# 6 S.C.R. 488 RELIANCE GENERAL INSURANCE CO. LTD v. SHASHI SHARMA & ORS

- **Citation:** [2016] 6 S.C.R. 488
- **Court:** Supreme Court of India
- **Decided:** 2016
- **Case number:** Civil Appeal No. 9654of2016
- **Bench:** RANJAN GOGOi, Prafulla C. Pant, A.M. Khanwilkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/6-s-c-r-488-reliance-general-insurance-co-ltd-v-shashi-sharma-ors-31541
- **Pages:** 24

## Headnote

Compensation - Fatal accident - In motor accident - Of
employee covered under Haryana Compassionate Assistance to the
Dependants of the Deceased Government Employees Rules, 2006 -
Compensation under Motor Vehicles Act granted after deducting
the amount received by the claimants under 2006 Rules - High Court
held that the amount paid under 2006 Rules could not have been
deducted - On appeal, held: In the matter of determination of
compensation under 1988 Act, the two cardinal principles are that
it must be just and adequate and that no double benefit should be
passed on to the claimants - The claimants· claim for the subject
'Pay and Wages' under 1988 Act, which is receivable under r.5(1)
of the 2006 Rules, would result in double payment towards the same
head -
The harmonious approach for determining a just
compensation payable under 1988 Act, is to exclude the amount
received or receivable by the dependants of deceased Government
employee, under 2006 Rules - Howeve1; claim towards loss of future
escalation of income and other benefits, which are not covered under
2006 Rules can be pursued under 1988 Act - Similarly other benefits
extended in terms of Sub-rule (2) to sub-rule (5) of r.5 of 2006
Rules would remain unaffected and cannot be allowed to be
deducted - Motor Vehicles Act, 1988 - ss. 167 and 168 - Haryana
Compassionate Assistance to the Dependants of the Deceased
Government Employees Rules, 2006 - r.5.
Words and Phrases:
Words 'compensation' and 'just' - Meaning of. in the collfext
of Motor Vehicles Act, 1988.
Partly allowing the appeals, the Court
HELD: 1. The term compensation has not been defined in
\
488
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
489
SHARMA & ORS.
the Motor Vehicles Act, 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. [Para 15] [505-F-G]
2. 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. That however may depend
upon facts and circumstances of each case, as to what amount
would be a just compensation. [Para 15] [505-G-JI; 506-A-B]
State of Harayana & Anr. v. Jasbir Kaur & Ors. (2003)
7 SCC 484 : 2003 (2) Suppl. SCR 245; Smt. Sar/a
Verma & Ors. v. Delhi Transport Corporation & Am:
(2009) 6 SCC 121 : 2009 (5) SCR 1098 - relied on.
3. 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
clue 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 Haryana Compassionate
Assistance to the Dependants of the Deceased Government
Employees Rules, 2006 - to grant. compassionate assistance by
way of ex-gratia financial assistirncc on compassionate grounds
to the dependents of the deceased Govemment 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. [Para 16] (506-C-E]
A
B
c
D
E
F
G
H
490
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2016] 6 S.C.R.
4. Rule 5 of 2006 Rules broadly

## Text

_Characters 0–39,891 of 53,728. This is a partial read: ask again with offset=39891 for what follows._

A
B
c
D
E
F
G
H
[2016) 6 S.C.R. 488
RELIANCE GENERAL INSURANCE CO. LTD.
v.
SHASHI SHARMA & ORS.
(Civil Appeal No. 9654of2016)
SEPTEMBER23,2016
[RANJAN GOGOi, PRAFULLA C. PANT AND
A.M. KHANWILKAR, JJ.]
