Indian Kanoon - Search engine for Indian Law

"It is nobody's case that it was an accident policy entitling the claimants to such amount, on the death of the deceased only in such an accident, and the amount could not have been received by them, had the death been. due to otherwise than such an accident. We express no opinion if this could have made any difference as there is no unanimity in the decided cases as to the liability of even such amounts to deduction from compensation".

Leaving this state of affairs so tar as Indian courts are concerned, we may now advert to the courts in England, right from the 19th century on this issue. It seems that they have also been oscillating with different interpretations under various facts and circumstances. The uncertainty went for a long time which was ultimately resolved by making legislation and the statutory amendments to set at rest this question. Now this question is no more res integra there and is settled that life insurance policy is not deductible from the compensation assessed on account of the death of the deceased. As aforesaid, before this, even in England, this question, as in Indian courts, varied its interpretation depending on the facts of each case, one set by strict interpretation deciding against; the claimant while other based on equity, justice, reasonableness and public policy deciding in favour of claimant. In England, the insurance policy amount was initially considered to be such pecuniary advantage, coming to the dependents on the deceased death, which was held deductible under the common law from the amount of compensation payable under the Fatal Accidents Act, 1846. This situation was reversed by the Fatal Accidents (Damages) Act of 1908 which was further rendered advantageous to the claimants by Law Reforms (Personal Injuries) Act of 1948 and finally altered drastically by the Fatal Accidents Act of 1959 ensuring various kinds of insurance and pensionary benefits not to be excluded from the compensation payable by the tortfeasors. In India, first such legislation was the Fatal Accidents Act 1855 analogous to English, Fatal Accident Act, 1846. In fact, the interpretation given by the Bombay High Court in Jaikumar (supra), which is also the submission by the learned counsel for the respondents that principle of deduction with reference to the Fatal Accidents Act, 1855 has to be the same as in the Fatal Accidents Act, 1846. Thus, Jai Kumar (supra) concludes, it is difficult to find any basis or trace for any rationale not to deduct such life policy amounts when on the face of it, this amounts to the pecuniary advantages and are received by the heirs by reason of the death of the bread winner. The question that arises, firstly, whether language of the provisions under 1855 Act and 1846 Act are the same and even if same, whether language of 1939 Act is similar to 1855 Act? So far as the first question is concerned, though something may be said but since the present case is only under 1939 Act, it is not necessary to go into this question In this case, we would be examining whether there is difference of language between 1855 Act and 1939 Act or not, if yes, what difference it would makes. Now we refer to the relevant provisions both of 1855 Act and 1939 Act. Relevant section of the Fatal Accidents Act, 1855 is quoted hereunder;

"Only by balancing on the one hand the loss to the claimants of the further pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is. the balance of Loss and gain to a dependant by the death must be ascertained... "

This was a case under the Fatal Accidents Act, 1855 as it stood before its amendment by the Act (3 of 1951). This Court, in this case, was not called upon to consider regarding any deduction out of the compensation payable as assessed, either under the aforesaid Act or under the Motor Vehicles Act. The question of life insurance deduction, which is in issue here or the deduction of pension, gratuity or any other pecuniary advantage received by the claimant was neither raised, considered or adjudicated. The passage quoted above only referred to the general principle under the common law with reference to tile decisions of the English Courts made under the Fatal Accidents Act of 1846. In that case the Gobald Motor Service Ltd. (Company) was engaged in the business of transporting passengers by bus, when one of its bus met with an accident causing death to some of the passengers in which one Rajaratnam died. The Claimants, the heirs of Rajaratnam, filed a suit against this company, claiming compensation under Section I of the Fatal Accidents Act, 1855 for the loss of pecuniary benefit sustained by them personally and under Section 2 for the loss sustained by the estate on account of the death of Rajaratnam. 'the Court awarded damages to the claimants. On appeal to the High Court, it confirmed the compensation awarded with some modification in the quantum of compensation. In this background, this Court was called upon to decide the limited question raised by the counsel for the appellant, which is evident from the following:

