Summary
The Supreme Court held that the High Court erred in deducting only 50% of the ex gratia financial assistance payable under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 while computing Motor Vehicles Act compensation; following the three-Judge Bench decision in Shashi Sharma, the amount received or receivable under those Rules towards pay and allowances must be excluded in full, though no recovery was ordered of sums already paid.
Issues
- How compensation payable under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 is to be treated when computing compensation under the Motor Vehicles Act, 1988.
- Whether the High Court could follow its own earlier decision in Kamla Devi v. Sahib Singh in preference to the Supreme Court's decision in Reliance General Insurance Co. Ltd. v. Shashi Sharma.
Provisions considered
- Rule 5, Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006Applying Shashi Sharma, the Court treated the financial assistance equivalent to pay and allowances under Rule 5(1) as an amount that cannot be paid a second time by the tortfeasor or insurer and must be excluded from the Motor Vehicles Act award; other benefits under Rule 5(2) to (5) such as family pension, insurance and provident fund are not deductible. (¶¶ 2, 5, 7)
- Article 141, Constitution of IndiaThe Court observed that the High Court, having noticed the Supreme Court's decision in Shashi Sharma yet followed a contrary judgment of its own, acted per se in violation of Article 141. (¶ 8)
Held
- Following the three-Judge Bench in Shashi Sharma, the just compensation under the Motor Vehicles Act, 1988 is to be computed by excluding the amount received or receivable by the dependents under the Rules of 2006 towards financial assistance equivalent to the pay and allowances last drawn by the deceased government employee; the dependents may still claim loss of future escalation of income and other benefits not covered by the Rules, and benefits such as family pension, life insurance and provident fund are not to be deducted. (¶ 5)
- In Birender the Court likewise made the enhanced award subject to deduction of any amount that became payable under the Rules of 2006, requiring the claimants to disclose such receipts to the executing court; the question is therefore no longer res integra. (¶¶ 4, 6)
- The High Court's deduction of only 50% of the compensation payable under the Rules of 2006 could not be sustained, but as the insurer undertook not to seek a refund, no recovery was to be made of amounts already paid to the claimants. (¶¶ 3, 4, 7)
- A High Court that notices a binding decision of the Supreme Court and nonetheless follows a contrary judgment of its own acts per se in violation of Article 141 of the Constitution. (¶ 8)
Result
Appeal allowed; the impugned judgment set aside to the extent it deducted only 50% of the compensation payable under the Rules of 2006; no recovery to be made of amounts already paid to the respondents; pending applications disposed of.