Supreme Court to decide issue of Retrospective Pay Revision in Motor accident cases

Supreme Court to decide issue of Retrospective Pay Revision in Motor accident cases

The Supreme Court has addressed the matter of whether pay revision applied retrospectively after the date of death of a Government employee is a factor taken into account while computing the monthly emoluments of the deceased. A Special Leave Petition (SLP) was filed by Shyno M. Aykara & Ors. (Petitioners) against New India Assurance Co. Ltd. & Ors. (Respondents) before the Supreme Court. The SLP was filed challenging the judgment of the Kerala High Court (HC). In the said judgment the HC held that a subsequent pay revision cannot be considered for fixing the income of a victim.

The was taken up by the bench comprising Justices Sanjay Kishan Kaul and Hrishikesh Roy. The petitioner referred to the judgment given in the case of Rajesh & Ors. v. Rajbir Singh & Ors.(2013) 9 SCC 54, by the Suprem Court wherein the subsequent pay revision, was taken into account.

The Bench said, "A reading of para 19 of Rajesh & Ors. v. Rajbir Singh & Ors., however, only shows the computation and does not specifically deal with the proposition. We are thus, of the view that this aspect would require to be considered by a three Judges Bench."

The Bench stated that a three-Judge Bench of the Supreme Court of India (SC) will consider the issue, "Whether pay revision applied retrospectively after the date of demise of Government/public authorities employee is a factor taken into account while computing the monthly emoluments of the deceased for the purpose of determining compensation to him/her?"

The High court, while passing the said judgment has relied on the judgment passed by the SC in the case of Oriental Insurance Co. Ltd. v. Jashuden and others, (2008) 4 SCC 162 wherein it was observed that only because the salary was revised at a later point of time, the same by itself would not have been a factor which could have been taken into consideration for determining the amount of compensation.

The facts of the case are that the deceased was a Development Officer (employee) and he had died at the age of 51 years. Subsequently by way of Rationalisation of Pay Scales and Other Conditions of Service of Development Staff Second Amendment Scheme, 2016, the scale of pay of development officers of all nationalized insurance companies was increased with retrospective effect from August 2012. Hence, there was a significant increase in the salary of the deceased employee as a result of the Pay Revision Order.

The employee had met with and an accident following which the Motor Accidents Claims Tribunal (Tribunal) had granted compensation of Rs. 53 lakh. The Tribunal did not consider the said pay revision to grant compensation to the claimant.

The view of the Tribunal was also upheld by the HC. However, the HC dissented with the ruling of the Tribunal that subsequent pay revision cannot be considered for fixing the income of a victim.

The SLP was taken up by the Two-Judges Bench of the SC and it referred the issue to a larger Bench of the Top Court.