NATIONAL INSURANCE COMPANY LIMITED versus BIRENDER AND ORS. on 13 January 2020

1. Reverting to the first issue - that needs to be answeredon the basis of the scheme of the Act. Section 166 of the Actprovides for filing of application for compensation by personsmentioned in clauses (a) to (d) of sub-Section (1) thereof. [Para13][957-D]

2. The legal representatives of the deceased could moveapplication for compensation by virtue of clause (c) of Section166(1). The major married son who is also earning and not fully ABC

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Adependant on the deceased, would be still covered by theexpression “legal representative” of the deceased. This Courtin Manjuri Bera had expounded that liability to pay compensationunder the Act does not cease because of absence of dependencyof the concerned legal representative. Notably, the expression“legal representative” has not been defined in the Act.B[Para 14][958-D-E]

3. In paragraph 15 of the said decision, while adverting tothe provisions of Section 140 of the Act, the Court observed thateven if there is no loss of dependency, the claimant, if he was aClegal representative, will be entitled to compensation. Thecompensation constitutes part of the estate of the deceased. Asa result, the legal representative of the deceased would inheritthe estate. Indeed, in that case, the Court was dealing with thecase of a married daughter of the deceased and the efficacy ofSection 140 of the Act. Nevertheless, the principle underlyingDthe exposition in this decision would clearly come to the aid ofthe respondent Nos. 1 and 2 (claimants) even though they aremajor 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 theEdeceased have a right to apply for compensation. Having saidthat, it must necessarily follow that even the major married andearning sons of the deceased being legal representatives have aright to apply for compensation and it would be the bounden dutyof the Tribunal to consider the application irrespective of the factFwhether the concerned legal representative was fully dependanton the deceased and not to limit the claim towards conventionalheads only. The evidence on record in the present case wouldsuggest that the claimants were working as agricultural labourerson contract basis and were earning meagre income betweenRs.1,00,000/- and Rs.1,50,000/- per annum. In that sense, theyGwere largely dependant on the earning of their mother and infact, were staying with her, who met with an accident at the youngage of 48 years. [Para 15][960-B-C]

5. The next issue is about the deduction of the amountreceivable by the legal representatives of the deceased underH

the 2006 Rules from the compensation amount determined bythe Tribunal in terms of the decision of three-Judge Bench ofthis Court in Shashi Sharma. [Para 16][960-D]

6. The Judge of the High Court has, however, afteradverting to the decision of the same High Court in Ajmero, wenton to observe that 50% of the amount receivable by the legalrepresentatives of the deceased towards financial assistanceunder the 2006 Rules is required to be deducted from thecompensation amount. [Para 16][962-G]

7. The view so taken by the High Court is not the correctreading of the decision of three-Judge Bench of this Court inShashi Sharma for more than one reason. First, this Court wasconscious of the fact that under Rule 5(2) of the 2006 Rules, thefamily pension receivable by the family would be payable, however,only after the period, during which the financial assistance isreceived, is completed. In that context, in paragraph 24 of thereported decision, the Court clearly noted that the amount towardsfamily pension cannot be deducted from the claim amount fordetermination of a just compensation under the Act. Further, theHigh Court has erroneously assumed that the family of thedeceased would be entitled for family pension amount immediatelyafter the death of the deceased employee. That is in the teeth ofthe scheme of the 2006 Rules, in particular Rule 5(2) thereof.The said Rules provide for financial assistance on compassionategrounds, as also, other benefits to the family members of thedeceased employee and as a package thereof, Rule 5(2) stipulatesthat the family pension as per the normal rules would be payableto the family members only after the period of delivery of financialassistance is completed. The validity of this provision is not putin issue. Suffice it to say that the view taken by the High Court inAjmero is a departure from the scheme envisaged by the 2006Rules, 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 Courtcommitted manifest error in assuming that the respondent Nos.1 and 2 would be eligible to receive financial assistance under AB

