NATIONAL INSURANCE COMPANY LIMITEDversusBIRENDER AND ORS.

946                       [2020]
               SUPREME COURT     1 S.C.R. 946
                              REPORTS                        [2020] 1 S.C.R.


A              NATIONAL INSURANCE COMPANY LIMITED
                                        v.
                            BIRENDER AND ORS.
                       (Civil Appeal Nos. 242-243 of 2020)
B                              JANUARY 13, 2020
       [A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
             Motor Vehicles Act, 1988 – s.166 – Application for
      compensation – Haryana Compassionate Assistance to the
      dependents of deceased Government Employees Rules, 2006 – The
C
      claim petition was filed by the respondent nos. 1 & 2, who were the
      major sons of the deceased – The Tribunal held that respondent
      nos. 1 & 2 cannot be deprived of the pecuniary benefits through
      the deceased – The deduction towards personal expenses was kept
      at 50% as the respondent nos. 1 & 2 were major and earning hands
D     – The total compensation was computed at Rs. 17,40,532/- –
      However, the High Court noted that the financial assistance available
      to the family of deceased, under the 2006 Rules would be
      Rs. 33,29,712/- and deducted 50% of the said amount from
      compensation amount of Rs. 29,20,772/ - – The High Court then
      deducted Rs.16,64,856/- from the compensation amount of
E
      Rs. 29,20,772/- – Appellant contended that High Court ought to
      have deducted the entire amount of financial assistance under the
      2006 Rules – Respondents contended that the High Court erred in
      deducting 50% of the amount from compensation instead of one
      third – On appeal held: The view taken by the High Court is not a
F     correct reading of the decision of the Supreme Court in Shashi
      Sharma case – The High Court committed manifest error in assuming
      that the respondent nos. 1 & 2 would be eligible to receive financial
      assistance under the 2006 Rules – Further, there is no clear evidence
      to get financial assistance or in fact, they are getting such financial
      assistance under the 2006 Rules – The High Court, therefore, instead
G
      of providing deduction of the amount receivable by the legal
      representative of the deceased on this count (under the 2006 Rules),
      from the compensation amount, should have independently
      determined the compensatory amount and ordered payment thereof
      subject to legal representative of the deceased filing affidavit/
H
                                       946
       NATIONAL INSURANCE COMPANY LIMITED v.                            947
                 BIRENDER AND ORS.

declaration before the executing court that they have not received      A
nor would they claim any amount towards financial assistance under
2006 Rules, so as to become entitled to withdraw the entire
compensation amount.
       Motor Vehicle Act,1988 – s.166 – Application for
compensation – Major sons of the deceased who were married and          B
gainfully employed – Entitlement of – Held: The legal representative
of the deceased could move application for compensation by virtue
of cl(c) of s.166 – The Supreme court in Manjuri Bera had
expounded that liability to pay compensation under the case does
not cease because of absence of dependency of the concerned legal
representative – It is settled that the legal representative of the     C
deceased have the right to apply for compensation – Having said
that, it must necessarily follow that even the major married and
earning sons of the deceased being legal representative have a right
to apply for compensation and it would be the bounden duty of the
Tribunal to consider the application irrespective of the fact whether   D
the concerned legal representative was fully dependent on the
deceased and not to limit the claims towards conventional heads
only.
      Partly allowing the appeals, the Court
      HELD: Whether the major sons of the deceased who are              E
married and gainfully employed or earning, can claim
compensation under the Motor Vehicles Act, 1988? Whether such
legal representatives are entitled only for compensation under
the conventional heads? Whether the amount receivable by the
legal representatives of the deceased under the 2006 Rules is           F
required to be deducted as a whole or only portion thereof ?
[957-B-C]
     1. Reverting to the first issue - that needs to be answered
on the basis of the scheme of the Act. Section 166 of the Act
provides for filing of application for compensation by persons          G
mentioned in clauses (a) to (d) of sub-Section (1) thereof. [Para
13][957-D]
      2. The legal representatives of the deceased could move
application for compensation by virtue of clause (c) of Section
166(1). The major married son who is also earning and not fully         H
948            SUPREME COURT REPORTS                      [2020] 1 S.C.R.


A     dependant on the deceased, would be still covered by the
      expression “legal representative” of the deceased. This Court
      in Manjuri Bera had expounded that liability to pay compensation
      under the Act does not cease because of absence of dependency
      of the concerned legal representative. Notably, the expression
      “legal representative” has not been defined in the Act.
B
      [Para 14][958-D-E]
            3. In paragraph 15 of the said decision, while adverting to
      the provisions of Section 140 of the Act, the Court observed that
      even if there is no loss of dependency, the claimant, if he was a
C     legal representative, will be entitled to compensation. The
      compensation constitutes part of the estate of the deceased. As
      a result, the legal representative of the deceased would inherit
      the estate. Indeed, in that case, the Court was dealing with the
      case of a married daughter of the deceased and the efficacy of
      Section 140 of the Act. Nevertheless, the principle underlying
D     the exposition in this decision would clearly come to the aid of
      the respondent Nos. 1 and 2 (claimants) even though they are
      major sons of the deceased and also earning. [Para 14][959-F-H;
      960-A]
             4. It is settled by now that the legal representatives of the
E     deceased have a right to apply for compensation. Having said
      that, it must necessarily follow that even the major married and
      earning sons of the deceased being legal representatives have a
      right to apply for compensation and it would be the bounden duty
      of the Tribunal to consider the application irrespective of the fact
F     whether the concerned legal representative was fully dependant
      on the deceased and not to limit the claim towards conventional
      heads only. The evidence on record in the present case would
      suggest that the claimants were working as agricultural labourers
      on contract basis and were earning meagre income between
      Rs.1,00,000/- and Rs.1,50,000/- per annum. In that sense, they
G     were largely dependant on the earning of their mother and in
      fact, were staying with her, who met with an accident at the young
      age of 48 years. [Para 15][960-B-C]

            5. The next issue is about the deduction of the amount
      receivable by the legal representatives of the deceased under
H
       NATIONAL INSURANCE COMPANY LIMITED v.                           949
                 BIRENDER AND ORS.

the 2006 Rules from the compensation amount determined by              A
the Tribunal in terms of the decision of three-Judge Bench of
this Court in Shashi Sharma. [Para 16][960-D]

      6. The Judge of the High Court has, however, after
adverting to the decision of the same High Court in Ajmero, went
on to observe that 50% of the amount receivable by the legal           B
representatives of the deceased towards financial assistance
under the 2006 Rules is required to be deducted from the
compensation amount. [Para 16][962-G]

       7. The view so taken by the High Court is not the correct       C
reading of the decision of three-Judge Bench of this Court in
Shashi Sharma for more than one reason. First, this Court was
conscious of the fact that under Rule 5(2) of the 2006 Rules, the
family pension receivable by the family would be payable, however,
only after the period, during which the financial assistance is
received, is completed. In that context, in paragraph 24 of the        D
reported decision, the Court clearly noted that the amount towards
family pension cannot be deducted from the claim amount for
determination of a just compensation under the Act. Further, the
High Court has erroneously assumed that the family of the
deceased would be entitled for family pension amount immediately       E
after the death of the deceased employee. That is in the teeth of
the scheme of the 2006 Rules, in particular Rule 5(2) thereof.
The said Rules provide for financial assistance on compassionate
grounds, as also, other benefits to the family members of the
deceased employee and as a package thereof, Rule 5(2) stipulates
that the family pension as per the normal rules would be payable       F
to the family members only after the period of delivery of financial
assistance is completed. The validity of this provision is not put
in issue. Suffice it to say that the view taken by the High Court in
Ajmero is a departure from the scheme envisaged by the 2006
Rules, in particular, Rule 5(2). That cannot be countenanced.          G
[Para 17][963-C-F]

     8. As a matter of fact, in the present case, the High Court
committed manifest error in assuming that the respondent Nos.
1 and 2 would be eligible to receive financial assistance under
                                                                       H
950            SUPREME COURT REPORTS                       [2020] 1 S.C.R.


A     the 2006 Rules. The eligibility to receive such financial assistance
      has been spelt out in Rule 3 of the 2006 Rules read with the
      provision of Pension/Family Pension Scheme, 1964. It appears
      that major sons and married daughters are not included in the
      definition. However, we need not dilate on that aspect in the
      present proceedings any further. It has come in the evidence of
B
      clerk in SDM Office (PW-1) that the legal representatives of the
      deceased have not submitted any request for getting financial
      assistance till he had deposed. Indeed, respondent No. 1, who
      had entered the witness box, did depose that they had applied
      for getting salary of their deceased mother. The fact remains that
C     there is no clear evidence on record that respondent Nos. 1 and
      2 are held to be eligible to get financial assistance or in fact, they
      are getting such financial assistance under the 2006 Rules. The
      High Court, therefore, instead of providing for deduction of the
      amount receivable by the legal representatives of the deceased
      on this count (under the 2006 Rules), from the compensation
D
      amount, should have independently determined the compensation
      amount and ordered payment thereof subject to legal
      representatives of the deceased filing affidavit/declaration before
      the executing Court that they have not received nor would they
      claim any amount towards financial assistance under the 2006
E     Rules, so as to become entitled to withdraw the entire
      compensation amount. [Para 18][964-G-H; 965-A-D]
            9. Reverting to the determination of compensation amount,
      it is noticed that the Tribunal proceeded to determine the
      compensation amount on the basis of net-salary drawn by the
F     deceased for the relevant period as Rs.16,918/- per month, while
      taking note of the fact that her gross-salary was Rs.23,123/- per
      month (presumably below taxable income). Concededly, any
      deduction from the gross-salary other than tax amount cannot be
      reckoned. In that, the actual salary less tax amount ought to have
      been taken into consideration by the Tribunal for determining
G
      the compensation amount, in light of the dictum of the Constitution
      Bench of this Court in paragraph 59.3 of Pranay Sethi.
      [Para 19][964-E-F]
            10. Similarly, the High Court despite having taken note of
      the submission made by the respondent Nos. 1 and 2 that the
H
       NATIONAL INSURANCE COMPANY LIMITED v.                            951
                 BIRENDER AND ORS.

