[MV Act] Family Pension Paid To Deceased's Family Can't Be Deducted While Calculating Compensation: Delhi High Court

Justice Neena Bansal Krishna was considering the appellant/Insurance Company's challenge to the Motor Accidents Claims Tribunal's award, which granted around Rs. 13.36 lakh of compensation to claimants (respondent nos. 1&2). The claimants are the wife and son of the deceased, who died in a road accident aged 80 years.

The deceased was a retired superintendent and received a pension of around Rs. 42000 per month. His wife was getting the family pension of Rs. 20000 per month after his death.

The appellant/insurance company challenged award on the ground that only non-pecuniary damages ought to have been granted to the legal heirs of the deceased and that no compensation towards Loss of Dependency could have been paid as the deceased was not gainfully employed.

At the outset, the High Court remarked that monetary compensation has to be granted in a just and fair manner so as to alleviate any financial crisis on the legal heirs of the deceased.

“While calculating Compensation in such unfortunate cases, it must be borne in mind that while no amount of monetary compensation can replace a person, but the objective of granting compensation is to grant just and fair compensation so as to alleviate the financial crisis which may befall the legal heirs of the deceased and to place them in a position to ensure at least financial security. With this in mind, the compensation may be calculated in this case.”

The Court referred to the Supreme Court judgment in Mrs. Helen C. Rebello & Ors. vs. Maharashtra State Road Transport Corpn. & Anr (1998), where it was observed that any amount received due to accidental cannot be construed as a 'pecuniary advantage' liable for deduction. The Apex Court noted that there was no correlation between the family pension and the amount which is paid on account of accidental death.

The High Court further relied to Sebastiani Lakra vs. National Insurance Co. Ltd. (2018), where the Supreme Court has observed that deductions cannot be allowed from the amount of compensation on account of pensionary benefits as such amount is earned by the deceased on account of contractual relations with others and it does not accrue to the heirs on account of death in a motor vehicle accident.

In view of the above, the Court thus held that the Tribunal was correct in deducting the family pension while calculating the compensation and dismissed the appeal.

Case title: Cholamandalam Ms General Insurance Co. Ltd vs. Usha Gupta & Ors.

Citation: 2025 LiveLaw (Del) 82