Taxation of life insurance policy

For those with dependent family members, purchasing a life insurance policy is critical. The policy will help you safeguard your parents’, spouse’s, and children’s financial futures. Insurance firms in India provide a wide range of options when it comes to obtaining an appropriate life insurance policy.

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MOTOR VEHICLE PERMITS, INSURANCE AND LIABILITY

HEAD NOTES ON MOTOR VEHICLE PERMITS, INSURANCE AND LIABILITY

Motor Vehicles – Passenger Vehicle – Non- Renewal of permit – Liability to pay tax – Held, have not been renewed cannot be reason for non-payment of tax – State of Orissa v. Bijaya C. Tripathy (2004) 7 SCC 139, relied upon – Even in absence of permit,  vehicle remains  transport vehicle which is capable of being used on road so long as vehicle has valid certificate of fitness and valid Certificate of Registration – Vehicles in question have been issued with permits for transport of passengers, petitioners are liable to pay tax under Sl. No. 7 of schedule – If petitioners want to avail benefit of exemption, they have to apply under S 5 of 1975 Act – Petition dismissed – Orissa Motor Vehicles Taxation Act 1975 S 3 (P 8, 14, 15 and 18)

1_KER_236986

The Judgment of the Court was delivered by

A.M. Shaffique, J.:— These writ petitions arise from a common issue and therefore heard and decided together.

2. In WP (C) No. 11714/2016, the petitioner is the registered owner of a stage carriage bearing Reg. No. KL-07 AB-101. His regular permit was valid since 04/02/2005. He was granted renewal after three years in the meeting of the RTA held on 26/05/2015. Petitioner submits that after 05/02/2012, that is after the expiry of the regular permit, neither regular or temporary permits were issued to the petitioner. Therefore the petitioner is not liable to pay tax for those periods the vehicle was not used nor kept for use as a stage carriage. In the writ petition, the petitioner challenges Ext.P10, an order passed by the Transport Commissioner rejecting his revision placing reliance on the judgment in Vipin v. Regional Transport Officer [2015 (1) KLT 89].

3. In WP (C) No. 21207/2016, the petitioner claims to be a stage carriage operator, whose regular permit was valid upto 26/08/2013. He also sought for exemption for payment of tax for the period during which he did not have a valid permit, which has been rejected by the Transport Commissioner as per Ext.P6 order dated 11/01/2016 placing reliance on the judgment in Vipin (supra).

4. In WP (C) No. 34656/2016, petitioner is the registered owner of vehicle bearing Reg. No. KL-8AF 4626. At the time when he purchased the vehicle, he did not have a permit. However, he was called upon to pay an amount of Rs. 2,23,380/- being the tax from 01/07/2015 to 31/03/2016. Petitioner challenges the aforesaid demand as well as Ext.P8 order by which the Joint Regional Transport Officer had registered his claim for exemption from payment of tax.

5. Counter affidavit has been filed in W.P.C. No. 21207/2016 wherein the authorities supported the stand taken by them.

6. Heard the learned counsel for the petitioners and the learned Government Pleader appearing on behalf of the respondents.

7. Learned counsel for the petitioner submits that there is an apparent conflict between the two judgments of the learned Single Judge of this Court. It is submitted that in Mini Dileep v. Regional Transport Officer, Kottayam [2013 (2) KHC 884], the learned Single Judge of this Court held at paragraphs 6 & 7 of the judgment as under:

“6. It is trite law that every vehicle in the state is presumed to be used or kept for use in the state unless the said statutory presumption flowing from Section 3 of the Act is rebutted by the procedure laid downunder the Act. The rate of tax for such vehicle is however specified in the schedule to the Act wherein the class of vehicles and the rate of quarterly tax payable are indicated. Serial No. 7 of the schedule deals with motor vehicles playing for hire and used for transport of passengers and in respect of which permits have been issued under the Motor Vehicles Act, 1988. The Vehicle cannot be said to have been ‘used for transport of passengers’ when substitute temporary permits had admittedly been issued to other operators to conduct service in the defaulted vacancy. The operator of a defaulted service can at best be made liable to pay tax at the rate applicable to a non transport vehicle under the residuary clause in serial No. 12 of the schedule to the Act. The liability to pay tax at the rate applicable to a transport vehicle arises only in respect of a vehicle plying for hire and used for transport of passengers and in respect of which permits have been issued.

7. A Division Bench of this Court had adopted the same view in R.P. No. 821/2011 in W.A. No. 113/2011 and R.P. No. 830/2011 in W.A. No. 114/2007 wherein it was observed as follows:

“If the vehicle was not operating and substitute vehicle only was operating then tax payable is only at the non-transport rate and not at the rate applicable to stage carriage “.

