Can non-dependent children claim compensation under compassionate grounds

Can non-dependent children claim compensation under compassionate grounds written by Avdhesh Parashar student of Maharashtra National Law University Aurangabad

National Insurance Company LTD. vs. Birender & Ors.

INTRODUCTION:

This case is related to Motor Accident Claim, wherein the claimants are two major sons (respondents nos. 1 and 2) of the deceased. The claim petition was filed against National Insurance Company LTD under Motor Accidents Claims Tribunal, Jind in 2014. An appeal was raised by National Insurance Company LTD against the order of MACT, Jind. Latter 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. The parties are referred to as per their status in the former appeal for the sake of convenience.

FACTS OF THE CASE:

• The deceased Smt. Sunheri Devi was a government employee and working as a peon in the office of Tehsildar, Uchana. On the day of 20.10.2014 at 9:00 a.m., she was going to attend the office of Tehsildar from Dharoli Khera village, traveling as a pillion rider on a motorcycle.
• At that time, a dumper coming from the opposite side, being driven in a rash and negligent manner, collided with the motorcycle, resulting in fatal injuries sustained to the deceased to which she succumbed.
• The respondent’s nos. 1 and 2 (sons of the deceased, majors and earning) claimed an amount of Rs. 50,00,000 (Rupees fifty lacks only) along with interest at the rate of 12% per annum.
• The matter went to Motor Accident Claim Tribunal, Jind where the tribunal after analyzing the evidence on record, Tribunal held that the accident occurred due to rash and negligent driving of the offending vehicle and ordered in favor of respondents nos. 1 and 2. The tribunal awarded Rs. 17,15,532/- as compensation to claimants.
• Against the award passed by tribunal, cross-appeals were preferred by the appellant (insurance company) in 2016 at Hon’ble High Court of Punjab and Haryana on the contention that claimants are major and have earning hands and also because the Haryana compassionate assistance to the Deceased Government Employees Rules, 2006, they are not eligible to claim the compensation.
• The Hon’ble High Court awarded the compensation in favor of claimants but this time again it deducted the personal expenses of the deceased at 50% of the compensation. Unsatisfied with the order of Hon’ble High Court, respondents nos. 1 and 2 preferred a Special Leave Petition (appeal) in this Hon’ble Supreme Court that the High Court erred in deducting 50% of the amount from compensation instead of one-third (1/3rd).

ISSUES:

The principal issues that arise for considerations are as follows:

1. Whether the major sons of the deceased who are married and gainfully employed or earning, can claim compensation under the Motor Vehicle Act, 1988(for short, the Act)?
2. Whether such legal representative is entitled only for compensation under the conventional heads?
3. Whether the amount receivable by the legal representative of the deceased under the 2006 Rules is required to be deducted as a whole or only portion thereof?

RULE OF LAW:

• Section 166 of the Motor Vehicle Act, 1988
• Section 2(11) of the Code of Civil Procedure
• Dependents of Deceased Government Employees Rules, 2006

OBSERVATION OF THE COURT:

In view of the issues present here; the Hon’ble Supreme Court observed that the first issue needs to be answered based on the scheme of the Motor Vehicle Act, 1988. Section 166 (1)
(c) of the Motor Vehicle Act provide that application of compensation can be made by all or any of the legal representative of the deceased, who has died in a motor accident. The Hon’ble Supreme Court said that the major married son who is also earning and not fully dependent on the deceased would be still covered by the expression “legal representative” of the deceased. In Manjuri Bera (Smt) vs. Oriental Insurance Co. Ltd & Anr., the Hon’ble Court ruled that the proviso 166 (1) (c) of the Act makes the position clear that where all the legal representative had not joined, then an application can be made on behalf of the legal representative of the deceased by impleading as respondents. According to section 2(11) of the Code of Civil Procedure,1908, 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 deceased. Further, 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 and have a right to apply for compensation. It is thus settled law by now that legal representative, even the major married and earning sons of the deceased being legal representative have a right to claim 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 dependent on the deceased and not to limit the claim towards conventional heads only.
The next issue is about the deduction of the amount receivable by the legal representative of the deceased under the 2006 Rules from the compensation amount determined by the Tribunal in terms of the decision of the three-judge bench of this Court in Reliance General Insurance Co. Ltd. Vs. Shashi Sharma and Ors.
The Hon’ble Court opined as follows that Rule 5(1) of the 2006 Rules provides for the period during which the dependents of the deceased employee may receive financial assistance equivalent to the pay and other allowances and Rule 5(2) provides that the family shall be eligible to receive a family pension as per the normal rules only after the period during which they would receive the financial assistance in terms of Rule 5(1).
The harmonious approach for determining a just compensation payable under the 1988 Act, therefore, is to exclude the amount received or receivable by the dependents 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 normal course. This is not to say that the amount or payment receivable by the dependents 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, 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 dependents of the deceased government employee in terms of subrule (2) to subrule (5) of Rule 5 including family pension, life insurance, provident fund, etc., that must remain unaffected and cannot be allowed to be deducted, which, anyway would be paid to the dependents of the deceased government employee.
So, the Hon’ble Court in the view to include the family pension (Rs. 7000 receivables by the deceased) as loss of dependency and in compensation amount.
Further claimant submitted that the deduction for personal expenses of the deceased should be reckoned only as 1/3rd amount for determining loss dependency. It has been held by this Hon’ble Court that if the dependent 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 proper6 considering the fact that respondents Nos. 1 and 2 along with their respective families were staying with the deceased and largely dependent on her income.

JUDGEMENT:

Considering the above observation, the Hon’ble Court allowed the appeals and respondent nos. 1 and 2 would be entitled to compensation to be reckoned on the basis of loss of dependency, due to loss of gross salary of the future prospects and deduction of only one-third amount towards personal expenses of the deceased and applied multiplier of 13 on the basis of age of deceased. The amount payable to respondents on the following basis:
Loss of dependency due to loss of income calculated at Rs. 31,26,229.60/- [(23,123/×12×13) + (30% future prospects) – (1/3rd deduction for personal expenses)] along with interest at the rate of 9% per annum from the date of filing of the claim petition. Also, it ordered that if the respondents are allowed financial assistance from the 2006 Rules then a commensurate amount will have to be deducted from the compensation amount along with the interest component thereon. The appeals are allowed and pending interlocutory application if any shall be disposed of.