A.M. Ahkadi, J.
1. Mr. H. P. Shroff Director, and Mr. D. G. Pujani, Administrative Officer (Mithapur), of Tata Chemicals Limited, (hereinafter called the Company) reached Jamnagar by the morning flight from Bombay on Ist Nov. 1974 and immediately left in an Ambassador Car GTP 1519 belonging to the Company and driven by one Bhupatsing Gagji for Mithapur. While the Car was being driven on the Jarrmagar-Dwarka State Highway No. 25 with the aforesaid two officers in the rear seat, it got involved in a head on collision with a public carrier GTS 5639 which was proceeding in the opposite direction. This collision took place about nine kilometers from Bhatia towards Dwarka between 1.30 and 1.45 P. M. The driver of the Ambassador Car belonging to the Company was killed on the spot while the two officers were seriously injured and were removed to the Company's Hospital at Mithapur in critical condition. The Medical Officer Dr. G. N. Chag examined them at about 3. 45 P. M. and noted down the injuries sustained by the two victims as detailed in the certificates, Exhibits 91 and 92. It appears that Mr. Pujari succumbed to his injuries in the hospital while he was under treatment at about 4.30 P. M. within less than two hours, Mr. Shroff also succumbed to his injuries in the hospital
2 to 5. x x x x x x x x x
6. The legal representatives of the three unfortunate victims of the accident filed Claim Applications Nos. 13, 15 and 17 of 1975 in the Claims Tribunal at Jamnagar. All of them contended in their Claim Applications that the driver of the public carrier was solely responsible for the accident. They therefore claimed compensation from the driver, owner and insurer of the said public carrier. At the same time the Company as the owner of the car and its insurer were impleaded as Parties to the Claim Applications filed by the legal representatives of Mr. Shroff and Mr. Pujari. The Tribunal came to the conclusion that the accident occurred because of want of care and caution on the part of the driver of the public carrier. It, therefore, held the driver, owner and insurer of the said public carrier liable in damages to the legal representatives of the three victims of the accident. The Tribunal awarded a sum of Rs. 36,400/- with six per cent interest from the date of the Claim Application and proportionate costs to the legal representatives or dependants of the deceased driver Bhupatsing. It awarded a sum of Rs. 2,20,000/- with six percent interest from the date of the Claim Application and proportionate costs to the legal representatives of the deceased D. G. Pujari. To the widow and son of deceased H. P. Shroff the Tribunal awarded a sum of Rs 2,45,000/- with six per cent interest from the date of the Claim Application and proportionate costs. The owner and the insurer of the offending public carrier feeling aggrieved by the awards made by the Claims Tribunal in the aforesaid three Claim Applications have preferred the present three appeals.
7 to 16 x x x x x x x x x
17. That takes us to the question of general importance which was ably presented to us by Mr. Shah, the learned advocate for the appellants. The question which he posed for our consideration was: whether in assessing damages payable under the Fatal Accidents Act to the dependants or legal representatives of the deceased must there be deducted there from any pecuniary benefit that such dependants or legal representatives may have received under any life insurance policy or accident benefit policy taken out by the deceased? Precisely stated the submission is two-fold: (1) the benefit of accelerated payment received by the legal representatives of the deceased under a life insurance policy taken out by the deceased was liable to be deducted from the total amount of compensation Payable under the Fatal Accidents Act; and (ii) the accident insurance money received by the legal representatives of the deceased must be deducted in its entirety from the compensation money and the surplus, if any could only be awarded to the legal representatives of the deceased.
18. The Fatal Accidents Act, 1855 was enacted to provide compensation to families for loss occasioned by the death of a person caused by actionable wrong. Sections 1A and 2 which are relevant for our purpose may be extracted at this stage:-
'1A, Whenever the death of a person shall be caused by wrongful act, neglect, or default, and the act, neglect or default is such as would (if death had not ensued ) have entitled the party injured to maintain an action and recover damages in respect thereof, the party who would have been liable if death had not ensued, shall be liable to an action or suit for damages, notwithstanding the death of person injured, and although the death shall have been caused under such circumstances as amount in law to felony or other crime.
Every such action or suit shall be for the benefit of the wife, husband, parent and child if any, of the person whose death shall have been so caused, and shall be brought by and in the name of the executor, administrator or representative of the person deceased;
and in every such action, the Court may give such damages as it may think proportioned to the loss resulting from such death to the parties respectively, for whom and for whose benefit such action shall be brought, and the amount so recovered, after deducting all costs and expenses, including the costs not recovered from the defendant, shall be divided amongst the before-mentioned parties, or any of them, in such shares as the Court by its judgment or decree shall direct.
2. Provided always that not more than one action or suit shall be brought for, and in respect of the same subject-matter of complaint.
Provided that in any such action or suit the executor, administrator or representative of the deceased may insert a claim for, and recover any pecuniary loss to the estate of the deceased occasioned by such wrongful act, neglect or default, which sum, when recovered, shall be deemed part of I the assets of the estate of the deceased.'
We are not concerned with the other, two sections in the said Act.
19. Mr. Shah argued that in England under Lord Campbell's Act, the-Fatal Accidents Act, 1846, before its amendment in 1908, the general rule in regard to assessment of damages was well settled, namely, that any benefit that accrued to a dependant by reason of the relevant death had to be taken into account, that is, the actual pecuniary loss to the dependant of the deceased had to be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which came to him by reason of the death. In other words. according to Mr. Shah, the damages to be awarded to a dependant of a victim of a fatal accident must take into account any pecuniary benefit accrued to that dependant in consequence at the death, in the absence of my statutory direction to the contrary
Since our Act, the Fatal Accidents Act, 1855, is indisputably founded on Lord Campbell's Act, the aforesaid general rule, argued counsel, must guide us in the matter of assessment of compensation payable to the legal representatives of the deceased.
