Prakash Narain, J.

(1) THESE two cross appeals are directed against the judgement of a learned

Single Judge of this court deciding the question of compensation payable to the

heirs and legal representatives of one Ajit Singh, who was killed as a result of being

run over by a, motor truck. The accident. occurred on June 13, 1963. The truck

belonged to M/s. Gopal Singh Ghanshyam Dass, appellant in L. P. A. No. 101 of

1969, and respondent No. 3 in L. P. A. No. 88 of 1969. The truck was being driven

by Bakshi Ram, respondent No. 2 in L. P. A. No. 88 of 1969 and respondent No. 1 in

L. P. A. No. 101 of 1969. The vehicle was insured with M/s. Vanguard Insurance Co.

Ltd. , respondent No. 1 in L. P. A. No. 88 of 1969 and the second appellant in L. P.

A. No. 101 of 1969. The legal representatives and heirs of Ajit Singh deceased are

Smt. Amarjit Kaur, widow of Ajit Singh, Harcharan Kaur and Rajinder Kaur, minor

daughters of Ajit Singh, and Manmohan Singh, Darsh Deep Singh and Rabinder

Singh, minor sons of Ajit Singh. They are appellants in L. P. A. No. 88 of 1969 and

respondents 2 to 7 in L. P. A. No. 101 of 1969.

(2) SMT. Amarjit Kaur and her children applied to the Motor Accidents Claims

Tribunal under. Section 110-A of the Motor Vehicles Act, 1939, hereinafter referred

to as the, for award of compensation for the death of Ajit Singh alleging that it

was due to. the rash and negligent driving of the motor truck that Ajit Singh got run

over and died. It was submitted that Ajit Singhs monthly income at the time of his

death was Rs. 1200 P. M. , he was 40 years of age, he was running a motor

workshop and planning to put up a factory, being a qualified and experienced

mechanical engineer, thus having great prospects in life. It was further alleged that

he purchased a plot measuring 20001 sq. yards with the intention of putting up his

factory and was in correspondence with his brother to join him in this venture. His

gross income was Rs. 3000 to Rs. 4000 P. M. He was having a good standard of life

and educating his children in a good school. Taking all these circumstances into view

damages to the extent of Rs. 3 lakhs were claimed.

(3) THE Tribunal on the basis of the evidence adduced before it came to the

conclusion that the loss of pecuniary advantage to the family of Ajit Singh was to

the extent of Rs. 31,800 on an expectancy- of life for Ajit Singh for a further period

of 15 years. After coming to the conclusion that the normal expectancy of life would

be upto the age of 60 years but keeping in view the uncertainties of life, 5 years had

to be deducted from the period of 20 years. From this amount of Rs. 31,800 further

10 per cent was deducted by the Tribunal on the principle that, Rs. 31,800 would

have been received by the family in 15 years but a lump sum payment was now to

be made. Admittedly, Amarjit Kaur had received Rs. 14,000 on account of an

insurance policy on the life of Ajit Singh. Tills amount was also deducted from the

compensation assessed. The Tribunal, therefore, made an award of Rs. 8,620 in

favour of Amarjit Kaur and her children payable by the insurance company, the

driver of the track and the owner of the truck. Appeals were preferred both by

Amarjit Kaur and her children on the one hand and the insurance company and the

owner of the truck on the other to the High Court. These cross appeals were

disposed of by a common judgment given by a learned Single Judge of this court on

April 1, 1969. The learned Single Judge enhanced the compensation payable and

awarded a net compensation of Rs. 23,895 limiting the liability of the insurance

company to Rs. 20,000. Both sides being aggrieved have filed the present appeals

under Clause X of the Letters Patent.

(4) ON the pleadings of the parties two primary questions which arose for

determination before the Tribunal were whether the death of Ajit Singh was caused

by rash and negligent driving of the truck without any contributory negligence on

the part of Ajit Singh and if it was so held, what was the quantum of compensation

payable to Amarjit Kaur and her children. Both the Tribunal and the learned Single

Judge came to the conclusion, and in our opinion rightly, that Ajit Singh died as a

result of rash and negligent driving of the truck. There was a difference of approach

between the Tribunal and the learned Single Judge in the manner and mode of

computation of the compensation to be awarded. In the appeals before us it is only

the second question which has been argued.

(5) SECTION 110-A of the speaks of an application being moved for grant of

"compensation arising out of an accident". The Act thus does not speak of Damages.

Why we mention this is because there is a difference in the connotation of these two

terms. The distinction is not commonly understood and may be called a somewhat

subtle difference. Nevertheless there is a distinction between compensation to be

awarded or a claim for damages being granted. Damages are given for an injury

suffered. Compensation is by way of atonement for the injury caused with intent to

put either the injured party or those who may suffer on account of the injury in

position as if the injury was not caused by making pecuniary atonement. The

distinction is fine but nevertheless there. Therefore, when the legislative intent. is to

grant compensation, computation of the same, as if computation is being made for

grant of damages, would not be a wholly correct approach. Mcgregor on Damages

(Thirteenth Edition) comments on this aspect. According to it "the object of an

award of damages is to give the plaintiff compensation for the damage, loss or

injury he has suffered. The heads or elements of damage recognized as such by the

law are divisible into two main groups; pecuniary and non-pecuniary loss".

According to Mcgregor no distinction is drawn between the three words damage,

loss or injury. Lord Blackburn in Livingstone v. Rawyards Coal Co. , (1880)5 Appeal

Cases 25 (1), defined the measure of damages as "that sum of money which will put

the party who has been injured, or who has suffered, the same position as he

would have been in if he had not sustained the wrong for which he is now getting

his compensation or reparation. " In English Law this rule enunciated by Lord

Blackburn has been consistently referred to and cited with approval. In respect of

torts and/or with regard to contract it may be possible to apply this rule but then as

Lord Halsbury L. C. observed in re: The Mediana (1900) Appeal Cases 113 (2), "how

is anybody to measure pain and suffering in moneys counted Nobody can suggest

that you can by arithmetical calculation establish what is the exact sum of money

which would represent such a thing as the pain and suffering which a person has

undergone by reason of an accident. . . . . But nevertheless the law recognises that

as a topic upon which damages may be given". In England, therefore, though

compensation and damages have often been treated as synonymous terms,

observations have been made which suggest that, perhaps, there would be a

distinction between the two terms. The Legislature in India has deliberately not used

the English term of damages but has used the term compensation. A meaning,

therefore, has to be given to this term though some times it may be difficult to

distinguish between what may be called damages and what may be regarded as

compensation. An example may, perhaps, highlight this distinction. The death of a

person by an accident may not result in any pecuniary loss whatsoever to his heirs

as, for instance, a rich unemployed man with no prospects of employment being

killed. The well-to-do family of that man may not miss the deceased in the sense of

pecuniary loss. Nevertheless an intangible loss is there by a member of the family

being taken away. Surely it cannot be said that no compensation would be payable

as a result of such death caused by an accident. We shall further dilate on this

aspect when we come to deal with one of the contentions raised on behalf of

Amarjit Kaur and her children in the context of reductions made from the gross

compensation ordered to be payable, both by the Tribunal and the learned Single

Judge.

(6) HAVING agreed with the findings of the Tribunal about the negligence of the

driver driving the motor truck, the learned Single Judge while considering how

compensation payable for death caused by negligent motor driving is to be

determined suggests two possible ways. First, the compensation may be determined

according to the existing principles of law. Secondly, it may be determined by the

legislature providing for a different system of compensation such as one based on

insurance or some other policy. The learned Judge observed that the principle

adopted both in England and in India have been based on the rule of "justice, equity

and good conscience", which have been "generally interpreted to mean the values of

English Law, if found applicable to the Indian Society and circumstances", Waghela

v. Sheikh, (1887) Indian Appeals 89 (3 ). He goes on further to observe that, "the

English Law itself has been constantly developing both by judicial decisions and

statutory changes. In India also the common law of England, as applied to India,

has been modified by legislation. " He referred to the Secretary of State v. Rukmini

Bai, AIR 1937 Nagpur 354 (4), and commented that the doctrine of common

employment of the common Law of England having been abolished by statutes in

England could no longer be applied in India also. In his view, the enactment of

Section 110a to 110f in the Motor Vehicles Act did not embody any change in the

Common Law with regard to compensation payable in this branch of the Law of

Torts. These provisions only provide a cheaper remedy by moving an application to

the Tribunal instead of civil action under the Law o{ Torts. In his opinion, therefore,

compensation had to be computed, as in English Law, for such damages as the

court or Tribunal "may think proportionate to the loss resulting from such death to

the parties respectively, for whom and for whose benefit such action shall be

brought". The learned Single Judge relied on Gobald Motor Service Ltd. v. R. M. K.

Veluswami, AIR 1962 S. C. 1 (5 ). He noticed with approval the observations of the

House of Lords in Davies v. Powel Duffryn Associated Collieries Ltd. , (1942) A. C.

601, in which it was observed that in calculating the loss caused by the death "any

benefit accruing to a dependent by reason of the relevant death must be taken into

consideration. . . . . the balance of loss or gain of a dependent by the death must

be ascertained. " Therefore, the learned Single Judge has primarily relied on. Gobald

Motor Service Ltd. in computing the compensation payable by first ascertaining the

loss of Amarjit Kaur and her children. With respect, we would like to observe that in

computing damages it would be a proper approach to take. Whether in computing

compensation some other principle should also be adopted is a matter on which we

will comment hereafter.

(7) ON the question of computation learned counsel for Amarjit Kaur and her

children has raised the following points: (1) Future prospects of Ajit Singh have not

been correctly taken into account by fixing his income at only Rs. 750 P. M. (2) The

working age fixed at 15 years is too short. It should have been 20 years. (3) The

amount of Rs. 175 P. M. deducted from Rs. 750 as personal expenses of Ajit Singh

was incorrect. According to Amarjit Kaur Ajit Singh used to give her Rs. 800 P. M.

for household expenses. (4) No deduction from the gross amount of compensation

payable could be made for insurance amount received by Amarjit Kaur. (5) Onethird

valuation of the industrial plot purchased by Ajit Singh was not the correct

approach in computing the heritable interest left by him in the said plot. (6) The

dependency principle adopted was not correctly applied. (7) Certain other

deductions made, like deductions for lumpsum payment, were not justified.

(8) AJIT Singh was proved to be a Matriculate. He had a Diploma of Engineering as

apprentice fitter machinist. He was employed first with the Central Tractor

Organization and later by a firm known as Kaiser engineers, Jamshedpur. His salary

during employment was approximately Rs. 1000 P. M. In 1959 he started his own

venture by opening a motor garage. It may be assumed that be was a competent

motor mechanic, duly qualified and having a will to make a headway in life. It is on

record that he intended to set up a factory for producing motor parts and in that

regard he was trying to persuade his brother to investments money and join him in

the venture (letter dated April 16, 1963, Exhibit Public Witness 12/1 ). It was in this

context that he went in for an industrial plot costing Rs. 5000. The finding is, and

we agree, that Ajit Singh had not yet paid the entire amount to become a full owner

of the plot in the industrial area. Therefore, his intention to set up a factory must be

regarded still in the realm of planning at a preliminary stage, in considering the

future prospects or expectancy of Ajit Singh or his family. Amarjit Kaur and her

children can thus claim only a very limited advantage from this contemplated

venture, not fructifying by the death of Ajit Singh. The advantage, therefore, fixed

at Rs. 5000 vis--vis the plot cannot, be regarded as an incorrect computation. The

question as to whether only one third of this value should have been allowed is a

separate question.

(9) THE next aspect is with regard to the pecuniary loss to Amarjit Kaur and her

children. To Amarjit Kaur her husband used to give Rs. 800 to 900 P. M. got

household expenses. Assuming that she may have a tendency to somewhat

exaggerate, the Tribunal and the learned Single Judge have come to the conclusion

that she used to get Rs. 750 P. M. This would come to Rs. 9000 per year. Amarjit

Kaur states that she was spending Rs. 800 to Rs. 900 P. M. Pecuniary loss,

therefore, to her and her children for 15 years comes to Rs. 1,35,000. We agree

with her learned. counsel that pegging her receipts at Rs. 750 for 15 years was not

wholly justified keeping in view the age of the deceased, the manner in which he

had given up a job of Rs. 1000 P. M. for opening his own workshop and his future

plans of expensation. Ajit Singh was 40 years old when he died. Even people working

on salaries, by and large, get a raise in their salary as they advance in years. In a

country where automobiles are constantly on the increase, it cannot be said that the

income of the family would have remained static for the next 15 years. It is proved

on record that Ajit Singh had four very young children who were being given

comparatively expensive education. As the children grew up the expenses would have

increased both on education and upkeep. Instead of spending only Rs. 8000 or Rs.

