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2025 Supreme(Online)(P&H) 6558
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Sudeepti Sharma, J
Reliance General Insurance Co. Ltd. – Appellant
Versus
Sunita – Respondent
FAO-2151-2019
For the Appellants/Petitioners: Sanjeev Kodan
For the Respondents: Sushil Jain, Rajesh Sharma, Balkar Singh
Financial assistance received by dependents of a deceased government employee under compassionate appointment rules, specifically representing loss of pay and allowances, is deductible from the compensation awarded under motor vehicle accident claims to prevent double recovery and ensure the determination of just compensation.
Headnote:(A) Motor Vehicles Act, 1988 - Sections 166 and 140 - Compassionate assistance - Deduction of financial benefits - Quantum of compensation - Whether amount received under state-specific compassionate assistance rules is deductible from motor accident compensation - Held, such assistance, specifically for loss of pay and wages, must be deducted to prevent double compensation or windfall - Rules serve as a welfare measure for government employees dying in harness and are distinct from other terminal benefits like family pension, which remain protected - Such deductions are mandatory to ensure 'just compensation' - (Paras 10-12, 17, 20)
(B) Appeals - Scope of appellate interference - Whether Tribunal erred in partial deduction - High Court in appeal found that entire amount received under compassionate rules must be subtracted, not just 50% - Appellate court must correct legal errors concerning the principle of 'just compensation' and double recovery. (Paras 29, 32)
Facts of the case:
The appellant sought reduction of compensation awarded by the tribunal, arguing that the financial assistance received by the respondents under state-specific compassionate assistance rules for government employees was not fully deducted from the death claim awarded under the motor vehicle legislation. The respondents contested this, claiming separate purposes for the two payments.
Findings of Court:
The court held that the amount received as financial assistance, equivalent to last drawn pay and allowances for a specified period, is meant to compensate for the same head of loss (loss of income). To prevent double payment or a bonanza, the entire amount of such assistance must be deducted from the compensation calculated for loss of dependency under motor vehicle provisions.
Issues: The central issue was whether financial assistance provided to dependents of a deceased government employee under specific state rules can be deducted from the compensation awarded under the motor vehicle statutes to prevent double recovery.
Ratio Decidendi: The court concluded that while certain terminal benefits (family pension, provident fund) are protected from deduction, financial assistance explicitly granted for 'loss of pay and wages' creates an overlap with the loss of dependency component of motor accident claims. Consequently, the entire amount of such assistance must be deducted to arrive at a 'just compensation'.
Result: Appeal allowed; the award for compensation was set aside.
| Table of Content |
|---|
| 1. nature of appeal concerning deduction of compassionate assistance under 2006 rules. (Para 1 , 2) |
| 2. parties' conflicting arguments regarding the deductibility of ex-gratia payments from motor vehicle act compensation. (Para 3 , 4 , 5 , 6) |
| 3. compulsory deduction of financial assistance received under statutory rules to prevent double recovery. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 4. application of established precedents (sarla verma, pranay sethi, magma) for calculating just compensation. (Para 21 , 22 , 23) |
| 5. recalculation of compensation and application of the deduction rule to the specific case. (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33) |
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SUDEEPTI SHARMA J.
1. The present appeal has been preferred against the award dated 09.01.2019 passed by the learned Motor Accident Claims Tribunal, Sonepat (for short, 'the Tribunal’) in the claim petition filed under Section 166 and 140 of the Motor Vehicles Act, 1988 (in short ‘1988 Act’) on the ground that amount of compensation awarded under Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 (in short ‘2006 Rules’) was not deducted by learned Tribunal while calculating the compensation awarded to claimants.
2. As sole issue for determination in the present appeal is confined to quantum of compensation awarded by the learned Tribunal, a detailed narration of the facts of the case is not required to be reproduced here for the sake of brevity.
SUBMISSIONS OF LEARNED COUNSEL FOR THE PARTIES
3. Learned counsel for the appellant–Insurance Company submits that the learned Tribunal erred in law and on facts in deducting only 50% of the financial assistance received by the claimants under the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 (in short ‘2006 Rules’). He further contends that the entire amount of financial assistance ought to have been deducted while computing the compensation payable under the 1988 Act. In support of this contention, reliance has been placed upon the judgment of the Hon’ble Supreme Court in Reliance General Insurance Co. Ltd. v. Shashi Sharma and Others, (2016) 9 SCC 627.
4. Learned counsel further argues that the computation of compensation by the learned Tribunal is not in accordance with the settled principles of law. On these grounds, it is urged that the present appeal deserves to be allowed and the impugned award be suitably modified.
5. Per contra, learned counsel for the respondent–claimants vehemently opposes the appeal and submits that the compensation awarded under the 1988 Act cannot be reduced by deducting the amount received under the 2006 Rules, as both have distinct purposes and objects. It is contended that the financial assistance under the 2006 Rules is a welfare measure intended to provide immediate relief to the dependents of a deceased government employee who dies in harness, whereas compensation under the 1988 Act is granted to compensate for the death caused by a motor accident. In support of this submission, reliance is placed upon the judgment of the Hon’ble Supreme Court in Sebastian Lakra v. National Insurance Company Limited , (2019) 17 SCC 465.
6. He further submits that the amount of compensation awarded by the learned Tribunal is on the lower side. He points out that the claimants have already filed a separate appeal, being FAO-4186-2019, titled as “Sunita and others Vs. Ramphal and others”, challenging the quantum of compensation awarded by the Tribunal and seeking its enhancement. He, therefore, prays that the present appeal filed by the Insurance Company be dismissed and that the compensation be suitably enhanced in accordance with the latest law laid down by the Hon’ble Supreme Court.
7. I have heard learned counsel for the parties and perused the whole record of this case with their able assistance.
8. The issue to be decided by this Court in the present appeal is as to wheth
