1988 PLP 830 (CLC)

5. In support of the above appeal Mr. Sadruddin Huda, learned counsel for the appellants has vehemently urged that every pecuniary benefit received by the appellants, (the dependants of the deceased) cannot be adjusted against the amount of damages particularly the amount relating to the insurance policies in respect of which deceased had paid the premium. On the other hand it was urged by Mr. M.G. Dastgir, learned counsel for the respondents that every pecuniary benefit received from whatsoever source was liable to be adjusted.

6. In furtherance of his above submission Mr. Huda has referred to the following books; (i) A passage from The Quantum of Damages by David A. McI, Kemp; at page 11.

4. Moneys received from the deceased's estate; There is no universal rule that all money received from the deceased's estate by a dependant must be deducted in full from his damages. Each case must be determined upon its particular facts. We submit that in every case the deduction to be made is the amount, if any, by which the dependant has on balance received a benefit when he came into possession of the money on the deceased's death. Sometimes there may be an obvious net gain to the dependant. Take the case of an elderly parent who receives money from his deceased child's estate. In most cases, if the child had not been killed, the parent would probably have predeceased the child and never received anything from the child's estate. The whole amount received by the parent on the child's death is therefore a net gain and should be deducted in full from the parent's damages. Similarly, in the case of a sick and aged widow, whose deceased husband was much younger and in good health, it would be right for the same reason to deduct from her damages the whole amount which she had received from her husband's estate. But in the converse case of a young and healthy widow, whose sick and aged husband is killed, the widow's gain may be very little. She may satisfy the Court that she would almost certainly have received the same amount from her husband's estate in any event within, say, five years. Her gain would then be merely the acceleration of the payment to her (the value of which can fairly be presented by the interest on the payment for the five years in question) plus something for the certainty of receiving the sum. The latter factor would warrant some further slight deduction since she herself might conceivably have died within the five years or her husband might have made a will leaving her less." (ii) The following passage from R.N.Dwivedi's The Fatal Accidents Act by K . K . Singh 3rd Edn. at page

96. The idea underlying is that the Court while entered to enquire about the pecuniary loss sustained by the dependants of the deceased it should be also on guard to see as to whether the claimants have gained financially by the death. As Lord Watson says: "All circumstances which though insufficient to exclude a statutory claim, may be legitimately pleaded in diminution of it, ought to be submitted to the jury, whose general function it is to assess damages, with such observations from the Presiding Judge as may be suggested by the facts in evidence." But, in England, any right to benefit under the National Insurance Act, 1946‑53, resulting from a person's death are to be disregarded. Further by the Fatal Accidents (Damages) Act, '1908, it is provided that in assessing damages "there shall not be taken into account any sum paid or payable on the death of the deceased under any contract of assurance. Again, if any amount has been received by the dependants of the deceased out of the fine realised from the defendant under the orders of the Criminal Court, it should be taken into account in fixing the quantum of damages under the Fatal Accidents Act (XIII of 1855). Where, however, at the time of the death, the dependant was already in enjoyment of the property of the deceased, no deduction was made in respect of it. But it is for the defendants to prove such pecuniary benefits which will accrue to the dependants in consequence of the death of the deceased and it is not for the plaintiff to prove the existence of any such items of deductions." (iii) The following passage from Mayne and Me Gregor on Damages 12 Edn. at page

