Case Note & Summary
The Supreme Court addressed an appeal concerning the computation of compensation under the Motor Vehicles Act, 1988 when the dependents had also received compassionate assistance under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006. The case originated from a claim petition where the High Court had deducted only 50% of the compensation payable under the Rules of 2006 from the amounts awarded under the Motor Vehicles Act. The Insurance Company appealed, arguing that the High Court had ignored the binding precedent set by the Supreme Court in Reliance General Insurance Co. Ltd. v. Shashi Sharma and instead followed its own judgment in Kamla Devi v. Sahib Singh & Ors. The sole legal issue was how to treat compensation received under compassionate assistance rules when computing just compensation under the Motor Vehicles Act. The Insurance Company contended that the question was no longer res integra and cited subsequent decisions including National Insurance Company Limited v. Birender and Others. The respondents did not appear despite service of notice. The Court analyzed the three-judge bench decision in Shashi Sharma, which held that amounts receivable under the Rules of 2006 towards financial assistance equivalent to pay and allowances must be excluded from compensation under the Motor Vehicles Act to prevent double payment, though other benefits like family pension, life insurance, and provident fund remain unaffected. The Court also referenced Birender, which required deduction of amounts received under the Rules of 2006 from motor accident compensation. The Court allowed the appeal, setting aside the impugned judgment to the extent it deducted only 50% of the compensation under the Rules of 2006, and clarified that no recovery should be made if amounts were already paid. The Court expressed surprise that the High Court had failed to follow Supreme Court precedent, noting this was a violation of Article 141 of the Constitution.
Headnote
A) Motor Accident Compensation - Deduction of Compassionate Assistance - Exclusion of Government Assistance from MV Act Compensation - Motor Vehicles Act, 1988, Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 - The Supreme Court considered whether compensation received under compassionate assistance rules should be deducted from motor accident compensation - Held that amounts received under Rules of 2006 towards financial assistance equivalent to pay and allowances must be excluded from compensation under MV Act to avoid double payment, but other benefits like family pension remain unaffected (Paras 5-6). B) Constitutional Law - Binding Nature of Precedents - Article 141 Compliance - Constitution of India, Article 141 - High Court failed to follow Supreme Court judgment in Reliance General Insurance Co. Ltd. v. Shashi Sharma and followed its own contrary judgment - Court observed this was per se violation of Article 141 which makes Supreme Court law binding on all courts (Para 8).
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Issue of Consideration: How compensation payable under Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 should be dealt with in computing compensation under Motor Vehicles Act, 1988
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Final Decision
Appeal allowed, impugned judgment set aside to the extent it deducted only 50% of compensation payable under Rules of 2006, clarified that if amounts already paid to respondents, no recovery shall be made
