Punjab & Haryana High Court Reduces Compensation in ₹77 Lakh Motor Accident Award; Excludes Family Pension from Deceased’s Income

Case Name: ICICI Lombard General Insurance Co. Ltd. v. Priya P.S. & Others
Date of Judgment: October 29, 2025
Citation: FAO-5779-2025
Bench: Hon’ble Mr. Justice Parmod Goyal

Held: The Punjab & Haryana High Court partly allowed ICICI Lombard’s appeal against a ₹77,24,440 compensation award passed by the Motor Accident Claims Tribunal, Kurukshetra, in favour of the dependents of deceased Satheesh Kumar. Justice Parmod Goyal held that the Tribunal erred in computing loss of dependency by wrongly taking the deceased’s age as 40 years instead of 41 years and by including family pension as part of his income. The Court clarified that family pension received by dependents cannot be treated as the deceased’s income for compensation computation. Accordingly, the compensation was recalculated on the basis of notional income under the “highly skilled” category and reduced to ₹21,43,000 with interest at 7.5% per annum.

Summary: The deceased, Satheesh Kumar, an ex-Air Force personnel, died in a road accident on October 2, 2020, involving a Bolero vehicle. His dependents were awarded ₹77,24,440 by the Motor Accident Claims Tribunal. The insurance company challenged the award on grounds of incorrect age, excessive multiplier, wrongful addition of future prospects, and inclusion of pension in income. The Court found that the deceased’s age was 41 years and 6 months, warranting a multiplier of 14 instead of 15, and held that pension cannot be added as income, though it cannot be deducted either. Citing Vishavjit Singh v. Cholamandalam Insurance Co. and Sarla Verma v. DTC, the Court reaffirmed that family pension is not related to the cause of death and thus cannot enhance the dependency loss. The recalculated compensation, including consortium and funeral expenses, totaled ₹21,43,000 — a reduction of ₹55,81,440 from the Tribunal’s award.

Decision: The Court reduced the compensation from ₹77,24,440 to ₹21,43,000, payable with 7.5% annual interest from the filing date of the claim petition till realization. The appeal was accordingly allowed in part.