20. Lord Campbell in Hicks v. Newport, Abergavenny and Hereford Ry. Co. (1857) 4 B & S. 403, observed that in estimating the widow's loss, the benefit which she derived from acceleration might be compensated by deducting from the estimate of the future earnings of the deceased the amount of the premiums which, it he had lived, he would have had to pay out of his earnings for the maintenance of the life insurance policy. This view was quoted with approval by the Privy Council in Grand Trunk Ry. Co. of Canada v. Jennings, (1888) 3 AC 800. Action was brought for damages by the widow of Williams Jennings who had taken out a life policy for 2000 and the sum insured was paid to his widow in full after his demise. The question which arose for consideration was, whether the insurance money which the widow had received under the life policy taken out by the deceased was liable to be deducted from the amount assessed as damages their Lordships of the Privy Council opined that the pecuniary benefit which accrued to the widow from the premature death of her husband consisted in the accelerated receipt of a sum of money, the consideration: for which had already been paid by the deceased out of his earnings. In such a case, the extent of the benefit may fairly be taken to be represented by the use of or interest of the money during the period of acceleration and relying on Lord Campbell's direction in Hicks (1857-
4B & S 403) (supra) Their Lordships suggested that in estimating the widow's loss, the benefit which she derived from acceleration' might be compensated by deducting from the estimate of future earnings of the deceased the amount of premiums which if he had lived he would have paid out of his earnings for the maintenance of the policy.
21. The first statutory change was effected in England by the Fatal Accidents (Damages) Act, 1908 which provided by Section 1 that in assessing the damages, insurance moneys should no longer be taken into account. This statutory change became necessary because Courts in England into consideration insurance moneys received by the dependants of the deceased in assessing the damages awardable under Lord Campbell's Act, Mr. Shah was, therefore. right in submitting that under Lord Campbell's Act, prior to its amendment in 1908, in cases of accidental death, the receipt of insurance moneys by the dependants of the deceased was taken into consideration in computing the pecuniary loss to the dependants of the deceased. It may also be mentioned that further inroads were made by statute so far as deduction on this count is concerned and the last of such statutory inroad is to be found in Section 4 of the Fatal Accidents Act, 1976 which provides that in assessing the damages, there shall not be taken into account any insurance money benefit under the enactments relating to social security pension or gratuity paid or to be paid as a result. of the death.
22. Strong reliance was placed by Mr. Shah on the observations of Lord Macmillan in Davies v. Powell Duffryn Associated Collieries, Ltd (1942) AC 601 who stated:
'Except where there is express statutory direction to the contrary, the damages to be awarded to a dependant of a deceased person under the Fatal Accidents Acts must take into account any pecuniary benefit accruing to that dependant in consequence of the death of the deceased. It is the net loss on balance which constitutes the measure of damages'.
Lord Wright observed:
'In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered'. Proceeding further, the learned Judge says that 'the general principle that the right of the individual dependant under these Acts is for damages to be assessed on a balance of loss and gain, is established by long-standing authority'. Lord Porter in his speech while dealing with the question of taking into consideration the receipt of insurance money by the dependants of the deceased in the matter of assessment of damages observes-
'........... up till 1908 it was necessary to have regard to any insurance effected by the deceased on his life. If the subject matter of that insurance was accidental death and the deceased man was accidentally killed, the full amount recoverable being a gain resulting wholly from the death was generally regarded as a gain which, to the extent to which any dependent benefited from it, would diminish the bum to be awarded to that dependant. But not every sum paid under an insurance policy was so regarded. Life insurance, inasmuch as its receipt was not solely brought about by the death but was merely accelerated by it, was, it is true, to be taken into account, but only to the extent of the benefit arising from its acceleration'.
The observation in regard to life insurance is based on what Lord Watson said in the case of Jennings (1888-13 A,C 800) on the basis of Lord Campbell's direction in the case of Hicks. These observations indicate the law as applied in England prior to the amendment of 1908.
23. In personal injury cases, however, the position has been otherwise ever since the decision in Bradburn v. Great Western Rail Co.' (1874-80) All ER 195.. That was a case where the plaintiff had taken out an accident insurance and the moneys received by him under the insurance policy consequent upon his having been injured as a result of the tortious act of the defendant, the question arose whether the moneys so received could be deducted from the amount of damages payable to him. Bramwell, B., observed '..... it would be the most unreasonable thing in the world if he were not to be allowed to get it, because a man pays his premiums on these insurances against accidents with the intention and object of getting them back again, if he should have the misfortune to meet with an accident and be injured'. It was further observed that 'a man pays the premiums upon these accident policies upon this kind of footing, namely, that his right to an indemnity in case of an accident shall be an equivalent for the mischief or injury that happens. He gets more, no doubt, if the mischief, happens than all the premiums which he has paid would amount to; but he runs the chance that he will not get anything at all, and therefore it is. I say, that he ought to have this sum in addition on to the damages that he may have sustained at the hands of the defendants by reason of the accident itself, for other wise he would be a loser by insuring against accidents ....'.
Pigott, B. observed. 'I think that there would be no justice or principle in setting off an amount which the plaintiff has entitled himself to under a contract of insurance, such as any prudent man would make on the principle of as the expression is 'laying by for a rainy day' ' The learned Judge further stated: 'He pays the premiums upon a contract which, it he meets with an accident, entitles him to receive a sum of money. It is not because be meets with the accident but because he made a contract with, and paid premiums to, the insurance company, for that express purpose, that he gets the money from them. It is true that there must be the element of accident in order to entitle him to the money; but it is under and by reason of his contract with the insurance company, that he gets the amount; and I think that it ought not, upon any principle of justice. to be deducted from the amount of the damages proved to have been sustained by him through the negligence of the defendants'. This decision was endorsed by the House of Lords in Parry X. Cleaver (1969) 1 All ER 555. That was a case in which two questions arose for determination, namely: (i) what did the appellant (injured) lose as a result of the accident and what are the sums which he would have received but for the accident but which by reason of the accident he can no longer get? and (ii) what are the sums which he did in fact receive as a result of the accident but which he would not have received if there had been no accident? That gave rise to the further question whether the latter sums must be deducted from the former in assessing the damages. Referring to the case law under Lord Campbell's Act, Lord Reid Observed:-
'In dealing with. damages under Lord Campbell's Act such receipts were not disregarded until the law was altered by recent legislation. There, there was a universal rule. Here, there never was. The common law has treated this matter as one depending on justice, reasonableness and public policy.
