Motor Accident Compensation | Claimants Can't Be Doubly Benefited, Benefits From Govt To Deceased Employee Must Be Deducted: Supreme Court

In a recent case, the Supreme Court observed that the family of a deceased in a motor accident cannot seek "double benefits". If the family has received benefits from the State Government on account of the death of the deceased, then such benefits are liable to be deducted from the compensation payable under the Motor Vehicles Act. 

In this case, a driver employed by the Haryana State Roadways died in a road accident while performing his duties. The family members of the deceased (appellant) have filed a petition claiming compensation under Section 166 of the Motor Vehicle Act, 1986 (“MVA”) on account of the death of the deceased Raghubir due to injuries received in a motor vehicle accident.

The Motor Accident Claims Tribunal (“Tribunal”) rejected the claim of the appellant on the note that the sum of Rs.31,37,665/- was to be received from the State Government under Haryana Compassionate Assistance to Dependents of Deceased Government Employees, Rules, 2006 (“the Rules, 2006”, for short) and this amount was more than the compensation to which the claimants were found entitled to.

The view taken by the Tribunal was affirmed by the High Court, which held that the amount received by the government under its policy would be deducted from the amount claimed through compensation under MVA.

The amount of Rs.31,37,665/- i.e. the amount to be received by the claimants in terms of the policy of the State of Haryana was deducted from the total amount of compensation i.e. Rs.34,40,480/-. The claimants were thus held to be entitled to receive Rs.3,02,815/-.

Against the High Court, the appellants preferred a Special Leave Appeal before the Supreme Court.

The appellant relied on the judgment in Sebastiani Lakra and others v. National Insurance Company Ltd(2018) to contend that the benefits are not liable to be deducted. However, the bench comprising Justices BV Nagarathna and Augustine George Masih followed the 2016 judgment passed in Reliance General Insurance Co. Ltd. Vs. Shashi Sharma which held that ex-gratia payment by employer to the family of the deceased was liable to be deducted from the compensation.

The bench noted that Sebastiani Lakra had distinguished Shashi Sharma on the ground that the amount involved in the former case was a benefit scheme to which the deceased employee had contributed. Wheareas, in Shashi Sharma it was an ex-gratia compassionate assistance.

"We have perused closely the judgment of this Court in Sebastiani Lakra (supra) and we find that the three-judge Bench of this Court in the said case has clearly distinguished the reasoning of this Court in Shashi Sharma (supra) and in paragraphs 18 and 20 thereof has observed in that case it was a employers' family benefit scheme which was totally different from the Rules under consideration in Shashi Sharma (Supra)," the bench observed.

The bench added :

“It is observed that the amount of Rs.31,37,665/- (Rupees Thirty One Lakhs, Thirty Seven Thousand and Six Hundred and Sixty Five only) was paid to the dependents of the deceased-employee who are the petitioners herein under the aforesaid Rules since the said Rule was by way of compassionate assistance owing to the sudden death of the employee in harness for any reason whatsoever including as a result of a road traffic accident. This is in order to compensate the loss of the bread earner of the family who dies in harness. In the case of a motor vehicle accidents, when negligence is proved, loss of dependency is compensated for the very same reason. In our view, there cannot be a duplication in payments or a windfall owing to a misfortune.”

“In another words, on the death of the person in harness, owing to a road traffic accident the dependents of a deceased cannot be doubly benefited as opposed to those who are dependents of a deceased who dies owing to illness or any other reason under the Rules formulated by the Haryana Government”, the court added.

In the Shashi Sharma case, the court held that the amount received or receivable by dependants of the deceased (who died in a motor accident) from the employer by way of ex gratia financial assistance on compassionate grounds can be deducted from the quantum of compensation fixed by the Motor Accident Claims Tribunal (MACT) under the head “pay and other allowances.

“If the dependants of the deceased employee, however, were to be compensated by the employer in that behalf, as is predicated by the Rules of 2006 - to grant compassionate assistance by way of ex gratia financial assistance on compassionate grounds to the dependants of the deceased government employee, who dies in harness, it is unfathomable that the dependants can still be permitted to claim the same amount as a possible or likely loss of income to be suffered by them to maintain a claim for compensation under the Act of 1988.”, the court observed in Shashi Sharma.

Accordingly, after finding no merits in the petition, the court declined to entertain the petition of the deceased family members seeking the double benefit of receiving compensation under MVA and by the government.

Case Details: KRISHNA & ORS. VERSUS TEK CHAND & ORS. SPECIAL LEAVE PETITION (C) No. 5044/2019