Similarly the vehicle could not have been used for transport of passengers in circumstances like the expiry of the validity of the fitness certificate or expiry of the route permit. Only tax at the rate applicable to a non-transport vehicle kept idle need be paid as per the residuary clause in serial No. 12 of the schedule to the Act under the contingencies aforesaid. It was also the cause of the petitioner that the route permit granted to his vehicle was valid only upto 09.08.2010 and that it could not have been used as a transport vehicle beyond the month of December, 2010. The authorities had blindly fastened the liability to pay tax at the rate applicable to a transport vehicle for the whole period for the mere reason that intimation in Form G was nor given.”

8. However, taking a contrary view based on the judgment of the Apex Court in State of Orissa v. Bijaya C. Tripathy [2004 KHC 1482], another learned Single Judge, having referred to Mini Dileep (supra), took a contrary view in Vipin (supra) and held at paragraphs 4, 5 and 6 as under:

“4. In the decision Mini Dileep there was an observation in paragraph 7, to the effect that, when the vehicle could not have been used for transport of passengers, in circumstances like the expiry of validity of fitness certificate or expiry of the route permit, tax only at the rate applicable to a non-transport vehicle kept idle need be paid, as per the residual clause in Sl. No. 12 of the Schedule to the Act. The petitioner in the said case contended that the route permit granted to the vehicle was valid only up to 9.8.2010 and that it could not have been used as a transport vehicle beyond the month of December 2010. The authorities proceeded with steps to impose tax liability for the whole period, for the reason that intimation ‘Form G’ was not given.

5. Whether the petitioner had actually operated the vehicle or not, even after the expiry of Permit or Fitness Certificate is a matter which is to be established on the basis of evidence to be let in and the burden is very heavy on the persons like the petitioner. This is for the obvious reason that, mere expiry of the ‘Fitness Certificate’ or the ‘Permit’ will not be and cannot be a tool to infer that the party has not used the vehicle for operation. The mandate of S.3 is something different, which is discernible from the provision extracted below:—

“3. Levy of tax.- (1) Subject to the provisions of this Act, on and from the date of commencement of this Act, a tax shall be levied on very motor vehicle used or kept for use in the State, at the rate specified for such vehicle in the Schedule:

Provided that no such tax shall be levied on a motor vehicle kept by a dealer in, or a manufacturer of, such vehicle, for the purpose of trade and used under the authorisation of a trade certificate granted by the registering authority.

[Provided further that in respect of a new motor vehicle of any of the classes specified in item numbers 1, 2, 6, 10(iii) and II of the Schedule to this Act, there shall be levied from the date of purchase of the vehicle one-time tax at the rate specified in Annexure I, at the time of first registration of the vehicle and thereafter tax shall be levied at the time of renewal of such vehicle at the rate specified in the Schedule as per fourth proviso to sub-section(1) of Section 4:]

[Provided further that in respect of new motor vehicle of any of the descriptions specified in item No. 1(a) of the Schedule to this Act, there shall be levied from the date of purchase of the vehicle a tax in advance for a period of five years at the rate specified in the Schedule, at the time of first registration of the vehicle, and thereafter tax shall be levied at the rate specified in the Schedule in accordance with the fourth proviso to sub-section (1) of Section 4:]

[Provided also that in respect of new autorickshaws specified in item number 7(i)(b) of the Schedule to this Act, there shall be levied from the date of purchase of the new vehicle, a tax in advance for a period of five years at the rate specified in Annexure II, at the time of first registration of the vehicle and thereafter tax shall be levied for 5 years or for one year at the rate specified in the seventh proviso to sub-section (1) of Section 4.]

(2) The Government may from time to time by notification in the Gazette, increase the rate of tax specified in the Schedule:

Provided that such increase shall not in the aggregate exceed fifty percent of such rate.

(3) The registered owner of, or any person having possession or control of a motor vehicle shall, for the purpose of this Act, be deemed to use or keep such vehicle for use in the State, except during any period for which no tax is payable on such motor vehicle under sub-section(1) of Section 5.

(4, 5, 6 are not relevant in this context)

6. The question whether expiry of the ‘Fitness Certificate’ or ‘Permit’ will automatically enable the party concerned to evade the tax liability, had come up for consideration before the Apex Court in State of Orissa v. Bijaya C. Tripathy ((2004) 7 SCC 139 = AIR 2005 SC 1431 = 2004 KHC 1482). After considering the relevant provisions of law, the Apex Court observed that, even in the absence of a permit, the vehicle remains a ‘transport vehicle’ which is capable of being used on a road. Paragraph 10 of the said verdict is very relevant; which hence is extracted below:—

