SEBASTIANI LAKRA & ORS.versusNATIONAL INSURANCE COMPANY LTD. & ANR.

                      [2018] 13 S.C.R. 1053                           1053


                 SEBASTIANI LAKRA & ORS.                              A
                                  v.
      NATIONAL INSURANCE COMPANY LTD. & ANR.
             (Civil Appeal Nos. 10588-10589 of 2018)
                       OCTOBER 12, 2018                               B
       [MADAN B. LOKUR, S. ABDUL NAZEER AND
                 DEEPAK GUPTA, JJ.]
      Motor Vehicles Act, 1988:
       s. 168 – Fatal accident – Claim for compensation – Income      C
of deceased Rs. 58,565/- p.m – Tribunal for the purpose of
compensation assessed the monthly income of deceased at Rs.
50,000/- p.m – Deducting 1/3 for his personal expenses, and
applying multiplier of 11assessed the compensation at
Rs. 40,00,000/- for loss of income and Rs. 90,000/- towards other
                                                                      D
heads – Thus, awarded total compensation at Rs. 40,90,000/- – On
appeal of insurance company plea that payment of sum of
Rs. 50,082/- p.m. to the claimants under employees Family Benefit
Scheme should be deducted while computing compensation towards
loss of income – High Court reduced the compensation amount to
Rs. 36,00,000/- – On appeal, held: Deductions cannot be allowed       E
from the amount of compensation either on account of insurance,
or on account of pensionary benefits or gratuity or grant of
employment to a kin of the deceased – Deduction can be ordered
only where the tort-feasor satisfies the court that the amount has
accrued to the claimants only on account of death of the deceased
                                                                      F
in a motor vehicle accident and not where the amount accrues as a
result of contract or act which the deceased performed in his life-
time – In the facts of the case amount received under the Scheme
cannot be deducted – However, since the claimants are getting quite
an advantage, they are not entitled to claim another amount @ 15%
by way of future prospects – Amount under the Scheme more than        G
offsets the loss of future prospects – Taking the last drawn income
as Rs. 58,565/- compensation amount is enhanced to
Rs. 50,00,000/- with interest @ 9% p.a. from the date of filing of
the petition till the payment of the amount.
                                                                      H
                               1053
1054           SUPREME COURT REPORTS                    [2018] 13 S.C.R.


 A           Judgments:
            Reasons of judgments – Need for – Held: Reasons are the
       heart and soul of any judicial pronouncement – No judicial
       pronouncement is complete without reasons.
             Allowing the appeals, the Court
 B
             HELD: 1. The High Court, without giving any reasons, has
       reduced the compensation by almost Rs.5,00,000/-. Reasons are
       the heart and soul of any judicial pronouncement. No judicial
       order is complete without reasons and it is expected that every
       court which passes an order, should give reasons for the same.
 C     [Para 3][1058-D]
             2.1 Section 168 of the Motor Vehicles Act, 1988 mandates
       that “just compensation” should be paid to the claimants. Any
       method of calculation of compensation which does not result in
       the award of ‘just compensation’ would not be in accordance with
 D     the Act. The word “just” is of a very wide amplitude. The Courts
       must interpret the word in a manner which meets the object of
       the Act, which is to give adequate and just compensation to the
       dependents of the deceased. Compensation can be paid only
       once and not time and again. [Para 5][1059-A-B]
 E           2.2 The law is well settled that deductions cannot be allowed
       from the amount of compensation either on account of insurance,
       or on account of pensionary benefits or gratuity or grant of
       employment to a kin of the deceased. The main reason is that all
       these amounts are earned by the deceased on account of
 F     contractual relations entered into by him with others. It cannot
       be said that these amounts accrued to the dependents or the
       legal heirs of the deceased on account of his death in a motor
       vehicle accident. The claimants/dependents are entitled to ‘just
       compensation’ under the Motor Vehicles Act as a result of the
       death of the deceased in a motor vehicle accident. Therefore,
 G     the natural corollary is that the advantage which accrues to the
       estate of the deceased or to his dependents as a result of some
       contract or act which the deceased performed in his life time
       cannot be said to be the outcome or result of the death of the
       deceased even though these amounts may go into the hands of
       the dependents only after his death. [Para 12][1063-E-H]
 H
  SEBASTIANI LAKRA & ORS. v. NATIONAL INSURANCE                        1055
               COMPANY LTD. & ANR.

