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Salary got on compassionate appointment not to be cut: SC

Last Updated 04 May 2013, 20:09 IST

The salary received by a dependent of a road accident victim appointed on compassionate grounds cannot be deducted while computing compensation under the Motor Vehicles Act, the Supreme Court has held.

A bench of Justices G S Singhvi and S J Mukhopadhaya passed the ruling while enhancing compensation awarded to the family of an assistant engineer, who died in a mishap, from Rs 14.93 lakh to Rs 29.73 lakh.

The court decided the question if the salary receivable by the claimant on compassionate appointment comes within the definition of “pecuniary advantage” liable for deduction under the Motor Vehicles Act.

The bench said: “Compassionate appointment may have a nexus with the death of an employee while in service but it is not necessary that it should have a correlation with the accidental death.

An employee dies in harness even in normal course, due to illness and to maintain the family of the deceased one of the dependents may be entitled for compassionate appointment but that cannot be termed as ‘pecuniary advantage’ that comes under the periphery of Motor Vehicles Act and any amount received on such appointment is not liable for deduction for determination of compensation.”

28-year-old Sajjan Singh, then working in the Public Works Department (PWD) of the Rajasthan government, succumbed to injuries after his scooter was hit by a jeep on September 14, 1996.

His family, including wife and mother, approached the Motor Accident Claims Tribunal seeking Rs 80.40 lakh compensation. The tribunal, however, directed the insurance company to pay 14.93 lakh after finding that the jeep driver was responsible for the accident. Though Singh would have continued for at least 20 years in service, the tribunal applied the lower multiplier of 15 to compute compensation on the ground that the wife would be getting family pension and the job on compassionate grounds.

The Rajasthan High Court (HC), even after noticing the mistake, upheld the tribunal’s order and also decided to deduct income tax.

In its verdict, the apex court modified the HC order and held that provident fund, pension and insurance, which would accrue to claimants, could not be deducted in totaling the amount.

In this case, the court held that the HC was wrong in deducting 20 per cent from the salary of the deceased towards income tax since his employer, the state government, had already deduced the same at the time of payment.

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(Published 04 May 2013, 20:09 IST)

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