Case: M/S. Bajaj Alliance General Insurance Company Limited Vs. Prabhavati Hiraman Babar &amp; Another

case also, the learned Member of the Tribunal has fixed a correct multiplier 9. The objection of the learned counsel for the appellant/ insurance company in fact is not about the multiplier, but it pertains to multiplicand in view of the age of the deceased and the nature of his service. The deceased was working as a Peon in the Office of Tahasildar hence government employee. At the time of accident, he was drawing salary of Rs. 11,500/- p.m. and the tenure of his service was fixed upto 58 years as per the government service Rules. The insurance company has no grievance in giving the compensation by adopting multiplicand in accordance with his monthly salary i.e., Rs.11,500/- p.m. only for two years till his age of 58, however, the objection is raised in respect of further seven years. After two years i.e., after superannuation the deceased would not have earned the same salary, but his earning was bound to reduce. The deceased was supposed to get pension, which is bound to be lesser than his salary. Hence, it was argued that for a period of seven years the multiplicand is to be fixed not on the basis of his salary, but on the basis of his pension.7. These arguments may appear correct, but after close scrutiny of the facts and on applying the principles of law under the Motor Vehicles Act and calculating the amount of compensation, the arguments are found fallacious and hence, not acceptable. While calculating the pecuniary damages, it cannot be restricted to the salary and pension of the deceased. The date of superannuation of the government employee is always fixed. However, two factors cannot be ignored. Firstly, there is always rise in the salary consequently pension also increases after every ten years i.e., on implementation, directions and recommendation of the pay commission. After retirement, a person may survive minimum 10 to 15 years i.e., upto 65 to 75 years. Secondly, after superannuation at the age of 58, considering the longevity of the life of the individuals due to advanced medical science, the person may get benefit of such pension for more years. Therefore, it is not desirable to restrict the multiplicand for a period of two years upto the amount of salary of the deceased and thereafter, by splitting it cannot be fixed at a lesser amount i.e., pension amount. The principle of split multiplier can be applied in appropriate case, but I am of the view that it is not a fit case to take recourse of split multiplier.8. The second point was whether the amount of pension receivable by the original claimant i.e., widow of the deceased is subjected to deduction while calculating the amount of compensation. The government employee is entitled to get pension for the services rendered by him/her during his/her service. The pension is a financial security to the employee if job is pensionable. After the death of the employee, the spouse is also entitled to receive family pension as per the rules. The pension is the statutory financial benefit for which the spouse is entitled to. The cause of death of the employee may be sickness or any other disease or natural or unnatural death. The accident may be one of the causes. After the death of the employee due to any reason, the pension is receivable by the spouse. However, the compensation is payable to only for a particular class of death where the cause is an accident. The amount of compensation is related to the accidental death, but the amount of pension is related to only death. The payment of compensation is based on contractual liability between the insured and insurer and the payment of pension is a statutory obligation of the Government/State or employer under the Act/ Rules. Thus, these two liabilities/ obligations are different, cannot be merged, as the amount of compensation is not a substitute in any manner for the amount of pension. This contractual liability of the insurance company is recognized under the statute hence the insurance company has to pay compensation. In the case of Smt. Sushma Sudhakar Kadam (supra), this was not the issue before the Single Judge of this Court. There is a passing reference where pension is deducted from the amount of compensation. I rely on the ratio laid down in the case of Vimal Kanwar and others (supra) wherein the Supreme Court has considered the issue whether the salary receivable by claimant on compassionate appointment comes within the periphery of the Motor Vehicles Act to be termed as Pecuniary Advantage liable for deduction. The Supreme Court has held as under:-Compassionate appointment may have nexus with the death of an employee while in service but it is not necessary that it should have a correlation with the accidental death. An employee dies in harness even in normal course, due to illness and to maintain the family of the deceased one of the dependents may be entitled for compassionate appointment but that cannot be termed as pecuniary advantage that comes under the periphery of Motor Vehicles Act and any amount received on such appointment is not liable for deduction for determination of compensation under the Motor Vehicles Act.Thus, income gained out of pension is not a pecuniary advantage purported in the Motor Vehicles Act and hence, not liable for deduction. If a person dies due to the dash given by the vehicle validly insured with the insurance company, and the claimant proves the cause of death and income, then the insurance company is liable to pay compensation as per standardized formula laid down in the case of Sarla Varma (supra) and also in the case of National Insurance Company Limited Versus Pranay Sheti and Ors. reported in AIR 2017 SC 5157 . Therefore, I am of the view that the learned Member of the Tribunal has taken correct approach in not deducting the amount of pension receivable by the original claimant from the amount of compensation. Hence, First Appeal is dismissed.