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Karnataka High Court
Judges : P.Krishnamurthy,R.V.Raveendran,T.N.Vellinayagam
PARVATI ALIAS BABY - Appellant
Versus
HOLLUR HALLAPPA - Respondent
MFA. 1309 Of 1986
Decided On : 06/26/1997
Whether family pension is liable to be deducted out of the compensation determined in the case? Whether in view of the decision of the Supreme Court in N. SIVAMMAL AND OTHERS vs. THE MANAGING DIRECTOR, PANDIAN ROADWAYS CORPORATION AND ANOTHER, air 1985 SC 106 the view taken by this Court in SMT. SHANTHA @ SHANTABAI annappa GADIVADDAR AND OTHERS vs. CHANNABASAPPA DYAMAPPA gadadavar AND ANOTHER M. F. A. No. 457/1993 : 1993 ACJ 850 is correct?
Fact of the Case:
In a motor accident case, the Tribunal determined the loss of dependency to the family as Rs. 900/ per month. Due to his death, his wife is getting family pension of Rs. 440/- per month. The Tribunal held relying on the decision of a division Bench of this Court in DEPUTY GENERAL MANAGER, KSRTC vs. SAROJAMMA 1981 (1) Kar.. 528, that the family pension of Rs. 440/- per month had to be deducted from the amount fixed as loss of dependency. Hence after deducting the family pension of Rs. 440/-, the tribunal determined the net loss of dependency at Rs. 460/- per month or Rs. 5,520/- per annum. Having regard to the age of the deceased, the Tribunal applied a multiplier of 12 and arrived at the total loss of dependency of Rs. 66,240/-. The Tribunal deducted 10% towards acceleration of receipt of insurance amount and rounded off the balance to Rs. 60,000/-. The Tribunal added Rs. 12,500/-towards loss of consortium, loss to the estate and funeral expenses. Thus, the total compensation found payable was Rs. 72,500/-.
Finding of the Court:
Family pension is a service benefit payable to the family, on the death of an employee, cannot be treated as a benefit or pecuniary advantage arising by reason of the death, to be taken into account by making suitable deduction while determining compensation. Family Pension as also Provident Fund, Gratuity and Life insurance amounts fall under the second category of benefits. Therefore family pension, which is a service benefit payable to the family, on the death of an employee, cannot be treated as a benefit or pecuniary advantage arising by reason of the death, to be taken into account by making suitable deduction while determining compensation.
Issues: 1) Whether the family pension amount is liable to be deducted out of the compensation determined in the case? 2) Whether in view of the decision of the Supreme Court in N. SIVAMMAL AND OTHERS vs. THE MANAGING DIRECTOR, PANDIAN ROADWAYS CORPORATION AND ANOTHER, air 1985 SC 106 the view taken by this Court in SMT. SHANTHA @ SHANTABAI annappa GADIVADDAR AND OTHERS vs. CHANNABASAPPA DYAMAPPA gadadavar AND ANOTHER M. F. A. No. 457/1993 : 1993 ACJ 850 is correct?
Ratio Decidendi: The multiplier method evolved in DAVIES case, as approved by the Supreme Court in GOBALD, continues to be the proper method for calculation and the mere use of the words 'just' compensation in Section 110b does not in any way permit Courts to veer away from the principles laid down in DAVIES case.
Final Decision: The family pension amount is a pecuniary benefit which has to be taken note of to balance the pecuniary loss, to arrive at the net loss, as a consequence of death, which constitutes the measure of damages; While assessing the compensation as per the multiplier method (DAVIES method) in the case of the death of an employee in pensionable service, a deduction on account of family pension can be made (as a pecuniary benefit arising out of the death) only if the pension factor had been taken note of as a part of monthly emoluments of the deceased, while calculating the loss of dependency. If the loss of dependency is calculated only on the monthly emoluments received, without adding the value of the pension factor to such emoluments, then it is unnecessary to make any deduction on account of receipt of Family Pension.
( 1 ) THE following questions are referred by a Division Bench of this Court for consideration: ( 1) Whether the family pension is liable to be deducted out of the compensation determined in the case? (2) Whether in view of the decision of the Supreme Court in N. SIVAMMAL AND OTHERS vs. THE MANAGING DIRECTOR, PANDIAN ROADWAYS CORPORATION AND ANOTHER, air 1985 SC 106 the view taken by this Court in SMT. SHANTHA @ SHANTABAI annappa GADIVADDAR AND OTHERS vs. CHANNABASAPPA DYAMAPPA gadadavar AND ANOTHER M. F. A. No. 457/1993 : 1993 ACJ 850 is correct?
( 2 ) THE facts leading to the reference are:
2. 1. In regard to the death of one Basavaraj in a motor accident on the midnight of 8/9. 4. 1983, his wife and children filed a claim petition. The Tribunal found that the deceased was an employee of Karnataka Electricity Board getting a salary of Rs. 1,300/ -. The Tribunal determined the loss of dependency to the family as Rs. 900/ per month. Due to his death, his wife is getting family pension of Rs. 440/- per month. The Tribunal held relying on the decision of a division Bench of this Court in DEPUTY GENERAL MANAGER, KSRTC vs. SAROJAMMA 1981 (1) Kar.. 528, that the family pension of Rs. 440/- per month had to be deducted from the amount fixed as loss of dependency. Hence after deducting the family pension of Rs. 440/-, the tribunal determined the net loss of dependency at Rs. 460/- per month or Rs. 5,520/- per annum. Having regard to the age of the deceased, the Tribunal applied a multiplier of 12 and arrived at the total loss of dependency of Rs. 66,240/ -. The Tribunal deducted 10% towards acceleration of receipt of insurance amount and rounded off the balance to Rs. 60,000/ -. The Tribunal added Rs. 12,500/-towards loss of consortium, loss to the estate and funeral expenses. Thus, the total compensation found payable was Rs. 72,500/ -. 2. 2. The claimants filed M. F. A. No. 1926/1985 interalia contending that the Tribunal was not justified in deducting the family pension amount received by the wife for arriving at the net loss of dependency placing reliance on the decision of the Supreme Court in N. SHIVAMMAL v. PANDYAN TRANSPORT CORPORATION. On the other hand, the Insurer contended that the supreme Court in SHIVAMMAL did not decide the question whether family pension should be deducted or not and therefore that decision was not applicable. The insurer further contended that the matter was covered by three decisions of this Court in PARVATAMMA v. SYED ahmed, 1977 ACJ 72. DEPUTY GENERAL MANAGER, KSRTC v. SAROJAMMA and shantha v. CHANNABASAPPA DYAMAPPA GADADAVAR. In SHANTHA's case, the division Bench held that in the case of Shivammal, the Supreme Court did not lay down any legal principle in regard to the question whether the family pension could be deducted or not and therefore it would not be a binding precedent and further held that the two earlier decisions of this Court continued to hold good. 2. 3. When this appeal came up for consideration, the Division Bench found that several other courts relying on the decision in SHIVAMMAL, have held that family pension could not be deducted. It was also noticed that the facts of this case were similar to the facts of shivammal. The claimants also contended that were the loss of dependency was determined by multiplier method (Davies Method) adopting an appropriate multiplier, the question of further deduction would not arise. In this back ground, it was felt that the two questions referred required consideration by a larger Bench.
( 3 ) THE claimants contend that family pension is a service benefit. It is paid to the widow or other legal heir because the deceased had served the employer for a specified period and he terms of employment or conditions of service provide for payment of pension to the employee on his retirement and payment of family pension to the legal heir of the employee, on his death. It is not a benefit arising to the family of the employee, out of
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