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(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

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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

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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

1  F.A.O No.1322 Of 2010

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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.

Santosh3.   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

2  2012 (1) PLR 761

3  2010 (4) PLR 780

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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,

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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

4  1999 (1) SCC 90

5  2002 (6) SCC 281

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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’

6  2008 (11) SCC 366

7  1962 (1) SCR 929 = AIR 1962 SC 1,

8  1971 (1) SCC 785

9   2013 (7) SCC 476

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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

10  2009 (13) SCC 123

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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

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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

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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

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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.”

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(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

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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.”  

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(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

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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

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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

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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

11  (2003) 7 SCC 484

12  (2009) 6 SCC 121

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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

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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.,-

(a) 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;

(b) 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;

(c) 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

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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

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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

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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

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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

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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

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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

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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