The ruling was handed down by a division bench comprising Justice K Venkataswami and Justice A P Misra while allowing an appeal.

The ruling assumes importance in view of the fact that the high courts in the country have expressed divergent views on the question whether the life insurance money of a deceased person is to be deducted from the claimants compensation recieveable under the act.

The importance of this question is underlined and revealing since 19th century there is a debate in the English courts having divergent views leading to legislation and amendments to set at rest this controversy. So far as our country is concerned, we have divergent views of the various high courts, but so far as this court is concerned, it has not dwelled this question in depth, except passing references in a few cases, the judges prefaced their judgement.

One Rebello, a 40-year-old boat builder died in a road accident on April 12, 1973, while travelling in a Maharashtra State Road Transport Corporation bus from Kolhapur to Satara.

His wife and children were awarded Rs 75,000 as damages by a civil judge in Satara, although the civil judge had reckoned the amount payable to them at Rs 4 lakh.

Relying on a full bench judgement of the Bombay High Court that the amount collected as insurance money had to be deducted from the compensation awarded under the act, the civil judge said that since the appellante, Helen Rebello and others had already got Rs 3.25 lakh from the LIC as insurance money, they would be entitled to receive only Rs 75,000 as damages.

The apex court judges noted that while the Bombay and Orissa high courts had held that the insurance payable was deductible from the compensation payable to the victim's heirs, the Gujarat, Punjab and Haryana, Delhi and Patna high courts had taken the contrary view.

``Why should the plaintiff be left worse off than if he had never insured,'' the judges asked.

The judges said the interpretation of deduction of life insurance money would result in gain to the wrongdoer in proportion to the higher premium paid by the insured for no contribution of his, and loss to the claimant in proportion to the higher scale of premium paid, as he would have received the compensation amount without payment of any premium.