Kiran Raj

The Supreme Court Division Bench of Justice Sanjay Karol and Justice Augustine George Masih has held that financial assistance received by dependents of a deceased government employee under the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006, is deductible from compensation awarded under the Motor Vehicles Act, to the extent it corresponds to the same pecuniary loss. The Court allowed the appeal filed by an insurance company, restoring the High Court's original order after finding that a subsequent clarification application had been impermissibly used to make a substantive alteration to the compensation amount — an exercise the Court found legally impermissible.

The appeals were filed by an insurance company challenging orders passed by the High Court of Punjab and Haryana in proceedings arising out of a motor accident claim. The dispute originated from an accident dated 2nd November 2009, in which a motorcycle carrying three persons collided with a jeep due to rash and negligent driving. One pillion rider, a government employee working as MPHW in a Primary Health Centre and earning a monthly salary of Rs. 21,805, died in the accident, while the other occupants sustained injuries.

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The dependents filed a claim petition before the Motor Accidents Claims Tribunal, Rohtak, which awarded Rs. 8,80,000/- with interest at 7.5% per annum. Upon appeal, the High Court enhanced the compensation to Rs. 29,09,240/- and directed that amounts received under the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 be deducted. Subsequently, in a clarification order, the High Court modified its earlier decision and held that the entire amount received under the 2006 Rules would not be deductible. The insurance company challenged this modification before the Supreme Court.

The Court framed the question as “whether the amount in terms of the 2006 Rules has to be deducted from the compensation awarded by the Tribunal or not?” It recorded that the High Court had relied on an earlier judgment but later took a contrary position in its clarification order.

Referring to precedent, Reliance General Insurance v. Shashi Sharma (supra), the Court extracted paragraph 26 from the decision in Reliance General Insurance v. Shashi Sharma and recorded: “The harmonious approach for determining a just compensation payable under the 1988 Act, therefore, is to exclude the amount received or receivable by the dependants of the deceased government employee under the 2006 Rules towards the head financial assistance equivalent to ‘pay and other allowances’ that was last drawn by the deceased government employee in the normal course.” It further noted: “Similarly, other benefits extended to the dependants 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.”

On the relationship between Shashi Sharma and Birender, the Court stated: “On a close reading of the two judgments… it can be concluded that they are not inconsistent on any point of law.” It observed: “Shashi Sharma defines what is deductible, while Birender clarifies when and how such deductions should be made.”

Regarding the power of clarification, the Court recorded: “The MVA does not create any independent procedural mechanism called a ‘clarification’ of a concluded appellate judgment.” It further observed: “Section 152 CPC permits correction only of clerical, arithmetical mistakes or errors arising from accidental slips or omissions.” The Court added: “Section 152 cannot be invoked to change the operative part of a judgment on merits.” It concluded: “Any such exercise would, in law, amount to a review in substance and must satisfy the strict requirements of review under Order XLVII CPC.”

The Court ordered: “Appeals are allowed. The Order in Review is set aside, and the Main Order is restored. The amount received by the claimant-respondents in terms of the 2006 Rules will be deducted from the award as modified by the Main Order. The rate of interest as awarded by the Tribunal will remain unchanged, payable from the date of institution of the claim petition.”

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“Let an affidavit be filed before the Tribunal, by the claimant-respondents, indicating the sum so received, if any, enabling the Tribunal to make suitable orders for disbursal of the money by appellant herein.” The Court stated that “Once such an order is made, the sum shall be released in favour of the claimant-respondent within six weeks therefrom.”

“If no amount is received or receivable under the 2006 Rules, the claimant-respondents shall be entitled to claim the entire amount in terms of the main order passed by the High Court.” It also directed that “The details of the bank account of the claimant-respondent be supplied to the appellant by the respective counsel before the Tribunal, when they appear before the Tribunal on 27th February 2026.”

Advocates Representing the Parties

For the Petitioners: Mr.Atul Nanda, Sr.Adv. Mr.Kshitij Mittal, Adv. Mr.Aryan Sharma, Adv. Mr. Mukesh Kumar, AOR

For the Respondents: Mr. Aditya Singh, AOR Mr. Shubham Singh, Adv. Mr. Kamal Kishor, Adv.

Case Title: Reliance General Insurance Company Limited v. Kanika & Ors.
Neutral Citation: 2026 INSC 188
Case Number: Civil Appeal Nos. 2506–2507 of 2026
Bench: Justice Sanjay Karol, Justice Augustine George Masih