Jitendra Chauhan, J.
CM No. 7950 CII of 2011 in FAO No. 2304 of 2011
2. For the reasons mentioned in the application, delay of 82 days in filing the appeal is hereby condoned.
3. Application stands disposed of.
Main appeals
4. The present bunch of Appeals has thrown up an interesting but complex proposition of law. This judgment shall dispose of the present bunch of First Appeals (FAO's) preferred by the Insurance Companies against the awards passed by the Ld. MACT's in different claim petitions arising out of respective motor vehicular accidents. It needs to be highlighted that though the awards are separate, having been passed by various MACT's, a common question of law was raised before this Court. Accordingly, the Court deemed it appropriate to dispose off all the FAO's raising a similar question of law, through a common judgment. However, the judgment is being delivered in FAO No. 589 of 2010 (Oriental Insurance Company Limited v. Saroj Devi). Before proceeding with the discussion, a brief resume of the FAO's being disposed off by this common judgment would be relevant.
FAO No. 589 of 2010
5. The Insurance Company has preferred the present appeal against the impugned Award dated 30.10.2009, passed in MACT case No. 115 of 2007, by the learned Motor Accident Claims Tribunal, Bhiwani. In this case, death of ASI Rajender Singh occurred in a motor accident on 21.6.2007 Rajender Singh was Assistant Sub Inspector in Haryana Police and his gross salary was Rs. 14,740/- per month as per Ex. P14, at the time of death. At the time of his death, he was about 43 years of age as per Ex. P15. The claimants i.e wife, daughter and father filed a claim petition, which was allowed by the learned Tribunal vide impugned Award dated 30.10.2009 and awarded the following amounts:
1.
Compensation on account of loss of dependency @ Rs. 60,000/- per annum (dependency taken as Rs. 5000/- per month) with multiplier of 14
Rs. 8,40,000/-
2.
Compensation on account of transportation of dead body and last rites
Rs. 5,000/-
Total
Rs. 8,45,000/-
FAO No. 590 of 2010
6. The Insurance Company has preferred the present appeal against the impugned Award dated 30.10.2009, passed in MACT case No. 85 of 2007, by the learned Motor Accident Claims Tribunal, Bhiwani. In this case, death of HC Satbir Singh Singh occurred in a motor accident on 21.6.2007 Rajender Singh was Head Constable in Haryana Police and his gross salary was Rs. 10,563/- per month, as per Ex. P2, at the time of death. At the time of his death, his age was about 42 years. The claimants i.e wife, daughter, son and father filed a claim petition, which was allowed by the learned Tribunal vide impugned Award dated 30.10.2009 and awarded the following amounts:
1.
Compensation on account of loss of dependency @ Rs. 60,000/- per annum (dependency taken as Rs. 5000/- per month) with multiplier of 14
Rs. 8,40,000/-
2.
Compensation on account of transportation of dead body, last rites and consortium etc.
Rs. 5,000/-
Total
Rs. 8,45,000/-
FAO No. 591 of 2010
7. The Insurance Company has preferred the present appeal against the impugned Award dated 30.10.2009, passed in MACT case No. 87 of 2007, by the learned Motor Accident Claims Tribunal, Bhiwani. In this case, death of Raje Ram occurred in a motor accident on 21.6.2007 Raje Ram was a Sanskrit Teacher in Govt. Girls High School, Duloth Ahir and his gross salary was Rs. 23,405/- per month, as per Ex. P23, at the time of death. His age was about 55 years. The claimants i.e wife, son, daughter and father filed a claim petition, which was allowed by the learned Tribunal vide impugned Award dated 30.10.2009 and awarded the following amounts:
1.
Compensation on account of loss of dependency @ Rs. 96,000/- per annum (dependency taken as Rs. 8000/- per month) with multiplier of 9
Rs. 8,64,000/-
2.
Compensation on account of transportation of dead body, last rites and consortium etc.
Rs. 5,000/-
Total
Rs. 8,69,000/-
Rounded off Rs. 8,70,000/-
8. The Insurance Company has preferred the present appeal against the impugned Award dated 7.1.2010, passed in MACT case No. 202 of 2009, by the learned Motor Accident Claims Tribunal, (FTC), Karnal.
9. In this case, death of HC Satbir Singh occurred in a motor accident on 16.7.2007 Satbir Singh was a Conductor in Haryana Roadways and his carry home was Rs. 10226/- per month, as per Ex. P3, at the time of death. His age was about 50 years. The claimants i.e wife, two sons and one daughter filed a claim petition, which was allowed by the learned Tribunal vide impugned Award dated 7.1.2010, and awarded a sum of Rs. 11,14,926/-.
