NATIONAL INSURANCE CO. LTD.versusREKHABEN & ORS.

                        [2017] 2 S.C.R. 691



               NATIONAL INSURANCE CO. LTD.                               A
                                 v.
                       REKHABEN & ORS.

                  (Civil Appeal No. 8867 of2012)
                                                                         B
                         MARCH 07, 2017
        [S. A. BOBDE AND L. NAGESWARA RAO, JJ.]
Motor Vehicles Act, 1988:                                            •
         ss.163A, 166, 168 - Compensation - Salary received by the       c
claimants from compassionate appointment whether deductible from
the award of compensation made in favour of the claimants - Held:
Compensation is awarded on the basis of the entire loss of income
of the deceased or in a case of injury, for the loss of income due to
the injury - The income from compassionate appointment offered
to the dependants of the deceased or the injured. by ihe e111ployer      D
of the deceased/ Injured, who is not the tort feasor, cannot be
deducted from the· compensation receivable by him on account of
the accident from the tort feasor - The source from which
compensation on account of the accident is claimed and the source
from which the compassionate employment is offered, are completely       E
separate and there is no co-relation between these two sources -
Since the tort feasor has not offered the compassionate appointment,
an amount which a claimant earns by his labour or by offering his
services, whether by reason of compassionate appointment or
 otherwise is not liable to be deducted from the co111pensation which
 the claimant is entitled to receive from a tort feasor under the Act.   F

        Compensation - Determination of - Relevant factors - Held:
The income of the deceased or the injured, which the claimants
have lost due to death of the deceased or inability of the injured to
earn is a relevant factor for determining the amount of compensation
- The income of the dependant-claimant in case of death of earning       G
member is generally not a relevant factor in determining
compensation primarily because the law takes no cognizance of
the claimant's situation, though in case of an injury, the income of
the claimant who is injured is relevant.
                                                                         H
                                 691
692           SUPREME COURT REPORTS                      [2017] 2 S.C.R.


A            Dismissin~ the appeals, the Court

            HELD: 1.1 The liability to pay the amount of compensation
    under Section 163A of the Motor Vehicles Act, 1988, is imposed
    on the owner of the motor vehicle or the authorized insurer, in
    the case of death or permanent disablement due to accident arising
B   out of the use of motor vehicle. It is payable to the legal heirs or
    the victim, as the case may be. In other cases, an award may be
    made in respect of the claim arising out of the accident under
    Section 168 of the Act. The Tribunal may make an award
  • determining the amount of compensation "which appears to it to
    be just", specifying the person.or persons to whom compensation
c shall be paid and in making the award, the Tribunal shall specify
    the amount which shall he 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. In these cases, compensation is claimed against
    the tort feasor wh_o may be the driver or owner of the vehicle or
D the insurer. In respect of an accident in which the tort feasor is
    found to be liable, the owner or the driver of the vehicle or the
    insurer, as the c~se may be, may alone be held responsible for
    the payment of such compensation since the accident has resulted
    in the injury or death which gives rise to the claim of the claimants.
    No other party is involved in it. And certainly not the employer
E who may offer compassionate appointment to the dependants of
    the injured/ deceased. [Paras 10, 11] [697-A-EJ
              1.2 While awarding compensation, amongst other things,
      the Tribunal takes into account the income of the deceased and
      calculates the loss of such income after making permissible
F     deductions to compensate the injured claimant for the loss of ·
      earning capacity in case of an injury, and to compensate the
      claimants dependent on him in case of deat.h. Thus, the into.me
      of the deceased or the injured, which the ctaiman_ts.have· lost due
      to the inability of the deceased or the injured to earn or to provide
      for them is a relevant factor which is always taken into
      consideration. The salary or the income of the claimant in case of
      death is generally not a relevant factor in determining
      compensation primarily because the law takes no cognizance of
      the claimant's situation. Though in case ·of an injury, the income
      of the claimant who is injured is relevant. [Para 12) [697-E-GJ
H
  NATI,QNAL INSURANCE CO. LTD. v. REKHABEN & ORS.                       693
        '·

        1.3 In the present cases, the claimants were offered            A
compassionate employment. The claimants were not offered any
sum of money equal to the income of the deceased. In fact, they
were not offered any sum of money at all. They were offered .
employment and the money they receive in the form of their salary,
would be earued from such employment. The loss of income in
                                                                        B
such cases. cannot be said to be set off because the claimants
would be earning their living. Therefore, the amount earned by
the claimants from compassionate appointments cannot be
deducted from the quantum of compensation receivable by them
under the Act. The compensation is claimed from the owner of
the offending vehicle who is different from tile employer who 'bas       c
offered employment on compassionate gr'Jmids to the dependants
of the deceased/injured. The sou'~ce fro'm which compensation
on account of the accident is claimed and the source from which
the compassionate employment is offered, are compfotely
separate and there is no co-relation. between these two sourc~s.
                                                                        D.
Since the tort feasor has not offered the co_mpassionate
appointment, an amount which a claimant earns by his labour or
by offering his services, whether by reason of compassionate
appointment or otherwise is not liable to be deducted from the
compensation which the claimant is entitled' to receive from a
tort feasor under the Act. In such a situation, the financial benefit    E
of the compassionate employment is not liable to be deducted at
all from the compensation amount which is liable to be paid either
by the owner/ the driver of the offending vehicle or the insurer.
[Paras 18, 19] [701-H; 702-A-E]
        Vimal Kanwar & Ors. v. Kishore Dan & Ors._ (2013) 7              F
       sec 476 - relied on.
       Bhakra Beas Management Board v. Kanta Aggarwal
       and Ors. [2008] 10 SCR 165 : (2008) 11 SCC 366 -
       held inapplicable.
       Helen C. Rebello and others v. Maharashtra State Road             G
       Transpoft Corporation and another [1998] 1 Suppl.
       SCR 684 : (1999) 1 'SCC 90; United India Insurance
       Co. Ltd. & Ors. v. Patricia Jean Mahajan & Ors.
       [2002] 3 SCR 1176 : (2002) 6 seC 281; Reliance
       General Insurance Company Limited v. Shashi Sharfl'la
                                                                         H
694              SUPREME COURT REPORTS                         [2017] 2 S.C.R.


A             &. Ors. [2016] 6 SCR 488 : (2016) 9 SCC 627 -
              referred to.
                               Case Law Reference

      (2008] 10 S,CR 165                held inapplicable         Para 13
B     (1998] 1 Suppl. SCR 684           referred to               Para 14

      (2002] 3 SCR 1176                 referred to               Para 14

      c201J) 1 sec 476                  relied on                 Para 14

C     [2016] 6 SCR 488                  referred to               Para 15
                CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8867
      of2012.
             From the Judgment and Order dated 28/29.03.2012 of the High
      Court of Gujarat at Ahmedabad in First Appeal No. 736 of2012
D                                       WITH
                C. A. No. 3812 of2017. ·
              Dr. Meera Agarwal, Ramesh Chandra Mishra, Vishnu Mehra,
      Ms. Manjeet Chawla, Alok Bhachawat, Ms. K. V. Bharathi Upadhyaya,
E     Advs. for the appearing parties.
                The Judgment of the Court was delivered by
                S. A. BOBDE, J.
      Civil Appeal No. 8867of2012
F              1. The appellant-Insurance Company has preferred this appeal
      against the impugned judgment and order dated 28/29.03.2012 passed
      by the High Court of Gujarat at Ahmedabad in First Appeal No. 736 of
      2012, whereby the High Court partly allowed the appeal of the claimants
      to the .extent of enhancing the sum awarded by the Motor Accident
      Claims Tribunal in MACPNo.1239of1999 dated I 0.12.2010.
G
                 2. The deceased, Girddharbhai Pansuriya@Girish, an employee
        of Gujarat Electricity Board was travelling from Wankanerto Mendarda
        village, when his motorcycle was hit by a matador bearing registration
        no. GJ. l.T.T. 9761 insured by the appellant-National Insurance Co. Ltd .
      . The matador, moving at a high speed on the opposite side of the road,
H
  NATIONAL lNSURANCE CO. LTD. v. REKHABEN & ORS.                               695
                           rs.
                   A. BOBDE, J.l

dashed against the vehicle of the deceased from the front resulting in         A
the fatality.
        The wife ofthe deceased was given empl_oyment by the employer
of the deceased with a regular salary on grounds of compassionate
appointment.
         3. The claimants viz., the wife, one minor child and the parents B
of the deceased, filed a claim petition before the Motor Accident Claims
Tribunal (for short, the 'Tribunal'). On the date of the accident, the
deceased was working as Store Keeper with Gujarat Electricity Board.
The Tribunal awarded an amount ofRs.2,22,372/- with interest at the
rate of 9% per annum as compensation after deducting the amount of c
Rs. 7,000/- per month from the salary of the deceased as this amount of
Rs.7,000/- per month after deduction was received by respondent no.I
as salary from the employment which was given to her on compassionate
ground hy the employer due to the death of her husband. Being aggrieved,
the claimants preferred an appeal before the High Court. The High Court
allowed said appeal and enhanced the compensation to Rs.14,90,000/- ·o
along with interest at the rate of7.5% per ~nnum on the enhanced amount.
         4. The High Court refused° to deduct the amount r~ceived by
the widow as salary on account of compassionate appointment in the
Gujarat Electricity Board granted to her by the employer due to her
husband's death ..Being aggrieved, the appellant preferred this appeal          E
against the impugned judgment and order dated 28/29 .03.2012, passed
by the High Court in First Appeal No.736 of2012.
Civil Appeal No. 3812 of 2017@ SLP {C) No. 26882/2013
        Leave Granted.
                                                                                F
         5. The appellant-Insurance Company has preferred this appeal
against the impugned judgment and order dated 15.02.2013 passed by
the High Court of Gujarat at Ahmedabad in First Appeal No.1398 of
2002, whereby the High Court dismissed the appeal and affirmed the
award passed by the Motor Accident Claims Tribunal in MACPNo.193
                                                                                G
of 1994 dated 05.11.2001.
         6. The injured, Ramrajsinh, an employee of Gujarat Electricity
Board, was travelling in a matador van bearing registration no. GJ .3.T.9537
in the course of his employment. A truck bearing no. GJ.3.T.906 insured
by the appellant-National Insurance Co. Ltd came from the opposite
                                                                                H
696             SUPREME COURT REPORTS                           [20 I 7] 2 S .C.R.



A     side of the road and collided with the van. As a result of the collision, the
      victim was seriously injured and suffered 70% permanent disability of
      his entire body. He was found unfit for further continuation in the job.
               The wife of the injured was given employment by the employer
      of the injured in the same post on grounds of compassionate appointment.
B.             7. The claimant viz. the wife of the injured filed an application
      for compensation before the Motor Accident Claims Tribunal at Bhuj
      (for short, the 'Tribunal') from the opponents for the injuries sustained
      by her husband. By an award dated 05.11.2011, the Tribunal allowed the
      application for compensation and awarded total compensation of
c     Rs.8,95,0001- with interest at the rate of9% per annum to the claimant.
      Being aggrieved, the appellant challenged the said award by filing an
      appeal before the High Court under Section 173 of the Motor Vehicles
      Act, 1988, inter a/ia, on the ground that since the wife of the injured had
      been given appointment on compassionate grounds, the Tribunal should
      have taken into consideration the income receivable by the wife from
D     such appointment for calculating the pecuniary loss suffered by the victim.
              The High Court while affirming the award of the Tribunal,
      dismissed the appeal. Being aggrieved, the appellant-Insurance Company
      preferred this appeal against the impugned judgment and order dated
      15.02.2013, passed by the High Court in First Appeal No.1398 of2012.
E
               8. In both these appeals, the appellant has challenged the
      impugned judgments and orders passed by the High Court holding that
      while granting compensation to the claimants in respect of fatal accidents
      under the Statute, the amount receivable by the claimants from
      compassionate appointment given to them by the employer, should not
F     be deducted. In other words, compensation should be granted irrespective
      of the income received from compassionate appointment.
              9. The main contention of the appellant in these appeals is that
      the amount of salary received by the claimants being appointed by the
      employers of the deceased on compassionate grounds must be reduced
 G    from the award of compensation made in favour of the claimants. Thus,
      the only issue before us in these appeals is whether the income of the
      claimants from compassionate employment is Iiable to be deducted from
      the compensation amount awarded by the Tribunal under the Statute.
               10. The payment of compensation may be claimed under Section
H
  NATIONAL INSURANCE CO. LTD. v. REKHABEN & ORS.                               697
                 [S. A. BOBDE, J.]

163Aofthe Motor Vehicles Act, 1988 (for short, the 'Act'). The liability       A
to pay the amount of compensation under Section I 63A of the Act, is
imposed on the owner of the motor vehicle or the authorized insurer, in
the case of death or permanent disablement due to accident arising out
of the use of motor vehicle. It is payable to the legal heirs or the victim,
as the case may be. In other cases, an award may be made in respect of
                                                                                B
the claim arising out of the accident under Section 168 of the Act. The
Tribunal may make an award determining the amount of compensation
"which appears to it to be just", specifying the person or persons to
whom compensation shall be paid and in making the award, the 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    c
the case_ may be.
         11. In these cases, compensation is claimed against the tort feasor
who may be the driver or owner of the vehicle or the insurer. In respect
ofan accident in which the tort feasor is found to be liable, the owner or
the driver of the vehicle or the insurer, as the case may be, may alone be      D
held responsible for the payment of such compensation since the accident
has resulted in the injury or death which gives rise to the claim of the
claimants. No other party is involved in it. And certainly not the employer
who may offer-compassionate appointment to the dependants of the
injured/ deceased.
                                                                                E
          12. While awarding compensation, amongst other things, the
Tribunal takes into account the income of the deceased and calculates
the loss of such income after making permissible deductions to compensate
the injured claimant for the loss of earning capacity in case of an injury,
and to compensate the claimants dependent on him in case of death.
Thus, the income of the deceased or the injured, which the claimants            F
have lost due to the inability of the deceased or the injured to earn or to
provide for them is a relevant factor which is always taken into
consideration. The salary or the income of the claimant in case of death
is generally not a relevant factor in determining compensation primarily
because the law takes no cognizance of the claimant's situation. Though         G
in case ofan injury, the income of the claimant who is injured is relevant.
In other words, compensation is awarded on the basis of the entire loss
of income of the deceased or in a case of injury, for the loss of income
due to the injury. What needs to be considered is whether compassionate
appointment offered to the dependants of the deceased or the injured,
                                                                                H
698             SUPREME COURT REPORTS                          [2017] 2 S.C.R.


A     by the employer of the deceased/ injured, who is not the tort feasor, can
      be deducted from the compensation receivable by him on account of the
      accident from the tort feasor. Certainly, it cannot be that the one liable
      to compensate the claimants for the loss of income due to the accident,
      can have his liability reduced by the amount which the claimants earn as
      a result of compassionate appointment offered by another viz. the
B
      employer,
               13. The submission on behalf of the appellant in these cases is
      that the salary of the claimants receivable on account of compassionate
      appointment must be deducted from the compensation awarded to them.
      Reliance is placed in this regard on the judgment of this Court in the
c     case of Bhakra Beas Manage111e11t Board vs. Kania Aggarwal and
      Ors'. in which compensation was claimed against the employer of the
      deceased who was also the owner of the offending vehicle i.e. the tort
      feasor. The tort feasor offered employment on compassionate grounds
      to the widow of the deceased - i.e. the claimant. In the facts and
      circumstances of the case, this Court took the view that the salary which
D
      flowed from the compassionate appointment offered by the tort feasor,
      was liable to be deducted from the compensation which was payable by
      the same employer in his capacity as the owner of the offending vehicle.
      We find this decision as being of no assistance to the appellant in the
      cases before us. In the present cases, the owner of the offending vehicle
E     is not the employer who offered the compassionate appointment. As
      observed earlier, it is difficult to see how the owner can contend that the
      compensation which he is liable to pay for causing the death or disability
      should be reduced because of compassionate employment offered by
      another. In any case, it is difficult to determine how much the person
      offered compassionate appointment would earn over the period of
F
      employment which is not certain, and deduct that amount from the
      compensation.
              14. At th is juncture, it would be apposite to refer to some of the
      decisions rendered by this Court. In case of Helen C. Rebello and
      others vs. Maharashtra State Road Transport Corporation and
G     another', the insurance company had claimed that the amount which
      was received by the claimant on account of life insurance was liable to
      be deducted from the compensation which is payable to the claimants.
      This contention was rejected by this Court in the following words:
      1
        (2008) 11 sec 366
H     '(1999) I SCC90
NATIONAL INSURANCE CO. LTD. v. REKHABEN & ORS.                             699
               rs. A. BOBDE, J.l
   "36. As we have observed, the whole scheme of the Act, in               A
   relation to the payment of compensation to the claimant, is a
   beneficial legislation. The intention of the legislature is made more
   clear by the change of language from what was in the Fatal
   Accidents Act, 1855 and what is brought under Section 110-B of
   the 1939 Act. This is also visible through the provision of Section
                                                                            B
   168(1) under the Motor Vehicles Act, I 988 and Section 92-A of
   the 1939 Act which fixes the liability on the ownerofthe vehicle
   even on no fault. It provides that where the death or pen11anent
   disablement of any person has resulted frotp an accident in spite
   ofno fault of the ownerofthe vehicle, an amount of compensation
   fixed therein is payable to the claimant by such owner of the            c
   vehicle. Section 92-B ensures that the claim for compensation
    under Section 92cA is in addition to any other right to claim
   compensation in respect whereof (sic thereof) under any other
   provision of this Act or of any other law for the time being in
    force. This clearly indicates the intention of the legislature which
                                                                            D
    is conferring larger benefit on the claimant. Interpretation of such
    beneficial legislation is also well settled. Whenever there be two
    possible interpretations in such statute, then the one which
    subserves the object of legislation, viz., benefit to the subject
    should be accepted. In the present case, two interpretations have
    been given of this statute, evidenced by two distinct sets of           E
    decisions of the various High Coutts. We have no hesitation to
    conclude that the set of decisions, which applied the principle of
    ml deduction of the life insurance amount, should be accepted
    and the other set, which interpreted to deduct, is to be rejected.
    For all these considerations, we have no hesitation to hold that
                                                                            F
    such High Courts were wrong in deducting the amount paid or
    payable under the life insurance by giving a restricted meaning
    to the provisions of the Motor Vehicles Act basing mostly on the
     language of English statutes and not taking into consideration
    the changed language and intents of the legislature under various
    provisions of the Motor Vehicles Act, 1939.                             G
    37. Accordingly, we set aside the impugned judgment dated 9-9-
    1985 and restore the judgment of the Tribunal dated 29-9-1980
    and hold that the amount received by the claimant on the life
    insurance of the deceased is not deductible from the compensation
                                                                            H
700            SUPREME COURT REPORTS                          [2017] 2 S.C.R.


A·           computed under the Motor Vehicles Act. The respondent
             concerned shall make the payment accordingly, if not already
             paid in terms thereof."
               Similarly, in the case of United India Insurance Co. Ltd &
      Ors. vs. Patricia Jean Mahajan & Ors.' , this Court held that the
B     amount received by the claimants on account of social security from an
      employer must have a nexus or relation with the accidental injury or
      death, in order to be deductible from the amount of compensation. Hence,
      this Court refused to deduct the said amount from the amount of
      compensation receivable on account of the motor accident.