“The High Court also appears to have misread S.66 of the Motor Vehicles Act. All that S.66 of the Motor Vehicles Act provides is that the owner of a motor vehicle cannot use the vehicle as a transport vehicle in any public place without a permit. S.66, therefore, merely prevents use of the vehicle as a transport vehicle without a permit. It does not prohibit driving of such a vehicle on a public road. The vehicle can be driven on a public road so long as it is not used as a transport vehicle. To take an extreme example, the owner of such a vehicle may use that vehicle for taking his family out for a picnic. S.66 will not bar such a use. It is thus clear that even in the absence of a permit the vehicle remains a transport vehicle which is capable of being used on a road so long as the vehicle has a valid certificate of fitness and a valid registration certificate. In such cases it has to be presumed that such a vehicle has been “kept for use” irrespective of whether or not it was actually used on the road.” The said decision was not brought to the notice of the learned Single Judge when the decision in Mini Dileep v. Regional Transport Officer (2013 (3) KLT 97) was rendered.”

9. It is contended that the Apex Court judgment relied upon in Vipin (supra) could not have been made applicable to the facts of the case especially on account of certain differences between the statutory format which was considered by the Apex Court as well as the Orissa Motor Vehicle Taxation Act is concerned and therefore the contention is that Mini Dileep (supra) still holds the field.

10. Having regard to the aforesaid rival contentions, the question to be considered is as to what exactly is the liability of a registered owner of a vehicle to pay motor vehicle tax in terms of Motor Vehicle Taxation Act, 1976. The question is whether while the vehicles do not have a permit for either being used as a stage carriage or as a contract carriage, is there any obligation to pay tax. Levy of tax under the Taxation Act is under Section 3. Section 3(1) reads under:

“3. Levy of Tax.- (1) Subject to the provisions of this Act, on and from the date of commencement of this Act, a tax shall be levied on every motor vehicle used or kept for use in the State, at the rate specified for such vehicle in the Schedule.

11. Statute indicates that tax shall be levied at the rate specified in the schedule for vehicles used or kept for use in the State. In other words, merely for the reason that a person does not use the vehicle, does not mean that he is not liable to pay tax. It is enough that the vehicle is “kept for use”. Hence there is liability to pay tax unless a person contends that he has not kept the vehicle for use. In fact, the petitioners in these cases do not have such a case as well. Then the only question is at what rate tax has to be paid as specified for such vehicle in the schedule. Before proceeding further, it would be worthwhile to extract Section 5 also which provides exemption from tax. Sec. 5(1) reads as under:

“5. Exemption from tax.- (1) In the case of motor vehicle which is not intended to be used or kept for use during the first month or the first and second months of a quarter, or the whole of a quarter or year, as the case may be, the registered owner or the person having possession or control of such vehicle shall give previous intimation in writing to the Regional Transport Officer from whom the endorsement of tax has been obtained, that such vehicle would not be used for such period and thereupon, the registered owner or such other person shall not be deemed to have used or kept for use the vehicle for such period, and no tax shall be payable in respect of such vehicle for such period.”

12. The above provision gives a right on the registered owner or the person having control of such vehicle to claim exemption from payment of tax. If the registered owner or such other person in control of the vehicle gives previous intimation in writing to the Regional Transport Authority stating that such vehicle shall not be used for such period he shall not be deemed to have used or kept for use the vehicle for such period and no tax shall be paid in respect of such period. In other words, if a person has a case that he has not used or kept for use a motor vehicle and he should be exempted from paying tax, his only remedy is to submit an intimation in writing to the Regional Transport Officer in terms of Sec.5(1). This provision had been incorporated in order to enable non-users of the vehicle from payment of tax.

13. Now, coming to the schedule, learned counsel for the petitioner points out that Sl. No. 7 relates to tax to be paid by motor vehicle plying for transport of passengers and in respect of which permits have been issued under the Motor Vehicles Act, 1998. It is submitted that when the permits are in force, there is an obligation to pay tax as per Sl. No. 7. However, the contention is that when there is no permit, for a vehicle to be used for transport of passengers, then the liability to pay tax is only in terms of Sl. No. 12 that is motor vehicles other than those liable to tax under the provisions of the schedule which depends upon the unladen weight of vehicles. In Bijaya C. Tripathy (supra), the Apex court was considering a some what similar question. But Sec.3 of the Orissa Motor Vehicle Taxation Act had an explanation attached to it which is highlighted in paragraph 3 of the judgment which indicates that an owner who keeps a transport vehicle for which certificate of fitness and Certificate of Registration are valid or an owner who keeps any other motor vehicle to which Certificate of Registration is valid shall for the purpose of the Act, be presumed to keep such vehicle as stage carriage. It is pointed out that such an explanation is lacking in the Kerala Act.

