RELIANCE GENERAL INSURANCE CO. LTD. versus SHASHI SHARMA & ORS.
[2016] 6 S.C.R. 488, Supreme Court of India, 2016
Outcome: Case Partly allowed (Granted)
Segment: Ratio
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[2016) 6 S.C.R. 488 
RELIANCE GENERAL INSURANCE CO. LTD. 
v. 
SHASHI SHARMA & ORS. 
(Civil Appeal No. 9654of2016) 
SEPTEMBER23,2016 
[RANJAN GOGOi, PRAFULLA C. PANT AND 
A.M. KHANWILKAR, JJ.] 
Compensation - Fatal accident - In motor accident - Of 
employee covered under Haryana Compassionate Assistance to the 
Dependants of the Deceased Government Employees Rules, 2006 -
Compensation under Motor Vehicles Act granted after deducting 
the amount received by the claimants under 2006 Rules - High Court 
held that the amount paid under 2006 Rules could not have been 
deducted - On appeal, held: In the matter of determination of 
compensation under 1988 Act, the two cardinal principles are that 
it must be just and adequate and that no double benefit should be 
passed on to the claimants - The claimants· claim for the subject 
'Pay and Wages' under 1988 Act, which is receivable under r.5(1) 
of the 2006 Rules, would result in double payment towards the same 
head -
The harmonious approach for determining a just 
compensation payable under 1988 Act, is to exclude the amount 
received or receivable by the dependants of deceased Government 
employee, under 2006 Rules - Howeve1; claim towards loss of future 
escalation of income and other benefits, which are not covered under 
2006 Rules can be pursued under 1988 Act - Similarly other benefits 
extended in terms of Sub-rule (2) to sub-rule (5) of r.5 of 2006 
Rules would remain unaffected and cannot be allowed
to be 
deducted - Motor Vehicles Act, 1988 - ss. 167 and 168 - Haryana 
Compassionate Assistance to the Dependants of the Deceased 
Government Employees Rules, 2006 - r.5. 
Words and Phrases: 
Words 'compensation' and 'just' - Meaning of. in the collfext 
of Motor Vehicles Act, 1988. 
Partly allowing the appeals, the Court 
HELD: 1. The term compensation has not been defined in 
\ 
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RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
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SHARMA & ORS. 
the Motor Vehicles Act, 1988. By interpretative process, it has 
been understood to mean to recompense the claimants for the 
possible loss suffered or likely to be suffered due to sudden and 
untimely death of their family member as a result of motor 
accident. [Para 15] [505-F-G] 
2. Two cardinal principles run through the provisions of 
the Motor Vehicles Act of 1988 in the matter of determination of 
compensation. Firstly, the measure of compensation must be just 
and adequate; and secondly, no double benefit should be passed 
on to the claimants in the matter of award of compensation. 
Section 168 of the Act of 1988 makes the first principle explicit. 
Sub-section (1) of that provision makes it clear that the amount 
of compensation must be just. The word "just" means - fair, 
adequate, and reasonable. It has been derived from the Latin 
word "justus", connoting right and fair. That however may depend 
upon facts and circumstances of each case, as to what amount 
would be a just compensation. [Para 15] [505-G-JI; 506-A-B] 
State of Harayana & Anr. v. Jasbir Kaur & Ors. (2003) 
7 SCC 484 : 2003 (2) Suppl. SCR 245; Smt. Sar/a 
Verma & Ors. v. Delhi Transport Corporation & Am: 
(2009) 6 SCC 121 : 2009 (5) SCR 1098 - relied on. 
3. Loss of income is a significant head under which 
compensation is claimed in terms of the Act of 1988. The 
component of quantum of "loss of income", inter alia, can be "pay 
and
wages" which otherwise would have been earned by the 
deceased employee if he had survived the injury caused to him 
clue to motor accident. If the dependents of the deceased 
employee, however, were to be compensated by the employer in 
that behalf, as is predicated by the Haryana Compassionate 
Assistance to the Dependants of the Deceased Government 
Employees Rules, 2006 - to grant. compassionate assistance by 
way of ex-gratia financial assistirncc on compassionate grounds 
to the dependents of the deceased Govemment employee who 
dies in harness, it is unfathomable that the dependents 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. [Para 16] (506-C-E] 
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SUPREME COURT REPORTS 
[2016] 6 S.C.R. 
4. Rule 5 of 2006 Rules broadly deals with two aspects. 
Firstly, to compensate the dependents of the deceased 
Government employee by granting ex-gratia financial assistance 
on compassionate grounds for the loss of pay and other allowances 
for a specified period. The second part of Rule 5 is to compensate 
the dependents of the deceased Government employee by way 
of allowances and concessions - of retaining occupation of the 
Government residence on specified terms, of family pension and 
other allowance. As regards the second part, it deals with income 
from other source which any way is receivable by the dependants 
of the deceased Government employee. That cannot be deducted 
from the claim amount, for determination of a just compensation 
under the Act of 1988. [Para 20] [509-A-C) 
5. The claimants are legitimately entitled to claim for the 
loss of "pay and wages" of the deceased Government employee 
· against the tortfeasor or Insurance Company, as the case may 
be, covered by the first part of Rule 5 under the Act of 1988. The 
claimants or dependents of the deceased Government employee 
(employed by State of Haryana), however, cannot set up a claim 
for the same subject falling under the first part of Rule 5 - "pay 
and allowances", which are receivable by them from employer 
(State) under Rule 5 (1) of the Rules of 2006. In that, if the 
deceased employee was to survive the motor accident
injury, 
would have remained in employment and earned his regular pay 
and allowances. Any other interpretation of the said Rules would 
inevitably result in double payment towards the same head of 
loss of "pay and wages" of the deceased Government employee 
entailing in grant of bonanza, largesse or source of profit to the 
dependants I claimants. Somewhat similar situation has been spelt 
out in Section 167 of the Motor Vehicles Act, 1988. [Para 21] 
[509-C-F] 
6. Similar statutory exclusion of claim receivable under 
the Rules of 2006 is absent. That, however, does not mean that 
the Claims Tribunal should remain oblivious to the fact that the 
claim towards loss of Pay and wages of the deceased has already 
been or will be compensated by the employer in the form of ex-
gratia financial assistance on compassionate grounds under Rule 
5(1). The Claims Tribunal has to adjudicate the claim and
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHl 
491 
SHARMA & ORS. 
