Case: National Insurance Co. Ltd Vs. Rekhaben and Ors

2. The deceased, Girddharbhai Pansuriya @ Girish, an employee of Gujarat Electricity Board was travelling from Wankaner to Mendarda village, when his motorcycle was hit by a matador bearing registration No. GJ.1. T.T. 9761 insured by the Appellant-National Insurance Co. Ltd. The matador, moving at a high speed on the opposite side of the road, dashed against the vehicle of the deceased from the front resulting in the fatalityThe wife of the deceased was given employment by the employer of the deceased with a regular salary on grounds of compassionate appointment3. The claimants viz., the wife, one minor child and the parents of the deceased, filed a claim petition before the Motor Accident Claims Tribunal (for short, the Tribunal). On the date of the accident, the deceased was working as Store Keeper with Gujarat Electricity Board. The Tribunal awarded an amount of Rs. 2,22,372/- with interest at the rate of 9% per annum as compensation after deducting the amount of Rs. 7,000/- per month from the salary of the deceased as this amount of Rs. 7,000/- per month after deduction was received by Respondent No. 1 as salary from the employment which was given to her on compassionate ground by the employer due to the death of her husband. Being aggrieved, the claimants preferred an appeal before the High Court. The High Court allowed said appeal and enhanced the compensation to Rs. 14,90,000/- along with interest at the rate of 7.5% per annum on the enhanced amount4. The High Court refused to deduct the amount received by the widow as salary on account of compassionate appointment in the Gujarat Electricity Board granted to her by the employer due to her husbands death. Being aggrieved, the Appellant preferred this appeal against the impugned judgment and order dated 28/29.03.2012, passed by the High Court in First Appeal No. 736 of 2012Civil Appeal No. 3812 of 2017 @ SLP (C) No. 26882/20136. The injured, Ramrajsinh, an employee of Gujarat Electricity Board, was travelling in a matador van bearing registration No. GJ.3. T.9537 in the course of his employment. A truck bearing No. GJ.3. T.906 insured by the Appellant-National Insurance Co. Ltd. came from the opposite side of the road and collided with the van. As a result of the collision, the victim was seriously injured and suffered 70% permanent disability of his entire body. He was found unfit for further continuation in the jobThe wife of the injured was given employment by the employer of the injured in the same post on grounds of compassionate appointment7. The claimant viz. the wife of the injured filed an application for compensation before the Motor Accident Claims Tribunal at Bhuj (for short, the Tribunal) from the opponents for the injuries sustained by her husband. By an award dated 05.11.2011, the Tribunal allowed the application for compensation and awarded total compensation of Rs. 8,95,000/- with interest at the rate of 9% per annum to the claimant. Being aggrieved, the Appellant challenged the said award by filing an appeal before the High Court Under Section 173 of the Motor Vehicles Act, 1988, inter alia, on the ground that since the wife of the injured had been given appointment on compassionate grounds, the Tribunal should have taken into consideration the income receivable by the wife from such appointment for calculating the pecuniary loss suffered by the victimThe High Court while affirming the award of the Tribunal, dismissed the appeal. Being aggrieved, the Appellant-Insurance Company preferred this appeal against the impugned judgment and order dated 15.02.2013, passed by the High Court in First Appeal No. 1398 of 2012.

Court's reasoning:
In the facts and circumstances of the case, this Court took the view that the salary which flowed from the compassionate appointment offered by the tortfeasor, was liable to be deducted from the compensation which was payable by the same employer in his capacity as the owner of the offending vehicle. We find this decision as being of no assistance to the Appellant in the cases before us. In the present cases, the owner of the offending vehicle is not the employer who offered the compassionate appointment. As observed earlier, it is difficult to see how the owner can contend that the compensation which he is liable to pay for causing the death or disability should be reduced because of compassionate employment offered by another. In any case, it is difficult to determine how much the person offered compassionate appointment would earn over the period of employment which is not certain, and deduct that amount from the compensation17. This case seems to superficially support the case of the Appellant Insurance Company before us. However, on a deeper consideration, it does not. In Reliance General Insurance (supra), the family of the deceased employee became entitled to financial assistance of a sum equal to the pay and other allowances that were last drawn by the deceased for a certain period after his death, even without raising a specific claim. In other words the family became entitled to the pay & allowances that the deceased would have received if he would have not died, for a certain period of time. This financial scheme resulted in paying the family the same pay and allowances for a certain period and thus in effect clearly offsetting the loss of income on account of the death of the deceased. Thus, the amount of financial assistance had to be excluded from the loss of income, as to that extent there was no loss of income, and the compensation receivable by the family had to be reduced from the amount receivable under the Motor Vehicles Act18. In the present cases, the claimants were offered compassionate employment. The claimants were not offered any sum of money equal to the income of the deceased. In fact, they were not offered any sum of money at all. They were offered employment and the money they receive in the form of their salary, would be earned from such employment. The loss of income in such cases cannot be said to be set off because the claimants would be earning their living. Therefore, we are of the view that the amount earned by the claimants from compassionate appointments cannot be deducted from the quantum of compensation receivable by them under the Act19. In the cases before us, compensation is claimed from the owner of the offending vehicle who is different from the employer who has offered employment on compassionate grounds to the dependants of the deceased/injured. The source from which compensation on account of the accident is claimed and the source from which the compassionate employment is offered, are completely separate and there is no co-relation between these two sources. Since the tortfeasor has not offered the compassionate appointment, we are of the view that an amount which a claimant earns by his labour or by offering his services, whether by reason of compassionate appointment or otherwise is not liable to be deducted from the compensation which the claimant is entitled to receive from a tortfeasor under the Act. In such a situation, we are of the view that the financial benefit of the compassionate employment is not liable to be deducted at all from the compensation amount which is liable to be paid either by the owner/the driver of the offending vehicle or the insurer.