(REPORTABLE)
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 9654 /2016
(Arising out of SLP (Civil) No. 14312/2013)
Reliance General Insurance Co. Ltd. …….Appellant
Vs.
Shashi Sharma & Ors. …….Respondents
WITH
C.A. No. 9655 of 2016 @ SLP(C) No. 14377 of 2012, C.A. No. 9657 of 2016
@ SLP(C) No. 14379 of 2012, C.A. No. 9659 of 2016 @ SLP(C) No. 26344 of
2012, C.A.No. 9661 of 2016 @ SLP(C) No. 11343 of 2014, C.A. No. 9663-9664
of 2016 @ SLP(C) No. 14995-14996 of 2014, C.A.No. 9666 of 2016 @ SLP(C)
No. 15320 of 2014, C.A.No. 9669 of 2016 @ SLP(C) No. 15343 of 2014,
C.A.No. 9671 of 2016 @ SLP(C) No. 18308 of 2014, C.A.No. 9677 of 2016 @
SLP(C) No. 18574 of 2014, C.A.No. 9674 of 2016 @ SLP(C) No. 19924 of 2014,
C.A.No. 9673 of 2016 @ SLP(C) No. 1539 of 2015, C.A.No. 9672 of
2016 @ SLP(C) No. 28423 of 2014, C.A.No. 9675 of 2016 @ SLP(C) No. 28201
of 2016 @ CC No. 21664 of 2014, C.A.No. 9670 of 2016 @ SLP(C) No. 29208
of 2014, C.A. No. 9667-9668 of 2016 @ SLP(C) No. 25185-25186 of 2015,
C.A.No. 9665 of 2016 @ SLP(C) No. 19592 of 2012, C.A.No. 9662 of
2016 @ SLP(C) No. 35412 of 2013, C.A. No. 9660 of 2016 @ SLP(C) No. 15870
of 2014,C.A.No. 9658 of 2016 @ SLP(C) No. 1934 of 2016, C.A.No. 9656 of
2016 @ SLP(C) No. 36135 of 2015, C.A.No. 9676 of 2016 @ SLP(C) No.
28202 of 2016 @ CC No. 2735 of 2016.
J U D G M E N T
A.M. KHANWILKAR,J.
Delay condoned.
2. Leave granted.
3. These matters have been placed before a three Judges’ Bench in terms
of order dated 7th October, 2015. This order has not formulated any
specific question to be answered by the larger Bench.
4. The leading appeal challenges the judgment of the Single Judge of the
High Court of Punjab and Haryana at Chandigarh dated February 13, 2013 in
FAO No.503/2012. That appeal was filed by the respondents (in appeal
arising from SLP (Civil) No.14312/2013) against the Award of the Motor
Accident Claims Tribunal, Jind, in MACT Case No.136 dated 3rd November
2011. The said respondents had filed a claim petition after the death of
Dr. Ashwini Sharma caused due to a motor accident on 24th October 2010 in
front of Main gate of General Hospital at Jind. He succumbed to the
injuries sustained in that accident. The Tribunal partly allowed the claim
petition. A sum of Rs.4,50,000/- was awarded as compensation to the
claimants being the dependants of deceased Dr. Ashwini Sharma; with
interest at the rate of 7.5% per annum from the date of filing of the claim
petition till realization. The Tribunal directed the appellant-Insurance
Company to pay the compensation amount as determined in the award to the
claimants. The claimants, being aggrieved by the quantum of compensation
fixed by the Tribunal and in particular deduction of compensation amount
received by them from other source, preferred appeal before the High Court.
The High Court, relying on the decision of Division Bench of the same High
Court dated December 21, 2012, in the case of Reliance General Insurance
Company Ltd. Vs. Purnima & Others,[1] acceded to the contention of the
claimants that the amount receivable by the dependents of the deceased
under the Haryana Compassionate Assistance to the dependents of the
Deceased Government Employees Rules, 2006 (hereinafter referred to “Rules
of 2006”) cannot be deducted from the quantum of compensation fixed by the
Tribunal. On that finding, the High Court allowed the appeal of the
respondents in the following terms:
“In view of the above, a sum of Rs.89,24,604/- (Rs.1,00,957/-
- 15% thereof being Rs. 15,143 = Rs.85,814/- - 1/3rd thereof being
Rs.28,605/- = Rs.57,209 x 12 =Rs.6,86,508/- x 13 = 89,24,604) towards loss
of dependency, Rs.15,000/-towards loss of consortium of the 1st appellant,
Rs.15,000/- towards loss of estate, Rs.10,000/- towards funeral expenses
and Rs.5,000/- towards transportation expenses, in aggregate a sum of
Rs.89,60,604/- with interest @ 7.5% for the enhanced portion of the
compensation from the date of petition till the date of realization is
awarded. The rate of interest applied and the mode of apportionment done by
the Tribunal stands confirmed.”
5. The High Court has adopted the same reasoning to disallow deduction
of compensation amount received by the claimants as per Rules of 2006 in
the respective companion cases listed for analogous hearing. The sole
contention advanced by the appellants - Insurance Companies, in these
appeals, is that, the High Court has erred in law in disallowing the
deduction of amount received by the concerned claimants under the Rules of
2006, from the quantum of compensation amount payable to the claimants
under the Act of 1988.
6. As the High Court has relied on the decision of the Division Bench of
the same High Court in Purnima’s case (supra), it is apposite to first
advert to that decision. That decision was rendered on a reference made to
a larger Bench, on a question which has been canvassed by the appellants -
Insurance Companies even in the present appeals, in view of the conflicting
decisions of Single Judges of the same High Court in the case of Oriental
Insurance Co. vs. Saroj Devi [2] and in the case of New India Assurance Co.
vs. Smt. Santosh[3]. The question considered by the Division Bench was:
“whether the compensation received from the Government under the Haryana
Compassionate Assistance to the Defendants of Deceased Governments
Employees Rules, 2006 (or otherwise) is to be deducted from the total
compensation, which is payable to the dependents of the deceased, who dies
in an accident, while computing financial benefits through ex-gratia
payments by the Government?” The Division Bench analysed the scheme and
intent of the Rules of 2006 and held that the said Rules have been framed
by the Governor of Haryana in exercise of powers conferred by proviso to
Article 309 of the Constitution of India; these Rules not only have
statutory force, but must be treated at par with the Statute enacted by the
Legislature; these Rules purport to assist the family of the deceased to
tide over hardship caused as a result of the employee dying in harness (not
merely because of motor accident) or who goes missing or whose whereabouts
are not known, by providing ex-gratia financial assistance to the family of
the deceased employee; this financial assistance to the dependents of the
employee who dies in harness, has no correlation with the cause of death of
the employee due to motor accident. In other words, on mere death of the
employee dying in harness, be it natural death or due to illness or
otherwise the Rules of 2006 would become applicable; and as a result of
which the family of the deceased employee is entitled to receive financial
assistance from the employer. The Division Bench held that the scheme of
financial assistance postulated in Rules of 2006, is a service benefit
which accrues to the dependents of the deceased and is in the domain of
service matter/benefit given to the employee as a result of the service
rendered by the deceased employee. The benefit accruing to the dependents
of the deceased is in the nature of enhanced pension given as per the
provisions of the Pension/Family Pension Scheme, recognizing the fact that
the pension is normally given for meritorious, long and faithful service by
the employee. The Division Bench relying on the exposition of two Judges’
Bench decision of this Court in Helen C. Rebello (Mrs.) & Ors. vs.
Maharashtra State Road Transport Corporation & Anr.[4] and also in United
India Insurance Co. vs. Patricia Jean Mahajan & Ors.[5], held that the
tortfeasor or Insurance Companies cannot get their liability excused or
reduced because the deceased’s family would receive financial assistance
from an alternative source (employer) by reason of the death of the
deceased. It held that deductions are admissible from the amount of
compensation in case the claimant receives the benefit as a consequence of
injuries sustained which otherwise he would not been entitled to; and does
not cover cases when the payment received is not dependent upon an injury
sustained on meeting with an accident. That the assistance received under
Rules of 2006 is not dependent upon the death of an employee arising out of
a motor accident only. Thus, it has no correlation with the manner in which
the death occurs. Accordingly, the Division Bench held that the Insurance
Company is not entitled to claim deduction of the amount given to the
dependents under the Rules of 2006, while calculating the compensation
amount payable under the Motor Vehicles Act.
7. The Insurance Companies, on the other hand, have relied on the
decision of two Judges’ Bench of this Court in Bhakra Beas Management Board
vs. Kanta Aggarwal (Smt.) & Ors.[6], to contend that the plea of the
appellant in that case that the claimants have received financial
assistance from other source due to the death of her husband - by way of
salary amount on account of compassionate appointment and also residence
provided to her was deductible, has been accepted by this Court; and was so
deducted while determining a just compensation amount payable under the
Motor Vehicles Act. Reliance is also placed on the dictum of three Judges’
Bench in Gobald Motor Service Limited vs. R.M.K.Veluswami [7], which,
according to the Insurance Company, permits deduction of benefits such as
compensation received by the dependents of the deceased from the employer.
