Case Note & Summary
The case involves an appeal by Reliance General Insurance Co. Ltd. against an award of the Motor Accident Claims Tribunal granting compensation to the legal heirs of a deceased employee. The deceased, aged 44, was working as an Assistant Technician in a Telecom Company with a monthly salary of Rs.30,491/-. The Tribunal deducted certain allowances and considered the salary as Rs.25,000/- per month, granted 30% future prospects, and did not deduct the compassionate employment salary or ex-gratia received by the widow. The Insurance Company argued that the salary should be less after deducting allowances, future prospects should be lower, and the compensation should be reduced due to the wife's employment and ex-gratia. The claimants opposed, stating allowances are part of salary and compassionate employment/ex-gratia are not deductible. The High Court held that allowances are part of salary and the Tribunal's deduction was improper, but the salary of Rs.25,000/- was correctly taken. For a 44-year-old, future prospects should be 15% as per Pranay Sethi, not 30%. Compassionate employment and ex-gratia are separate benefits and cannot be deducted from compensation. The Court modified the award, reducing future prospects to 15%, and directed the Insurance Company to pay the modified amount with interest.
Headnote
A) Motor Accident Compensation - Salary Deduction - Allowances - The Tribunal's deduction of allowances from the deceased's salary was improper as allowances are part of salary; the salary of Rs.25,000/- per month was correctly considered. (Para 5) B) Motor Accident Compensation - Future Prospects - Age of Deceased - For a deceased aged 44 years, future prospects should be 15% as per National Insurance Co. Ltd. v. Pranay Sethi, not 30%. (Para 6) C) Motor Accident Compensation - Compassionate Employment - Not Deductible - The fact that the wife got a job on compassionate grounds does not reduce compensation as it is a separate benefit and not a substitute for loss of dependency. (Para 7) D) Motor Accident Compensation - Ex-Gratia Payment - Not Deductible - Ex-gratia amount received from employer cannot be deducted from compensation under the Motor Vehicles Act, 1988. (Para 7)
Issue of Consideration
Whether the Tribunal erred in deducting allowances from the deceased's salary, in granting 30% future prospects, and in not considering compassionate employment and ex-gratia as deductions?
Final Decision
Appeal partly allowed. Future prospects reduced from 30% to 15%. Tribunal's award modified accordingly. Insurance Company to pay the modified amount with interest.
Law Points
- Deduction of salary allowances not permissible
- compassionate employment not deductible
- ex-gratia not deductible
- future prospects for self-employed or fixed salary employees
- Motor Vehicles Act
- 1988
