Mother Cannot Be Denied Motor Accident Compensation Because She Is Ineligible for State Welfare Assistance
A three-judge Supreme Court bench held that deducting state compassionate assistance from a mother’s accident compensation, when she was never eligible for that assistance, amounts to illegal enrichment of the insurer.
The Supreme Court has restored a dependent mother’s share of motor accident compensation after finding that the Punjab and Haryana High Court had improperly set off state welfare payments against her award — payments she was never entitled to receive in the first place. The three-judge bench of Justice Vikram Nath, Justice Sandeep Mehta, and Justice Vijay Bishnoi, deciding a civil appeal arising from SLP (Civil) No. 13979 of 2018, held that allowing such a deduction would constitute illegal enrichment of the insurer at the cost of a dependent parent. The Court raised the total compensation payable to the claimants from Rs. 7,70,400 to Rs. 19,01,000, directing payment within eight weeks.
How the Dispute Reached the Court
On 23 July 2012, at around 9:00 PM, Sachin Kumar, a constable in the Haryana Police Department, was riding his motorcycle from Jhajjar to Rohtak on the correct side of the road. Near Pehlwan Dhaba on the Rohtak-Jhajjar Road, a Trolla bearing Registration No. RJ-14GC-8428 came onto the wrong side at high speed and collided with him. Sachin Kumar died on the spot.
He was 25 years old. He left behind a widow, a minor daughter, his mother, and his father. His gross monthly salary was Rs. 16,230.
The four family members filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal, Rohtak, claiming Rs. 40,00,000 at 18% interest per annum. The Tribunal found that the Trolla driver had been rash and negligent. It assessed the deceased’s age at 24 to 25 years, applied a multiplier of 18 following Sarla Verma and Others v. Delhi Transport Corporation and Anr., (2009) 6 SCC 121, and awarded Rs. 37,30,680 to the widow, daughter, and mother jointly. The father was excluded because he was a retired government servant receiving pension and therefore not a dependent under the Act.
The insurer, Reliance General Insurance Company Limited, appealed to the High Court. The High Court affirmed the income calculation in principle but made two significant changes. First, it deducted Rs. 9,490 per annum towards the deceased’s income tax liability, reducing the loss-of-dependency figure. Second, and more consequentially, it held that financial assistance payable to the family under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 (the 2006 Rules) must be set off against the compensation. The High Court calculated that assistance at Rs. 29,21,400 (Rs. 16,230 per month for 15 years, the period applicable to an employee who dies below age 35). After the set-off, the total compensation fell to Rs. 7,70,400.
The Core Problem: A Deduction Applied to Someone Who Gets Nothing
The appellants, represented by Senior Counsel Mr. Rameshwar Singh Malik, argued that the 2006 Rules were welfare legislation designed to protect bereaved families, not a mechanism to reduce the insurer’s liability. They further pointed out a specific injustice: the mother was not eligible to receive any financial assistance under the 2006 Rules at all. Deducting the full welfare amount from the total award — which included the mother’s one-third share — effectively wiped out her compensation entirely, even though she had never received, and would never receive, a rupee under those Rules.
The insurer, represented by Senior Counsel Mr. Joy Basu, defended the High Court’s approach. It relied on the three-judge bench decision in Reliance General Insurance Company Ltd. v. Shashi Sharma and Others, (2016) 9 SCC 627, which had held that amounts receivable under the 2006 Rules towards pay and allowances must be excluded from the compensation for loss of dependency to prevent double recovery. The insurer also argued that the deceased had joined service on 3 August 2007 under a non-pensionable regime.
The Court’s Analysis on Whether the 2006 Rules Deduction Was Correct in Principle
The Court framed three issues: whether the 2006 Rules assistance should be deducted from the Act compensation; whether that deduction should affect the mother’s entitlement; and what the final compensation figure should be.
On the first issue, the Court upheld the principle from Shashi Sharma. Rule 5(1) of the 2006 Rules entitles eligible family members to financial assistance equivalent to the last drawn salary of the deceased, for a period determined by the employee’s age at death. Since the deceased was 25, the eligible family members were entitled to 15 years of assistance, amounting to Rs. 29,21,400. The Court agreed that paying the same loss-of-income amount twice — once from the insurer and once from the State — would be a windfall. The High Court had correctly applied Shashi Sharma on this point.
The Court also noted the further clarification in National Insurance Company Ltd. v. Birender and Others, (2020) 11 SCC 356, that the total compensation under the Act must first be calculated in full and only then adjusted against the financial assistance actually received under the 2006 Rules.
Why the Mother Stood Apart: Eligibility Under the 2006 Rules
The second issue was where the High Court had gone wrong. The 2006 Rules tie eligibility for financial assistance to the Family Pension Scheme, 1964. Under Para 4, sub-para (ii) of that Scheme, “family” includes the wife, minor sons, unmarried minor daughters, and widowed or divorced daughters of a male officer. Parents are included only in the case of an unmarried officer. Sub-para (iii)(c) further specifies that pension is admissible to parents who were wholly dependent on the government employee only where the deceased employee had left behind neither a widow nor a child.
In this case, the deceased left behind a widow and a daughter. The mother therefore fell outside the definition of an eligible family member under the 2006 Rules. The Court referred to the Punjab and Haryana High Court’s own decision in Ram Kala Devi v. State of Haryana and Another, 2025 SCC OnLine P&H 12159, which had confirmed that a dependent parent is entitled to financial assistance under the 2006 Rules only when the employee is not survived by either a widow or a child.
The Supreme Court accepted this position. The mother was a dependent under the Motor Vehicles Act, 1988, entitled to one-third of the loss-of-dependency compensation. But she was not an eligible family member under the 2006 Rules. The High Court had set off the entire Rs. 29,21,400 against the total award without carving out the mother’s share, leaving her with nothing.
Just Compensation Cannot Be a Pittance
The Court drew on State of Haryana and Another v. Jasbir Kaur and Others, (2003) 7 SCC 484, which held that compensation must be just — not a windfall, but equally not a pittance. The Court observed that negating the mother’s claim, while the insurer benefited from a deduction tied to assistance she never received, would amount to illegal enrichment of the insurer at the cost of a dependent parent.
The Court held that the mother’s independent legal injury from the sudden death of her son was not diminished by the fact that the widow and daughter were entitled to state assistance. Her entitlement under the Act stood on its own footing.
Recalculating the Final Award
The High Court had correctly determined the total compensation at Rs. 36,91,800, comprising:
- Loss of dependency (after income tax deduction): Rs. 33,91,800
- Loss of consortium: Rs. 1,00,000
- Loss of love and affection for the daughter: Rs. 1,00,000
- Loss of love and affection for the mother: Rs. 50,000
- Funeral expenses: Rs. 25,000
- Loss of estate: Rs. 25,000
The mother’s one-third share of the loss-of-dependency amount of Rs. 33,91,800 came to Rs. 11,30,600. Since she was not eligible for any assistance under the 2006 Rules, this amount could not be absorbed by the set-off. The Court directed that Rs. 11,30,600 be added to the Rs. 7,70,400 already awarded by the High Court, bringing the total compensation to Rs. 19,01,000.
Order
The Supreme Court disposed of the civil appeal and directed the respondents to pay Rs. 19,01,000 jointly and severally to the appellants within eight weeks from the date of the order, with interest as accorded by the Tribunal and upheld by the High Court. All pending applications were also disposed of. The judgment was delivered on 26 May 2026.