This Court in Gobald Motor Service (supra) considering the quantum of damages under Sections I and 2 of the Fatal Accidents Act, 1855, referred to the said principle as enunciated in the English decisions, since our provisions under the Act in consideration, was similar to Section 9 of the English Fetal Accidents Act 1846. This Court was neither called upon to consider computing damages under the Motor Vehicles Act nor to consider any form of deductions, whether justified under the Motor Vehicles Act. We have already referred to above the Section (1A) of the Fatal Accidents Act, 1855 and Section 110-B of the Motor Vehicles Act, 1939 under which compensation is payable to the claimant. Section I of 1855 Act was renumbered as Section I A through the amending Act No. 3 of 1951. We find that the language of Section 110-B of the 1939 Enactment is different than what is under Section IA of the 1855 Act. Section IA of 1855 Act provides that whenever death, occurs on account of wrongful act or neglect entitles the party injured to maintain a suit to recover damages from the party, who caused the injury or the death. This entitles the party to recover damages, whenever death is occasioned by the wrongful act, negligence or default, which would have entitled the party injured (if death had not resulted) to maintain an action to recover damages in respect thereof. This provision was interpreted within the limitation of the words used therein and in the absence of any guiding words therein. The Courts rightly drew the general principle of common law of loss and gain. But Section 110-B of 1939 Act empowers the Tribunal to determine the compensation which appears to it to be just. The words used in Section 110-B are: "which appears to it to be just". Use of these words, widen the scope of determination of compensation which is neither under the Indian Fatal Accidents Act, 1855 nor under the English Fatal Accidents Act, 1846., So far, as observed above, apart from the conflictingly decisions of the Indian High Courts' no decision has been placed before us of this Court, determining any principle of deductibility of any amount, like, life insurance, gratuity, pension etc., from the amount payable under the Motor Vehicles Act. In M/s Sheikhupura Transport Company Ltd. Vs. Northern India Transporters Insurance Co. Ltd. (AIR 1971 SC 1624) this Court did consider the case of compensation under Section 110-B of the Motor Vehicles Act, 1939 and did refer to the decision in Gobald Motor Service (supra), in case the compensation is to be computed under 1855 Act. This inference was drawn by assuming if 1855 Act is applicable, however, it further holds that language used in the 1939 Act, is wider. This apart, again in this case neither any question was raised for fact were pleaded and adjudicated regarding the deduction of life insurance, gratuity, pension etc.. The relevant portion is quoted herein-under.

Fleming has also expressed that the deduction, or set off of the life insurance could not be justifiable. When he uses the words "not be justifiable" he refers to one's conscience, fairness and contrary to what is just. In this context, the use of the word 'just', which was neither in the English 1846 Act nor in the Indian 1855 Act now brought in under 1939 Act, gains importance. This shows that the word "just' was deliberately brought in 110-B of the 1939 Act to enlarge the consideration in computing the compensation which, of course, would include the question of deductibility, if any. This leads us to an irresistible conclusion that principle of computation of the compensation both under the English Fatal Accidents Act, 1846 and under the Indian Fatal Accidents Act, 1855 by the earlier decision, were restrictive in nature In the absence of any guiding words therein, hence the courts applied the general principle at the common law of loss and gain but that would not apply to the considerations under Section 110-B of 1939 Act which enlarges the discretion to deliver better justice to the claimant, in computing the compensation, to see what is just. Thus, we find that all the decisions of the High Courts, which based its interpretation on the principles of these two Acts, viz., English 1846 Act and Indian 1855 Act to hold deductions, were valid cannot be upheld. As we have observed above, the decisions even with reference to the decision of this Court in Gobald Motor Service (supra), where the question was neither raised nor adjudicated and that case also. bang under the 1855 Act, cannot be pressed into service. Thus, these Courts by giving restrictive interpretation in computation of compensation based on the limitation of the language of the Fatal Accidents Act, fell into an error, as it did not take into account the change of language in the 1939 Act and did not consider the widening of the discretion of the Tribunal under Section 110-B. The word 'just", as its nomenclature, denotes equitability, fairness and reasonableness having large peripheral field. The largeness is, of course, not arbitrary; it is restricted by the conscience which is fair, reasonable and equitable, if it exceeds; it is termed as unfair, unreasonable, unequitable, not just. Thus, this field of wider discretion of the Tribunal has to be within the said limitations and the limitations under any provision of this Act or any other provision having force of law. In Law Lexicon, 5th Edn., by T.P.Mukherjee "Just" is described: