Dependant Mother Who's Ineligible For State Ex-Gratia Entitled To Separate Share In Motor Accident Compensation : Supreme Court

The Supreme Court has ruled that while ex gratia financial assistance received by the family of a deceased government employee under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006, must be deducted from compensation awarded under the Motor Vehicles Act to prevent duplication of benefits, such deduction cannot defeat the independent entitlement of a dependent mother who is not eligible to receive assistance under the state scheme.

A three-judge bench comprising Justice Vikram Nath, Justice Sandeep Mehta and Justice Vijay Bishnoi passed the judgment while partly allowing an appeal filed by the family members of Haryana Police constable Sachin Kumar, who died in a road accident in 2012.

The deceased's widow, minor daughter, mother and father had sought compensation under the Motor Vehicles Act. The Motor Accident Claims Tribunal awarded compensation of ₹37.30 lakh, while excluding the father from the category of dependents as he was a retired government employee drawing pension.

In an appeal filed by the insurer, the Punjab and Haryana High Court held that the family was entitled to receive financial assistance under the 2006 Rules equivalent to the deceased's last drawn salary for 15 years. Relying on the Supreme Court's decision in Reliance General Insurance Co. Ltd. v. Shashi Sharma (2016), the High Court deducted ₹29.21 lakh payable under the Rules from the compensation amount and reduced the final award to ₹7.70 lakh.

Before the Supreme Court, the claimants argued that the compassionate assistance scheme was a welfare measure and that the deduction caused grave prejudice to the family. They also contended that the deceased's mother was not entitled to receive any benefit under the 2006 Rules and therefore her share in compensation could not be wiped out through the set-off.

The Court followed the principle laid down in Shashi Sharma that financial assistance equivalent to pay and allowances received under the 2006 Rules must be deducted from compensation awarded under the head of loss of dependency under the Motor Vehicles Act. It observed that otherwise the claimants would receive double compensation for the same pecuniary loss.

However, the bench found merit in the contention regarding the mother. Examining the 2006 Rules and the Family Pension Scheme, 1964, the Court held that where a deceased employee is survived by a widow and child, the parents are not eligible for financial assistance under the Haryana scheme. Therefore, the deceased's mother did not receive any benefit under the 2006 Rules.

The Court observed that although the deduction principle was correctly applied by the High Court, it had the effect of extinguishing the mother's entitlement as a dependent under the Motor Vehicles Act.

"The mother is not entitled to any ex-gratia financial assistance under the 2006 Rules... however, that does not diminish the independent legal injury suffered by the mother due to the sudden death of her son," the Court said.

Holding that denying compensation to the mother would amount to unjust enrichment of the insurance company, the Court awarded her one-third share of the loss of dependency compensation, amounting to ₹11.30 lakh.

"Negating the mother's claim, who is entitled to a 1/3rd share of the total compensation awarded, would amount to an illegal enrichment of the Respondent No.1/Insurance Company at the cost of a dependent parent."

As a result, the Court enhanced the total compensation payable to the claimants from ₹7.70 lakh to ₹19.01 lakh, with interest as awarded by the Tribunal and affirmed by the High Court. The insurer and other respondents were directed to pay the amount within eight weeks.

Headnote

Motor Vehicles Act, 1988 — Section 166 — Claim Petition — Double Benefit / Deduction of Ex-gratia Financial Assistance — Interplay with State Welfare Rules — Eligibility of Mother as a Dependent – i. Deduction of Financial Assistance under Service Rules – held that the High Court was fully justified in deducting the ex-gratia financial assistance amount receivable by the eligible dependents under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 from the total compensation assessed under the Motor Vehicles Act, 1988 - The component of "loss of income" or "pay and allowances" cannot be paid a second time to the claimants, as it would exceed the actual pecuniary loss suffered and operate as a financial windfall/windfall profit; ii. Independent Entitlement of a Dependent Mother - While statutory rules must be strictly interpreted, courts cannot lose sight of the paramount object of social welfare legislations, which is to award just and adequate compensation to all dependents - Under the Haryana Pension Scheme of 1964 (read with the 2006 Rules), a dependent parent is ineligible for ex-gratia financial assistance if the deceased employee leaves behind a widow or children - this statutory ineligibility under service rules does not diminish or negate the independent legal injury suffered by the mother under the Motor Vehicles Act; iii. Prevention of Unjust Enrichment by Insurer - Setting off the entire financial assistance amount against the collective pool of compensation thereby depriving a dependent mother of her rightful share under the head of loss of dependency amounts to an illegal and unjust enrichment of the Insurance Company at the cost of a dependent parent - The mother's distinct share ( share of the total loss of dependency) cannot be set off or consumed by the service benefits paid exclusively to the widow and daughter. [Relied on Reliance General Insurance Company Ltd. v. Shashi Sharma and Others, (2016) 9 SCC 627; Sarla Verma and Others v. Delhi Transport Corporation and Anr., (2009) 6 SCC 121; State of Haryana and Another v. Jasbir Kaur and Others, (2003) 7 SCC 484; Ram Kala Devi v. State of Haryana and Another, 2025 SCC OnLine P&H 12159; Paras 15-25]

Case: Sarla Devi & Ors. v. Reliance General Insurance Company Ltd. & Ors.

Citation : 2026 LiveLaw (SC) 578

Click here to read the judgment

For the Petitioners: Mr. Rameshwar Singh Malik, Senior Advocate; Mr. Jitesh Malik, Mr. Jatin Hooda, Mr. Abhaya Nath Das, Mr. Piyush Sharma, Advocates; Mr. Satish Kumar, AOR.

For the Respondents: Mr. Joy Basu, Senior Advocate; Mr. A.K. Soni, Mr. Nilesh Kumar, Mr. P. Srinivasan, Mr. Pavan Kumar, Mr. Anoop George, Advocates; Mr. Rajeev Maheshwaranand Roy, AOR.