      2.3 As far as any amount paid under any insurance policy is      A
concerned whatever is added to the estate of the deceased or his
dependents is not because of the death of the deceased but
because of the contract entered into between the deceased and
the insurance company from where he took out the policy. The
deceased paid premium on such life insurance and this amount
                                                                       B
would have accrued to the estate of the deceased either on
maturity of the policy or on his death, whatever be the manner of
his death. These amounts are paid because the deceased has
wisely invested his savings. Similar would be the position in case
of other investments like bank deposits, share, debentures etc..
The tort-feasor cannot take advantage of the foresight and wise        C
financial investments made by the deceased. [Para 13]
[1064-A-C]
      2.4 As far as the amounts of pension and gratuity are
concerned, these are paid on account of the service rendered by
the deceased to his employer. It is now an established principle       D
of service jurisprudence that pension and gratuity are the property
of the deceased. They are more in the nature of deferred wages.
The deceased employee works throughout his life expecting that
on his retirement he will get substantial amount as pension and
gratuity. These amounts are also payable on death, whatever be
the cause of death. Therefore, applying the same principles, the       E
said amount cannot be deducted. [Para 14][1064-D]
       2.5 Deduction can be ordered only where the tort-feasor
satisfies the court that the amount has accrued to the claimants
only on account of death of the deceased in a motor vehicle
accident. [Para 16][1064-F]                                            F

      2.6 Under the employees family Benefit Scheme, the
nominee or legal heir(s) of the deceased employee have to
deposit the entire amount of gratuity and all other benefits payable
to them on the death of the employee. In the present case, it
stands proved that the claimants have deposited a sum of               G
Rs.27,43,991/- received by them on the death of the deceased
with the employer and are now getting about Rs.50,082/- per
month. This amount of Rs.50,082/- is to be paid to the legal
heirs under the Scheme only till date of retirement of the
deceased. Even if an interest @ of 12% per annum is calculated         H
1056            SUPREME COURT REPORTS                     [2018] 13 S.C.R.


 A     on the amount of Rs.27,43,991/-, that would amount to
       Rs.3,30,000/- per year or Rs.27,500/- per month. The appellants-
       claimants are getting about Rs.50,000/- per month i.e. about
       Rs.22,500/- per month more, but this is only to be paid for a period
       of about 7 years till 30.04.2021. This payment will cease
       thereafter. This amount cannot be deducted. [Paras 18, 19 and
 B
       20][1064-G-H; 1065-A-C]
             2.7 However, since the claimants are getting quite an
       advantage, the MACT was right in not taking into consideration
       the future prospects in the peculiar facts and circumstances of
       the case. Therefore, though the amount payable to the claimants,
 C     are not to be deducted, in the peculiar facts and circumstances of
       the case, they are not entitled to claim another amount @ of 15%
       by way of future prospects. The payment of the amount under
       the Scheme more than offsets the loss of future prospects. This,
       would be ‘just’ compensation. [Para 21][1065-D-E]
 D            2.8 It is not disputed that the last drawn income of the
       deceased including DA was Rs.58,565/-. On this amount, the
       deceased would definitely have been paying some income tax.
       Since exact calculations of the same has not been given, the Court
       deducts about Rs.2,565/- per month for this purpose and for
 E     purposes of calculation of loss of income, assesses the income as
       Rs.56,000/- per month. Out of this amount 1/3 is deducted i.e.
       Rs.18,667/-, for personal expenses leaving a balance of
       Rs. 37,333/- per month as loss of dependency to the family, which
       works out to Rs.4,47,996/- per annum. Applying a multiplier of
       11, the compensation works out to Rs.49,27,956/-. In addition
 F     thereto, the claimants are entitled to Rs.15,000/- for loss of estate,
       Rs.40,000/- for loss of consortium, Rs.15,000/- for funeral
       expenses i.e. a total amount of Rs.49,97,956/- which is rounded
       off to Rs.50,00,000/-. On this amount, the claimants shall be
       entitled to interest @ of 9% per annum from the date of filing of
 G     the petition till the payment of the amount. [Para 22][1065-F-H;
       1066-A]
             Sarla Verma v. DTC (2009) 6 SCC 121 : [2009] 5
             SCR 1098; Helen C. Rebello v. Maharashtra SRTC
             (1999) 1 SCC 90 : [1998] 1 Suppl. SCR 684; United
 H           India Insurance Co. Ltd. v. Patricia Jean Mahajan
  SEBASTIANI LAKRA & ORS. v. NATIONAL INSURANCE                          1057
               COMPANY LTD. & ANR.