9000 in 1963, in r. ext 10 or 15 years it could reasonably be expected that Amarjit

Kaur would have been spending much more on herself and her children and in

running the family Public Witness 11, the Accountant, had deposed that there had

been regular increase in the income of Ajit Singh every year. A figure of Rs. 4000 P.

M. being the income of Ajit Singh was deposed to by his brother, A. W. 12. Ajit

Singh also had one-third share in another garage, as deposed to by Amarjit Kaur. He

had plans to put up a factory. In our opinion, therefore, on a rough and ready

estimate it could be said that Ajit Singh, in due course of time, would have earned

much more than he was earning in 1963 and would have thus given more spending

money to his wife and spent much more on his children. Pegging the income at Rs.

750 P. M. for the next 15 years, therefore, cannot be regarded as justified. What his

income would have been in future is difficult to say but taking into consideration his

qualifications, expectancy and prospects, it could well be said that on an average

future income can be computed at Rs. 1000 P. M. For 15 years, therefore, the figure

would come to Rs. 1,80,000. The Tribunal had dispelled this contention by observing

that future prospects of setting up a factory had to be discounted in the absence of

any capital with Ajit Singh. Regarding increase in income, the Tribunal held that in

the absence of definite evidence the same could not be ascertained with any

certainty or with reasonableness. Future increases in income can never be found out

with any certainty except in the case of people employed on a time-scale salary.

These have to be gauged from all the circumstances of the case. In the present case

there is sufficient evidence to make a conservative estimate in the manner in which

we have done. We will, therefore, fix the future income available for utilisation by

Amarjit Kaur and her family at Rs. 1000 P. M.

(10) THIS brings us to the question of whether future income should be computed

for 15 years or for at least 20 years. Learned counsel for Amarjit Kaur and her

children has urged that in view of the expectancy of life having increased in our

country, it could reasonably be assumed that Ajit Singh would have been in a

position to earn money and spend on his family till he attained the agand of 60

years. We do not. find anything wrong in this assumption. Why we agree with the

Tribunal and the learned Single Judge having taken only a period of 15 years more

is because not only one has to keep in view possible future accidents in life but also

the dependency of the children. Ajit Singh had four children 3 sons aged 12 years, 7

years and an infant and one daughter, aged 9 years. He had one adopted daughter,

aged 17 years. This was in 1963. In normal circumstances the two daughters would

have got married between the ages of 18 and 23 years and gone away. The son,

aged 12 years in 1963 would have been in a position to earn his own livelihood in 9

or 10 years. The two younger sons would have also grown up and at least in 13 or

14 years one more son would have been of the age to earn his OWE. livelihood.

Therefore, a deduction of 5 years from the normal remaining working age of Ajit

Singh cannot be called unjustified. Accordingly, we agree with the. Tribunal and the

learned Single Judge that 15 years period was a reasonable period to fix for

computation of compensation payable to Amarjit Kaur and her children.

(11) THE next question is whether there was justification for deducting Rs. 175 P.

M. with regard to the personal expenses of Ajit Singh. In view of our having fixed

Rs. 1000 P. M. as the expectancy in future of Amarjit Kaur and her children, this

point does not survive for consideration.

(12) WE do not find anything wrong in deduction of onethird value of the plot of

Rs. 5000 on the principle of benefit of the acceleration of interest- The value of the

plot has been fixed at Rs. 5000. As we have said, nothing more can be regarded as

the loss of Amarjit Kaur and her children vis-a-vis the industrial plot. Had Ajit Singh

been alive, he may have set up a factory. With his death it is only the land which is

available and to it cannot be added the prospects of putting up a factory on that

plot. Therefore, Rs. 1666 have been rightly deducted from this interest of Rs. 5000.

(13) NOTHING much has been urged on the other points. The main thrust has

whether Rs. 14. 000 insurance amount could be deducted from the gross

compensation computed. We need not, therefore, comment upon those and uphold

the findings of the learned Single Judge.

(14) WE now come to the question as to whether the sum of Rs. 14,000 received

by Amarjit Kaur on account of insurance policy could be deducted from the gross

compensation.

(15) LEARNED counsel appearing for Amarjit Kaur and her children contends that

deduction of the amount of insurance money of Rs. 14,000 is not justifiable. In any

case, be submits that only payment with regard to life policy could be deducted if at

all, and not the amount received towards the accident aspect where death is caused

on account of an accident. The contention is that the benefit arising out of the life

insurance policy cannot go to a tort-feasor. As opposed to this contention Mr Dhir,

appearing for the opposite parties, contends that by a long chain of decisions

insurance moneys have always been deducted from the amount of compensation

assessed and, therefore, the sum of Rs. 14. 000. 00 has rightly been deducted from

the compensation adjudged to be paid to Amarjit Kaur and her children. He has

relied on various decisions which we may now notice.