Reliance is also placed on two Judges’ Bench decision in the case of
Sheikhupura Transport Co. Ltd. vs. Northern India Transport Insurance
Co.[8]; another two Judges’ Bench judgment in the case of Vimal Kanwar &
Ors. vs. Kishore Dan & Ors.[9]. Reliance is then placed on another decision
of two Judges’ Bench of this Court in Oriental Insurance Co. Ltd. vs. Deo
Patodi and Ors.[10] for the principles to be reckoned to determine a just
compensation payable under the Motor Vehicles Act. In substance, the
contention of the Insurance Companies is that the claimants cannot be
permitted to profiteer and receive double benefit on account of the death
of their family member on the same head of “Loss of income” to them.
8. Besides the above noted stand of the Insurance Companies the other
incidental question to be considered is whether there is any conflict of
opinion between the coordinate Benches (of two Judges’) of this Court, in
the case of Bhakra Beas Management Board (supra) on the one hand, and that
of Helen C. Rebelo and Patricia J.Mahajan (supra) on the other.
9. The decision in the case of Gobald Motor Service Ltd. (supra) of
three Judges’ Bench of this Court has been carefully analysed and
distinguished by the two Judges’ Bench in Helen’s case (supra). In that,
the dictum in Gobald Motor’s case was in relation to the provisions
regarding quantum of damages payable in terms of Sections 1 and 2 of the
Fatal Accident Act, 1855, which are held to be materially different. On the
other hand, the provision of the Motor Vehicles Act, 1939 enlarges the
scope for computation of compensation amount. The Court in Helen’s case
held that the observation in Gobald’s case cannot be the basis to claim
deduction of amount receivable by the dependents of the deceased from
whatever source, in the context of provisions of the Motor Vehicles Act as
in force. Even the decision in the case of Sheikhupura Transport (supra)
has been explained and distinguished on the same lines.
10. The question is: whether the principle expounded by the two Judges’
Bench in Helen’s case, in paragraphs 32 to 35, in particular, can be
doubted? In that case the Court was called upon to answer as to whether it
will be permissible to disallow the deduction of amount receivable by the
dependants of the deceased towards “Life Insurance Policy”, from the amount
of compensation payable under the provisions of Motor Vehicles Act (in that
case Sections 110B, 92A and 92B of the Act of 1939 corresponding to
Sections 168, 140 and 141 of the Act of 1988). Paragraphs 32 to 35 read
thus:
“32. So far as the general principle of estimating damages under the
common law is concerned, it is settled that the pecuniary loss can be
ascertained only by balancing on one hand, the loss to the claimant of the
future pecuniary benefits that would have accrued to him but for the death
with the “pecuniary advantage” which from whatever source comes to him by
reason of the death. In other words, it is the balancing of loss and gain
of the claimant occasioned by the death. But this has to change its colour
to the extent a statute intends to do. Thus, this has to be interpreted in
the light of the provisions of the Motor Vehicles Act, 1939. It is very
clear, to which there could be no doubt that his Act delivers compensation
to the claimant only on account of accidental injury or death, not on
account of any other death. Thus, the pecuniary advantage accruing under
this Act has to be deciphered, correlating with the accidental death. The
compensation payable under the Motor Vehicles Act is on account of the
pecuniary loss to the claimant by accidental injury or death and not others
forms of death. If there is natural death or death by suicide, serious
illness, including even death by accident, through train, air flight not
involving a motor vehicle, it would not be covered under the Motor Vehicles
Act. Thus, the application of the general principle under the common law of
loss and gain for the computation of compensation under this Act must
correlate to this type of injury or death, viz., accidental. If the words
“pecuniary advantage” from whatever source are to be interpreted to mean
any form of death under this Act, it would dilute all possible benefits
conferred on the claimant and would be contrary to the spirit of the law.
If the “pecuniary advantage” resulting from death means pecuniary advantage
coming under all forms of death then it will include all the assets
moveable, immovable, shares, bank accounts, cash and every amount
receivable under any contract. In other words, all heritable assets
including what is willed by the deceased etc. this would obliterate both,
all possible conferment of economic security to the claimant by the
deceased and the intentions of the legislature. By such an interpretation,
the tort feasor in spite of his wrongful act or negligence, which
contributes to the death, would have in many cases no liability or meager
liability. In our considered opinion, the general principle of loss and
gain takes colour of this statute, viz., the gain has to be interpreted
which is as a result of the accidental death and the loss on account of the
accidental death. Thus, under the present Act, whatever pecuniary advantage
is received by the claimant, from whatever source, would only mean which
comes to the claimant on account of the accidental death and not other
forms of death. The constitution of the Motor Accident Claims Tribunal
itself under Section 110 is, as the section states:
“………for the purpose of adjudicating upon claims for
compensation in respect of accidents involving the death of, or bodily
injury to,……”
33. Thus, it would not include that which the claimant receives on
account of other forms of deaths, which he would have received even apart
from accidental death. Thus, such pecuniary advantage would have no
corelation to the accidental death for which compensation is computed. Any
amount received or receivable not only on account of the accidental death
but that which would have come to the claimant even otherwise, could not be
construed to be the “pecuniary advantage”, liable for deduction. However,
where the employer insures his employee, as against injury or death arising
out of an accident, any amount received out of such insurance on the
happening of such incident may be an amount liable for deduction. However,
our legislature has taken note of such contingency through the proviso of
Section 95. Under it the liability of the insurer is excluded in respect of
injury or death, arising out of and in the course of employment of an
employee.
34. This is based on the principle that the claimant for the happening of
the same incidence may not gain twice from two sources. This, it is
excluded thus, either through the wisdom of the legislature or through the
principle of loss and gain through deduction not to give gain to the
claimant twice arising from the same transaction, viz., the same accident.
It is significant to record here in both the sources, viz., either under
the Motor Vehicles Act or from the employer, the compensation receivable by
the claimant is either statutory or through the security of the employer
securing for his employee but in both cases he receives the amount without
his contribution. How thus an amount earned out of one’s labour or
contribution towards one’s wealth, savings, etc either for himself or for
his family which such person knows under the law has to go to his heirs
after his death either by succession or under a Will could be said to be
the “pecuniary gain” only on account of one’s accidental death. This, of
course, is a pecuniary gain but how this is equitable or could be balanced
out of the amount to be received as compensation under the Motor Vehicle
Act. There is no correlation between the two amounts. Not even remotely.
How can an amount of loss and gain of one contract be made applicable to
the loss and gain of another contract. Similarly, how an amount receivable
under a statute has any correlation with an amount earned by an individual.
Principle of loss and gain has to be on the same plane within the same
sphere, of course, subject to the contract to the contrary or any
provisions of law.
35. Broadly, we may examine the receipt of the provident fund which is a
deferred payment out of the contribution made by an employee during the
tenure of his service. Such employee or his heirs are entitled to receive
this amount irrespective of the accidental death. This amount is secured,
is certain to be received, while the amount under the Motor Vehicles Act is
uncertain and is receivable only on the happening of the event, viz.,
accident, which may not take place at all. Similarly, family pension is
also earned by an employee for the benefit of his family in the form of his
contribution in the service in terms of the service conditions receivable
by the heirs after his death. The heirs receive family pension even
otherwise than the accidental death. No corelation between the two.
Similarly, life insurance policy is received either by the insured or the
heirs of the insured on account of the contract with the insurer, for which
the insured contributes in the form of premium. It is receivable even by
the insured if he lives till maturity after paying all the premiums. In
the case of death, the insurer indemnifies to pay the sum to the heirs,
again in terms of the contract for the premium paid. Again, this amount is
receivable by the claimant not on account of any accidental death but
otherwise on the insured’s death. Death is only a step or contingency in
terms of the contract, to receive the amount. Similarly any cash, bank
balance, shares fixed deposits, etc. though are all a pecuniary advantage
receivable by the heirs on account of one’s death but all these have no
corelation with the amount receivable under a statute occasioned only on
account of accidental death. How could such an amount come within the
periphery of the Motor Vehicles Act to be termed as “pecuniary advantage”
liable for deduction. When we seek the principle of loss and gain, it has
to be on a similar and same plane having nexus, inter se, between them and
not to which there is no semblance of any corelation. The insured
(deceased) contributes his own money for which he receives the amount which
has no corelation to the compensation computed as against the tortfeasor
for his negligence on account of the accident. As aforesaid, the amount
receivable as compensation under the Act is on account of the injury or
death without making any contribution towards it, then how can the fruits
of an amount received through contributions of the insured be deducted out
of the amount receivable under the Motor Vehicles act. The amount under
this Act he receives without any contribution. As we have said, the
compensation payable under the Motor Vehicles Act is statutory while the
amount receivable under the life insurance policy is contractual.”