Compensation - Fatal accident - In motor accident - Of
employee covered under Haryana Compassionate Assistance to the
Dependants of the Deceased Government Employees Rules, 2006 -
Compensation under Motor Vehicles Act granted after deducting
the amount received by the claimants under 2006 Rules - High Court
held that the amount paid under 2006 Rules could not have been
deducted - On appeal, held: In the matter of determination of
compensation under 1988 Act, the two cardinal principles are that
it must be just and adequate and that no double benefit should be
passed on to the claimants - The claimants· claim for the subject
'Pay and Wages' under 1988 Act, which is receivable under r.5(1)
of the 2006 Rules, would result in double payment towards the same
head -
The harmonious approach for determining a just
compensation payable under 1988 Act, is to exclude the amount
received or receivable by the dependants of deceased Government
employee, under 2006 Rules - Howeve1; claim towards loss of future
escalation of income and other benefits, which are not covered under
2006 Rules can be pursued under 1988 Act - Similarly other benefits
extended in terms of Sub-rule (2) to sub-rule (5) of r.5 of 2006
Rules would remain unaffected and cannot be allowed to be
deducted - Motor Vehicles Act, 1988 - ss. 167 and 168 - Haryana
Compassionate Assistance to the Dependants of the Deceased
Government Employees Rules, 2006 - r.5.
Words and Phrases:
Words 'compensation' and 'just' - Meaning of. in the collfext
of Motor Vehicles Act, 1988.
Partly allowing the appeals, the Court
HELD: 1. The term compensation has not been defined in
\
488
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
489
SHARMA & ORS.
the Motor Vehicles Act, 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. [Para 15] [505-F-G]
2. 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. That however may depend
upon facts and circumstances of each case, as to what amount
would be a just compensation. [Para 15] [505-G-JI; 506-A-B]
State of Harayana & Anr. v. Jasbir Kaur & Ors. (2003)
7 SCC 484 : 2003 (2) Suppl. SCR 245; Smt. Sar/a
Verma & Ors. v. Delhi Transport Corporation & Am:
(2009) 6 SCC 121 : 2009 (5) SCR 1098 - relied on.
3. 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
clue 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 Haryana Compassionate
Assistance to the Dependants of the Deceased Government
Employees Rules, 2006 - to grant. compassionate assistance by
way of ex-gratia financial assistirncc on compassionate grounds
to the dependents of the deceased Govemment 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. [Para 16] (506-C-E]
A
B
c
D
E
F
G
H
490
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2016] 6 S.C.R.
4. Rule 5 of 2006 Rules 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. [Para 20] [509-A-C)
5. 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 I claimants. Somewhat similar situation has been spelt
out in Section 167 of the Motor Vehicles Act, 1988. [Para 21]
[509-C-F]
6. 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 exgratia financial assistance on compassionate grounds under Rule
5(1). The Claims Tribunal has to adjudicate the claim and
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHl
491
SHARMA & ORS.
determine the amount of compensation which appears to it to be
just. (Para 22) [510-A-B)
7. The amount receivable by the dependants I 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 of2006 towards the head financial assistance equivalent
to "pay and other allowances" that was last drawn by the deceased
Government employee in the normal course.[Para 22) [510-C-D)
8. However it docs not mean 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. [Para 22] [510-E-G]
9. 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.
[Para 23] [510-H;
511-A)
A
B
c
D
E
F
G
H
492
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2016] 6 S.C.R.
10. There is no conflict of opinion between the co-ordinate
Benches (of two Judges) of Supreme Coul't, in the case of *Bliakra
Beas Management Board case on one hand and of **Helen C.
Rebello am/ ***Patricia J. Malla}an cases on the other * Bllakra
Beas Management Board is not an authority of having taken a
contra view than the view expressed in **Hele11 C. Rebello and
***Patricia's case. No observation is found in the entire decision,
to .have doubted the correctness of the dictum in **Helen C.
Rebello and ***Patricia's cases. [Paras 8 and 14] [497-E; 505-E)
**Helen C. Rebello (Mrs.) & Ors. v. Maharashtra State
Road Transport Corporation & Am: 1999 (1) SCC 90 :
1998 (1) Suppl. SCR 684; Oriental Insurance Co. v.
Saroj Devi 2012 (t) PLR 761; New India Assurance
Co. v. Smt. Santush 2010 (4) PLR 780; *Bhakra Beas
Management Board v. Kanta Aggarwal (Smt.) & Ors.