      (2002) 6 SCC 281 : [2002] 3 SCR 1176; National                     A
      Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC
      680; Vimal Kanwar v. Kishore Dan (2013) 7 SCC 476
      – relied on.
      Reliance General Insurance Co. Ltd. v. Shashi Sharma
      (2016) 9 SCC 627 : [2016] 6 SCR 488 – distinguished.               B
      Perry v. Cleaver 1969 ACJ 363 – referred to.
                       Case Law Reference
[2009] 5 SCR 1098               relied on               Para 3
                                                                         C
[2016] 6 SCR 488                distinguished           Para 4
[1998] 1 Suppl. SCR 684         relied on               Para 4
[2002] 3 SCR 1176               relied on               Para 4
(2017) 16 SCC 680               relied on               Para 4           D

(2013) 7 SCC 476                relied on               Para 9
1969 ACJ 363                    referred to             Para 15
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 10588-
10589 of 2018                                                            E

      From the Judgment and Order dated 21.12.2017 of the High
Court of Orissa at Cuttack in M.A.C.A. Nos. 372 and 508 of 2016.
      Hitendra Nath Rath, Avijit Patnaik, Advs. for the Appellants.
      Abhishek Kumar, Sudhir Naagar, Sidharth Khatana, Advs. for         F
the Respondents.
      The Judgment of the Court was delivered by
      DEEPAK GUPTA J. 1. Leave granted.
       2. These appeals filed by the claimants-appellants are directed   G
against the judgment dated 21.12.2017 delivered by the High Court of
Orissa at Cuttack whereby compensation of Rs.40,90,000/- awarded by
the IInd Addl. District Judge-cum-Vth Motor Accidents Claim Tribunal,
Rourkela (hereinafter referred to as ‘the MACT’) has been reduced to
Rs.36,00,000/-.
                                                                         H
1058             SUPREME COURT REPORTS                       [2018] 13 S.C.R.


 A            3. The MACT found that the revised basic pay of the deceased
       was Rs.51,328/- and he was entitled to DA of Rs.7,237/- at the time of
       his death i.e. he was getting a total salary of Rs.58,565/-. However, the
       MACT, for the purposes of compensation, assessed the monthly income
       of deceased at Rs.50,000/- per month and deducted 1/3 for his personal
       expenses leaving a datum figure of Rs.33,333/- per month. Since the
 B
       deceased was 52 years old, the MACT following the judgment of this
       Court in Sarla Verma v. DTC1, applied a multiplier of 11 and assessed
       compensation at Rs.40,00,000/- for loss of income, Rs.25,000/- was
       added for funeral expenses, Rs.5,000/- for the loss of estate, Rs.50,000/
       - towards loss of consortium and Rs.10,000/- for loss of affection i.e.
 C     total compensation of Rs.40,90,000/- was awarded to the claimants. The
       claimants and the insurance company filed appeals challenging the
       quantum of compensation. The main ground raised by the insurance
       company was that the claimants were being paid a sum of Rs.50,082/-
       per month under the Employees Family Benefit Scheme (for short ‘the
       EFB Scheme’). The High Court, without giving any reasons, has reduced
 D
       the compensation by almost Rs.5,00,000/-, to Rs.36,00,000/-. Reasons
       are the heart and soul of any judicial pronouncement. No judicial order
       is complete without reasons and it is expected that every court which
       passes an order, should give reasons for the same.
             4. We have heard learned counsel for the parties and it is not
 E     disputed before us that the last drawn income of the deceased including
       DA was Rs.58,565/- per month. According to the insurance company,
       since the claimants are getting a sum of Rs.50,082/- under the EFB
       Scheme, this amount should be deducted in terms of the judgment of this
       Court in Reliance General Insurance Co. Ltd. v. Shashi Sharma2.
 F     On the other hand, the claimants/appellants submit that no deduction
       should be made in view of the judgments rendered by this Court in the
       case of Helen C. Rebello v. Maharashtra SRTC3 and United India
       Insurance Co. Ltd. v. Patricia Jean Mahajan4. The appellants further
       contend that, in fact, as per the judgment rendered in National Insurance
       Co. Ltd. v. Pranay Sethi5, 15% should be added towards future prospects.
 G
       1
         (2009) 6 SCC 121
       2
         (2016) 9 SCC 627
       3
         (1999) 1 SCC 90
       4
         (2002) 6 SCC 281
       5
         (2017) 16 SCC 680
 H
   SEBASTIANI LAKRA & ORS. v. NATIONAL INSURANCE                                1059
       COMPANY LTD. & ANR. [DEEPAK GUPTA, J.]

