Supreme Court of India
NEW INDIA ASSURANCE CO. LTD.versusSMT. SUNITA SHARMA AND ORS.
- Citation
- 2025 INSC 469
- Decided
- 7 April 2025
- Disposal
- Appeal(s) allowed
- Bench
- SUDHANSHU DHULIA
Holding
The compensation payable under the Haryana Compassionate Assistance Rules, 2006 must be fully excluded from the compensation awarded under the Motor Vehicles Act, 1988, and no deduction is required if such amount has already been paid to the dependents.
Summary
The case arose from a claim for compensation under the Motor Vehicles Act, 1988 following the death of a government employee, where the dependents were also entitled to ex‑gratia assistance under the Haryana Compassionate Assistance Rules, 2006. The High Court had deducted only 50% of the amount payable under the Rules from the award under the Motor Vehicles Act, a deduction challenged by the insurer, New India Assurance Co. Ltd. The Supreme Court examined earlier decisions, notably Reliance General Insurance Co. Ltd. v. Shashi Sharma and National Insurance Co. Ltd. v. Birender, and held that the full amount payable under the Rules must be excluded from the tortfeasor's liability, as it is a separate statutory benefit. The Court further clarified that if the dependents have already received the assistance, no further deduction or recovery is required. Consequently, the appeal was allowed, setting aside the High Court’s partial deduction and directing that the compensation be computed without the Rules' amount unless already paid.
Issues considered
- Whether compensation payable under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 should be deducted from the compensation awarded under the Motor Vehicles Act, 1988.
- Whether a partial deduction (50%) of the Rules' amount is permissible.
- If the amount under the Rules has already been paid to the dependents, should any further deduction be made.
Legislation cited
Headnote
Issue for Consideration How the compensation payable under the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006 has to be dealt with in computing the compensation under the Motor Vehicles Act, 1988. Headnotes† Motor Vehicles Act, 1988 – to the Dependents of Deceased Government Employees Rules, 2006 – In the present case, the High Court has deducted only 50% of the compensation under the Rules of 2006 from the amounts awarded in the Claim Petition under the Motor Vehicles Act – The Insurance Company pointed out
Subjects
CompensationCompensation payableClaim petitionAmounts receivable under Dependents of Deceased Government Employees Rules, 2006Deceased Government employeeMotor Vehicles ActDouble recovery
Judgment
[2025] 4 S.C.R. 603 : 2025 INSC 469
New India Assurance Co. Ltd.
v.
Smt. Sunita Sharma and Ors.
(Civil Appeal No. 5093 of 2025)
08 April 2025
[Sudhanshu Dhulia and K. Vinod Chandran,* JJ.]
Issue for Consideration
How the compensation payable under the Haryana Compassionate
Assistance to the Dependents of Deceased Government Employees
Rules, 2006 has to be dealt with in computing the compensation
under the Motor Vehicles Act, 1988.
Headnotes†
Motor Vehicles Act, 1988 – Haryana Compassionate Assistance
to the Dependents of Deceased Government Employees Rules,
2006 – In the present case, the High Court has deducted
only 50% of the compensation under the Rules of 2006 from
the amounts awarded in the Claim Petition under the Motor
Vehicles Act – The Insurance Company pointed out that despite
noticing the decision in Reliance General Insurance Co. Ltd.
v. Shashi Sharma, the High Court has ignored the dictum and
followed the Judgment of High Court in Kamla Devi v. Sahib
Singh & Ors:
Held: The appeal is allowed setting aside the judgment impugned
of the High Court to the extent it deducted only 50% of the
compensation payable under the Rules of 2006 but also making
it clear that if the amounts are already paid to the respondents,
no recovery shall be made – The High Court despite noticing a
judgment of this Court, in the impugned judgment, failed to follow
the dictum and followed a contrary judgment of the High Court
itself; which is per-se in violation of Article 141 of the Constitution
of India. [Paras 7, 8]
Case Law Cited
Reliance General Insurance Co. Ltd. v. Shashi Sharma [2016]
6 SCR 488 : (2016) 9 SCC 627; National Insurance Company
* Author
604 [2025] 4 S.C.R.
Digital Supreme Court Reports
Limited v. Birender and Others [2020] 1 SCR 946 : 2020 SCC
Online SC 28 – relied on.
Kamla Devi v. Sahib Singh & Ors., FAO No. 3064 of 2013 and
others – decided on 30.11.2017 by the High Court – referred to.
List of Acts
Dependents of Deceased Government Employees Rules, 2006;
Motor Vehicles Act, 1988.
List of Keywords
Compensation; Compensation payable; Claim petition; Amounts
receivable under Dependents of Deceased Government Employees
Rules, 2006; Deceased Government employee.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5093 of 2025
From the Judgment and Order dated 13.12.2019 of the High Court
of Punjab & Haryana at Chandigarh in FAO No. 908 of 2016
Appearances for Parties
Advs. for the Appellant:
Abhishek Gola, Viresh B. Saharya, Akshat Agarwal, Rishabh Mathur.