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Athe 2006 Rules. The eligibility to receive such financial assistancehas been spelt out in Rule 3 of the 2006 Rules read with theprovision of Pension/Family Pension Scheme, 1964. It appearsthat major sons and married daughters are not included in thedefinition. However, we need not dilate on that aspect in thepresent proceedings any further. It has come in the evidence ofBclerk in SDM Office (PW-1) that the legal representatives of thedeceased have not submitted any request for getting financialassistance till he had deposed. Indeed, respondent No. 1, whohad entered the witness box, did depose that they had appliedfor getting salary of their deceased mother. The fact remains thatCthere is no clear evidence on record that respondent Nos. 1 and2 are held to be eligible to get financial assistance or in fact, theyare getting such financial assistance under the 2006 Rules. TheHigh Court, therefore, instead of providing for deduction of theamount receivable by the legal representatives of the deceased on this count (under the 2006 Rules), from the compensationDamount, should have independently determined the compensationamount and ordered payment thereof subject to legalrepresentatives of the deceased filing affidavit/declaration beforethe executing Court that they have not received nor would theyclaim any amount towards financial assistance under the 2006ERules, so as to become entitled to withdraw the entirecompensation 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 thecompensation amount on the basis of net-salary drawn by theFdeceased for the relevant period as Rs.16,918/- per month, whiletaking note of the fact that her gross-salary was Rs.23,123/- permonth (presumably below taxable income). Concededly, anydeduction from the gross-salary other than tax amount cannot bereckoned. In that, the actual salary less tax amount ought to havebeen taken into consideration by the Tribunal for determiningGthe compensation amount, in light of the dictum of the ConstitutionBench of this Court in paragraph 59.3 of Pranay Sethi.[Para 19][964-E-F]

10. Similarly, the High Court despite having taken note ofthe submission made by the respondent Nos. 1 and 2 that theH

deduction for personal expenses of the deceased should bereckoned only as one-third (1/3rd) amount for determining lossof dependency, maintained the deduction of 50% towards thathead as ordered by the Tribunal. This Court in Pranay Sethi, inparagraph 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 to3, as in this case, the deduction towards personal and livingexpenses of the deceased should be taken as one-third (1/3rd).In other words, the deduction towards personal expenses to theextent of 50% is excessive and not just and proper consideringthe fact that the respondent Nos. 1 and 2 alongwith their respectivefamilies were staying with the deceased at the relevant time andwere largely dependant on her income. [Para 20][964-G; 965-A-B]

11. The High Court, without reversing the said finding,proceeded to include the amount of Rs.7,000/- per month receivedby the deceased as pension amount after demise of her husband.This Court is in agreement with the view taken by the Tribunaland for the same reason, have to reverse the conclusion recordedby the High Court to include the said amount as loss ofdependency. That could not have been taken into account, as thesame was payable only to the deceased being widow and not herincome as such for the purpose of computing the amount ofcompensation. [Para 21][965-E]

12. Respondent Nos. 1 and 2 would be entitled forcompensation to be reckoned on the basis of loss of dependency,due to loss of gross salary (less tax amount, if any) of the deceasedand future prospects and deduction of only one-third (1/3rd)amount towards personal expenses of the deceased. As regardsthe multiplier ‘13’ applied by the Tribunal and the High Court,the same needs no interference. As a result, on the facts and inthe circumstances of this case, the amount payable towardscompensation will have to be recalculated on the following basis:- Loss of dependency due to loss of income calculated atRs.31,26,229.60/-[(Rs.23,123/- x 12 x 13) + (30% futureprospects) – (1/3rd deduction for personal expenses)]. Inaddition, the claimants would be entitled for a sum of Rs.70,000/

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A- towards conventional heads in terms of dictum in paragraph59.8 of Pranay Sethi. Thus, a total sum of Rs.31,96,230/- (Rupeesthirty-one lakhs ninety-six thousand two hundred thirty only), asrounded off, is payable to the claimants.[Para 22][965-F-H; 966-A-B]

BHowever, 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 bythe respondent Nos. 1 and 2 to the competent authority for grantof financial assistance under the 2006 Rules. If that application isallowed and the amount becomes payable towards financialCassistance under the said Rules to the specified legalrepresentatives of the deceased, commensurate amount will haveto be deducted from the compensation amount alongwith interestcomponent thereon. The respondent Nos. 1 and 2, therefore,can be permitted to withdraw the compensation amount only uponDfiling of an affidavit-cum-declaration before the executing Courtthat they have not received nor would claim any amount towardsfinancial assistance under the 2006 Rules and if already receivedor to be received in future on that account, the amount so receivedwill be disclosed to the executing Court, which will have to bededucted from the compensation amount determined in terms ofEthis order. The compensation amount, therefore, be paid to therespondent Nos. 1 and 2 subject to the above and upon giving anundertaking before the executing Court to indemnify theinsurance company (appellant) to that extent. [Para 22][966-B-E]F

Manjuri Bera (Smt.) v. Oriental Insurance Co. Ltd. &Anr. (2007) 10 SCC 643 : [2007] 4 SCR 590; RelianceGeneral Insurance Co. Ltd. v. Shashi Sharma and Ors.(2016) 9 SCC 627 : [2016] 6 SCR 488; New IndiaAssurance Co. Ltd. v. Ajmero and others F.A.O. No.G2648 of 2016 decided on 31.07.2017; NationalInsurance Company Limited v. Pranay Sethi & Ors.(2017) 16 SCC 680; Sarla Verma (Smt.) & Ors. v. DelhiTransport Corporation & Anr. (2009) 6 SCC 121 :[2009] 5 SCR 1098 – referred to.