c              The facts of the case in Vimal Kanwar & Ors. vs. Kishore
      Dan & Ors'. are similar to the facts of the cases in hand. The contention
      in the said case was that the amount of salary receivable by the claimant
      appointed on compassionate ground was deductible from the amount of
      compensation which the claimant was entitled to receive under Section
      168 of the Motor Vehicles Act, 1988. This Court rejected the said
D     contention and observed as follows:
              "21. "Compassionate appointment" can be one of the conditions
              of service of an employee, if a scheme to that effect is framed
              by the employer. In case, the employee dies in harness i.e. while
              in service leaving behind the dependants, one of the dependants
E             may request for compassionate appointment to maintain the family
              of the deceased employee who dies in harness. This cannot be
              stated to be an advantage receivable by the heirs on account of
              one's death and have no correlation with the amount receivable
              under a statute occasioned on account of accidental death.
F             Compassionate appointment may have nexus with the death of
              an employee while in service but it is not necessary that it should
              have a correlation with the accidental death. An employee dies
              in harness even in normal course, due to illness and·to maintain
              the family of the deceased one of the dependants may be entitled
              for compassionate appo.intment but that cannot be termed as
G             "pecuniary advantage" that comes under the periphery of the
              Motor Vehicles Act and any amount received on ·such
              appointment is not liable for deduction for determination of
              compensation under the Motor Vehicles Act."
      '(2002) 6 sec 2s1
H     '(2013) 1 sec 476
  NATIONAL INSURANCE CO. LTD. v. REKHABEN & ORS.                            701
                 rs. A. BOBDE, J.l
         15. In the case of Reliance General Insurance Company               A
Limited vs. Shashi Sharma & Ors'., this Court permitted the deduction
of.the amount receivable by the claimant under the scheme of the 2006
Rules framed by the State of Haryana which provided a grant of
compassionate assistance by way of ex gratia financial assistance on
compassionate grounds to the members of the family of a deceased
                                                                             B
government employee who died while in service/missing government
employee.
         16. The financial assistance was a sum equal to the pay and
other allowances that were last drawn by the deceased employee in the
normal course without raising a specific claim for periods up to 15 years
from the date of the death of the employee if the employee had not           c
attained the age of35 years, and lesser periods of 12 years and 7 years
depending on the age of the employee at the time of death. The family
was eligible to receive family pension only after the period of financial
assistance was completed. The Court held that ex gratia financial
assistance was liable to be deducted on the ground that the claimant         D
was eligible to it on account of the same event in which the compensation
was claimed under tl]e Motor V,ehicles Act, 1988, i.e. the death of the
employee.
         17. This case seems to superficially support the case of the
appellant Insurance Company before us. However, on a deeper
                                                                             E
consideration, it does not. In Reliance General Insurance (supra), the
family of the deceased employee became entitled to financial assistance
of a sum equal to the pay and other allowances that were last drawn by
the deceased for a certain period after his death, even without raising a
specific claim. In other words the family became entitled to the pay &
allowances that the deceased would have received ifhe would have not         F
died, for a certain period of time. This financial scheme resulted in
paying the family the same pay and allowances for a certain period and
thus in effect clearly offseting the loss of income on account of the
death of the deceased. Thus, the amount of financial assistance had to
be excluded from the loss of income, as to that extent there was no loss
                                                                             G
of income, and the compensation receivable by the family had to be
reduced from the amount receivable under the Motor Vehicles Act.
       18. In the present cases, the claimants were offered
compassionate employment. The claimants were not offered any sum
 '(2016) 9 sec 621
                                                                             H
702              SUPREME COURT REPORTS                          [2017] 2 S.C.R.


A     of money equal to the income of the deceased. In fact, they were not
      offered any sum of money at all. They were offered employment and
      the money they receive in the form of their salary, would be earned from
      such employment. The loss of income in such cases cannot be said to
      be set off because the claimants would be earning their living. Therefore,
      we are of the view that the amount earned by the claimants from
B
      compassionate appointments cannot be deducted from the quantum of
      compensation receivable by them under the Act.
                19. In the cases before us, compensation is claimed from the
      owner of the offending vehicle who is different from the employer who
      has offered employment on compassionate grounds to the dependants
c     of the deceased/injured. The source from which compensation on account
      of the accident is claimed and the source from which the compassionate
      employment is offered, are completely separate and there is no co-relation
      between these two sources. Since the tort feasor has not offered the
      compassionate appointment, we are of the view that an amount which a
.D    claimant earns by his labour or by offering his services, whether by
      reason of compassionate appointment or otherwise is not liable to be
      deducted from the compensation which the claimant is entitled to receive
      from a tort feasor under the Act. In such a situation, we are of the view
      that the financial benefit of the compassionate employment is not liable
      to be deducted at all from the compensation amount which is liable to be
E     paid either by the owner/ the driver of the offending vehicle or the insurer.
              Hence, we find no merit in these appeals and they are dismissed
      accordingly.


F     Devika Gujral                                                Appeals disn1issed.