- (1.) These five appeals are placed for the decision of the Division Bench by the learned Single Judge vide orders dated July 23, 2012. The said self-speaking order of the learned Single Judge discloses the necessity of hearing cases by the Division Bench and, therefore, we would like to reproduce that order in its entirety:- Out of these bunch cases of five appeals, two have been preferred by claimants seeking enhancement of compensation and others by insurance company impugning the award on the ground that compensation granted is on the higher side. Learned counsel for the parties submit that two coordinate benches of this court have taken two different views in the matter. In the judgment reported as New India Assurance Co. Ltd. v. Smt. Santosh & others, 2010 160 PunLR 780, it has been held that the amount of compensation received from the government under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006, would be deducted from the total compensation determined. Operative part of the said judgment being as under:- I would, therefore, take the actual benefit, which obtains to the claimants through the Government scheme and deduct it from the amount, which would become payable if we apply the formula in Sarla Verma that takes due notice of an estimation for future increase and an application of multiplier appropriate to the age. The difference in the amount is the amount of compensation that will become payable. In another judgment, however, reported as Oriental Insurance Company Ltd. v. Saroj Devi and others, 2012 3 RCR(Civ) 292, it has been held as follows:- I, therefore, hold that financial assistance under the Compassionate Assistance under the Compassionate Assistance Rules and the compensation as assessed under the relevant provisions of Motor Vehicles Act are mutually exclusive and have no reciprocal bearing on the quantum as arrived at under the respective heads. Accordingly, I hold that the Insurance Companies are liable under the terms of their contract with the insured, independent of the financial assistance as received under State compassionate assistance policy, to pay the compensation as assessed by the learned Tribunals under section 166 or 163A of the Motor Vehicles Act, except to the extent worked out in accordance with the formulae as detailed herein above. It is, thus, evident that in the judgment in Saroj Devi's case , financial assistance under the policy and the Act has been taken to be mutually exclusive. However, a formula has been adopted for computing compensation in such cases. While counsel for the claimants would urge that ratio of the law laid down in Saroj Devi's case should be followed, insurance company wants this court to proceed on the basis of judgment rendered in Santosh & others . In view of the importance of the question involved and somewhat different views taken by two Single Benches, it appears that matter needs to be settled by reference to a Larger Bench. Be placed before Hon'ble the Acting Chief Justice for appropriate orders. A photo copy of this order be placed on the files of the connected cases. What follows from the reading of the aforesaid order is that the question that needs to be determined is: Whether the compensation received from the government under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 (or otherwise) is to be deducted from the total compensation, which is payable to the dependents of the deceased, who dies in an accident, while computing financial benefits through ex-gratia payments by the government. In Smt. Santosh , a learned Single Judge has answered in affirmative, whereas, another single Judge in Saroj Devi has taken a contrary view. It would, therefore, be apposite to go into the reasons given by the two learned Judges, in support of their respective conclusions.
(2.) Government of Haryana has published notification dated 1.8.2006 promulgating the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006. Under these rules, financial assistance is given to assist the families of deceased/missing Government employees of Group A, B, C & D category in tiding over the emergent situation, resulting from the loss of the bread-earner while in regular service. These rules are reproduced in toto hereunder:- 1. (1) These rules may be called the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006. (2) They shall come into force at once. 2. The object of the rule is to assist the family of a deceased/missing Government employee of Group C and D category, in tiding over the emergent situation, resulting from the loss of bread-earner while in regular service by giving financial assistance. 3. The eligibility to receive financial assistance under these rules shall be as per the provision in the pension/family pension scheme, 1964. 4. An eligible family member of the deceased/missing Government employee shall make an application Form A for compassionate financial assistance. 5. (1) On the death of any Government employee, the family of the employee would continue to receive as financial assistance a sum equal to the pay and other allowances that was last drawn by the deceased employee in the normal course without raising a specific claim;- (a) for a period of fifteen years from the date of death of the employee, if the employee at the time of his death had not attained the age of thirty five years; (b) for a period of twelve years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less, if the employee at the time of his death had attained the age of thirty five years but had not attained the age of forty-eight years; (c) for a period of seven years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less, if the employee had attained the age of forty five years; (2) The family shall be eligible to receive family pension as per the normal rules only after the period during which he receives the financial assistance as above is completed. (3) The family of a deceased Government employee who was in occupation of a Government residence would continue to retain the residence on payment of normal rent/licence fee for a period of one year from the date of death of the employee. (4) Within fifteen days from the date of a Government employee, an ex-gratia assistance of twenty five thousand rupees shall be provided to the family of the deceased employee to meet the immediate needs on the loss of the bread earner. (5) House Rent Allowance shall not be a part of allowance for the purposes of calculation of assistance. Since the claimants in the present cases had received financial assistance, under the aforesaid rules, from the Haryana Government, in that context, question arose as to whether insurance company (or for that matter owner of the vehicle) can seek deduction of the said financial assistance while paying compensation to the claimants under the provisions of the Motor Vehicles Act.
