Punjab-Haryana High Court
Date Of Decision: December 2 vs Purnima And Others on 21 December, 2012
Author: A.K. Sikri
Bench: A.K. Sikri, Rakesh Kumar Jain
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
1. F.A.O No.1322 of 2010 (O&M)
DATE OF DECISION: December 21, 2012
Reliance General Insurance Company Limited
.....Appellant
versus
Purnima and others
.....Respondents
2. F.A.O No.1326 of 2010 (O&M)
New India Assurance Company Limited
.....Appellant
versus
Mahindro Kumari and others
.....Respondents
3. F.A.O No.3520 of 2010 (O&M)
Purnima and others
.....Appellants
versus
Kapoor Singh and others
.....Respondents
4. F.A.O No.1407 of 2010 (O&M)
National Insurance Company Ltd.
.....Appellant
versus
Smt.Sonu Sharma and others
.....Respondents
5. F.A.O No.4569 of 2010 (O&M)
Mahindro Kumari and others
.....Appellants
versus
Siya Ram and others
.....Respondents
FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -2-
CORAM:- HON'BLE MR.JUSTICE A.K. SIKRI, CHIEF JUSTICE
HON'BLE MR. JUSTICE RAKESH KUMAR JAIN, JUDGE
Present: Mr.Subhash Goyal, Advocate for the appellant
in FAO-1322-2010
Mr.L.M. Suri, Senior Advocate with
Mr.Neeraj Khanna, Advocate for appellant in
FAO-1407-2010
Mr.Ashwani Talwar, Advocate for the appellant in
FAO-1326-2010
Mr.Ashit Malik, Advocate for appellants in FAO-3520-2010
Mr.Manav Bajaj, Advocate for
Mr.Sumeet Goel, Advocate for respondents No.5 & 6 in
FAO-1326-2010
Ms.Vandana Malhotra, Advocate for Reliance General
Insurance Company in FAO-3520-2010
..
A.K. SIKRI, C.J.:
1. These five appeals are placed for the decision of the Division Bench by the learned Single Judge vide orders dated July 23, 2012. The said self-speaking order of the learned Single Judge discloses the necessity of hearing cases by the Division Bench and, therefore, we would like to reproduce that order in its entirety:-
"Out of these bunch cases of five appeals, two have been preferred by claimants seeking enhancement of compensation and others by insurance company impugning the award on the ground that compensation granted is on the higher side. Learned counsel for the parties submit that two coordinate benches of this court have taken two different views in the matter. In the judgment reported as New India Assurance Co. Ltd. vs. Smt. Santosh & others, 2010 (4) PLR 780, it has been held that the amount of compensation received from the government under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006, would be deducted from the total compensation determined. Operative part of the said judgment being as under:-
"...I would, therefore, take the actual benefit, which obtains to the claimants through the Government scheme and deduct it from the amount, which would become payable if we apply the formula in Sarla Verma that takes due notice of an estimation for future increase and an application of multiplier appropriate to the age. The difference in the FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -3- amount is the amount of compensation that will become payable."
In another judgment, however, reported as Oriental Insurance Company Ltd. vs. Saroj Devi and others, 2012 (1) PLR 761, it has been held as follows:-
"I, therefore, hold that financial assistance under the Compassionate 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."
It is, thus, evident that in the judgment in Saroj Devi's case (supra), financial assistance under the policy and the Act has been taken to be mutually exclusive. However, a formula has been adopted for computing compensation in such cases. While counsel for the claimants would urge that ratio of the law laid down in Saroj Devi's case (supra) should be followed, insurance company wants this court to proceed on the basis of judgment rendered in Santosh & others (supra).
In view of the importance of the question involved and somewhat different views taken by two Single Benches, it appears that matter needs to be settled by reference to a Larger Bench.
Be placed before Hon'ble the Acting Chief Justice for appropriate orders.
A photo copy of this order be placed on the files of the connected cases."
2. What follows from the reading of the aforesaid order is that the question that needs to be determined is: "Whether the compensation received from the government under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 (or otherwise) is to be deducted from the total compensation, which is payable to the dependents of the deceased, who dies in an accident, while computing financial benefits through ex-gratia payments by the government. In Smt. Santosh (supra), a learned Single Judge has answered in affirmative, whereas, another single Judge in Saroj Devi (supra) has taken a contrary view. It would, therefore, be FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -4- apposite to go into the reasons given by the two learned Judges, in support of their respective conclusions.
