Compassionate Assistance Deductible from Motor Accident Compensation to Prevent Double Recovery: SC

Reliance General Insurance Company Limited Vs Kanika & Ors. (Supreme Court of India)

The appeals arose from orders of the High Court of Punjab and Haryana concerning deduction of financial assistance received under the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 (“2006 Rules”) from compensation awarded under the Motor Vehicles Act, 1988 (MVA).

The case stemmed from a motor accident on 2 November 2009, in which a motorcycle collided with a jeep due to rash and negligent driving. Smt. Hom Devi, employed as MPHW in PHC Chhara, died in the accident. Her legal heirs filed a claim before the Motor Accidents Claims Tribunal (MACT), which awarded ₹8,80,000 with 7.5% interest. On appeal, the High Court enhanced compensation to ₹29,09,240 but held that amounts received under the 2006 Rules were deductible from the total compensation. Subsequently, by a clarification order, the High Court modified its position, holding that the entire amount received under the 2006 Rules would not be deductible, reducing the payable compensation to ₹25,83,949. A review followed, and the matter reached the Supreme Court.

The core issue was whether financial assistance under the 2006 Rules must be deducted from compensation awarded under the MVA.

The Court examined its earlier decision in Reliance General Insurance v. Shashi Sharma (2016) 9 SCC 627, which held that only those benefits under the 2006 Rules that directly correspond to loss of income—such as ex gratia financial assistance equivalent to pay and allowances—are deductible from MVA compensation to prevent double recovery. Other benefits, including family pension, life insurance, provident fund, and unrelated allowances, are not deductible.