Insurance Company Cannot Use Government Assistance Paid to Widow and Child to Deny Compensation to Dependent Mother
Case Name: Sarla Devi & Ors. v. Reliance General Insurance Company Limited & Ors.
Citation: 2026 INSC 575
Date of Judgment/Order: 26 May 2026
Bench: Justice Vikram Nath, Justice Sandeep Mehta and Justice Vijay Bishnoi
Held: The Supreme Court held that financial assistance received by the eligible family members of a deceased Haryana Government employee under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 can be deducted from motor accident compensation to avoid double payment under the same head of “loss of income”. However, the Court clarified that such deduction cannot be applied in a manner that wipes out the separate compensation share of a dependent who is not eligible to receive that government assistance. Since the deceased’s mother was a dependent under the Motor Vehicles Act but was not eligible for financial assistance under the 2006 Rules because the deceased had left behind a widow and daughter, her share of loss of dependency could not be denied to her.
Summary: The case arose from the death of Sachin Kumar, a 25-year-old Haryana Police constable, who died in a road accident on 23.07.2012 when a Trolla coming from the wrong side hit his motorcycle near Rohtak-Jhajjar Road. His widow, minor daughter, mother and father filed a claim petition under Section 166 of the Motor Vehicles Act. The Tribunal awarded INR 37,30,680 as compensation, treating the widow, minor daughter and mother as dependents, while excluding the father because he was a retired government servant receiving pension. The High Court recalculated the compensation at INR 36,91,800 but deducted INR 29,21,400 payable to the family under the 2006 Rules, thereby reducing the final compensation to INR 7,70,400. The Supreme Court agreed that the widow and daughter, being eligible family members under the 2006 Rules, could not receive duplicate compensation for the same income loss. But the Court found that the mother was not entitled to receive financial assistance under those Rules, and therefore deducting the entire government assistance from the accident compensation unfairly deprived her of her lawful dependency share.
Decision: The Supreme Court modified the High Court’s award and held that the mother of the deceased was entitled to her 1/3rd share of the loss of dependency, amounting to INR 11,30,600, in addition to the INR 7,70,400 already awarded by the High Court. The total compensation was therefore enhanced to INR 19,01,000, with interest as awarded by the Tribunal and upheld by the High Court. The respondents were held jointly and severally liable to pay the enhanced compensation to the claimants within eight weeks. The appeal was disposed of, and all pending applications also stood disposed of.