NEW INDIA ASSURANCE CO. LTD.versusKAMLESH AND OTHERS.

          [2025] 4 S.C.R. 2594 : 2025 INSC 724

              New India Assurance Co. Ltd.
                           v.
                 Kamlesh and Others.
           (Civil Appeal No(s). 5609-5610 of 2025)
                          28 April 2025
 [Sudhanshu Dhulia and K. Vinod Chandran, JJ.]


                    Issue for Consideration
Matter pertains to the correctness of the order passed by the High
Court, enhancing the compensation to Rs.45,14,986/- and directing
deduction of half of the compensation under the Rules of 2006,
i.e. Rs.21,67,704/- out of the total compensation.

                           Headnotes†
Motor Vehicles Act, 1988 – Haryana Compensation Assistance
to the Dependents of Deceased Government Employees
Rules, 2006 – Compensation – Deduction in respect to the
financial assistance under 2006 Rules, if to be deducted from
the total compensation – Deceased succumbed to injuries
sustained in motor accident – Award of compensation of
Rs.37,85,800/- by the tribunal to the claimants-legal heirs –
Appeal by the Insurance Company on the deduction with
respect to the financial assistance under 2006 Rules – Appeal
by claimants for enhancement of compensation – High Court
enhanced compensation to Rs.45,14,986/-, however, under
conventional heads, reduced the award to Rs.70,000/-; and
directed deduction of half of the compensation under the
Rules of 2006, i.e. Rs.21,67,704/- out of the total compensation
of Rs.45,14,986/- – Correctness:
Held: Rules of 2006 permits the last drawn salary of the deceased to
be continued to the family of the employee but for different periods
dependent upon the age of the deceased – Proper method would
be for tribunal considering the death of a government employee, to
whom the Rules of 2006 is applicable, to first consider the loss of
income, quantum of compensation with reference to loss of income
and to deduct the pay and allowances payable under Rules of
2006 – If the compensation for loss of income arrived at under the
M.V. Act is more, then necessarily the difference has to be paid to
[2025] 4 S.C.R.                                                           2595

         New India Assurance Co. Ltd. v. Kamlesh and Others.


     the claimants – Deceased was earning for a family comprised of
     five persons, in which context, deduction for personal expenses
     would be 1/4th – Last drawn salary of the deceased should have
     been reckoned for the purpose of calculating the loss of income
     under the M.V. Act also – Considering the fact that no deduction
     for the income tax was made in the amounts entitled to the family
     of the deceased for 12 years, which would be deducted only from
     monthly payments, there could be no deduction made even while
     computing the loss of income from the last drawn pay, for income
     tax – Since the amounts payable under the Rules of 2006 is the
     last drawn pay in computing the loss of income under the M.V Act
     necessarily the future prospects will have to be added and the
     multiplier applicable would be 14 since the age of the deceased
     was 43 – Computation would be Rs.49,31,527/- from which the
     amounts payable as financial assistance under the Rules of 2006
     will have to be deducted – Additional loss of income payable under
     the M.V. Act would be Rs.5,96,019/- to which loss of consortium for
     the widow and three children at Rs.1,60,000/- and loss of estate
     and funeral expenses of Rs.30,000/- would be added – Total
     compensation would be Rs.7,86,119/- .[Paras 13-17]

                             Case Law Cited
     National Company Limited v. Pranay Sethi and Other [2017] 13
     SCR 100 : (2017) 16 SCC 680 – followed.
     Reliance General Insurance Company Ltd. v. Shashi Sharma and
     Others [2016] 6 SCR 488 : (2016) 9 SCC 627 – relied on.
     New India Assurance Company Ltd. v. Ajmero and Others, FAQ
     No. 2648 of 2016; National Insurance Company Ltd. v. Birendra,
     2020 SCC OnLine SC 28; Helen C. Rebello v. Maharashtra
     State Road Transport Corporation [1998] Supp. 1 SCR 684 :
     (1999) 1 SCC 90; Rajkumar Agrawal v. Vehicle Tata Venture,
     Commercial Auto Sales Private Limited, Civil Appeal No. 4941
     of 2022; Western India Plywood Ltd. v. P. Ashokan [1997] Supp.
     4 SCR 180 : (1997) 7 SCC 638; National Insurance Co. Ltd. v.
     Hamida Khatoon & Others [2009] 8 SCR 248 : (2009) 13 SCC
     361; Regional Director, E.S.I Corpn. and Anr. v. Francis De Costa
     and Anr. [1992] 3 SCR 23 : (1993) Supp. 4 SCC 100; New India
     Assurance Co. Ltd. v. Sunita Sharma [2025] 4 SCR 603 : C.A.
     No. 5093 of 2025 @ SLP(C) No. 9515 of 2020; Krishna v. Tek
2596                                                   [2025] 4 S.C.R.

