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Synopsis

The Supreme Court recently expressed surprise over the Punjab and Haryana High Court's failure to follow the dictum of its judgment and instead following a conflicting judgment of the high court itself — a move the top court said amounted to a per se violation of Article 141 of the Constitution. 

A bench of Justices Sudhanshu Dhulia and K Vinod Chandran was examining how compensation under the 2006 Haryana Compassionate Assistance Rules for dependents of deceased government employees should be factored into awards under the Motor Vehicles Act, 1988.

The high court had deducted only 50% of the compensation under the Rules of 2006 from the amounts awarded in the claim petition under the Motor Vehicles Act.

The counsel for the insurance company pointed out that despite noticing the decision in Reliance General Insurance Co Ltd Vs Shashi Sharma (2016) the high court had ignored the dictum of the apex court and followed the judgment of that high court in Kamla Devi Vs Sahib Singh & Ors (2017).

The insurance company submitted that the question arising was no longer res-integra, but the high court was awarding compensation without deducting the compensation payable under the Rules of 2006. Reliance was also placed on the subsequent decision of the top court in National Insurance Company Limited Vs Birender and Others (2020). 

The apex court also noted that in Shashi Sharma, a three-judge bench held that the claims tribunal has to adjudicate the claim and determine the amount of compensation which appears to it to be just. The amount receivable by the dependents/claimants towards the head of pay and allowances in the form of ex-gratia financial assistance, therefore, cannot be paid for the second time to the claimants. True it is, that the Rules of 2006 would come into play if the Government employee dies in harness even due to natural death, court noted. 

At the same time, the Rules of 2006 do not expressly enable the dependents of the deceased government employee to claim similar amount from the tortfeasor or the insurance company because of the accidental death of the deceased government employee. The harmonious approach for determining a just compensation payable under the Act of 1988, therefore, is to exclude the amount received or receivable by the dependents of the deceased government employee under the Rules of 2006 towards the head financial assistance equivalent to “pay and other allowances” that was last drawn by the deceased Government employee in the normal course, the court pointed out.

The bench thus allowed the appeal, setting aside the judgment impugned to the extent it deducted only 50% of the compensation payable under the Rules of 2006, but also making it clear that if the amounts are already paid to the respondents, no recovery would be made.

"We cannot but observe that we are surprised that the High Court despite noticing a judgment of this Court, in the impugned judgment, failed to follow the dictum and followed a contrary judgment of the High Court itself; which is per-se in violation of Article 141 of the Constitution of India," the bench said.

Case Title: New India Assurance Co Ltd Vs Smt Sunita Sharma & Ors