Compassionate Appointment On Father's Death In Motor Accident Doesn't Affect Right To Compensation Under MV Act: Jharkhand High Court

The Jharkhand High Court, in a recent appeal filed by the New India Assurance Company, upheld the entitlement of the deceased's legal heirs to compensation under the Motor Vehicles Act, notwithstanding the compassionate appointment of the deceased's son following his death in a motor accident.

A single bench of Justice Subhash Chand observed, “The provision of the compassionate appointment after the death of the employee during his service period is statutory provision in all cases whether the death is natural, accidental, suicidal or homicidal, the dependent of the deceased are entitled to compassionate appointment. Therefore, I am of the view that the compassionate appointment has no co-relation with the amount of compensation, which the dependents of the deceased are entitled after the death in motor accident.”

“So far as the retiral benefits are concerned, the same are also vested right of the retired employee or his/her dependent. If the retiral benefit has been received by the dependents of the deceased after his death during service period, the same has also no co-relation with the amount of compensation to be awarded by the Motor Accident Claim Tribunal in a motor accident,” Justice Chand added.

The appeal was filed against the award passed by the Motor Accident Claims Tribunal, directing the Insurance Company to pay Rs. 89,05,359/- to the claimants.

The appellant contested the award on two primary grounds. Firstly, it argued that the Tribunal failed to address whether the driver of the offending vehicle held a valid driving license at the time of the accident, asserting that any breach of this condition would relieve the insurer of liability.

Secondly, the insurer contended that since the son of the deceased had received a compassionate appointment after his father's death, granting compensation under the Motor Vehicles Act would result in undue double benefit.

The case stemmed from an accident where the deceased, a 48-year-old government school teacher, was struck by a motorcycle while walking near Shiv Parvati Vastralay, District Giridih. The vehicle, driven by Laxman Saw, was insured by the New India Assurance Company. Following the incident, a claim petition was filed by the deceased's family members, including his two widows and three children, to seek compensation for their loss.

The Insurance Company's primary defence was that the motorcycle driver did not possess a valid driving licence at the accident's time, constituting a fundamental policy breach.

The Court found, however, that neither the owner of the vehicle, nor his counsel, nor the claimants offered any evidence to substantiate who was driving at the time of the accident, despite the Insurance Company's insistence that the driver named in the claim petition, Gulsan Kumar Sao, was not the actual driver per police records.

The Court said, “Therefore, the very initial burden, which is to be discharged by the owner of the offending vehicle in regard to driving the offending vehicle with a valid and effective driving license is not discharged. Consequently, the onus cannot be shifted upon the appellant-Insurance Company. The learned Tribunal has recorded no finding at all while fastening the liability upon the Insurance Company to pay the amount of compensation.”

“Since there is a fundamental breach of terms and conditions of Insurance Policy, no liability to pay the compensation can be fastened upon the appellant-Insurance Company, it is the owner of the offending vehicle, who has to pay the said amount of compensation as awarded by the learned Tribunal. Accordingly, first plea raised on behalf of the appellant-Insurance Company is decided in favour of the appellant and against the owner of the vehicle,” the Court added.

On the second argument, which contested the compensation on grounds of the compassionate appointment received by the deceased's son, the Court unequivocally held that compassionate appointments have no bearing on entitlement to compensation under the Motor Vehicles Act.

The Court cited precedent from the Allahabad High Court in the case of State of U.P. & Anr. v. Satyawati Devi & Ors., 2015, whereby the Court had held that the compassionate appointment or ex-gratia has no correlation with the amount received under the Motor Vehicles Act occasioned on account of the accidental death and same cannot be the ground to deny the compensation.

Concluding its findings, the Jharkhand High Court partly allowed the Insurance Company's appeal by affirming the compensation amount but absolved the insurer of the obligation to pay. Instead, it directed the vehicle owner to settle the compensation with interest.

The Court further clarified that if any portion of the awarded amount has already been disbursed by the Insurance Company to the claimants, the insurer has the right to recover this from the vehicle owner. Additionally, the Court ordered that any statutory deposits made by the appellant be refunded in accordance with rules.

Case Title: Branch Manager, New India Assurance Co. Ltd vs Urmila Devi and Ors

LL Citation: 2024 LiveLaw (Jha) 166

Click Here To read Judgement