Insurance, provident fund, pension, or gratuity benefits received by the dependants of a victim of an automobile accident are not to be taken into consideration for fixing a suitable multiplier in their claims of compensation under Sec.110-B of the Motor Vehicles Act.

S.S.SANDHAWALIA, J.

1. whether the actual receipt of insurance, provident fund, pension, or gratuity benefits by the dependants of a victim of an automobile accident must be taken into consideration for fixing a suitable multiplier in their claims of compensation under Sec.110-B of the Motor Vehicles Act, is the significant question in this reference to the Full Bench.

2. At the very threshold one must dutifully notice that herein there is undoubtedly a sharp cleavage of judicial opinion. There are two distinct and rival schools of thought. On one side is the somewhat liberal view that insurance, provident fund, pension or gratuity are the products of the employee s service or his thrift. Their true character is such that it was never intended nor is it just that a tortfeasor should take over the benefit of these by getting a credit for them in mitigation of the damages that he must pay. They are the deferred returns of a man s thrift, prudence and foresight which are the true source of these benefits to his dependants and not the accident as such. Arrayed on the other side is the stricter view that damages are not to be punitive, that the claimant s actual financial loss to his pocket can alone be recovered, and that since the accident brought these financial benefits as well as losses both must be taken into account in balancing liquidated damages payable.

3. In the aforesaid context there appears to be a global controversy ranging from the mother country to the Commonwealth of Australia in the south and to that of Canada in the west. The aforesaid conflict of views is perhaps best symbolised by the narrowly divided House of Lords in Perry V/s. Cleaver, (1969) 1 All ER 555. Therein, by a majority of three to two the liberal first school of thought has been authoritatively adopted. Undoubtedly, herein the choice is not easy because eminent judicial minds have subscribed to either of the two views. With respect, for the detailed reasons delineated hereinafter, we apt wholly for the majority view in Perry V/s. Cleaver (supra).

4. In view of the pristinely legal nature of the question involved, the facts giving rise thereto pale into insignificance. It suffices to mention that the issue arose pointedly in F.A.O. 159 of 1980 (Bhagat Singh Sohan Singh V/s. Smt. Om Sharma) before my learned brother Punchhi, J. sitting singly. Noticing the significance of the moot question, whether the pecuniary benefits of gratuity, pension and provident fund would partake of the same character as insurance and the divergence of views thereon within this Court itself, he had referred the matter for adjudication by the Full Bench. In Letters Patent Appeals Nos.251, 279 and 300 of 1979, the identical questions arose and were consequently directed to be heard by the same Bench as well.

5. At the very threshold what perhaps calls for pointed notice is the wide ranging language of Sec.110-B of the Motor Vehicles Act, 1939 (hereinafter called the Act), which cannot be without significance.

"S.110-B - Award of the Claims Tribunal :-

On receipt of an application for compensation made under Sec.110-A, the Claims Tribunal shall, after giving the parties an opportunity of being heard, hold an inquiry into the claim and may make an award determining the amount of compensations which appears to it to be just and specifying the person or persons to whom compensation shall be paid; and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be."

The plain language of the above warrants the Tribunal to determine the amount of compensation which appears to be just. In essence, therefore, the dependants are entitled to a just compensation for the loss. In a way, the question is liberated from narrow technicality and has to be decided on the larger perspectives of justice, equity and good conscience. The language of