14. Explanation provided under Section 3 of the Orissa Motor Vehicles Taxation Act 1975 reads as under:

“Explanation.- An owner who keeps a transport vehicle for which the certificate of fitness an the certificate of registration are valid, or an owner who keeps any other motor vehicle, of which the certificate of registration is valid, shall, for the purposes of this Act, be presumed to keep such vehicle for use:

Provided that if the taxing officer finds a motor vehicle having been used on any day during the period for which the registration certificate of a vehicle has been suspended or cancelled under the relevant provisions of the Motor Vehicles Act such vehicle shall be deemed to have been kept for use for the whole period without payment of tax.”

15. However, in Bijaya C. Tripathy (supra), the question considered was whether tax is levied on every motor vehicle which is used or kept for use. The Apex Court held that the explanation only clarifies that a transport vehicle having a valid certificate of fitness and a valid Certificate of Registration will be presumed to be kept for use. Even without such explanation, the meaning of the words ‘used or kept for use within the State’ cannot be given a different meaning. The explanation in the Orissa Act only gives a clarification to what is “kept for use”. It clarifies that a transport vehicle which has a valid certificate of fitness and Certificate of Registration is presumed to be “kept for use”. The Apex Court held that even in the absence of a permit, the vehicle remains a transport vehicle which is capable of being used on a road so long as the vehicle has a valid certificate of fitness and a valid Certificate of Registration in which event it has to be presumed that such a vehicle has been kept for use. In the cases on hand as well, petitioners do not have a case that the vehicles do not have valid certificate of fitness or valid Certificate of Registration. As I already indicated that in the Orissa Act, explanation only gives a clarity to the main provision and does not make any addition to the Statute or to the words “kept for use”. It is further held by the Apex Court that, in so far as the petitioner had not given intimation, it is to be presumed that the vehicle had been used or kept for use in the State. I am of the view that the judgment squarely applies to the Kerala Act as well and therefore the learned Single Judge, in the later judgment in Vipin (supra) was justified in deciding the case placing reliance upon the Apex Court judgment in Bijaya C. Tripathy (supra).

16. Therefore, merely for the reason that the petitioners' vehicle do not have a permit, by itself cannot be stated as a reason to hold that the vehicles were not kept for use.

17. Now the only question that remains to be considered is whether the petitioner's liability to pay tax is under Sl. No. 7 or 12 of the schedule. The heading of Sl. No. 7 reads as under:

“7. Motor Vehicles plying for hire & used for transport of passengers and in respect of which permits have been issued under the Motor vehicles Act, ‘88”

18. There is no dispute about the fact that the vehicles in question have been issued with permits for transport of passengers, in which event, petitioners are liable to pay tax under Sl. No. 7 of the schedule. That the permits have not been renewed cannot be a reason for non-payment of tax and if the petitioners want to avail the benefit of exemption, they have to apply under Section 5.

19. In the above circumstances, I am of the view that the petitioners are under obligation to pay tax in terms of Sl. No. 7 of the schedule unless exempted in terms of Sec.5. In the light of the above finding, I do not think that the authorities had committed any error in passing the interim order.

20. These writ petitions are hence dismissed.

———

PRASANNAKUMAR V/S TRANSPORT COMMISSIONER & ANOTHER, decided on Friday, December 2, 2016.

==========================
[ In the High Court of Kerala, WP(C).Nos. 11712, 21207 & 34656 of 2016(L). ] 02/12/2016

Judge(s) : A.M. SHAFFIQUE
Advocate(s) : I. Dinesh Menon. V.K. Shamsudheen, Government Pleader.
 

All you need to know about Road Accidents

PART I

There has been a steep escalation of road accidents in the past few years with the expansion of more motor vehicles in India. Road injuries and fatalities have come up as a major public concern as it is one of the leading causes of death and permanent disability in this country. According to a study conducted by National Transportation Planning and Research Center [1], one road accident takes place in every four minutes in India. Almost 97% of the road accidents are caused by rash or negligent driving[2].

When a road accident takes place, it gives rise to both civil and criminal liabilities on the part of the driver depending upon the nature and cause of the accident. Motor Vehicles Act, 1988 majorly deal with issues related to road accidents. Indian Penal Code also covers certain areas when it comes to criminal liability.

Things to do in case of a road accident (Section 132 of Motor Vehicles Act, 1988)

It is the driver’s duty to stop his vehicle and wait for a police officer for some reasonable time[3] when he is involved in a road accident and injures any person, animal or causes damage to any other car or property.

The driver of the vehicle should not panic and he should give his name and address to the person affected by the accident and also ask for the affected person’s details.

Generally people run away from such situations mainly due to fear of public harassment, violence and criminal record. There is a possibility that people may own up to their fault but because of rampant bribery culture they think that it is safer to run away than fact potential harassment and loot by the police.