(emphasis supplied)
11. This decision has analysed the legal position regarding the
application of the general principle for estimating damages under the
common law. It has also noted the distinguishing features between the
provisions of Fatal Accidents Act, 1855, before its amendment by Act (3 of
1951) and thereafter. It then found that in Gobald’s case the Court
decided the issue placing reliance on English decisions - as the provisions
applicable at that time were similar to Section 9 of the English Fatal
Accidents Act, 1846. The Court was neither called upon to determine damages
under the Motor Vehicles Act, 1939 nor consider as to any form of
deductions are justified under the Motor Vehicles Act. The Court noted
that the language of Section 110-B of the Act of 1939 (corresponding to
Section 168 of the Act of 1988) is different from Section 1A of the Fatal
Accidents Act, 1855. It held that Section 110-B of the Act of 1939
empowers the Tribunal to determine the compensation which appears to it to
be “just”. The Court held that this provision widens the scope for
determination of compensation, which is neither permissible under the
Indian Fatal Accidents Act, 1855 nor under the English Fatal Accidents Act,
1846. The Court then went on to analyse the decisions of this Court and
held that there is a deliberate departure in the language of the Act of
1939, revealing the intent of the legislature to confer wider discretion on
the Tribunal. Therefore, the decisions based on the principles applicable
to previous law cannot be invoked while adjudicating the compensation
payable to the claimant under the Motor Vehicles Act. In Paragraph 28, the
Court observed thus:
“28. …….. This show that the word “just” was deliberately brought it
Section 110 B of the 1939 Act to enlarge the consideration in computing the
compensation which, of course, would include the question of deductibility,
if any. This leads us to an irresistible conclusion that the principle of
computation of the compensation both under the English Fatal Accidents Act,
1846 and under the Indian Fatal Accidents Act, 1855 by the earlier
decisions, were restrictive in nature in the absence of any guiding words
therein, hence the courts applied the general principle at the common law
of loss and gain but that would not apply to the considerations under
Section 110-B of the 1939 Act which enlarges the discretion to deliver
better justice to the claimant, in computing the compensation, to see what
is just. Thus, we find that all the decisions of the High Courts, which
based their interpretation on the principles of these two Acts, viz., the
English 1846 Act and the Indian 1855 Act to hold that deductions were valid
cannot be upheld. As we have observed above, the decisions even with
reference to the decision of this Court in Gobald Motor Service where the
question was neither raised nor adjudicated and that case also, being under
the 1855 Act, cannot be pressed into service. Thus, these courts by giving
a restrictive interpretation in computation of compensation based on the
limitation of the language of the Fatal Accidents Act, fell into an error,
as it did not take into account the change of language in the 1939 Act and
did not consider the widening of the discretion of the Tribunal under
Section 110-B. The word “just”, as its nomenclature, denotes equitability,
fairness and reasonableness having a large peripheral field. The largeness
is, of course, not arbitrary; it is restricted by the conscience which is
fair, reasonable and equitable, if it exceeds; it is termed as unfair,
unreasonable, un-equitable, not just. Thus, this field of wider discretion
of the Tribunal has to be within the said limitations and the limitations
under any provision of this Act or any other provision having the force of
law.”
(emphasis supplied)
12. The principle expounded in this decision that the application of
general principles under the common law to estimate damages cannot be
invoked for computing compensation under the Motor Vehicles Act. Further,
the “pecuniary advantage” from whatever source must correlate to the injury
or death caused on account of motor accident. The view so taken, is the
correct analysis and interpretation of the relevant provisions of the Motor
Vehicles Act of 1939, and must apply proprio vigore to the corresponding
provisions of the Motor Vehicles Act, 1988. This principle has been
restated in the subsequent decision of two Judges’ Bench in Patricia
S.Mahajan’s case (supra), to reject the argument of the Insurance Company
to deduct the amount receivable by the dependents of the deceased by way of
“social security compensation” and “Life Insurance Policy”.
13. In the case of Bhakra Beas Management Board (supra), ostensibly, it
may appear that a departure has been made in allowing deduction of the
pecuniary advantage received by the claimants from other source on account
of death of her husband. However, on a closer analysis of the said
decision, two aspects become prominent. Firstly, the grievance of the
appellant Board was that the claimants had filed an appeal before the High
Court for enhancement of compensation of amount, which was still pending.
However, the appeal preferred by the Board against the same decision was
dismissed by the High Court. The grievance of the appellant was
essentially about the inappropriate approach of the High Court in
dismissing its appeal. That can be discerned from the observation in
paragraph 13 of the reported decision. From the observation found in para
14 of the reported decision, it is seen that the High Court judgment has
been held to be clearly unsustainable. That must be understood as
disapproving the approach of the High Court in dismissing the appeal filed
by the appellants, though cross appeal filed by the claimants for
enhancement of compensation amount was pending before it. The second
aspect, is that, the Court, to do complete justice between the parties and
for bringing quietus to the long pending litigation (14 years) between
them, including to dispose of appeal of the claimants pending before the
High Court, passed an order for full and final settlement of all the claims
inter partes. That can be discerned from paragraphs 13 and 14, which read
thus:
“13. Learned counsel for the respondent supported the judgment and
additionally submitted that appeal of respondent 1 is pending. In normal
course, when two appeals are directed against the common judgment, both the
appeals should be heard by the same bench of the High Court. But we find
that the High Court had lost sight of the fact that the benefits which the
claimant receives on account of the death or injury have to be duly
considered while fixing the compensation. It is pointed out that Respondent
1 was getting Rs.4,700/-p.m. and a residence has been provided to her and
actually the compassionate appointment was given immediately after the
accident.
“14. In view of what has been stated above, the High Court’s judgment is
clearly unsustainable. However, the accident took place more than 14 years
back and it would not be desirable to send the matter back to the Tribunal
for fresh consideration. A sum of rupees five lakhs has been deposited vide
this Court’s order dated 1-11-2004. We are of the considered view that in
view of the background facts, it is just and proper that the sum of rupees
five lakhs already deposited shall be permitted to be withdrawn by the
claimants in full and final settlement of the claim relatable to the death
of the deceased. It is for the Tribunal to fix the quantum of fixed deposit
and the amount to be released to the claimants.”
(emphasis supplied)
14. Thus understood, it is not an authority of having taken a contra view
than the view expressed in Helen C. Rebello and Patricia’s case. As a
matter of fact, in para 11 of the reported decision, paragraphs 32 to 34 of
Helen C. Rebello’s case has been reproduced in its entirety. No observation
is found in the entire decision, to have doubted the correctness of the
dictum in Helen C. Rebello and Patricia’s case.
15. Be that as it may, the term compensation has not been defined in the
Act of 1988. By interpretative process, it has been understood to mean to
recompense the claimants for the possible loss suffered or likely to be
suffered due to sudden and untimely death of their family member as a
result of motor accident. Two cardinal principles run through the
provisions of the Motor Vehicles Act of 1988 in the matter of determination
of compensation. Firstly, the measure of compensation must be just and
adequate; and secondly, no double benefit should be passed on to the
claimants in the matter of award of compensation. Section 168 of the Act of
1988 makes the first principle explicit. Sub-section (1) of that provision
makes it clear that the amount of compensation must be just. The word
“just” means - fair, adequate, and reasonable. It has been derived from
the Latin word “justus”, connoting right and fair. In para 7 of State of
Harayana & Anr. vs. Jasbir Kaur & Ors.[11], it has been held that
expression “just” denotes that the amount must be equitable, fair,
reasonable and not arbitrary. In para 16 of Smt. Sarla Verma & Ors. vs.
Delhi Transport Corporation & Anr.[12], this Court has observed that the
compensation “is not intended to be a bonanza, largesse or source of
profit”. That however may depend upon facts and circumstances of each case,
as to what amount would be a just compensation.
16. The principle discernable from the exposition in Helen C.Rebello’s
case (supra) is that if the amount “would be due to the dependants of the
deceased even otherwise”, the same shall not be deductible from the
compensation amount payable under the Act of 1988. At the same time, it
must be borne in mind that loss of income is a significant head under which
compensation is claimed in terms of the Act of 1988. The component of
quantum of “loss of income”, inter alia, can be “pay and wages” which
otherwise would have been earned by the deceased employee if he had
survived the injury caused to him due to motor accident. If the dependents
of the deceased employee, however, were to be compensated by the employer
in that behalf, as is predicated by the Rules of 2006 - to grant
compassionate assistance by way of ex-gratia financial assistance on
compassionate grounds to the dependents of the deceased Government employee
who dies in harness, it is unfathomable that the dependents can still be
permitted to claim the same amount as a possible or likely loss of income
to be suffered by them to maintain a claim for compensation under the Act
of 1988.
17. A perusal of the scheme of Rules of 2006 would reinforce the
position that the dependents of the deceased Government employee are
suitably compensated for a specified period by way of financial assistance
in the form of ex-gratia payment on compassionate grounds equivalent to the
pay and other allowances that was last drawn by the deceased employee in
the normal course without raising a specific claim. Here, we may advert to
the recital of the Rules of 2006, which reads thus:
“No. G.S.R. 19/Const./Art.309/2006.-In exercise of the powers conferred by
the proviso to article 309 of the Constitution of India, The Governor of
Haryana hereby makes the following rules to grant the compassionate
assistance by way of ex-gratia financial assistance on compassionate
grounds to members of the family of a deceased Government employee
who dies while in service/missing Government employee, namely:-
(emphasis supplied)
Rule 2 stipulates the objects of the Rules, namely, to assist the family of
a deceased/missing Government employee of Group C and D category, in tiding
over the emergent situation, resulting from the loss of the bread-earner
while in regular service by giving financial assistance. Rule 3 of the
said Rules provides for eligibility to receive financial assistance under
the Rules. As per Rule 4, the eligible family members are required to
submit an application in Form A for compassionate financial assistance.