As regards moneys coming to the plaintiff under the contract of insurance, the learned Lord observes that the real and substantial is that the plaintiff has bought them and that it would be unjust and unreasonable to hold that the money which he prudently spent on premiums and the benefit from it should enure to the benefit of the tort-feasor. He posed a question: 'Why' should the plaintiff be left worse off than it he had never insured?' and then proceeded to answer it by saying that 'if he had not spent it (Premium money) he would have had it in his possession at the time of the accident grossed up at compound interest '. The learned Law Lord then quoted the following passage from Shearman v. Folland, (1950) 1 All ER 976- 'If the wrongdoer were entitled to set-off what the plaintiff was entitled to recoup or had recouped under his policy, he would, in effect, be depriving the plaintiff of all benefit from the premiums Paid by the latter and appropriating that benefit to himself.' with approval and then wondered 'why should it make any difference that he (the injured) insured by arrangement with the employer rather than with an insurance company?'' These two decisions make it clear that under common law in personal injury cases payments received by the injured under a contract of insurance taken out by him were not liable to be set off against the amount of damages awardable to the injured on the principle that the wrongdoer could not be allowed to reap the benefit of what the injured had sown by way of payment of premiums from time to time. Such benefits were described as completely collateral matters, as res inter alios act or as too remote to be brought into consideration.
24. It was, therefore, argued by Mr. Shah that so far as Courts in England are concerned, the general principle applicable in personal injury cases so far as the deduct-ion of collateral benefits is concerned was quite different from the general principle in this behalf in so far as fatal accident claims were concerned before the amendment of Lord Campbell's Act from time to time between 1908 and 1976. He submitted that this distinction in so far as the application of the general rule is concerned ought to be borne in mind by Courts in India while dealing with claims arising under Fatal Accidents Act. Our law, the Fatal Accidents Act, 1855, has not undergone any change since Its enactment and that is why Krishna 1yer J., (as he then. was) in P. B. Kader v. Thatchamma, AIR 1970 Ker 241 was Prompted to describe it as 'trifle archaic in form and somewhat obsolescent in content'. Be that as it may, counsel argued, that the general principle accepted in England before the amendment of Lord Campbell's Act in 1908 must guide our Courts in deciding cases under the Fatal Accidents Act, 1855, which is in pari materia with Lord Campbell's Act. In support of this submission he invited our attention to the decision of the Supreme Court in Gobald Motor Service v. Veluswami AIR 1962 SC I wherein the Supreme Court relying on the decision in Davies v. Powell (1942 AC 601) observed that in calculating the loss caused by the death any benefit accruing to a dependant by reason of the death must be ascertained. The principle laid down in Davies v. Powell wag also applied in Municipal Corporation of Delhi v. Subhagwanti AIR 1966 SC 1750; C. K. S. Iyer v. T. K. Nair, AIR 1970 SC 376 and Sheikhupura Transport Co. v. Northern India Transporters Insurance Co. Ltd., AIR 1971 SC 1624. Mr. Shah, therefore, vehemently argued that once the general principle stated in Davies v. Powell has been accepted by cur Supreme Court in a line of decisions arising under the Fatal Accidents Act, 1855. the proper view to take is that the benefit derived under an insurance policy by the dependants of the victim of the accident must be taken into account in assessing the compensation payable to such dependants.
25. Mr. Joshi, the learned advocate for the claimants, however, argued that so far as this Court is concerned the point is clearly covered by the decision of the Division Bench of this Court consisting of J. B. Mehta and S. N. Patel JJ., in Jaipur Golden Transport Co. Pvt. Ltd., Delhi v. Keshavlal Maganlal. First Appeals Nos. 159 and 160 of 1968 decided on 3rd November 1971. Speaking for the Court, J. B. Mehta J., observed:
'...this multiplier was suitably adjusted so that it took into account both the kinds of deductions: (1) because a lump sum amount was arrived of the benefit spread over a number of years; and (2) on account of other changes and changes in future due to various contingencies and imponderables which necessarily depend on the particular circumstances of the case because one has to take into account the probable duration of the life of the deceased, duration of the life of the widow and their, dependents who might prematurely, die, the possibility of widows remarriage, acceleration of interest in the estate, possibilities of increased earning, an the one hand as well as disablement of unemployment on the other.' . On the question -of deduction of insurance amount, after referring to the decision of the House of Lords in Bradburn's case (1874-80 All ER 195) and Parry v. Cleaver (1969-1 All ER 555) it was observed as under:-
'Therefore, these authorities show that the common law principle, which was evolved as early as in 1874 in Bradburn's case by the House of Lords and which was approved in all common law jurisdictions, is to exclude proceeds of insurance policy by holding that they are not deductible from the amount of damages both on the ground that it is collateral benefit and because we are not deducting like from like.'