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]6. The first point involves the age of the deceased, who was 56 years old at the time of the accident. As per the schedule given in the case of Smt. Sarla Varma and Others V/s. Delhi Transport Corporation and Another reported in (2009) 6 Supreme Court Cases 121,  if the deceased is between the age group ofp.m. only for two years till his age of 58, however, the objection is raised in respect of further seven years. After two years i.e., after superannuation the deceased would not have earned the same salary, but his earning was bound to reduce. The deceased was supposed to get pension, which is bound to be lesser than his salary. Hence, it was argued that for a period of seven years the multiplicand is to be fixed not on the basis of his salary, but on the basis of his pension.7. These arguments may appear correct, but after close scrutiny of the facts and on applying the principles of law under the Motor Vehicles Act and calculating the amount of compensation, the arguments are found fallacious and hence, not acceptable. While calculating the pecuniary damages, it cannot be restricted to the salary and pension of the deceased. The date of superannuation of the government employee is always fixed. However, two factors cannot be ignored. Firstly, there is always rise in the salary consequently pension also increases after every ten years i.e., on implementation, directions and recommendation of the pay commission. After retirement, a person may survive minimum 10 to 15 years i.e., upto 65 to 75 years. Secondly, after superannuation at the age of 58, considering the longevity of the life of the individuals due to advanced medical science, the person may get benefit of such pension for more years. Therefore, it is not desirable to restrict the multiplicand for a period of two years upto the amount of salary of the deceased and thereafter, by splitting it cannot be fixed at a lesser amount i.e., pension amount. The principle of split multiplier can be applied in appropriate case, but I am of the view that it is not a fit case to take recourse of split multiplier.8. The second point was whether the amount of pension receivable by the original claimant i.e., widow of the deceased is subjected to deduction while calculating the amount of compensation. The government employee is entitled to get pension for the services rendered by him/her during his/her service. The pension is a financial security to the employee if job is pensionable. After the death of the employee, the spouse is also entitled to receive family pension as per the rules. The pension is the statutory financial benefit for which the spouse is entitled to. The cause of death of the employee may be sickness or any other disease or natural or unnatural death. The accident may be one of the causes. After the death of the employee due to any reason, the pension is receivable by the spouse. However, the compensation is payable to only for a particular class of death where the cause is an accident. The amount of compensation is related to the accidental death, but the amount of pension is related to only death. The payment of compensation is based on contractual liability between the insured and insurer and the payment of pension is a statutory obligation of the Government/State or employer under the Act/ Rules. Thus, these two liabilities/ obligations are different, cannot be merged, as the amount of compensation is not a substitute in any manner for the amount of pension. This contractual liability of the insurance company is recognized under the statute hence the insurance company has to pay compensation. In the case of Smt. Sushma Sudhakar Kadam (supra), this was not the issue before the Single Judge of this Court. There is a passing reference where pension is deducted from the amount of compensation. I rely on the ratio laid down in the case of Vimal Kanwar and others (supra) wherein the Supreme Court has considered the issue whether the salary receivable by claimant on compassionate appointment comes within the periphery of the Motor Vehicles Act to be termed as Pecuniary Advantage liable for deduction. The Supreme Court has held asappointment may have nexus with the death of an employee while in service but it is not necessary that it should have a correlation with the accidental death. An employee dies in harness even in normal course, due to illness and to maintain the family of the deceased one of the dependents may be entitled for compassionate appointment but that cannot be termed as pecuniary advantage that comes under the periphery of Motor Vehicles Act and any amount received on such appointment is not liable for deduction for determination of compensation under the Motor Vehicles Act.Thus, income gained out of pension is not a pecuniary advantage purported in the Motor Vehicles Act and hence, not liable for deduction. If a person dies due to the dash given by the vehicle validly insured with the insurance company, and the claimant proves the cause of death and income, then the insurance company is liable to pay compensation as per standardized formula laid down in the case of Sarla Varma (supra) and also in the case of National Insurance Company Limited Versus Pranay Sheti and Ors. reported in AIR 2017 SC 5157  . Therefore, I am of the view that the learned Member of the Tribunal has taken correct approach in not deducting the amount of pension receivable by the original claimant from the amount of compensation. Hence, First Appeal is dismissed.