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NATIONAL INSURANCE COMPANY LIMITED v.BIRENDER AND ORS.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 242-243 of 2020.

From the Judgment and Order dated 08.08.2018 of the High Courtof Punjab and Haryana at Chandigarh in FAO Nos. 1341 and 4023 of2016.

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Civil Appeal No. 244 of 2020.

Amit Kumar Singh, Mrs. K. Entoli Sema, Gaurav Prakash,DMs. Abha R. Sharma, D.S. Parmar, Ankit Mishra, Advs. for the appearingparties.

The Judgment of the Court was delivered by

A. M. KHANWILKAR, J.

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1. Delay condoned.

2. Leave granted.

3. These civil appeals emanate from the common judgment andorder dated 8.8.2018 passed by the High Court of Punjab and Haryanaat Chandigarh (for short, ‘the High Court’) in cross appeals being F.A.O.Nos. 1341 of 2016 (O&M) and 4023 of 2016 (O&M), questioning thecorrectness of the award dated 4.12.2015 passed by the Motor AccidentsClaims Tribunal, Jind (for short, ‘the Tribunal’) in M.A.C.T. Case No.205 of 2014. The former appeal (arising out of S.L.P.(C) No……/2020@ Diary No. 47693/2018) has been preferred by the insurance companyand the latter appeal (arising out of S.L.P.(C) No……./2020 @ DiaryNo. 17683/2019) by the claimants-respondent Nos. 1 and 2. The partiesare referred to as per their status in the former appeal for the sake ofconvenience.

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4. The claim petition was filed by the respondent Nos. 1 and 2herein, who are the major sons of Smt. Sunheri Devi (deceased). The H

Adeceased was on her way to attend the office of Tehsildar, Uchana(where she was working as a Peon) from Dharoli Khera village on20.10.2014 at about 9.00 a.m., travelling as a pillion rider on a motorcyclebearing No. HR-32-G-8749. At that time, a dumper/tipper bearingregistration No. HR-56-A-3260 coming from the opposite direction, beingdriven in a rash and negligent manner, collided with the motorcycle,Bresulting in fatal injuries sustained to the deceased to which shesuccumbed.

5. The respondent Nos. 1 and 2 claimed an amount ofRs. 50,00,000/- (Rupees fifty lakhs only) along with interest at the rateof 12% per annum on the assertion that the deceased was earningCRs.28000/- per month (Rs. 21000/- as salary and Rs.7000/- as familypension of her husband), she was hale and healthy and was the onlybread earner of her entire family and that they were largely dependantupon her income and have also been deprived of her love and affection.The appellant disputed the claim and pleaded that the accident did notDoccur with the offending vehicle (the dumper/tipper) or due to fault of itsdriver, and that the respondent Nos. 1 and 2 were majors and notdependant upon the deceased and as such not entitled for anycompensation. Further, the vehicle in question was being plied incontravention of terms and conditions of the insurance policy and thedriver was not holding a valid and effective driving licence. Resultantly,Ethe insurance company-appellant was not liable to pay compensation.

6. After analysing the evidence on record, the Tribunal held thatthe accident of the deceased occurred due to rash and negligent drivingof the offending vehicle. The Tribunal further noted that the driver andthe owner of offending vehicle have placed on record the driving licenceFof the driver, valid insurance policy, public carrier permit and theregistration certificate of the offending vehicle and the appellant havingfailed to lead any evidence to prove that the terms and conditions of theinsurance policy were violated, cannot be absolved of its liability. TheTribunal also noted that though the respondent Nos. 1 and 2 were majorGand earning hands, the fact that they were legal heirs of the deceasedand have been deprived of the pecuniary benefits through the deceasedcannot be denied.

7. Having decided the above issues in favour of the respondentNos. 1 and 2, the Tribunal while determining the quantum of compensationHtook note of the gross monthly salary of the deceased as on September, 2014, which according to her service record was Rs.23,123/- and thenet take home salary was Rs.16,918/-. The Tribunal did not consider thefamily pension for computation, as the deceased was getting it in herown right as widow and the same could not be reckoned. Her date ofbirth was 1.4.1967 and date due for retirement was 31.3.2027, for whichmultiplier of ‘13’ was applied. The deduction towards personal expenseswas kept at 50% as the respondent Nos. 1 and 2 were major and earninghands. Thus, the loss of dependency was determined at Rs.17,15,532/-.In addition, an amount of Rs.25,000/- was awarded on account of funeralexpenses, etc. and the total compensation was computed atRs.17,40,532/- along with interest at the rate of 9% per annum from thedate of institution of petition. The driver, owner and insurer of theoffending vehicle were held jointly and severally liable.