deduction for personal expenses of the deceased should be               A
reckoned only as one-third (1/3rd) amount for determining loss
of dependency, maintained the deduction of 50% towards that
head as ordered by the Tribunal. This Court in Pranay Sethi, in
paragraph 37, adverted to the dictum of this Court in Sarla Verma
(Smt.) & Ors. vs. Delhi Transport Corporation & Anr. with approval,
                                                                        B
wherein it is held that if the dependant family members are 2 to
3, as in this case, the deduction towards personal and living
expenses of the deceased should be taken as one-third (1/3rd).
In other words, the deduction towards personal expenses to the
extent of 50% is excessive and not just and proper considering
the fact that the respondent Nos. 1 and 2 alongwith their respective    C
families were staying with the deceased at the relevant time and
were largely dependant on her income. [Para 20][964-G; 965-A-
B]
      11. The High Court, without reversing the said finding,
proceeded to include the amount of Rs.7,000/- per month received        D
by the deceased as pension amount after demise of her husband.
This Court is in agreement with the view taken by the Tribunal
and for the same reason, have to reverse the conclusion recorded
by the High Court to include the said amount as loss of
dependency. That could not have been taken into account, as the
same was payable only to the deceased being widow and not her           E
income as such for the purpose of computing the amount of
compensation. [Para 21][965-E]
      12. Respondent Nos. 1 and 2 would be entitled for
compensation to be reckoned on the basis of loss of dependency,
due to loss of gross salary (less tax amount, if any) of the deceased   F
and future prospects and deduction of only one-third (1/3rd)
amount towards personal expenses of the deceased. As regards
the multiplier ‘13’ applied by the Tribunal and the High Court,
the same needs no interference. As a result, on the facts and in
the circumstances of this case, the amount payable towards              G
compensation will have to be recalculated on the following basis:-
      Loss of dependency due to loss of income calculated at
Rs.31,26,229.60/-[(Rs.23,123/- x 12 x 13) + (30% future
prospects) – (1/3rd deduction for personal expenses)]. In
addition, the claimants would be entitled for a sum of Rs.70,000/       H
952            SUPREME COURT REPORTS                      [2020] 1 S.C.R.


A     - towards conventional heads in terms of dictum in paragraph
      59.8 of Pranay Sethi. Thus, a total sum of Rs.31,96,230/- (Rupees
      thirty-one lakhs ninety-six thousand two hundred thirty only), as
      rounded off, is payable to the claimants.[Para 22][965-F-H; 966-
      A-B]
B            However, this amount alongwith interest at the rate of 9%
      per annum from the date of filing of the claim petition till payment,
      will be payable subject to the outcome of the application made by
      the respondent Nos. 1 and 2 to the competent authority for grant
      of financial assistance under the 2006 Rules. If that application is
      allowed and the amount becomes payable towards financial
C     assistance under the said Rules to the specified legal
      representatives of the deceased, commensurate amount will have
      to be deducted from the compensation amount alongwith interest
      component thereon. The respondent Nos. 1 and 2, therefore,
      can be permitted to withdraw the compensation amount only upon
D     filing of an affidavit-cum-declaration before the executing Court
      that they have not received nor would claim any amount towards
      financial assistance under the 2006 Rules and if already received
      or to be received in future on that account, the amount so received
      will be disclosed to the executing Court, which will have to be
      deducted from the compensation amount determined in terms of
E     this order. The compensation amount, therefore, be paid to the
      respondent Nos. 1 and 2 subject to the above and upon giving an
      undertaking before the executing Court to indemnify the
      insurance company (appellant) to that extent. [Para 22]
      [966-B-E]
F           Manjuri Bera (Smt.) v. Oriental Insurance Co. Ltd. &
            Anr. (2007) 10 SCC 643 : [2007] 4 SCR 590; Reliance
            General Insurance Co. Ltd. v. Shashi Sharma and Ors.
            (2016) 9 SCC 627 : [2016] 6 SCR 488; New India
            Assurance Co. Ltd. v. Ajmero and others F.A.O. No.
G           2648 of 2016 decided on 31.07.2017; National
            Insurance Company Limited v. Pranay Sethi & Ors.
            (2017) 16 SCC 680; Sarla Verma (Smt.) & Ors. v. Delhi
            Transport Corporation & Anr. (2009) 6 SCC 121 :
            [2009] 5 SCR 1098 – referred to.

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        NATIONAL INSURANCE COMPANY LIMITED v.                               953
                  BIRENDER AND ORS.

                        Case Law Reference                                  A
[2016] 6 SCR 488              referred to                Para 10
[2007] 4 SCR 590              referred to                Para 10
(2017) 16 SCC 680             referred to                Para 10
[2009] 5 SCR 1098             referred to                Para 20            B
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 242-
243 of 2020.
      From the Judgment and Order dated 08.08.2018 of the High Court
of Punjab and Haryana at Chandigarh in FAO Nos. 1341 and 4023 of
                                                                            C
2016.
                                  With
      Civil Appeal No. 244 of 2020.
       Amit Kumar Singh, Mrs. K. Entoli Sema, Gaurav Prakash,
Ms. Abha R. Sharma, D.S. Parmar, Ankit Mishra, Advs. for the appearing      D
parties.
      The Judgment of the Court was delivered by
      A. M. KHANWILKAR, J.
      1. Delay condoned.                                                    E
      2. Leave granted.
       3. These civil appeals emanate from the common judgment and
order dated 8.8.2018 passed by the High Court of Punjab and Haryana
at Chandigarh (for short, ‘the High Court’) in cross appeals being F.A.O.
                                                                            F
Nos. 1341 of 2016 (O&M) and 4023 of 2016 (O&M), questioning the
correctness of the award dated 4.12.2015 passed by the Motor Accidents
Claims Tribunal, Jind (for short, ‘the Tribunal’) in M.A.C.T. Case No.
205 of 2014. The former appeal (arising out of S.L.P.(C) No……/2020
@ Diary No. 47693/2018) has been preferred by the insurance company
and the latter appeal (arising out of S.L.P.(C) No……./2020 @ Diary          G
No. 17683/2019) by the claimants-respondent Nos. 1 and 2. The parties
are referred to as per their status in the former appeal for the sake of
convenience.
      4. The claim petition was filed by the respondent Nos. 1 and 2
herein, who are the major sons of Smt. Sunheri Devi (deceased). The         H
954             SUPREME COURT REPORTS                           [2020] 1 S.C.R.


