Compassionate Assistance To Govt Employee's Family Deductible From Motor Accident Compensation: Supreme Court

The Supreme Court has reaffirmed that the compassionate assistance received by a dependent of a deceased employee would be liable to be deductible from the compensation received under the Motor Vehicles Act.

Referring to Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 (“Rules”), a bench of Justices Sanjay Karol and Augustine George Masih allowed the Reliance General Insurance's appeal, while setting aside the High Court's decision holding that the compassionate assistance would not be deductible from the motor accident compensation.

The case arose from a road accident on November 2, 2009, in which a Haryana government employee, posted as a Multi-Purpose Health Worker, lost her life. Her dependents filed a claim under the Motor Vehicles Act. While the Motor Accidents Claims Tribunal awarded ₹8.8 lakh, the Punjab and Haryana High Court enhanced the compensation to ₹29.09 lakh in September 2019, while directing that amounts received under the 2006 Rules be deducted.

The claimant-respondents filed an application for clarification insofar as the deduction of the amount received as per the 2006 Rules was ordered. By way of the Clarification Order, the position of the Main Order appears to have been reversed by the High Court, in exercise of its review jurisdiction, and it held that the compassionate assistance received under the 2006 Rules was not deductible. This prompted the insurer, Reliance General Insurance Company Limited, to approach the Supreme Court.

Setting aside the impugned review order, the judgment authored by Justice Karol restored the High Court's main order, where it referenced Reliance General Insurance v. Shashi Sharma (2016) 9 SCC 627 to note that only benefits that directly replace the same type of loss, like loss of income, can be deducted from the compassionate compensation awarded.

“Benefits under the 2006 Rules that correspond to pay and allowances the deceased would have earned must therefore be offset against the compensation awarded under MVA, to prevent double recovery. Other components of the 2006 Rules, such as pensions, life insurance, or unrelated allowances, remain unaffected and cannot be deducted.”, the court observed in Reliance General Insurance v. Shashi Sharma (supra).

The Court observed that the High Court erred in reviewing its main order to hold otherwise, which would grant double benefit to the claimants.

“Compensation under the MVA should be paid in full initially, with adjustments made later if the legal representatives actually receive amounts under the 2006 Rules. This ensures that the dependents receive their rightful compensation without the risk of receiving double benefits.”, the court added.

Accordingly, the appeal was allowed, and the High Court's main order was restored.

Cause Title: RELIANCE GENERAL INSURANCE COMPANY LIMITED VERSUS KANIKA & ORS.

Citation : 2026 LiveLaw (SC) 196

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Appearance:

For Petitioner(s) : Mr.Atul Nanda, Sr.Adv. Mr.Kshitij Mittal, Adv. Mr.Aryan Sharma, Adv. Mr. Mukesh Kumar, AOR

For Respondent(s) : Mr. Aditya Singh, AOR Mr. Shubham Singh, Adv. Mr. Kamal Kishor, Adv.