There have been many accidents in which because of celebrity limelight and monetary stronghold the matter has been suppressed and not faced any serious implications in the eyes of law. The Aaston Martin hit and run case is one of those cases where the eye witness gave the statement that a young man (Mukesh Ambani’s son Akash Ambani) came out of the Aaston Martin Rapid and hopped into security vehicle after hitting a Hundai car and then ramming into an Audi showroom but the next day an old employee of Reliance Industries, Mr. Bansilal Joshi said he was responsible for the accident which occurred during a routine maintenance ride of the said car. He said that he panicked so he ran away. The police recorded his report but did not arrest him as they were not sure about who was the actual culprit.[4]

The recent Hema Malini car accident also is one of the incidents where priority of fetching first aid was given to the celebrity and member of parliament over the common Indian family. All of the family members had suffered graver injuries than what Hema Malini did; and in addition to that, they lost their 2 year old daughter too. But medical help reached them long after Hema Malini was driven off around 60 km away by a Samaritan passer-by in his car.[5]

 Things to do in case of injury to a person in a road accident (Section 134 of Motor Vehicles Act, 1988)

It is the duty of the driver or the person in charge of the vehicle to take the injured person to the nearest hospital unless he is unable to do so due to circumstances out of his control. Such a driver should provide any kind of information to the police as and when demanded.

In case there was no police near the area of accident, such incident should be reported to the nearest police station within 24 hours of the said accident.

Information about the accident should be given to the insurer of the policy holder (driver or owner). Policy holder is the person who holds the Certificate of Insurance issued by the insurer. Information such as date, time and place of the accident, details of the person dead or injured, details of the driver of the car are important in such cases.

Things to do after a road accident

An application for compensation should be filed under the Claims Tribunal[6] when death, injury or damage has been caused by a motor vehicle.

Such application can be filed by[7]:-

the person who has sustained such injury;

the person whose property is damaged;

legal representatives of the person deceased or;

an agent duty authorized by the injured person or the legal representatives.

There are three modes by which aggrieved can ask for compensation:-

Principle of no fault liability (Section 140),

Structured formula basis (Section 163A),

Compensation in hit and run cases (Section161)

In the case of no fault liability principle, the claimant does not need to prove any fault or neglect on the part of the driver for receiving compensation. There is a fixed amount of compensation payable to the victim which is 50,000/- in case of death and 25,000/- in case of permanent disablement.

In case of compensation by structured formula basis, the owner of the vehicle or the authorized insurer shall be liable to pay as per the Second Schedule of the said Act to the victim or his legal representatives when such vehicle is involved in causing death or permanent disablement to any person.

The above two modes of compensation can be availed only if the identity of the car is known. Also, a claimant cannot use both methods of compensation together.

The third mode of compensation is in Hit and Run cases. Hit and run can be explained as the liability of a driver of any vehicle who is involved in a collision which damages vehicle or property of any other person or injures any other person(s) or both and who runs away without giving his name and license number as prescribed by statute to the injured party, witness or any law enforcement officer. It is a situation where the identity of the vehicle responsible for the accident is not traceable. As the identity of the driver or the owner is not traceable, a fixed amount of compensation is given to the victim or the legal representatives of the victim from funds created by the government. The claimant receives 25,000/- and 12,500/- in situation of death and grievous injury respectively.

So evidently, the compensation amount reduces by half if the driver or the car cannot be located. Therefore it is imperative to attempt to locate the wrong doer.

No time limit has been prescribed for filing claim application. Initially when the law came into force application had be filed within 6 months from the date of accident which was later increased to one year but for the welfare of the people such limitation has been deleted from the legislation[8].

Any person who feels aggrieved by the decision of the Claims tribunal can appeal in the High Court. There are exceptions to such appeal. Firstly, no appeal by the person who is supposed to pay any amount in terms of award given by the Claims Tribunal shall be entertained by the High Court, unless he has deposited with it rupees 25,000/- or 50% of the amount so awarded, whichever is less in the manner directed by the High Court. Secondly, no appeal shall lie against any award if the amount in the dispute is less than rupees 10,000/-[9].

Motor Vehicles Act, 1988 also covers the offences like over speeding, dangerous driving and drunk driving. A person should have had 30mg of alcohol per 100ml of blood in his/her body to be called drunk under the Act. A first time offender in the case of drunk driving could be sentenced up to 6 months imprisonment or fined up to two thousand rupees or both. A second time offender within the time gap of 3 years could be sentenced up to 2 years of imprisonment or fined up to three thousand rupees or both[10].

What gives rise to criminal liability in a road accident?