3. Government of Haryana has published notification dated 1.8.2006 promulgating the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006. Under these rules, financial assistance is given to assist the families of deceased/missing Government employees of Group A, B, C & D category in tiding over the emergent situation, resulting from the loss of the bread-earner while in regular service. These rules are reproduced in toto hereunder:-
"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;
FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -5- (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 Government 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."
Since the claimants in the present cases had received financial assistance, under the aforesaid rules, from the Haryana Government, in that context, question arose as to whether insurance company (or for that matter owner of the vehicle) can seek deduction of the said financial assistance while paying compensation to the claimants under the provisions of the Motor Vehicles Act.
4. In Smt.Santosh (supra) while ruling in favour of the Insurance Company, the learned Single Judge relied upon the judgment of the Supreme Court in Bhakra Beas Management Board vs. Kanta Aggarwal, (2008) 11 SCC 366. The rationale given by learned Single Judge is found in para-7 and 8 thereof which makes the following reading:-
"VI. Contentions examined in the light of court decisions
7. The most significant pronouncement on the relevance of the benefit obtained to the representatives of the deceased has come through the judgment of the Hon'ble Supreme Court in Bhakra Beas Management Board Vs. Kanta Aggarwal 2008(11) SCC 366. In that case the claimant lost her husband in a motor accident. She had been given compassionate appointment through which she received a monthly salary of Rs.4700/- and was also provided accommodation. The Tribunal took this to be totally irrelevant and determined a compensation of Rs.8,48,160/- plus interest @9%. The death had taken place 14 years before the adjudication came to Hon'ble Supreme Court and at the time of admission of the SLP, an amount of Rs.5,00,000/- had been directed to be deposited. The contention on behalf of the Bhakra Beas Management Board, which had been directed to give the compensation was that the compassionate appointment provided to the wife and free accommodation which had been given to her must have been taken due notice of. Reliance was FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -6- made on the earlier judgment of the Hon'ble Supreme Court in United India Insurance Co. Ltd. Vs. Patricia Jean Mahajan 2002 (6) SCC 281 and still earlier ruling in Gobald Motor Service Ltd.
Vs. R.M.K. Veluswami AIR 1962 Supreme Court 1. The judgment traversed the reasoning in Gobald Motor Service Ltd's case (supra), which obtained the benefit of observations of House of Lords in Davies Vs. Powell Duffryn Associated Collieries Ltd. 1942(1) All England Law Reporter 657, which said " the general rule, which has always prevailed in regard to assessment of damages and a Fatal Accidents Act is well settled, namely, that any benefit accruing to a dependent by reason of the relevant death must be taken into account. Under those Acts, the balance of loss and gain to a dependent by the death must be ascertained, the position of each dependent being considered separately." The basis was observed by the House of Lords as "The damages are to be based on the reasonable expectation of pecuniary benefit or benefit reducible to money value. In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered...... The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which from whatever source comes to him by reason of the death." These observations had been reiterated in subsequent pronouncements of the Hon'ble Supreme Court in Sheikhupura Transport Co. Ltd. Vs. Northerin India Transporters' Ins. Co. Ltd. 1971 (1) SCC 785 and General Manager, Kerala State Road Trans. Corpn. Vs. Susamma Thomas 1994(2) SCC 176. The principle of balance of loss and gain so as to arrive at a just and fair amount of compensation has thus been accepted by the Hon'ble Supreme Corut and expected to be followed by all Courts as well. A still later decision of the House of Lords in Hodgson Vs. Trapp (1988) 3 All ER 870 gave a fuller expression to the same idea in the following observations:-
"...The basic rule is that it is the net consequential loss and expense which the Court must measure, if, in consequence of the injuries sustained, the plaintiff has enjoyed receipts to which he would not otherwise have been entitled, prima facie, those receipts are to be set agaisnt the aggregate of the plaintiff's losses and expenses in arriving at the measure of his damages. All this is elementary and has been said over and over again. To this basic rule there are, of course, certain well established, though not always precisely defined and delineated, exceptions..... It is the rule which is fundamental and axiomatic and exceptions to it which are only to be admitted on grounds which clearly justify their treatment as such."
