Motor Vehicles Act, 1988 – s.166 – Application for compensation – Haryana Compassionate Assistance to the dependents of deceased Government Employees Rules, 2006 – The claim petition was filed by the respondent nos. 1 & 2, who were the major sons of the deceased – The Tribunal held that respondent nos. 1 & 2 cannot be deprived of the pecuniary benefits through the deceased – The deduction towards personal expenses was kept at 50% as the respondent nos. 1 & 2 were major and earning hands – The total compensation was computed at Rs. 17,40,532/- – However, the High Court noted that the financial assistance available to the family of deceased, under the 2006 Rules would be Rs. 33,29,712/- and deducted 50% of the said amount from compensation amount of Rs. 29,20,772/ - – The High Court then deducted Rs.16,64,856/- from the compensation amount of Rs. 29,20,772/- – Appellant contended that High Court ought to have deducted the entire amount of financial assistance under the 2006 Rules – Respondents contended that the High Court erred in deducting 50% of the amount from compensation instead of one third – On appeal held: The view taken by the High Court is not a correct reading of the decision of the Supreme Court in Shashi Sharma case – The High Court committed manifest error in assuming that the respondent nos. 1 & 2 would be eligible to receive financial assistance under the 2006 Rules – Further, there is no clear evidence to get financial assistance or in fact, they are getting such financial assistance under the 2006 Rules – The High Court, therefore, instead of providing deduction of the amount receivable by the legal representative of the deceased on this count (under the 2006 Rules), from the compensation amount, should have independently determined the compensatory amount and ordered payment thereof subject to legal representative of the deceased filing affidavit/declaration before the executing court that they have not received nor would they claim any amount towards financial assistance under 2006 Rules, so as to become entitled to withdraw the entire compensation amount.
Motor Vehicle Act,1988 – s.166 – Application for compensation – Major sons of the deceased who were married and gainfully employed – Entitlement of – Held: The legal representative of the deceased could move application for compensation by virtue of cl(c) of s.166 – The Supreme court in Manjuri Bera had expounded that liability to pay compensation under the case does not cease because of absence of dependency of the concerned legal representative – It is settled that the legal representative of the deceased have the right to apply for compensation – Having said that, it must necessarily follow that even the major married and earning sons of the deceased being legal representative have a right to apply for compensation and it would be the bounden duty of the Tribunal to consider the application irrespective of the fact whether the concerned legal representative was fully dependent on the deceased and not to limit the claims towards conventional heads only.
Partly allowing the appeals, the Court
HELD: Whether the major sons of the deceased who are married and gainfully employed or earning, can claim compensation under the Motor Vehicles Act, 1988? Whether such legal representatives are entitled only for compensation under the conventional heads? Whether the amount receivable by the legal representatives of the deceased under the 2006 Rules is required to be deducted as a whole or only portion thereof ? [957-B-C]
1. Reverting to the first issue - that needs to be answered on the basis of the scheme of the Act. Section 166 of the Act provides for filing of application for compensation by persons mentioned in clauses (a) to (d) of sub-Section (1) thereof. [Para 13][957-D]
2. The legal representatives of the deceased could move application for compensation by virtue of clause (c) of Section 166(1). The major married son who is also earning and not fully dependant on the deceased, would be still covered by the expression “legal representative” of the deceased. This Court in Manjuri Bera had expounded that liability to pay compensation under the Act does not cease because of absence of dependency of the concerned legal representative. Notably, the expression “legal representative” has not been defined in the Act. [Para 14][958-D-E]
3. In paragraph 15 of the said decision, while adverting to the provisions of Section 140 of the Act, the Court observed that even if there is no loss of dependency, the claimant, if he was a legal representative, will be entitled to compensation. The compensation constitutes part of the estate of the deceased. As a result, the legal representative of the deceased would inherit the estate. Indeed, in that case, the Court was dealing with the case of a married daughter of the deceased and the efficacy of Section 140 of the Act. Nevertheless, the principle underlying the exposition in this decision would clearly come to the aid of the respondent Nos. 1 and 2 (claimants) even though they are major sons of the deceased and also earning. [Para 14][959-F-H; 960-A]
