REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APEPAL NO.    4216           OF 2008 (Arising out of SLP (C) No. 21953/2004)

Bhakra Beas Management Board …Appellant

Versus

Kanta Aggarwal and Ors. …Respondents  

J U D G M E N T  

Dr. ARIJIT PASAYAT, J

1. Leave granted.

2. Challenge in this appeal is to the judgment of a learned

Single  Judge  of  the  Punjab  and  Haryana   High  Court

dismissing the appeal filed against the award dated 4.2.2003

passed  by  Motor  Accidents  Claim  Tribunal,  Chandigarh  (in

short ‘Tribunal’).  

3. Background facts in a nutshell are as follows:

In an accident which took place on 16.11.1994 at about

10.00  p.m.   K.C.  Aggarwal  (hereinafter  referred  to  as  the

‘deceased’)  who was sitting directly behind the driver lost his

life.  Balbir Singh (PW-1) was an eye witness to the accident.

At the relevant time, he was standing in front of Mayur Dhaba

near which the accident took place. He categorically deposed

that the jeep was coming from Bilaspur side and was going

towards  Sunder  Nagar  at  a  very  high  speed.  It  was  being

driven by the driver in the middle of the road. He also stated

that  a  truck  was  coming  from the  opposite  side  at  normal

speed. When the truck reached near the jeep, the driver of the

jeep applied brakes, but because the jeep was being driven at

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a very high speed, it came to halt in the middle of the road.

The back portion of the truck struck against  the right side

portion of the jeep. Some persons rushed towards the jeep. In

the  meantime,  the  truck  sped  away  from  the  spot.  He

categorically stated that the accident occurred due to rash and

negligent driving of the jeep driver. The deceased left behind a

widow and three children.  

A claim petition was filed by the widow and the children

under Section 166 of the Motor Vehicles Act, 1988 (in short

the  ‘Act’).  The  Tribunal  awarded  compensation  of

Rs.8,48,160/- along with interest @ 9% per annum from the

date of institution.  

An appeal was filed before the High Court. It was pointed

out  that  on the  death  of   K.C.  Aggarwal,  respondent  No.1-

widow had  been  provided  with  compassionate  appointment

and she was getting salary of nearly  Rs.4,700/- p.m. (basic

pay of  nearly Rs.4,700/-)   and a residence  was provided to

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her. The High Court did not accept this plea and observed that

the quantum of compensation has been rightly fixed.

4. Learned  counsel  for  the  appellant  submitted  that  the

benefits which claimant has received on account of death of

her  husband  have  to  be  deducted  while  computing  the

compensation, if  any, payable.  With reference to the factual

aspects  it  is  submitted  that  respondent  No.1  was  getting

salary of nearly Rs.4,700/- and therefore she was not entitled

to  compassionate  appointment.  It  is  pointed  out  that  the

appeal  filed  by  the  claimants  is  pending  adjudication  and

without considering the relevant factors the High Court has

declined to interfere.

5. Learned counsel for the respondents on the other hand

submitted that the judgment of the High Court is in order.  

6. There are several undisputed factors:  (i) the husband of

respondent No.1 had received fatal injuries in an accident; (ii)

the  claimants  seem to  be  facing  financial  problem;  (iii)  the

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concept of just compensation cannot be lost sight of. The High

Court does not appear to have considered the effect of amount

received on account of compassionate appointment.  

7. In  United India Insurance Co. Ltd. and Ors. v.  Patricia

Jean Mahajan and Ors. (2002 (6) SCC 281) it was inter-alia

observed as follows:

“24.  Mr.  Soli  J.  Sorabji  submitted  that  while assessing the amount of compensation, the benefits which have accrued to the claimants by reason of death must also be taken into account. A kind of balancing  of  losses  and  the  gains  or  benefit  by reason of death would be necessary. In support of the above contention he has referred to a decision reported in  Gobald Motors Service Limited v. R. M. K. Veluswami (1962 (1) SCR 929), and others. It is a decision by a three-Judge Bench of this Court, and at  SCR  page  938  the  observations  made  by  the House  of  Lords  in  Davies  v.  Powell  Duffryn Associated Collieries Ltd. (1942 AC page 601)  has been quoted which reads as follows : AIR ER p. 658 B)  

"The  general  rule  which  has  always prevailed in regard to the assessment of damages under the Fatal Accidents Acts is  well  settled,  namely,  that any benefit accruing to a dependent by reason of the relevant  death  must  be  taken  into account. Under those Acts the balance of loss  and  gain  to  a  dependant  by  the

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death must be ascertained,  the position of  each  dependant  being  considered separately."

25.  To  further  elaborate  the  above  proposition, observations made by Lord Wright in Davies  case (supra) have also been quoted. It reads as follows :-

"The  damages  are  to  be  based  on  the reasonable  expectation  of  pecuniary benefit  or  benefit  reducible  to  money value.  In  assessing  the  damages  all circumstances which may be legitimately placed  in  diminution  of  the  damages must  be  considered…..The  actual pecuniary, loss of each individual entitled to  sue  can  only  be  ascertained  by balancing, on the one hand, the loss to him of the future pecuniary benefit, and on  the  other,  any  pecuniary  advantage which  from  whatever  source  comes  to him by reason of the death."

The learned counsel laid stress on the last part of observation  made  to  the  effect  that  -  for  the purposes  of  balancing  losses  and  gains  any pecuniary  advantage  which  from whatever  source come to them, has to be considered.