This decision was followed in L. I. C. of India v. L. R. of Deceased Naranbhai. (1972) 13 Guj LR 920 at page 937 : (AIR 1973 Guj 216 at p. 225) and Amthiben v. Suptd. Geo. O. N. G. C., (1976) 17 Guj LR 910 at page 935. From the aforesaid three decisions of this Court, it seems well settled that in so far as the benefit arising out of accelerated payment of life insurance money is concerned, it is taken care of by the multiplier adopted on the basis of. Lord Wright's method in Davies v. Powell (1942 AC 601), and need not, therefore, be separately dealt with. In so far as money received under an accident policy is concerned, no deduction whatsoever is permitted on the principle adopted in Bradburn's case and solidly endorsed by Parry v, Cleaver.
26. Mr. Shah, however, submitted that the decision of the Gujarat High Court insofar as non-deduction of accident insurance money is concerned is solely based an the decision of the House of Lords in Bradburn's case which was endorsed by majority in Parry v. Cleaver. He pointed out that both these cases were personal injury cases and not cases arising out of the death of the victim of a tort. He further pointed out that the Gujarat High Court placed strong reliance on Bradbum's case, presumably because the text of the judgment of Bramwell, B., in the reprint did not contain a passage which has been reproduced by the Patna High Court in Union of India v, Supriya Ghosh, AIR 1973 Pat 129 at page 136. That indeed is true and it must be conceded that the text in the original report is somewhat different in language but to our minds in purpose and substance, it is the same. Mr. Shah is, however, on a sounder tooting when he argues that in personal injury cases damages awarded for the loss of victims earning capacity were not to be reduced because money received under an accident benefit policy were considere:1 to be collateral benefits conferred upon him by third parties under a contract of insurance with whom the tort-feasor had nothing to do But in the case of fatal accidents, the general rule in the matter of deduction of accident insurance benefits was just the reverse as found from the speeches of their Lordships in Davies v. Powell up till the amendment of Lord Campbell's Act in 1908. Therefore, according to Mr. Shah the general principle applicable in personal injury cases was applie:1 by the Gujarat High Court M the aforesaid decisions on an erroneous reading of Bradburn's case, presumably because of the missing passage in the text of the judgment of Bramwell. B., in the reprint.
27. Mr. Shah reinforced his argument by inviting our attention to the decision of the Patna High Court in Union of India v. Supriya Ghosh, AIR 1973 Pat 129. The facts show that the first respondent had received a certain sum of money under an accident benefit policy. The Court below had refused deduction relying on Bradburn's case. ((1874) 80 All ER 195). It was, however, argued that the principle laid down in Bradburn's case had no application to suits brought by the members of the family of deceased victim of the accident. The following passage from the decision of Bramwell, B., not reproduced in the reprint, was relied upon :-
'As to the case of Hicks v. Newport & C. Ry. Co., (1857) 4 B & S 403 that was an action brought under Lord Campbell's Act, and the ruling is quite correct. The statute had laid down no rule as to the mode of calculating the damages to be given in respect of the right of action which it created. The rule was first laid down in this Court (Franklin v. South Eastern Rly Co., (1858) 3 K & N 211, followed in Dalton v. South Eastern Rly. Co (t858) 4 CB (NS) 296: 27 LJ (CP) 227, and Pym v, Great Northern Rly. Co., (1863) 4 B & S 396 : 32 LJ QB 377) and that rule was that the damages were to be a compensation to the family of the deceased equivalent to the pecuniary benefits which they might have reasonably expected from the continuance of his life. It. therefore, the person claiming damages was put by the death of his relative into possession of large estate, there was no loss; he was a gainer by the event, and similarly, whatever comes into the possession of the family who have suffered by the death of their relative by reason of his death must be taken into account. But that has no bearing on the case of a person suing upon his common law right for injuries caused to him by the defendants' negligence.'
There is no gainsaying that under Lord Campbell's Act benefits received by the dependants under a contract of insurance were deductible on the principle that any benefit accruing by reason of the death must be taken into account to ascertain the balance of loss or gain to the dependants. Observing that this principle was approved by the Supreme Court in Gobald Motors (AIR 1962 SC .1), the Patna High Court held that if the deceased had insurance policies, the amount received by the dependants must be reduced to damages awardable to them. Deshpande, J., in Amarjit Kaur.v. Vanguard Ins, Co. Ltd., 1969 Acc CJ 286 held that Ss. 110 to 110-F of the Motor Vehicles Act do not lay down any new principle for assessing the amount of compensation and, therefore, in determining the amount of compensation which appears to be 'just', the Tribunal is not to invent any new policy or law. According to the learned Judge the provisions of Ss. 110 to 110-F do not, in any way, override the Pre-existing principles of the law of torts applied by English Courts prior to 1908 in regard to receipt of insurance money and then relying on Gobald Motors held that so long as that decision stood, in the absence of legislation to the contrary, subsequent changes in statutory law in England must be overlooked, Deshpande , J., speaking on the Bombay Bench in Jaikumar Chhaganlal Patni v. Mary Jerome D'Souza, 1978 Acc CJ 28 : (AIR 1978 Bom 239), was once again required to consider whether the insurance -policy money received by the dependants of the deceased could be said to be pecuniary advantages that came to the dependants by reason of the death of the deceased and, if yes, whether the same could be set off against the amount of compensation payable to such dependants, After dealing with the provisions of Lord Campbell's Act and the amendments that followed in 1908, 1948 and 1959, the learned Judge referred to the decision in Bradburn's case (supra) as well as Lord Reid's observations in Parry v. Cleaver and then pointed out that in the reprint, the text of the judgment of Bramwell.B in Bradburn's case was 'slightly different in detail though not in purport and substance'. The decisions of the Gujarat High Court as well as the decision of Sen, J. in Sushila Devi v. Ibrahim. 1974 Acc CJ 150 : (AIR 1974 Madh Pra 181) were not followed on the ground that the view expressed therein was open to grave doubt as their Lordships had lost sight of the fact that the decision of the House of Lords in Bradburn's case was a personal injury case and the common law rule applicable to such cases was just the reverse of that applicable to cases arising under Lord Campbell's Act as it stood before its amendment in 1908.