8. Against the award passed by the Tribunal, cross appeals werepreferred being F.A.O. No. 1341 of 2016 (O&M) filed by the appellantand F.A.O. No. 4023 of 2016 (O&M) filed by the respondent Nos. 1and 2. The appellant (insurance company) primarily contended that therespondent Nos. 1 and 2 are not entitled to compensation for loss ofdependency as they are major and earning and also because the familyof the deceased was entitled to receive financial assistance under theHaryana Compassionate Assistance to the Dependants of DeceasedGovernment Employees Rules, 2006 (in short, ‘the 2006 Rules’). Therespondent Nos. 1 and 2 contended that being major and also earning byitself cannot be regarded as ineligibility to claim compensation. Further,the Tribunal has wrongly assessed loss of dependency on take-homesalary instead of the drawing salary and without considering the familypension received by the deceased had she been alive. They furtherclaimed that the deduction of personal expenses should be one-third(1/3[rd]) instead of 50%.

9. The High Court by considering the monthly salary for computingcompensation as Rs.23,123/-, benefits of future prospects at 30%,applying a multiplier of ‘13’ and deduction for personal expenses at 50%held that the respondent Nos. 1 and 2 were entitled to loss of dependencyqua loss of income at Rs.23,44,672/-. The High Court, in addition, whileconsidering the loss of dependency qua loss of pension by taking monthlypension at Rs.7,000/-, applying a multiplier of ‘13’ and deduction forpersonal expenses at 50%, held that Rs.5,46,000/- would be payabletowards this head. The compensation under conventional heads was AB

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Aalso increased from Rs.25,000/- to Rs.30,000/-. Therefore, the totalcompensation payable was determined as Rs.29,20,672/-. The High Courtfurther noted that financial assistance available to the family of thedeceased, under the 2006 Rules would be Rs.33,29,712/- and deducted50% of the said amount from compensation whilst relying upon ajudgment of the same High Court in New India Assurance Co. Ltd. v.BAjmero and others[1]. The High Court then deducted that amount ofRs.16,64,856/- from the compensation amount of Rs.29,20,672/-determined by it. Resultantly, the High Court reduced the compensationawarded by the Tribunal to the extent of Rs.4,84,716/- and gave libertyto the appellant to recover the excess amount, if already paid.C

10. The former appeal is preferred by the appellant on the groundthat the High Court ought to have deducted the entire amount of financialassistance under the 2006 Rules, instead of deducting only 50% thereof.Reliance was placed on the judgment of this Court in Reliance GeneralInsurance Co. Ltd. v. Shashi Sharma and Ors.[2]. It is urged that claimDfor loss of dependency is unavailable to the respondent Nos. 1 and 2 inthe facts of the present case, they being major sons of the deceasedwho were married and also gainfully employed. Reliance is placed onManjuri Bera (Smt) v. Oriental Insurance Co. Ltd. & Anr.[3]. It isurged that the respondent Nos. 1 & 2 may be entitled only tocompensation under conventional heads as held in National InsuranceECompany Limited v. Pranay Sethi & Ors.[4].

11. The latter appeal has been preferred by the respondent Nos.1 and 2, primarily on the ground that the High Court erred in deducting50% of the amount from compensation instead of one-third (1/3[rd]).Further, deduction of 50% amount of the financial assistance receivableFunder the 2006 Rules on the assumption that the respondent Nos. 1 and2 are eligible therefor is a manifest error. Reliance is also placed on thedecision of the High Court in Ajmero (supra). It is urged that the HighCourt ought to have considered that the respondent Nos. 1 and 2 weredependant on the deceased and that they have been deprived of her loveGand affection and income and thus entitled to compensation as claimedin the original application in that regard.

1 F.A.O. No. 2648 of 2016, decided on 31.07.2017

2 (2016) 9 SCC 627

3 (2007) 10 SCC 643

H4 (2017) 16 SCC 680

12. We have heard Mr. Amit Kumar Singh, learned counsel forthe insurance company (appellant) and Ms. Abha R. Sharma, learnedcounsel for the respondent Nos. 1 and 2. The principal issues whicharise for our consideration are as follows: -

(i) Whether the major sons of the deceased who are marriedand gainfully employed or earning, can claim compensationunder the Motor Vehicles Act, 1988 (for short, ‘the Act’)?