determine the amount of compensation which appears to it to be 
just. (Para 22) [510-A-B) 
7. The amount receivable by the dependants I claimants 
towards the head of pay and allowances in the form of ex-gratia 
financial assistance, therefore, cannot be paid for the second time 
to the claimants. True it is, that the Rules of 2006 would come 
into play if the Government employee dies in harness even due 
to natural death. At the same time, the Rules of 2006 do not 
expressly enable the dependents of the deceased Government 
employee to claim similar amount from the tortfeasor or 
Insurance Company because of the accidental death of the 
deceased Government employee. The harmonious approach for 
determining a just compensation payable under the Act of 1988, 
· therefore, is to exclude the amount received or receivable by 
the dependents of the deceased Government employee under 
the Rules of2006 towards the head financial assistance equivalent 
to "pay and other allowances" that was last drawn by the deceased 
Government employee in the normal course.[Para 22) [510-C-D) 
8. However it docs not mean 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, if the 
deceased Government employee had
survived the accident can 
still be pursued by them in their claim under the Act of 1988. For, 
it is not covered by the Rules of 2006. Similarly, other benefits 
extended to the dependents of the deceased Government 
employee in terms of sub-rule (2) to sub-rule (5) of Rule 5 
including family pension, Life Insurance, Provident Fund etc., 
that must remain unaffected and cannot be allowed to be deducted, 
which, any way would be paid to the dependents of the deceased 
Government employee. [Para 22] [510-E-G] 
9. Appellants must succeed only to the extent of amount 
receivable by the dependents of the deceased Government 
employee in terms of Rule 5(1) of the Rules 2006, towards 
financial assistance equivalent to the loss of pay and wages of the 
deceased employee for the period specified. 
[Para 23] [510-H; 
511-A) 
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SUPREME COURT REPORTS 
[2016] 6 S.C.R. 
10. There is no conflict of opinion between the co-ordinate 
Benches (of two Judges) of Supreme Coul't, in the case of *Bliakra 
Beas Management Board case on one hand and of **Helen C. 
Rebello am/ ***Patricia J. Malla}an cases on the other * Bllakra 
Beas Management Board is not an authority of having taken a 
contra view than the view expressed in **Hele11 C. Rebello and 
***Patricia's case. No observation is found in the entire decision, 
to .have doubted the correctness of the dictum in **Helen C. 
Rebello and ***Patricia's cases. [Paras 8 and 14] [497-E; 505-E) 
**Helen C. Rebello (Mrs.) & Ors. v. Maharashtra State 
Road Transport Corporation & Am: 1999 (1) SCC 90 : 
1998 (1) Suppl. SCR 684; Oriental Insurance Co. v. 
Saroj Devi 2012 (t) PLR 761; New India Assurance 
Co. v. Smt. Santush 2010 (4) PLR 780; *Bhakra Beas 
Management Board v. Kanta Aggarwal (Smt.) & Ors. 
2008 (11) sec 366 : 2008 (10) SCR 165; Gobald 
Motor Service Limited v. R.MK. Veluswami 1962 (1) SCR 
929; Sheikhupura 'fransport Co. Ltd. \'. MJr/hern India 
Transport Insurance Co. 1971 (1) SCC 785; Vimal 
Kanwar & Ors. v. Kishore Dan & Ors. 2013 (7) SCC 
476; Oriental Insurance Co. Ltd. 
~: Deo Parodi and 
Ors. 2009 (13) SCC 123: 2009 (8) SCR 791; ***United 
India Insurance Co. v. Patricia Jean Mahajan & Ors. 
2002 (6) SCC 281 : 2002 (3) SCR 1176 -
referred 
to. 
Case Law Reference 
21)12 (1) PLR 761 
referred to 
Para6 
2010 (4) PLR
780 
referred to 
Para6 
2002 (3) SCR 1176 
referred to 
Para6 
2008 (10) SCR 165 
referred to 
Para 7 
1 ?62 (1) SCR 929 
referred lo 
Para 7 
1911 (1) sec 785 
referred to 
Para 7 
2013 (7) sec 476 
referred to 
Para7 
2009 (8) SCR 791 
l'eferred lo 
Para 7
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
493 
SHARMA & ORS. 
1998 (1) Suppl. SCR 684 
2003 (2) Suppl. SCR 245 
2009 (5) SCR 1098 
referred to 
Para 8 
relied on 
relied on 
Para 15 
Para 15 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9654 
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of2016. 
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From the Judgment and Order dated 13.02.2012 of the High Court 
of Punjab and Haryanaat Chandigarh in FAO No. 503 of 2012. 
WITH 
C. A. Nos. 9655, 9657, 9659, 9661, 9663-9664, 9666, 9669, 9671, 
9677,9674,9673,9672,9675,9670,9667-9668,9665,9662,9660,9658, 
9656 and 9676of2016. 
Dhruv Mehta, Mahabir Singh, Pallav Sisodia, Sr. Advs., Ms. 
Prerna Mehta, Ms. Anupama Dlmrve, Yadav Narender Singh, Gaurav 
Jain, Satish Kumar, Vishnu Mehra, Ms. Sakshi Mittal, Ms. Manjeet 
Chawla, Abhishek Gola, Nikhil Jain, Gagandeep Sharma, Ms. Preeti 
Singh, Ravindra Keshavrao Adsure, Bharat Bhushan, Rakesh Vishan, 
Gaurav Jain, Dr. Meera Agarwal, Ramesh Chandra Mishra, K. K. 
