Ex-gratia cannot be deducted from tribunal compensation under Motor Vehicles Act: Karnataka High Court

Bengaluru: In a relief to the family members of the deceased and injured in the LPG tanker leakage case at Perne village near Uppinangady on the Mangaluru-Bantwal highway in 2013, the Karnataka High Court has ruled that the ex-gratia amount paid by Hindustan Petroleum Corporation Limited (HPCL) cannot be deducted from the compensation granted by the Tribunal under the Motor Vehicles Act (MVA).

Justice P Sree Sudha said this while dismissing a batch of appeals filed by the company, insurer of the truck which capsized leading to the accident.

The accident took place on April 9, 2013, at Perne village when the LPG gas loaded truck capsized. After the accident, the gas leaked and fire spread out resulting in 13 deaths and injuries to several others. Many shops along the road were also damaged due to the impact of the fire. The state government disbursed the ex-gratia amount through Deputy Commissioner to the family members of the deceased and injured.

Subsequently, the Motor Accident Claims Tribunal at Mangaluru received applications claiming compensation under the MVA. In December 2016, the tribunal ordered payment of compensation by allowing the claim petitions filed under the MVA.

Challenging these orders, the insurance company argued that the state government had already paid an ex-gratia amount, and this was not deducted by the Tribunal. It was further argued that it was not a motor vehicle accident but a fire accident and hence, the ex-gratia amount paid by HPCL to the building owner and to the family members who succumbed and persons who sustained injuries had to be deducted.

The court examined the Apex Court judgements in the Nusrat Jahan and other cases and noted that the top court had ruled that ex-gratia granted by the government cannot be deducted from the compensation. 

“Therefore, it is clear from the above said judgments that if the deceased was having life insurance and if he gets any amount from the insurance company, that is not deductible from the compensation awarded under the Motor Vehicles Act. So also, if the deceased was an employee and he gets any benefit, pecuniary advantages like provident fund, family pension, cash balance, share, service and deposits, it cannot be termed as if the deceased was an employee and if he gets any provident fund, family pension, cash balance, shares or fixed deposits, it cannot be termed as pecuniary advantage for the purpose of Motor Vehicles Act and it cannot be deducted, so also the ex gratia granted by the HPCL, immediately after the accident, cannot be deducted from the compensation granted by the Tribunal under the Motor Vehicles Act,” Justice Sree Sudha said. 

The court further directed the insurance company to deposit the entire compensation amount along with interest within one month.