(ii) Whether such legal representatives are entitled only forcompensation under the conventional heads?

(iii) Whether the amount receivable by the legal representativesof the deceased under the 2006 Rules is required to bededucted as a whole or only portion thereof?

13. Reverting to the first issue - that needs to be answered on thebasis of the scheme of the Act. Section 166 of the Act provides forfiling of application for compensation by persons mentioned in clauses(a) to (d) of sub-Section (1) thereof. Section 166 of the Act, as applicableat the relevant time, reads thus: - “Section 166. Application for compensation.- (1) Anapplication for compensation arising out of an accident of the naturespecified in sub-section (1) of section 165 may be made- (a) by the person who has sustained the injury; or (b) by the owner of the property; or

(c) where death has resulted from the accident, by all orany of the legal representatives of the deceased; or (d) by any agent duly authorised by the person injured or allor any of the legal representatives of the deceased, asthe case may be:

Provided that where all the legal representatives of thedeceased have not joined in any such application for compensation,the application shall be made on behalf of or for the benefit of allthe legal representatives of the deceased and the legalrepresentatives who have not so joined, shall be impleaded asrespondents to the application.

(2) Every application under sub-section (1) shall be made, at theoption of the claimant, either to the Claims Tribunal having A

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jurisdiction over the area in which the accident occurred or to theClaims Tribunal within the local limits of whose jurisdiction theclaimant resides or carries on business or within the local limits ofwhose jurisdiction the defendant resides, and shall be in such formand contain such particulars as may be prescribed:

Provided that where no claim for compensation underSection 140 is made in such application, the application shallcontain a separate statement to that effect immediately beforethe signature of the applicant.

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(4) The Claims Tribunal shall treat any report of accidentsforwarded to it under sub-section (6) of section 158 as anapplication for compensation under this Act.”

(emphasis supplied)

D14. The legal representatives of the deceased could moveapplication for compensation by virtue of clause (c) of Section 166(1).The major married son who is also earning and not fully dependant onthe deceased, would be still covered by the expression “legalrepresentative” of the deceased. This Court in Manjuri Bera (supra)had expounded that liability to pay compensation under the Act does notEcease because of absence of dependency of the concerned legalrepresentative. Notably, the expression “legal representative” has notbeen defined in the Act. In Manjuri Bera (supra), the Court observedthus:- “9. In terms of clause (c) of sub-section (1) of Section 166 of theFAct in case of death, all or any of the legal representatives of thedeceased become entitled to compensation and any such legalrepresentative can file a claim petition. The proviso to said sub-section makes the position clear that where all the legalrepresentatives had not joined, then application can be made onbehalf of the legal representatives of the deceased by impleadingGthose legal representatives as respondents. Therefore, the HighCourt was justified in its view that the appellant could maintain aclaim petition in terms of Section 166 of the Act.

10. …..The Tribunal has a duty to make an award, determine theamount of compensation which is just and proper and specify the H

person or persons to whom such compensation would be paid.The latter part relates to the entitlement of compensation by aperson who claims for the same.

11. According to Section 2(11) CPC, “legal representative” meansa person who in law represents the estate of a deceased person,and includes any person who intermeddles with the estate of thedeceased and where a party sues or is sued in a representativecharacter the person on whom the estate devolves on the deathof the party so suing or sued. Almost in similar terms is thedefinition of legal representative under the Arbitration andConciliation Act, 1996 i.e. under Section 2(1)(g).

12. As observed by this Court in Custodian of Branches ofBANCO National Ultramarino v. Nalini Bai Naique [1989 Supp(2) SCC 275 the definition contained in Section 2(11) CPC isinclusive in character and its scope is wide, it is not confined tolegal heirs only. Instead it stipulates that a person who may ormay not be legal heir competent to inherit the property of thedeceased can represent the estate of the deceased person. Itincludes heirs as well as persons who represent the estate evenwithout title either as executors or administrators in possession ofthe estate of the deceased. All such persons would be covered bythe expression “legal representative”. As observed in GujaratSRTC v. Ramanbhai Prabhatbhai [(1987) 3 SCC 234 a legalrepresentative is one who suffers on account of death of a persondue to a motor vehicle accident and need not necessarily be awife, husband, parent and child.”

In paragraph 15 of the said decision, while adverting to theprovisions of Section 140 of the Act, the Court observed that even ifthere is no loss of dependency, the claimant, if he was a legalrepresentative, will be entitled to compensation. In the concurringjudgment of Justice S.H. Kapadia, as His Lordship then was, it is observedthat there is distinction between “right to apply for compensation” and“entitlement to compensation”. The compensation constitutes part ofthe estate of the deceased. As a result, the legal representative of thedeceased would inherit the estate. Indeed, in that case, the Court wasdealing with the case of a married daughter of the deceased and theefficacy of Section 140 of the Act. Nevertheless, the principle underlyingthe exposition in this decision would clearly come to the aid of the AB

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[2020] 1 S.C.R.