                       Supreme Court Reports


    Chand, SLP(C) No. 5044 of 2019; Sebastiani Lakra & Ors. v.
    National Insurance Company Ltd. & Anr. [2018] 13 SCR 1053 :
    (2019) 17 SCC 465; Magma General Insurance Company Ltd. v.
    Nanu Ram @ Chuhru Ram, 2018 (4) RCR (Civil) 333; New India
    Assurance Company v. Somwati [2020] 10 SCR 1132 : (2020) 9
    SCC 644 – referred to.

                             List of Acts
    Haryana Compensation Assistance to the Dependents of
    Deceased Government Employees Rules, 2006; Motor Vehicles
    Act, 1988.

                          List of Keywords
    Motor accident; Compensation; Pecuniary advantages due to
    the dependents of deceased; Loss of pay and wages; Just
    compensation; Deducting income tax and personal expenses;
    Loss of dependency; Funeral expenses; Loss of consortium; Loss
    of estate; Principle of normal life expectancy of an employee;
    Pay and allowances; Last drawn salary; Enhancement of
    compensation.

                         Case Arising From
    CIVIL APPELLATE JURISDICTION: Civil Appeal No(s).
    5609-5610 of 2025
    From the Judgment and Order dated 24.01.2019 of the High Court
    of Punjab & Haryana at Chandigarh in FAO No. 7415 of 2016 and
    FAO No. 1583 of 2017
    With
    Civil Appeal No(s). 5611-5612 of 2025

                      Appearances for Parties
    Advs. for the Appellant:
    Dr. Meera Agarwal, Ramesh Chandra Mishra.
    Advs. for the Respondents:
    M.R. Shamshad, Sr. Adv., Shashank Singh, Ms. Savita Devi,
    Gaurav Gupta, Rohit Kumar, Akshay Verma, Devendra Kumar
    Saini, Samar Vijay Singh, Ms. Sabarni Som, Fateh Singh, Aman
    Dev Sharma, Ayush Gupta, Vaibhav Vikram Singh.
[2025] 4 S.C.R.                                                       2597

             New India Assurance Co. Ltd. v. Kamlesh and Others.


                       Judgment / Order of the Supreme Court

                                                 Order

1.     Leave granted.
2.     The claimants are the legal heirs of the deceased who succumbed
       to the injuries sustained in a motor accident. In the claim petition
       before the Motor Accident Claims Tribunal, they were awarded a
       compensation of Rs.37,85,800/-. The Insurance Company filed
       an appeal, restricted to the quantum, especially on the deduction
       to be allowed with respect to the financial assistance under the
       Haryana Compensation Assistance to the Dependents of Deceased
       Government Employees Rules, 20061; whether the same is liable
       to be deducted from the total compensation. The appeal by the
       claimants was for enhancement of compensation.
3.     The loss of dependency granted by the Tribunal at Rs.35,65,800/-
       was enhanced to Rs.45,14,986/- employing the multiplier system
       for calculating loss of dependency as has been declared by a
       Constitution Bench decision in National Company Limited v. Pranay
       Sethi and Other2. However, under conventional heads, the award of
       Rs.2,20,000/- granted by the Tribunal was reduced to Rs.70,000/-. The
       total compensation was determined at Rs.45,14,986/- out of which
       half of the compensation under the Rules of 2006 was directed to
       be deducted i.e. Rs.21,67,704/- on the basis of the decision of the
       Punjab and Haryana High Court in New India Assurance Company
       Ltd. v. Ajmero and Others3.
4.     Dr.Meera Agarwal, learned Counsel for the Insurance Company
       submits that the deduction as per the Rules of 2006 has to be 100%
       as has been held by a decision of this Court in Reliance General
       Insurance Company Ltd. v. Shashi Sharma and Others4 followed
       in National Insurance Company Ltd. v. Birendra5.



