The Supreme Court has reiterated that courts must deduct compassionate assistance paid to the dependents of a deceased government employee from Motor Vehicles Act (MV Act) compensation, when both benefits cover the same head of loss. The Court said this prevents double recovery.
A Bench of Justice Sanjay Karol and Justice Augustine George Masih allowed an appeal filed by Reliance General Insurance Company Limited. It set aside the Punjab and Haryana High Court’s review/clarification order, which had said that compassionate assistance under the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 (“2006 Rules”) was not deductible.
Background of the claim
The case arose from a road accident on November 2, 2009. A Haryana government employee, who worked as a Multi-Purpose Health Worker, died in the accident. Her dependents filed a claim under the MV Act.
The Motor Accidents Claims Tribunal awarded ₹8.8 lakh. Later, in September 2019, the Punjab and Haryana High Court enhanced the compensation to ₹29.09 lakh. It also directed the court to deduct amounts payable/received under the 2006 Rules.
Review order reversed the earlier direction
After the High Court’s main judgment, the claimants sought a clarification on the deduction direction. In its review/clarification order, the High Court took the opposite view and held that compassionate assistance under the 2006 Rules was not deductible.
Therefore, the insurer moved the Supreme Court.
Supreme Court restores the High Court’s main order
Justice Karol, writing the judgment, set aside the review order and restored the High Court’s main judgment. The Bench relied on Reliance General Insurance v. Shashi Sharma, (2016) 9 SCC 627.
The Court explained that deductions apply only when the benefit substitutes the same kind of loss, such as loss of income. In other words, if the 2006 Rules give dependents an amount that mirrors the pay and allowances the employee would have earned, courts must set it off against MV Act compensation.
The Court put it this way:
Benefits under the 2006 Rules that mirror pay and allowances must be adjusted against MV Act compensation to avoid double benefit.
At the same time, the Court clarified that other components under the 2006 Rules do not attract deduction. For instance, pensions, life insurance, or unrelated allowances remain outside this set-off.
Mode of adjustment
The Supreme Court also laid down a practical method. It said the tribunal should release MV Act compensation in full at the first instance. Later, it can adjust the amount if and when the legal representatives actually receive benefits under the 2006 Rules.
This approach, the Court noted, avoids delay for dependents while still preventing double recovery.
Accordingly, the Court allowed the appeal and restored the High Court’s main order.
Cause Title: Reliance General Insurance Company Limited v. Kanika & Ors.
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.