      5. Section 168 of the Motor Vehicles Act, 1988 (for short ‘the            A
Act’) mandates that “just compensation” should be paid to the claimants.
Any method of calculation of compensation which does not result in the
award of ‘just compensation’ would not be in accordance with the Act.
The word “just” is of a very wide amplitude. The Courts must interpret
the word in a manner which meets the object of the Act, which is to give
                                                                                B
adequate and just compensation to the dependents of the deceased. One
must also remember that compensation can be paid only once and not
time and again.
       6. The traditional view was that while assessing compensation,
the Court should assess the loss of income caused to the claimants by
the death of the deceased and balance it with the benefits which may            C
have accrued on account of the death of the deceased. However, even
when this traditional view was being followed, it was a well settled position
of law that the tort-feasor cannot take benefit of the munificence or
gratuity of others.
        7. In Helen C. Rebello case (supra), the issue was whether the          D
amounts received by the deceased by way of provident fund, pension,
life insurance policies and similarly, in cash, bank balance, shares, fixed
deposits etc., are ‘pecuniary advantages’ received by the heirs on account
of death of the deceased and liable to be deducted from the compensation.
This Court held that these amounts have no co-relation with the                 E
compensation receivable by the dependents under the Motor Vehicle
Act. The following observations were made by the Court:
      “35. Broadly, we may examine the receipt of the provident fund
      which is a deferred payment out of the contribution made by an
      employee during the tenure of his service. Such employee or his           F
      heirs are entitled to receive this amount irrespective of the
      accidental death. This amount is secured, is certain to be received,
      while the amount under the Motor Vehicles Act is uncertain and
      is receivable only on the happening of the event, viz., accident,
      which may not take place at all. Similarly, family pension is also
      earned by an employee for the benefit of his family in the form of        G
      his contribution in the service in terms of the service conditions
      receivable by the heirs after his death. The heirs receive family
      pension even otherwise than the accidental death. No corelation
      between the two. Similarly, life insurance policy is received either
                                                                                H
1060            SUPREME COURT REPORTS                          [2018] 13 S.C.R.


