Family Pension Cannot Be Deducted While Computing Loss Of Dependency In Motor Accident Claims: Punjab And Haryana High Court
Safiya Malik
The High Court of Punjab and Haryana Single Bench of Justice Sudeepti Sharma has modified a motor accident compensation award, holding that the family pension received by a deceased employee’s widow cannot be deducted while computing loss of dependency under the Motor Vehicles Act, 1988. In an appeal seeking enhancement, the Court found that the tribunal had reduced dependency by subtracting the widow’s monthly family pension, even though such pension is a service-linked benefit payable to heirs on death and bears no nexus to compensation for accidental death. Allowing the appeal, the Court enhanced the compensation and directed the insurer to deposit the enhanced amount with interest within two months for disbursal to the claimants.
The appeal arose from an award passed by the Motor Accident Claims Tribunal, Kaithal, in a claim petition under Section 166 of the Motor Vehicles Act, 1988, concerning the death of the deceased in a motor vehicular accident on 23.04.2016. The Tribunal had awarded compensation of ₹3,22,000/- along with interest at 7% per annum to the claimants.
The appellants–claimants sought enhancement of compensation, contending that the Tribunal had committed an error in deducting the monthly family pension of ₹24,000/- received by the widow while computing loss of dependency. They further contended that the assessment of notional income at ₹6,000/- per month was arbitrary and unsustainable. Reliance was placed on precedents governing deduction of pensionary benefits. The Insurance Company opposed the appeal and supported the award, contending that the compensation assessed by the Tribunal was justified.
The deceased was a retired government employee, and it was undisputed that his widow was receiving family pension of ₹24,000/- per month. The central issue before the Court was whether such family pension could be deducted while computing compensation payable under the Motor Vehicles Act.
The Court recorded that “the sole issue for determination in the present appeal is confined to quantum of compensation awarded by the learned Tribunal.”
While examining the question of deduction of family pension, the Court observed that “the pivotal question that thus arises for consideration is whether the family pension being received by the widow can be taken into account while computing the loss of dependency.”
Referring to settled law, the Court observed that “any amount receivable or received not on account of accidental death but would have in any case be received by the Claimant, cannot be construed as a ‘pecuniary advantage’ liable for deduction.” It further recorded that “there is no co-relation between the family pension, which in any case the family would have got and the amount which is paid on account of accidental death.”
The Court noted that pensionary benefits are earned by the employee during service and are receivable irrespective of accidental death. It recorded that “pensionary benefit could not have been treated as ‘pecuniary advantage’ liable to be deducted for the purpose of computation of compensation within the scope of Motor Vehicles Act, 1988.”
Applying these principles, the Court observed that “it is evident that the learned Tribunal committed a manifest error in deducting the family pension while computing the compensation, which is wholly impermissible in law and warrants interference.”
On assessment of income, the Court stated that “income of the deceased Kehar Singh is assessed as Rs.24,000/- per month.” It further recorded that “the learned Tribunal has rightly deducted 1/2 towards personal expenditure after taking into account that the major and married son of the deceased were not dependent on the deceased.”
Regarding consortium, the Court observed that “the compensation awarded for loss of consortium is on lower side. Therefore, the award requires indulgence of this Court.”
The Court directed that “the present appeal is allowed. The award dated 01.03.2018 is modified accordingly. The appellants/claimants are entitled to enhanced compensation as per the calculations made here-under,” and recalculated the total compensation at ₹11,58,000/-, with an enhanced amount of ₹8,36,000/-.
“The appellants-claimants are granted the interest @ 9% per annum on the enhanced amount from the date of filing of claim petition till the date of its realization. The respondent No.3-Insurance Company is directed to deposit the enhanced amount of compensation along with interest with the Tribunal within a period of two months from today.” It also directed that “the Tribunal is further directed to disburse the enhanced amount of compensation along with interest in the accounts of the appellants/claimants, in the ratio settled by the learned Tribunal in the award.”
Advocates Representing the Parties:
For the Petitioners: Mr. Balwinder Singh, Advocate
For the Respondents: Mr. Nigam K. Bhardwaj, Advocate for Respondent No.3–Insurance Company
Case Title: Chameli Devi and Others v. Sanjeev Kumar and Others
Neutral Citation: 2026: PHHC:012369
Case Number: FAO-4272-2018 (O&M)
Bench: Justice Sudeepti Sharma