VII. Balancing of loss of benefit that would have accrued with benefit that will accrue to representative by reason of death; with exceptions
8. The general principle of estimating damages shall be by balancing of what is the loss to the claimants of the future pecuniary benefits that would accrue to a person if he had not died, with the pecuniary advantage from whichever source it comes. At common law, the balancing act would always be invoked while determining the compensation payable to victims of motor accident claims. This was set in Helen C. Rebello Vs. Maharashtra State Road Trans. Corpn. 1999 (1) SCC 90 as a guiding principle for determining compensation and still later dealt with in great detail by the Hon'ble Supreme Court in United India Insurance Co. Ltd. Vs. Patricia Jean Mahajan and others 2002(6) FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -7- SCC 281. Having set down the law, the Hon'ble Supreme Court, in Patricia Jean Mahajan's case, dealt with the exceptions which we have referred to above. It said only the receipts which have correlation with the accidental death would be deductible and amounts received by the dependents on account of insurance policy of the deceased or amounts received by them under social security system, which would have come to them even without reference to death would have no such correlation with the accidental death and hence would not be deductible. The reasoning is obvious. The amount that a person obtains by way of terminal benefits or pension are all methods of deferred payment of wages. It is a consideration for the service already rendered which stand accrued to the estate of the deceased and therefore, they cannot be permitted to be deducted on the death of the person. In matters of insurance, for instance, it is the payment for the premium periodically, which would make possible a return of lump sum on the happening of the event mentioned in the policy. In the case of payments under the social security system, the Court found in Patricia Jean Mahajan that as a matter of fact, they were again returns secured to the family for periodical contributions made and some deductions made from the salary during the life time. Amounts that come by way of recompense or a consideration for some service were found not to be related to the death and therefore, found not deductible. "
5. The learned Single Judge has clarified that pure gratuitous payments received by the claimants are not to be deducted. Likewise, returns as deferred wages or for self-service rendered would fall within the category of impermissible deductions. Caveat thereto is added by holding that even if a particular payment of benefit is termed as gratuitous but is specifically enforceable is deductible. This is so held in para-11 in the following manner:-
"X. Gratuitous Payments or benefits, though termed as such, but are specifically enforceable are a different genre and hence ought to obtain different treatment
11. Payments or benefits on a statutory basis or under a scheme which could be legally enforced by the legal representative ought to receive a different treatment for, after all, we are trying to re- create a situation of what the deceased would have done to the family of dependents if he had continued to live. In an injury case in Tamil Nadu State Transport Corporation v Natarajan (2003) 6 SCC 137, even a compassionate appointment received by a workman was held to be a relevant factor to scale down the claim for compensation against an employer to the extent to which the liability was apportioned on the latter. In Bhakra-Beas Management Board v Kanta Aggarwal (2008) 11 SCC 366 the fact that the wife was given compassionate appointment and also provided with accommodation was taken into consideration to scale down the extent of entitlement, although not taken as completely wiping out the claim. In UK also, the law favors deductions which have an element of enforceability. As opposed to 'public benevolence in the shape of various un-covenanted benefits from the Welfare FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -8- State', benefits which are earned by the public through their contributions go into reckoning while assessing compensation. Even free medical treatment provided under National Health Service, is taken as relevant to deny medical expenses for injuries which an injured claimant would never have incurred while availing the benefits under NHS (West v Shephard (1964) AC 326; Mitchell v Mulholland (No.2) (1972) 1 QB 65)."
As a fortiori, the learned Single Judge opined that following posers need to be addressed to arrive at the correct answers:-
"12. When we consider whether there could be any deduction made for benefits received by the legal representatives of the deceased, the following questions must be asked: Is the benefit the direct result of death? If yes, is the benefit a mode of deferred wage or a return for present services rendered? If yes again, there shall be no deduction. On the contrary, is it a legally enforceable right of monetary benefit that requires no compulsory service to be rendered by the representative to claim the benefit? If the answer is yes, appropriate deduction shall have to be made, though it may not result in total effacement of the claim."
6. To sum up, the rationale given in Smt. Santosh (supra) is that the liability to pay compensation under the MACT is based on tort i.e. general principle of estimating damages, i.e., balancing of what is the loss to the claimants of the future pecuniary benefits that would accrue to a person if he would not have died, with the pecuniary advantage from whichever source it comes. Therefore, the monetary compensation, received by the claimants from the State of Haryana because of the death of the person dying in accident, will have to be taken into account while arriving at the figure of compensation to be paid under the Motor Vehicles Act. It is pure gratuitous payment, which is given as a mark of sympathy and assistance and has no statutory basis but is coming fortuitously, is to be ignored and not to be deducted. Likewise, benefits, which could have accrued by the service of the deceased and payments made after death, that take the shape of deferred wage, are also not be deducted.