(3.) In Smt. Santosh while ruling in favour of the Insurance Company, the learned Single Judge relied upon the judgment of the Supreme Court in Bhakra Beas Management Board v. Kanta Aggarwal, 2008 11 SCC 366. The rationale given by learned Single Judge is found in para-7 and 8 thereof which makes the following reading:- VI. Contentions examined in the light of court decisions 7. The most significant pronouncement on the relevance of the benefit obtained to the representatives of the deceased has come through the judgment of the Hon'ble Supreme Court in Bhakra Beas Management Board v. Kanta Aggarwal, 2008 11 SCC 366. In that case the claimant lost her husband in a motor accident. She had been given compassionate appointment through which she received a monthly salary of Rs. 4700/- and was also provided accommodation. The Tribunal took this to be totally irrelevant and determined a compensation of Rs. 8,48,160/- plus interest @ 9%. The death had taken place 14 years before the adjudication came to Hon'ble Supreme Court and at the time of admission of the SLP, an amount of Rs. 5,00,000/- had been directed to be deposited. The contention on behalf of the Bhakra Beas Management Board, which had been directed to give the compensation was that the compassionate appointment provided to the wife and free accommodation which had been given to her must have been taken due notice of Reliance was made on the earlier judgment of the Hon'ble Supreme Court in United India Insurance Co. Ltd. v. Patricia Jean Mahajan, 2002 6 SCC 281 and still earlier ruling in Gobald Motor Service Ltd. v. R.M.K. Veluswami, 1962 AIR(SC) 1. The judgment traversed the reasoning in Gobald Motor Service Ltd's case , which obtained the benefit of observations of House of Lords in Davies v. Powell Duffryn Associated Collieries Ltd.,1942 1 AllELR 657, which said "the general rule, which has always prevailed in regard to assessment of damages and a Fatal Accidents Act is well settled, namely, that any benefit accruing to a dependent by reason of the relevant death must be taken into account. Under those Acts, the balance of loss and gain to a dependent by the death must be ascertained, the position of each dependent being considered separately." The basis was observed by the House of Lords as "The damages are to be based on the reasonable expectation of pecuniary benefit or benefit reducible to money value. In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered...... The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which from whatever source comes to him by reason of the death." These observations had been reiterated in subsequent pronouncements of the Hon'ble Supreme Court in Sheikhupura Transport Co. Ltd v. Northern India Transporters Ins. Co. Ltd., 1971 1 SCC 785 and General Manager, Kerala State Road Trans. Corpn. v. Susamma Thomas, 1994 2 SCC 176. The principle of balance of loss and gain so as to arrive at a just and fair amount of compensation has thus been accepted by the Hon'ble Supreme Court and expected to be followed by all Courts as well. A still later decision of the House of Lords in Hodgson v. Trapp, 1988 3 AllER 870 gave a fuller expression to the same idea in the following observations:- ...The basic rule is that it is the net consequential loss and expense which the Court must measure, if, in consequence of the injuries sustained, the plaintiff has enjoyed receipts to which he would not otherwise have been entitled, prima facie, those receipts are to be set against the aggregate of the plaintiff's losses and expenses in arriving at the measure of his damages. All this is elementary and has been said over and over again. To this basic rule there are, of course, certain well established, though not always precisely defined and delineated, exceptions..... It is the rule which is fundamental and axiomatic and exceptions to it which are only to be admitted on grounds which clearly justify their treatment as such. VII. Balancing of loss of benefit that would have accrued with benefit that will accrue to representative by reason of death; with exceptions 8. The general principle of estimating damages shall be by balancing of what is the loss to the claimants of the future pecuniary benefits that would accrue to a person if he had not died, with the pecuniary advantage from whichever source it comes. At common law, the balancing act would always be invoked while determining the compensation payable to victims of motor accident claims. This was set in Helen C. Rebello v. Maharashtra State Road Trans. Corpn., 1999 1 SCC 90 as a guiding principle for determining compensation and still later dealt with in great detail by the Hon'ble Supreme Court in United India Insurance Co. Ltd. v. Patricia Jean Mahajan and others, 2002 6 SCC 281. Having set down the law, the Hon'ble Supreme Court, in Patricia Jean Mahajan's case, dealt with the exceptions which we have referred to above. It said only the receipts which have correlation with the accidental death would be deductible and amounts received by the dependents on account of insurance policy of the deceased or amounts received by them under social security system, which would have come to them even without reference to death would have no such correlation with the accidental death and hence would not be deductible. The reasoning is obvious. The amount that a person obtains by way of terminal benefits or pension are all methods of deferred payment of wages. It is a consideration for the service already rendered which stand accrued to the estate of the deceased and therefore, they cannot be permitted to be deducted on the death of the person. In matters of insurance, for instance, it is the payment for the premium periodically, which would make possible a return of lump sum on the happening of the event mentioned in the policy. In the case of payments under the social security system, the Court found in Patricia Jean Mahajan that as a matter of fact, they were again returns secured to the family for periodical contributions made and some deductions made from the salary during the life time. Amounts that come by way of recompense or a consideration for some service were found not to be related to the death and therefore, found not deductible.;