A     deceased was on her way to attend the office of Tehsildar, Uchana
      (where she was working as a Peon) from Dharoli Khera village on
      20.10.2014 at about 9.00 a.m., travelling as a pillion rider on a motorcycle
      bearing No. HR-32-G-8749. At that time, a dumper/tipper bearing
      registration No. HR-56-A-3260 coming from the opposite direction, being
      driven in a rash and negligent manner, collided with the motorcycle,
B
      resulting in fatal injuries sustained to the deceased to which she
      succumbed.
             5. The respondent Nos. 1 and 2 claimed an amount of
      Rs. 50,00,000/- (Rupees fifty lakhs only) along with interest at the rate
      of 12% per annum on the assertion that the deceased was earning
C     Rs.28000/- per month (Rs. 21000/- as salary and Rs.7000/- as family
      pension of her husband), she was hale and healthy and was the only
      bread earner of her entire family and that they were largely dependant
      upon her income and have also been deprived of her love and affection.
      The appellant disputed the claim and pleaded that the accident did not
D     occur with the offending vehicle (the dumper/tipper) or due to fault of its
      driver, and that the respondent Nos. 1 and 2 were majors and not
      dependant upon the deceased and as such not entitled for any
      compensation. Further, the vehicle in question was being plied in
      contravention of terms and conditions of the insurance policy and the
      driver was not holding a valid and effective driving licence. Resultantly,
E     the insurance company-appellant was not liable to pay compensation.
             6. After analysing the evidence on record, the Tribunal held that
      the accident of the deceased occurred due to rash and negligent driving
      of the offending vehicle. The Tribunal further noted that the driver and
      the owner of offending vehicle have placed on record the driving licence
F     of the driver, valid insurance policy, public carrier permit and the
      registration certificate of the offending vehicle and the appellant having
      failed to lead any evidence to prove that the terms and conditions of the
      insurance policy were violated, cannot be absolved of its liability. The
      Tribunal also noted that though the respondent Nos. 1 and 2 were major
G     and earning hands, the fact that they were legal heirs of the deceased
      and have been deprived of the pecuniary benefits through the deceased
      cannot be denied.
             7. Having decided the above issues in favour of the respondent
      Nos. 1 and 2, the Tribunal while determining the quantum of compensation
H     took note of the gross monthly salary of the deceased as on September,
        NATIONAL INSURANCE COMPANY LIMITED v.                                955
        BIRENDER AND ORS. [A. M. KHANWILKAR, J.]

2014, which according to her service record was Rs.23,123/- and the          A
net take home salary was Rs.16,918/-. The Tribunal did not consider the
family pension for computation, as the deceased was getting it in her
own right as widow and the same could not be reckoned. Her date of
birth was 1.4.1967 and date due for retirement was 31.3.2027, for which
multiplier of ‘13’ was applied. The deduction towards personal expenses
                                                                             B
was kept at 50% as the respondent Nos. 1 and 2 were major and earning
hands. Thus, the loss of dependency was determined at Rs.17,15,532/-.
In addition, an amount of Rs.25,000/- was awarded on account of funeral
expenses, etc. and the total compensation was computed at
Rs.17,40,532/- along with interest at the rate of 9% per annum from the
date of institution of petition. The driver, owner and insurer of the        C
offending vehicle were held jointly and severally liable.
        8. Against the award passed by the Tribunal, cross appeals were
preferred being F.A.O. No. 1341 of 2016 (O&M) filed by the appellant
and F.A.O. No. 4023 of 2016 (O&M) filed by the respondent Nos. 1
and 2. The appellant (insurance company) primarily contended that the        D
respondent Nos. 1 and 2 are not entitled to compensation for loss of
dependency as they are major and earning and also because the family
of the deceased was entitled to receive financial assistance under the
Haryana Compassionate Assistance to the Dependants of Deceased
Government Employees Rules, 2006 (in short, ‘the 2006 Rules’). The
respondent Nos. 1 and 2 contended that being major and also earning by       E
itself cannot be regarded as ineligibility to claim compensation. Further,
the Tribunal has wrongly assessed loss of dependency on take-home
salary instead of the drawing salary and without considering the family
pension received by the deceased had she been alive. They further
claimed that the deduction of personal expenses should be one-third          F
(1/3rd) instead of 50%.
       9. The High Court by considering the monthly salary for computing
compensation as Rs.23,123/-, benefits of future prospects at 30%,
applying a multiplier of ‘13’ and deduction for personal expenses at 50%
held that the respondent Nos. 1 and 2 were entitled to loss of dependency    G
qua loss of income at Rs.23,44,672/-. The High Court, in addition, while
considering the loss of dependency qua loss of pension by taking monthly
pension at Rs.7,000/-, applying a multiplier of ‘13’ and deduction for
personal expenses at 50%, held that Rs.5,46,000/- would be payable
towards this head. The compensation under conventional heads was
                                                                             H
956             SUPREME COURT REPORTS                          [2020] 1 S.C.R.