 A           by the insured or the heirs of the insured on account of the contract
             with the insurer, for which the insured contributes in the form of
             premium. It is receivable even by the insured if he lives till maturity
             after paying all the premiums. In the case of death, the insurer
             indemnifies to pay the sum to the heirs, again in terms of the
             contract for the premium paid. Again, this amount is receivable
 B
             by the claimant not on account of any accidental death but
             otherwise on the insured’s death. Death is only a step or
             contingency in terms of the contract, to receive the amount.
             Similarly any cash, bank balance, shares, fixed deposits, etc. though
             are all a pecuniary advantage receivable by the heirs on account
 C           of one’s death but all these have no corelation with the amount
             receivable under a statute occasioned only on account of accidental
             death. How could such an amount come within the periphery of
             the Motor Vehicles Act to be termed as “pecuniary advantage”
             liable for deduction. When we seek the principle of loss and gain,
             it has to be on a similar and same plane having nexus, inter se,
 D
             between them and not to which there is no semblance of any
             corelation. The insured (deceased) contributes his own money
             for which he receives the amount which has no corelation to the
             compensation computed as against the tortfeasor for his
             negligence on account of the accident. As aforesaid, the amount
 E           receivable as compensation under the Act is on account of the
             injury or death without making any contribution towards it, then
             how can the fruits of an amount received through contributions of
             the insured be deducted out of the amount receivable under the
             Motor Vehicles Act. The amount under this Act he receives without
             any contribution. As we have said, the compensation payable under
 F
             the Motor Vehicles Act is statutory while the amount receivable
             under the life insurance policy is contractual.”
              8. In Patricia Jean Mahajan case (supra), the deceased was a
       doctor practicing in the United States of America. He died on a visit to
       India. His wife had received an amount of $ 2,50,000/- on account of
 G     life insurance policies of the deceased. She had also received
       unemployment allowance for 8 or 9 months and it was urged that these
       amounts should be deducted from the compensation assessed. After
       referring to the entire law on the subject including the decision in Helen
       C. Rebello case (supra) this Court held as follows:
 H
SEBASTIANI LAKRA & ORS. v. NATIONAL INSURANCE                                1061
    COMPANY LTD. & ANR. [DEEPAK GUPTA, J.]

  “36. We are in full agreement with the observations made in the            A
  case of Helen Rebello that principle of balancing between losses
  and gains, by reason of death, to arrive at the amount of
  compensation is a general rule, but what is more important is that
  such receipts by the claimants must have some correlation with
  the accidental death by reason of which alone the claimants have
                                                                             B
  received the amounts. We do not think it would be necessary for
  us to go into the question of distinction made between the provisions
  of the Fatal Accidents Act and the Motor Vehicles Act. According
  to the decisions referred to in the earlier part of this judgment, it is
  clear that the amount on account of social security as may have
  been received must have a nexus or relation with the accidental            C
  injury or death, so far to be deductible from the amount of
  compensation. There must be some correlation between the
  amount received and the accidental death or it may be in the
  same sphere, absence (sic) the amount received shall not be
  deducted from the amount of compensation. Thus, the amount
                                                                             D
  received on account of insurance policy of the deceased cannot
  be deducted from the amount of compensation though no doubt
  the receipt of the insurance amount is accelerated due to premature
  death of the insured. So far as other items in respect of which
  learned counsel for the Insurance Company has vehemently urged,
  for example some allowance paid to the children, and Mrs Patricia          E
  Mahajan under the social security system, no correlation of those
  receipts with the accidental death has been shown much less
  established. Apart from the fact that contribution comes from
  different sources for constituting the fund out of which payment
  on account of social security system is made, one of the
                                                                             F
  constituents of the fund is tax which is deducted from income for
  the purpose. We feel that the High Court has rightly disallowed
  any deduction on account of receipts under the insurance policy
  and other receipts under the social security system which the
  claimant would have also otherwise been entitled to receive
  irrespective of accidental death of Dr Mahajan. If the proposition         G
  “receipts from whatever source” is interpreted so widely that it
  may cover all the receipts, which may come into the hands of the
  claimants, in view of the mere death of the victim, it would only
  defeat the purpose of the Act providing for just compensation on
                                                                             H
1062               SUPREME COURT REPORTS                       [2018] 13 S.C.R.