844. Case will also arise where, but for the death, the dependants would probably never have received the estate: this will be so, for instance, in the case of a claim by aged parents who would otherwise in all probability have predeceased their child. In such a case it would be proper to deduct something approaching the whole amount of the estate received by the parents; the value of the acceleration is irrelevant here. And intermediate cases can readily be imagined. Lastly, where the deceased's sole property consists of unearned income out of which he supported the dependant and the whole estate from which he derived this income passes to the dependant, the dependant's claim fails as there is no pecuniary loss. All that the dependant could lose was the support from that income, and since the death he has the income himself." (iv) The following passage from the Law of Damages & Compensation by Sir S. Varadachariar, Kt. 3rd Edn, at p.1087. 2204. Deduction for insurance monies and other allowances. The basis of the action being the pecuniary loss suffered by the dependants, it follows that all pecuniary advantages derived from the death must also be taken into account. As Lord Watson says: "All circumstances which though insufficient to exclude a statutory claim, may be legitimately pleaded in diminution of it, ought to be submitted to the jury, whose general function it is to assess damages, with such observations from the Presiding Judge as may be suggested by the facts in evidence. In Peacock v. Amusement Equipment Co. Ltd., the payment of a sum of L. 575 made to the plaintiff by the children of the deceased by her previous marriage was taken into account in estimating the damages under the Act, although the payment was merely voluntary as representing one‑third of the value of her estate. To this rule there is one exception made by the Fatal Accident (Damages) Act, 1908 according to which any sum paid or payable on the death of the deceased under any contract of insurance was not to be taken into account in assessing damages under the original Act. Similarly, the amount of fine recovered from the defendant after his conviction in the Criminal Court and paid over to the dependants was also to be taken into consideration in fixing the amount of compensation payable under the Fatal Accidents Act, XIII of 1855. He has also referred to the following cases; (i) Vanguard Fire and General Insurance Co. Ltd. v. Sarla Davi and others (AIR 1959 Punjab 297), in which a Division Bench of the Punjab High Court held that it is for the defendant to prove what pecuniary benefit accrued to the dependants in consequence of the death of the deceased and it is not for the plaintiff to prove the existence of any such item of deduction. (ii) Qaiser Ali and 2 others. v. K.R.T. Corporation (P L D 1986 Kar. 489). In the above case a learned single Judge, inter alia, observed that in all the cases referred to by him the amount received by the heirs cannot be regarded as the estate of the deceased. On the other hand Mr. M. G. Dastgir has referred to the following cases; (i) Hussain and others v. Muhammad Rafiq and '4 others (P L D 1971 Kar. 129) in which Dorab Patel, J. , (as he then was) inter alia, observed as follows; "As observed by Lord Wright in Davies v. Powell Duffryn Associated Collieries Ltd. "the damages (for death) are to be assessed on the reasonable expectation of pecuniary benefit or benefit reducible to money value. In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered: Grand Trunk Railway Co. of Canada v. Jennings. The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which from whatever source comes to him by reason of the death." (ii) Mrs. Gul Bano and 4 others v. Muhammad Ramzan and others (1982 C L C 1120). In the above case a learned single Judge, inter alia, held that claim of the wife for a sum of Rs.25, 000 as loss for companionship was not sustainable under the law as under the Fatal Accident Act damages were granted only for pecuniary loss suffered by the plaintiff on account of the death of the person on whom he was dependant.

7. From the above cited passages from the treatise on the subject in issue and from the above cited cases, it is evident that in a case under the Fatal Accidents Act a dependant is entitled to recover pecuniary loss, which he has suffered on account of the death of the deceased. If he has not suffered any such loss but has received some pecuniary advantage, which he would not have otherwise received if the deceased would have remained alive, he cannot maintain an action under the above Act. It also seems to be a well settled principle of law that while computing the amount of pecuniary loss, the pecuniary benefit and other benefits which can be transacted into money received by a dependant on account of the death of the person involved in the fatal accident are to be deducted from the calculated amount o the pecuniary loss. In other words, a balance is to be struck down by keeping in juxta‑position pecuniary loss suffered and the pecuniary gains made by the dependant. However, neither the pecuniary loss nor pecuniary gain should be illusory or fictional but should be real. If the deceased had no earning other than from certain property and out of such earning he was providing pecuniary assistance to his dependant and upon his death the said property stands vested in the dependant by operation of law, it cannot be said that he has, suffered any pecuniary loss, on the contrary, he has made pecuniary gain on account of the death of the deceased. Similarly, if a dependant would have otherwise received a particular pecuniary benefit from the deceased on his natural death, merely the fact that the accidental death has accelerated the above event, would not constitute a pecuniary benefit liable to be deducted from the pecuniary loss. We may also observe that there seems to be judicial consensus on the question of burden of proof, namely, that the burden of proof is not on a dependant to prove in the negative that he has not received any pecuniary benefit, on account of the death of the deceased involved in the fatal accident, but the burden is on a defendant to plead and to prove all the legitimate circumstances or pecuniary benefits in diminution of the damages.

