Supreme Court Restores High Court's Original Compensation Order in Motor Accident Claim, Apex Court Rules Against Deduction of Unrelated Benefits in Motor Vehicle Accident Compensation
In a significant ruling, the Supreme Court of India has restored the original compensation order of the Punjab and Haryana High Court in the case of Reliance General Insurance Company Limited v. Kanika and others. The Supreme Court set aside the High Court's subsequent clarification order that altered the compensation amount payable under the Motor Vehicles Act, 1988, by deducting financial assistance received under the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006.
The case arose from a tragic accident on November 2, 2009, involving a collision between a motorcycle and a jeep, resulting in the death of Smt. Hom Devi, a government employee. The deceased's family was granted compensation under the Motor Vehicles Act, which the High Court initially enhanced to Rs. 29,09,240. However, it also ruled that the financial assistance received under the 2006 Rules should be deducted from the awarded compensation. Upon a request for clarification, the High Court reversed its stance, leading to the appeal by Reliance General Insurance Company.
The Supreme Court, in its judgment, emphasized that only benefits under the 2006 Rules that directly replace the loss of income should be deducted from the compensation awarded under the Motor Vehicles Act. The Court clarified that unrelated benefits, such as pensions and life insurance, are not subject to deduction. This decision aligns with the Court's earlier judgment in Reliance General Insurance v. Shashi Sharma, which stated that compensation should only consider overlapping benefits to prevent double recovery.
Furthermore, the Supreme Court addressed the procedural aspect, highlighting that a High Court cannot alter substantive rights through a clarification application. Such changes can only be made through a review process as per the Code of Civil Procedure, 1908.
The ruling underscores the judiciary's commitment to ensuring just compensation for victims of motor vehicle accidents while preventing duplication of benefits. The Supreme Court's decision provides clarity on the treatment of financial assistance under the 2006 Rules in the context of compensation awarded under the Motor Vehicles Act.
Bottom Line:
Compensation awarded under Motor Vehicles Act to be adjusted with financial assistance received under Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006, only to the extent of overlapping benefits replacing income loss, while unrelated benefits like pensions, life insurance, etc., remain unaffected.
Statutory provision(s): Motor Vehicles Act, 1988 Section 173, Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006, Code of Civil Procedure, 1908 Sections 151 and 152.
Reliance General Insurance Company Limited v. Kanika, (SC) : Law Finder Doc id # 2857760