FAO Nos.1322,1326,1407,3520 & 4569 of 2010 -9-
7. This view has not found favour with another single Judge of this Court in Saroj Devi (supra). That judgment proceeds on the premise that liability of the Insurance Company to pay assessed compensation under the Motor Vehicles Act is distant, separate and unconnected with any other form of financial assistance, which may be available to the dependents of the deceased. It is held that insofar as compassionate assistance policy of the Government of Haryana is concerned, it grants service benefits accruing to the dependents of the deceased by virtue of the deceased having put in labour and hard work in the service of the State affairs. This compassionate assistance is in no manner connected with tiding over of the financial crisis resulting to the deceased 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. On that basis, the Insurance Companies cannot reduce their statutory liability under the provisions of the Motor Vehicle Act. The reasoning of the learned Single Judge given in Saroj Devi (supra), taking the aforesaid view, proceeds as under:-
19. 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.
FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 10 -
20. 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 and Others Vs. DTC and Another (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:
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.
Compassionate assistance works out to - 25000 x 12 x 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 x 12 = Rs. 2,25,000/- (Rs. Two akhs and twenty five thousand) Multiplier would be, say 9 - 2,25,000 x 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).
22. 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 FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 11 -
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.
23. 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."
8. It would be interesting to note that some of the judgments which are relied upon in Smt.Santosh (supra) have been distinguished/explained and commented upon in Saroj Devi (supra), giving altogether different hue. We would advert to that aspect at the appropriate stage. Suffice it to mention that whereas Smt.Santosh proceeds on the general principles of damages in tort, Saroj Devi (supra) holds that the assistance given under the scheme of the Government of Haryana, is the compassionate assistance with altogether different purpose. It is in recognition of service already put in the discharge of the affairs of the Government. Under that Scheme, financial assistance is admissible to the dependents of the deceased employee irrespective of the cause of death and the objective is to tide over the emergent situation resulting from the loss of the bread-earner while in regular service. Which view of the two should prevail is the contentious issue before us.
FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 12 -
9. Before we arrive at a conclusion as to which of the aforesaid opinion is correct, first and foremost aspect which needs to be kept in mind is the nature of compassionate assistance, which is rendered by the Government of Haryana under the policy framed in this behalf, to the dependents of the deceased. This policy was notified vide notification dated 1.8.2006 and is called 'Haryana Compassionate Assistance to the Dependents of the Deceased Government Employees Rules, 2006'. It is also pertinent to mention that these rules are made by the Governor of Haryana in exercise of powers conferred by proviso to Article 309 of the Constitution of India. In that sense, these rules are not only statutory in force, they are to be treated as at par with the statute of the Legislature (see, B.S. Yadav vs. State of Haryana, AIR 1981 SC 561).
10. Proceeding further, next important aspect which needs mention is the object with which these rules have been framed. Rule-2 specifically delineates the objects and reads as under:-
"2. The object of the rules 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 the bread earner while in regular service by giving financial assistance."
It is clear from the above that the purpose of the rules is to assist the family of the deceased to tide over immediate hardship caused as a result of the employee dying in harness or who goes missing and whose whereabouts are not known. Most significant aspect which has to be discerned is that the financial assistance given under these rules has no connection with the cause of death. To put it otherwise, whether employee of the Government of Haryana, dies as FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 13 - a result of accident or for any other reason, the rules become applicable. This would be a very relevant factor in determining the controversy as would be noticed at a later stage.
11. Rule-3 is another rule which provides for eligibility and reads as under:-
"3. The eligibility to receive financial assistance under these rules shall be as per the provision in the pension/family pension scheme, 1964."
Thus, it is clear from the reading of this rule that financial assistance to be given is as per the provisions of Pension/Family Pension Scheme, 1964. Rule-5(1) of the said rules provides for criteria for financial assistance and stipulates different levels of financial assistance depending upon the number of years which the employee has put in before his death. Rule 5(1) is as under:-
"5. (1) On the death of any Government employee, the family of the employee would continue to receive as financial assistance a sum equal to the pay and other allowances that was last drawn by the deceased employee in the normal course without raising a specific claim.-
(a) for a period of fifteen years from the date of death of the employee, if the employee at the time of his death had not attained the age of thirty-five years;
(b) for a period of twelve years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less. If the employee at the time of his death had attained the age of thirty five years but had not attained the age of forty-eight years;
(c) for a period of seven years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less, if the employee had attained the age of forty-eight years ."