Rule 5, is of some significance which provides for the extent of financial
assistance. The same reads thus:
“5.(1) On the death of any Government employee, the family of the
employee would continue to receive as financial assistance a sum equal to
the pay and other allowances that was last drawn by the deceased employee
in the normal course without raising a specific claim.,-
for a period of fifteen years from the date of death of the employee, if
the employee at the time of his death had not attained the age of thirty-
five years;
for a period of twelve years or till the date the employee would have
retired from Government service on attaining the age of superannuation,
whichever is less, if the employee at the time of his death had attained
the age of thirty-five years but had not attained the age of forty-eight
years;
for a period of seven years or till the date the employee would have
retired from Government service on attaining the age of superannuation,
whichever is less, if the employee had attained the age of forty-eight
years.
(2) The family shall be eligible to receive family pension as per the
normal rules only after the period during which he receives the financial
assistance as above is completed.
(3) The family of a deceased Government employee who was in occupation of a
Government residence would continue to retain the residence on payment of
normal rent/license fee for a period of one year from the date of death of
the employee.
(4) Within fifteen days from the date of death of a Government employee, an
ex-gratia assistance of twenty five thousand rupees shall be provided to
the family of the deceased employee to meet the immediate needs on the loss
of the bread earner.
(5) House Rent Allowance shall not be a part of allowance for the purposes
of calculation of assistance.”
18. Rule 6 pertains to pending cases of ex-gratia assistance, with which
we are not concerned in the present appeals. But to complete the
narrative, we may refer to the said provision. It postulates that all
pending cases of ex-gratia assistance shall be covered under the new Rules
(i.e. Rules of 2006). Further, the calculation of the period and payment
shall be made to such cases from the date of notification of the new Rules.
It further provides that the families will have the option to opt for the
lump sum ex-gratia grant provided in the Rules, 2003 or 2005, as the case
may be, in lieu of the monthly financial assistance provided under the new
Rules.
19. Reverting back to Rule 5, sub-clause (1) provides for the period
during which the dependents of the deceased employee may receive financial
assistance equivalent to the pay and other allowances that was last drawn
by the deceased employee in the normal course without raising a specific
claim. Sub-rule (2) provides that the family shall be eligible to receive
family pension as per the normal Rules only after the period during which
they would receive the financial assistance in terms of sub-rule (1). Sub-
rule (3) guarantees the family of a deceased Government employee of a
Government residence in occupation for a period of one year from the date
of death of the employee, upon payment of normal rent/license fee. By
virtue of sub-rule (4), an ex-gratia assistance of 25,000/- is provided to
the family of the deceased employee to meet the immediate needs on the loss
of the bread earner. Sub-rule (5) clarifies that house rent allowance shall
not be a part of allowance for the purposes of calculation of assistance.
20. Rule 5 broadly deals with two aspects. Firstly, to compensate the
dependents of the deceased Government employee by granting ex-gratia
financial assistance on compassionate grounds for the loss of pay and other
allowances for a specified period. The second part of Rule 5 is to
compensate the dependents of the deceased Government employee by way of
allowances and concessions - of retaining occupation of the Government
residence on specified terms, of family pension and other allowance. As
regards the second part, it deals with income from other source which any
way is receivable by the dependants of the deceased Government employee.
That cannot be deducted from the claim amount, for determination of a just
compensation under the Act of 1988.
21. The claimants are legitimately entitled to claim for the loss of “pay
and wages” of the deceased Government employee against the tortfeasor or
Insurance Company, as the case may be, covered by the first part of Rule 5
under the Act of 1988. The claimants or dependents of the deceased
Government employee (employed by State of Haryana), however, cannot set up
a claim for the same subject falling under the first part of Rule 5 - “pay
and allowances”, which are receivable by them from employer (State) under
Rule 5 (1) of the Rules of 2006. In that, if the deceased employee was to
survive the motor accident injury, would have remained in employment and
earned his regular pay and allowances. Any other interpretation of the said
Rules would inevitably result in double payment towards the same head of
loss of “pay and wages” of the deceased Government employee entailing in
grant of bonanza, largesse or source of profit to the dependants /
claimants. Somewhat similar situation has been spelt out in Section 167 of
the Motor Vehicles Act, 1988, which reads thus:
“167. Option regarding claims for compensation in certain cases.---
Notwithstanding anything contained in the Workmen’s Compensation Act, 1923
(8 of 1923) where the death of, or bodily injury to, any person gives rise
to a claim for compensation under this Act and also under the Workmen’s
Compensation Act, 1923, the person entitled to compensation may without
prejudice to the provisions of Chapter X claim such compensation under
either of those Acts but not under both.”
(emphasis supplied)
22. Indeed, similar statutory exclusion of claim receivable under the
Rules of 2006 is absent. That, however, does not mean that the Claims
Tribunal should remain oblivious to the fact that the claim towards loss of
Pay and wages of the deceased has already been or will be compensated by
the employer in the form of ex-gratia financial assistance on compassionate
grounds under Rule 5 (1). The Claims Tribunal has to adjudicate the claim
and determine the amount of compensation which appears to it to be just.
The amount receivable by the dependants / claimants towards the head of
pay and allowances in the form of ex-gratia financial assistance,
therefore, cannot be paid for the second time to the claimants. True it
is, that the Rules of 2006 would come into play if the Government employee
dies in harness even due to natural death. At the same time, the Rules of
2006 do not expressly enable the dependents of the deceased Government
employee to claim similar amount from the tortfeasor or Insurance Company
because of the accidental death of the deceased Government employee. The
harmonious approach for determining a just compensation payable under the
Act of 1988, therefore, is to exclude the amount received or receivable by
the dependents of the deceased Government employee under the Rules of 2006
towards the head financial assistance equivalent to “pay and other
allowances” that was last drawn by the deceased Government employee in the
normal course. This is not to say that the amount or payment receivable by
the dependents of the deceased Government employee under Rule 5 (1) of the
Rules, is the total entitlement under the head of “loss of income”. So far
as the claim towards loss of future escalation of income and other
benefits, if the deceased Government employee had survived the accident can
still be pursued by them in their claim under the Act of 1988. For, it is
not covered by the Rules of 2006. Similarly, other benefits extended to the
dependents of the deceased Government employee in terms of sub-rule (2) to
sub-rule (5) of Rule 5 including family pension, Life Insurance, Provident
Fund etc., that must remain unaffected and cannot be allowed to be
deducted, which, any way would be paid to the dependents of the deceased
Government employee, applying the principle expounded in Helen C.Rebello
and Patricia Jean Mahajan’s cases (supra).
23. A Priori, appellants must succeed only to the extent of amount
receivable by the dependents of the deceased Government employee in terms
of Rule 5(1) of the Rules 2006, towards financial assistance equivalent to
the loss of pay and wages of the deceased employee for the period
specified.
24. As no other point arises for consideration, the appeals must succeed
in part to the extent indicated above.
25. Accordingly, the appeals are partly allowed in the above terms with
no order as to costs.
………………………………..J.
(Ranjan Gogoi)
………………………………..J.
(Prafulla C.Pant)
………………………………….J.
(A.M.Khanwilkar)
New Delhi,
23rd September, 2016
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL) NO. 26882/2013
National Insurance Co.Ltd.
….Petitioners
Vs.
Ramrajsinh Zala & Ors. …..Respondents
WITH C.A.No.8867/2012
O R D E R
The issue involved in these matters is not similar to the issue
decided in the appeals disposed of by a separate judgment today, concerning
the effect of benefit derived under the Haryana Compassionate Assistance to
the Dependents of Deceased Government Employees Rules, 2006 by the
dependants of the deceased Government employees. Hence, delinked. To be
listed before an appropriate Bench.
…………………………………..J.
(Ranjan Gogoi)
……………………………………J.
(Prafulla C.Pant)
……………………………………J.
(A.M.Khanwilkar)
New Delhi,
23rd September, 2016
-----------------------
[1]
[2] F.A.O No.1322 Of 2010
[3]
[4] 2012 (1) PLR 761
[5]
[6] 2010 (4) PLR 780
[7]
[8] 1999 (1) SCC 90
[9]
[10] 2002 (6) SCC 281
[11]
[12] 2008 (11) SCC 366
[13]
[14] 1962 (1) SCR 929 = AIR 1962 SC 1,
[15]
[16] 1971 (1) SCC 785
[17]
[18] 2013 (7) SCC 476
[19]
[20] 2009 (13) SCC 123
[21]
[22] (2003) 7 SCC 484
[23]
[24] (2009) 6 SCC 121
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 9654 /2016
(Arising out of SLP (Civil) No. 14312/2013)
Reliance General Insurance Co. Ltd. …….Appellant
Vs.
