MV Act Compensation: Amounts Being Received By Family Under Employees Family Benefit Scheme Not To Be Deducted While Calculating Loss Of Income: SC

“The aforesaid payment is totally different to the payment made by the employer in Shashi Sharma case (supra) which was statutory in nature.  Therefore, we hold that this amount cannot be deducted.”

The Supreme Court has held that amount being received by the family members of deceased under the Employees Family Benefit (EFB) Scheme cannot be deducted while calculating the loss of income for the purpose of determining compensation under the Motor Vehicles Act.

The bench comprising Justice Madan B. Lokur, Justice S. Abdul Nazeer and Justice Deepak Gupta in Sebastiani Lakra vs. National Insurance Co. Ltd. was considering the contention made by the insurance company that, since the claimants are getting a sum of Rs 50,082 under the EFB Scheme, this amount should be deducted in terms of the judgment of this court in  Reliance  General  Insurance  Co.  Ltd. vs.  Shashi Sharma.

In Shashi Sharma, a three-judge bench of the Apex court had held that the amount received or receivable by dependants of the deceased (who died in a motor accident) from the employer by way of ex gratia financial assistance on compassionate grounds can be deducted from the quantum of compensation fixed by the Motor Accident Claims Tribunal (MACT) under the head “pay and other allowances”.

In this case, the bench observed that the EFB Scheme is totally different from the rules which were under consideration in Shashi  Sharma case (supra).  Under this scheme, the nominee or legal heir(s) of the deceased employee have to deposit the entire amount of gratuity and all other benefits payable to them on the death of the employee. The court also noted that this amount will be paid to the legal heirs under the EFB Scheme only till date of retirement of the deceased.

“The aforesaid payment is totally different to the payment made by the employer in Shashi Sharma case (supra) which was statutory in nature.  Therefore, we hold that this amount cannot be deducted,” the bench said.

However, the bench added: “Therefore, though we are not inclined to deduct the amount payable to the claimants, we feel that in the peculiar facts and circumstances of the case, they are not entitled to claim another amount @ of 15% by way of future prospects.  The payment of the amount under the   EFB Scheme more than offsets the loss of   future prospects.  This, in our opinion, would be ‘just’ compensation.”
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