Compassionate appointment does not bar addition of future prospects in fatal accident compensation.

Hira Singh Mehra alias Hari Singh, aged 39 years and employed as a regular Class-IV government employee, was riding his bicycle from Peerumadara to Ramnagar on 15 September 2011 when an Alto car bearing registration no. UK06S-2569 allegedly hit him from behind. He sustained grievous injuries and subsequently died in hospital.

An FIR was initially registered against an unknown vehicle; after further investigation pursuant to a protest petition, the offending vehicle and its driver, Nadeem Khan, were identified.

The deceased’s widow and other legal representatives filed a claim petition under Sections 166 and 140 of the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal held that the accident was caused by the rash and negligent driving of the Alto car, that the vehicle was insured with Reliance General Insurance Company Limited, and that the driver possessed a valid licence. It awarded compensation of ₹17,96,005 with interest at 7.5% per annum.

The insurer challenged the award, contending that the accident and involvement of the vehicle were doubtful and that the widow’s receipt of family pension and appointment under the Dying-in-Harness Rules disentitled or reduced the compensation. The claimants filed a connected appeal seeking enhancement on the ground that future prospects had not been added to the deceased’s income.

1. Whether the Tribunal was justified in holding that vehicle no. UK06S-2569 was involved in the accident and that its driver caused the accident by rash and negligent driving, despite the initial FIR being against an unknown vehicle and the filing of a final report?

2. Whether the family pension received by the deceased’s widow and her compassionate appointment under the Dying-in-Harness Rules could be deducted from, or otherwise disentitle her to, motor accident compensation?

3. Whether an addition towards future prospects was payable where the deceased was a permanent government employee and his widow had obtained compassionate employment?

4. What was the proper amount of compensation payable to the claimants?

The Court applied Sections 166 and 140 of the Motor Vehicles Act, 1988, governing claims for compensation arising from motor vehicle accidents, and Section 173, providing for an appeal against an award of the Claims Tribunal.

It relied on Sebastiani Lakra v. National Insurance Company Limited, (2019) 17 SCC 465, for the rule that pension and gratuity are deferred wages or benefits arising from the deceased employee’s service and cannot be deducted from motor accident compensation.

For future prospects, the Court relied on National Insurance Company Limited v. Pranay Sethi, (2017) 16 SCC 680, which provides for a 50% addition to actual salary for a permanent employee below 40 years of age, and on Rajesh v. Rajbir Singh, (2013) 9 SCC 54, which had adopted the principle of adding future prospects even before Pranay Sethi.

The Court also applied the beneficial-construction principle applicable to the Motor Vehicles Act.

The Court upheld the Tribunal’s factual finding that the Alto car was involved in the accident and that its driver was negligent. The subsequent police investigation, the identification of the vehicle and driver, and the site plan supported the Tribunal’s conclusion; the initial registration of the FIR against an unknown vehicle did not, by itself, render the accident doubtful.

The insurer’s objection based on the widow’s family pension failed because, under Sebastiani Lakra, pension is earned through the deceased’s service and is not a benefit arising from the tortious death; it therefore could not be deducted from the compensation.

Likewise, the widow’s compassionate appointment did not exclude the claimants from receiving future prospects. Since the deceased was below 40 years of age and held a permanent government post, the Court applied the 50% addition prescribed in Pranay Sethi, noting that the insurer cited no contrary authority concerning compassionate employment.

On that basis, the Court recalculated the dependency compensation using a monthly salary of ₹12,563, a 50% addition for future prospects, a one-fourth deduction for personal expenses, and a multiplier of 15, together with the conventional heads of compensation.

The claimants’ Appeal From Order No. 390 of 2016 was allowed.

The compensation was enhanced from ₹17,96,005 to ₹26,14,008.40, comprising loss of dependency of ₹25,44,008.40, ₹15,000 for loss of estate, ₹40,000 for loss of consortium, and ₹15,000 for funeral expenses, with interest at 7.5% per annum.

The insurer was directed to deposit the enhanced amount before the concerned Tribunal within 45 days of production of the certified copy, after giving credit for the amount already paid.