Judgment / Order of the Supreme Court
Judgment
K. Vinod Chandran, J.
1. Leave granted.
2. The sole question arising in the above case is as to how the
compensation payable under the Haryana Compassionate Assistance
to the Dependents of Deceased Government Employees Rules,
20061 has to be dealt with in computing the compensation under
the Motor Vehicles Act, 1988.
1 For brevity ‘Rules of 2006’
[2025] 4 S.C.R. 605
New India Assurance Co. Ltd. v. Smt. Sunita Sharma and Ors.
3. We notice that in the present case, the High Court has deducted
only 50% of the compensation under the Rules of 2006 from the
amounts awarded in the Claim Petition under the Motor Vehicles
Act. The learned counsel for the Insurance Company points out that
despite noticing the decision in Reliance General Insurance Co.
Ltd. v. Shashi Sharma,2 the High Court has ignored the dictum and
followed the Judgment of that High Court in Kamla Devi v. Sahib
Singh & Ors.3
4. In the present case though, notice has been served on respondent,
none appears. The learned counsel for the Insurance Company
submits that the question arising is no longer res-integra, but the High
Court is awarding compensation without deducting the compensation
payable under the Rules of 2006. Reliance is also placed on the
subsequent decision of this Court in National Insurance Company
Limited v. Birender and Others.4 It is undertaken that there will be
no refund claimed from the respondents-claimants who have been
awarded compensation by the High Court after deducting 50% of
the compensation awarded under the Rules of 2006.
5. In Shashi Sharma,2 a three Judge Bench held so in paragraph 26:
“26. …The Claims Tribunal has to adjudicate the claim and
determine the amount of compensation which appears to
it to be just. The amount receivable by the dependents/
claimants towards the head of pay and allowances in the
form of ex-gratia financial assistance, therefore, cannot be
paid for the second time to the claimants. True it is, that
the Rules of 2006 would come into play if the Government
employee dies in harness even due to natural death.
At the same time, the Rules of 2006 do not expressly
enable the dependents of the deceased Government
employee to claim similar amount from the tortfeasor or
Insurance Company because of the accidental death of
the deceased Government employee. The harmonious
approach for determining a just compensation payable
under the Act of 1988, therefore, is to exclude the amount
2 (2016) 9 SCC 627
3 FAO No.3064 of 2013 and others – decided on 30.11.2017
4 2020 SCC Online SC 28
606 [2025] 4 S.C.R.
Digital Supreme Court Reports
received or receivable by the dependents of the deceased
Government employee under the Rules of 2006 towards
the head financial assistance equivalent to “pay and
other allowances” that was last drawn by the deceased
Government employee in the normal course. This is not
to say that the amount or payment receivable by the
dependents of the deceased Government employee under
Rule 5 (1) of the Rules, is the total entitlement under the
head of “loss of income”. So far as the claim towards
loss of future escalation of income and other benefits, if
the deceased Government employee had survived the
accident can still be pursued by them in their claim under
the Act of 1988. For, it is not covered by the Rules of
2006. Similarly, other benefits extended to the dependents
of the deceased Government employee in terms of sub-
rule (2) to sub-rule (5) of Rule 5 including family pension,
Life Insurance, Provident Fund etc., that must remain
unaffected and cannot be allowed to be deducted, which,
any way would be paid to the dependents of the deceased
Government employee, applying the principle expounded
in Helen C. Rebello v. Maharashtra SRTC, (1999) 1 SCC
90 and United India Insurance Co. Ltd. V. Patricia Jean
Mahanan, (2002) 6 SCC 281 cases.”
6. In Birender4 also while enhancing the award amounts the payment
was made subject to the amounts received under the rules of 2006,
in the following manner:
“However, this amount alongwith interest at the rate of 9%
per annum from the date of filing of the claim petition till
payment, will be payable subject to the outcome of the
application made by the respondent Nos.1 and 2 to the
competent authority for grant of financial assistance under
the Rules of 2006. If that application is allowed and the
amount becomes payable towards financial assistance
under the said Rules to the specified legal representatives
of the deceased, commensurate amount will have to
be deducted from the compensation amount along with
interest component thereon. The respondent Nos.1 and 2,
therefore, can be permitted to withdraw the compensation
amount only upon filing of an affidavit-cum-declaration
[2025] 4 S.C.R. 607
New India Assurance Co. Ltd. v. Smt. Sunita Sharma and Ors.
before the executing Court that they have not received
nor would claim any amount towards financial assistance
under the Rules of 2006 and if already received or to be
received in future on that account, the amount so received
will be disclosed to the executing Court, which will have to
be deducted from the compensation amount determined
in terms of this order”.
7. The appeal is allowed setting aside the judgment impugned to the
extent it deducted only 50% of the compensation payable under the
Rules of 2006 but also making it clear that if the amounts are already
paid to the respondents, no recovery shall be made.
8. We cannot but observe that we are surprised that the High Court
despite noticing a judgment of this Court, in the impugned judgment,
failed to follow the dictum and followed a contrary judgment of the
High Court itself; which is per-se in violation of Article 141 of the
Constitution of India.
Pending applications, if any, shall stand disposed of.
Result of the case: Appeal Allowed.
†
Headnotes prepared by: Ankit Gyan
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