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United India Insurance Company Ltd vs. Smt Usha Rana and Ors

Motor Accident Claims Appeal · 2026:DHC:8741Decided 6 Oct 2026New Delhi Bench
MAC.APP. 65/2022CNR: DLHC010094692022
Justice Anish Dayal

Background

A 48-year-old employee died in a 2017 road accident, and the Tribunal awarded his family about Rs. 56.8 lakh based on his salary, including allowances like HRA and travel allowance. The insurance company appealed, arguing certain allowances shouldn't count toward income and that Rs. 10 lakh already paid to the family by the convicted driver under Section 357(3) CrPC should be deducted from the civil compensation.

Decision Breakdown

The Court held that allowances benefiting the employee's family (HRA, travel, education allowance) are rightly included in income, and that Provident Fund deductions must also be added back, relying on settled Supreme Court precedent. On the Rs. 10 lakh criminal-court payment, since the driver's conviction itself was under appeal, the Court directed that amount be kept in a separate interest-bearing deposit pending the outcome of that criminal appeal, rather than either releasing it to the family immediately or deducting it outright.

Lesson Learnt

Compensation already paid in a criminal case (Section 357(3) CrPC) isn't automatically set off against accident compensation while the underlying criminal conviction is still being contested: courts can "park" such amounts until the position becomes final.

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