The
Supreme Court on Monday said the claim amount received through
employer-provided group insurance schemes or other social security benefits
cannot be deducted from compensation awarded under the Motor Vehicles Act,
1988, reported LiveLaw.
A
Bench of Justices Pankaj Mithal and Prasanna B Varale issued the ruling while
hearing a batch of appeals against a Karnataka High Court decision that had
refused to allow the deduction of group insurance benefits from compensation
awarded under the Motor Vehicles Act following a road accident death.
The appeals arose from two motor accident cases in
Karnataka, where victims died after being hit by buses driven negligently. In
both cases, Motor Accident Claims Tribunals awarded compensation but deducted
amounts received by the families under employer-provided group insurance
schemes.
The
Karnataka High Court later set aside these deductions. The transport
corporation and insurer challenged these rulings in the Supreme Court, arguing
that such benefits should be adjusted against the compensation, and a claimant
should not gain twice from the same accident. The core issue before the Court
was whether amounts received through group insurance could be deducted from
compensation awarded under the Motor Vehicles Act.
The apex court said amounts received by the
dependants of the deceased under employer-provided group insurance or other
contractual or social security benefits cannot be treated as "pecuniary
advantages" liable to be deducted from compensation awarded under the Motor
Vehicles Act, 1988.
"Such
benefits arise out of an independent contractual relationship and lack the
requisite nexus with the statutory compensation payable for death in a motor
vehicle accident. The principle of balancing loss and gain cannot therefore be
invoked to diminish the statutory entitlement of the claimants to just
compensation," the court added.
It further said it finds no ground to to interfere
with the high court order that sets aside the deductions made by the tribunal.