Family Pension Cannot Be Deducted While Calculating Loss Of Income In Motor Accident Claims: J&K&L High Court

The Jammu and Kashmir and Ladakh High Court has held that while computing the loss of income in a motor accident compensation case, it would not be permissible to deduct the pensionary amount received by the dependents of the deceased.Justice Sanjay Dhar, while dismissing an appeal filed by Reliance General Insurance Company, ruled that “for the purpose of computing the loss of income, the monthly salary has to be accepted without deducting the pension amount.”Background:The case arose out of a road accident that claimed the life of Vijay Kumar, a 54-year-old ex-serviceman from Jammu. His widow Santosh Devi, two children, and aged parents filed a claim petition before the Motor Accidents Claims Tribunal (MACT), Jammu, seeking ₹1.85 crore compensation for his death. The offending vehicle was insured with Reliance General Insurance Company. The Tribunal, after analyzing the evidence, awarded ₹42,54,900 with 7.5% interest to the claimants, holding the insurer liable to pay.The insurance company challenged the MACT award before the High Court, arguing that the Tribunal erred in computing the deceased's income. It contended that the widow's family pension should have been deducted while calculating the loss of dependency and that there was no documentary evidence proving that the deceased was running a chemist shop or earning ₹6,000 per month from business.Courts Observations:Justice Dhar, after perusing the record, observed that the deceased was receiving a monthly pension of ₹30,316, as confirmed by bank statements and the unrebutted testimony of his widow, Santosh Devi. The Court noted that this pensionary income was correctly computed by the Tribunal.The Court also accepted the Tribunal's finding that the deceased was running a medical shop, based on documents such as registration certificates from the J&K Pharmacy Council and communication from the Food and Drugs Control Department. Even though no direct proof of income was produced, the Tribunal's estimation of ₹6,000 per month as business income was found reasonable.Addressing the insurer's contention regarding deduction of family pension, Justice Dhar firmly rejected it, referring to a catena of Supreme Court precedents.Relying on Helen C. Rebello (Mrs.) & Ors v. Maharashtra State Road Transport Corporation [(1999) 1 SCC 90], the Court quoted:“Family pension is earned by an employee for the benefit of his family in the form of his contribution in the service conditions receivable by the heirs after his death. The heirs receive family pension even otherwise than the accidental death. No co-relation between the two.”The Court emphasized that pecuniary advantages like provident fund, pension, or life insurance are not deductible since they arise from separate contractual or statutory rights of the deceased, and not from the accident itself.Justice Dhar further cited Bhakra Beas Management Board v. Kanta Aggarwal (2008) 11 SCC 366 and Sebastiani Lakra v. National Insurance Co. Ltd. (2019) 17 SCC 465, reiterating that deductions cannot be allowed from compensation on account of pension, gratuity, or insurance benefits.The Court particularly noted the Supreme Court's recent ruling in Hanumantharaju B (Dead) by L.Rs v. M. Akram Pasha & Ors, AIR 2025 SC 3283, which reaffirmed:“While computing the loss of income, it would not be permissible to deduct the pensionary amount and that for the purpose of computing the loss of income, the monthly salary has to be accepted without deducting the pension amount.”Applying this consistent legal position, the Court held that the widow's family pension could not be deducted while calculating the loss of dependency.In view of these findings Justice Dhar concluded that the appeal filed by the insurance company lacked merit and dismissed it, upholding the award with interest in favour of the claimants.Case Title: Reliance General Insurance Vs Santosh DeviCitation: 2025 LiveLaw (JKL) Click Here To Read/Download Judgment

Family Pension Cannot Be Deducted While Calculating Loss Of Income In Motor Accident Claims: J&K&L High Court

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