(16) IN Parkash Vati and others v. The Delhi Dayal Bagh Dairy Ltd. 1967 A. C.. 82

(7), a Bench of the Punjab High Court upheld the trial Courts decision deducting the

proceeds of life policies of the deceased. There is no reasoning to be found in

paragraph 8 of the report except an observation that financial gain by the widow on

account of the death of her husband has to be taken into consideration in arriving at

the figure of any loss suffered by her. Further more, it is noticed that the plaintiffs

counsel did not press his claim vis-a-vis this deduction in the appeal preferred by the

plaintiff.

(17) IN Veena Kumari Kohli v. Punjab Roadways and others, 1967 ACJ 297 (8), a

learned Single Judge of the Punjab High Court also upheld deduction of the life

insurance policy amount by following the bench decision in Parkash Vatis case

without any further reasoning.

(18) IN Manjula Devi Bhuta and another v. Manjushri Raha and others, 1968 A. C..

1 (9), a Bench of the Madhya Pradesh High Court also upheld the deduction of life

insurance policy but, again, without any reasoning.

(19) IN Ishwari Devi and others v. Union of India and others, 1968 A.. 141 (10), a

Bench of this Court negatived the contention that the benefit arising out of life

insurance should be deducted vis--vis the five applicants, other than the wife. on

the ground that it was not known whether it was life insurance simplicitor or

whether the deceased was insured for accidents also, whether the insurer

nominated any particular individual, and whether the amount was duly claimed and

collected by any of all of the applicants. Why the deduction was allowed from the

claim of the wife is not commented upon except that one may read the rule that

pecuniary advantages and disadvantages from the accidental death have to be

weighed and assessed.

(20) IN Unique Motor and Gen. Ins. Co. Ltd. v. Mrs. Krishna Kishori and others,

1968 A.. 318 (11), a Single Judge of the Punjab and Haryana High Court rejected

the contention challenging the deduction of the insurance money but without any

rationale behind it. In fact, in this case the learned Judge did not interfere because,

in his opinion, the net compensation as awarded was more than ample.

(21) IN Sushila Devi and others v. Ibrahim and another,. 1974 A. C.. 150 (12),

their Lordships of the Madhya Pradesh High Court upheld the deduction of the

insurance money bill we do not find any reasoning or discussion for doing so.

(22) IN Jaikumar Chhagan Lal Patni and others v. Mary. Jerome Dsouza and

anothers, 1978 A. C.. 28 (13), a. Bench of In the Bombay High Court noticed the

change of law in England covered by the enactments pertaining to fatal accidents.

Their Lordships noticed that insurance money was considered to he such pecuniary

advantage coming to the dependents by reason. of the death of a person that it was

held liable to be deducted under the common law from the amount of compensation

payable under the Fatal Accidents Act of 1846. This situation was reversed first by

Fatal Accident (Damages) Act of 1908 and improved further for the benefit of the

claimants by Law Reforms (Personal Injuries) Act of 1948 and altered drastically by

the Fatal Accidents Act of 1959 ensuring that various kinds of insurance and

pensionary benefits are not excluded from the compensation payable by the tort

feasors. Their Lordships observed that claims for compensation arising out of fatal

accidents in India are still determined mainly by reference to principles underlying

the Fatal Accidents Act, 1855, analogous to English Act of 1846. In their opinion, "in

the absence of any statutory provisions analogous to the above referred to English

enactments of 1908, 1948 and 1959, it should be difficult to find any basis or trace

any rationale not to deduct such life policy amount when on the face of it, these

amount to pecuniary advantages and are received by the dependents by reason of

the death of the bread winner victim". They disagreed with the view that receipt of

such amounts were collateral benefits, taken by the High Courts of Gujarat, Punjab

and Haryana and Delhi in L.. C. of India v. Legal representatives of deceased

Naranbhai Munjabhai, 1973, A. C.. 226 (14) in Sood and Company v. Surjit Kaur,

1973 A. C.. 414 (15), and in Bhagwanti Devi v. Ish Kumar, 1975 A. C.. 56 (16)

respectively. Their Lordships of the Bombay High Court also noticed that the

judgments of some other High Courts, in particular Patna High Court, support

deduction only of such policy amounts as are subscribed to meet accident

contingencies and not other policy amounts. Particular reference was made to Orissa

Road Transport Co. Ltd. v. Sibananda Pattnaik, 1976 A. C.. 497 (17), where this

court held that the deduction only of a portion and not of the entire policy amount

could be allowed. Acceleration of interest. is noticed as one of the grounds

permitting whole or part of an insurance money to be deducted provided it was

possible to split the amount. If it was not, the opinion given is that the whole

amount should be deducted as there is no statutory change brought about in law in

India, unlike in England.

