Mact- help sought please
Gaurav
(Querist) 18 January 2012
This query is : Resolved
Respected Sir,
This is with respect to my father's MACT case. He was the sole bread earner and post accident had unfortunately had become mentally challenged.
I have two parts to my question.
Part A: Treatment of Depreciation while computing Income for Sole Proprietor:
My father was a sole proprietor. He recently passed away.
His income was nearly 4.5 Lakhs. He however claimed nearly 3 Lakhs as depreciation.
Thus, his Profit before Depreciation was 4.5 Lakhs
while Profit After Depreciation was 1.5 Lakhs.
Which amount would be taken as amount for compensation case. Please guide sir.
Per my understanding, depreciation is a non-cash expense and is similar to say standard deduction which is allowed for Tax computation.
Thus, Profit before depreciation should be taken into account.
Part B ) Is my Lawyer acting fine?
Its been over 2 years but we are yet to get any ourcome. My father recently passed away.
My father became mentally challenged post accident and after 2 years of sufferings recently passed away after a brain hemorrage.
He is also suggesting that amount of compensation would be very small amount.
My lawyer prima facie prefers for a settlement. He is suggesting Insurance Company may contest that my Father passed away after 2 years due to some other reason.
Medical reports clearly show that he passed post a brain hemmorage. He had suffered large Brain damage in accident.
Now after 2 years, Insurance company guy for the first time interacted with us and said we would offer an amount. This seems a ploy to offer a lower compensation.
Nearly 6 months back , case submitted to Lok Adalat but Insurance Company refused to go for it. I was not even informed about this. I got to know about this lok adalat thing on the day of date. My lawyer suggested as the case is on higher side, insurance company is not ready to take it up.
My point is how he died is immaterial now as in any which case, he was not in a position to earn. So all we are seeking is loss of income and reimbursement of expenses.
Sir please help me as I have no source of information. My lawyer, is bent on compromise. Now after he is no more and I have suffered 2 years of misery including a brain stroke due to tensions, why should i go for compromise.
Many Thanks in advance sir...
Regards,
Gaurav Ahuja on behalf of my CousinSister....
Deepak Nair
(Expert) 18 January 2012
Dear Gaurav,
As per my understanding, the court will consider the profit before depreciation while deciding the amount of compensation. However, the court will not grant any amount higher than what is prayed for.
Where is your case lodged?? If it is in Mumbai or Thane, then it is true that the case will not finish in 2 years. There are huge backlogs of cases and new cases as not considered for final hearing. The lawyer will try for settlement as in normal course, the case will take aroud 5 years to finish. If any order is passed, then the insurer can go or appeal in high court. Thus, the settlement will be a speady remedy to finish the case.
The insurance companies does not give preference to big claims in Lok Adalats as the big claims are very difficult to settle. Smaller claims gets settled easily as the difference in amounts quoted by the parties will be much less.
Even if the lawyer tries for compromise, only you can take the final call as you will be called to record the settlement in the court. Thus, you agree only on a good and reasonable amount of compensation. Otherwise go ahead with teh case. At the end you will get the amount as well as interest from the date of filing of claim.
I repeatedly say that no case in MACT finishes in 2 years except settlement/compromise.
Gaurav
(Querist) 18 January 2012
Thanks Mr Deepak. Great Help..Would you know of any decided case with respect to the Deprecition treatment.
Case is based out of Delhi.
Further, is my lawyer correct is saying that Insurance company may contest reason of death?
He in any case was mentally challenged. Infact his unfortunate demised saved insurance company from paying his monthly medical bills for rest of his life.
Anyways, medical summary shows reason as Brain Hemmorage which is what he suffered in initial incident.
Gaurav
(Querist) 18 January 2012
Grateful to you for your help sir.
Deepak Nair
(Expert) 19 January 2012
Yes. The insurance company may fight against the issue of reason for death. If they succeed to prove that the cause of death is not the accident, then the court will order less amount of compensation.
Whatever amount you claim, you have to justify the said amount.
The insurer will try to reduce the amount as much as possible, both in compromise as well as in contesting the case.
Deepak Nair
(Expert) 19 January 2012
Further,
If your father died after the claim was lodged, you can file an application for enhancement of claim on account of death of the injured.
If you are not satisfied with your lawyer, you can discuss the issue with any other lawyer for guidance. The lawyers who practice in MACT generally does exclusive MACT practice. As per my opinion, your lawyer is not at all wrong.
Deepak Nair
(Expert) 19 January 2012
Regarding the calculation of the claim, your advocate have to give the calculation under different heads and you can claim any amount.
the court, while passing the order will consider all the aspects and calculate the amount of compensation according to the permissible limits. Thus, whatever claim you make, you will get what the court orders.
V R SHROFF
(Expert) 19 January 2012
You have to generate documents to support your claim. That That include Medical evidence to connect accident with death. In Indian environment of Corruption, one have to spend Cash, illegally, to get benefit.
What amt u claimed?
What ur father business? what income shown in last 5 yrs I tax return/
What bank transaction? What age he died/
Why immediate interim relief not allowed?