28. In Megjibhai Khiniji Vira v. Chaturbhai Taliabha, 1977 Acc CJ 253 : (AIR 1977 Guj 195), the Division Bench of this Court to which I was a party, considered the position in law as it stood before the enactment of Lord Campbell's Act and undertook a detailed comparative study of the provisions of the Fatal Accidents Act, 1855 and the provisions of the Motor Vehicles Act, 1939, and held -
(i) that clause (b) of sub-section (1) of Section 110-A of the 1939 Act was a substantive provision which conferred a right on all the legal representatives of the deceased-victim of a tortious act to claim compensation from the wrongdoer and being a special provision dealing with accidents arising out of the use of motor vehicles, it has the effect of overriding Paragraph 2 of S. I-A of the 1855 Act; and,
(ii) that S.110-B of the 1939 Act gave wider scope to the Claims Tribunal in the matter of assessment of compensation inasmuch as the Claims Tribunal was called upon to determine the amount of compensation which appeared to it to be 'just' and was not hedged by the limitative words found in S. 1-A of 1855 Act.
Tatachari, J., of the Delhi High Court while speaking for the Division Bench in Ishwari Devi v. Union of India, 1968 Acc CJ 141 : (AIR 1969 Delhi 183) while considering the ambit of the aforesaid two laws observed in Para 39 (of Acc CJ) -(Para 40 of AIR) as under:-
'It is thus a general law (reference is to the Fatal Accidents Act, 1855) providing for compensation to the representatives of a deceased person or to his estate for the loss occasioned by his death as a result of an accident on the other hand. the Motor Vehicles Act is a special law which, by S& 110 to 110-F provides for adjudication upon claims for compensation in respect of accidents involving the death of or injury to persons arising out of the use of motor vehicles.
In that case it was further observed that the Motor Vehicles Act was a self-contained statute and as such an application under S. 110-A thereof could not be said to be governed by the provisions of the Fatal- Accidents Act. Dealing with the expression 'just compensation' their Lordships of the Delhi High Court observed at page 157 (of Acc CJ) : (at p. 191 of AIR) as under:-
'But, in view of the difference between the language of Ss. 1-A and 2 of the said Act (Fatal Accidents Act) and S. 110-B of the Motor Vehicles Act the decisions under the Fatal Accidents Act are not directly applicable to a claim made under the Motor Vehicles Act. A Claims Tribunal under the Motor Vehicles Act is empowered to determine the amount of compensation which, appears to it to be just, has necessarily to depend upon the circumstances in a given case. The word 'just' has a wider ambit than the words used in Ss. 1-A and 2 of the Fatal Accidents Act. Therefore, a Claims Tribunal dealing with a claim under the Motor Vehicles Act has only to consider what appears to it to be just compensation on the facts and circumstances of the case before it and it need not strictly follow and apply the basis of the assessment of compensation indicated in the various decisions under the Fatal Accidents Act or under the English Law.'
Almost the same view was expressed by us in Megjibhai's case (AIR 1977 Guj 195) though, of course, our attention then was not invited to the above referred decision of the Delhi High Court.
29. We have now reached the crucial stage. The question which stares in our faces is whether the decision of the Division Bench of this High Court in First Appeals Nos. 159 and 160 of 1968 decided on 3rd November 1971, followed in the subsequent two decisions in L. 1. C. of India v. L. R. of Deceased Naranbhai (1972) 13 Guj LR 920: (AIR 1973 Guj 216) and Anithiben v. Suptd. Geo. O. N. G. C., (1976) 17 Guj LR 940, does not lay down the correct law as it proceeds on an erroneous reading of Bradburn's case ((1874) 80 All ER 195) as reported in the reprint which does not contain the passage in the same language as reproduced in the decision of the Patna High Court in Supriya Ghosh's case (AIR 1973 Pat 129) (supra). The second question which we must consider is, whether these throe decisions of the Gujarat High Court proceed on an erroneous application of the general principle or rule applicable to personal injury cases only and not to cases arising. out of fatal accidents. This question also requires us to consider whether the correct principle which should guide the Courts in the matter of determination of compensation in cases arising out of fatal accidents would be as laid down by English Courts under Lord Campbell's Act prior to its amendment in 1908 since our law is modelled on Lord Campbell's Act, the Fatal Accidents Act 1846. Mr. Shah emphasised that the general principle stated in Davies v. Powell (1942 AC 601) was approved by our Supreme Court in Gobald Motors case (AIR 1962 SC 1) and thereafter in the subsequent decisions which were binding on this Court and, therefore, the amount of insurance money received under an accident insurance must be deducted or set off from the total amount of pecuniary loss occasioned to the legal representatives of the deceased on his death and it is only the net loss on balance which could be awarded as compensation to them. For reasons which we shall immediately state, we find it difficult to persuade ourselves to take the view canvassed before us by Mr. Shah.