Accidents which are caused by the rashness or negligence of the driver give rise to criminal liability. Section 304A of the IPC covers such liability which is punishable for 2 years or fine or both. It is absolutely necessary that death or injury should be a direct result of the negligent act of the accused. If there is a third party intervention then the prosecution case would weaken. Remote or indirect connection will not give rise to any criminal liability. For example, if a driver while talking on the cell phone hits a pedestrian, he is directly responsible for such an accident. On the other hand, when a driver collides with a building and the window sill falls on a pedestrian walking by, then such driver will not be liable under this section.

A person who is driving or riding holds the ultimate duty to control his vehicle. Such a person is prima facie guilty of negligence if his vehicle dashes into something or someone unless he has reason to explain that he did everything in his power to keep the vehicle under control but the accident was inevitable. This principle was established in the landmark case of Ratlam v.s Emperor[11]. In the case of K. Perumal v.s State[12] it was held that the driver was liable to be punished under section 304A of the IPC as he ran over his vehicle on the victim, without attempting to save him even though there was sufficient space on the other side.

Carelessness does not give rise to criminal liability (but it does result in civil liability under the Motor Vehicles Act as previously explained). Recklessness of the accused should reflect disregard for other person’s life and property which means there has to be intention or what we call in law Mens Rea. In the case of Chintaram v.s State of Madhya Pradesh[13] , the deceased was walking on the middle of the road so the accused was driving by the left of the road trying to keep a distance from her. When the accused reached close to the deceased she abruptly took a left turn and got struck by the motorcycle. In this case, the accused was not negligent. The erratic decision of the victim did not give any reasonable time to the motorcyclist to avoid her so he was acquitted.

There are various other offences involving motor vehicle accidents which are punishable under the Indian Penal Code.

Section 279 covers rash driving or riding on public way which is punishable by the way of imprisonment up to 6 months or fine of one thousand rupees or both. Rash driving is independent of other offences irrespective of its consequences, which means if the consequence of such rash driving is death or injury then the accused will be tried for those offences in addition to the charge under this section.

Section 336 provides that anyone who acts rashly or negligently which endangers human life or safety can be punished with imprisonment for a term up to three months or a fine of rupees 250/- or both.

Section 337 and section 338 cover causing hurt and causing grievous hurt which threatens life and safety of people. A person is liable to pay up to rupees 500/- as fine and can be sentenced imprisonment for a term of six months or both in case of causing hurt under section 337. In case of grievous hurt, the driver can be punished with imprisonment extending up to two years or fine of rupees 1000/- or both.

All seven charges were proved in the Sessions Court against the accused in the Salman Khan’s 2002 hit and run case which were covered sections 279, 304(iii), 336,337,338,427 of the IPC and sections 181 and 183 of the Motor Vehicles Act.

 Recently, Vice President (Legal) of Reliance Industries, Jahnvi Gadkar has been charged with culpable homicide not amounting to murder along with provisions of drunk driving from the Motor Vehicles Act because Gadkar had in an inebriated state rammed her car (Audi) – into a taxi and killed two persons.

PART-II

Position of road accident legislations in UK and USA

India and UK have very similar legal position with regard to road accidents. Road Traffic Act, 1988 is the main legislation which covers issues related to road safety and accidents. Provisions of Motor Vehicles Act 1988 (India) and Road Traffic Act, 1988 (UK) are quite identical. UK Highway Code Penalty Table[14]  gives a complete list of offences and their corresponding punishments.

There is a Drink Drive Rehabilitation Scheme in UK which has been active since January 2000. This is generally offered at the discretion of Court to the offender and under this scheme, any offender can reduce his ban on driving which should be more than 12 months. There is also provision of community service for repeated offenders.

In USA, car accident issues are entirely covered under respective state legislations but all the states have three basic elements which need to be proved satisfactorily by the victim to claim compensation. Firstly, plaintiff should prove that there had been a breach of duty from the part of the defendant. A mere utterance of sorry at the time of the accident by the defendant can be used as evidence against him. Secondly, the victim must prove harm is caused to him. Damage to vehicle and injury to the victim must be proved to the court so that the victim can rightfully claim compensation, medical expenses, loss of wages etc. Finally, the plaintiff must prove element of causation. Causation means consistency of medical testimony of the victim with the nature of the collision. It is possible that certain injuries of the victim occurred before the accident so injuries of the victim should be compared with a proper evaluation of the crash scene which is generally captured in pictures and CCTV footage at the traffic poles.

Conclusion

The Motor Vehicles Act had been recently amended in March 2015 and a new Motor vehicle Bill is set to be introduced in the monsoon session of the Parliament this year. The bill is going to introduce strict measures against traffic offenders. It suggests heavy fines up to 3 lakh rupees and imprisonment up to 7 years for death of a child.[15] The increase in both pecuniary and imprisonment penalty may create a deterrent effect in the minds of general public as well as regular offenders. There are CCTV cameras at the traffic signals and the highway speed check posts but most of them are non functional. This loose functioning of the traffic authorities also needs to change. India may have an ideal legislation for dealing with traffic regulations and accidents but in the end it is the duty of the citizens and traffic authority to keep the roads & highways a safe place.