1    for brevity ‘the Rules of 2006’
2    (2017) 16 SCC 680
3    FAQ No.2648 of 2016 decided on 31.07.2017
4    (2016) 9 SCC 627
5    2020 SCC OnLine SC 28
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5.     Mr. M.R. Shamshad, learned Senior Counsel appearing for the
       claimant would however point out that a two Judge Bench of this
       Court in Helen C. Rebello v. Maharashtra State Road Transport
       Corporation6 held that life insurance amounts received by heirs
       on account of the victim’s death was not deductible from the
       compensation for death in motor accidents. A Coordinate Bench in
       Rajkumar Agrawal v. Vehicle Tata Venture, Commercial Auto
       Sales Private Limite7 considering whether the insurance amounts
       paid under the Employees’ State Insurance Act, 19488 is a similar
       benefit, as the compensation which is claimed in a case where
       there is a motor accident, has referred the issue to a larger Bench.
       The reference was made since in Western India Plywood Ltd. v.
       P. Ashokan9, National Insurance Co. Ltd. v. Hamida Khatoon &
       Others10 and Regional Director, E.S.I Corpn. and Anr. v. Francis
       De Costa and Anr.11, there was no authoritative pronouncement on
       the subject issue. It is also pointed out that even if the issue is found
       against the claimants, following the decision of this very bench in
       New India Assurance Co. Ltd. v. Sunita Sharma12 there should
       be no refund ordered as of now.
6.     In addition to the aforesaid decisions, we have also been apprised of
       a decision of another Coordinate Bench in Krishna v. Tek Chand13.
       The two Judge Bench having considered the decision in Helen C.
       Rebello6 and Shashi Sharma4 found that Shashi Sharma4, a three
       Judge Bench decision was distinguished by another three Judge
       Bench in Sebastiani Lakra & Ors. v. National Insurance Company
       Ltd. & Anr.14
7.     Helen C. Rebello6 was a case in which the life insurance amount
       received by heirs, on account of victim’s death was held to be not
       deductible from the compensation for death in a motor accident.


6    (1999) 1 SCC 90
7    Civil Appeal No.4941 of 2022 dt.19.01.2023
8    For brevity ‘ESI Act’
9    (1997) 7 SCC 638
10   (2009) 13 SCC 361
11   (1993) Supp. 4 SCC 100
12   C.A.No.5093 of 2025 @ SLP(C) No.9515 of 2020
13   SLP(C) No.5044 of 2019 delivered on 05.02.2024
14   (2019) 17 SCC 465
[2025] 4 S.C.R.                                                      2599

         New India Assurance Co. Ltd. v. Kamlesh and Others.