30. In Megjibhai's case (AIR 1977 Guj 195) while speaking for the Division Bench it was pointed out that under the common law of England no action could be laid by the dependants of a person whose death was brought about by the tortious act of another on the maxim actio personalis moritur cum persona although a person injured by a similar act could validly claim damages for the wrong done to him. That led to the comment: 'it is cheaper to kill than to maime. This dictum was followed till the enactment of Lord Campbell's Act in 1846. The inroad made by Lord Campbell's Act on the maxim actio personalis moritur cum persona was made absolute by the Law Reforms Act, 1934,. After the enactment of Lord Campbell's Act in England action far damages for tortious death came to be governed under that statute whereas personal injury cases continued to be governed under the common law of England. Prior to 1908 under Lord Campbell's Act assessment of compensation or damages was made on the principle laid down in Davies v. Powell (1942 AC 601). Moneys received by the dependent of the deceased under a life insurance policy was dealt with on the principle laid down in the case of Hicks (1857-4 B & S 403). Pecuniary benefits accruing to the- dependants under an accident policy were deductible in toto from the amount of damages payable to the dependant for pecuniary loss suffered by him on account of the tortious death. This position was remedied by statutory amendments brought in 1908,1 948, 1959 and 1976 whereby no deduction was permitted on the ground that the dependants had received insurance money under a life insurance policy or accident insurance policy taken out by the deceased. In so far as personal injury cases are concerned, under common law no deduction was permitted on that count in view of the decision in Bradburn's case ((1874) 80 All ER 195) which came to be endorsed by Parry v. Cleaver ((1969) 1 All ER 555). Insofar as the latter class of cases are concerned, these deductions were refused, because, to use the words of Bramwell, B., it would be most unreasonable in the world to refuse the benefits accruing under, an insurance policy purchased by the injured out of his own earning or savings. Peggot. B therefore felt that the insurance money was received under a contract of insurance purchased by the insured and not because of the accident. That is why Lord Reid in Parry v. Cleaver, observed that the question of deduction of insurance money in personal injury cases was treated at common law as one depending on justice, reasonableness and public policy.
31. Soon after the enactment of Lord Campbell's Act, in India the Fatal Accidents Act, 1855 came to be enacted on 27th March 1855. The provisions of Lord Campbell's Act were bodily lifted and introduced in our statute. It is also true that our statute has not undergone any change since its enactment, as in England. Therefore, after the enactment of the Fatal Accidents Act, cases arising out of tortious death were dealt with under the provisions of Ss. 1A and 2 of the said Act. Personal injury cases were, however, dealt with on common law principle applicable in England. However, as pointed out in Megjibhai's case (AIR 1977 Guj 195) after the introduction of Ss. 110 to 110-F in the Motor Vehicles Act, by Act 100 of 1956 radical changes were brought about. By S. 110 the State Government was empowered to constitute one or more Motor Accident Claims Tribunals for the purpose of adjudicating upon claims for compensation 1n, respect of accidents involving the death of or bodily, injury to persons arising out of the use of motor vehicles. Under S. 110-A an application for compensation arising out of an accident of the nature specified in sub-section (1) of S. 110 could be made by the person who sustained the injury or the legal representatives of the deceased, as the case may be. S. 110-B brought in the concept of 'just compensation' and not compensation in proportion to the loss resulting from such death as provided in S. 1A of the Fatal Accidents Act. Therefore, as pointed out in Megjibhai's case the amendment introduced by the Amending Act 100 of 1956 in the Motor Vehicles Act was not purely adjectival. In the earlier decision of the Division Bench of the Delhi High Court in Ishwari Devi's case (AIR 1969 Delhi 183) also it was concluded that applications arising under the Motor Vehicles Act, a self contained statute could not be governed by the provisions of the Fatal Accidents Act. While dealing with the concept of 'just compensation' the Division Bench observ7 ed that the word 'just' has a wider ambit than the words used in Ss. 1A and 2 of the Fatal Accidents Act. In fact, after the introduction of Ss. 110 to 11OF in the Motor Vehicles Act, the measure of damages for both personal injury cases an I cases arising out of fatal accidents is compensation which appears to the Tribunal to be 'just'. Therefore, strictly speaking the rule in the matter of deduction of I insurance money under the life insurance policy or an accident insurance policy as applicable under Lord Campbell's Act prior to its amendment in 1908 may not govern cases arising under the provisio2 of the Motor Vehicles' Act.
32. What then does the expression just compensation connote? The term 'just' is derived from the Latin word Justus'. It is used in a variety of shades and contexts. According to Shorter Oxford Dictionary, it inter alia means what is morally right righteous, equitable; consonant with the principles of moral right, equitable fair
.According to Mukherjee's Law Lexicon the term Just, has various meanings and its meaning is often governed by the context. 'Just' may apply in nearly all of its senses, either to ethics or law, denoting something which is morally right and fair and sometimes that which is right and fair according to positive law.-
It connotes reasonableness and something conforming to rectitude and justice, something equitable, fair. (Vide page 1100 of Volume 50, Corpus Juris Secundum). Therefore, when one talks of 'just compensation' he talks of compensation which is equitable, fair and reasonable. As pointed out earlier, compensation payable under the Motor Vehicles Act is that which the Tribunal considers just both in personal injury cases as well as cases arising out of fatal accidents. That is why we have observed that the provisions of S. 1A of the Fatal Accidents Act directing the Court to give such damages as it may think proportioned to the loss resulting from such death does not stricto sensu apply to matters governed under the Motor Vehicles Act. When we talk of 'just compensation', we talk of compensation which the Tribunal thinks is fair, equitable, reasonable and morally right i. e., in consonance with public policy; no, matter whether it is a personal injury case or a case arising out of a fatal accident. If this aspect of the matter is borne in mind, It becomes obvious that the English decisions in personal injury cases which are based on justice, equity and good conscience must also apply to cases arising out of fatal accidents. In England, accident insurance money was not deducted in personal injury cases because, to use the words of Bramwell, B., it would be the most unreasonable thing in the world to do if he (the injured) were not to be allowed to get it, because the man pays his premiums on these insurances against accidents with the intention of getting them back again, if he should have the misfortune to meet with the accident and be injured. The observation of Lord Reid in Parry v. Cleaver ((1969) 1 All ER 555). clearly clinches the Issue when he observes that 'the common law ,has treated this matter as one depending on justice, reasonableness and public policy'. Therefore, if the Tribunal has to consider the award of compensation which it considers just, it has to take into account principles of justice, reasonableness and public policy. It was considered unjust