Arespondent Nos. 1 and 2 (claimants) even though they are major sons ofthe deceased and also earning.

15. It is thus settled by now that the legal representatives of thedeceased have a right to apply for compensation. Having said that, itmust necessarily follow that even the major married and earning sons ofBthe deceased being legal representatives have a right to apply forcompensation and it would be the bounden duty of the Tribunal to considerthe application irrespective of the fact whether the concerned legalrepresentative was fully dependant on the deceased and not to limit theclaim towards conventional heads only. The evidence on record in thepresent case would suggest that the claimants were working asCagricultural labourers on contract basis and were earning meagre incomebetween Rs.1,00,000/- and Rs.1,50,000/- per annum. In that sense, theywere largely dependant on the earning of their mother and in fact, werestaying with her, who met with an accident at the young age of 48 years.

16. The next issue is about the deduction of the amount receivableDby the legal representatives of the deceased under the 2006 Rules fromthe compensation amount determined by the Tribunal in terms of thedecision of three-Judge Bench of this Court in Shashi Sharma (supra).This Court, after analysing the relevant rules, opined as follows: -

“23. Reverting back to Rule 5, sub-rule (1) provides for the periodEduring which the dependants of the deceased employee mayreceive financial assistance equivalent to the pay and otherallowances that was last drawn by the deceased employee in thenormal course without raising a specific claim. Sub-rule (2)provides that the family shall be eligible to receive familyFpension as per the normal Rules only after the period duringwhich they would receive the financial assistance in termsof sub-rule (1). Sub-rule (3) guarantees the family of a deceasedgovernment employee of a government residence in occupationfor a period of one year from the date of death of the employee,upon payment of normal rent/licence fee. By virtue of sub-ruleG(4), an ex gratia assistance of Rs 25,000 is provided to the familyof the deceased employee to meet the immediate needs on theloss of the bread earner. Sub-rule (5) clarifies that house rentallowance shall not be a part of allowance for the purposes ofcalculation of assistance.

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24. …..As regards the second part, it deals with income fromother source which any way is receivable by the dependants ofthe deceased government employee. That cannot be deductedfrom the claim amount for determination of a justcompensation under the 1988 Act.

25. The claimants are legitimately entitled to claim for the loss of“pay and wages” of the deceased government employee againstthe tortfeasor or insurance company, as the case may be, coveredby the first part of Rule 5 under the 1988 Act. The claimants ordependants of the deceased government employee (employed bythe State of Haryana), however, cannot set up a claim for thesame subject falling under the first part of Rule 5—”pay andallowances”, which are receivable by them from employer (theState) under Rule 5(1) of the 2006 Rules. In that, if the deceasedemployee was to survive the motor accident injury, he would haveremained in employment and earned his regular pay andallowances. Any other interpretation of the said Rules wouldinevitably result in double payment towards the same head of lossof “pay and wages” of the deceased government employeeentailing in grant of bonanza, largesse or source of profit to thedependants/claimants…..

26. Indeed, similar statutory exclusion of claim receivable underthe 2006 Rules is absent. That, however, does not mean that theClaims Tribunal should remain oblivious to the fact that the claimtowards loss of pay and wages of the deceased has already beenor will be compensated by the employer in the form of ex gratiafinancial assistance on compassionate grounds under Rule 5(1).The Claims Tribunal has to adjudicate the claim and determinethe amount of compensation which appears to it to be just. Theamount receivable by the dependants/claimants towards the headof “pay and allowances” in the form of ex gratia financialassistance, therefore, cannot be paid for the second time to theclaimants. True it is, that the 2006 Rules would come into play ifthe government employee dies in harness even due to naturaldeath. At the same time, the 2006 Rules do not expressly enablethe dependants of the deceased government employee to claimsimilar amount from the tortfeasor or insurance company becauseof the accidental death of the deceased government employee.