Shashi Sharma & Ors. …….Respondents
WITH
C.A. No. 9655 of 2016 @ SLP(C) No. 14377 of 2012, C.A. No. 9657 of 2016
@ SLP(C) No. 14379 of 2012, C.A. No. 9659 of 2016 @ SLP(C) No. 26344 of
2012, C.A.No. 9661 of 2016 @ SLP(C) No. 11343 of 2014, C.A. No. 9663-9664
of 2016 @ SLP(C) No. 14995-14996 of 2014, C.A.No. 9666 of 2016 @ SLP(C)
No. 15320 of 2014, C.A.No. 9669 of 2016 @ SLP(C) No. 15343 of 2014,
C.A.No. 9671 of 2016 @ SLP(C) No. 18308 of 2014, C.A.No. 9677 of 2016 @
SLP(C) No. 18574 of 2014, C.A.No. 9674 of 2016 @ SLP(C) No. 19924 of 2014,
C.A.No. 9673 of 2016 @ SLP(C) No. 1539 of 2015, C.A.No. 9672 of
2016 @ SLP(C) No. 28423 of 2014, C.A.No. 9675 of 2016 @ SLP(C) No. 28201
of 2016 @ CC No. 21664 of 2014, C.A.No. 9670 of 2016 @ SLP(C) No. 29208
of 2014, C.A. No. 9667-9668 of 2016 @ SLP(C) No. 25185-25186 of 2015,
C.A.No. 9665 of 2016 @ SLP(C) No. 19592 of 2012, C.A.No. 9662 of
2016 @ SLP(C) No. 35412 of 2013, C.A. No. 9660 of 2016 @ SLP(C) No. 15870
of 2014,C.A.No. 9658 of 2016 @ SLP(C) No. 1934 of 2016, C.A.No. 9656 of
2016 @ SLP(C) No. 36135 of 2015, C.A.No. 9676 of 2016 @ SLP(C) No.
28202 of 2016 @ CC No. 2735 of 2016.
J U D G M E N T
A.M. KHANWILKAR,J.
Delay condoned.
2. Leave granted.
3. These matters have been placed before a three Judges’ Bench in terms
of order dated 7th October, 2015. This order has not formulated any
specific question to be answered by the larger Bench.
4. The leading appeal challenges the judgment of the Single Judge of the
High Court of Punjab and Haryana at Chandigarh dated February 13, 2013 in
FAO No.503/2012. That appeal was filed by the respondents (in appeal
arising from SLP (Civil) No.14312/2013) against the Award of the Motor
Accident Claims Tribunal, Jind, in MACT Case No.136 dated 3rd November
2011. The said respondents had filed a claim petition after the death of
Dr. Ashwini Sharma caused due to a motor accident on 24th October 2010 in
front of Main gate of General Hospital at Jind. He succumbed to the
injuries sustained in that accident. The Tribunal partly allowed the claim
petition. A sum of Rs.4,50,000/- was awarded as compensation to the
claimants being the dependants of deceased Dr. Ashwini Sharma; with
interest at the rate of 7.5% per annum from the date of filing of the claim
petition till realization. The Tribunal directed the appellant-Insurance
Company to pay the compensation amount as determined in the award to the
claimants. The claimants, being aggrieved by the quantum of compensation
fixed by the Tribunal and in particular deduction of compensation amount
received by them from other source, preferred appeal before the High Court.
The High Court, relying on the decision of Division Bench of the same High
Court dated December 21, 2012, in the case of Reliance General Insurance
Company Ltd. Vs. Purnima & Others,[1] acceded to the contention of the
claimants that the amount receivable by the dependents of the deceased
under the Haryana Compassionate Assistance to the dependents of the
Deceased Government Employees Rules, 2006 (hereinafter referred to “Rules
of 2006”) cannot be deducted from the quantum of compensation fixed by the
Tribunal. On that finding, the High Court allowed the appeal of the
respondents in the following terms:
“In view of the above, a sum of Rs.89,24,604/- (Rs.1,00,957/-
- 15% thereof being Rs. 15,143 = Rs.85,814/- - 1/3rd thereof being
Rs.28,605/- = Rs.57,209 x 12 =Rs.6,86,508/- x 13 = 89,24,604) towards loss
of dependency, Rs.15,000/-towards loss of consortium of the 1st appellant,
Rs.15,000/- towards loss of estate, Rs.10,000/- towards funeral expenses
and Rs.5,000/- towards transportation expenses, in aggregate a sum of
Rs.89,60,604/- with interest @ 7.5% for the enhanced portion of the
compensation from the date of petition till the date of realization is
awarded. The rate of interest applied and the mode of apportionment done by
the Tribunal stands confirmed.”
5. The High Court has adopted the same reasoning to disallow deduction
of compensation amount received by the claimants as per Rules of 2006 in
the respective companion cases listed for analogous hearing. The sole
contention advanced by the appellants - Insurance Companies, in these
appeals, is that, the High Court has erred in law in disallowing the
deduction of amount received by the concerned claimants under the Rules of
2006, from the quantum of compensation amount payable to the claimants
under the Act of 1988.
6. As the High Court has relied on the decision of the Division Bench of
the same High Court in Purnima’s case (supra), it is apposite to first
advert to that decision. That decision was rendered on a reference made to
a larger Bench, on a question which has been canvassed by the appellants -
Insurance Companies even in the present appeals, in view of the conflicting
decisions of Single Judges of the same High Court in the case of Oriental
Insurance Co. vs. Saroj Devi [2] and in the case of New India Assurance Co.
vs. Smt. Santosh[3]. The question considered by the Division Bench was:
“whether the compensation received from the Government under the Haryana
Compassionate Assistance to the Defendants of Deceased Governments
Employees Rules, 2006 (or otherwise) is to be deducted from the total
compensation, which is payable to the dependents of the deceased, who dies
in an accident, while computing financial benefits through ex-gratia
payments by the Government?” The Division Bench analysed the scheme and
intent of the Rules of 2006 and held that the said Rules have been framed
by the Governor of Haryana in exercise of powers conferred by proviso to
Article 309 of the Constitution of India; these Rules not only have
statutory force, but must be treated at par with the Statute enacted by the
Legislature; these Rules purport to assist the family of the deceased to
tide over hardship caused as a result of the employee dying in harness (not
merely because of motor accident) or who goes missing or whose whereabouts
are not known, by providing ex-gratia financial assistance to the family of
the deceased employee; this financial assistance to the dependents of the
employee who dies in harness, has no correlation with the cause of death of
the employee due to motor accident. In other words, on mere death of the
employee dying in harness, be it natural death or due to illness or
otherwise the Rules of 2006 would become applicable; and as a result of
which the family of the deceased employee is entitled to receive financial
assistance from the employer. The Division Bench held that the scheme of
financial assistance postulated in Rules of 2006, is a service benefit
which accrues to the dependents of the deceased and is in the domain of
service matter/benefit given to the employee as a result of the service
rendered by the deceased employee. The benefit accruing to the dependents
of the deceased is in the nature of enhanced pension given as per the
provisions of the Pension/Family Pension Scheme, recognizing the fact that
the pension is normally given for meritorious, long and faithful service by
the employee. The Division Bench relying on the exposition of two Judges’
Bench decision of this Court in Helen C. Rebello (Mrs.) & Ors. vs.
Maharashtra State Road Transport Corporation & Anr.[4] and also in United
India Insurance Co. vs. Patricia Jean Mahajan & Ors.[5], held that the
tortfeasor or Insurance Companies cannot get their liability excused or
reduced because the deceased’s family would receive financial assistance
from an alternative source (employer) by reason of the death of the
deceased. It held that deductions are admissible from the amount of
compensation in case the claimant receives the benefit as a consequence of
injuries sustained which otherwise he would not been entitled to; and does
not cover cases when the payment received is not dependent upon an injury
sustained on meeting with an accident. That the assistance received under
Rules of 2006 is not dependent upon the death of an employee arising out of
a motor accident only. Thus, it has no correlation with the manner in which
the death occurs. Accordingly, the Division Bench held that the Insurance
Company is not entitled to claim deduction of the amount given to the
dependents under the Rules of 2006, while calculating the compensation
amount payable under the Motor Vehicles Act.
7. The Insurance Companies, on the other hand, have relied on the
decision of two Judges’ Bench of this Court in Bhakra Beas Management Board
vs. Kanta Aggarwal (Smt.) & Ors.[6], to contend that the plea of the
appellant in that case that the claimants have received financial
assistance from other source due to the death of her husband - by way of
salary amount on account of compassionate appointment and also residence
provided to her was deductible, has been accepted by this Court; and was so
deducted while determining a just compensation amount payable under the
Motor Vehicles Act. Reliance is also placed on the dictum of three Judges’
Bench in Gobald Motor Service Limited vs. R.M.K.Veluswami [7], which,
according to the Insurance Company, permits deduction of benefits such as
compensation received by the dependents of the deceased from the employer.