 A              account of accidental death. Such gains, maybe on account of
                savings or other investment etc. made by the deceased, would
                not go to the benefit of the wrongdoer and the claimant should not
                be left worse off, if he had never taken an insurance policy or had
                not made investments for future returns.”
 B            9. Thereafter, similar matter came up for consideration in Vimal
       Kanwar v. Kishore Dan6. This Court, following Helen C. Rebello case
       (supra) held that the amounts received by the heirs by way of provident
       fund, pension and insurance cannot be termed as ‘pecuniary advantage’
       liable for deduction. This Court also held that the salary received on
       compassionate appointment cannot be deducted.
 C
              10. In Shashi Sharma case (supra) this Court was dealing with
       the payments made to the legal heirs of the deceased in terms of Rule 5
       (1) of the Haryana Compassionate Assistance to the Dependants of
       Deceased Government Employees Rules, 2006 (for short ‘the said
       Rules’). Under Rule 5 of the said Rules on the death of a Government
 D     employee, the family would continue to receive as financial assistance a
       sum equal to the pay and other allowances that was last drawn by the
       deceased employee for periods set out in the Rules and after the said
       period the family was entitled to receive family pension. The family
       was also entitled to retain the Government accommodation for a period
 E     of one year in addition to payment of Rs.25,000/- as ex gratia. In this
       case, the three-Judge Bench adverted to the principles laid down in Helen
       C. Rebello case (supra), followed in Patricia Jean Mahajan case
       (supra), and came to the conclusion that the decision in Vimal Kanwar
       case (supra) did not take a view contrary to Helen C. Rebello or Patricia
       Jean Mahajan case (supra). The following observations are relevant:
 F
                “15. The principle expounded in this decision in Helen C. Rebello
                case that the application of general principles under the common
                law to estimate damages cannot be invoked for computing
                compensation under the Motor Vehicles Act. Further, the
                “pecuniary advantage” from whatever source must correlate to
 G              the injury or death caused on account of motor accident. The
                view so taken is the correct analysis and interpretation of the
                relevant provisions of the Motor Vehicles Act of 1939, and must

       6
           (2013) 7 SCC 476
 H
   SEBASTIANI LAKRA & ORS. v. NATIONAL INSURANCE                               1063
       COMPANY LTD. & ANR. [DEEPAK GUPTA, J.]

      apply proprio vigore to the corresponding provisions of the Motor        A
      Vehicles Act, 1988. This principle has been restated in the
      subsequent decision of the two-Judge Bench in Patricia Jean
      Mahajan case, to reject the argument of the Insurance Company
      to deduct the amount receivable by the dependants of the deceased
      by way of “social security compensation” and “life insurance
                                                                               B
      policy.”
However, while dealing with the scheme the Court held that applying a
harmonious approach and to determine a just compensation payable under
the Motor Vehicles Act it would be appropriate to exclude the amount
received under the said Rules under the Head of ‘Pay and Other
Allowances’ last drawn by the employee. We may note that on principle          C
this Court has not disagreed with the proposition laid down in Helen C.
Rebello or in Patricia Jean Mahajan case (supra), but while arriving
at a just compensation, it had ordered the deduction of the salary, received
under the statutory rules.
      11. The Indian courts have consistently followed the multiplier          D
system while assessing compensation and the judgment of this Court in
Sarla Verma (supra) has been reiterated by a Constitution Bench of
this Court in Pranay Sethi (supra) in so far as choice of multiplier is
concerned.
       12. The law is well settled that deductions cannot be allowed           E
from the amount of compensation either on account of insurance, or on
account of pensionary benefits or gratuity or grant of employment to a
kin of the deceased. The main reason is that all these amounts are earned
by the deceased on account of contractual relations entered into by him
with others. It cannot be said that these amounts accrued to the               F
dependents or the legal heirs of the deceased on account of his death in
a motor vehicle accident. The claimants/dependents are entitled to ‘just
compensation’ under the Motor Vehicles Act as a result of the death of
the deceased in a motor vehicle accident. Therefore, the natural corollary
is that the advantage which accrues to the estate of the deceased or to
his dependents as a result of some contract or act which the deceased          G
performed in his life time cannot be said to be the outcome or result of
the death of the deceased even though these amounts may go into the
hands of the dependents only after his death.

                                                                               H
1064               SUPREME COURT REPORTS                       [2018] 13 S.C.R.