Mohan, Abhishek Gola, Viresh B. Saliarya, Ms. Meenakshi Midha, 
Chander Shekhar Ashri, Anil Nag, Ravi Mehrotra, R. K. Sinha, (For · 
Bhaskar Y. Kulkarni), Anil Kumar Tandale, Karan Kapoor, Manik 
Kapoor,AkshatGoel, Dr. MonikaGusain, Dr. Kailash Chand,J\jay Singh, 
NafisA. Siddiqui, Rakesh Dahiya, Raj Kumar, Devashish Bharuka, Ms. 
Arpita Bishnoi, Vaibhav, Ms. Rani Bharuka, Anil Hooda, Ankit Gupta, 
Kaushal Yadav, Nikhil Goel, Ashutosh, Ms. Tavishi Chandra, Karan 
Chaudhary, Ms. K. V. Bharathi Upadhyaya, Dinesh Verma, Rajat 
Sharma, Subhasish Bhowmick, Dr. Sudhir
Bisla, Ms. Surnitra Bisla, 
Kamal Mohan Gupta, Ravinder Kumar, (For Mrs. Shiel Sethi), Advs. 
for the appearing parties. 
The Judgment of the Court was delivered by 
A.M. KHANWILKAR, J. I. Delay condoned. 
2. Leave granted. 
3. These matters have been placed before a three Judges' Bench 
in terms of order dated 71h October, 2015. This order has not formulated 
any specific question to be answered by the larger Bench. 
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(2016] 6 S.C.R. 
4. The leading appeal challenges the judgment of the Single Judge 
of the High Court of Punjab and Haryana at Chandigarh dated February 
13, 2013 in FAONo.503/2012. That appeal was filed by the respondents 
(in appeal arising from SLP (Civil) No.14312/2013) against the Award 
of the Motor Accident Claims Tribunal, Jind, in MACT Case No.136 
dated 3rd November 2011. The said respondents had filed a claim petition 
after the death of Dr. Ashwini Sharma caused due to a motor accident 
on 241h October 2010 in front of Main gate of General Hospital at Jind. 
Be succumbed to the injuries sustained in that accident. The Tribunal 
partly allowed the claim petition. A sum of Rs.4,50,000/- was awarded 
as compensation to the claimants being the dependants of deceased Dr. 
Ashwini Sharma; with interest at the rate of 7.5% per annum from the 
date of filing of the claim petition till realization. The Tribunal directed 
the appellant-Insurance Company to pay the compensation amount as 
determined in the award to the claimants. The claimants, being aggrieved 
by the quantum of compensation fixed by the Tribunal and in particular 
deduction of compensation amount received by them from other source, 
preferred appeal before the High Court. The High Court, relying on the 
decision of Division Bench of the same High Court dated December 21, 
2012, in the case of Re/i{lnce Gener"/ lnsur{l11ce Comp""Y Ltd. Vs. 
Purnima &
Others,' acceded to the contention of the claimants that 
the amount receivable by the dependents of the deceased under the 
Haryana Compassionate Assistance to the dependents of the Deceased 
Government Employees Rules, 2006 (hereinafter referred to "Rules of 
2006") cannot be deducted from the quantum of compensation fixed by 
the Tribunal. On that finding, the High Court allowed the appeal of the 
respondents in the following terms: 
"In view of the above, a sum of Rs.89,24,604/-
(Rs. I ,00,957/- - 15%thereofbeingRs.15,143=Rs.85,814/ 
- -
l/J'd thereof being Rs.28,605/-
= Rs.57,209 x 12 
=Rs.6,86,508/- x 13 = 89,24,604) towards loss of 
dependency, Rs. I 5,000/-towards loss of consortium of the 
I" appellant, Rs. I 5,000/- towards loss of estate, Rs. I 0,000/ 
- towards funeral expenses and Rs.5,000/- towards 
transportation expenses, in aggregate a sum ofRs.89,60,604/ 
- with interest @ 7.5% for the enhanced portion of the 
compensation from the date of petition till the date of 
1 F.A.O No.1322 Of2010
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
495 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
realization is awarded. The rate of interest applied and the 
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mode of apportionment done by the Tribunal stands 
confirmed." 
5. The High Court has adopted the same reasoning to disallow 
deduction of compensation amount received by the claimants as per 
Rules of 2006 in the respective companion cases listed for analogous 
hearing. The sole contention advanced by the appellants - Insurance 
Companies, in these appeals, is that, the High Court has erred in law in 
disallowing the deduction ofamount received by the concerned claimants 
under the Rules of 2006, from the quantum of compensation amount 
payable to the claimants under the Act of I 988. 
6. As the High Court has relied on the decision of the Division 
Bench of the same High Court in Purnima's case (supra), it is apposite 
to first advert to that decision. That decision was rendered on a reference 
-•~" . 
made to a larger Bench, on a question which has been canvassed by the 
appellants - Insurance Companies even in the present appeals, in view 
of the conflicting decisions of Singh: Judges of the same High Court in 
the case of Oriental Insurance Co. vs. Saroj Devi 2 and in the case 
of New India Assurance Co. vs. Smt. Santosh3 • The question 
considered by the Division Bench was: "whether the compensation. 