FAO No. 2304 of 2011
10. The Insurance Company has preferred the pre sent appeal against the impugned Award dated 21.8.2010, passed in MACT case No. 69 of 2009, by the learned Motor Accident Claims Tribunal, Hisar.
11. In this case, death of Narender Pal occurred in a motor accident on 14.10.2008 Narender Pal was a Government JBT Teacher in Haryana Education Department and his carry home salary after deduction was Rs. 9760/- per month, as per Ex. P2, at the time of death. His age was about 36 years. The claimants i.e wife, daughter, son and parents filed a claim petition, which was allowed by the learned Tribunal vide impugned Award dated 30.10.2009 and awarded a sum of Rs. 20,76,400/- (14640 (average salary) × ¾th (dependency) × 12 × 15 (multiplier) + 10000(conventional heads).
FAO No. 1490 of 2010
12. The Insurance Company has preferred the present appeal against the impugned Award dated 22.12.2009, passed in MACT case No. 114 of 2007, by the learned Motor Accident Claims Tribunal, Karnal.
13. In this case, death of Constable Sanjeev Kumar occurred in a motor accident on 9.5.2007 Sanjeev Kumar was Constable in Haryana Police and his gross salary was Rs. 8472/- per month and carry home salary was Rs. 7862/- per month, as per Ex. P1, at the time of death. His age was about 28 years. The claimants i.e parents and two minor sons filed a claim petition, which was allowed by the learned Tribunal vide impugned Award dated 22.12.2009 and awarded a sum of Rs. 17,33,000/-.
MAIN ISSUE
14. The legal issue before the Court is regarding the measure of compensation that an insurance company or an owner is required to pay, in case of a death having been caused by the use of a motor vehicle in a public place, in the face of a compassionate assistance policy formulated by the State (State of Haryana) which enables the claimants i.e deceased's family, to tide over the financial crisis, resulting from the death of the earning member, by providing full salary for a certain number of years (which is determined by the age of the deceased government employee) followed by family pension for the remainder term.
15. As per the Compassionate Assistance Policy i.e Haryana Compassionate Assistance To the Dependants of Deceased Government Employees Rules, 2006, the maximum number of years, for which full last drawn salary is payable to the dependants of the deceased employee, is 15 i.e in those case where the deceased was under the age of 35 years. In case the deceased was in the age group of 35 to 48 years, the period of full salary gets reduced to 12 years or the age of superannuation, whichever is less, had the deceased continued in service and the said period gets further reduced to 7 years or the age of superannuation, whichever is less, in case the deceased had attained the age of 45 years. However, in all scenarios, the period of full last drawn salary is followed by grant of family pension. It would be appropriate to reproduce the text of said Compassionate Assistance Policy/notification in order to appreciate its complete import.
“1. (1) These rules may be called the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006. (2) They shall come into force at once.
2. The object of the rule is to assist the family of a deceased/missing Government employee of Group C and D category, in tiding over the emergent situation, resulting from the loss of bread-earner while in regular service by giving financial assistance.
3. The eligibility to receive financial assistance under these rules shall be as per the provision in the pension/family pension scheme, 1964.
4. An eligible family member of the deceased/missing Government employee shall make an application i Form A for compassionate financial assistance.
5. (1) On the death of any Government employee, the family of the employee would continue to receive as financial assistance a sum equal to the pay and other allowances that was last drawn by the deceased employee in the normal course without raising a specific claim;-
(a) for a period of fifteen years from the date of death of the employee, if the employee at the time of his death had not attained the age of thirty five years;
(b) for a period of twelve years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less, if the employee at the time of his death had attained the age of thirty five years but had not attained the age of forty-eight years;
(c) for a period of seven years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less, if the employee had attained the age of forty five years;
(2) The family shall be eligible to receive family pension as per the normal rules only after the period during which he receives the financial assistance as above is completed.
(3) The family of a deceased Government employee who was in occupation of a Govern-ment residence would continue to retain the residence on payment of normal rent/licence fee for a period of one year from the date of death of the employee.
(4) Within fifteen days from the date of a Government employee, an ex-gratia assistance of twenty five thousand rupees shall be provided to the family of the deceased employee to meet the immediate needs on the loss of the bread earner.
(5) House Rent Allowance shall not be a part of allowance for the purposes of calculation of assistance.”
