Reliance General Insurance Co Ltd vs Saroj Bala & Ors.

The Appellant-Insurance Company has challenged the Award dated 15.07.2015 vide which a compensation in the sum of Rs. 64,93,174/- along with interest @ 9% per annum has been granted to the Claimants-Respondents on the demise of Shri Ishwar Singh Rana, aged 42 years, in a road accident, which took place on 02.02.2009.

The Award dated 15.07.2015 has been challenged on the following grounds: -

Learned Counsel for the Respondents/Claimants in the Cross Appeal has argued that the washing, travelling allowances, etc., were fixed salary and cannot be adjusted since the amount has already been deducted towards the personal expenses of the deceased.

It is further submitted that so far as the other benefits are concerned, it is submitted that the same may be granted according to the Judgment of the Constitution Bench in Pranay Sethi, (supra).

So far as the medical benefits are concerned, it is submitted that the same had not been granted in the Award.

Submissions heard.

Shri Ishwar Singh Rana, aged about 42 years, met with an accident on 02.02.2009 with Truck-Trella bearing No.HR-55B-0265 driven by its driver-Shri Srikishan Yadav and suffered fatal injuries. A Claim Petition under Section 166 of the Motor Vehicle Act, 1988 was filed by his wife and two children. The compensation in the sum of Rs.64,93,174/- along with interest @ 9% per annum has been granted.

The basic grievance of the Insurance Company is that there were certain allowance towards Transport, Shift Duties, Washing Allowance and Income Tax which could not have been considered while taking the salary of the deceased as Rs.41,676.19 per month.

The Salary Slip Ex.PW1/P reflects the earnings/allowances and deductions as under:

Hence, Net Salary Paid is Rs. 31,060/- (Earnings/Allowances -Deductions).

Based on the salary slip, the deceased enjoyed the following perks that were attached to his job in BPCL, provided as under:

The total salary of the deceased as per his Salary Slip was Rs.41,676.69/-. However, these Allowances as mentioned above, are all perks available to the deceased on account of his working in the Organization. These were the expenses the deceased was incurring in attending the Office and on Transportation.

Pertinently, in the case of Ram Charan and Ors. vs. New India Assurance Co. Ltd. and Ors., 2022 SCC OnLine Del 5146, it has been held that the benefits granted to the deceased, specifically Travel and Washing Allowances, were inherently tied to the amelioration of workplace hardships experienced during employment. Consequently, these allowances cannot be considered part of the compensation that would benefit the Appellants (legal heirs of the deceased). By excluding Travel and Washing Allowances, the Delhi High court affirmed a principled method of calculating the deceased’s income by only deducting the allowances that were solely for the personal benefit of the deceased, ensuring that compensation reflects genuine economic loss to the family rather than job-specific transient benefits.

Learned counsel on behalf of the Respondents/Claimants has argued that the amounts mentioned as allowances/perks were part of the fixed salary and cannot be deducted. It cannot be overlooked that these were the perks or the job-specific benefits which were being consumed only by the deceased when he went to attend his Office. Once, he was no longer working, he cannot be earning any Day Shift Arrear Allowances, nor would he be utilizing his Washing Allowance for washing the clothes or the Transport Allowance. Likewise, Meal and Tea Expenses were the consumables while the person attends the Office. Hence, these amounts which add up to Rs.5190.86 have to be deducted and the Net Salary of the deceased comes to Rs.36,485.83/- per month. Furthermore, Rs.4,784/-towards tax liability as reflected in the Salary Slip is also liable to be deducted. The salary of the deceased per month thus, comes to Rs.31,701.83.

Learned counsel on behalf of the Respondents/Claimants has further argued that since 1/3^rd deductions have already been made on account of the expenses of the deceased, the deductions from the Salary of certain allowance, would become a double deduction. However, this argument is not tenable as personal expenses of 1/3^rd are deducted towards the expenditure incurred by the deceased as an individual living in the family as a member. However, the deductions from the salary of the allowances are those which he would have enjoyed, had he been attending the Office.

It is not a case of double deduction, as is argued on behalf of the Counsel for the Claimants.

The other aspects in regard to Multiplier, Future Prospects etc. have not been challenged.

Therefore, the Loss of Dependency is calculated as under :

The other aspect under challenge is that the compensation under the Non-Pecuniary heads has been granted excessively.

Learned counsel on behalf of the Claimants submits that they may be recalibrated in accordance with the Judgment of Pranay Sethi, (supra).

The same are accordingly recalculated as under:

In the end, it had been argued on behalf of the Insurance Company that the Claimants have been granted Rs.3,55,686/- towards the Medical Bills, even though the amount has been reimbursed by Bharat Petroleum Corporation Limited (BPCL). However, the perusal of the Award shows that this amount has not been granted to the Claimants.

The total amount of compensation thus, awarded to the Claimants is as under:

The total amount of Compensation of Rs. 47,70,000/- is awarded to the Claimants along with interest @ 9% per annum, as per the terms of the Award dated 15.07.2015.

The Appeal stands disposed of along with the pending Application(s), if any.