Reliance is also placed on two Judges’ Bench decision in the case of
Sheikhupura Transport Co. Ltd. vs. Northern India Transport Insurance
Co.[8]; another two Judges’ Bench judgment in the case of Vimal Kanwar &
Ors. vs. Kishore Dan & Ors.[9]. Reliance is then placed on another decision
of two Judges’ Bench of this Court in Oriental Insurance Co. Ltd. vs. Deo
Patodi and Ors.[10] for the principles to be reckoned to determine a just
compensation payable under the Motor Vehicles Act. In substance, the
contention of the Insurance Companies is that the claimants cannot be
permitted to profiteer and receive double benefit on account of the death
of their family member on the same head of “Loss of income” to them.
8. Besides the above noted stand of the Insurance Companies the other
incidental question to be considered is whether there is any conflict of
opinion between the coordinate Benches (of two Judges’) of this Court, in
the case of Bhakra Beas Management Board (supra) on the one hand, and that
of Helen C. Rebelo and Patricia J.Mahajan (supra) on the other.
9. The decision in the case of Gobald Motor Service Ltd. (supra) of
three Judges’ Bench of this Court has been carefully analysed and
distinguished by the two Judges’ Bench in Helen’s case (supra). In that,
the dictum in Gobald Motor’s case was in relation to the provisions
regarding quantum of damages payable in terms of Sections 1 and 2 of the
Fatal Accident Act, 1855, which are held to be materially different. On the
other hand, the provision of the Motor Vehicles Act, 1939 enlarges the
scope for computation of compensation amount. The Court in Helen’s case
held that the observation in Gobald’s case cannot be the basis to claim
deduction of amount receivable by the dependents of the deceased from
whatever source, in the context of provisions of the Motor Vehicles Act as
in force. Even the decision in the case of Sheikhupura Transport (supra)
has been explained and distinguished on the same lines.
10. The question is: whether the principle expounded by the two Judges’
Bench in Helen’s case, in paragraphs 32 to 35, in particular, can be
doubted? In that case the Court was called upon to answer as to whether it
will be permissible to disallow the deduction of amount receivable by the
dependants of the deceased towards “Life Insurance Policy”, from the amount
of compensation payable under the provisions of Motor Vehicles Act (in that
case Sections 110B, 92A and 92B of the Act of 1939 corresponding to
Sections 168, 140 and 141 of the Act of 1988). Paragraphs 32 to 35 read
thus:
“32. So far as the general principle of estimating damages under the
common law is concerned, it is settled that the pecuniary loss can be
ascertained only by balancing on one hand, the loss to the claimant of the
future pecuniary benefits that would have accrued to him but for the death
with the “pecuniary advantage” which from whatever source comes to him by
reason of the death. In other words, it is the balancing of loss and gain
of the claimant occasioned by the death. But this has to change its colour
to the extent a statute intends to do. Thus, this has to be interpreted in
the light of the provisions of the Motor Vehicles Act, 1939. It is very
clear, to which there could be no doubt that his Act delivers compensation
to the claimant only on account of accidental injury or death, not on
account of any other death. Thus, the pecuniary advantage accruing under
this Act has to be deciphered, correlating with the accidental death. The
compensation payable under the Motor Vehicles Act is on account of the
pecuniary loss to the claimant by accidental injury or death and not others
forms of death. If there is natural death or death by suicide, serious
illness, including even death by accident, through train, air flight not
involving a motor vehicle, it would not be covered under the Motor Vehicles
Act. Thus, the application of the general principle under the common law of
loss and gain for the computation of compensation under this Act must
correlate to this type of injury or death, viz., accidental. If the words
“pecuniary advantage” from whatever source are to be interpreted to mean
any form of death under this Act, it would dilute all possible benefits
conferred on the claimant and would be contrary to the spirit of the law.
If the “pecuniary advantage” resulting from death means pecuniary advantage
coming under all forms of death then it will include all the assets
moveable, immovable, shares, bank accounts, cash and every amount
receivable under any contract. In other words, all heritable assets
including what is willed by the deceased etc. this would obliterate both,
all possible conferment of economic security to the claimant by the
deceased and the intentions of the legislature. By such an interpretation,
the tort feasor in spite of his wrongful act or negligence, which
contributes to the death, would have in many cases no liability or meager
liability. In our considered opinion, the general principle of loss and
gain takes colour of this statute, viz., the gain has to be interpreted
which is as a result of the accidental death and the loss on account of the
accidental death. Thus, under the present Act, whatever pecuniary advantage
is received by the claimant, from whatever source, would only mean which
comes to the claimant on account of the accidental death and not other
forms of death. The constitution of the Motor Accident Claims Tribunal
itself under Section 110 is, as the section states:
“………for the purpose of adjudicating upon claims for
compensation in respect of accidents involving the death of, or bodily
injury to,……”
33. Thus, it would not include that which the claimant receives on
account of other forms of deaths, which he would have received even apart
from accidental death. Thus, such pecuniary advantage would have no
corelation to the accidental death for which compensation is computed. Any
amount received or receivable not only on account of the accidental death
but that which would have come to the claimant even otherwise, could not be
construed to be the “pecuniary advantage”, liable for deduction. However,
where the employer insures his employee, as against injury or death arising
out of an accident, any amount received out of such insurance on the
happening of such incident may be an amount liable for deduction. However,
our legislature has taken note of such contingency through the proviso of
Section 95. Under it the liability of the insurer is excluded in respect of
injury or death, arising out of and in the course of employment of an
employee.
34. This is based on the principle that the claimant for the happening of
the same incidence may not gain twice from two sources. This, it is
excluded thus, either through the wisdom of the legislature or through the
principle of loss and gain through deduction not to give gain to the
claimant twice arising from the same transaction, viz., the same accident.
It is significant to record here in both the sources, viz., either under
the Motor Vehicles Act or from the employer, the compensation receivable by
the claimant is either statutory or through the security of the employer
securing for his employee but in both cases he receives the amount without
his contribution. How thus an amount earned out of one’s labour or
contribution towards one’s wealth, savings, etc either for himself or for
his family which such person knows under the law has to go to his heirs
after his death either by succession or under a Will could be said to be
the “pecuniary gain” only on account of one’s accidental death. This, of
course, is a pecuniary gain but how this is equitable or could be balanced
out of the amount to be received as compensation under the Motor Vehicle
Act. There is no correlation between the two amounts. Not even remotely.
How can an amount of loss and gain of one contract be made applicable to
the loss and gain of another contract. Similarly, how an amount receivable
under a statute has any correlation with an amount earned by an individual.
Principle of loss and gain has to be on the same plane within the same
sphere, of course, subject to the contract to the contrary or any
provisions of law.
35. Broadly, we may examine the receipt of the provident fund which is a
deferred payment out of the contribution made by an employee during the
tenure of his service. Such employee or his heirs are entitled to receive
this amount irrespective of the accidental death. This amount is secured,
is certain to be received, while the amount under the Motor Vehicles Act is
uncertain and is receivable only on the happening of the event, viz.,
accident, which may not take place at all. Similarly, family pension is
also earned by an employee for the benefit of his family in the form of his
contribution in the service in terms of the service conditions receivable
by the heirs after his death. The heirs receive family pension even
otherwise than the accidental death. No corelation between the two.
Similarly, life insurance policy is received either by the insured or the
heirs of the insured on account of the contract with the insurer, for which
the insured contributes in the form of premium. It is receivable even by
the insured if he lives till maturity after paying all the premiums. In
the case of death, the insurer indemnifies to pay the sum to the heirs,
again in terms of the contract for the premium paid. Again, this amount is
receivable by the claimant not on account of any accidental death but
otherwise on the insured’s death. Death is only a step or contingency in
terms of the contract, to receive the amount. Similarly any cash, bank
balance, shares fixed deposits, etc. though are all a pecuniary advantage
receivable by the heirs on account of one’s death but all these have no
corelation with the amount receivable under a statute occasioned only on
account of accidental death. How could such an amount come within the
periphery of the Motor Vehicles Act to be termed as “pecuniary advantage”
liable for deduction. When we seek the principle of loss and gain, it has
to be on a similar and same plane having nexus, inter se, between them and
not to which there is no semblance of any corelation. The insured
(deceased) contributes his own money for which he receives the amount which
has no corelation to the compensation computed as against the tortfeasor
for his negligence on account of the accident. As aforesaid, the amount
receivable as compensation under the Act is on account of the injury or
death without making any contribution towards it, then how can the fruits
of an amount received through contributions of the insured be deducted out
of the amount receivable under the Motor Vehicles act. The amount under
this Act he receives without any contribution. As we have said, the
compensation payable under the Motor Vehicles Act is statutory while the
amount receivable under the life insurance policy is contractual.”
