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2026 Supreme(SC) 622

SUPREME COURT OF INDIA
VIKRAM NATH, SANDEEP MEHTA, VIJAY BISHNOI, JJ.
Sarla Devi and Others – Appellants
Versus
Reliance General Insurance Company Limited and Others – Respondents
Civil Appeal No. 8190 of 2026 [Arising Out of SLP (Civil) No. 13979 of 2018]
Decided On : 26-05-2026

Advocates appeared:
For the Petitioner(s): Mr. Rameshwar Singh Malik, Sr. Adv. Mr. Jitesh Malik, Adv. Mr. Jatin Hooda, Adv. Mr. Abhaya Nath Das, Adv. Mr. Piyush Sharma, Adv. Mr. Satish Kumar, AOR
For the Respondent(s): Mr. Joy Basu, Sr. Adv. Mr. A.K. Soni, Adv. Mr. Rajeev Maheshwaranand Roy, AOR Mr. Nilesh Kumar, Adv. Mr. P Srinivasan, Adv. Mr. Pavan Kumar, Adv. Mr. Anoop George, Adv.

Compassionate financial assistance paid by an employer is deductible from motor vehicle accident compensation to prevent double recovery, provided that such deduction does not unfairly deprive a dependent who is ineligible to receive the compassionate assistance from their rightful share of the compensation.

Headnote:(A) Motor Vehicles Act, 1988 - Sections 166 and 168 - Compassionate financial assistance scheme - Deduction of ex-gratia payment from compensation - Just compensation - The objective of providing compassionate financial assistance to dependents of a deceased government employee is to prevent destitution - While the principle holds that there should be no double recovery or unjust enrichment of claimants, the deduction of such financial assistance from the total compensation awarded under the Act is permissible to avoid duality of loss of income (Para 15).

(B) Dependency and Entitlement - Eligibility for compassionate assistance - Financial assistance schemes often have specific eligibility criteria defined under pensionary rules; parents are often excluded if a spouse or children survive - Where a claimant is a dependent under the relevant legislation but is excluded from receiving independent financial assistance, the deduction of the aggregate financial aid from the total compensation would unfairly deprive that claimant of their due share in the award (Paras 16-18, 24).

(C) Judicial Review - Duty to ensure just compensation - Appellate courts must ensure that the process of setting off financial aid does not equate to the forfeiture of the rightful share of a dependent who does not receive any such collateral benefit - The total compensation calculation must reflect the actual loss of dependency of each claimant, and an arbitrary deduction which negates the share of an ineligible dependent is impermissible (Paras 22-25).

Facts of the case:
An employee died in a road accident. The tribunal awarded compensation under the Act. Upon appeal, the High Court reduced the award by setting off the total financial assistance provided to the family by the employer under a welfare scheme. The appellants, including the mother of the deceased, challenged the reduction, arguing that the mother was ineligible for the compassionate financial assistance granted under the service rules.

Findings of Court:
The court upheld the principle that financial assistance towards loss of income can be deducted from the compensation to prevent double recovery. However, the court found that the mother was legally ineligible for such assistance under the state welfare rules as the deceased was survived by a spouse and children. Consequently, the court ruled that the daughter-in-law and the mother's share of the compensation could not be equated, and the deduction should not negate the share of the dependent mother.

Issues: Whether the financial assistance payable under a compassionate welfare scheme is liable to be deducted from the compensation amount assessed for loss of income, and whether such deduction adversely affects the entitlement of a dependent who is ineligible to receive said financial assistance.

Ratio Decidendi: To prevent double compensation for loss of income, financial aid provided by the employer is deductible from the compensation awarded under the Act. However, this deduction must not result in the deprivation of compensation to a dependent who is not a beneficiary of the compassionate assistance scheme, as doing so would lead to an inequitable outcome inconsistent with the goal of awarding 'just' compensation.

Result: Appeal disposed of with a direction for payment of the modified compensation amount to the claimants within eight weeks.

Table of Content
1. case facts, procedural history, and compensation assessment methods. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8)
2. conflicting arguments regarding deductibility of ex-gratia assistance versus compensation. (Para 9 , 10 , 11)
3. deduction of financial assistance mandated to prevent double recovery. (Para 12 , 13 , 14 , 15)
4. parents ineligible for financial assistance when widow/children survive. (Para 16 , 17 , 18)
5. ensuring just compensation for all dependents regardless of statutory deductions. (Para 19 , 20 , 21 , 22 , 23 , 24)
6. adjustment of total compensation to ensure individual dependent rights are protected. (Para 25 , 26)

JUDGMENT :

VIJAY BISHNOI, J.

1. Leave Granted.

2. The present appeal has been preferred by the Appellants challenging the order dated 12.09.2017 (hereinafter referred to as “impugned order”) passed by the High Court of Punjab and Haryana at Chandigarh (hereinafter referred to as “the High Court”) in F.A.O. No. 3633 of 2015, wherein the High Court allowed the appeal, and modified the compensation amount awarded by the Motor Accident Claims Tribunal, Rohtak (hereinafter referred to as “Tribunal”) vide award dated 23.02.2015 in M.A.C.T. Case No. 117 of 2012, thereby granting a total compensation of Rs.7,70,400/- to the Appellants.

FACTUAL MATRIX

3. On 23.07.2012, at about 9:00 PM, Sachin Kumar (hereinafter referred to as “deceased”) was travelling from Jhajjar to Rohtak on motorcycle bearing Registration No. HR-12H-2221, driving on the correct side of the road and at a moderate speed. When he reached near Pehlwan Dhaba on Rohtak-Jhajjar Road, near village Karontha, a Trolla bearing Registration No. RJ-14GC-8428, being driven rashly and negligently at a high speed from the opposite direction, came onto the wrong side of the road and collided with the motorcycle. Due to the impact, the deceased sustained fatal injuries and died on the spot.

4. The Appellants herein, the widow (Appellant No. 1), the minor daughter of the deceased (Appellant No. 2), the mother of the deceased (Appellant No. 3) and the father of the deceased (Appellant No. 4) filed a claim petition bearing MACT Case No. 117 of 2012, under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as “the Act”) before the Tribunal. The Appellants, contending that the deceased was 25 years of age at the time of accident and was employed as a constable in the Haryana Police Department, Government of Haryana, drawing a salary of Rs. 18,000/- claimed Rs. 40,00,000/- as compensation at an interest of 18% per annum from the Respondents herein.

5. The Tribunal, after considering the pleadings and evidence adduced by the parties, held that the deceased had died due to the injuries sustained in the accident, which occurred on account of the rash and negligent driving of Respondent No. 2, who was driving Trolla bearing Registration No. RJ-14GC-8428. Further, on the basis of the matriculation certificate, postmortem report, and the pleadings of the claimants, the Tribunal assessed the age of the deceased to be between 24 and 25 years. Upon perusal of the salary certificate of the deceased, the Tribunal determined his gross monthly salary to be Rs. 16,230/-. Relying upon the judgment in Sarla Verma and Others vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121, the Tribunal assessed the total compensation payable to Appellant Nos. 1 to 3 at Rs. 37,30,680/-along with interest @ 8% per annum, payable jointly and severally by the respondents, as the offending vehicle was duly insured with Respondent No. 1.

6. As regards Appellant No. 4, the Tribunal held that he was a retired government servant and was receiving pension, and thus could not be considered a dependent under the Act. Consequently, the Tribunal directed that the amount under the head of loss of dependency, was to be divided equally between the Appellant Nos. 1 to 3. The compensation assessed by the Tribunal is as under:

Income

Rs. 16,230/- per month

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