4. It is settled by now that the legal representatives of the deceased have a right to apply for compensation. Having said that, it must necessarily follow that even the major married and earning sons of the deceased being legal representatives have a right to apply for compensation and it would be the bounden duty of the Tribunal to consider the application irrespective of the fact whether the concerned legal representative was fully dependant on the deceased and not to limit the claim towards conventional heads only. The evidence on record in the present case would suggest that the claimants were working as agricultural labourers on contract basis and were earning meagre income between Rs.1,00,000/- and Rs.1,50,000/- per annum. In that sense, they were largely dependant on the earning of their mother and in fact, were staying with her, who met with an accident at the young age of 48 years. [Para 15][960-B-C]
5. The next issue is about the deduction of the amount receivable by the legal representatives of the deceased under the 2006 Rules from the compensation amount determined by the Tribunal in terms of the decision of three-Judge Bench of this Court in Shashi Sharma. [Para 16][960-D]
6. The Judge of the High Court has, however, after adverting to the decision of the same High Court in Ajmero, went on to observe that 50% of the amount receivable by the legal representatives of the deceased towards financial assistance under the 2006 Rules is required to be deducted from the compensation amount. [Para 16][962-G]
7. The view so taken by the High Court is not the correct reading of the decision of three-Judge Bench of this Court in Shashi Sharma for more than one reason. First, this Court was conscious of the fact that under Rule 5(2) of the 2006 Rules, the family pension receivable by the family would be payable, however, only after the period, during which the financial assistance is received, is completed. In that context, in paragraph 24 of the reported decision, the Court clearly noted that the amount towards family pension cannot be deducted from the claim amount for determination of a just compensation under the Act. Further, the High Court has erroneously assumed that the family of the deceased would be entitled for family pension amount immediately after the death of the deceased employee. That is in the teeth of the scheme of the 2006 Rules, in particular Rule 5(2) thereof. The said Rules provide for financial assistance on compassionate grounds, as also, other benefits to the family members of the deceased employee and as a package thereof, Rule 5(2) stipulates that the family pension as per the normal rules would be payable to the family members only after the period of delivery of financial assistance is completed. The validity of this provision is not put in issue. Suffice it to say that the view taken by the High Court in Ajmero is a departure from the scheme envisaged by the 2006 Rules, in particular, Rule 5(2). That cannot be countenanced. [Para 17][963-C-F]
8. As a matter of fact, in the present case, the High Court committed manifest error in assuming that the respondent Nos.
1 and 2 would be eligible to receive financial assistance under the 2006 Rules. The eligibility to receive such financial assistance has been spelt out in Rule 3 of the 2006 Rules read with the provision of Pension/Family Pension Scheme, 1964. It appears that major sons and married daughters are not included in the definition. However, we need not dilate on that aspect in the present proceedings any further. It has come in the evidence of clerk in SDM Office (PW-1) that the legal representatives of the deceased have not submitted any request for getting financial assistance till he had deposed. Indeed, respondent No. 1, who had entered the witness box, did depose that they had applied for getting salary of their deceased mother. The fact remains that there is no clear evidence on record that respondent Nos. 1 and
2 are held to be eligible to get financial assistance or in fact, they are getting such financial assistance under the 2006 Rules. The High Court, therefore, instead of providing for deduction of the amount receivable by the legal representatives of the deceased on this count (under the 2006 Rules), from the compensation amount, should have independently determined the compensation amount and ordered payment thereof subject to legal representatives of the deceased filing affidavit/declaration before the executing Court that they have not received nor would they claim any amount towards financial assistance under the 2006 Rules, so as to become entitled to withdraw the entire compensation amount. [Para 18][964-G-H; 965-A-D]
