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SUPREME COURT OF INDIA
SUDHANSHU DHULIA, K. VINOD CHANDRAN, JJ.
New India Assurance Co. Ltd. - Appellant
Versus
Kamlesh and Others - Respondents
Civil Appeal No................of 2025 [Special Leave Petition (C) No. 12235-12236 of 2019], Civil Appeal No................of 2025 [Special Leave Petition (C) No. 12421-12422 of 2023]
Decided On : 28-04-2025
To challenge this judgment, one could argue that the Court's decision to deduct benefits received under the Rules of 2006 from the total compensation amount is not consistent with the established legal principles regarding deductions for ex-gratia or state scheme benefits. Specifically, the argument could be made that benefits received through the Rules of 2006, which are intended as compassionate assistance, should not be considered as direct income or pecuniary advantages attributable to the death caused by the accident (!) (!) .
Furthermore, it can be contended that the Court's reliance on certain precedents to justify the deduction may have overlooked the broader legal doctrine that benefits which are not directly linked to the pecuniary loss due to the accident should not diminish the compensation payable (!) (!) . The argument can emphasize that benefits under state schemes, especially those designed as ex-gratia or compassionate aid, are not equivalent to income or pecuniary advantages arising directly from the death, and thus, should not be deducted from the compensation amount.
Additionally, one might assert that the Court's approach to calculating loss of dependency and the deduction thereof may have failed to account for the principle of 'just compensation,' which aims to provide a fair and adequate remedy without unjust enrichment or double recovery (!) (!) . The deduction of benefits received under the Rules of 2006 could be viewed as an overreach, potentially leading to a reduction in compensation that does not align with the legislative intent or the principles of equitable relief.
Lastly, it could be argued that the Court's interpretation of the applicable statutes and rules may have been overly restrictive or not sufficiently nuanced to distinguish between different types of benefits, leading to a potentially unjust outcome for the claimants. Challenging the Court's reasoning would involve advocating for a more liberal interpretation that recognizes the difference between pecuniary benefits directly resulting from the accident and those provided as compassionate or ex-gratia assistance, which should not diminish the rightful compensation.
| Table of Content |
|---|
| 1. claimants are heirs entitled to compensation. (Para 1 , 2) |
| 2. calculation of compensation involves deductions based on existing rules. (Para 3 , 4 , 5) |
| 3. previous case law informs deductions under the mv act. (Para 6 , 7 , 8 , 9 , 10) |
| 4. binding precedent must be followed in compensation cases. (Para 11 , 12) |
| 5. calculation of loss must consider dual benefits and appropriate deductions. (Para 13 , 14 , 15 , 16 , 17) |
| 6. final decision and relief granted based on precedent. (Para 18 , 19) |
ORDER :
1. Leave granted.
2. The claimants are the legal heirs of the deceased who succumbed to the injuries sustained in a motor accident. In the claim petition before the Motor Accident Claims Tribunal, they were awarded a compensation of Rs. 37,85,800/-. The Insurance Company filed an appeal, restricted to the quantum, especially on the deduction to be allowed with respect to the financial assistance under the Haryana Compensation Assistance to the Dependents of Deceased Government Employees Rules, 20061 [for brevity ‘the Rules of 2006’] whether the same is liable to be deducted from the total compensation. The appeal by the claimants was for enhancement of compensation.
3. The loss of dependency granted by the Tribunal at Rs. 35,65,800/- was enhanced to Rs. 45,14,986/- employing the multiplier system for calculating loss of dependency as has been declared by a Constitution Bench decision in National Company Limited vs. Pranay Sethi and Others , (2017) 16 SCC 680. However, under conventional heads, the award of Rs. 2,20,000/- granted by the Tribunal was reduced to Rs. 70,000/-. The total compensation was determined at Rs. 45,14,986/- out of which half of the compensation under the Rules of 2006 was directed to be deducted i.e. Rs. 21,67,704/- on the basis of the decision of the Punjab and Haryana High Court in New India Assurance Company Ltd. vs. Ajmero and Others, FAQ No. 2648 of 2016 decided on 31.07.2017.
4. Dr. Meera Agarwal, learned Counsel for the Insurance Company submits that the deduction as per the Rules of 2006 has to be 100% as has been held by a decision of this Court in Reliance General Insurance Company Ltd. vs. Shashi Sharma and Others , (2016) 9 SCC 627 followed in National Insurance Company Ltd. vs. Birendra , 2020 SCC Online SC 28.
5. Mr. M.R. Shamshad, learned Senior Counsel appearing for the claimant would however point out that a two Judge Bench of this Court in Helen C. Rebello vs. Maharashtra State Road Transport Corporation , (1999) 1 SCC 90 held that life insurance amounts received by heirs on account of the victim's death was not deductible from the compensation for death in motor accidents. A Coordinate Bench in Rajkumar Agrawal vs. Vehicle Tata Venture, Commercial Auto Sales Private Limited, Civil Appeal No. 4941 of 2022 dated 19.01.2023 considering whether the insurance amounts paid under the Employees' State Insurance Act, 19482 [For brevity ‘ESI Act’] is a similar benefit, as the compensation which is claimed in a case where there is a motor accident, has referred the issue to a larger Bench. The reference was made since in Western India Plywood Ltd. vs. P. Ashokan , (1997) 7 SCC 638, National Insurance Co. Ltd. vs. Hamida Khatoon and Others , (2009) 13 SCC 361 and Regional Director, E.S.I. Corporation and Another vs. Francis De Costa and Another , 1993 SCC Supp. (4) 100 there was no authoritative pronouncement on the subject issue. It is also pointed out that even if the issue is found against the claimants, following the decision of this very bench in New India Assurance Co. Ltd. vs. Sunita Sharma , C.A. No. 5093 of 2025 and SLP (C) No. 9515 of 2020 there should be no refund ordered as of now.
6. In addition to the aforesaid decisions, we have also been apprised of a decision of another Coordinate Bench in Krishna vs. Tek Chand, SLP (C) No. 5044 of 2019 delivered on 05.02.2024. The two Judge Bench having considered the decision in Helen C. Rebello (supra) and Shashi Sharma (supra) found that Shas
Compensation for loss of dependency must not deduct pension or personal expenses; future prospects should be included, with the correct multiplier applied.
Compensation under the Motor Vehicles Act cannot be reduced by amounts received under the Haryana Compassionate Assistance Rules, preventing double recovery for the same loss.
Compensation under the Motor Vehicles Act is statutory and distinct from contractual benefits, ensuring claimants receive just compensation for loss due to negligence.
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