Safiya Malik

The Allahabad High Court Single Bench of Justice Sandeep Jain, while allowing an appeal for enhancement of motor accident compensation, held that neither the pension received by a deceased employee nor the family pension subsequently drawn by his widow can be deducted while computing compensation under the Motor Vehicles Act, 1988. The Court consequently revised the total compensation from Rs. 4,76,620 to Rs. 15,22,545, also granting future prospects at 20% and enhanced amounts under conventional heads.

The appeal was preferred by the claimant’s seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal for the death of a 73-year-old pensioner in a road accident dated 07.02.2018. The Tribunal had awarded Rs.4,76,620/- with interest at 7% per annum, computing compensation on the differential amount between the deceased’s monthly pension of Rs.23,936/- and the family pension of Rs.14,900/- received by his widow.

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The claimants contended that the Tribunal erred in deducting family pension while assessing compensation and argued that the full pension drawn at the time of death should have been considered. They relied upon decisions of the Supreme Court and further submitted that they were entitled to 20% addition towards future prospects under Rule 220-A of the U.P. Motor Vehicle Rules, 1998. They also sought enhancement under non-pecuniary heads.

The insurer opposed the appeal, submitting that the deceased had no future prospects at the age of 73 and that deduction of family pension was justified. The dispute thus concerned computation of income, applicability of future prospects, multiplier, and amounts under conventional heads.

The Court referred to Supreme Court precedents Sebastiani Lakra and others vs. National Insurance Company Limited and another and Hanumantharaju B. through LR vs. M. Akram Pasha and another,  and recorded: “It is apparent from the above judgements of the Apex Court that the pension paid to the claimant or family pension being paid to the legal heirs of the deceased employee is not to be considered and deducted while assessing compensation in the claim case and the compensation is to be determined on the basis of salary/pension of the injured/deceased, which he was getting at the time of the accident.”

While discussing the correlation between pensionary benefits and compensation, the Court noted: “the advantage which accrues to the estate of the deceased or to his dependants as a result of some contract or act which the deceased performed in his lifetime cannot be said to be the outcome or result of the death of the deceased.” It also recorded: “Deduction can be ordered only where the tortfeasor satisfies the court that the amount has accrued to the claimants only on account of death of the deceased in a motor vehicle accident.”

Referring to Supreme Court precedent on pension, the Court stated: “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 the law to the facts, the Court observed: “the family pension which the wife of the deceased was getting after the death of the deceased was not at all to be considered for assessing the compensation in the instant case but that amount of Rs. 14,900/- per month has been deducted… which is erroneous.” It concluded that “the claimants are entitled to get compensation on the basis of the monthly pension of the deceased, which was Rs.23,936/-.”

On future prospects, the Court recorded: “since the deceased was above 50 years old at the time of the accident, the claimants are entitled to compensation on future prospects @ 20% of his income but no compensation has been awarded by the Tribunal on this account, which is erroneous.” It further noted that “there is no upper age limit upto which the compensation towards future prospects of the deceased are admissible.”

Regarding multiplier, the Court stated: “where the claimant/deceased was above 65 years old at the time of accident, a multiplier of 5 is to be applied for assessing the compensation in a claims case.”

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The Court held: “In this way, the claimants are entitled to total compensation of Rs.15,22,545/- alongwith interest @ 7% per annum from the date of filing of the claim petition till it's actual payment, which is to be indemnified by the insurer of the offending vehicle No.UP-21-BK-5747. The appeal is allowed. The impugned judgment and award of the tribunal dated 12.07.2024 is modified to the above extent.”

“If any amount has been paid by the insurance company previously, then it is entitled to adjust it accordingly. The insurance company is directed to deposit the enhanced amount of compensation before the concerned tribunal within two months. The tribunal will be at liberty to proportionally award the enhanced amount of compensation to the claimants, keeping in view their age and dependency.”

Advocates Representing the Parties

For the Petitioners: Mohd. Asim Zulfiquar, Advocate (through Sri Abhishek Tripathi)
For the Respondents: Nagendra Kumar Srivastava, Advocate

Case Title: Smt Mugga Devi And 4 Others vs Makkhan Singh And 2 Others
Neutral Citation: 2026: AHC:7448
Case Number: First Appeal From Order No. 1995 of 2024
Bench: Justice Sandeep Jain