received from the Government under the Haryana Compassionate 
Assistance to the Defendants of Deceased Governments
Employees 
Rules, 2006 (or otherwise) is to be deducted from the total compensation, 
which is payable to the dependents of the deceased, who dies in an 
accident, while computing financial benefits through ex-gratia payments 
by the Government?" The Division Bench analysed the scheme and 
intent of the Rules of2006 and held that the said Rules have been framed 
by the Governor ofHaryana in exercise of powers conferred by proviso 
to Article 309 of the Constitution of India; these Rules not only have 
statutory force, but must be treated at par with the Statute enacted by 
the Legislature; these Rules purport to assist the family of the deceased 
to tide over hardship caused as a result of the employee dying in harness 
(not merely because of motor accident) or who goes missing or whosr.i 
whereabouts are not known, by providing ex-gratia financial assistance 
to the family of the deceased employee; this financial assistance to the 
dependents of the employee who dies in harness, has no correlation with 
'2012 (I) PLR 761 
3 2010 (4) PLR 780 
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the cause of death of the employee due to motor accident. In other 
words, on mere death of the employee dying in harness, be it natural 
death or due to illness or otherwise the Rules of 2006 would become 
:1pplicable; and. as a result of which the family of the deceased employee 
is entitled to receive financial assistance from the employer. The Division 
Bench held that the scheme of financial assistance postulated in Rules 
of 2006, is a service benefit which accrues to the dependents of the 
deceased and is in the domain of service matter/benefit given to the 
employee as a result of the service rendered by the deceased employee. 
The benefit accruing to the dependents of the deceased is in the nature 
of enhanced pension given as per the provisions of the Pension/Family 
Pension Scheme, recognizing the fact that the pension is normally given 
for meritorious, long and faithful service by the employee. The Division 
Bench relying on the exposition of two Judges' Bench decision of this 
Court in Helen C. Rebello (Mrs.) & Ors. vs. Maharashtra State 
Road Transport Corporation & Anr! and also in United India 
Insurance Co. vs. Patricia Jean Mahajan & Ors.5, held that the 
tortfeasor or Insurance Companies cannot get their liability excused or 
reduced because the deceased's family would receive financial assistance 
from an alternative source (employer) by reason of the death of the 
deceased. It held
that deductions are admissible from the amount of 
compensation in case the claimant receives the benefit as a consequence 
of injuries sustained which otherwise he would not been entitled to; and 
does not cover cases when the payment received is not dependent upon 
an injury sustained on meeting with an accident. That the assistance 
received under Rules of 2006 is not dependent upon the death of an 
employee arising out of a motor accident only. Thus, it has no correlation 
with the manner in which the death occurs. Accordingly, the Division 
Bench held that the Insurance Company is not entitled to claim deduction 
of the amount given to the dependents under the Rules of2006, while 
calculating the compensation amount payable under the Motor Vehicles 
Act. 
7. The Insurance Companies, on the other hand, have relied on 
the decision of two-'Judges' Bench of this Court in Bhakra Beas 
Management Board vs. Kanta Aggarwal (Smt.) & Ors.6, to contend 
thatthe plea of the appellant in that case that the claimants have received 
'1999 (I) sec 90 
'2002 (6) sec 281 
• 2008 (I I) sec 366
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
financial assistance from other source due to the death of her husband" 
by way of salary amount on account of compassionate appointment and 
also residence provided to her was deductible, has been accepted by 
this Court; and was so deducted while determining a just compensation 
amount payable under the Motor Vehicles Act. Reliance is also placed 
on the dictum of three Judges' Bench in Gobald Motor Service 
Limited vs. R.M.K.Veluswami 7, which, according to the Insurance 
Company, permits deduction of benefits such as compensation received 
by the dependents of the deceased from the employer. Reliance is also 
placed on two Judges' Bench decision in the case of Sheikhupura 
Transport Co. Ltd. vs. Northern India Transport Insurance Co.8; 
another two Judges' Bench judgment in the case of Vimal Kanwar & 
Ors. vs. Kishore Dan & Ors.9• Reliance is then placed on another 
decision of two Judges' Bench of this Court in Oriental Insurance 
Co. Ltd. vs. Deo Patodi and Ors. 10 for the principles to be reckoned 
to determine a just compensation payable under the Motor Vehicles Act. 
In substance, the contention of the Insurance Companies is that the 
claimants cannot be permitted to profiteer and receive double benefit on 
account of the death of their family memberon the same head of"Loss 
of income" to them. 
8. Besides the above noted stand of the Insurance Companies the 
other incidental
question to be considered is whether there is any conflict 
of opinion between the coordinate Benches (of two Judges') of this 
Court, in the case of Bhakra Beas Management Board (supra) on 
the one hand, and that of Helen C. Rebelo and Patricia J.Mahajan 
(supra) on the other. 
9. The decision in the case of Gobald Motor Service Ltd. 
(supra) of three Judges' Bench of this Court has been carefully analysed 
and distinguished by the two Judges' Bench in Helen's case (supra). In 
that, the dictum in Gobald Motor's case was in relation to the provisions 
regarding quantum of damages payable in terms of Sections I and 2 of 
the Fatal Accident Act, 1855, which are held to be materially different. 
On the other hand, the provision of the Motor Vehicles Act, 1939 enlarges 
the scope for computation of compensation amount. The Court in Helen's 
case held that the observation in Gobald's case cannot be the basis to 
7 1962 (1) SCR 929 =AIR 1962 SC I, 
• 1971 < 1 l sec 1ss 
• 2013 (7) sec 476 
10 2009 (13) sec 123 
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claim deduction of amount receivable by the dependents of the deceased 
from whatever source, in the context of provisions of the Motor Vehicles 
Act as in force. Even the decision in the case of Sheikhupura 
Transport (supra) has been explained and distinguished on the same 
lines. 
I 0. The question is: whether the principle expounded by the two 
Judges' Bench in Helen's case, in paragraphs 32 to 35, in particular, 
can be doubted? In that case the Court was called upon to answer as to 
whether it will be permissible to disallow the deduction of amount 
receivable by the dependants of the deceased towards "Life Insurance 
Policy", from the amount of compensation payable under the provisions 
of Motor Vehicles Act (in that case Sections I !OB, 92A and 92B of the 
Act of 1939 corresponding to Sections 168, 140 and 141 of the Act of 
1988). Paragraphs 32 to 35 read thus: 
"32. 