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SUPREME COURT REPORTS

AThe harmonious approach for determining a just compensationpayable under the 1988 Act, therefore, is to exclude the amountreceived or receivable by the dependants of the deceasedgovernment employee under the 2006 Rules towards the headfinancial assistance equivalent to “pay and other allowances” thatwas last drawn by the deceased government employee in theBnormal course. This is not to say that the amount or paymentreceivable by the dependants of the deceased governmentemployee under Rule 5(1) of the Rules, is the total entitlementunder the head of “loss of income”. So far as the claim towardsloss of future escalation of income and other benefits is concerned,Cif the deceased government employee had survived the accidentcan still be pursued by them in their claim under the 1988 Act.For, it is not covered by the 2006 Rules. Similarly, other benefitsextended to the dependants of the deceased government employeein terms of sub-rule (2) to sub-rule (5) of Rule 5 including familypension, life insurance, provident fund, etc., that must remainDunaffected and cannot be allowed to be deducted, which, anyway would be paid to the dependants of the deceased governmentemployee, applying the principle expounded in Helen C.Rebello v. Maharashtra SRTC, (1999) 1 SCC 90 and UnitedIndia Insurance Co. Ltd. v. Patricia Jean Mahajan, (2002) 6ESCC 281 cases.

27. A priori, the appellants must succeed only to the extent ofamount receivable by the dependants of the deceased governmentemployee in terms of Rule 5(1) of the 2006 Rules, towards financialassistance equivalent to the loss of pay and wages of the deceasedFemployee for the period specified.”

(emphasis supplied)

The learned Judge of the High Court has, however, after advertingto the decision of the same High Court in Ajmero (supra), went on toobserve that 50% of the amount receivable by the legal representativesGof the deceased towards financial assistance under the 2006 Rules isrequired to be deducted from the compensation amount. In the reliedupon decision, the same learned Judge had occasion to observe as follows:- “… However, perusal of the judgment would reveal thatthe Court has not adverted to the issue that had the RulesH

of 2006 extending assistance to family of a deceasedemployee been not in existence, family would have beenentitled to pension to the extent of 50% of the last drawnpay. As per the settled position in law, the pensionary benefitsavailable to family of a deceased employee are not amenable fordeduction for computing loss of dependency. There is nothing onrecord suggestive of the fact that in addition to compassionateassistance under the Rules, family of the deceased is being paidpension till the age of superannuation. Rather Rule 5(2) of the2006 Rules specifically denies family pension as per normalrules...” (emphasis supplied)

17. The view so taken by the High Court is not the correct readingof the decision of three-Judge Bench of this Court in Shashi Sharma(supra) for more than one reason. First, this Court was conscious of thefact that under Rule 5(2) of the 2006 Rules, the family pension receivableby the family would be payable, however, only after the period, duringwhich the financial assistance is received, is completed. In that context,in paragraph 24 of the reported decision, the Court clearly noted that theamount towards family pension cannot be deducted from the claim amountfor determination of a just compensation under the Act. Further, theHigh Court has erroneously assumed that the family of the deceasedwould be entitled for family pension amount immediately after the deathof the deceased employee. That is in the teeth of the scheme of the2006 Rules, in particular Rule 5(2) thereof. The said Rules provide forfinancial assistance on compassionate grounds, as also, other benefits tothe family members of the deceased employee and as a package thereof,Rule 5(2) stipulates that the family pension as per the normal rules wouldbe payable to the family members only after the period of delivery offinancial assistance is completed. The validity of this provision is not putin issue. Suffice it to say that the view taken by the High Court in Ajmero(supra) is a departure from the scheme envisaged by the 2006 Rules, inparticular, Rule 5(2). That cannot be countenanced.

18. As a matter of fact, in the present case, the High Courtcommitted manifest error in assuming that the respondent Nos. 1 and 2would be eligible to receive financial assistance under the 2006 Rules.The eligibility to receive such financial assistance has been spelt out inRule 3 of the 2006 Rules read with the provision of Pension/Family A

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APension Scheme, 1964. It appears that major sons and married daughtersare not included in the definition. However, we need not dilate on thataspect in the present proceedings any further. It has come in the evidenceof Gobind Singh, Clerk in SDM Office (PW-1) that the legalrepresentatives of the deceased have not submitted any request for gettingfinancial assistance till he had deposed. Indeed, respondent No. 1, whoBhad entered the witness box, did depose that they had applied for gettingsalary of their deceased mother. The fact remains that there is no clearevidence on record that respondent Nos. 1 and 2 are held to be eligibleto get financial assistance or in fact, they are getting such financialassistance under the 2006 Rules. The High Court, therefore, instead ofCproviding for deduction of the amount receivable by the legalrepresentatives of the deceased on this count (under the 2006 Rules),from the compensation amount, should have independently determinedthe compensation amount and ordered payment thereof subject to legalrepresentatives of the deceased filing affidavit/declaration before theexecuting Court that they have not received nor would they claim anyDamount towards financial assistance under the 2006 Rules, so as tobecome entitled to withdraw the entire compensation amount.