2008 (11) sec 366 : 2008 (10) SCR 165; Gobald
Motor Service Limited v. R.MK. Veluswami 1962 (1) SCR
929; Sheikhupura 'fransport Co. Ltd. \'. MJr/hern India
Transport Insurance Co. 1971 (1) SCC 785; Vimal
Kanwar & Ors. v. Kishore Dan & Ors. 2013 (7) SCC
476; Oriental Insurance Co. Ltd.
~: Deo Parodi and
Ors. 2009 (13) SCC 123: 2009 (8) SCR 791; ***United
India Insurance Co. v. Patricia Jean Mahajan & Ors.
2002 (6) SCC 281 : 2002 (3) SCR 1176 -
referred
to.
Case Law Reference
21)12 (1) PLR 761
referred to
Para6
2010 (4) PLR 780
referred to
Para6
2002 (3) SCR 1176
referred to
Para6
2008 (10) SCR 165
referred to
Para 7
1 ?62 (1) SCR 929
referred lo
Para 7
1911 (1) sec 785
referred to
Para 7
2013 (7) sec 476
referred to
Para7
2009 (8) SCR 791
l'eferred lo
Para 7
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
493
SHARMA & ORS.
1998 (1) Suppl. SCR 684
2003 (2) Suppl. SCR 245
2009 (5) SCR 1098
referred to
Para 8
relied on
relied on
Para 15
Para 15
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9654
A
of2016.
B
From the Judgment and Order dated 13.02.2012 of the High Court
of Punjab and Haryanaat Chandigarh in FAO No. 503 of 2012.
WITH
C. A. Nos. 9655, 9657, 9659, 9661, 9663-9664, 9666, 9669, 9671,
9677,9674,9673,9672,9675,9670,9667-9668,9665,9662,9660,9658,
9656 and 9676of2016.
Dhruv Mehta, Mahabir Singh, Pallav Sisodia, Sr. Advs., Ms.
Prerna Mehta, Ms. Anupama Dlmrve, Yadav Narender Singh, Gaurav
Jain, Satish Kumar, Vishnu Mehra, Ms. Sakshi Mittal, Ms. Manjeet
Chawla, Abhishek Gola, Nikhil Jain, Gagandeep Sharma, Ms. Preeti
Singh, Ravindra Keshavrao Adsure, Bharat Bhushan, Rakesh Vishan,
Gaurav Jain, Dr. Meera Agarwal, Ramesh Chandra Mishra, K. K.
Mohan, Abhishek Gola, Viresh B. Saliarya, Ms. Meenakshi Midha,
Chander Shekhar Ashri, Anil Nag, Ravi Mehrotra, R. K. Sinha, (For ·
Bhaskar Y. Kulkarni), Anil Kumar Tandale, Karan Kapoor, Manik
Kapoor,AkshatGoel, Dr. MonikaGusain, Dr. Kailash Chand,J\jay Singh,
NafisA. Siddiqui, Rakesh Dahiya, Raj Kumar, Devashish Bharuka, Ms.
Arpita Bishnoi, Vaibhav, Ms. Rani Bharuka, Anil Hooda, Ankit Gupta,
Kaushal Yadav, Nikhil Goel, Ashutosh, Ms. Tavishi Chandra, Karan
Chaudhary, Ms. K. V. Bharathi Upadhyaya, Dinesh Verma, Rajat
Sharma, Subhasish Bhowmick, Dr. Sudhir Bisla, Ms. Surnitra Bisla,
Kamal Mohan Gupta, Ravinder Kumar, (For Mrs. Shiel Sethi), Advs.
for the appearing parties.
The Judgment of the Court was delivered by
A.M. KHANWILKAR, J. I. Delay condoned.
2. Leave granted.
3. These matters have been placed before a three Judges' Bench
in terms of order dated 71h October, 2015. This order has not formulated
any specific question to be answered by the larger Bench.
c
D
E
F
G
H
494
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
(2016] 6 S.C.R.
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 FAONo.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 241h October 2010 in front of Main gate of General Hospital at Jind.
Be 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 Re/i{lnce Gener"/ lnsur{l11ce Comp""Y Ltd. Vs.