So far as the general principle of estimating 
damages under the common law is concerned, it is settled 
that the pecuniary loss can be ascertained only by balancing 
on one hand, the loss to the claimant of the future pecuniary 
benefits that would have accrued to him but for the death 
with the "pecuniary advantage" which from whatever 
source comes to him by reason of the death. In other words, 
it is the balancing ofloss and gain of the claimant occasioned 
by the death. But this has to change its colour to the extent 
a statute
intends to do. Thus, this has to be interpreted in 
the light of the provisions of the Motor Vehicles Act, 1939. 
It is veiy clear. to which there could be no doubt that his 
Act delivers compensation to the claimant only on account 
of accidental injuiy or death. not on account of any other 
death. Thus, the pecuniary advantage accruing under this 
Act has to be deciphered, correlating with the accidental 
death. The compensation payable under the Motor Vt.hicles 
Act is on account of the pecuniary Joss to the claimant by 
accidental injury or death and not others forms of death. If 
there is natural death or death by suicide, serious illness, 
including even death by accident, through train, air flight 
not involving a motor vehicle, it would not be covered under 
the Motor Vehicles Act. Thus, the application of the general 
principle under the common law of loss and gain for the
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
499 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
computation of compensation under this Act must correlate 
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to this type of injury or death, viz., accidental. Ifthe words 
"gecuniaQ'. advantage" from whatever source are to be 
intergreted to mean an)' form of death under this Act, it 
would dilute all gossible benefits conferred on the claimant 
and would be contra[)'. to the SQirit of the law. If the 
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"pecuniary advantage" resulting from death means 
pecuniary advantage coming under all forms of death then 
it will include all the assets moveable, immovable, shares, 
bank accounts, cash and every amount receivable under 
any contract. In other words, all heritable assets including 
what is willed by the deceased etc. this would obliterate 
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both, all possible conferment of economic security to the 
claimant by the deceased and the intentions of the legislature. 
B)' such an interyretation, the tort feasor in sgite of his 
wrongful act or negligence, which contributes to the death, 
.. 
would have in man)' cases no liabili!)' or meager liabili!)'. In 
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our considered opinion, the general principle of loss and 
gain takes colour of this statute, viz., the gain has to be 
interpreted which is as a result of the accidental death and 
the loss on account of the accidental death. Thus. under 
the gresent Act, whatever gecunia1:x advantage is received 
b)' the claimant, from whatever source, would onl)' mean 
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which comes to the
claimant on account of the accidental 
death and not other forms of death. The constitution of the 
Motor Accident Claims Tribunal itselfunder Section 110 is, 
as the section states: 
" ......... forthe purpose of adjudicating 
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upon claims for compensation in respect of accidents 
involving the death of, or bodily injury to, ...... " 
33. Thus, it would not include that which the claimant 
receives on account of other forms of deaths, which he 
would have received even apart from accidental death. Thus, 
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such pecuniary advantage would have no corelation to the 
accidental death for which compensation is computed. An)' 
amount received or receivable not onl)' on account of the 
accidental death but that which would have come to the 
claimant even otherwise, could not be construed to be the 
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[2016] 6 S.C.R. 
"pecuniary advantage''. liable for deduction. However, 
where the employer insures his employee, as against injury 
or death arising out of an accident, any amount received 
out of such insurance on the happening of such incident 
may be an amount liable for deduction. However, our 
legislatu~e has taken note of such contingency through the 
proviso of Section 95. Under it the liability of the insurer is 
excluded in respect of injury or death, arising out of and in 
the course of employment of an employee. 
34. This is based on the principle that the claimant for the 
happening of the same incidence may not gain twice from 
two sources. This, it is excluded thus, either through the 
wisdom of the legislature or through the principle of loss 
and gain through deduction not to give gain to the claimant 
twice arising from the same transaction, viz., the same 
accident. It is significant to record here in both the sources, 
viz., either under the Motor Vehicles Act or from the 
employer, the compensation receivable by the claimant is 
either statutory or through the security of the employer 
securing for his employee but in both cases he receives the 
amount without his contribution. How thus an amount 
earned out of one's labour or contribution towards one's 
wealth, savings. etc either for himself or for his family which 
such person knows under the law has to go to his heirs 
.after his death either by
succession or under a Will could 
be said to be the "pecuniary gain" only on account of one's 
accidental death. This, of course, is a pecuniary gain but 
how this is equitable or could be balanced out of the amount 
to be received as compensation under the Motor Vehicle 
Act. There is no correlation between the two amounts. 
Not even remotely. How can an amount of loss and gain 
of one contract be made applicable to the loss and gain of 
another contract. Similarly, how an amount receivable under 
a statute has any correlation with arfamount earned by an 
individual. Principle ofloss and gain has to be on the same 
plane within the same sphere, of course, subject to the 
contract to the contrary or any provisions of law. 
35. Broadly, we may examine the receipt of the provident
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
fund which is a deferred payment out of the contribution 
made by an employee during the tenure of his service. Such 
employee or his 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 
pl!lce at all. Similarly, family pension is also earned by an 
employee for the benefit of his family in the form of 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 tw.o. Similarly, life insurance 
policy is received either 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 ifhe 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 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 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, 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 receivable as 
compensation under the Act is on account of the injury or 
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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 
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compensation payable under the Motor Vehicles Act is 
statutory while the amount receivable under the life 
insurance policy is contractual." 
