the

deceased for the previous years 1995-96 and 1996-

97 but did not file and income-tax return for the

subsequent year i.e. 1997-98 for the alleged

business income allegedly earned between May

and October 1997 belies the claimants’ case that

the deceased was getting substantial income from

the business being carried on by him in the name

of Ultra Clearing and Forwarding Company. We

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are, therefore, shocked to find that the Claims

Tribunal accepted the claimants’ case about the

alleged income of the deceased from the business

in the name of Ultra Clearing and Forwarding

company without making any probe into such tall

claim and without testing the claimants’ case even

on the touchstone of commonsense.”

(Empnasis supplied)

So far as the question with regard to the applicability of the Indian

Evidence Act is concerned, the High Court while opining that the strict rules

of evidence would not apply to the claim proceedings before the Tribunal,

held as under :

“The foregoing discussion would show that there

was no evidence on record before the Tribunal to

arrive at the conclusion that on the credit amount

of Rs.12.73 lakhs, the deceased was getting

commission of 20% as held by the Tribunal. The

finding of the Tribunal on this score is, therefore,

not only incorrect and unwarranted, but to say the

least, perverse. No reasonable person instructed in

this branch of law would ever arrive at such

conclusion that the deceased was getting

commission of 20% of the gross deposits made in

his bank accounts. The finding can never be said

to be based on judicial considerations.”

The High Court also interfered with the rate of interest opining that

the rate of interest should be fixed at 9% per annum from the date of the

claim till the date of deposit.

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5.Mr. K.V. Vishwanathan, learned senior counsel appearing on behalf

of the appellant, would contend that the High Court committed a serious

error insofar as it held that a forwarding and clearing agent dealt with goods.

It was urged that the expenditures required to be incurred by a clearing and

forwarding agency will depend upon the expenditures required to be

incurred in terms of the agreement as clearing and forwarding agent does not

deal with sale of goods and as such the question of payment of any price of

the goods being consigned would not arise.

6.Before us, an application has been filed seeking permission to reply

upon additional documents containing various bills, debit notes, etc. to show

the nature of expenditure incurred by the said proprietorship concern.

7.Having heard the learned counsel for the parties, we are of the opinion

that keeping in view the provisions of Section 168 of the Motor Vehicles

Act, 1988 in terms whereof the Tribunal is required to award a fair

compensation, the additional documents sought to be produced before us

should be taken into evidence. We say so because the appellants have

contended that those documents were not available at the relevant time.

Evidently, they have not been brought on records before the Tribunal also.

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8.We, therefore, are of the opinion that the interest of justice would be

subserved if the matter relating to award of compensation is considered

afresh by the Tribunal upon taking additional documents placed before us as

additional evidence. The claimants unless admit or formal proof thereof is

dispensed with, may prove the said documents by examining witnesses. The

respondents, it goes without saying, would be entitled to cross-examine the

said witnesses produced on behalf of the appellants and would furthermore

be entitled to examine their witnesses in this behalf. We make it clear that

all other findings arrived at by the Tribunal and as modified by the High

Court shall remain undisturbed.

9.The appeal is allowed to the aforementioned extent and the matter is

remanded to the Tribunal with the aforementioned directions and

observations. However, in the facts and circumstances of this case, there

shall be no order as to costs.

.……………………….J.

[S.B. Sinha]

……………………..…J.

[Deepak Verma]

New Delhi;

August 7, 2009

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