Setting to rest divergent views taken by various high courts on this issue, the court concluded that "the set of decisions, which applied the principle of no deduction of the life insurance amount, should be accepted and the other set, which interpreted to deduct, is to be rejected."

The court, in its recent judgement, said it has no hesitation "to hold that such high courts were wrong in deducting the amount paid or payable under the life insurance by giving restricted meaning to the provisions of the MVA basing mostly on the language of English statutes and not taking into consideration the changed language and intends of the legislature under the MVA, 1939."

The case arose from the accidental death of one Rebello in 1973. While the trial court awarded a compensation of Rs 3,90,000, the Bombay high court ordered deduction of the insurance amount of Rs 3,15,000 from the compensation awarded under the Motor Vehicles Act.

A division bench comprising Justice K Venkataswami and Justice AP Misra, while setting aside the high court order, said, "We hold that the amount received by the claimant on the life insurance of the deceased is not deductible from the compensation computed under the MVA."

The bench in its 43-page judgement said the deduction of life insurance money would result into the gain to the wrong doer.

"These (high) courts by giving restrictive interpretation in computation of compensation based on the limitation of the language of the Fatal Accidents Act, 1855, fell into error, as it did not take into account the change of language in the 1939 Act and did not consider the widening of discretion of the Motor Vehicle Accident Claims Tribunal," the bench said.

"Thus, we have no hesitation in concluding that the tribunal, while computing the compensation under Section 110-B of the 1939 Act, has a wider discretion than what it had under the 1855 Act," it said.

The court said it was very clear that the 1939 Act delivers compensation to the claimant only on account of accidental injury or death, not on account of any other death.

The compensation payable under MVA was on account of the pecuniary loss to the claimant by accidental injury or death and not other forms of death, the court said.

This calculation of compensation has no relation as to how rich the person was or how much wealth he had as by such interpretation the person, in spite of his wrongful act or negligence, which contributed to the death, would have in many cases no liability o meagre liability.