A     also increased from Rs.25,000/- to Rs.30,000/-. Therefore, the total
      compensation payable was determined as Rs.29,20,672/-. The High Court
      further noted that financial assistance available to the family of the
      deceased, under the 2006 Rules would be Rs.33,29,712/- and deducted
      50% of the said amount from compensation whilst relying upon a
      judgment of the same High Court in New India Assurance Co. Ltd. v.
B
      Ajmero and others1. The High Court then deducted that amount of
      Rs.16,64,856/- from the compensation amount of Rs.29,20,672/-
      determined by it. Resultantly, the High Court reduced the compensation
      awarded by the Tribunal to the extent of Rs.4,84,716/- and gave liberty
      to the appellant to recover the excess amount, if already paid.
C            10. The former appeal is preferred by the appellant on the ground
      that the High Court ought to have deducted the entire amount of financial
      assistance under the 2006 Rules, instead of deducting only 50% thereof.
      Reliance was placed on the judgment of this Court in Reliance General
      Insurance Co. Ltd. v. Shashi Sharma and Ors.2. It is urged that claim
D     for loss of dependency is unavailable to the respondent Nos. 1 and 2 in
      the facts of the present case, they being major sons of the deceased
      who were married and also gainfully employed. Reliance is placed on
      Manjuri Bera (Smt) v. Oriental Insurance Co. Ltd. & Anr.3. It is
      urged that the respondent Nos. 1 & 2 may be entitled only to
      compensation under conventional heads as held in National Insurance
E     Company Limited v. Pranay Sethi & Ors.4.
             11. The latter appeal has been preferred by the respondent Nos.
      1 and 2, primarily on the ground that the High Court erred in deducting
      50% of the amount from compensation instead of one-third (1/3rd).
      Further, deduction of 50% amount of the financial assistance receivable
F     under the 2006 Rules on the assumption that the respondent Nos. 1 and
      2 are eligible therefor is a manifest error. Reliance is also placed on the
      decision of the High Court in Ajmero (supra). It is urged that the High
      Court ought to have considered that the respondent Nos. 1 and 2 were
      dependant on the deceased and that they have been deprived of her love
G     and affection and income and thus entitled to compensation as claimed
      in the original application in that regard.

      1
        F.A.O. No. 2648 of 2016, decided on 31.07.2017
      2
        (2016) 9 SCC 627
      3
        (2007) 10 SCC 643
H     4
        (2017) 16 SCC 680
        NATIONAL INSURANCE COMPANY LIMITED v.                                  957
        BIRENDER AND ORS. [A. M. KHANWILKAR, J.]

       12. We have heard Mr. Amit Kumar Singh, learned counsel for             A
the insurance company (appellant) and Ms. Abha R. Sharma, learned
counsel for the respondent Nos. 1 and 2. The principal issues which
arise for our consideration are as follows: -
      (i) Whether the major sons of the deceased who are married
          and gainfully employed or earning, can claim compensation            B
          under the Motor Vehicles Act, 1988 (for short, ‘the Act’)?
      (ii) Whether such legal representatives are entitled only for
           compensation under the conventional heads?
      (iii) Whether the amount receivable by the legal representatives
            of the deceased under the 2006 Rules is required to be             C
            deducted as a whole or only portion thereof?
        13. Reverting to the first issue - that needs to be answered on the
basis of the scheme of the Act. Section 166 of the Act provides for
filing of application for compensation by persons mentioned in clauses
(a) to (d) of sub-Section (1) thereof. Section 166 of the Act, as applicable   D
at the relevant time, reads thus: -
      “Section 166. Application for compensation.- (1) An
      application for compensation arising out of an accident of the nature
      specified in sub-section (1) of section 165 may be made-
                                                                               E
           (a) by the person who has sustained the injury; or
           (b) by the owner of the property; or
           (c) where death has resulted from the accident, by all or
               any of the legal representatives of the deceased; or
           (d) by any agent duly authorised by the person injured or all       F
               or any of the legal representatives of the deceased, as
               the case may be:
            Provided that where all the legal representatives of the
      deceased have not joined in any such application for compensation,
      the application shall be made on behalf of or for the benefit of all     G
      the legal representatives of the deceased and the legal
      representatives who have not so joined, shall be impleaded as
      respondents to the application.
      (2) Every application under sub-section (1) shall be made, at the
      option of the claimant, either to the Claims Tribunal having             H
958            SUPREME COURT REPORTS                           [2020] 1 S.C.R.


A           jurisdiction over the area in which the accident occurred or to the
            Claims Tribunal within the local limits of whose jurisdiction the
            claimant resides or carries on business or within the local limits of
            whose jurisdiction the defendant resides, and shall be in such form
            and contain such particulars as may be prescribed:
B                  Provided that where no claim for compensation under
            Section 140 is made in such application, the application shall
            contain a separate statement to that effect immediately before
            the signature of the applicant.
            (3) ***
C           (4) The Claims Tribunal shall treat any report of accidents
            forwarded to it under sub-section (6) of section 158 as an
            application for compensation under this Act.”
                                                           (emphasis supplied)

D            14. The legal representatives of the deceased could move
      application for compensation by virtue of clause (c) of Section 166(1).
      The major married son who is also earning and not fully dependant on
      the deceased, would be still covered by the expression “legal
      representative” of the deceased. This Court in Manjuri Bera (supra)
      had expounded that liability to pay compensation under the Act does not
E     cease because of absence of dependency of the concerned legal
      representative. Notably, the expression “legal representative” has not
      been defined in the Act. In Manjuri Bera (supra), the Court observed
      thus:-
            “9. In terms of clause (c) of sub-section (1) of Section 166 of the
F           Act in case of death, all or any of the legal representatives of the
            deceased become entitled to compensation and any such legal
            representative can file a claim petition. The proviso to said sub-
            section makes the position clear that where all the legal
            representatives had not joined, then application can be made on
            behalf of the legal representatives of the deceased by impleading
G
            those legal representatives as respondents. Therefore, the High
            Court was justified in its view that the appellant could maintain a
            claim petition in terms of Section 166 of the Act.
            10. …..The Tribunal has a duty to make an award, determine the
            amount of compensation which is just and proper and specify the
H
        NATIONAL INSURANCE COMPANY LIMITED v.                                959
        BIRENDER AND ORS. [A. M. KHANWILKAR, J.]