(23) IN Prem Devi Pandey and others v. Dayal Singh and others, 1976 A. C -. 407

(18), a learned Judge of this court allowed deduction of pension on the ground that

widow would not have got this pension but for the death of her husband and so, it is

necessarily a pecuniary gain to her on account of death. Deduction of provident fund

and gratuity was not allowed for the reason that this amount would have come to

the legal representatives even if the deceased had collected it on his

superannuation. Therefore, no pecuniary gain occurred due to the premature death.

However, the principle of acceleration of pecuniary gain could be applied and

proportionate amount had to be reduced. On the. question of insurance policy the

learned Judge observed that the amount due on maturity of the insurance policy

would have been received by the deceased only if he had paid the remaining

instalments on the policy. That the legal representatives get the insured amount on

account of earlier death without payment of future premium is definitely a pecuniary

gain and had to be deducted.

(24) IN Parvatamma and others v. Syed Ahmed and others, 1977a. C.. 72 (19), a

Bench of the Karnataka High Court noticed the distinction pointed out by D. B. Lal,.

in Rita. Arora v. Salig Ram, 1975 A. C.. 420 (20) and by Anand,. in Bhagwanti Devi

v. Ish Kumar, 1975 A. C.. 56 between benefit arising on account of death and

amounts payable at death, in other words, benefits arising as a result of death as

opposed to benefits arising independently of death but payable on death. Their

Lordships disagreed with the distinction pointed out by the two learned Judges

quoted with approval Mcgregor on Damages in para 15 of the report in which

reads :"however, in dealing with these cases, it remains a difficult matter to lay

down any lest, which will embrace all of them, of whether a benefit following the

death does or does not result from the death. The insidious maxim post hoc,

proper hoc must here as everywhere be guarded against, but the limits of its

operation remain difficult to - define. Although the language causa causans and

causa sine qua non has sometimes been relied on, it has been said by Pearce L.. in

Jenner v. Alien West that this distinction does not help. Any analysis of the case law

can therefore only for a general guide : the approach to each new case must remain

empirical. "

(25) MR. Vohra has invited our attention to some judgments in support of his

contention that the insurance policy money is not deductible at all and if at all

deductible, only a part of it is deductible either by applying the principle of

acceleration of receipt of that benefit or better still by excluding either the portion of

insurance money which pertains to life policy or the one which pertains to accident

policy.

(26) WE have already noticed the judgment of this court rendered by brother H. L.

Anand,. in Bhagwanti Devi v. Ish Kumar, 1975 A. C.. 56. We may only add that the

learned Judge commenting upon the question as to whether life insurance moneys

should be deducted observed that these benefits are in the nature of quid pro quo

and have relation to the savings effected by the deceased besides having their

genesis either in contract or in past service and good conduct and these benefits

could not be said to be benefits arising out of the death of a person in the sense in

which the action for damages or inheritance could be related to such an event. In

his opinion, such a conclusion would be justified even on the principles enunciated

by the Supreme Court in the case of Gobald Motor Service (Supra ).

(27) WE may straightway, therefore, refer to Gobald Motor Service Ltd. , and

another v. R. M. K. Veluswami and others, 1962 (1) S. C. R. 929. This case, no

doubt, lays down the principle that the pecuniary loss to the dependents can be

ascertained only by balancing on the one hand the loss to the claimants of the

future pecuniary benefit and on the other any pecuniary advantage which from

whatever sources come to them by reason of the death, that is, the balance of loss

and gain to a dependant by the death must be ascertained. All the same, it has to

be noticed that the pecuniary advantage which has to be set off against pecuniary

loss is that advantage which comes "by reason of the death" and not all pecuniary

advantage.

