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Sarla Devi & Ors. v. Reliance General Insurance Company Limited & Ors.

Civil Appeal · 2026 INSC 575Decided 26 May 2026
C.A. No.-008190-008190 - 2026 (arising out of SLP (Civil) No. 13979 of 2018)
Justice Vikram Nath · Justice Sandeep Mehta · Justice Vijay Bishnoi · Justice J.B. Pardiwala

Background

Sachin Kumar, a 25-year-old constable in the Haryana Police, died on 23 July 2012 when a rashly-driven Trolla truck collided head-on with his motorcycle near Rohtak, Haryana. His widow, minor daughter, mother and father filed a compensation claim before the Motor Accident Claims Tribunal, Rohtak, which awarded them compensation; the High Court of Punjab and Haryana later reduced this amount on appeal by setting off certain government financial-assistance benefits already received under Haryana's 2006 Rules. The family (the appellants) challenged this reduction before the Supreme Court, arguing the set-off unfairly deprived the deceased's mother of her rightful share.

Decision Breakdown

The Supreme Court held that the High Court had erred by setting off amounts received under the state's 2006 Rules against the compensation award without accounting for the fact that the deceased's mother (Appellant No. 3) was not entitled to any benefit under those 2006 Rules at all, meaning the set-off effectively denied her the compensation she was legally due under the Motor Vehicles Act, unjustly enriching the insurance company. Citing precedent on the principle that motor accident compensation must be "just", neither a windfall nor a mere pittance, the Court restored the mother's 1/3rd share of the loss-of-dependency compensation, adding ₹11,30,600 to the ₹7,70,400 already awarded by the High Court, for a total of ₹19,01,000 with interest as previously ordered. The Respondents were directed to pay this jointly and severally within eight weeks.

Lesson Learnt

When calculating motor accident compensation, courts cannot mechanically set off unrelated state welfare payments against a dependent's statutory entitlement if that dependent was never eligible for the welfare scheme in the first place, doing so wrongly enriches the insurer at the victim's family's expense. Compensation under the Motor Vehicles Act must remain genuinely "just," reflecting each dependent's actual loss.

Official source (sci.gov.in)View Judgment (PDF)

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