Provident Fund & Other Pecuniary Benefits Received By Legal Heirs Of Deceased Have No Co-Relation With Motor Accident Claim: J&K&L High Court

Basit Amin Makhdoomi

23 Aug 2022 8:00 AM GMT

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  • Provident Fund & Other Pecuniary Benefits Received By Legal Heirs Of Deceased Have No Co-Relation With Motor Accident Claim: J&K&L High Court

    The Jammu and Kashmir and Ladakh High Court has ruled that Provident Fund, Pension, Insurance, bank balance, shares, fixed deposits, etc., are all pecuniary advantages receivable by heirs on account of one's death but all these have no correlation with the amount receivable as compensation under the Motor Vehicles Act, a statute occasioned only on account of accidental death. A...

    The Jammu and Kashmir and Ladakh High Court has ruled that Provident Fund, Pension, Insurance, bank balance, shares, fixed deposits, etc., are all pecuniary advantages receivable by heirs on account of one's death but all these have no correlation with the amount receivable as compensation under the Motor Vehicles Act, a statute occasioned only on account of accidental death.

    A bench comprising Justice Vinod Chaterjee Koul observed,

    "The main reason is that all these amounts are earned by deceased on account of contractual relations entered into by him with others. It cannot be said that these amounts have accrued to dependents or legal heirs of deceased on account of his death in a motor vehicle accident. The claimants/ dependents are entitled to just compensation under the Motor Vehicles Act as a result of death of deceased in a motor vehicle accident."

    The bench was hearing an appeal against an award passed by Motor Accident Claims Tribunal, Kupwara on a Claim petition whereby the tribunal had directed the appellant Insurance Company to pay compensation in the amount of Rs. 32,43,212/- along with 7.5% interest per annum from the date of institution of claim till realization, on the grounds made mention of therein.

    The appellants challenged the award inter alia primarily on the ground that the tribunal had failed to consider that deceased was a government employee, working in Forest Department as Junior Assistant and posted in Forest Division, Kupwara, which implied that his legal heirs would be entitled to full salary for a period of seven years and, therefore, it was incumbent upon the Tribunal to take into consideration the said fact while assessing the payment of compensation, but this aspect was ignored by the Tribunal while passing impugned Award.

    Adjudicating upon the matter Justice Koul observed that the deductions cannot be allowed from the amount of compensation either on account of insurance, or on account of pensionary benefits or gratuity or grant of employment to kin of deceased. The bench underscored.

    "The claimants/ dependents are entitled to just compensation under the Motor Vehicles Act as a result of death of deceased in a motor vehicle accident. Thus, the natural corollary is that the advantage that accrues to the estate of deceased or to his dependents as a result of some contract or act which deceased performed in his life time cannot be said to be the outcome or result of death of deceased even though these amounts may go into the hands of dependents only after his death", the bench explained.

    Deliberating further on the said proposition of law the bench observed that it is now an established principle of service jurisprudence that pension and gratuity are the property of deceased and they are more in the nature of deferred wages. The deceased employee works throughout his life expecting that on his retirement he will get substantial amount as pension and gratuity and these amounts are also payable on death, whatever be the cause of death. Therefore, applying the same principles, the said amount cannot be deducted, the court maintained.

    In order to buttress the stand taken the bench found it worthwhile to record the observations made by Supreme Court in Helen C. Rebello (Mrs) and others v. Maharashtra State Transport Corporation and another, (1999) wherein SC held that any sorts of funds receivable by heirs on account of one's death have no correlation with the amount receivable under a statute occasioned only on account of accidental death. Such an amount will not come within the periphery of the Motor Vehicles Act, to be termed as pecuniary advantage liable for deduction and that family pension is also earned by an employee for benefit of his family in the form of his contribution in the service in terms of the service conditions receivable by heirs after his death and heirs receive family pension even otherwise than accidental death.

    Elaborating further the bench examined various SC judgements and reiterated that compassionate appointment in the case of death of an employee in harness, could also not be stated to be an advantage receivable by heirs on account of one's death and had no correlation with amount receivable under a statute occasioned on account of accidental death. Compassionate appointment may have nexus with death of an employee while in service but it is not necessary that it should have a correlation with accidental death, the bench recorded.

    "I have given my thoughtful consideration to the submissions made by learned counsel for respondents/claimants and do not find any merit in the Appeal as the Tribunal has given just compensation in favour of claimants and the same does not warrant any interference," the bench concluded while dismissing the appeal.

    Case Title: United Insurance Co Ltd Vs Jawahira Begum &Ors.

    Citation : 2022 LiveLaw (JKL) 115

    Click Here To Read/Download Judgment


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