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SUPREME COURT OF INDIA
Madan B. Lokur, S. Abdul Nazeer, Deepak Gupta, JJ.
SEBASTIANI LAKRA & ORS. – APPELLANT(S)
VERSUS
NATIONAL INSURANCE COMPANY LTD. & ANR. – RESPONDENT(S)
CIVIL APPEAL NO(S). 1058889 OF 2018 (@ SLP (C) NO(S).12359-12360 OF 2018)
Decided On : 12-10-2018
(b) Motor Vehicles Act, 1988 – Section 168 – Just compensation – The word "just" – Of a very wide amplitude – Well settled that tortfeasor cannot not take benefit of the munificence or gratuity of others – Amounts received by heirs by way of provident fund, pension and insurance as also the salary received on compassionate appointment cannot be deducted – The tortfeasor cannot take advantage of wise financial investments made by the deceased like insurance policy – Only the amounts accrued on account of death of the deceased in a motor accident can be deducted from the compensation. (Para 5, 6, 9, 12, 13, 14, 15, 16)
(2016) 9 SCC 627; (1999) 1 SCC 90; (2002) 6 SCC 281; (2017) 16 SCC 680; (2013) 7 SCC 476 – Relied upon
1969 ACJ 363 – Referred
(c) Motor Vehicles Act, 1988 – Section 168 – Amounts received from employer under EFB till date of retirement of deceased and interest received thereon – Claimants getting 50000 per month – Held, the amount cannot be deducted from compensation – Compensation towards loss of future prospects @ 15% awarded by MACT disallowed – Rs.50,00,000 awarded as compensation applying multiplier of 11 – Insurer allowed to deduct the amount already paid. (Para 19, 20, 21, 22)
Facts of the case:
This is a case for enhancement of compensation in a motor accident claim.
Finding of the Court:
Tortfeasor cannot not take benefit of the munificence or gratuity of others including wise financial investments made by the deceased like insurance policy. Amounts received by heirs by way of provident fund, pension and insurance as also the salary received on compassionate appointment cannot be deducted. Only the amounts accrued on account of death of the deceased in a motor accident can be deducted from the compensation.
Result: Appeal allowed.
Key Points: - No judicial order is complete without reasons (!) . - Tortfeasor cannot benefit from insurance policies or other financial investments made by the deceased (!) (!) (!) (!) (!) . - Amounts from provident fund, pension, insurance, or salary on compassionate appointment cannot be deducted (!) (!) (!) (!) . - Only amounts accrued on account of death in the motor accident may be deducted (!) (!) . - Compensation must be calculated to provide just compensation to dependents, not by rigid income-loss offsets (!) (!) . - Payments under the EFB Scheme are not deductible as they differ in nature from statutory payments (!) (!) . - Loss of future prospects may be disallowed where offset by benefits from the EFB Scheme (!) . - The multiplier system is the established method for assessing compensation (!) . - Interest on compensation is payable at 9% per annum from the date of filing (!) . - The appeals are allowed and compensation is revised accordingly (!) .
JUDGMENT
Deepak Gupta J.
Leave granted.
2. These appeals filed by the claimants-appellants are directed against the judgment dated 21.12.2017 delivered by the High Court of Orissa at Cuttack whereby compensation of Rs. 40,90,000/- awarded by the IInd Addl. District Judge-cum-Vth Motor Accidents Claim Tribunal, Rourkela (hereinafter referred to as `the MACT') has been reduced to Rs. 36,00,000/-.
3. The MACT found that the revised basic pay of the deceased was Rs. 51,328/- and he was entitled to DA of Rs. 7,237/- at the time of his death i.e. he was getting a total salary of Rs. 58,565/-. However, the MACT, for the purposes of compensation, assessed the monthly income of deceased at Rs. 50,000/- per month and deducted 1/3 for his personal expenses leaving a datum figure of Rs. 33,333/- per month. Since the deceased was 52 years old, the MACT following the judgment of this Court in Sarla Verma v. DTC, (2009) 6 SCC 121, applied a multiplier of 11 and assessed compensation at Rs. 40,00,000/- for loss of income, Rs. 25,000/- was added for funeral expenses, Rs. 5,000/- for the loss of estate, Rs. 50,000/- towards loss of consortium and Rs. 10,000/- for loss of affection i.e. total compensation of Rs. 40,90,000/- was awarded to the claimants. The claimants and the insurance company filed appeals challenging the quantum of compensation. The main ground raised by the insurance company was that the claimants were being paid a sum of Rs. 50,082/- per month under the Employees Family Benefit Scheme (for short `the EFB Scheme'). The High Court, without giving any reasons, has reduced the compensation by almost Rs. 5,00,000/-, to Rs.36,00,000/-. Reasons are the heart and soul of any judicial pronouncement. No judicial order is complete without reasons and it is expected that every court which passes an order, should give reasons for the same.
4. We have heard learned counsel for the parties and it is not disputed before us that the last drawn income of the deceased including DA was Rs. 58,565/- per month. According to the insurance company, since the claimants are getting a sum of Rs. 50,082/- under the EFB Scheme, this amount should be deducted in terms of the judgment of this Court in Reliance General Insurance Co. Ltd. v. Shashi Sharma, (2016) 9 SCC 627. On the other hand, the claimants/appellants submit that no deduction should be made in view of the judgments rendered by this Court in the case of Helen C. Rebello v. Maharashtra SRTC, (1999) 1 SCC 90 and United India Insurance Co. Ltd. v. Patricia Jean Mahajan, (2002) 6 SCC 281. The appellants further contend that, in fact, as per the judgment rendered in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, 15% should be added towards future prospects.
5. Section 168 of the Motor Vehicles Act, 1988 (for short `the Act') mandates that "just compensation" should be paid to the claimants. Any method of calculation of compensation which does not result in the award of `just compensation' would not be in accordance with the Act. The word "just" is of a very wide amplitude. The Courts must interpret the word in a manner which meets the object of the Act, which is to give adequate and just compensation to the dependents of the deceased. One must also remember that compensation can be paid only once and not time and again.
6. The traditional view was that while assessing compensation, the Court should assess the loss of income caused to the claimants by the death of the deceased and balance it with the benefits which may have accrued on account of the death of the deceased. However, even when this traditional view was being followed, it was a well settled position of law that the tortfeasor cannot not take benefit of the munificence or gratuity of others.
7. In Helen C. Rebello case (supra), the issue was whether the amounts received by the deceased by way of provident fund, pension, life insurance policies and similarly, in cash, bank balance, shares, fixed deposits etc., are `pecuniary adv
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