9. Reverting to the determination of compensation amount, it is noticed that the Tribunal proceeded to determine the compensation amount on the basis of net-salary drawn by the deceased for the relevant period as Rs.16,918/- per month, while taking note of the fact that her gross-salary was Rs.23,123/- per month (presumably below taxable income). Concededly, any deduction from the gross-salary other than tax amount cannot be reckoned. In that, the actual salary less tax amount ought to have been taken into consideration by the Tribunal for determining the compensation amount, in light of the dictum of the Constitution Bench of this Court in paragraph 59.3 of Pranay Sethi. [Para 19][964-E-F]
10. Similarly, the High Court despite having taken note of the submission made by the respondent Nos. 1 and 2 that the deduction for personal expenses of the deceased should be reckoned only as one-third (1/3rd) amount for determining loss of dependency, maintained the deduction of 50% towards that head as ordered by the Tribunal. This Court in Pranay Sethi, in paragraph 37, adverted to the dictum of this Court in Sarla Verma (Smt.) & Ors. vs. Delhi Transport Corporation & Anr. with approval, wherein it is held that if the dependant family members are 2 to 3, as in this case, the deduction towards personal and living expenses of the deceased should be taken as one-third (1/3rd). In other words, the deduction towards personal expenses to the extent of 50% is excessive and not just and proper considering the fact that the respondent Nos. 1 and 2 alongwith their respective families were staying with the deceased at the relevant time and were largely dependant on her income. [Para 20][964-G; 965-AB]
11. The High Court, without reversing the said finding, proceeded to include the amount of Rs.7,000/- per month received by the deceased as pension amount after demise of her husband. This Court is in agreement with the view taken by the Tribunal and for the same reason, have to reverse the conclusion recorded by the High Court to include the said amount as loss of dependency. That could not have been taken into account, as the same was payable only to the deceased being widow and not her income as such for the purpose of computing the amount of compensation. [Para 21][965-E]
12. Respondent Nos. 1 and 2 would be entitled for compensation to be reckoned on the basis of loss of dependency, due to loss of gross salary (less tax amount, if any) of the deceased and future prospects and deduction of only one-third (1/3rd) amount towards personal expenses of the deceased. As regards the multiplier ‘13’ applied by the Tribunal and the High Court, the same needs no interference. As a result, on the facts and in the circumstances of this case, the amount payable towards compensation will have to be recalculated on the following basis:Loss of dependency due to loss of income calculated at Rs.31,26,229.60/-[(Rs.23,123/- x 12 x 13) + (30% future prospects) – (1/3rd deduction for personal expenses)]. In addition, the claimants would be entitled for a sum of Rs.70,000/- towards conventional heads in terms of dictum in paragraph
59.8 of Pranay Sethi. Thus, a total sum of Rs.31,96,230/- (Rupees thirty-one lakhs ninety-six thousand two hundred thirty only), as rounded off, is payable to the claimants.[Para 22][965-F-H; 966A-B]
However, this amount alongwith interest at the rate of 9% per annum from the date of filing of the claim petition till payment, will be payable subject to the outcome of the application made by the respondent Nos. 1 and 2 to the competent authority for grant of financial assistance under the 2006 Rules. If that application is allowed and the amount becomes payable towards financial assistance under the said Rules to the specified legal representatives of the deceased, commensurate amount will have to be deducted from the compensation amount alongwith interest component thereon. The respondent Nos. 1 and 2, therefore, can be permitted to withdraw the compensation amount only upon filing of an affidavit-cum-declaration before the executing Court that they have not received nor would claim any amount towards financial assistance under the 2006 Rules and if already received or to be received in future on that account, the amount so received will be disclosed to the executing Court, which will have to be deducted from the compensation amount determined in terms of this order. The compensation amount, therefore, be paid to the respondent Nos. 1 and 2 subject to the above and upon giving an undertaking before the executing Court to indemnify the insurance company (appellant) to that extent. [Para 22] [966-B-E]
Manjuri Bera (Smt.) v. Oriental Insurance Co. Ltd. & Anr. (2007) 10 SCC 643 : [2007] 4 SCR 590; Reliance General Insurance Co. Ltd. v. Shashi Sharma and Ors. (2016) 9 SCC 627 : [2016] 6 SCR 488; New India Assurance Co. Ltd. v. Ajmero and others F.A.O. No. 2648 of 2016 decided on 31.07.2017; National
Insurance Company Limited v. Pranay Sethi & Ors. (2017) 16 SCC 680; Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr. (2009) 6 SCC 121 : [2009] 5 SCR 1098 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.