16. The argument raised on behalf of the Insurance Companies is that once the family of the deceased is provided financial assistance in the form of full salary of the deceased, in practical terms, there is no monetary loss to the dependents and hence, the Insurance Companies cannot be made liable to pay compensation by assessing the salary (annual dependency) and then multiplying it with an appropriate multiplier, as laid down in the schedule of the Act or as per the law down by the Hon'ble Supreme Court in the case of Sarla Verma v. DTC, 2009 (3) R.C.R (Civil) 77 : 2009(3) Recent Apex Judgments (R.A.J) 373 : (2009) 6 SCC 121. This course of action i.e payment of compassionate assistance as well as compensation assessed by applying the principles as laid down in the case of Sarla Verma (supra), in the submission of the Id. Counsel's appearing for the Insurance Companies, would result in twice over benefit to the claimants and the same is not permissible, as has been repeatedly held by the Hon'ble Supreme Court by observing that the death of a person should not result in a bonanza for the dependents. It is further argued that the salary of the deceased employee is to be made the basis only once for rendering financial assistance and using it twice to compute financial assistance would result in undue enrichment, especially keeping in mind that the annual dependency is a pure fiction of law which has been worked out as a welfare measure but not for giving undue benefit. It is further submitted that calculation is to be made, firstly of the financial assistance accruing to the claimants as a result of the compassionate assistance policy and secondly, as per the law laid down in Sarla Verma v. DTC (in case of a claim under section 166 Motor Vehicles Act) or as under section 163 A Motor Vehicles Act (for short ‘the Act) read with 2nd Schedule, as the case may be. After making the said calculations, if the financial assistance (as per the compassionate assistance policy) to be received by the dependents is less than what they are entitled to in view of the law laid down in Sarla Verma v. DTC, in that scenario the Insurance Company or the owner/drivers should be made liable to pay up the short fall. The learned counsels appearing for the Insurance Companies have made a strong pitch for the aforementioned submission stating it to be logical and one which ensures that the claimants don't end up with a monetary bonanza/double benefit. It is also submitted that this matter has already been considered by a Single bench of this Court i.e FAO No. 3432 of 2009 (along with a bunch of 9 FAO's) decided on 29.9.2010 In the said judgment, it has been laid down that the compassionate assistance being received by the dependents must necessarily be deducted from the compensation as assessed by applying the principles of Sarla Verma (supra). Additionally, the Ld. Counsels have also submitted that as per the view taken by the Hon'ble Supreme Court, compassionate assistance or financial assistance accruing to the dependents as a result of the death of the employee in an accident has to be taken into consideration for computing the final compensation under the Motor Vehicles Act proceedings. In support of their submissions, learned Counsel's appearing for the Appellant Insurance Companies have placed reliance on the judgment of the Hon'ble Apex Court namely, BBMB v. Kanta Aggarwal, 2008 (3) R.C.R (Civil) 733 : (2008) 11 SCC 366.
17. On behalf of the claimants, it has been strenuously argued that liability of the Insurance Company to pay assessed compensation is distinct, separate and unconnected with any other form of financial assistance which might be available to the dependents of the deceased. The Compassionate Assistance Policy formulated by the State of Haryana is a service benefit accruing to the dependants of the deceased by virtue of the deceased having put in his labour and hard work in the service of the state affairs. Compassionate assistance is in no manner connected with tiding over of the financial crises resulting to the deceased's family due to an accident only but is a general welfare measure which is available across the board to the family of all deceased employees who die in harness, irrespective of the cause of death. It is further submitted that the In-surance Companies cannot, by any stretch of logic, be permitted to get their liability excused because the deceased's family is also entitled to financial assistance from an alternative source. The liability of the Insurance Company is statutory and contractual whereas compassionate assistance results from employer-employee relationship. The two can not be reconciled and hence have to charter their own course.
18. Learned Counsels appearing for the State of Haryana have also argued that the Insurance Companies cannot derive any advantage from the compassionate assistance policy in as much as compassionate assistance coming from the State is by virtue of employer-employee relationship manifested in the form of Compassionate Assistance Rules, 2006 whereas the liability of the insurance company is arising in a totally different context i.e by virtue of a contract, under the law of indemnity. It is further contended that compensation payable under the Motor Vehicles Act is statutory and has no correlation with the amount received as a part of compassionate assistance. It is submitted that in case of a life insurance policy, the sum assured would payable to the LR's of the insured, in the event of his death (whether accidental or natural death) and even where the death does not occur, to the insured himself at the time of maturity of the policy. This advantage, the insured derives from the fact that he pays premium for the stipulated period. Drawing an analogy from this, it is contended that pecuniary benefit by way of compassionate assistance is a result of the labour already put in by the employee and which he would have earned, had he not died. In other words, compassionate assistance works quite much like a life insurance policy and hence cannot be taken into consideration for the purposes of deduction from the compensation as assessed under Motor Vehicles Act. In support of their submissions, the learned State counsel's rely on Helen C. Rebello v. M.S.R.T.C, 1998 (4) RCR (Civil) 177 and UIIC v. Patricia Jean Mahajan, (2002 (3) RCR (Civil) 534). It is still further contended that there is no clause in the insurance policy that in case the claimant is to get any benefit under the social security scheme, the said amount is to be deducted while awarding compensation to the LRs' of the deceased.
