Supreme Court Clarifies Treatment of Compassionate Assistance in Motor Vehicle Accident Compensation.


08 April 2025 Civil Appeals >> Civil & Consumer Law   |   Motor Accident >> Family Law  

The Supreme Court addressed the issue of how compensation granted under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006, should be treated when calculating compensation under the Motor Vehicles Act, 1988. The Court noted that the High Court in the present case had only deducted 50% of the compassionate assistance from the motor vehicle accident compensation, despite the Supreme Court's previous ruling in Reliance General Insurance Co. Ltd. v. Shashi Sharma ((2016) 9 SCC 627), which mandated a full deduction of the financial assistance equivalent to the deceased employee's last drawn pay and allowances.


 

 

The Court reiterated the principle established in Shashi Sharma that the financial assistance received or receivable under the 2006 Rules, specifically the amount equivalent to the deceased's last drawn pay and allowances, cannot be paid again as part of the motor accident compensation. However, the Court clarified that claims for loss of future income escalation and other benefits not covered by the 2006 Rules can still be pursued under the Motor Vehicles Act. Benefits like family pension, life insurance, and provident fund are not to be deducted.

The Court also referred to its subsequent decision in National Insurance Company Limited v. Birender and Others (2020 SCC Online SC 28), which reinforced the principle of deducting the compassionate assistance. While allowing the appeal and setting aside the High Court's judgment to the extent of the 50% deduction, the Supreme Court directed that no recovery of the already paid amount should be made from the claimants.

The Court expressed surprise that the High Court had disregarded a Supreme Court judgment and followed its own contrary judgment, which is a violation of Article 141 of the Constitution of India.


Motor Vehicles Act, 1988  

Constitution of India, 1950