 A            13. As far as any amount paid under any insurance policy is
       concerned whatever is added to the estate of the deceased or his
       dependents is not because of the death of the deceased but because of
       the contract entered into between the deceased and the insurance
       company from where he took out the policy. The deceased paid premium
       on such life insurance and this amount would have accrued to the estate
 B
       of the deceased either on maturity of the policy or on his death, whatever
       be the manner of his death. These amounts are paid because the
       deceased has wisely invested his savings. Similar would be the position
       in case of other investments like bank deposits, share, debentures etc..
       The tort-feasor cannot take advantage of the foresight and wise financial
 C     investments made by the deceased.
              14. As far as the amounts of pension and gratuity are concerned,
       these are paid on account of the service rendered by the deceased to his
       employer. It is now an established principle of service jurisprudence
       that pension and gratuity are the property of the deceased. They are
 D     more in the nature of deferred wages. The deceased employee works
       throughout his life expecting that on his retirement he will get substantial
       amount as pension and gratuity. These amounts are also payable on
       death, whatever be the cause of death. Therefore, applying the same
       principles, the said amount cannot be deducted.
 E            15. As held by the House of Lords in Perry v. Cleaver7 the
       insurance amount is the fruit of premium paid in the past, pension is the
       fruit of services already rendered and the wrong doer should not be
       given benefit of the same by deducting it from the damages assessed.
             16. Deduction can be ordered only where the tort-feasor satisfies
 F     the court that the amount has accrued to the claimants only on account
       of death of the deceased in a motor vehicle accident.
             17. The issue before us is whether we should deduct the amount
       being received by the family members under the EFB Scheme while
       calculating the loss of income.
 G            18. The EFB Scheme is totally different from the rules which
       were under consideration of this Court in Shashi Sharma case (supra).
       Under this Scheme, the nominee or legal heir(s) of the deceased employee
       have to deposit the entire amount of gratuity and all other benefits payable
       to them on the death of the employee.
 H     7
           1969 ACJ 363
   SEBASTIANI LAKRA & ORS. v. NATIONAL INSURANCE                              1065
       COMPANY LTD. & ANR. [DEEPAK GUPTA, J.]

        19. In the present case, it stands proved that the claimants have     A
deposited a sum of Rs.27,43,991/- received by them on the death of the
deceased with the employer and are now getting about Rs.50,082/- per
month. This amount of Rs.50,082/- is to be paid to the legal heirs under
the EFB Scheme only till date of retirement of the deceased. Even if an
interest @ of 12% per annum is calculated on the amount of Rs.27,43,991/
                                                                              B
-, that would amount to Rs.3,30,000/- per year or Rs.27,500/- per month.
The appellants-claimants are getting about Rs.50,000/- per month i.e.
about Rs.22,500/- per month more, but this is only to be paid for a period
of about 7 years till 30.04.2021. This payment will cease thereafter.
       20. The aforesaid payment is totally different to the payment made
by the employer in Shashi Sharma case (supra) which was statutory in          C
nature. Therefore, we hold that this amount cannot be deducted.
       21. However, since the claimants are getting quite an advantage,
we feel that the MACT was right in not taking into consideration the
future prospects in the peculiar facts and circumstances of the case.
Therefore, though we are not inclined to deduct the amount payable to         D
the claimants, we feel that in the peculiar facts and circumstances of the
case, they are not entitled to claim another amount @ of 15% by way of
future prospects. The payment of the amount under the EFB Scheme
more than offsets the loss of future prospects. This, in our opinion,
would be ‘just’ compensation.                                                 E
       22. It is not disputed that the last drawn income of the deceased
including DA was Rs.58,565/-. On this amount, the deceased would
definitely have been paying some income tax. Since exact calculations
of the same has not been given, we deduct about Rs.2,565/- per month
for this purpose and for purposes of calculation of loss of income, assess    F
the income as Rs.56,000/- per month. Out of this amount 1/3 is deducted
i.e. Rs.18,667/-, for personal expenses leaving a balance of Rs. 37,333/
- per month as loss of dependency to the family, which works out to
Rs.4,47,996/- per annum. Applying a multiplier of 11, the compensation
works out to Rs.49,27,956/-. In addition thereto, according to the judgment
of this Court in Pranay Sethi case (supra), the claimants are entitled to     G
Rs.15,000/- for loss of estate, Rs.40,000/- loss of consortium, Rs.15,000/
- for funeral expenses i.e. a total amount of Rs.49,97,956/- which is
rounded off to Rs.50,00,000/-. On this amount, the claimants shall be
entitled to interest @ of 9% per annum from the date of filing of the
                                                                              H
1066             SUPREME COURT REPORTS                       [2018] 13 S.C.R.


 A     petition till the payment of the amount. Obviously, the insurance company
       shall be entitled to deduct/adjust the amounts already paid by it.
             23. The appeals are allowed in the aforesaid terms. Pending
       application(s), if any, stands disposed of.

 B
       Kalpana K. Tripathy                                        Appeals allowed.




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