19. I have given my thoughtful consideration to the arguments addressed on behalf of the parties.
20. The liability of the Insurance Company arises from a contract in which it promises to indemnify the insured in case of a damage arising to a third party due to his act. Such a liability can either be waived off by the insured himself or can be excused, in case there is a violation of the terms/conditions of the contract by virtue of which the insurer promises to indemnify. Law does not recognize a third situation where the insurer can get away with his responsibility to pay the damages on behalf of the insured. The issue that arises in the present Appeals is whether the insurance companies and the owners/drivers of the offending vehicles, which includes drivers with invalid or fake driving license, can be allowed to get their liability reduced or excused in certain exceptional cases because of a benevolent act of an unconnected third party, which in these Appeals happens to be the State of Haryana. If the argument advanced on behalf of the Insurance Companies is to be accepted in totality, it would negate the purpose of section 163-A or section 166 of the Act. This fact can be established by hypothesizing two different situations.
21. In the first hypothesis, we presume that the deceased was a new entrant in the service of the Government and was unmarried, say in the age group of 26 - 30 years, which is the usual age of entry to a government job. It has been repeatedly held by the Hon'ble Apex Court that in case of an unmarried deceased, it is the age of the claimants which is to be considered for the purpose of applying the appropriate multiplier. In all probability, the claimants would be the parents who would be in the age group of 55 - 65 years, for which the multiplier would range from 11 - 9, as per Sarla Verma v. DTC (supra). However, as per the compassionate policy assistance, the family of such a deceased employee would get his full last drawn salary for 15 years and they would also be entitled to family pension for the period thereafter. If the contention of the learned Counsels appearing for the insurance companies (which has been reproduced above) is applied in such a fact situation, there would not be any shortfall between the compassionate assistance and compensation as worked out under the guidelines of Sarla Verma's case. The real effect would be that insurance companies or the owner and/or driver of the vehicle will not be required to pay anything and their liability will get excused.
Example:
As per Compassionate Assistance Policy:
22. If salary is Rs. 25,000/-, deceased is unmarried and below 35 years of age, full last drawn salary will be given for 15 years to the dependents.
23. Compassionate assistance works out to - 25000 × 12 × 15 = Rs. 45,00,000/- (forty five lakhs). In addition, family pension will also be granted.
As per Sarla Verma:
50% increase in salary since age less than 40 years - Rs. 37,500/- (Rs. 25,000/- plus 50%)
Dependency half (since unmarried) Rs. 37,500/2 = Rs. 18750
Annual dependency comes to - Rs. 18,750 × 12 = Rs. 2,25,000/- (Rs. Two lakhs and twenty five thousand)
Multiplier would be, say 9 - 2,25,000 × 9 = Rs. 20,25,000/- (rupees twenty lakhs and twenty five thousand) will be the total compensation (in addition, compensation under conventional heads can be granted for which Rs. 40,000/- may be added).
24. In the second hypothesis, let us presume that the employer has taken out a life insurance cover on the deceased employee or under the Group Insurance Scheme, say from LIC (Life Insurance Corporation). On the death of the employee/deceased, the dependents would get the benefit of that life insurance policy. In such a fact situation, can the Insurance Companies submit that the compensation worked out under section 166 of the Act should take into account the amount given to the dependents under the life insurance policy or group insurance scheme for which a separate contract has been entered into and premium/contributions paid? In the opinion of the Court, such an argument, if accepted would negate not only the principle underlying Section 166 of the Act, but also the purpose of insurance policy. Financial assistance from the insurance cover is a service benefit resulting from employer-employee relationship and not a part of compensation as assessed by law. Then why should the fortuitous circumstance of alternative financial assistance scheme coming from the state government make such a big difference so as to excuse the insurance company of their liability? In the opinion of this Court, if the argument advanced on behalf of the insurance companies is accepted in totality, it would result in obvious injustice and law taking a retrograde step. Not only will it be a step backward but will also be a discouragement for the governments for formulating such welfare measures in the future. In addition, it will send a patently wrong signal to the thousands of reckless and rash drivers out on the Indian roads.
25. There is another relevant issue which must be highlighted. In a case where the offending vehicle is uninsured or where the insurance policy becomes void due the reason of the driver either having an invalid driving license or a fake driving license, the liability would fall on the owner and/or the driver. However, if the aforementioned contention of the Appellants is to be accepted, the same would result in even the owner/driver of the offending vehicles getting away without paying a single penny as compensation. This would be feeding and encouraging misconduct as well as perpetuating illegality.