     The common law principle of adjusting the pecuniary advantages
     coming from whatever source, by reason of death, was interpreted
     as referring to pecuniary advantage on account of accidental
     death and not coming out of other forms of death. Provident fund,
     family pension, cash balance, shares, fixed deposits etc. cannot be
     termed as pecuniary advantages for the purposes of Motor Vehicles
     Act, especially taking into account the beneficial character of the
     legislation.
8.   Rajkumar Agrawal (supra) referred the question as to whether a
     motor accident claim would lie with respect to an injured employee,
     in view of the bar contemplated under Section 53 of the ESI Act;
     not very relevant in the instant case. Western India Plywood Ltd.9
     held that the bar under Section 53 of the ESI Act acted against
     receiving or recovery of compensation or damages under any other
     law and is equally applicable to relief under another statute and to
     a claim in torts. A suit for damages on account of an employment
     injury was held barred. In Hamida Khatoon10, the applicability of the
     bar under Section 53 was held to apply even against receiving the
     compensation under the M.V. Act. In the two Judge Bench decision
     of Francis De Costa11, the two Judges differed on the question
     whether the accident suffered by an employee on the public road,
     while he was on his way to join duty, is one arising out of and in the
     course of employment. The observation made in so far as a remedy
     under the M.V. Act is inconsequential, in so far as the issue itself
     was referred to a three Judge Bench. The larger Bench answered
     the reference in (1996) 6 SCC 1, against the employee, holding
     that the injury caused to an employee in an accident while he was
     travelling to his place of employment would not be covered, unless
     the accident had at least a causal connection with the work he was
     doing at the factory. The reference of the specific question need
     not detain us in the present case where there is an authoritative
     finding by a three Judge Bench with regard to the Rules of 2006
     as is seen from Shashi Sharma4.
9.   In Shashi Sharma4, Helen C. Rebello6 and one other decision
     on the same lines was referred to and distinguished. The principle
     stated in Helen C. Rebello6 that any pecuniary advantage “due
     to the dependents of the deceased” which has no direct nexus
     with the accident, injury or death, would not be deductible from
     the compensation amount payable under the M.V. Act, was
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     affirmed. However, the compensation claimed under the M.V. Act
     takes in the component of loss of income which has a direct reference
     to the “pay and wages” which otherwise would have been earned
     by the deceased employee, if he had survived the injury caused to
     him due to the motor accident. Looking at the Rules of 2006, it was
     held to be a compassionate assistance by way of ex-gratia financial
     assistance to the deceased government employee who dies in
     harness and it would be unfathomable if the dependents can still be
     permitted to claim the same amount as a possible or likely loss of
     income suffered by them; thus maintaining a claim for compensation
     of loss of dependency in the context of loss of income, again under
     the M.V. Act. Whether the claimants would be legitimately entitled
     for the loss of pay and wages, which in effect is the compensation
     assessed as loss of income by reason of the death of an employee,
     when the very same benefits of pay and wages is made available
     to them under the Rules of 2006 was the question posed. It was
     answered in the negative since the receipt of both would result in
     a double benefit. Reference was also made to Section 167 of the
     M.V. Act wherein a person entitled to claim under the M.V. Act and
     the Workmen’s Compensation Act, 1923 is permitted to claim such
     compensation only under either of the enactments, but not under
     both; reserving the right of election to the injured employee or his
     dependants.
10. We cannot but notice that the three Judge Bench in Sebastiani
    Lakra14 was again concerned with ‘just compensation’ and held
    that amount/advantages accruing to the claimants as a result of
    some contract or act which the deceased performed in his life time;
    like on account of insurance, bank deposits, shares, debentures,
    pensionary benefits, gratuity or grant of employment to a kin of
    the deceased, which cannot be said to be the outcome or result of
    death of deceased in a motor vehicle accident, even though these
    amounts would go into the hands of the claimants after the death of
    the deceased. Therein an Employees’ Benefit Scheme was held to be
    not deductible in terms of the judgment in Helen C. Rebello6. While
    accepting the dictum in Helen C. Rebello6, Shashi Sharma4 was
    specifically referred to and distinguished. Though Shashi Sharma4
    did not in principle disagree with the propositions laid down in Helen
    C. Rebello6, it all the same permitted deduction of the amounts
    received under the Rules of 2006 under the head of pay and other
[2025] 4 S.C.R.                                                       2601

         New India Assurance Co. Ltd. v. Kamlesh and Others.