(28) IN Hirji Virji Transport and others v. Easiram Bibi, 1971 A. C.. 458 (21), their

Lordship of the Gujarat High Court went on the principle of same deduction for

lumpsum payment or acceleration of interest.

(29) THE Gujarat High Court in Shakurmiya Immammiya Shaikh and others v.

Minor Surendra Singh Rup Singh and others, 1978 A. C.. 130 (22) enunciated two

principles with regard to deductions from the amount which has been found to be

the pecuniary loss to a claimant. The first one was that insurance policy amounts

were collateral benefits which the deceased had bought with his own money. It was

a benefit derived by way of prudent savings effected for his own benefit under a

contract by the insured party whose benefit could never go to the tort-feasers. They

noticed with approval the decision of the House of Lords in Perry v. Cleaver, 1969

(2) A. C.. 363. The second principle that was enunciated was that in order to arrive

at a just compensation if the method followed was to reduce the normal expectancy

of working life,. e. the Davies Method, there could be no deduction for acceleration

of receipt of financial benefit as it got squared up when in such a case only the

multiplier of say 15 years is computed as the financial loss.

(30) IN Life Insurance Corporation of India and another v. Legal representatives of

deceased Naranbhai Manjabhai Vadhia, 1973 A. C.. 226, already noticed earlier, a

Bench of the Gujarat High Court relying on Perry v. Cleaver (Supra) held that

pension amount or retirement-cum-gratuity benefit which had the insurance element

could not be deducted from the amount found to be the financial loss of the

claimant on a death by accident.

(31) A learned Single Judge of the Punjab and Haryana High Court in Sood and

Company, Kulu v. Surjit Kaur and others, 1973 A. C.. 414, set out with approval the

two criteria enunciated in a bench decision of the same court in Damyanti Devi and

others v. Sita Devi and another. 1972 A. C.. 334. These two criteria were as

under :" (1) the assets of which benefit was being taken by or was avaiable to the

family during his life time; (2) or the assets which were being created by the

deceased out of his savings to be utilised for the benefit of the members of the

family on various occasions like marriage, higher education of the children etc. were

to be kept out of consideration while determining the just compensation because

such assets could not be said to confer undue or untimely benefits on the legal

representatives because of the death of the person on whom they were dependent.

"

(32) A review of the judgments cited before us brings out the divergenal of

approach in the various High Courts well into focus. The primary conflict appears to

be whether the law in India, which has been following the English common law,

should be continued to be applied because there has been no statutory intervention,

as observed by the Bombay High Court, or whether taking note of the change of law

in England and by way of further development of this branch of law of torts, we

should not adopt the principles enunciated, particularly by the Delhi and Gujarat

High Courts, and fall in line with Perry v. Cleaver (Supra ). In our opinion, keeping in

view a very salient aspect that a tortfensor should not be given the benefit of any

moneys that may come into the hands of a claimant on account of the death of a

near one and dear one, the proper approach would be to deny to the tort-feasor the

right to claim a set off from the financial loss caused by his rash and negligent act.

whether the liability be vicarious or direct, caused to the claimant. There is no

statutory bar to adopt this progressive view. We are in respectful agreement with

the distinction pointed out between whether the moneys come into the hands of a

claimant "at death" or "on account of death". Therefore, we hold that the amount of

Rs. 14,000 deducted from the financial loss suffered by Amarjit Kaur and her

children cannot be deducted from the amount of financial loss computed. It is at this

stage that we might comment that the concept of mitigation of damages is relevant

to the award of damages. This would not be so for award of compensation. Though

the terms have been used interchangeably in many decisions, in our view, some

meaning has to be given to the word compensation as the legislature has purposely

adopted that term and not damages.

(33) THIS brings us to the last point as to whether there should be scaling down

by 33. 113 per cent for lumpsum payment. The learned Single Judge has deducted

33. 1/3 per cent on this account. The Bench decision of this court in Hirji Virji

Transport and others Vs. Basiram Bibi, 1971 A. C. T. 458, has clearly negatived this

view and has held that in lumpsum payment the scaling down to. the extent of only

15 per cent is permissible.

(34) WE are, not impressed by the contention that interest on the amount found

due should also be awarded in accordance with the principle in Section 314 of the

Code of Civil Procedure. No doubt, Amarjit Kaur and her children have been denied

some moneys for a long period ,of time but at the same. time the concept of

payment of interest on damages or compensation has not been looked at with

favour except where statutorily so provided.