Purnima & Others,' 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. I ,00,957/- - 15%thereofbeingRs.15,143=Rs.85,814/
- -
l/J'd thereof being Rs.28,605/-
= Rs.57,209 x 12
=Rs.6,86,508/- x 13 = 89,24,604) towards loss of
dependency, Rs. I 5,000/-towards loss of consortium of the
I" appellant, Rs. I 5,000/- towards loss of estate, Rs. I 0,000/
- towards funeral expenses and Rs.5,000/- towards
transportation expenses, in aggregate a sum ofRs.89,60,604/
- with interest @ 7.5% for the enhanced portion of the
compensation from the date of petition till the date of
1 F.A.O No.1322 Of2010
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
495
SHARMA & ORS. [A. M. KHANWILKAR, J.]
realization is awarded. The rate of interest applied and the
A
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 ofamount received by the concerned claimants
under the Rules of 2006, from the quantum of compensation amount
payable to the claimants under the Act of I 988.
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 Singh: 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 of2006 and held that the said Rules have been framed
by the Governor ofHaryana 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 whosr.i
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
'2012 (I) PLR 761
3 2010 (4) PLR 780
B
c
D
E
F
G
H
'.
496
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2016) 6 S.C.R.
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
:1pplicable; 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! 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 of2006, 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
thatthe plea of the appellant in that case that the claimants have received
'1999 (I) sec 90
'2002 (6) sec 281
• 2008 (I I) sec 366
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
SHARMA & ORS. [A. M. KHANWILKAR, J.]
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 memberon 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 I 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
7 1962 (1) SCR 929 =AIR 1962 SC I,
• 1971 < 1 l sec 1ss
• 2013 (7) sec 476
10 2009 (13) sec 123
497.
A
B
c
D
E
F
G
H
498
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[20 I G] 6 S.C.R.
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.
I 0. 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 I !OB, 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 ofloss 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 veiy clear. to which there could be no doubt that his
Act delivers compensation to the claimant only on account
of accidental injuiy 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 Vt.hicles
Act is on account of the pecuniary Joss 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
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
499
SHARMA & ORS. [A. M. KHANWILKAR, J.]
computation of compensation under this Act must correlate
A
to this type of injury or death, viz., accidental. Ifthe words
"gecuniaQ'. advantage" from whatever source are to be
intergreted to mean an)' form of death under this Act, it
would dilute all gossible benefits conferred on the claimant
and would be contra[)'. to the SQirit of the law. If the
B
"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
c
both, all possible conferment of economic security to the
claimant by the deceased and the intentions of the legislature.
B)' such an interyretation, the tort feasor in sgite of his
wrongful act or negligence, which contributes to the death,
..
would have in man)' cases no liabili!)' or meager liabili!)'. In
D
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 gresent Act, whatever gecunia1:x advantage is received
b)' the claimant, from whatever source, would onl)' mean
E
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 itselfunder Section 110 is,
as the section states:
" ......... forthe purpose of adjudicating
F
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,
G
such pecuniary advantage would have no corelation to the
accidental death for which compensation is computed. An)'
amount received or receivable not onl)' on account of the
accidental death but that which would have come to the
claimant even otherwise, could not be construed to be the
H
500
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2016] 6 S.C.R.
"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
legislatu~e 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 arfamount earned by an
individual. Principle ofloss 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
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
SHARMA & ORS. [A. M. KHANWILKAR, J.]
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
pl!lce 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 tw.o. 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 ifhe 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
501
A
B
c
D
E
F
G
H
502
SUPREME COURT REPORTS
[2016] 6 S.C.R.
A
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
B
c
D
E
F
G
H
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 I A 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 detennination 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 Com1 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
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI
SHARMA & ORS. [A. M. KHANWILKAR, J.]
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
ofloss and gain butthat 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
503
A
B
c
D
E
F
G
H
504
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2016] 6 S.C.R.
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 I itigation
( 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 I 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
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHl
505
SHARMA & ORS. [A. M. KHANWILKAR, J.]
of the death or injury have to be duly considered while fixing
A
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
B
Court'' 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.