      person or persons to whom such compensation would be paid.             A
      The latter part relates to the entitlement of compensation by a
      person who claims for the same.
      11. According to Section 2(11) CPC, “legal representative” means
      a person who in law represents the estate of a deceased person,
      and includes any person who intermeddles with the estate of the        B
      deceased and where a party sues or is sued in a representative
      character the person on whom the estate devolves on the death
      of the party so suing or sued. Almost in similar terms is the
      definition of legal representative under the Arbitration and
      Conciliation Act, 1996 i.e. under Section 2(1)(g).
                                                                             C
      12. As observed by this Court in Custodian of Branches of
      BANCO National Ultramarino v. Nalini Bai Naique [1989 Supp
      (2) SCC 275 the definition contained in Section 2(11) CPC is
      inclusive in character and its scope is wide, it is not confined to
      legal heirs only. Instead it stipulates that a person who may or
      may not be legal heir competent to inherit the property of the         D
      deceased can represent the estate of the deceased person. It
      includes heirs as well as persons who represent the estate even
      without title either as executors or administrators in possession of
      the estate of the deceased. All such persons would be covered by
      the expression “legal representative”. As observed in Gujarat          E
      SRTC v. Ramanbhai Prabhatbhai [(1987) 3 SCC 234 a legal
      representative is one who suffers on account of death of a person
      due to a motor vehicle accident and need not necessarily be a
      wife, husband, parent and child.”
       In paragraph 15 of the said decision, while adverting to the          F
provisions of Section 140 of the Act, the Court observed that even if
there is no loss of dependency, the claimant, if he was a legal
representative, will be entitled to compensation. In the concurring
judgment of Justice S.H. Kapadia, as His Lordship then was, it is observed
that there is distinction between “right to apply for compensation” and
“entitlement to compensation”. The compensation constitutes part of          G
the estate of the deceased. As a result, the legal representative of the
deceased would inherit the estate. Indeed, in that case, the Court was
dealing with the case of a married daughter of the deceased and the
efficacy of Section 140 of the Act. Nevertheless, the principle underlying
the exposition in this decision would clearly come to the aid of the         H
960            SUPREME COURT REPORTS                          [2020] 1 S.C.R.


A     respondent Nos. 1 and 2 (claimants) even though they are major sons of
      the deceased and also earning.
            15. It is thus settled by now that the legal representatives of the
      deceased have a right to apply for compensation. Having said that, it
      must necessarily follow that even the major married and earning sons of
B     the deceased being legal representatives have a right to apply for
      compensation and it would be the bounden duty of the Tribunal to consider
      the application irrespective of the fact whether the concerned legal
      representative was fully dependant on the deceased and not to limit the
      claim towards conventional heads only. The evidence on record in the
      present case would suggest that the claimants were working as
C     agricultural labourers on contract basis and were earning meagre income
      between Rs.1,00,000/- and Rs.1,50,000/- per annum. In that sense, they
      were largely dependant on the earning of their mother and in fact, were
      staying with her, who met with an accident at the young age of 48 years.
             16. The next issue is about the deduction of the amount receivable
D     by the legal representatives of the deceased under the 2006 Rules from
      the compensation amount determined by the Tribunal in terms of the
      decision of three-Judge Bench of this Court in Shashi Sharma (supra).
      This Court, after analysing the relevant rules, opined as follows: -
            “23. Reverting back to Rule 5, sub-rule (1) provides for the period
E           during which the dependants of the deceased employee may
            receive financial assistance equivalent to the pay and other
            allowances that was last drawn by the deceased employee in the
            normal course without raising a specific claim. Sub-rule (2)
            provides that the family shall be eligible to receive family
F           pension as per the normal Rules only after the period during
            which they would receive the financial assistance in terms
            of sub-rule (1). Sub-rule (3) guarantees the family of a deceased
            government employee of a government residence in occupation
            for a period of one year from the date of death of the employee,
            upon payment of normal rent/licence fee. By virtue of sub-rule
G           (4), an ex gratia assistance of Rs 25,000 is provided to the family
            of the deceased employee to meet the immediate needs on the
            loss of the bread earner. Sub-rule (5) clarifies that house rent
            allowance shall not be a part of allowance for the purposes of
            calculation of assistance.
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 NATIONAL INSURANCE COMPANY LIMITED v.                                 961
 BIRENDER AND ORS. [A. M. KHANWILKAR, J.]

24. …..As regards the second part, it deals with income from           A
other source which any way is receivable by the dependants of
the deceased government employee. That cannot be deducted
from the claim amount for determination of a just
compensation under the 1988 Act.
25. The claimants are legitimately entitled to claim for the loss of   B
“pay and wages” of the deceased government employee against
the tortfeasor or insurance company, as the case may be, covered
by the first part of Rule 5 under the 1988 Act. The claimants or
dependants of the deceased government employee (employed by
the State of Haryana), however, cannot set up a claim for the
same subject falling under the first part of Rule 5—”pay and           C
allowances”, which are receivable by them from employer (the
State) under Rule 5(1) of the 2006 Rules. In that, if the deceased
employee was to survive the motor accident injury, he would have
remained in employment and earned his regular pay and
allowances. Any other interpretation of the said Rules would           D
inevitably result in double payment towards the same head of loss
of “pay and wages” of the deceased government employee
entailing in grant of bonanza, largesse or source of profit to the
dependants/claimants…..
26. Indeed, similar statutory exclusion of claim receivable under      E
the 2006 Rules is absent. That, however, does not mean that the
Claims Tribunal should remain oblivious to the fact that the claim
towards loss of pay and wages of the deceased has already been
or will be compensated by the employer in the form of ex gratia
financial assistance on compassionate grounds under Rule 5(1).
The Claims Tribunal has to adjudicate the claim and determine          F
the amount of compensation which appears to it to be just. The
amount receivable by the dependants/claimants towards the head
of “pay and allowances” in the form of ex gratia financial
assistance, therefore, cannot be paid for the second time to the
claimants. True it is, that the 2006 Rules would come into play if     G
the government employee dies in harness even due to natural
death. At the same time, the 2006 Rules do not expressly enable
the dependants of the deceased government employee to claim
similar amount from the tortfeasor or insurance company because
of the accidental death of the deceased government employee.
                                                                       H
962            SUPREME COURT REPORTS                          [2020] 1 S.C.R.


