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1982 Supreme(Online)(Guj) 19
GUJARAT HIGH COURT
R.M. Doshit, J
Prataprai Arjandas Dhameja and Another v. Bhupatsing Gagji (deceased by L.Rs.) and Others
First Appeals Nos.159 and 160 of 1968
For the Appellants: Mr. Shah
For the Respondents: Mr. Joshi
Benefits from life or accident insurance received by dependants of a deceased cannot be deducted from damage awards under the Fatal Accidents Act, endorsing principles of justice, equity, and public policy.
Headnote:(A) Fatal Accidents Act, 1855 - Sections 1A and 2 - Motor Vehicles Act, 1988 - Determination of compensation to dependants of deceased due to wrongful act - The court addressed whether benefits received under life or accident insurance should be deducted from damages payable to dependants. The court ruled that the net loss concept must guide the assessment of damages without deducting insurance benefits, in line with public policy and the principles established in relevant cases. (Paras 1-38)
(B) Damages - Assessment principles - The principle that benefits accrued to dependants from the death of the insured must not be deducted from the amount of compensation payable aligns with justice and reasonableness - The court distinguished these provisions from personal injury cases, highlighting the necessity of considering public policy. (Paras 20-32)
Facts of the case:
The legal representatives filed claims following an accident involving Company officials where the driver died, and the officials sustained fatal injuries. The Claims Tribunal awarded compensation to the dependants of the deceased driver and officials.
Findings of Court:
The Tribunal's standing awards were upheld with the conclusion that insurance benefits would not reduce liability.
Issues: Whether benefits under life/accident policies must be deducted in assessing damages to legal representatives.
Ratio Decidendi: The court ruled no deduction of insurance benefits is warranted as it contradicts the principle of compensatory justice, highlighting a broader interpretation of 'just' compensation under the Motor Vehicles Act.
Result: Appeals partly allowed.
| Table of Content |
|---|
| 1. deduction of insurance benefits in fatal accidents. (Para 17 , 19) |
| 2. provision of fatal accidents act regarding compensation. (Para 18 , 20 , 21) |
| 3. historical case law insights on insurance benefits. (Para 22 , 23 , 24) |
| 4. distinction between deductions for personal injury and fatal accidents. (Para 25 , 26) |
| 5. assessment of compensation principles under law. (Para 29 , 30) |
| 6. concept of 'just compensation' clarified. (Para 31 , 32) |
| 7. application of justice and equity in compensation claims. (Para 34 , 36) |
| 8. endorsement of prior legal stance on insurance deductions. (Para 37) |
| 9. conclusion and ruling on appeal. (Para 38) |
17. That takes us to the question of general importance which was ably presented to us by Mr. Shah, the learned advocate for the appellants. The question which he posed for our consideration was : whether in assessing damages payable under the Fatal Accidents Act to the dependants or legal representatives of the deceased, must there be deducted therefrom any pecuniary benefit that such dependants or legal representatives may have received under any life insurance policy or accident benefit policy taken out by the deceased? Precisely stated, the submission is two - fold : (i) the benefit of accelerated payment received by the legal representatives of the deceased under a life insurance policy taken out by the deceased was liable to be deducted from the total amount of compensation payable under the Fatal Accidents Act ; and (ii) the accident insurance money received by the legal representatives of the deceased must be deducted in its entirety from the compensation money and the surplus, if any, could only be awarded to the legal representatives of the deceased.
18. The Fatal Accidents Act , 1855 was enacted to provide compensation to families for loss occasioned by the death of a person caused by actionable wrong. S.1A and S.2 which are relevant for our purpose may be extracted at this stage: -
"1A. Whenever the death of a person shall be caused by wrongful act. neglect, or default, and the act, neglect or default is such as would (if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof, the party who would have been liable if death had not ensued, shall be liable to an action or suit for damages, notwithstanding the death of person injured, and although the death shall have been caused under such circumstances as amount in law to felony or other crime.
Every such action or suit shall be for the benefit of the wife, husband, parent and child, if any, of the person whose death shall have been so caused, and shall be brought by and in the name of the executor, administrator or representative of the person deceased;
and in every such action, the Court may give such damages as it may think proportioned to the loss resulting from such death to the parties respectively, for whom and for whose benefit such action shall be brought, and the amount so recovered, after deducting all costs and expenses, including the costs not recovered from the defendant, shall be divided amongst the before - mentioned parties, or any of them, in such shares as the Court by its judgment or decree shall direct.
2. Provided always that not more than one action or suit shall be brought for, and in respect of the same subject - matter of complaint.
Provided that in any such action or suit the executor, administrator or representative of the deceased may insert a claim for, and recover any pecuniary loss to the estate of the deceased occasioned by such wrongful act, neglect or default, which sum, when recovered, shall be deemed part of the assets of the estate of the deceased."
We are not concerned with the other two sections in the said Act.
19. Mr. Shah argued that in England under Lord Campbell's Act, the Fatal Accidents Act , 1846, before its amendment in 1908, the general rule in regard to assessment of damages was well - settled, namely, that any benefit that accru