(35) THE result of our above discussion is that the financial loss caused to Amarjit

Kaur and her children comes to Rs. 1,80,000. From this amount there is to be no

deduction for acceleration of interest as instead of computing loss of income for 20

years, loss has only been computed for 15 years. A sum of Rs. 1666 has to be

deducted, as upheld by us vis--vis the interest in the industrial plot. This brings the

figure to Rs. 1,78,334 or say by rounding off the figure at. Rs. 1,78. 000. Amarjit

Kaur had admitted that her income from the other workshop in which her husband

had a share was Rs. 150 to Rs. 200 P. M. We may take a mean of this income at Rs.

175 P. M. This was certainly a direct gain to her on death of Ajit Singh. Therefore,

for 15 years this income has also to be deducted. Thus, from Rs. 1,78,000 we have

to deduct Rs. 31,500 which leaves a balance of Rs. 1,46,500. We have agreed with

the figure of Rs. 750 P. M. fixed by the learned Single Judge as the amount that Ajit

Singh used to give to his wife for family expenses. The family expenses would

include kitchen expenses. We have, however, fixed Rs. 1000 P. M. as the financial

loss to Amarjit Kaur and her children keeping in view possible increase in Income. It

was on the basis of Rs. 1000 P. M. that we arrived at the figure of Rs. 1,80,000 for

15 years. Obviously, the expense to be incurred by way of family expenses on Ajit

Singh personally has to be excluded. This amount one can legitimately fix at Rs. 200

P. M. as afterall Ajit Singh was the man of the house and the bread winner. So, from

Rs. 1,46,500 a sum of Rs. 200 P. M. for the next 15 years, coming to Rs. 36,000,

has to be deducted. This brings down the figure to Rs. 1,10,500. As lumpsum

payment is to be made, there is to be a further deduction of 15 per cent in the

amount of Rs. 1,10,500 which comes to a deduction of Rs. 16,575 bringing t,he

amount payable to Rs. 93,925.

(36) DURING the course of arguments we had suggested to learned counsel for

the insurance company and the owner of the motor truck if it could be agreed upon

to pay a sum of Rs. 50,000 over and above Rs. 23,895 awarded by the learned

Single Judge. Mr. Dhir after taking instructions said that he was unable to persuade

his clients to agree to an increase of compensation by Rs. 50,000. Had he agreed

the figure would have come to Rs. 73,895. On the basis of our judgment the figure

comes to Rs. 93,925. So, by an arithmetical process there is a difference of a little

over Rs. 20,000 and our first impression for an increase in compensation by at least

Rs. 50,000 was not very far wrong.

(37) IT is common case that the motor truck only had a third party insurance and

the insurance companys liability is only Rs. 20,000. Accordingly, accepting the

appeal of Amarjit Kaur and others (L. P. A. No. 88 of 1969) and dismissing the

appeal of M/s. Vanguard Insurance Company and others (L. P. A. No. 101 Of 1969)

we hold that Ms. Vanguard Insurance Company Ltd. is liable to pay jointly and

severally to Amarjit Kaur and her children the sum of Rs. 20,000 by way of

compensation subject to its rights under the policy of insurance regarding third party

risk on the aforesaid motor truck. This is because the amendment to the

increasing the third party liability of the insurance companies to Rs. 50,000 came into

force only with effect from March 2, 1970 by the amending Act 56 of 1969 and,

admittedly, the accident in the present case was prior to that date. A faint

suggestion made during the course of arguments to the contrary relying on M/s.

Maheshwari Transport Company and another v. Pritam Kaur and others. 1980 A. C..

157 (25), cannot be accepted. We further hold that Bakshi Ram and M/s. Gopal

Singh Ghanshyam Dass are liable to pay to Amarjit Kaur and her children jointly and

severally the sum of Rs. 93,925 by way of compensation for the death of Ajit Singh

on account of rash and negligent driving as the aforesaid motor truck belonged to

M/s. Gopal Singh Ghanshyam Dass and which was being driven by Bakshi Ram. If

the amount of Rs. 20,000 is paid by the insurance company, Bakshi Ram and M/s.

Gopal Singh Ghanshyam Das would be liable to pay to Amarjit Kaur and her children

only a sum of Rs. 73,925. The appellants in L. P. A. No. 88 of 1969 will also be

entitled to their costs which we fix at Rs. 550, the same be recovered jointly and

severally from the aforesaid three parties.