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2025 Supreme(SC) 1553

SUPREME COURT OF INDIA
J.K. MAHESHWARI AND ARAVIND KUMAR, JJ.
Pramod Kumar Tiwari – Appellant
Versus
Premlal Gautam And Others – Respondent
Civil Appeal No. 5061 of 2025 (Arising Out of SLP (C) No. 26620 of 2023)
Decided on : 08-04-2025

Headnote:(A) Motor Vehicles Act, 1988 - Calculation of compensation - The issue is whether family pension can be deducted from salary while calculating compensation post-accidental death - The High Court ruled that salary must be considered without deductions for pension when calculating loss of dependency (Paras 3-4).

(B) Legal Principles - The law states that deductions for pension, insurance, or gratuity are not permitted from compensation amounts due to their contractual nature, which does not correlate with the statutory entitlement under the Motor Vehicles Act (Paras 5-6).

Facts of the case:
The appellant challenged the High Court's order on compensation calculations following the vehicular death of an employee, clarifying the treatment of family pension in assessments of loss of dependency.

Findings of Court:
The deceased's total loss of dependency was calculated at Rs. 65,79,212/-, which included additional amounts for funeral expenses and love and affection, thus determining the compensation to be awarded (Paras 8-9).

Issues: The court addressed whether family pension should be deducted from salary during compensation calculations after accidental death and upheld the principle that such deductions are unjust (Paras 3-7).

Ratio Decidendi: The court confirmed prior rulings that family pensions and similar benefits, arising from different contractual relationships than those governed by the Motor Vehicles Act, should not influence the statutory compensation to be awarded (Paras 5-6).

Result: Appeal allowed in part; the compensation was fixed at Rs. 66,94,212/- with interest awarded.

Table of Content
1. question on deducting family pension from salary. (Para 2 , 3)
2. high court's reasoning on pension and salary consideration. (Para 4)
3. comparison of benefits under law and contract. (Para 5)
4. no deductions from compensation for pension or benefits. (Para 6)
5. computation of total loss of dependency. (Para 8 , 9)
6. final compensation awarded. (Para 10)

ORDER :

1. Leave granted.

2. Assailing order dated 21.03.2023 passed by the High Court[High Court of Madhya Pradesh] in Miscellaneous Appeal No. 783 of 2020 filed by the appellant-claimant impugning the Award dated 29.08.2019 passed by the MACT[Second Additional Motor Accident Claims Tribunal, Rewa, District Rewa (M.P.)] in Claim Case No. 2000443 of 2016, the present appeal has been filed.

3. In the facts of the case, the short question that arises for our reconsideration is whether on death of an employee during subsistence of employment due to vehicular accident, the amount of family pension can be deducted from his/her salary while calculating compensation under MOTOR VEHICLES ACT , 1988?

4. We have perused the judgment of the High Court and gone through the records. In appeal, the High Court vide impugned judgment has concluded as under:

    "11. It is true that the wife of a deceased employee would get the family pension even if the death of an employee takes places in a normal course, but said analogy cannot be made applicable in the motor accident claim cases.

    12. During the lifetime of an employee, he is entitled for salary only and not pension and similarly, during the lifetime of an employee, his wife is not entitled for pension. The family pension is payable only after the death of an employee. However, for calculating the loss of income, the salary which was otherwise payable to the employee had he not died in a vehicular accident, has to be taken into consideration.

    13. If the salary of the deceased is taken into consideration for assessing the loss of dependency and at the same time, the family pension received by his wife is not deducted, then it would create a very awkward situation. This aspect can be understood in a very simple manner. If the monthly salary of an employee is Rs.30 000/-, then after his retirement he will be entitled for a pension of Rs.15,000/-and after death of the employee, his wife would be entitled for family pension at the admissible rate. If the family pension is not excluded from the loss of dependency, then it would mean as under: -

    Salary of the deceased employee -personal expenses + family pension + future prospects"

5. The issue whether deduction of pension amount from the salary can be made has been settled by the judgment of this Court in the case of 'Helen C. Rebello (Mrs.) and Others vs. Maharashtra State Road Transport Corporation and Another , (1999) 1 SCC 90 ', wherein, this Court drawing an analogy in para 35 observed as under -

    "35. Broadly, we may examine the receipt of the provident fund which is a deferred payment out of the contribution made by an employee during the tenure of his service. Such employee or his heirs are entitled to receive this amount irrespective of the accidental death. This amount is secured, is certain to be received, while the amount under the Motor Vehicles Act is uncertain and is receivable only on the happening of the event, viz., accident, which may not take place at all. Similarly, family pension is also earned by an employee for the benefit of his family in the form of his contribution in the service in terms of the service conditions receivable by the heirs after his death. The heirs receive family pension even otherwise than the accidental death. No corelation between the two. Similarly, life insurance policy is received either by the insured or the heirs of the insured on account of the contract with the insurer, for which the insured contributes in the form of premium. It is receivable even by the insured if he lives till maturity after paying all the premiums. In the case of death,

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