     allowances. The Coordinate Bench in Sebastiani Lakra14, also did not
     differ from the principles laid down in Shashi Sharma4 with specific
     reference to the Rules of 2006. In any event in Sebastiani Lakra14,
     a three Judge Bench could not have differed from the dictum of a
     coordinate Bench in Shashi Sharma4.
11. In this context, we notice that the Constitution Bench decision in
    Pranay Sethi2 wherein a conflict between two decisions of Coordinate
    Benches was considered and it was so held in paragraphs No.14,
    27 and 28: -
           14. The aforesaid analysis in Santosh Devi [Santosh
           Devi v. National Insurance Co. Ltd., (2012) 6 SCC 421
           may prima facie show that the two-Judge Bench has
           distinguished the observation made in Sarla Verma case
           [Sarla Verma v. DTC, (2009) 6 SCC 121] but on a studied
           scrutiny, it becomes clear that it has really expressed
           a different view than what has been laid down in Sarla
           Verma [Sarla Verma v. DTC, (2009) 6 SCC 121]. If we
           permit ourselves to say so, the different view has been
           expressed in a distinctive tone, for the two-Judge Bench
           had stated that it was extremely difficult to fathom any
           rationale for the observations made in para 24 of the
           judgment in Sarla Verma case [Sarla Verma v. DTC,
           (2009) 6 SCC 121] in respect of self-employed or a person
           on fixed salary without provision for annual increment,
           etc. This is a clear disagreement with the earlier view,
           and we have no hesitation in saying that it is absolutely
           impermissible keeping in view the concept of binding
           precedents.
           27. We are compelled to state here that in Munna Lal Jain
           [Munna Lal Jain v. Vipin Kumar Sharma, (2015) 6 SCC
           347], the three-Judge Bench should have been guided by
           the principle stated in Reshma Kumari [Reshma Kumari
           v. Madan Mohan, (2013) 9 SCC 65] which has concurred
           with the view expressed in Sarla Verma [Sarla Verma v.
           DTC, (2009) 6 SCC 121] or in case of disagreement,
           it should have been well advised to refer the case to a
           larger Bench. We say so, as we have already expressed
           the opinion that the dicta laid down in Reshma Kumari
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                        Supreme Court Reports


          [Reshma Kumari v. Madan Mohan, (2013) 9 SCC 65]
          being earlier in point of time would be a binding precedent
          and not the decision in Rajesh [Rajesh v. Rajbir Singh,
          (2013) 9 SCC 54].
          28. In this context, we may also refer to Sundeep Kumar
          Bafna v. State of Maharashtra [Sundeep Kumar Bafna v.
          State of Maharashtra, (2014) 16 SCC 623] which correctly
          lays down the principle that discipline demanded by a
          precedent or the disqualification or diminution of a decision
          on the application of the per incuriam rule is of great
          importance, since without it, certainty of law, consistency
          of rulings and comity of courts would become a costly
          casualty. A decision or judgment can be per incuriam any
          provision in a statute, rule or regulation, which was not
          brought to the notice of the court. A decision or judgment
          can also be per incuriam if it is not possible to reconcile
          its ratio with that of a previously pronounced judgment of
          a co-equal or larger Bench. There can be no scintilla of
          doubt that an earlier decision of co-equal Bench binds
          the Bench of same strength. Though the judgment in
          Rajesh case [Rajesh v. Rajbir Singh, (2013) 9 SCC 54]
          was delivered on a later date, it had not apprised itself
          of the law stated in Reshma Kumari [Reshma Kumari v.
          Madan Mohan, (2013) 9 SCC 65] but had been guided
          by Santosh Devi [Santosh Devi v. National Insurance Co.
          Ltd., (2012) 6 SCC 421] . We have no hesitation that it is
          not a binding precedent on the co-equal Bench.
                                    (underlining by us for emphasis)

12. In the teeth of the decision of the Constitution Bench with all the
    respect at our command, we cannot agree with the two Judge Bench
    decision in Krishna13. Nor can we find Sebastiani Lakra14 having
    clarified Shashi Sharma4 and we are hence, bound to follow Shashi
    Sharma4 which has been followed in Birendera5, another two Judge
    Bench and also by this very Division Bench in Sunita Sharma12.
13. Now we come to the quantum in the appeal filed by the claimants.
    The loss of dependency awarded by the High Court is Rs.44,44,986/-
    reckoning the future prospects and the multiplier applicable to a
[2025] 4 S.C.R.                                                      2603

            New India Assurance Co. Ltd. v. Kamlesh and Others.