26. Learned Counsels appearing for the Appellant - Insurance Companies have placed strong reliance on the observations of Hon'ble the Supreme Court in BBMB v. Kanta Aggarwal (supra) wherein it has been held that the benefits which the claimant receives on account of the death or injury have to be duly considered while fixing the compensation.
27. In the afore-cited case of BBMB v. Kanta Aggarwal, widow of the deceased was given compassionate appointment and the facility of free residence. These two factors were held relevant by the Hon'ble Apex Court for determining the final compensation under the Motor Vehicles Act proceedings. However, it must be appreciated that before arriving at the above conclusion, the Hon'ble Apex Court scanned the entire law on the subject and made certain crucial observations before finally basing its conclusion. It would be appropriate to consider the ratio of the law laid down in BBMB v. Kanta Aggarwal in the backdrop of the observations made therein (referring to previous decision of the Hon'ble Supreme Court) by the Hon'ble Supreme Court.
28. The first such crucial observation of Hon'ble the Supreme Court appears in Para 7 of the judgment in which, while discussing an earlier decision of Hon'ble the Supreme Court in United India Insurance Company Ltd. v. Patricia Jean Mahajan, 2002 (3) RCR (Civil) 534 : (2002) 6 SCC 281, the Hon'ble Court states that “…..deductions are admissible from the amount of compensation in case of the claimant receives the benefit as a consequence of injuries sustained which otherwise he would not have been entitled to. It does not cover cases where the payment received is not dependent upon an injury sustained on meeting with an accident.” At this stage of the discussion it would be relevant to highlight the object of the Compassionate Assistance Rules framed by the State of Haryana. Rule 2 of the said Rules (which have been reproduced above) clearly states that ‘the object of the rule is to assist the family of a deceased/missing Government employee of Group C and D category, in tiding over the emergent situation, resulting from the loss of bread earner while in regular service by giving financial assistance’. A bare perusal of the said ‘object’ would reveal that financial assistance through the Compassionate Assistance Rules is not dependant upon the death of an employee arising out of an accident only. This benefit is available across the board to any employee who dies in harness. Infact, even death of a serving employee is not a precondition for the grant of compassionate assistance as such assistance is to be given even in case of a missing employee. The financial assistance as envisaged under the Rules of 2006 has absolutely no correlation with manner in which the death occurs and is not in the least intended to cover cases of motor vehicle accident death. The obvious corollary is that the ‘object’ of Compassionate Assistance Rules, as stated in Rule 2 above, clearly brings the said financial assistance within the purview of the exception carved out in the case of Patricia Jean Mahajan (supra) and which has been highlighted immediately above.
29. While referring to the decision of Hon'ble Supreme Court in Helen C. Rebello v. Maharahtra State Road Transport Corporation, 1998 (4) RCR (Civil) 177 : (1999) 1 SCC 90, in Para 9 of its judgment (i.e in BBMB v. Kanta Aggarwal), the Hon'ble Supreme Court made a specific reference to paras 32 to 34 of the judgment in Helen C. Rebello's case (supra). In the said case, the Hon'ble Supreme Court, in para 33, categorically holds as under:
“33. Thus, it would not include that which the claimant receives on account of other forms of deaths, which he would have received even apart from accidental death. Thus, such pecuniary advantage would have no correlation to the accidental death for which compensation is computed. Any amount received or receivable not only on account of the accidental death but that which would have come to the claimant even otherwise could not be construed to be the pecuniary advantage, liable for deduction…”
30. The aforesaid observation of the Hon'ble Supreme Court clearly declares that the financial assistance coming to the claimants which cannot be solely traced to the effect of a motor vehicle accident death, cannot be considered for deduction while computing the compensation under the Motor Vehicles Act.
31. I would also like to draw support from the observations of the Hon'ble Supreme Court in Helen C. Rebello's case (supra) made in para 34 of its judgment, which has also been reproduced and referred to by the Hon'ble Supreme Court in the judgment delivered in BBMB v. Kanta Aggarwal. In Para 34 Helen C. Rebello's case (supra), the Hon'ble Supreme Court observes as under:
“How can an amount of loss and gain of one contract be made applicable to the loss and gain of another contract. Similarly, how an amount receivable under a statute has any correlation with an amount earned by an individual.”
32. In the line of reasoning adopted by the Hon'ble Supreme Court, this Court declares that the Insurance Companies cannot get their liability excused or reduced because the deceased's family is also entitled to financial assistance from an alternative source which is accruing only by reason of the death of the deceased and not because he died in a motor vehicle accident. Drawing an analogy from the aforesaid observation of the Hon'ble Apex Court, when liability of the Insurance Company arises from a specific type of contract i.e contract of indemnity, how can they be permitted to take benefit of compassionate assistance which results from employer-employee relationship and which is a right accruing by virtue of a welfare legislation (subordinate legislation).
