Reasonable Classification and Compensation in Motor Vehicles Act

In the judgment of the case - Rajasthan state Road Transport Corporation v. Danish Khan, delivered on October 4, 2019, Justice L. Nageswara Rao and Justice Hemant Gupta, at the Supreme Court, have held that as the respondent has received the compensation under the Motor vehicles Act, 1988, he is not entitled for compassionate appointment under the RSRTC Compassionate appointment Regulations, 2010.

The Apex-Court has pointed out that it is well-settled that though Article 14 of the Constitution of India forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. 

The Court has noted that the dependents of a deceased employee, who claim compensation from the Corporation under the Act and compassionate appointment from the Appellant- Corporation form a separate class.  When any impugned rule or statutory provision is assailed on the ground that that it contravenes Article 14, its validity can be sustained if two tests are satisfied. The first test is that the classification on which it is founded must be based on an intelligible differentia which distinguishes persons or things grouped together from others left out of the group; and the second test is that differential in question must have a reasonable relation to the object sought to be achieved by the rule or statutory provision in question. (see State of Mysore & Another v. P. Narasing Rao- 1968 SCR(1) 407).

According to the Supreme Court, after holding that the classification of two categories of dependents of deceased employees reasonable, it remains to be examined that whether there is a rationale nexus of the classification with the objective sought to be achieved by the Regulation 4(3).

The intention with which Regulation 4(3) is made is to obviate the liability of the Corporation in payment of compensation under the Act and to provide compassionate appointment to the same person. The Court’s finding is that that there is a rationale nexus between the basis of classification and the object sought to be achieved by the Regulation.

The Supreme Court has referred its own decision in the case – National Insurance Company Ltd. v. Rekhaben & Others – (2017) 1 SCC 547. The question which arose for consideration in that case related to the deduction of salary which was earned by the claimant therein after being appointed on compassionate grounds while calculating the compensation payable to her under the Act for the death of her husband.

It was held that the salary earned by compassionate appointee cannot be deducted from the compensation which the claimant is entitled to under the Act. However, it was made clear that the salary which flowed from the compassionate appointment that was provided by the tortfeasor was liable to be deducted if the employer was the owner of the offending vehicle and thus liable to pay compensation under the Act.

In other words, the employer who has provided compassionate appointment can claim deduction of the salary of the dependent while calculating it if he is liable to pay compensation under the Act, being the owner of the offending vehicle.

The Rajasthan State Road Transport Corporation had filed this appeal aggrieved by the judgment of the Rajasthan High Court’s Jaipur Bench by which Regulation 4(3) of the RSRTC Compassionate Appointment Regulations, 2010, has been declared as violative of Article 14 of the Constitution of India.

The respondent’s father Mohammad Shahid, who was working as a helper in the appellant-Corporation died in a motor accident. He was travelling in a bus of the appellant, which collided with another bus. A claim was made by the respondent before the Motor Accident Claim Tribunal, Tonk under sections 166 and 140 of the Motor Vehicles Act, 1988. An amount of Rs 1,35,50,000/-  was claimed, but the Tribunal awarded a compensation of Rs 22,95,775/- .

The respondent made a representation to the Chief Manager of the appellant seeking compassionate appointment. This request was rejected on the ground that the respondent was not entitled in light of Regulation 4(3) of the Regulations.

Dissatisfied with the rejection of the request for compassionate appointment, the respondent filed a writ petition in the HC challenging the constitutionality of Regulation 4 (3). The HC allowed the writ petition on August 29, 2016 on the ground that Regulation 4(3) of the Regulations of 2010 is discriminatory and violative of Article 14 of the Constitution.

The HC held that the object of compassionate appointment is to mitigate the hardship of the family members of the bread-winner and for that reason compassionate appointment should be provided to the family in distress.

According to the Regulation 4(3) of the Regulations, claim for both compassionate appointment and compensation under the Act cannot be made against the Corporation in case of death of an employee while travelling in the  vehicle of the appellant-Corporation. Regulation 4(3) was held discriminatory because compassionate appointment can be provided to an employee who dies in an accident while travelling in a vehicle not belonging to the Corporation though he had claimed compensation either  from the owner of the vehicle or the insurance company under the Act.

The HC was of the opinion that the dependents of the employees of the Corporation who died due to an accident while travelling in a vehicle of the Corporation cannot be treated differently from dependents of the employees who died in an accident while travelling in a vehicle not belonging to the Corporation.

The purpose of the appellant-Corporation in carving out two classes of dependents of the deceased employees in respect of claims for compassionate appointment is to avoid extra burden on the appellant.

The dependents in these two categories are not similarly situated in respect of their claims against the Corporation. They cannot be treated as equals. Therefore, Regulation 4(3) cannot be said to be discriminatory. In this view of the facts and circumstances, the Supreme Court has said that it does not agree with the judgment of the HC that Regulation 4(3) is violative of Article 14 of the Constitution. As the respondent has received the compensation under the Act, he is not entitled for compassionate appointment under the Regulations. In result, the SC has set aside the impugned judgment of the HC and allowed the appeal.