The Supreme Court recently comprising of a bench of Justices Uday Umesh Lalit and Ajay Rastogi observed that the judgment in Pranay Sethi does not limit operation of a statutory provision granting greater benefits in the matter of Motor Accident Compensation. (New India Assurance Co. Ltd. vs. Urmila Shukla)
The Bench observed that if a statutory instrument has devised a formula that affords greater/better, then such a statutory instrument should be allowed to operate unless the instrument is found to be invalid.
Facts of the case
The case was related to an accident that resulted in the death of one Jairam Shukla. While determining the compensation amount, the Trial Court relied on Rule 220A of the U. P. Motor Vehicles Rules, 1998 that mandates 20% additional compensation in case the deceased falls within the age bracket of 50-60. As a result, the total compensation amount was Rs. 24,43,432/- with 7% interest.
The Appellant approached the Allahabad High Court stating that the Trial Court’s order stands contrary to the Supreme Court’s decision in National Insurance Company v. Pranay Sethi (2017), which serves as a precedent for calculating the compensation in accident cases. The High Court, however, upheld the Trial Court’s verdict, and therefore, the present appeal has been preferred before the Supreme Court.
The Appellants approached the Supreme Court challenging the verdicts of the two courts.
Issues before the court
Whether the application of sub-Rule 3(iii) of Rule 220A of the U. P. Motor Vehicles Rules, 1998 must be restricted or it must be allowed to operate fully?
Contention of the parties
The Insurance Company contended that sub-rule 3(iii) of Rule 220A of Uttar Pradesh Motor Vehicles Rules, 1998 is contrary to the conclusions arrived at by the Constitution Bench of this Court in National Insurance Company. Ltd. vs. Pranay Sethi (2017) 16 SCC 680. As per the said Rule, the future prospects of a deceased, shall be added in the actual salary or minimum wages of the deceased. If the deceased was more than 50 years of age: 20% of the salary has to be added.
The Respondents argued that the observations in the Pranay Sethi Case would not be applicable in this case because there is already a statutory provision under the U. P. Motor Vehicles Rules to that effect.
The Amicus Curiae submitted that since the statutory provision provides for a more advantageous remedy, the observations in Pranay Sethi Case ought not be considered. He further added that in the Pranay Sethi Case, this Court did not give its opinion on the Rules.
Courts Observation and judgment
The Bench further opined that only in absence of any such statutory provision, the judgement would serve as a precedent. It was stated that the observations in the Pranay Sethi case were an outcome of the concept of “just compensation” under Section 168 of the Motor Vehicles Act.
In case if a law provides a more beneficial remedy, the Pranay Sethi Judgement would have no effect unless the concerned law is null and void, the Bench noted. And accordingly, the orders of the Trial Court and Allahabad High Court were upheld.
The increasing cases of motor vehicle accidents is becoming an issue of concern in our country. There are always some irregularities in determining the quantum of compensation in such cases, despite having the Motor Vehicles Act, 1988. This is mainly because such compensations are decided only after considering the conduct of both the parties.
The instant case had a different issue. It is based on the concept of “just compensation”, which is awarded by the courts, above the actual compensation. There is no standard provision which made the Supreme Court to make it so in the Pranay Sethi Case. At the same time, the Court did not make any comments on the existing laws in this regard, nor did it state that the judgement overrides the existing laws. This should have been the grounds that made both the Trial Court and the High Court to rely on the Rules. Further, as stated by the Supreme Court, when a law gives a more favorable treatment, then it can definitely prevail over other observations.
Since this amount is given as a small compensation against the life of a person, such beneficial provisions should be considered as the same can help the devastated family until they stabilize themselves. The Supreme Court’s observations, in this issue, comes as a glimmer of hope and upholds the principle of “just and fair compensation”.
The bench noted that the judgment in Pranay Sethi was from the standpoint of arriving at "just compensation" in terms of Section 168 of the Motor Vehicles Act, 1988.
The court while rejecting Insurance Company's contention said, "11. If an indicia is made available in the form of a statutory instrument which affords a favourable treatment, the decision in Pranay Sethi cannot 7 be taken to have limited the operation of such statutory provision specially when the validity of the Rules was not put under any challenge. The prescription of 15% in cases where the deceased was in the age bracket of 50-60 years as stated in Pranay Sethi cannot be taken as maxima. In the absence of any governing principle available in the statutory regime, it was only in the form of an indication. If a statutory instrument has devised a formula which affords better or greater benefit, such statutory instrument must be allowed to operate unless the statutory instrument is otherwise found to be invalid."
Observing thus, the bench dismissed the appeal.
In Pranay Sethi's judgment, the Constitution bench had considered the question about the addition as regards the future prospects" in a case where the deceased was self-employed or was a person on fixed salary without provision for annual increment, etc.
Read Judgment @Latestlaws.com
Share this Document :Picture Source :