(emphasis supplied)
11. This decision has analysed the legal position regarding the
application of the general principle for estimating damages under the
common law. It has also noted the distinguishing features between the
provisions of Fatal Accidents Act, 1855, before its amendment by Act (3 of
1951) and thereafter. It then found that in Gobald’s case the Court
decided the issue placing reliance on English decisions - as the provisions
applicable at that time were similar to Section 9 of the English Fatal
Accidents Act, 1846. The Court was neither called upon to determine damages
under the Motor Vehicles Act, 1939 nor consider as to any form of
deductions are justified under the Motor Vehicles Act. The Court noted
that the language of Section 110-B of the Act of 1939 (corresponding to
Section 168 of the Act of 1988) is different from Section 1A of the Fatal
Accidents Act, 1855. It held that Section 110-B of the Act of 1939
empowers the Tribunal to determine the compensation which appears to it to
be “just”. The Court held that this provision widens the scope for
determination of compensation, which is neither permissible under the
Indian Fatal Accidents Act, 1855 nor under the English Fatal Accidents Act,
1846. The Court then went on to analyse the decisions of this Court and
held that there is a deliberate departure in the language of the Act of
1939, revealing the intent of the legislature to confer wider discretion on
the Tribunal. Therefore, the decisions based on the principles applicable
to previous law cannot be invoked while adjudicating the compensation
payable to the claimant under the Motor Vehicles Act. In Paragraph 28, the
Court observed thus:
“28. …….. This show that the word “just” was deliberately brought it
Section 110 B of the 1939 Act to enlarge the consideration in computing the
compensation which, of course, would include the question of deductibility,
if any. This leads us to an irresistible conclusion that the principle of
computation of the compensation both under the English Fatal Accidents Act,
1846 and under the Indian Fatal Accidents Act, 1855 by the earlier
decisions, were restrictive in nature in the absence of any guiding words
therein, hence the courts applied the general principle at the common law
of loss and gain but that would not apply to the considerations under
Section 110-B of the 1939 Act which enlarges the discretion to deliver
better justice to the claimant, in computing the compensation, to see what
is just. Thus, we find that all the decisions of the High Courts, which
based their interpretation on the principles of these two Acts, viz., the
English 1846 Act and the Indian 1855 Act to hold that deductions were valid
cannot be upheld. As we have observed above, the decisions even with
reference to the decision of this Court in Gobald Motor Service where the
question was neither raised nor adjudicated and that case also, being under
the 1855 Act, cannot be pressed into service. Thus, these courts by giving
a restrictive interpretation in computation of compensation based on the
limitation of the language of the Fatal Accidents Act, fell into an error,
as it did not take into account the change of language in the 1939 Act and
did not consider the widening of the discretion of the Tribunal under
Section 110-B. The word “just”, as its nomenclature, denotes equitability,
fairness and reasonableness having a large peripheral field. The largeness
is, of course, not arbitrary; it is restricted by the conscience which is
fair, reasonable and equitable, if it exceeds; it is termed as unfair,
unreasonable, un-equitable, not just. Thus, this field of wider discretion
of the Tribunal has to be within the said limitations and the limitations
under any provision of this Act or any other provision having the force of
law.”
(emphasis supplied)
12. The principle expounded in this decision that the application of
general principles under the common law to estimate damages cannot be
invoked for computing compensation under the Motor Vehicles Act. Further,
the “pecuniary advantage” from whatever source must correlate to the injury
or death caused on account of motor accident. The view so taken, is the
correct analysis and interpretation of the relevant provisions of the Motor
Vehicles Act of 1939, and must apply proprio vigore to the corresponding
provisions of the Motor Vehicles Act, 1988. This principle has been
restated in the subsequent decision of two Judges’ Bench in Patricia
S.Mahajan’s case (supra), to reject the argument of the Insurance Company
to deduct the amount receivable by the dependents of the deceased by way of
“social security compensation” and “Life Insurance Policy”.
13. In the case of Bhakra Beas Management Board (supra), ostensibly, it
may appear that a departure has been made in allowing deduction of the
pecuniary advantage received by the claimants from other source on account
of death of her husband. However, on a closer analysis of the said
decision, two aspects become prominent. Firstly, the grievance of the
appellant Board was that the claimants had filed an appeal before the High
Court for enhancement of compensation of amount, which was still pending.
However, the appeal preferred by the Board against the same decision was
dismissed by the High Court. The grievance of the appellant was
essentially about the inappropriate approach of the High Court in
dismissing its appeal. That can be discerned from the observation in
paragraph 13 of the reported decision. From the observation found in para
14 of the reported decision, it is seen that the High Court judgment has
been held to be clearly unsustainable. That must be understood as
disapproving the approach of the High Court in dismissing the appeal filed
by the appellants, though cross appeal filed by the claimants for
enhancement of compensation amount was pending before it. The second
aspect, is that, the Court, to do complete justice between the parties and
for bringing quietus to the long pending litigation (14 years) between
them, including to dispose of appeal of the claimants pending before the
High Court, passed an order for full and final settlement of all the claims
inter partes. That can be discerned from paragraphs 13 and 14, which read
thus:
“13. Learned counsel for the respondent supported the judgment and
additionally submitted that appeal of respondent 1 is pending. In normal
course, when two appeals are directed against the common judgment, both the
appeals should be heard by the same bench of the High Court. But we find
that the High Court had lost sight of the fact that the benefits which the
claimant receives on account of the death or injury have to be duly
considered while fixing the compensation. It is pointed out that Respondent
1 was getting Rs.4,700/-p.m. and a residence has been provided to her and
actually the compassionate appointment was given immediately after the
accident.
“14. In view of what has been stated above, the High Court’s judgment is
clearly unsustainable. However, the accident took place more than 14 years
back and it would not be desirable to send the matter back to the Tribunal
for fresh consideration. A sum of rupees five lakhs has been deposited vide
this Court’s order dated 1-11-2004. We are of the considered view that in
view of the background facts, it is just and proper that the sum of rupees
five lakhs already deposited shall be permitted to be withdrawn by the
claimants in full and final settlement of the claim relatable to the death
of the deceased. It is for the Tribunal to fix the quantum of fixed deposit
and the amount to be released to the claimants.”
(emphasis supplied)
14. Thus understood, it is not an authority of having taken a contra view
than the view expressed in Helen C. Rebello and Patricia’s case. As a
matter of fact, in para 11 of the reported decision, paragraphs 32 to 34 of
Helen C. Rebello’s case has been reproduced in its entirety. No observation
is found in the entire decision, to have doubted the correctness of the
dictum in Helen C. Rebello and Patricia’s case.
15. Be that as it may, the term compensation has not been defined in the
Act of 1988. By interpretative process, it has been understood to mean to
recompense the claimants for the possible loss suffered or likely to be
suffered due to sudden and untimely death of their family member as a
result of motor accident. Two cardinal principles run through the
provisions of the Motor Vehicles Act of 1988 in the matter of determination
of compensation. Firstly, the measure of compensation must be just and
adequate; and secondly, no double benefit should be passed on to the
claimants in the matter of award of compensation. Section 168 of the Act of
1988 makes the first principle explicit. Sub-section (1) of that provision
makes it clear that the amount of compensation must be just. The word
“just” means - fair, adequate, and reasonable. It has been derived from
the Latin word “justus”, connoting right and fair. In para 7 of State of
Harayana & Anr. vs. Jasbir Kaur & Ors.[11], it has been held that
expression “just” denotes that the amount must be equitable, fair,
reasonable and not arbitrary. In para 16 of Smt. Sarla Verma & Ors. vs.
Delhi Transport Corporation & Anr.[12], this Court has observed that the
compensation “is not intended to be a bonanza, largesse or source of
profit”. That however may depend upon facts and circumstances of each case,
as to what amount would be a just compensation.
16. The principle discernable from the exposition in Helen C.Rebello’s
case (supra) is that if the amount “would be due to the dependants of the
deceased even otherwise”, the same shall not be deductible from the
compensation amount payable under the Act of 1988. At the same time, it
must be borne in mind that loss of income is a significant head under which
compensation is claimed in terms of the Act of 1988. The component of
quantum of “loss of income”, inter alia, can be “pay and wages” which
otherwise would have been earned by the deceased employee if he had
survived the injury caused to him due to motor accident. If the dependents
of the deceased employee, however, were to be compensated by the employer
in that behalf, as is predicated by the Rules of 2006 - to grant
compassionate assistance by way of ex-gratia financial assistance on
compassionate grounds to the dependents of the deceased Government employee
who dies in harness, it is unfathomable that the dependents can still be
permitted to claim the same amount as a possible or likely loss of income
to be suffered by them to maintain a claim for compensation under the Act
of 1988.
17. A perusal of the scheme of Rules of 2006 would reinforce the
position that the dependents of the deceased Government employee are
suitably compensated for a specified period by way of financial assistance
in the form of ex-gratia payment on compassionate grounds equivalent to the
pay and other allowances that was last drawn by the deceased employee in
the normal course without raising a specific claim. Here, we may advert to
the recital of the Rules of 2006, which reads thus:
“No. G.S.R. 19/Const./Art.309/2006.-In exercise of the powers conferred by
the proviso to article 309 of the Constitution of India, The Governor of
Haryana hereby makes the following rules to grant the compassionate
assistance by way of ex-gratia financial assistance on compassionate
grounds to members of the family of a deceased Government employee
who dies while in service/missing Government employee, namely:-
(emphasis supplied)
Rule 2 stipulates the objects of the Rules, namely, to assist the family of
a deceased/missing Government employee of Group C and D category, in tiding
over the emergent situation, resulting from the loss of the bread-earner
while in regular service by giving financial assistance. Rule 3 of the
said Rules provides for eligibility to receive financial assistance under
the Rules. As per Rule 4, the eligible family members are required to
submit an application in Form A for compassionate financial assistance.