33. In Perry v. Cleaver, 1970 AC 1, it was observed that “it would be revolting to the ordinary man's sense of justice, and therefore contrary to public policy, that the sufferer should have his damages reduced so that he would gain nothing from the benevolence of his friends or relations or of the public at large.” Having regard to this observation of the House of Lords, I find it strange to conclude that a gratuitous payment coming from a private source should have no bearing on the assessment of compensation but if the same comes though State, it should be taken into consideration? Still further, in any State, whether a welfare state or not, it is the primary responsibility of the Government to look after its citizens. Then why, if the Government steps in to provide a benefit to the dependants of the deceased who was employed in the conduct its affairs and who had a role to play in the working of the entire official machinery, should such a benefit be taken into consideration at all for reduction of damages suffered by the claimants of the deceased or the injured, for that matter? In my understanding, even the aforementioned observation of House of Lords includes the possibility of State assistance when it uses the term “public at large”.
34. In Liffen v. Watson, (1940) 1 KB 556 (CA), gratuitous payments made by the master of a domestic servant as well as free board and lodging during the period when she was not able to continue in her employment due to injuries were held not deductible from compensation payable by the tortfeasor. The principle of law that I would derive from the afore-stated decision is that benefits accruing to an injured or the claimants by virtue of master-servant relation-ship are not liable for deduction. The same principle when applied to the facts of the present cases would clearly bring us to the conclusion that the State, in its capacity of a Master, can provide certain benefits to its employees/servants which can not be taken into consideration for deductions from the damages assessed by a court of law. Our own High Court, in Amarjit Kaur v. State of Punjab, 1993 (3) R.C.R (Criminal) 559 : 1993 (3) PLR 27, has held that compassionate appointment is irrelevant for computation of compensation for death in motor accidents. If compassionate employment can not be taken into consideration for deductions from assessed damages, why should compassionate assistance be taken into consideration for the same purpose?
35. However though, the overarching principle of balancing the loss and gains, as a result of the accidental death, remains the guiding principle for deciding the issue at hand. In the opinion of this Court, the present conflict has arisen because the compassionate assistance as well as the compensation assessed by applying the guidelines of Sarla Verma's case (in a claim case under section 166) or 163A of Act treat the ‘salary’ of the deceased as the benchmark. The primary concern of the Insurance Companies is to ensure that the claimants should not derive double benefit. The concern of the Court, however, is to ensure that the Insurance Companies or owners and drivers of offending vehicles do not get away with their liability to pay compensation. In order to address these concerns, the Court proposes to further develop the principle of calculation as advocated by the Ld. Counsels appearing for the Appellant - Insurance Companies, which in its present form will result in injustice in certain cases, as has already been explained above.
36. The reworking of the calculation will involve 2 steps but with modifications. In the first step, notional age of the deceased will be worked out by adding the actual age of the deceased with the number of years for which his family would be getting last drawn salary. In the second step, the notional age so arrived at will be made the basis for working out the assessed salary (dependency) and multiplier, as per the law lad down in Sarla Verma's case.
Example:
FIRST STEP—
Working out the Notional Age of the deceased:
37. If salary is Rs. 25,000/-, deceased is unmarried and below 35 years of age (lets take his age to be 34 years), full last drawn salary will be given for 15 years to the dependents as per the Haryana Compassionate Assistance To the Dependants of Deceased Government Employees Rules, 2006. The actual age of the deceased should be added with the number of years for which full salary is to be given i.e 34 years + 15 years = 49 years.
SECOND STEP—
38. This figure of 49 years should then be made the basis for assessing the compensation as per Sarla Verma's judgment. If the age of the claim ants is more than this figure, age of the claimants is to be taken into consideration for applying the multiplier as per NIC v. Shyam Singh, 2012 (1) AICJ 264 : 2011(4) PLR 112.
As per Sarla Verma :
30% increase in salary if age of deceased (notional age) is taken as basis, since it is less than 50 years - Rs. 32,500/- (Rs. 25,000 plus 30%)
Dependency ½ (presuming to be unmarried) Rs. 32,500/3 = Rs. 16,250/- Annual depend-ency comes to - 16,250 × 12 = Rs. 1,95,000 (Rs. One lakh and ninety five thousand)
39. Multiplier would be 9 (taking age of parents/claimants as basis) - this multiplier should be broken into two parts, in case the multiplier spills over to age beyond 58 years. The first part should cover the number of years for which he would have been in service i.e in this example, for 9 years, taking the age of retirement to be 58 years. Dependency should be then assessed for this part on the bass of assessed salary.