(emphasis supplied) 
11. This decision has analysed the legal position regarding the 
application of the general principle for estimating damages under the 
common law. It has also noted the distinguishing features between the 
provisions of Fatal Accidents Act, 1855, before its amendment by Act (3 
of 1951) and thereafter. It then found that in Gobald's case the Court 
decided the issue placing reliance on English decisions -as the provisions 
applicable at that time were similar to Section 9 of the English Fatal 
Accidents Act, 1846. The Court was neither called upon to determine 
damages under the Motor Vehicles Act, 1939 nor consider as to any 
form of deductions are justified under the Motor Vehicles Act. The 
Court noted that the language of Section 110-B of the Act of 1939 
(corresponding to Section 168 of the Act of 1988) is different from 
Section I A of the Fatal Accidents Act, 1855. It held that Section 110-B 
of the Act of 1939 empowers the Tribunal to determine the
compensation 
which appears to it to be "just". The Court held that this provision 
widens the scope for detennination of compensation, which is neither 
permissible under the Indian Fatal Accidents Act, 1855 nor under the 
English Fatal Accidents Act, 1846. The Court then went on to analyse 
the decisions of this Com1 and held that there is a deliberate departure in 
the language of the Act of 1939, revealing the intent of the legislature to 
confer wider discretion on the Tribunal. Therefore, the decisions based 
on the principles applicable to previous law cannot be invoked while 
adjudicating the compensation payable to the claimant under the Motor 
Vehicles Act. In Paragraph 28, the Court observed thus: 
"28 ......... This show that the word "just" was deliberately 
brought it Section 110 B of the 1939 Act to enlarge the 
consideration in computing the compensation which, of 
course, would include the question of deductibility, if any. 
This leads us to an irresistible conclusion that the principle
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
of computation of the compensation both under the English 
Fatal Accidents Act, 1846 and under the Indian Fatal 
Accidents Act, 1855 by the earlier decisions, were restrictive 
in nature in the absence of any guiding words therein, hence 
the courts applied the general principle at the common law 
ofloss and gain butthat would not apply to the considerations 
under Section 110-B of the 1939 Act which enlarges the 
discretion to deliver better justice to the claimant, in 
computing the compensation, to see what is just. Thus, we 
find that all the decisions of the High Courts, which based 
their interpretation on the principles of these two Acts, viz., 
the English 1846 Act and the Indian 1855 Act to hold that 
deductions were valid cannot be upheld. As we have 
observed above, the decisions even with reference to the 
decision of this Court in Gobald Motor Service where the 
question was neither raised nor adjudicated and that case 
also, being under the 1855 Act, cannot be pressed into 
service. Thus, these courts by giving a restrictive 
interpretation in computation of compensation based on the 
limitation of the language of the Fatal Accidents Act, fell 
into an error, as it did not take into account the change of 
language in the 1939 Act and did not consider the widening 
of the discretion of the Tribunal under Section 110-B. The 
word "just", as its nomenclature. denotes equitability,
fairness 
and reasonableness having a large peripheral field. The 
largeness is, of course, not arbitrary: it is restricted by the 
conscience which is fair, reasonable and equitable, if it 
exceeds: it is termed as unfair, unreasonable, un-equitable, 
not just. Thus, this field of wider discretion of the Tribunal 
has to be within the said limitations and the limitations under 
any provision of this Act or any other provision having the 
force of law." 
(emphasis supplied) 
12. The principle expounded in this decision 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 the injury or death caused on account of motor accident. The view so 
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taken, is the correct analysis and interpretation of the relevant provisions 
of the Motor Vehicles Act of 1939, and must apply proprio vigore to 
the corresponding provisions of the Motor Vehicles Act, 1988. This 
principle has been restated in the subsequent decision of two Judges' 
Bench in Patricia S.Mahajan's case (supra), to reject the argument of 
the Insurance Company to deduct the amount receivable by the 
dependents of the deceased by way of"social security compensation" 
and "Life Insurance Policy". 
13. In the case of Bhakra Beas Management Board (supra), 
ostensibly, it may appear that a departure has been made in allowing 
deduction of the pecuniary advantage received by the claimants from 
other source on account of death of her husband. However, on a closer 
analysis of the said decision, two aspects become prominent. Firstly, the 
grievance of the appellant Board was that the claimants had filed an 
appeal before the High Court for enhancement of compensation of 
amount, which was still pending. However, the appeal preferred by the 
Board against the same decision was dismissed by the High Court. The 
grievance of the appellant was essentially about the inappropriate 
approach of the High Court in dismissing its appeal. That can be discerned 
from the observation in paragraph 13 of the reported decision. From the 
observation found in para 14 of the reported decision, it is seen that the
High Court judgment has been held to be clearly unsustainable. That 
must be understood as disapproving the approach of the High Court in 
dismissing the appeal filed by the appellants, though cross appeal filed 
by the claimants for enhancement of compensation amount was pending 
before it. The second aspect, is that, the Court, to do complete justice 
between the parties and for bringing quietus to the long pending I itigation 
( 14 years) between them, including to dispose of appeal of the claimants 
pending before the High Court, passed an order for full and final settlement 
of all the claims inter partes. That can be discerned from paragraphs 
13 and 14, which read thus: 
"13. Learned counsel for the respondent supported the 
judgment and additionally submitted that appeal of 
respondent I is pending. In normal course, when two 
appeals are directed against the common judgment, both 
the appeals should be heard by the same bench of the High 
Court. But we find that the High Court had lost sight of the 
fact that the benefits which the claimant receives on account
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHl 
505 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
of the death or injury have to be duly considered while fixing 
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the compensation. It is pointed out that Respondent 1 was 
getting Rs.4,700/-p.m. and a residence has been provided 
to her and actually the compassionate appointment was 
given immediately after the accident. 
"14. In view of what has been stated above, the High 
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Court'' judgment is clearly unsustainable. However, the 
accident took place more than 14 years back and it would 
not be desirable to send the matter back to the Tribunal for 
fresh consideration. A sum of rupees five lakhs has been 
deposited vide this Court's order dated 1-11-2004. We are 
of the considered view that in view of the background facts, 
it is just and proper that the sum of rupees five lakhs already 
deposited shall be permitted to be withdrawn by the 
claimants in full and final settlement of the claim relatable 
to the death of the deceased. It is forthe Tribunal to fix the 
quantum of fixed deposit and the amount to be released to 
the claimants." 