…………………………………………………………………………………………………………………………………….

[1] http://www.helplinelaw.com/govt-agencies-and-taxation/ACMV/accidents-claims-under-the-motor-vehcles-act-1939.html

http://sites.ndtv.com/roadsafety/important-feature-to-you-in-your-car/

[2] http://www.newindianexpress.com/states/kerala/97-Percent-of-Accidents-in-2013-Due-to-Rash-Driving/2014/02/24/article2074546.ece

[3] Reasonable time has not been defined under the Act. It varies from case to case and also depends to some extent on the judges who comprise the bench.

[4] http://www.forbes.com/sites/naazneenkarmali/2014/01/02/the-curious-incident-of-mukesh-ambanis-aston-martin-in-the-night-time/

[5] http://www.ndtv.com/india-news/brutal-error-by-hema-malini-says-union-minister-babul-supriyo-779629

[6] Section 166 of The Motor Vehicles Act, 1988

[7] Section 166 of The Motor Vehicles Act, 1988

[8] 1994 Amendment of the Motor Vehicles Act, 1988

[9] Section 173 of the Motor Vehicles Act, 1988

[10] Section 185 of the Motor Vehicles Act, 1988

[11] AIR 1935 Mad 209

[12] 1998 4 Crimes 382

[13] 1986, ACJ 1043 MP

[14] https://www.gov.uk/highway-code-penalties/penalty-table

[15] http://auto.ndtv.com/news/new-motor-vehicles-bill-to-be-introduced-in-monsoon-session-of-parliament-778968

 

Picture Credits:

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  2. https://www.educaloi.qc.ca/en/capsules/car-accidents-what-do
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Three Social Security Schemes For Prosperity

INTRODUCTION

Since the time Modi led government has come into force, it has been burdened with sky high expectations of reform. The Union Budget of 2015-16 was the first full budget that was presented by the newly elected government and it clearly did not disappoint us, for it gave due importance to all sections of the economy. Keeping the infrastructural development as its main agenda the budget introduced various schemes for all sectors of our society especially in the sector of health, education, pension and insurance, etc.

Bearing numerous economic problems such as inflation, global commodity price crash, etc., in mind the Finance Minister had presented a very credible budget which can be dubbed as a budget for the common man. The new Budget seemed to provide a balanced policy framework aimed at supporting everyone from the common man to the corporate[1]. The Finance Ministry announced detailed guidelines for three social security schemes in the Budget. Though anyone can enrol in these schemes and avail of its benefits, it was primarily formulated to cover workers engaged in unorganised sectors apart from the poor and vulnerable sections of the society[2]. These comprise a pension scheme and two insurance schemes for the welfare of the mass.

 

ANALYSIS

“Worryingly, as our young population ages, it is also going to be pension-less,” Union Finance Minister Arun Jaitley said while presenting the Budget for 2015-16 in the Lok Sabha.[3] The Budget he said was proposed to work towards creating a universal social security system for all Indians, especially the poor and the underprivileged. The GOI had a few years ago launched a pension scheme called ‘Swalamban’. Unfortunately it failed to draw enough investors. Swalamban’s failure prompted the government to launch a modified scheme.. The new scheme i.e. Atal Pension Scheme (APY) which is governed by the Insurance and Regulatory Development Authority of India (IRDA) has its focus on all the citizens in the unorganised sector who have joined the National Pension System (NPS) but are not members of any statutory social security scheme. APY entitles them to a pension ranging between Rs.1,000 to Rs.5,000 per month after 60 years of age. Each employee will be given a retirement number after registering under APY with which he can track easily track his investments. The fixed pension will be based on the contributions made by an individual.  The contributions would vary upon the age of joining the scheme. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

The benefit of fixed pension would be guaranteed by the Government. The Central Government would also co-contribute 50% of the subscriber's contribution or Rs. 1,000 per annum, (whichever is lower), to each eligible subscriber account, for a period of 5 years, that is, from 2015-16 to 2019-20, who join the NPS before December 31 this year and who are not income-tax payers.[4] The existing subscribers of ‘Swavalamban’ Scheme i.e. the old scheme would automatically be migrated to the new scheme, unless they specifically opt out of it.

The Pradhan Mantri Suraksha Bima Yojana is another scheme, which is mainly for accidental death. The risk coverage for accidental death is Rs 2 lakhs whereas for partial disability the risk coverage is Rs. 1 lakh. The benefits of this scheme are available to people in age group 18 to 70 years who have a bank account. They would be required to pay a minimum premium of Rs. 12 per annum or Re 1 per day. The scheme is set to be offered by all public sector general insurance companies and all other insurers who are willing to join the scheme and tie-up with banks for this purpose. Any person having a bank account and his Aadhaar number (linked to the bank account) would be able to avail of benefits arising from the scheme if he fills up a simple form and submits it to the bank every year before by June 1[5].

