Motor Accident Compensation| Renewal Commission Is Hereditary Which Is Not Deductible While Fixing Income Of Deceased LIC Agent: Jharkhand HC

The Court confirmed the impugned award passed by the Motor Accident Claims Tribunal (Tribunal) whereby the Tribunal directed the Insurance Company (Appellant) to pay compensation to the legal heirs (claimants) of the deceased LIC agent who lost his life in a road accident. The Bench confirmed that the renewal commission received by the deceased’s wife could not be deducted while calculating the compensation.

A Single Bench of Justice Subhash Chand held, “Accordingly, this point of determination is disposed of against the appellant-Insurance Company and in favour of the respondents-claimants. The renewal commission is hereditary commission and the same is not deductible while fixing the income of deceased LIC Agent.”

Advocate Ashutosh Anand represented the Appellant, while Advocate Saibal Kumar Laik appeared for the Opposite Parties.

The claimants, including the deceased’s wife, children, and mother, filed a claim petition seeking compensation for loss of dependency, loss of consortium, and other damages. The Tribunal awarded compensation with interest from the date of filing until realisation.

The Appellant challenged the award contending that the deceased’s wife continued to receive his renewal commission as an LIC agent, and there was no loss of dependency. They argued that the compensation awarded was excessive and based on incorrect findings. It was also submitted that the insurer was authorised to challenge the quantum of compensation under Section 170 of the Motor Vehicles Act, 1988, as permitted by the Tribunal.

The High Court held, “The renewal commission is the hereditary commission and the same is also payable to the widow of deceased even after the death is otherwise. As such, this renewal commission is hereditary commission and the same comes under the pecuniary advantage, which is payable after the death of her husband in very case where the death is natural, homicidal or accidental.”

The Bench referred to a decision by the Calcutta High Court in the case of National Insurance Co. Ltd. v. Ayesha Sekh (2015), wherein it was held that the fixation of the income without hereditary commission receivable by the legal representative upon the death of LIC agent is not proper. Since hereditary commission receivable by the legal heir of deceased has no nexus with the accident and would have been receivable even if the death was otherwise.

Consequently, the Court held that “the impugned award passed by the learned Tribunal needs no interference and this appeal deserves to be dismissed.”

Accordingly, the High Court dismissed the Appeal.

Cause Title: Shriram General Insurance Co. Ltd v. Kavita & Ors.

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