      person between the age of 40 and 45 and deducting income tax
      and personal expenses, which are in tune with the dictum in Pranay
      Sethi2. However, we have to notice that the compensation under
      conventional heads has not been restricted to Rs.70,000/- in Pranay
      Sethi2 but has been restricted to Rs.40,000/- for loss of consortium,
      Rs.15,000/- for funeral expenses and Rs.15,000/- for loss of estate.
      Magma General Insurance Company Ltd. v. Nanu Ram @ Chuhru
      Ram15 and in New India Assurance Company v. Somwati16 declared
      the principle that in addition to loss of spousal consortium, loss of
      parental & filial consortium also have to be considered. This does
      not go against the judgment of the Constitution Bench and is in
      tune with the three Judge Bench in Sebastiani Lakra14 which also
      emphasise the need for ‘just compensation’.
14. In the above context we notice that here the loss of consortium is
    entitled to the spouse and the three children of the deceased which
    will come to Rs.1,60,000/-. This amount cannot be reduced by any
    amounts received by the claimants under the Rules of 2006. The
    Rules of 2006 permits the last drawn salary of the deceased to be
    continued to the family of the employee but for different periods
    dependent upon the age of the deceased. If the deceased was aged
    35 years, then the last drawn pay and allowances would be payable
    for a period of 15 years and if the employee is between 35 years and
    48 years of age, the period would be reduced to 12 years and for an
    employee who died at the age of 48 years, the payment would be
    restricted to 7 years. The year-wise restriction made applicable in the
    Rules of 2006 is also on the principle of the normal life expectancy
    of an employee on which principle, the multiplier system has been
    introduced and affirmed in Sarla Verma’s case.
15. Hence, the proper method would be for the Tribunal itself considering
    the death of a Government employee, to whom the Rules of 2006
    is applicable, to first consider the loss of income, quantum of
    compensation with reference to loss of income as would be available
    from the principles enunciated in Sarla Verma and Pranay Sethi’s
    case and to deduct the pay and allowances payable under the Rules
    of 2006. If the compensation for loss of income arrived at under the


15   2018 (4) RCR (Civil) 333
16   (2020) 9 SCC 644
2604                                                     [2025] 4 S.C.R.

                        Supreme Court Reports


     M.V. Act is more, then necessarily the difference has to be paid to
     the claimants.
16. In the present case, the deceased was aged 43 years and was
    getting a salary of Rs.28,300/- per month which takes his annual
    income to Rs.3,39,600/-. The deceased left behind his wife and
    three children, thus he was earning for a family comprised of five
    persons, in which context, the deduction for personal expenses has
    to be 1/4th. The High Court has deducted the income tax to arrive at
    the annual income of Rs.3,25,640/- and an addition has been made
    for future prospects at the rate of 30% which is in accordance with
    Pranay Sethi2. The High Court has also reduced half of the financial
    assistance payable computed at Rs.43,35,408/- under the Rules
    of 2006. The High Court also relied on PW-4, an employee in the
    District Employment Office, Fatehabad who has deposed that the
    family of the deceased is entitled to a salary of Rs.30,107/- for the
    month of August 2015 which in accordance with the Rules of 2006
    would be continued for 12 years coming to a total of Rs.43,35,408/-.
    Obviously, this is the last drawn salary of the deceased which should
    have been reckoned for the purpose of calculating the loss of income
    under the M.V. Act also. Considering the fact that no deduction
    for the income tax has been made in the amounts entitled to the
    family of the deceased for 12 years, which would be deducted only
    from monthly payments, we are of the view that there could be no
    deduction made even while computing the loss of income from the
    last drawn pay; for income tax.
17. Hence, the loss of income, ideally would have to be computed in the
    following manner. Obviously since the amounts payable under the
    Rules of 2006 is the last drawn pay in computing the loss of income
    under the M.V Act necessarily the future prospects will have to be
    added and the multiplier applicable would be 14 since the age of the
    deceased was 43. The computation hence would be 30,107 x 12 x
    14 x 130% x 3/4 = Rs.49,31,527/- from which the amounts payable
    as financial assistance under the Financial Assistance Rules of 2006
    will have to be deducted which is Rs. 43,35,408/-. The additional
    loss of income payable under the M.V. Act would be Rs. 5,96,019/-
    to which will be added loss of consortium for the widow and three
    children at Rs. 1,60,000/- and loss of estate and funeral expenses
    of Rs. 30,000/-. The total compensation would be Rs. 7,86,119/-.
    The compensation already paid shall not be refunded.
[2025] 4 S.C.R.                                                  2605

            New India Assurance Co. Ltd. v. Kamlesh and Others.


18. The Appeals are disposed of on the afore said terms on the question
    of law, following Shashi Sharma4.
19. Pending application(s), if any, shall stand disposed of.

     Result of the case: Appeals disposed of.




     †
         Headnotes prepared by: Nidhi Jain