Again, the quantum of financial assistance, which is given over a period of time, depends upon the number of years of service and has FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 14 - no connection with the age at which the said employee met his destiny.
12. Once we take note of the character and nature of the financial assistance scheme in the form of aforesaid rules, as above, other things follow flawlessly and automatically. In its discourse by the learned single Judge in Smt. Santosh (supra), though the principles of law based on tort are discussed with lot of erudition, the error is committed in applying those principles to the scheme of the things at hand. In the first place, it needs to be understood that the scheme of financial assistance contained in statutory rules of 2006, is a service benefit which accrues to the dependents of the deceased in the domain of service matter/benefit and is given as a result of the services rendered by the deceased employee. Consequently, it is in the nature of pension given as per the provisions of the Pension/Family Pension Scheme, recognizing the fact that pension is normally given for meritorious, long and faithful service by the employee. There cannot be an ex facie adjustment of such a service benefit in the nature of family pension, which accrues to an employee or his dependent(s), in case of his death. If this is accepted, then in every case where family pension is given or other terminal benefits in the nature of provident fund, gratuity, etc. are given to the dependents of the deceased employee will have to be adjusted. That would lead to preposterous results. It appears that the object behind formulating the scheme was not only to assist the family of the deceased to tide over the emergent situation, but was for the reason to give benefit in those cases as well where service FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 15 - rendered is not sufficient (which is normally 20 years), which could entitle to grant family pension to the dependents of the deceased. Position would have been different if the compensation/financial assistance was admissible only in case of death of the employee as a result of motor accident. Then, perhaps, the principles laid down by the learned single Judge in Smt. Santosh (supra) would have got attracted. However, in the instant case, grant or financial assistance has no relation or relevance with the case of death. The only governing factor is that the employee dies in harness, irrespective of the cause of death, after rendering certain amount of service, leaving his dependants in financial lurch.
13. For the aforesaid reasons, we would express our agreement with the view taken by another single Judge in Saroj Devi's case (supra). Since we have already extracted the reasons given in support of that view in Saroj Devi (supra) and we are agreeing with the same, it is not necessary to repeat the said analogy. As already remarked above, Saroj Devi's judgment cited in Smt.Santosh (supra) has been distinguished and commented upon and we agree therewith as well. We would, however, like to reproduce the following discussion from Saroj Devi with which we entirely agree:
"24. Learned Counsels appearing for the Appellant - Insurance Companies have placed strong reliance on the observations of Hon'ble the Supreme Court in BBMB vs. 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.
25. In the afore-cited case of BBMB vs. Kanta Aggarwal, widow of the deceased was given compassionate appointment and the facility of free residence. These two factors were held relevant by the FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 16 -
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 vs 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.
26. 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. Vs Patricia Jean Mahajan and Others, 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.
27. While referring to the decision of Hon'ble Supreme Court in Helen C. Rebello vs. Maharahtra State Road Transport Corporation, 1998(4) RCR (Civil) 177: 1999 (1) SCC 281, in Para 9 of its judgment (i.e. in BBMB vs. 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 FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 17 -
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..."
28. 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.
29. 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 vs. 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."
30. 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).
31. In Perry vs. 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 FAO Nos.1322,1326,1407,3520 & 4569 of 2010 - 18 -
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".
14. We, accordingly, hold that view taken in Saroj Devi's case (supra) is correct in law. Accordingly, the Insurance Companies shall not be entitled to the deduction of the amount given to the dependents under the Rules of 2006 while calculating compensation payable under the Motor Vehicles Act.
15. FAO No.1322 of 2010, FAO No.1326 of 2010 and FAO No.1407 of 2010 preferred by the Insurance Companies are, accordingly, dismissed.
16. FAO No.3520 of 2010 and FAO No.4569 of 2010 filed by the claimants seeking enhancement of compensation will now be decided on their own merits by the learned single Judge.
( A.K. SIKRI )
CHIEF JUSTICE
December 21, 2012 (RAKESH KUMAR JAIN)
pc JUDGE