Bearing in mind low number of  health insurance penetration in India (which is only around 5% of all insurance policies and which comprises only about 13 – 15% in urban areas) the government launched another insurance scheme to provide life insurance cover i.e. Pradhan Mantri Jeevan Jyoti Bima Yojana. This scheme provides for risk coverage of Rs. 2 lakh in case of death for any reason whatsoever. This scheme is available to anyone holding a bank account and aged between 18 to 50 years. People who join the scheme before completing 50 years can continue to have the risk of life cover up to the age of 55 years subject to the payment of premium. The subscribers need to pay a premium of Rs. 330 p.a. The scheme would be offered by Life Insurance Corporation and all other life insurers who are willing to join the scheme and tie-up with banks for this purpose.

The premium under both the schemes will be directly auto-debited by the bank from the subscribers’ account and a person will have to opt for the scheme every year. He can also prefer to give a long-term option of continuing in which case his account will be auto-debited every year by the bank.

These three schemes not only provide for social security by the way of fixed pension and risk covers but also provide a tax benefit of additional Rs 50,000. As per Section 80C of the Income Tax Act[6] a person is eligible for certain deductions from his income tax if he makes certain investments and expenditures[7]. Earlier if such investments and expenditures together totalled to Rs.1,00,000 or above a person was eligible for  exemption under Section 80C, 80CC, 80CCC of the Income Tax Act. This limit has now been raised to Rs.1,50,000 per annum as per the amendment in Income Tax Act, 1961 through Finance Act of 2015[8]. A contribution upto 10% of salary or 10% of the gross total income to notified pension scheme of Central Government is only eligible for deduction.[9] Which means that the income gets reduced by Rs.1,50,000 and the persons ends up paying no tax on it at all. On health insurance premium paid for self and family a deduction upto Rs.15,000 was allowed[10] and in case of health insurance premium for parents there is an additional deduction upto Rs.15,000.[11] This deduction is now increased to the limit of Rs.25,000 for self and family and from Rs.20,000 to Rs.30,000 for senior citizens[12].

 

CONCLUSION

This budget seems to be a budget for the development of the poor. The new schemes are nothing but a government driven investment for fixed returns to the common man in future. But except for the tax rebates there is not much motivation for the common man to opt for these schemes.. Therefore, the government might face a little difficulty in inviting people to invest in these schemes at the initial stage. But with the flow of time and better awareness about the benefits, the additional deductions would certainly encourage investment in pension schemes which in turn will enable India to become a pensioned society instead of a pension less society.

All the contributions under these social security schemes shall be transferred from subscribers’ Jan Dhan accounts directly and the accounts will be linked with the Aadhar numbers. This not only will make it compulsory for every citizen to have a bank account but also to have a unique identity number through Aadhar Card which will give a new direction to the schemes already launched by the government. These schemes reflect the government’s intention that no person suffers from pain due to illness or old age. This will also help to realise the dream of 'One India, Great India' and bring the country on the path of prosperity through 'Sabka saath, Sabka vikas' i.e., equal cooperation and contribution from both citizens as well as the government.

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[1] http://www2.deloitte.com/content/dam/Deloitte/in/Documents/tax/in-tax-india-budget-2015-analysis.pdf

[2] http://www.thehindubusinessline.com/economy/govt-announces-details-of-new-insurance-pension-schemes/article6950744.ece

[3] http://www.dailymail.co.uk/indiahome/indianews/article-2973762/India-budget-2015-Jaitley-insures-Aam-Aadmi-Government-launch-two-insurance-schemes-lower-income-groups.html

[4] http://www.thehindubusinessline.com/economy/govt-announces-details-of-new-insurance-pension-schemes/article6950744.ece

[5] http://articles.economictimes.indiatimes.com/2015-02-28/news/59612737_1_jan-dhan-accounts-budget-2015-life-insurance-plan

[6] Deductions allowable to tax payer

[7] The investments that fall under Section 80C can be broadly classified as contributions / investments to: • Provident Fund • Public Provident Fund • Life insurance premium • Pension plans • Equity Linked Saving Schemes of mutual funds • Infrastructure bonds • National Savings Certificate

[8] http://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx

[9] Section 80CCD (1) of Income Tax Act: Deduction in respect of Contribution to Pension Account

[10] Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

[11] Section 80D: Deduction in respect of Medical Insurance

[12] http://www.goodreturns.in/personal-finance/planning/2015/03/new-pension-scheme-2015-should-you-invest-the-same-342189.html