A           The harmonious approach for determining a just compensation
            payable under the 1988 Act, therefore, is to exclude the amount
            received or receivable by the dependants of the deceased
            government employee under the 2006 Rules towards the head
            financial assistance equivalent to “pay and other allowances” that
            was last drawn by the deceased government employee in the
B
            normal course. This is not to say that the amount or payment
            receivable by the dependants of the deceased government
            employee under Rule 5(1) of the Rules, is the total entitlement
            under the head of “loss of income”. So far as the claim towards
            loss of future escalation of income and other benefits is concerned,
C           if the deceased government employee had survived the accident
            can still be pursued by them in their claim under the 1988 Act.
            For, it is not covered by the 2006 Rules. Similarly, other benefits
            extended to the dependants of the deceased government employee
            in terms of sub-rule (2) to sub-rule (5) of Rule 5 including family
            pension, life insurance, provident fund, etc., that must remain
D
            unaffected and cannot be allowed to be deducted, which, any
            way would be paid to the dependants of the deceased government
            employee, applying the principle expounded in Helen C.
            Rebello v. Maharashtra SRTC, (1999) 1 SCC 90 and United
            India Insurance Co. Ltd. v. Patricia Jean Mahajan, (2002) 6
E           SCC 281 cases.
            27. A priori, the appellants must succeed only to the extent of
            amount receivable by the dependants of the deceased government
            employee in terms of Rule 5(1) of the 2006 Rules, towards financial
            assistance equivalent to the loss of pay and wages of the deceased
F           employee for the period specified.”
                                                           (emphasis supplied)
             The learned Judge of the High Court has, however, after adverting
      to the decision of the same High Court in Ajmero (supra), went on to
      observe that 50% of the amount receivable by the legal representatives
G     of the deceased towards financial assistance under the 2006 Rules is
      required to be deducted from the compensation amount. In the relied
      upon decision, the same learned Judge had occasion to observe as follows:-
            “… However, perusal of the judgment would reveal that
            the Court has not adverted to the issue that had the Rules
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        NATIONAL INSURANCE COMPANY LIMITED v.                                  963
        BIRENDER AND ORS. [A. M. KHANWILKAR, J.]

      of 2006 extending assistance to family of a deceased                     A
      employee been not in existence, family would have been
      entitled to pension to the extent of 50% of the last drawn
      pay. As per the settled position in law, the pensionary benefits
      available to family of a deceased employee are not amenable for
      deduction for computing loss of dependency. There is nothing on
                                                                               B
      record suggestive of the fact that in addition to compassionate
      assistance under the Rules, family of the deceased is being paid
      pension till the age of superannuation. Rather Rule 5(2) of the
      2006 Rules specifically denies family pension as per normal
      rules...”                                    (emphasis supplied)
                                                                               C
       17. The view so taken by the High Court is not the correct reading
of the decision of three-Judge Bench of this Court in Shashi Sharma
(supra) for more than one reason. First, this Court was conscious of the
fact that under Rule 5(2) of the 2006 Rules, the family pension receivable
by the family would be payable, however, only after the period, during
which the financial assistance is received, is completed. In that context,     D
in paragraph 24 of the reported decision, the Court clearly noted that the
amount towards family pension cannot be deducted from the claim amount
for determination of a just compensation under the Act. Further, the
High Court has erroneously assumed that the family of the deceased
would be entitled for family pension amount immediately after the death        E
of the deceased employee. That is in the teeth of the scheme of the
2006 Rules, in particular Rule 5(2) thereof. The said Rules provide for
financial assistance on compassionate grounds, as also, other benefits to
the family members of the deceased employee and as a package thereof,
Rule 5(2) stipulates that the family pension as per the normal rules would
be payable to the family members only after the period of delivery of          F
financial assistance is completed. The validity of this provision is not put
in issue. Suffice it to say that the view taken by the High Court in Ajmero
(supra) is a departure from the scheme envisaged by the 2006 Rules, in
particular, Rule 5(2). That cannot be countenanced.
      18. As a matter of fact, in the present case, the High Court             G
committed manifest error in assuming that the respondent Nos. 1 and 2
would be eligible to receive financial assistance under the 2006 Rules.
The eligibility to receive such financial assistance has been spelt out in
Rule 3 of the 2006 Rules read with the provision of Pension/Family
                                                                               H
964                SUPREME COURT REPORTS                       [2020] 1 S.C.R.