All insurance co, do not pay from their own pocket.
the insurance fees collected every year from every vehicle owner in indi vary from 1k to 50k & there are lots of cars, vehicles in India, generating so huge fund, that considering these facts, they hardly pay 25% of what they receive, all fund lying idle, invested by ins co, generating huge amount , and capable to pay all claims.
the income goes agent's omission, that equals claim amt pd .
all compromised, suppose paid 25l cheque, claimant get 12-15 l, balance claimant must pay in advance, in cash to his lawyer to give to insurance advocate and judge. they all share huge amount. that’s why MACT advocate pay court fees out of his own pocket, invest it for 4-5 years, get 20 times on order.
in no other caases, advocate pay court fees, why in MACT?? only for compromise money !!
MACT , is big racket.
delay accident benefit of 25l for 5 years generate interest income of rs. 18-25 l , free, at cost of died person's family.
i one case at Alibag, I have to argue with judge, how a poor widow will survive with 3 small children for years, you must expedite the matter, young widow have no source of income, and child had to be feed milk today, they cannot wait for tomorrow. Their name is today, not tomorrow. insurance co. have huge fund lying, and they receive in advance from vehicle owner, and is compulsory. while paying, they wait till injured die, and do not pay after 4 years, using money for 6 years without interest?? how can they justify? why such cases be delayed?? they will die.
it worked, a person never paid i tax, was paid 28 Lakhs, on his proof of regular payment to bank installment of his tempo loan of Rs. 20k per month, [without any loan from others + his home exp] proved his income 30k pm =3.5 l x10 years - depreciation. Income tax returns not reliable, as all tax practitioner file false returns to save tax for their clients. Argument accepted.
Gaurav
(Querist) 19 January 2012
Respected Shroff Sir,
Thanks for your kind reply and time Sir.
Here are the required details:
What amt u claimed?
70 Lakhs..though my lawyer has hinted of settlement of about 20 Lkhs of which 11 Lkahs are in medical bills.
I told him that this was less amount as we used to spend over 20 K every month on his medical treatment & attendant.
Infact, Insurance company has raised concern on our salary vouchers for attendants of 8K per month. My sister is only daughter and how can they expect she can take care of a male 24*7 who is mentally challenged.
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What ur father business? what income shown in last 5 yrs I tax return/
We do not have his ITR for past 5 years. However, last year income was :
Profit before interest & Depreciation : 5 Lakhs
Depreciation : 3 Lakhs
Interest Paid : 60000
Profit after Interest & depreciation : Nearly 1 lakh 40000
My lawyer has admitted he has no knowledge of income calculations.
Per my understanding, depreciation is a non-cash expense and thus cash in hand amount should be used for compensation i.e 5 Lakh - Interest income
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What bank transaction? What age he died/
He used to pay over 14000 PM as house loan installment and thus income cannot be assumed at Rs 1 lakh 40 Thousand.
Annual home loan repayment would be of Rs 168000.
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His age was 49 at the time of accident and he passed at the age of 51.
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Why immediate interim relief not allowed?
Only 25 K was offered
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MY lawyer has never shared with Judge the fact that she is the only one at home and with no source of income. She has to borrow money to fund dad's treatment.
Further, due to trauma she had a barin stroke and had her MRI based on advice of AIIMS Neurosurgeon.
Her whole life is ruined and these guys are playing unacceptable tricks...
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My lawyer is scaring us that insurance company may drag the matter to High court and contest teh cause of death.,
My point is, in any case cause of death is immaterial.
All we are claiming is :
1. Medical expense reimbursements
2. Loss of income.
Loss of income would stand anyways as had he been alive, he was not in a position to earn. Further, had he been alive, insurance company would have been required to pay medical bills as well.
His final medical summary anyways shows brain hemmorage.
Gaurav
(Querist) 19 January 2012
Forgot to add, my uncles business was Transport. Buses and cabs he used to run.
V R SHROFF
(Expert) 19 January 2012
So even 100 months c 25k pm u deserve 25L + medical exp reimbursement .
Period calculation as per age X Gross Income.
Gaurav
(Querist) 19 January 2012
Sir, does any settled case exist with respect to treatment of depreciation.
Further, may i request you to please advise how 25K and 100 Months were arrived at.
Need to explain to my lawyer.
V R SHROFF
(Expert) 19 January 2012
no of months he was capable of working, after accident, and loss in Rs. incurred. There are ready tables for it's calculation
capacity to earn is ur payment to bank + home exp
Court fee payable for Motor acci :
for 3L =2372.50p+ Rs. 10 per k onwards Rs. 100/1L say for bal 22L=24572.50
Gaurav
(Querist) 19 January 2012
Many Thanks Sir..Could you please share case which you won using the loan payment as basis..
Would the court not consider ITR return as basis..
Deepak Nair
(Expert) 20 January 2012
Great helping hand from Mr.Shroff.
Very well advised.
In case you are not satisfied with your advocate, then you can cahnge your advocate.
It is advisable to appoint an advocate who is very familiar with MACT matters. As advised you earlier, the advocates who practice in MACT mostly stick to MACT and they are well aware of all the laws and procedures.
If you were in Mumbai, then Mr.Shroff would have been a great help.
I too have given you sime reference if you were in Mumbai.