Rule 5, is of some significance which provides for the extent of financial
assistance. The same reads thus:
“5.(1) On the death of any Government employee, the family of the
employee would continue to receive as financial assistance a sum equal to
the pay and other allowances that was last drawn by the deceased employee
in the normal course without raising a specific claim.,-
for a period of fifteen years from the date of death of the employee, if
the employee at the time of his death had not attained the age of thirty-
five years;
for a period of twelve years or till the date the employee would have
retired from Government service on attaining the age of superannuation,
whichever is less, if the employee at the time of his death had attained
the age of thirty-five years but had not attained the age of forty-eight
years;
for a period of seven years or till the date the employee would have
retired from Government service on attaining the age of superannuation,
whichever is less, if the employee had attained the age of forty-eight
years.
(2) The family shall be eligible to receive family pension as per the
normal rules only after the period during which he receives the financial
assistance as above is completed.
(3) The family of a deceased Government employee who was in occupation of a
Government residence would continue to retain the residence on payment of
normal rent/license fee for a period of one year from the date of death of
the employee.
(4) Within fifteen days from the date of death of a Government employee, an
ex-gratia assistance of twenty five thousand rupees shall be provided to
the family of the deceased employee to meet the immediate needs on the loss
of the bread earner.
(5) House Rent Allowance shall not be a part of allowance for the purposes
of calculation of assistance.”
18. Rule 6 pertains to pending cases of ex-gratia assistance, with which
we are not concerned in the present appeals. But to complete the
narrative, we may refer to the said provision. It postulates that all
pending cases of ex-gratia assistance shall be covered under the new Rules
(i.e. Rules of 2006). Further, the calculation of the period and payment
shall be made to such cases from the date of notification of the new Rules.
It further provides that the families will have the option to opt for the
lump sum ex-gratia grant provided in the Rules, 2003 or 2005, as the case
may be, in lieu of the monthly financial assistance provided under the new
Rules.
19. Reverting back to Rule 5, sub-clause (1) provides for the period
during which the dependents of the deceased employee may receive financial
assistance equivalent to the pay and other allowances that was last drawn
by the deceased employee in the normal course without raising a specific
claim. Sub-rule (2) provides that the family shall be eligible to receive
family pension as per the normal Rules only after the period during which
they would receive the financial assistance in terms of sub-rule (1). Sub-
rule (3) guarantees the family of a deceased Government employee of a
Government residence in occupation for a period of one year from the date
of death of the employee, upon payment of normal rent/license fee. By
virtue of sub-rule (4), an ex-gratia assistance of 25,000/- is provided to
the family of the deceased employee to meet the immediate needs on the loss
of the bread earner. Sub-rule (5) clarifies that house rent allowance shall
not be a part of allowance for the purposes of calculation of assistance.
20. Rule 5 broadly deals with two aspects. Firstly, to compensate the
dependents of the deceased Government employee by granting ex-gratia
financial assistance on compassionate grounds for the loss of pay and other
allowances for a specified period. The second part of Rule 5 is to
compensate the dependents of the deceased Government employee by way of
allowances and concessions - of retaining occupation of the Government
residence on specified terms, of family pension and other allowance. As
regards the second part, it deals with income from other source which any
way is receivable by the dependants of the deceased Government employee.
That cannot be deducted from the claim amount, for determination of a just
compensation under the Act of 1988.
21. The claimants are legitimately entitled to claim for the loss of “pay
and wages” of the deceased Government employee against the tortfeasor or
Insurance Company, as the case may be, covered by the first part of Rule 5
under the Act of 1988. The claimants or dependents of the deceased
Government employee (employed by State of Haryana), however, cannot set up
a claim for the same subject falling under the first part of Rule 5 - “pay
and allowances”, which are receivable by them from employer (State) under
Rule 5 (1) of the Rules of 2006. In that, if the deceased employee was to
survive the motor accident injury, would have remained in employment and
earned his regular pay and allowances. Any other interpretation of the said
Rules would inevitably result in double payment towards the same head of
loss of “pay and wages” of the deceased Government employee entailing in
grant of bonanza, largesse or source of profit to the dependants /
claimants. Somewhat similar situation has been spelt out in Section 167 of
the Motor Vehicles Act, 1988, which reads thus:
“167. Option regarding claims for compensation in certain cases.---
Notwithstanding anything contained in the Workmen’s Compensation Act, 1923
(8 of 1923) where the death of, or bodily injury to, any person gives rise
to a claim for compensation under this Act and also under the Workmen’s
Compensation Act, 1923, the person entitled to compensation may without
prejudice to the provisions of Chapter X claim such compensation under
either of those Acts but not under both.”
(emphasis supplied)
22. Indeed, similar statutory exclusion of claim receivable under the
Rules of 2006 is absent. That, however, does not mean that the Claims
Tribunal should remain oblivious to the fact that the claim towards loss of
Pay and wages of the deceased has already been or will be compensated by
the employer in the form of ex-gratia financial assistance on compassionate
grounds under Rule 5 (1). The Claims Tribunal has to adjudicate the claim
and determine the amount of compensation which appears to it to be just.
The amount receivable by the dependants / claimants towards the head of
pay and allowances in the form of ex-gratia financial assistance,
therefore, cannot be paid for the second time to the claimants. True it
is, that the Rules of 2006 would come into play if the Government employee
dies in harness even due to natural death. At the same time, the Rules of
2006 do not expressly enable the dependents of the deceased Government
employee to claim similar amount from the tortfeasor or Insurance Company
because of the accidental death of the deceased Government employee. The
harmonious approach for determining a just compensation payable under the
Act of 1988, therefore, is to exclude the amount received or receivable by
the dependents of the deceased Government employee under the Rules of 2006
towards the head financial assistance equivalent to “pay and other
allowances” that was last drawn by the deceased Government employee in the
normal course. This is not to say that the amount or payment receivable by
the dependents of the deceased Government employee under Rule 5 (1) of the
Rules, is the total entitlement under the head of “loss of income”. So far
as the claim towards loss of future escalation of income and other
benefits, if the deceased Government employee had survived the accident can
still be pursued by them in their claim under the Act of 1988. For, it is
not covered by the Rules of 2006. Similarly, other benefits extended to the
dependents of the deceased Government employee in terms of sub-rule (2) to
sub-rule (5) of Rule 5 including family pension, Life Insurance, Provident
Fund etc., that must remain unaffected and cannot be allowed to be
deducted, which, any way would be paid to the dependents of the deceased
Government employee, applying the principle expounded in Helen C.Rebello
and Patricia Jean Mahajan’s cases (supra).
23. A Priori, appellants must succeed only to the extent of amount
receivable by the dependents of the deceased Government employee in terms
of Rule 5(1) of the Rules 2006, towards financial assistance equivalent to
the loss of pay and wages of the deceased employee for the period
specified.
24. As no other point arises for consideration, the appeals must succeed
in part to the extent indicated above.
25. Accordingly, the appeals are partly allowed in the above terms with
no order as to costs.
………………………………..J.
(Ranjan Gogoi)
………………………………..J.
(Prafulla C.Pant)
………………………………….J.
(A.M.Khanwilkar)
New Delhi,
23rd September, 2016
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL) NO. 26882/2013
National Insurance Co.Ltd.
….Petitioners
Vs.
Ramrajsinh Zala & Ors. …..Respondents
WITH C.A.No.8867/2012
O R D E R
The issue involved in these matters is not similar to the issue
decided in the appeals disposed of by a separate judgment today, concerning
the effect of benefit derived under the Haryana Compassionate Assistance to
the Dependents of Deceased Government Employees Rules, 2006 by the
dependants of the deceased Government employees. Hence, delinked. To be
listed before an appropriate Bench.
…………………………………..J.
(Ranjan Gogoi)
……………………………………J.
(Prafulla C.Pant)
……………………………………J.
(A.M.Khanwilkar)
New Delhi,
23rd September, 2016
-----------------------
[1]
[2] F.A.O No.1322 Of 2010
[3]
[4] 2012 (1) PLR 761
[5]
[6] 2010 (4) PLR 780
[7]
[8] 1999 (1) SCC 90
[9]
[10] 2002 (6) SCC 281
[11]
[12] 2008 (11) SCC 366
[13]
[14] 1962 (1) SCR 929 = AIR 1962 SC 1,
[15]
[16] 1971 (1) SCC 785
[17]
[18] 2013 (7) SCC 476
[19]
[20] 2009 (13) SCC 123
[21]
[22] (2003) 7 SCC 484
[23]
[24] (2009) 6 SCC 121
