While computing the compensation in a road accident death, the ex gratia given to the kin of the deceased from his employer should not be deducted from the total income. However, if the amount is received under a government rule, it can be deducted. This was stated by the Supreme Court in the case, National Insurance Company vs. Mannat Johal.
It rejected the appeal of the insurance company, which argued that the Rs. 48-lakh compensation granted by the Punjab and Haryana High Court, was too high. In this case, a 38-year-old executive died when an oil tanker hit his car while returning from Kaziranga with his wife and two children.
As the young man is with five dependents, the motor accident compensation tribunal granted awarded Rs. 38 lakh. On appeal, the high court raised it but reduced the interest from 12 per cent to 7.5 per cent. Both the insurer and the dependents appealed to the Supreme Court.
Both appeals were dismissed as the court held that the compensation was fair and just. The reduction in the interest rate was also justified stating that it was the normal rate in such cases.
