Punjab & Haryana High Court Enhances Compensation to ₹16.53 Lakh, Disallows Deduction of Insurance Proceeds from Motor Accident Claim

Case Name: Harsial Singh and Others v. Jaswant Singh and Others
Date of Judgment: October 9, 2025
Citation: FAO-594-2023
Bench: Hon’ble Mrs. Justice Sudeépti Sharma

Held: The Punjab & Haryana High Court enhanced the compensation from ₹10.39 lakh to ₹16.53 lakh in a fatal motor accident case, holding that the Motor Accident Claims Tribunal erred in deducting ₹6.02 lakh received under a personal accident insurance policy. Justice Sudeépti Sharma ruled that such deductions contravene the settled law that life or personal accident insurance proceeds cannot be adjusted against compensation under the Motor Vehicles Act. The Court emphasized that the Act is a beneficial legislation intended to provide just compensation independent of any contractual or policy-based benefits.

Summary: The appeal arose from a Motor Accident Claims Tribunal award dated August 8, 2022, granting ₹10.39 lakh for the death of Sukhchain Singh, who died in a motor accident on January 13, 2020. The appellants sought enhancement, arguing that the Tribunal wrongly deducted ₹6.02 lakh received under a personal accident insurance policy and awarded inadequate sums under conventional heads.

Justice Sharma relied on Helen C. Rebello v. Maharashtra SRTC (1999) 1 SCC 90 and Sebastiani Lakra v. National Insurance Co. Ltd. (2019) 17 SCC 465, where the Supreme Court held that life or accident insurance proceeds, pensions, or gratuities earned through contractual or service-related entitlements cannot be deducted from compensation under the Motor Vehicles Act. The Court also reaffirmed the settled principles from Sarla Verma v. DTC (2009) 6 SCC 121, Pranay Sethi (2017) 16 SCC 680, and Magma General Insurance Co. Ltd. v. Nanu Ram (2018) 18 SCC 130, governing multiplier selection, future prospects, and consortium.

Reassessing the award, the Court adopted a monthly income of ₹11,311, applied 40% addition for future prospects, deducted 50% towards personal expenses (as the deceased was unmarried), and used a multiplier of 16, fixing dependency loss at ₹15,20,256. The Court enhanced the sums for loss of estate and funeral expenses to ₹18,150 each and granted ₹96,800 towards filial consortium, computing a total of ₹16,53,356.

Decision: The High Court allowed the appeal, modifying the Tribunal’s award and directing the Insurance Company to deposit the enhanced compensation of ₹16.53 lakh along with 9% interest per annum from the date of filing the claim petition till realization. The Tribunal was instructed to disburse the amount to the claimants within two months.