40. Dependency for 9 years - 1,95,000 × 9 = Rs. 17,55,000/- (Rupees Seventeen Lakhs and fifty five thousand)
41. The remainder of multiplier, if any, should be applied for working out the compensation as pension period i.e 50% of the last drawn salary as pension (last drawn salary arrived at as per Sarla Verma's case on the notional age), since the multiplier for the period beyond 58 years (the age of superannuation) can not be treated as full salary period and has to be treated as the period during which the deceased would have drawn pension. The above stated mode of calculation shall now be applied to the facts of the present appeals. In view of the above, the following compensation is determined in these appeals.
42. In FAO No. 589 of 2010, the learned Tribunal has assessed the income of the deceased as Rs. 9,000/- per month, after making presumptive deductions under GPF, GIS and Income tax. However, it is relevant to mention here that the deduction made by the learned Tribunal is not correct. The gross salary of the deceased, as per the Salary Certificate Ex. P14, does not cross the income tax exemption limit keeping in mind that the deceased would have made savings as permitted under the income tax rules. The deduction towards GPF and GIS, being the personal savings of the deceased should not have been deducted from the salary. Hence, this Court is inclined to take the salary of the deceased as per the Salary Certificate Ex. P14 i.e Rs. 14,740/- per month.
In FAO No. 589 of 2010
1
2
3
4
6
7
8
9
10
Monthly income in Rupees).
Actual age of the deceased
Notional age (Actual age of the deceased+the number of years of full last drawn salary as per Compassionate Rules)
Increase in future Income as per Sarla Verma
Annual dependency
Multiplier as per Sarla Verma (to be broken into 2 parts if multiplier spills over the age of 58 yrs. Before + after superannuation)
Compensation for full Salary period i.e upto 58 yrs. (rounded off)
Compensation for Pension Period i.e after 58 years (rounded off)
Total compensation : (column 8+column 9 +conventional heads i.e Rs. 20,000)
14740
43
43+12 = 55
Nil
⅔rd × 12
11(3+8)
353700
471600
8,45,300
In FAO No. 590 of 2010
10563
42
42+12=54
Nil
⅔rd × 12
11(4+7)
338000
2,95,700
6,53,700
In FAO No. 591 of 2010
17405
55
55+3=58
Nil
⅔rd × 12
9
Nil
6,26,600
6,46,600
In FAO No. 4710 of 2010
10226
50
50+7=57
Nil
⅔rd × 12
9 (1+8)
81800
3,27,200
4,29,000
In FAO No. 2304 of 2011
(after I.T Deduction) 16598
36
36+12=48
30%
¾th × 12
13 (10+3)
19,41,900
2,91,300
22,53,200
In FAO No. 1490 of 2010
8472
28
28+15=43
30%
⅔rd × 12
14
12,33,500
Nil
12,53,500
43. In FAO No. 590 of 2010, the learned Tribunal has assessed the income of the deceased as Rs. 7603/- per month after deductions, whereas the gross salary as per salary certificate Ex. P2 was Rs. 10563/-. However, it is relevant to mention here that the deduction made by the learned Tribunal is not correct. The gross salary of the deceased, as per the Salary Certificate Ex. P2, does not cross the income tax exemption limit keeping in mind that the deceased would have made savings as permitted under the income tax rules. Hence, this Court is inclined to take the salary of the deceased as per the Salary Certificate Ex. P2 i.e Rs. 10563/- per month. In FAO No. 591 of 2010, the learned Tribunal has assessed the income of the deceased as Rs. 12000/- per month after making presumptive deductions. It is relevant to mention here that the deduction made by the learned Tribunal is not correct. The gross salary of the deceased, as per the Salary Certificate Ex. P23, was Rs. 23405/-, which is proved on record. However, the learned Tribunal has given undue weight-age to the averments in the petition, relating to the salary according to which the salary of the deceased was Rs. 17908/- per month. The learned Tribunal erred in brushing aside the salary certificate, which was substantive piece of evidence and which has to take precedence over the averments made in the petition. Therefore, this Court is inclined to take the salary of the deceased as Rs. 23405/- per month. However, since no deductions have been mentioned in the salary certificate, the deduction applied by the learned Tribunal i.e Rs. 5000/- is retained and the monthly assessed salary is taken to be Rs. 17405/-.