and unreasonable insofar as personal injury cases were concerned to deduct the amount of accident insurance money from the amount of damages awardable to the claimant under common law. When a person decides to insure himself against accidents, he at the same time hopes that an accident will not befall him. Nevertheless he invests a part of his earnings or savings to insure himself against accidents. He does not do so to mitigate the damages that a tort-feasor may become liable to pay. In fact that is farthest from his mind. To put it differently, he does not buy the insurance policy to insure the wrongdoer. That is why it was thought unjust and unreasonable to deduct the amount of insurance money received by him under a contract of insurance which he had purchased from his own earnings or savings in the event he may become the victim of an accident. In England, therefore, so far As personal injury cases are concerned it is settled law that deduction of accident insurance moneys from the amount of damages payable to the injured is unfair, unreasonable and inequitable. If that be so, we fail to understand how it can be said to be reasonable, fair and in consonance with public policy if the very same amount is to be deducted merely because the victim of the accident had passed away. If such a view is accepted in the instant case the widow will not get a single farthing by way of dependency benefit, having regard to the amount received by her under the accident benefit policy. Such a view would be retrograde., If the victim of the accident had survived, he would have collected the accident insurance money under the contract of insurance and in the assessment of compensation payable to him, the Insurance Company could not have claimed a deduction of that amount therefrom. But now that he has passed away, the Insurance Company demands the deduction of the amount paid under that very insurance policy from his widow on the language of S. 1A of the Fatal Accidents Act. 1855 as interpreted by English Courts under Lord Campbell's Act. Now, if under the Motor Vehicles Act the Tribunal is called upon to pay 'just, compensation the ambit whereof is wider than that of Section 1-A of the Fatal Accidents Act, it stands to reason that in assessing the compensation the Tribunal will be guided by principles of reasonableness, fairness and public policy. We are, therefore, of the opinion that having regard to the f act that under the Motor Vehicles Act the Tribunal is called upon to determine and award compensation which appears to it to be just, the Tribunal must be guided by considerations of what is morally reasonable and equitable as were the Courts in England in Braburn ((1874) 80 All ER 195) and Parry v. Cleaver.
33. We may examine this question from a slightly different angle. The dependents of the deceased were entitled to damages proportioned to the loss resulting from tortious death. While interpreting this expression namely, 'proportioned to the loss resulting from death', the Courts in England took the view that accident insurance payments were liable to be deducted, vide Davies v. Powell (1942 AC 601). As pointed out earlier, in order to remedy this situation, the Legislature stepped in and brought about several amendments between 1908 and 1976 and it is now statutorily settled in England that accident insurance payments received by the dependants shall not be deducted from the amount of damages payable under the Fatal Accidents Acts. These amendments were brought about in England with a view to advancing a public policy presumably because it was thought unjust and unreasonable to deduct these payments for which the deceased had made payments out of his own earnings or savings. If, therefore, 'in England it is now statutorily settled that such payments are not to be deducted. the question which arises for our consideration is, whether we should continue to deduct such payments on the basis of the general rule applied before 1908 notwithstanding the words of wider amplitude 'compensation which appears to be just' used in the Motor Vehicles Act.
34. The English decisions can at the most be of general guidance to the Claims Tribunals called upon to decide the question of payment of compensation. They may be relied upon insofar as they promote the interests of justice. In India we are to follow the common law or the English statutory law as amended from time to time insofar as it advances the principles of justice, equity and good conscience. Even Deshpande, J. in Amarjit Kaur's case (1969 Acc CJ 286) (Delhi) (supra) concedes: 'the English law of Torts has been applied by the Indian Courts on the ground that in the absence of any other rule of law, the Courts are to follow the principles of justice. equity and good conscience'. The learned Judge then proceeds to point out that English statutes modifying the law of Torts do not apply to India in terms but if they embody any principles of justice, equity and good conscience, such principles would apply in preference to the common law repealed by legislation as being contrary to such principles. Lord Campbell's Act was amended from time to time to embody these very principles which were applied in personal injury cases. If under our statute we are called upon to determine just compensation, we would be justified in drawing from the common law rule embodying the principles of justice, equity and good conscience. That is why, Mehta J., speaking for the Division Bench in First Appeals Nos. 159 and 160 of 1968 refused deduction of insurance payments relying on the decision of the House of Lords in Bradburn's case (1874-80 All ER 195) which was later endorsed by Parry v. Cleaver (1969-1 All ER 555).
35. The Division Bench of the Delhi High Court in Ishwari Devi's case (AIR 1969 Delhi 183) after indicating that the Motor Vehicles Act was a self-contained Code and the expression 'just' in S. 110-D thereof was a word of wider connotation as compared to the language of Ss. 1-A and 2 of the Fatal Accidents Act, fell back on the general rule laid down by Courts in England prior to the amendment of Lord Campbell's Act in 1908 on the ground that it provided a sound and reasonable basis for assessing just compensation in claims under the Motor Vehicles Act also. The Patna High Court refused to apply the principle of Bradburn's case solely on the basis of the observations of the Supreme Court in Gobald Motors case (AIR 1962 SC 1) (supra). Deshpande, J., in Arnarjit Kaur's case (1969 Ace CJ 286) (supra) observed in paragraph 16 that 'The long established rule is that the dependants of the deceased are awarded only the balance of the loss and the benefit suffered by them by reason of the death of the deceased. This rule was apparently based on 'justice, equity and good conscience' and has been followed in India'. He also, therefore, applied the rule on the basis that it was affirmed by the Supreme Court in Gobald Motors. In Jaikumar's case (AIR 1978 Bom 239) (supra) the decision of the Gujarat High Court was dissented from on the ground that it was based on the judgment of Bramwell B., in Bradburn's case as appearing in the reprint while the original text was slightly different. On the same line of reasoning Deshpande J., while dealing with the judgment of this High Court observes in Jaikumar's case that 'the learned Judges ......seem to have lost sight of this distinction emphasised in Bradburn's case''. We find it difficult to hold that merely because the full text of Bradburn's case was not available the distinction was lost sight of. Deshpande - J.,himself agrees that the omission of the paragraph from the full text, of the judgment of Bramwell B.. was not of substance. Besides, this distinction has been brought out in th, speech of Lord Reid reproduced earlier. How then could it be said with any amount of justification that the learned Judges of this High Court has lost sight of the distinction?