8. Having dealt with the legal position obtaining in relation to the adjustment of a pecuniary benefit against a pecuniary loss suffered in a fatal accident case by a dependant, we may revert to the facts of the instant case. It is an admitted position that the respondents in their written statement had not pleaded that the appellants had received any pecuniary benefit liable to be adjusted against the pecuniary loss to be calculated in the suit. However, in the cross‑examination PW 1 Abdul Rahman an employee of the deceased's employer admitted the factum of payment of Rs.1,30,000, the break up of which is given hereinabove in para

4. Mr. Sadruddin Huda, learned counsel for the appellants has candidly submitted that the items mentioned in sub‑paras. (i) , (ii) and (iii) of para 4 could have been adjusted against the pecuniary loss but there was no justification to deduct the fourth item, namely, Rs.94,915.07 being the amount paid by the State Life Insurance Corporation direct to appellant No.1 in respect of five life insurance policies, which were obtained by the deceased and in respect of which the employer contributed 50$ of the premium. In this regard, it may be pertinent to point out that there is a marked difference between the law obtaining in England and the law in force in Pakistan as to the question of adjustment of the pecuniary benefit received under an insurance policy. In England under the Fatal Accident (Damages) Act, 1908, it was enacted that any sum paid or payable on the death of the deceased under any contract of insurance was not to be taken into account in assessing damages under the Fatal Accident Act (XIII of 1855). No such provision was enacted during the prepartition period of India nor it has been enacted during the post‑partition period in Pakistan. In this view of the matter, the view obtaining in Pakistan seems to be that all pecuniary benefits including a benefit received under an insurance policy are liable to be adjusted against the pecuniary loss. However, we are inclined t hold that not every payment under an insurance policy can be treated as a pecuniary benefit for the purpose of deducting it from the pecuniary loss. We may explain this by illustrating by an example; suppose a deceased had an insurance policy for a sum of Rs.40,000, which was due to be matured say on 3 1‑12‑1987 and in respect of which he had paid all the premium by 15‑12‑1987. He met with an accident say on 17‑12‑1987. Can it be said that the deceased's dependant who was to receive the insured amount as a nominee under the insurance policy has pecuniary benefit of Rs.40,000 for the purpose of adjustment against the pecuniary loss. Factually the dependant has not received any pecuniary benefit on account of the death of the deceased on 17‑12‑1987 as the insured amount would have become part of the estate of the insured on or after 1st January, 1988. The death of the deceased on 17‑12‑1987 has accelerated the event of maturity of the insurance policy by few days but it has not brought any real pecuniary advantage to the dependant. In such a case, in our view, the above insured amount is not liable to be adjusted against the pecuniary loss.

9. In the instant case the above sum of Rs.94,915.07 includes the payment under the Accident Death Benefit Provision in the insurance policies and, therefore, the sum paid in pursuance of the above clause is to be adjusted against the pecuniary loss as admittedly the above amount would not have been payable, if the deceased would not have met with an accident. The other portion of the above amount of Rs.94,915.07 pertains to the five life insurance policies obtained by the deceased in respect of which he paid 50% premium and 50% premium was paid by his employer. In our view, the entire remaining portion of the insured amount paid under the above five policies (excluding the amount under the provision of Accident Death Benefit) cannot be adjusted against the pecuniary loss. Admittedly the deceased and his employer had paid premium from their pocket against the five insurance. policies. Each policy must have indicated its surrender value, which could have been obtained by the insured during his life time by surrendering the policies before their maturity. In our view, the above surrender value of each of the above insurance policies should have been excluded from the insured amount paid, while deducting pecuniary benefits from the pecuniary loss.

10. We, therefore, maintain the judgment and decree for the decretal amount but would remand the case for a further decree for an additional amount in the light of the above observations after providing opportunity to the parties to lead evidence on the above aspect. Before parting with the above discussion, we may observe that in order to eliminate hardship and to clarify the legal position, it is desirable that a suitable amendment may be made in the Fatal Accident Act in line with the English Fatal Accident (Damages) Act, 1908 referred to hereinabove in para

9. The Registrar of this Court may forward a copy of this judgment to the Ministry of Justice and Parliamentary Affairs, Islamabad, for examining the above observation. The appeal stands disposed off in the above terms with no order as to costs. M. B. A./S‑151/K Order accordingly.