(emphasis supplied) 
14. Thus understood, it is not an authority of having taken a contra 
view than the view expressed in Helen C. Rebello and Patricia's 
case. As a matter of fact, in para 11 of the reported decision, paragraphs 
32 to 34 of Helen C. Rebello's case has been reproduced in its entirety. 
No observation is found in the entire decision, to have doubted the 
correctness of the
dictum in Helen C. Rebello and Patricia's case. 
15. Be that as it may, the term compensation has not been defined 
in the Act of 1988. By interpretative process, it has been understood to 
mean to recompense the claimants for the possible loss suffered or likely 
to be suffered due to sudden and untimely death of their family member 
as a result of motor accident. Two cardinal principles run through the 
provisions of the Motor Vehicles Act of 1988 in the matter of detennination 
of compensation. Firstly, the measure of compensation must be just and 
adequate; and secondly, no double benefit should be passed on to the 
claimants in the matter of award.of compensation. Section 168 of the 
Act of 1988 makes the first principle explicit. Sub-section ( 1) of that 
provision makes it clear that the amount of compensation must be just. 
The word "jusf"·means - fair, adequate, and (easonable. It has been 
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derived from the Latin word "justus'', connoting right and fair. Jn para 7 
of Sf(lfe of H"ray"na & Anr. vs. J"sbir Kaur & Ors.", it has been 
held that expression "just" denotes that the amount must be equitable, 
fair, reasonable and not arbitrary. In para 16 of Smt. Sari" Vernw & 
Ors. vs. Delhi Transport Corpomtion & Anr. '2, this Court has observed 
that the compensation "is not intended to be a bonanza, largesse or source 
of profit''. That however may depend upon facts and circumstances of 
each case, as to what amount would be a just compensation. 
16. The principle discernable from the exposition in Helen 
C.Rebello's case (supra) is that if the amount "would be due to the 
dependants of the deceased even otherwise'', the same shail not be 
deductiblefrom the compensation amount payable under the Act of 1988. 
At the same time, it must be borne in mind that loss of income is a 
significant head under which compensation is claimed in terms of the 
Act of 1988. The component of quantum of"loss of income", inter alia, 
can be "pay and wages" which otherwise would have been earned by 
the deceased employee ifhe had survived the injury caused to him due 
to motor accident. If the dependents of the deceased employee, however, 
were to be compensated by the employer in that behalf, as is predicated 
by the Rules of2006 - to grant compassionate assistance by way of' ex-
gratia financial assistance on
compassionate grounds to the dependents 
of the deceased Government employee who dies in harness, it is 
unfathomable that the dependents 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. 
17. A perusal of the scheme of Rules of 2006 would reinforce 
the position that the dependents of the deceased Government employee 
are suitably compensated for a specified period by way of financial 
assistance in the form of ex-gratia payment on compassionate grounds 
equivalent to the pay and other allowances that was last drawn by the 
deceased employee in the normal course without raising a specific claim. 
Here, we may advert to the recital of the Rules of 2006, which reads 
thus: 
"No. G.S.R. 19/Const./Art.309/2006.-ln exercise of the 
powers conferred by the proviso to article 309 of the 
Constitution of India, The Governor of Haryana hereby 
11 <2003 l 1 sec 484 
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RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
makes the following rules to grant the compassionate 
assistance by way of ex-gratia financial assistance on 
compassionate grounds to members of the family of a 
deceased Government employee who dies while in service/ 
missing Government emplo~ namely:-
( emphasis supplied) 
Rule 2 stipulates the objects of the Rules, namely, to assist the 
family of a deceased/missing Government employee of Group C and D 
category, in tiding over the emergent situation, resulting from the loss of 
the bread-earner while in regular service by giving financial assistance. 
Rule 3 of the said Rules provides for eligibility to receive financial 
assistance under the Rules. As per Rule 4, the eligible family members 
are required to submit an application in Form A for compassionate 
financial assistance. Rule 5, is of some significance which provides for 
the extent of financial assistance. The same reads thus: 
"5.(1) On the death ofany Government employee, the family 
of the employee would continue to receive as financial 
assistance a sum equal to the pay and other allowances 
that was last drawn by the deceased employee in the normal 
course without raising a specific claim.,-
(a)for a period of fifteen years from the date of death of 
the employee, ifthe employee at the time of his death 
had not attained the age of thirty-five years; 
(b)for a period of twelve years or till the date the em-
- ployee would
have retired from Government service 
on attaining th.e age of superannuation, whichever is 
less, if the employee at the time of his death had at-
tained the age of thirty-five years but had not attained 
the age of forty-eight years; 
( c )for a period of seven years or till the date the employee 
would have retired from Government service on attain-
ing the age of superannuation, whichever is less, if the 
employee had attained the age of forty-eight years. 
(2) The family shall be eligible to receive family pension as 
per the normal rules only after the period during which he 
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receives the financial assistance as above is completed. 
(3) The family of a deceased Government employee who 
was in occupation of a Government residence would 
continue to retain the residence on payment of normal rent/ 
license fee for a period of one year from the date of death 
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of.the_ employee. 
( 4) Within fifteen days from the date of death of a 
Government employee, an ex-gratia assistance of twenty 
five thousand rupees shall be provided to the family of the 
deceased employee to meet the immediate needs on the 
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(5) House Rent Allowance shall not be a part of allowance 
for the purposes of calculation of assistance." 
18. Rule 6 pertains to pending cases of ex-gratia assistance, with 
which we are not concerned in the present appeals. But to complete the 
narrative, we may refer to the said provision. It postulates that all pending 
cases of ex-gratia assistance shall be covered under the new Rules (i.e. 