36. The next question that arises is was there any, valid rationale in deducting insurance payments and accident insurance payments under Lord Campbell's Act as it stood prior to the amendment in 1908 when such payments were not deducted under common law in personal injury cases? There was hardly any convincing rationale and it is precisely for that reason that it became necessary for the legislature to intervene in 1908 and thereafter from time to time to extend the principle of justice, reasonableness and public policy to fatal accident cases. The distinguishing feature, as pointed out by English Courts that in personal injury cases these were collateral benefits unlike in fatal accident cases which were governed on the language of Lord, Campbell's Act, has been criticised by P. S. Atiyah in his book: 'Accidents, Compensation and the Law'. Second Edition, at page 400, in the following words:-
'But the wor:i 'collateral' has no very obvious meaning. If taken 11iteially, it presumably means,that benefits ' deriving from a source other than the defendant himself should all be ignored .. while benefits coming from the defendant should be taken into account. No such extreme view has ever been accepted by the Courts, how ever, though they have (until very recently) continued to refer to 'collateral' benefits and 'collateral' sources. But if the literal meaning of these words is once departed from, a judge who is trying to decide whether another source of compensation is 'collateral' will get no assistance from the word itself, and will therefore still be forced to decide the issue as one of policy.'
If in personal injury cases deductions are refused on the ground that the policy was bought by the injured out of his own earnings or savings. it can as well be stated in fatal accident cases that the accident benefit policy was purchased by the deceased from his own earnings or savings. In that case the distinction on the ground of collateral benefits would appear to be more artificial than real. But once the matter is looked at from the point of public policy, as observed by, Lord Reid in Parry v. Cleaver (1969~1, All ER 555), it would be revolting to the ordinary man's sense of justice that the benefit which is derived from the investments of the victim should go to the tort-feasor. Lord Campbell's Act was, therefore, amended from time to time to make it consistent with principles of justice, equity, reasonableness and public policy. So far as our Fatal Accidents Act is concerned, it is undoubtedly true that it has not undergone a change but when we are determining compensation under the Motor Vehicles Act, we have to assess the amount of compensation which is just and just as pointed out earlier, means that which is reasonable. equitable and morally sustainable. Therefore, when we are determining the amount of compensation which we consider to be just, we are not laying down any new principle but we are merely trying to determine compensation on the basis of what is considered reasonable, equitable and in consonance with good conscience and public policy. The Supreme Court in Gobald Motors (AIR, W62 SC 1) (supra) was concerned with a such arising out of the Fatal Accidents Act. It undoubtedly stated the general principle stated by the House of Lords in Davies v. Powell (1942 AC 601) but it had no occasion to consider whether insurance moneys received by the dependants could be deducted in determining the, amount of damages in the context of the concept of 'just' compensation introduced in the Motor Vehicles Act. The subsequent Supreme Court decisions which followed the earlier decision in Gobald Motors also did not deal with this precise question. The principles evolved by Courts for the determination of compensation under the Fatal Accidents Act may guide but cannot govern cases arising under the Motor Vehicles Act. We, therefore, find it difficult to~ agree with the submission that having regard to the principle affirmed by the Supreme Court in Gobald Motors, the decision of the Division Bench of this High Court in First Appeals Nos. 159 and 160 of 1968 requires reconsideration. We are of the view that the Division Bench of this Court while deciding the question of deduction of insurance moneys relied on the decision of the House of Lords in Braburn's case and Parry v. Cleaver because those decisions were based on principles of justice, equity, good conscience land public policy recognised by statutory amendments in Lord Campbell's Act from 1908 and onwards. We are, therefore, of the opinion that the submission made by the learned counsel for the appellants for the deduction, of the benefits of accelerated payments under life insurance policy taken out by the deceased and, money received under the accident benefit policy taken out by Mr. Shroff, cannot be accepted.
37. For the above reasons we are of the opinion that the learned Judges comprising the Division Bench of this Court in First Appeals Nos. 159 and 160 of 1968 were fully conscious of the distinction made by English Courts on this count; but while dealing with the question of determination of just compensation they bore in mind the legislative policy in amending Lord Campbell's Act in 1908 and, thereafter and ultimately extended, the principle of justice equity and good conscience relied upon in Bradburn's case (1874-80 All ER 195) and endorsed by Parry v. Cleaver (1969-1 All ER 555). We think Courts in India must be alive to the statutory changes made in England and should not rigidly follow the dictum laid down in cases which have since become obsolete. In this connection the following passage from Ramaswamy Iyer's The Law of Torts, Seventh Edition, may be reproduce with advantage:-
'In England, it was held that in an action under this Act, the damages would be reduced by the amount of an insurance policy obtained by the plaintiff's relative, on the death of the deceased. This is because the damages represent the loss actually sustained by the plaintiff while the rule is different, as we have seen, in the case of a common law action for physical injury and impairment on the ground that the benefit of an accident insurance for which the plaintiff has paid premia should go to him and not the defendant. In England, the law has been altered by a statute of 1908 and it is enacted that any sum paid or payable on the death of the deceased under any contract of assurance or insurance shall not be taken into account in an action under this Act. The principle of this statute will perhaps be followed in India, where the point has not se, far arisen.'
We, therefore, do not think that I the view taken by this High Court in 'the earlier decision requires reconsideration. We must, therefore, respectfully follow the earlier view that accident insurance benefits received by the dependants of the deceased cannot be set off against the amount of compensation payable to them.
38. x x x x x x x x
39. Appeal partly allowed.