26. It is submitted in Gobald's case the principle of Davies  Case  was  referred  and  taken  into consideration. Reliance has also been placed on a decision reported in  M/s. Sheikhupura Transport Co.  Ltd.  v.  Northern  India  Transport  Insurance Company (1971 (1) SCC page 785), particularly to the observations made by the Court in paragraph 6 of the judgment where the principle in the case of Gobald Motors (supra) has been reiterated. In this connection  learned  counsel  for  the  Insurance

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Company  has  also  drawn  our  attention  to  the decision in the case  of  Susamma Thomas (supra) particularly on paragraph 8 of the report, where it is observed that the principle in the case of Davies v. Powell  was adopted, in the case of Gobald Motors (supra).  It  is  thus  submitted  that  principle  of balancing of loss and gains, so as to arrive at a just and  fair  amount  of  compensation  has  been accepted  by  this  Court  as  well.  On  behalf  of  the Insurance Company  Hodgson v. Trapp (1988 (3) All ER 870) has been relied on in which our attention has  particularly  been  drawn  to  the  following observations made at All ER p. 873j-874b:  

"……..the basic rule is that it is the net consequential  loss  and  expense  which the  Court  must  measure.  If,  in consequence  of  the  injuries  sustained, the plaintiff has enjoyed receipts to which he  would  not  otherwise  have  been entitled, prima facie, those receipts are to be  set  against  the  aggregate  of  the plaintiff's losses and expenses in arriving at the measure of his damages. All this is elementary and has been said over and over again. To this basic rule there are, of course,  certain  well  established,  though not  always  precisely  defined  and delineated,  exceptions.  But  the  Courts are,  I  think,  sometimes  in  danger,  in seeking  to  explore  the  rationale  of  the exceptions,  of  forgetting  that  they  are exceptions.  It  is  the  rule  which  is fundamental  and  axiomatic  and exceptions  to  it  which  are  only  to  be admitted on grounds which clearly justify their treatment as such."

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From  the  above  passage  it  is  clear  that  the 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 have been entitled to. It does not cover cases where the payment received is  not  dependent  upon  an  injury  sustained  on meeting with an accident. The other observation to which our attention has been drawn at page  876 placitum 'f' also does not help the contention raised on behalf of the Insurance Company for deduction of  amounts  in  the  present  case.  The  Court  was considering  a  situation  where  due  to  the  injuries received  the  victim  was  claiming  cost  of  care necessary  in  future  in  respect  of  which  statutory provision, provided for attendant's allowance. It was found that the statutory benefit  and the damages claimed  were  designed  to  meet  the  identical expenses.  This  is  however  not  so,  at  least  not shown, to be so in the case in hand.”

8. Similarly,  in  Gobald  Motor  Service  Ltd.  and  Anr. Vs.

R.M.K. Veluswami and Ors. (1962 (1) SCR 929 at p.938) it was

inter-alia observed as follows:

“The general rule which has always prevailed in regard to the assessment of damages under the  Fatal  Accidents  Acts  is  well  settled, namely,  that  any  benefit  accruing  to  a dependant  by  reason  of  the  relevant  death must be taken into account. Under those Acts the balance of loss and gain to a dependant by

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the death must be ascertained, the position of each dependants being considered separately.”

9. In  Helen  C.  Rebello v.  Maharashtra  S.R.T.C. (1999 (1)

SCC 90) it was held as follows:

“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  of  loss  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 very clear, to which there could be no doubt that this Act delivers compensation to the claimant only on account of accidental injury 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  Vehicles  Act  is  on  account  of  the pecuniary  loss  to  the  claimant  by accidental injury or death and not other 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

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the Motor Vehicles Act. Thus, the application of the general principle under the common law of  loss  and  gain  for  the  computation  of compensation under this Act must correlate to this type of injury or death, viz., accidental. If the  words  “pecuniary  advantage”  from whatever source are to be interpreted to mean any  form  of  death  under  this  Act,  it  would dilute  all  possible  benefits  conferred  on  the claimant and would be contrary to the spirit of the law. If the “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  both,  all  possible  conferment  of economic  security  to  the  claimant  by  the deceased and the intentions of the legislature. By  such  an  interpretation,  the  tortfeasor  in spite of his wrongful act or negligence, which contributes to the death, would have in many cases  no  liability  or  meagre  liability.  In  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 present Act, whatever pecuniary advantage is  received  by  the  claimant,  from  whatever source, would only mean 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  itself under Section 110 is, as the section states:

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“...  for  the purpose  of  adjudicating 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,  such pecuniary advantage would have no corelation to  the  accidental  death  for  which compensation  is  computed.  Any  amount received or receivable not only on account of the  accidental  death  but  that  which  would have  come  to  the  claimant  even  otherwise, could not  be  construed to be  the “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  legislature  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 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

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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 Vehicles  Act.  There  is  no  corelation  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 corelation with  an  amount  earned  by  an  individual. Principle  of  loss  and  gain  has  to  be  on  the same plane within the same sphere, of course, subject to the contract to the contrary or any provision of law.”  

10. It  is  pointed  out  that the award as made  is  extremely

high and the concept of just compensation has been lost sight

of.  

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11. Learned  counsel  for  the  respondent  supported  the

judgment  and  additionally  submitted  that  appeal  of

respondent  No.1  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.

12. But we find that the High Court lost sight of the fact that

the  benefits  which  the  claimant  receives  on  account  of  the

death or injury have  to be  duly  considered  while  fixing the

compensation.  It  is  pointed  out  that  respondent  No.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.  

13. In view of what has been stated above, the High Court’s

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

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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 for the Tribunal to fix the quantum of

fixed deposit and the amount to be released to the claimants.  

14. The appeal is allowed in the aforesaid extent.

 ……………………………J. (Dr. ARIJIT PASAYAT)

…………………………..J. (P. SATHASIVAM)

New Delhi, July 7, 2008

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