Rules of2006). Further, the calculation of the period and payment shall 
be made to such cases from the date of notification of the new Rules. It 
further provides that the families will have the option to opt for the lump 
sum ex-gratia grant provided in the Rules, 2003 or 2005, as the case 
may be, in lieu of the monthly financial assistance provided under the 
new Rules. 
19. Reverting back to Rule 5, sub-clause (I) provides for the period 
during which the
dependents of the deceased employee may receive 
financial assistance equivalent to the pay and other allowances that was 
last drawn by the deceased employee in the normal course without raising 
a specific claim. Sub-rule (2) provides that the family shall be eligible to 
receive family pension as per the normal Rules only after the period 
during which they would receive the financial assistance in terms of 
sub-rule ( 1 ). Sub-rule (3) guarantees the family of a deceased Government 
employee of a Government residence in occupation for a period of one 
year from the date of death of the employee, upon payment of normal 
rent/license fee .. BY virtue of sub-rule (4), an ex-gratia assistance of 
25,000/- is provided to the family of the deceased employee to meet the 
immediate needs on the loss of the bread earner. Sub-rule (5) clarifies 
that house rent allowance shall not be a part ofallowance for the purposes
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
SHARMA & ORS. [A. M. KHANWILKA~, J.] 
of calculation of assistance. 
20. Rule 5 broadly deals with two aspects. Firstly, to compensate 
the depen<,lents of the deceased Government employee by granting ex-
gratia financial assistance on compassionate grounds for the loss of pay 
and other allowances for a specified period. The second part of Rule 5 
is to compensate the dependents of the deceased Government employee 
by way of allowances and concessions - of retaining occupation of the 
Govemment residence on specified terms, of family pension and other 
allowance. As regards the second part, it deals with income from other 
source which any way is receivable by the dependants of the deceased 
Government employee. That cannot be deducted from the claim amount, 
for determination of a just compensation under the Act of 1988. 
21. The claimants are legitimately entitled to claim for the loss of 
"pay and wages" of the deceased Government employee against the 
tortfeasor or Insurance Company, as the case may be, covered by the 
first part of Rule 5 under the Act of 1988. The claimants or dependents 
of the deceased Government employee (employed by State ofHaryana), 
however, cannot set up a claim for the same subject falling under the 
first part of Rule 5 - "pay and allowances", which are receivable by 
them from employer (State)' under Rule 5 (1) of the Rules of 2006. In · 
that, if the deceased employee was to survive the motor
accident injury, 
would have remained in employment and earned-his regular pay and 
allowances. Any other interpretation of the said.Rules wo1,1ld inevitably 
result in double payment towards the same head of loss of "pay and 
wages" of the deceased Government employee entailing in grant of 
bonanza, largesse or source of profit to the dep~ndants I claimants. 
Somewhat similar situation has been spelt out in Section 167 of the Motor 
Vehicles Act, 1988, which reads thus: 
"167. Option regarding claims for compensation in 
certain ca.ses.- Notwithstanding anything contained in 
the Workmen's Compensation Act, 1923 (8of1923) where 
the death of, or bodily injury to, any person gives rise to a 
claim for compensation under this Act and also under the 
Workmen's Compensation Act, 1923, the person entitled to 
compensation may without prejudice to the provisions of 
Chapter X claim such compensation under either of those. 
Acts but not under both." 
(emphasis supplied) 
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SUPREME COURT REPORTS 
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22. Indeed, similar statutory exclusion of claim receivable under 
the Rules of 2006 is absent. That, however, does not mean that the 
Claims Tribunal should remain oblivious to the fact that the claim towards 
loss of Pay and wages of the deceased has already been or will be 
compensated by the employer in the form of ex-gratia financial assistance 
on compassionate grounds under Rule 5 (1). The Claims Tribunal has to 
adjudicate the claim and determine the amount of compensation which 
appears to it to be just. The amount receivable by the dependants I 
claimants towards the head of pay and allowances in the form of ex-
gratia financial assistance, therefore, cannot be paid for the second time 
to the claimants. True it is, that the Rules of2006 would come into play 
if the Government employee dies in harness even due to natural death. 
At the same time, the Rules of 2006 do not expressly enable the 
dependents of the deceased Government employee to claim similar 
amount from the tortfeasor or Insurance Company because of the 
accidental death of the deceased Government employee. The harmonious 
approach for determining a just com pen~ :ition payable under the Act of 
1988, therefore, is to exclude the amount received or receivable by the 
dependents of the deceased Government employee under the Rules of 
2006 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 {I) of the Rules, is the total entitlement under the head of 
"loss ofincome". So far as the claim towards loss offuture escalation of 
income and other benefits, if the deceased Government employee had 
survived the accident can still be pursued by them in their claim under 
the Act of 1988. For, it is not covered by the Rules of2006. Similarly, 
other benefits extended to the dependents of the deceased Government 
employee in terms of sub-rule (2) to sub-rule (5) of Rule 5 including 
family pension, Life Insurance, Provident Fund etc., that must remain 
unaffected and cannot be allowed to be deducted, which, any way would 
be paid to the dependents of the deceased Government employee, 
applying the principle expounded in Helen C.Rebello and Patricia Jean 
Mahajan's cases (supra). 
23. A Priori, appellants must succeed only to the extent ofamount 
receivable by the dependents of the deceased Government employee in
RELIANCE GENERAL INSURANCE CO. LTD. v. SHASHI 
511 
SHARMA & ORS. [A. M. KHANWILKAR, J.] 
terms of Rule 5(1) of the Rules 2006, towards financial assistance 
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equivalent to the loss of pay and wages of the deceased employee for 
the period specified. 
24. As no other point arises for consideration, the appeals must 
succeed in part to the extent indicated above. 
25. Accordingly, the appeals are partly allowed in the above terms 
with no order as to costs. 
Kalpana K. Tripathy 
Appeals partly al1011·cd. 
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