19. Reverting to the determination of compensation amount, it isnoticed that the Tribunal proceeded to determine the compensationamount on the basis of net-salary drawn by the deceased for the relevantEperiod as Rs.16,918/- per month, while taking note of the fact that hergross-salary was Rs.23,123/- per month (presumably below taxableincome). Concededly, any deduction from the gross-salary other thantax amount cannot be reckoned. In that, the actual salary less tax amountought to have been taken into consideration by the Tribunal for determiningFthe compensation amount, in light of the dictum of the Constitution Benchof this Court in paragraph 59.3 of Pranay Sethi (supra).

20. Similarly, the High Court despite having taken note of thesubmission made by the respondent Nos. 1 and 2 that the deduction forpersonal expenses of the deceased should be reckoned only as one-thirdG(1/3[rd]) amount for determining loss of dependency, maintained thededuction of 50% towards that head as ordered by the Tribunal. ThisCourt in Pranay Sethi (supra), in paragraph 37, adverted to the dictumof this Court in Sarla Verma (Smt.) & Ors. vs. Delhi TransportCorporation & Anr.[5] with approval, wherein it is held that if the dependant family members are 2 to 3, as in this case, the deduction towards personaland living expenses of the deceased should be taken as one-third (1/3[rd]).In other words, the deduction towards personal expenses to the extentof 50% is excessive and not just and proper considering the fact that therespondent Nos. 1 and 2 alongwith their respective families were stayingwith the deceased at the relevant time and were largely dependant onher income.

21. Be that as it may, the Tribunal, for excluding the amountreceived by the deceased as family pension due to demise of her husband,had noted in paragraph 26, as under: - “26. Learned counsel for the claimants further requested that aboutto family pension being drawn by the deceased also be calculatedfor the purpose of assessing the compensation. This contentionand assertion of learned counsel for the claimants does not carryany conviction with the Tribunal because the deceased was gettingfamily pension in her own right as the widow of the deceased andcannot be termed as her income for the purpose of computing theamount of compensation.”

The High Court, without reversing the said finding, proceeded toinclude the amount of Rs.7,000/- per month received by the deceased aspension amount after demise of her husband. We are in agreement withthe view taken by the Tribunal and for the same reason, have to reversethe conclusion recorded by the High Court to include the said amount asloss of dependency. That could not have been taken into account, as thesame was payable only to the deceased being widow and not her incomeas such for the purpose of computing the amount of compensation.

22. Considering the above, respondent Nos. 1 and 2 would beentitled for compensation to be reckoned on the basis of loss ofdependency, due to loss of gross salary (less tax amount, if any) of thedeceased and future prospects and deduction of only one-third (1/3[rd])amount towards personal expenses of the deceased. As regards themultiplier ‘13’ applied by the Tribunal and the High Court, the sameneeds no interference. As a result, on the facts and in the circumstancesof this case, the amount payable towards compensation will have to berecalculated on the following basis: - Loss of dependency due to loss of income calculated atRs.31,26,229.60/- [(Rs.23,123/- x 12 x 13) + (30% future AB

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Aprospects) – (1/3[rd] deduction for personal expenses)]. In addition,the claimants would be entitled for a sum of Rs.70,000/- towardsconventional heads in terms of dictum in paragraph 59.8 of PranaySethi (supra). Thus, a total sum of Rs.31,96,230/- (Rupees thirty-one lakhs ninety-six thousand two hundred thirty only), as roundedoff, is payable to the claimants.B

However, this amount alongwith interest at the rate of 9% perannum from the date of filing of the claim petition till payment, will bepayable subject to the outcome of the application made by the respondentNos. 1 and 2 to the competent authority for grant of financial assistanceunder the 2006 Rules. If that application is allowed and the amountCbecomes payable towards financial assistance under the said Rules tothe specified legal representatives of the deceased, commensurate amountwill have to be deducted from the compensation amount alongwith interestcomponent thereon. The respondent Nos. 1 and 2, therefore, can bepermitted to withdraw the compensation amount only upon filing of anDaffidavit-cum-declaration before the executing Court that they have notreceived nor would claim any amount towards financial assistance underthe 2006 Rules and if already received or to be received in future on thataccount, the amount so received will be disclosed to the executing Court,which will have to be deducted from the compensation amount determinedin terms of this order. The compensation amount, therefore, be paid toEthe respondent Nos. 1 and 2 subject to the above and upon giving anundertaking before the executing Court to indemnify the insurancecompany (appellant) to that extent.

23. The appeals are partly allowed in the aforementioned termswith no order as to costs. Pending interlocutory applications, if any, shallFstand disposed of.

Ankit Gyan

Appeals partly allowed.

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