A     Pension Scheme, 1964. It appears that major sons and married daughters
      are not included in the definition. However, we need not dilate on that
      aspect in the present proceedings any further. It has come in the evidence
      of Gobind Singh, Clerk in SDM Office (PW-1) that the legal
      representatives of the deceased have not submitted any request for getting
      financial assistance till he had deposed. Indeed, respondent No. 1, who
B
      had entered the witness box, did depose that they had applied for getting
      salary of their deceased mother. The fact remains that there is no clear
      evidence on record that respondent Nos. 1 and 2 are held to be eligible
      to get financial assistance or in fact, they are getting such financial
      assistance under the 2006 Rules. The High Court, therefore, instead of
C     providing for deduction of the amount receivable by the legal
      representatives of the deceased on this count (under the 2006 Rules),
      from the compensation amount, should have independently determined
      the compensation amount and ordered payment thereof subject to legal
      representatives of the deceased filing affidavit/declaration before the
      executing Court that they have not received nor would they claim any
D
      amount towards financial assistance under the 2006 Rules, so as to
      become entitled to withdraw the entire compensation amount.
             19. Reverting to the determination of compensation amount, it is
      noticed that the Tribunal proceeded to determine the compensation
      amount on the basis of net-salary drawn by the deceased for the relevant
E     period as Rs.16,918/- per month, while taking note of the fact that her
      gross-salary was Rs.23,123/- per month (presumably below taxable
      income). Concededly, any deduction from the gross-salary other than
      tax amount cannot be reckoned. In that, the actual salary less tax amount
      ought to have been taken into consideration by the Tribunal for determining
F     the compensation amount, in light of the dictum of the Constitution Bench
      of this Court in paragraph 59.3 of Pranay Sethi (supra).
             20. Similarly, the High Court despite having taken note of the
      submission made by the respondent Nos. 1 and 2 that the deduction for
      personal expenses of the deceased should be reckoned only as one-third
G     (1/3rd) amount for determining loss of dependency, maintained the
      deduction of 50% towards that head as ordered by the Tribunal. This
      Court in Pranay Sethi (supra), in paragraph 37, adverted to the dictum
      of this Court in Sarla Verma (Smt.) & Ors. vs. Delhi Transport
      Corporation & Anr.5 with approval, wherein it is held that if the dependant
      5
H         (2009) 6 SCC 121 (para 30)
        NATIONAL INSURANCE COMPANY LIMITED v.                                965
        BIRENDER AND ORS. [A. M. KHANWILKAR, J.]

family members are 2 to 3, as in this case, the deduction towards personal   A
and living expenses of the deceased should be taken as one-third (1/3rd).
In other words, the deduction towards personal expenses to the extent
of 50% is excessive and not just and proper considering the fact that the
respondent Nos. 1 and 2 alongwith their respective families were staying
with the deceased at the relevant time and were largely dependant on
                                                                             B
her income.
      21. Be that as it may, the Tribunal, for excluding the amount
received by the deceased as family pension due to demise of her husband,
had noted in paragraph 26, as under: -
      “26. Learned counsel for the claimants further requested that about    C
      to family pension being drawn by the deceased also be calculated
      for the purpose of assessing the compensation. This contention
      and assertion of learned counsel for the claimants does not carry
      any conviction with the Tribunal because the deceased was getting
      family pension in her own right as the widow of the deceased and
      cannot be termed as her income for the purpose of computing the        D
      amount of compensation.”
       The High Court, without reversing the said finding, proceeded to
include the amount of Rs.7,000/- per month received by the deceased as
pension amount after demise of her husband. We are in agreement with
the view taken by the Tribunal and for the same reason, have to reverse      E
the conclusion recorded by the High Court to include the said amount as
loss of dependency. That could not have been taken into account, as the
same was payable only to the deceased being widow and not her income
as such for the purpose of computing the amount of compensation.
       22. Considering the above, respondent Nos. 1 and 2 would be           F
entitled for compensation to be reckoned on the basis of loss of
dependency, due to loss of gross salary (less tax amount, if any) of the
deceased and future prospects and deduction of only one-third (1/3rd)
amount towards personal expenses of the deceased. As regards the
multiplier ‘13’ applied by the Tribunal and the High Court, the same         G
needs no interference. As a result, on the facts and in the circumstances
of this case, the amount payable towards compensation will have to be
recalculated on the following basis: -
      Loss of dependency due to loss of income calculated at
      Rs.31,26,229.60/- [(Rs.23,123/- x 12 x 13) + (30% future
                                                                             H
966                SUPREME COURT REPORTS                        [2020] 1 S.C.R.


A           prospects) – (1/3rd deduction for personal expenses)]. In addition,
            the claimants would be entitled for a sum of Rs.70,000/- towards
            conventional heads in terms of dictum in paragraph 59.8 of Pranay
            Sethi (supra). Thus, a total sum of Rs.31,96,230/- (Rupees thirty-
            one lakhs ninety-six thousand two hundred thirty only), as rounded
            off, is payable to the claimants.
B
             However, this amount alongwith interest at the rate of 9% per
      annum from the date of filing of the claim petition till payment, will be
      payable subject to the outcome of the application made by the respondent
      Nos. 1 and 2 to the competent authority for grant of financial assistance
      under the 2006 Rules. If that application is allowed and the amount
C     becomes payable towards financial assistance under the said Rules to
      the specified legal representatives of the deceased, commensurate amount
      will have to be deducted from the compensation amount alongwith interest
      component thereon. The respondent Nos. 1 and 2, therefore, can be
      permitted to withdraw the compensation amount only upon filing of an
D     affidavit-cum-declaration before the executing Court that they have not
      received nor would claim any amount towards financial assistance under
      the 2006 Rules and if already received or to be received in future on that
      account, the amount so received will be disclosed to the executing Court,
      which will have to be deducted from the compensation amount determined
      in terms of this order. The compensation amount, therefore, be paid to
E     the respondent Nos. 1 and 2 subject to the above and upon giving an
      undertaking before the executing Court to indemnify the insurance
      company (appellant) to that extent.
            23. The appeals are partly allowed in the aforementioned terms
      with no order as to costs. Pending interlocutory applications, if any, shall
F     stand disposed of.


      Ankit Gyan                                             Appeals partly allowed.


G




H