44. In FAO No. 2304 of 2011, the learned Tribunel has awarded a sum of Rs. 8,45,000. As per the salary Certificate Ex. P2, which was given under the seal of Principal of Govt. Senior Secondary School, Pali (Hisar), the Basic Pay of the deceased Narinder Pal Singh, in September, 2008, was Rs. 14,760/- and gross salary was Rs. 19,098/- inclusive of HRA, DA and Medical Allowance. However, in the cross-examination of Mahesh Kumar, Clerk, PW2, it has come on record that the deceased had drawn Rs. 9760/- as his last Salary in September, 2008. He further submitted that as per the revision of pay scale in accordance with the recommendations of 6th Pay Commission, the salary of the deceased was increased to Rs. 19098/- as has been reflected in the Salary Certificate Ex. P2. However, the learned Tribunal rushed aside the salary certificate Ex. P2 and instead assessed the monthly salary of the deceased by taking the average of actual last drawn salary i.e Rs. 9760 and an imaginary amount of Rs. 19,520/- by presuming that the salary of the deceased would have reached this figure by the time of his retirement. This course of action is totally impermissible. The appropriate mode should have been to place reliance on Ex. P2, the salary certificate of the deceased, especially since it was duly proved before the Tribunal. Accordingly, this Court is inclined to assess the salary of the deceased as Rs. 19098/- per month. Since the gross annual salary of the deceased was Rs. 2,29,176/-, which was beyond the tax exemption limit in the year 2008, it would be reasonable to assume that the deceased would have made atleast 50% of the permissible savings as per income tax law. The remainder amount shall be treated as income tax deducted at source i.e approximately Rs. 2500/- per month.
45. In FAO No. 589 of 2010, the learned Tribunal has awarded a sum of Rs. 8,45,000/-. However, in view of assessment of compensation made above, the claimants shall be entitled to Rs. 8,45,300/-. Since, the enhancement is nominal, therefore, this figure should be read as Rs. 8,45,000. Accordingly, the Insurance Company shall not be liable to pay any enhanced amount to the claimants.
46. In FAO No. 590 of 2010, the learned Tribunal has awarded a sum of Rs. 8,45,000/-. However, in view of assessment of compensation made above, the claimants shall be entitled to Rs. 6,53,700/-. The balance amount i.e Rs. 8,45,000 - 6,53,700 = 1,91,300/-, if already paid, shall not be recovered from the claimants.
47. In FAO No. 591 of 2010, the learned Tribunal has awarded a sum of Rs. 8,70,000/-. However, in view of assessment of compensation made above, the claimants shall be entitled to Rs. 6,46,600/-. The balance amount i.e Rs. 8,70,000 - 6,46,600 = 2,23,400/-, if already paid, shall not be recovered from the claimants.
48. In FAO No. 4710 of 2010, the learned Tribunal has awarded a sum of Rs. 11,14,926/-. However, in view of assessment of compensation made above, the claimants shall be entitled to Rs. 4,29,000/-. The balance amount i.e Rs. 11,14,926- 4,29,000 = 6,85,926/-, if already paid, shall not be recovered from the claimants.
49. In FAO No. 2304 of 2011, the learned Tribunal has awarded a sum of Rs. 20,76,400. However, in view of assessment of compensation made above, the claimants shall be entitled to Rs. 22,53,200/-. The balance amount i.e Rs. 1,76,800/- (22,53,200 - 20,76,400 (already awarded by the learned Tribunal), shall be paid to the claimants, in the manner indicated in the impugned Award, within 45 days from the date of receipt of the certified copy of the judgment, failing which, the same shall be carry interest @7.5% per annum from the date of the filing of the appeal, till its realization.
50. In FAO No. 1490 of 2010, the learned Tribunal has awarded a sum of Rs. 17,33,000/-. How-ever, in view of assessment of compensation made above, the claimants shall be entitled to Rs. 12,53,500/-. The balance amount i.e Rs. 17,33,000- 12,53,500 = 4,79,500/-, if already paid, shall not be recovered from the claimants.
51. Every law framed by the State has an ‘Object’ attached to it because law is never created in vacuum. In order to achieve a particular Object, a reasoning or justification is required as to why the ‘Object’ is sought to be achieved. I believe that the scheme of compassionate assistance is in recognition of the services already put in the discharge of the affairs of the government and a further recognition that the deceased would have continued to perform his services diligently but for his demise. I am even inclined to hold that the compassionate assistance coming from the State is itself a form of deferred wage, which the deceased employee has earned by putting in his labour and effort in the service of the State. I, therefore, hold that financial assistance under the Compassionate Assistance Rules and the compensation as assessed under the relevant provisions of Motor Vehicles Act are mutually exclusive and have no reciprocal bearing on the quantum as arrived at under the respective heads. Accordingly, I hold that the Insurance Companies are liable under the terms of their contract with the insured, independent of the financial assistance as received under State compassionate assistance policy, to pay the compensation as assessed by the learned Tribunals under section 166 or 163 A of the Motor Vehicles Act, except to the extent worked out in accordance with the formulae as detailed herein above.
52. As a sequel to the above discussion, the present appeals are disposed of and the impugned awards of the respective Tribunals are modified to the above extent.
Appeal disposed of.