The Supreme Court of India ruled that employer-provided group insurance and other contractual or social security benefits received by a deceased person’s family cannot reduce compensation under the Motor Vehicles Act, holding such benefits are independent of statutory accident compensation claims.
The Supreme Court has ruled that any money received by the family of a deceased person under employer-provided group insurance, or other contractual/social security benefits, cannot be subtracted from the compensation determined under the Motor Vehicles Act, 1988.
A Bench comprising Justices Pankaj Mithal and Prasanna B Varale held that these benefits arise from an independent contractual arrangement and are not linked to the statutory compensation payable in a motor accident death claim.
The Bench observed,
“The principle of balancing loss and gain cannot therefore be invoked to diminish the statutory entitlement of the claimants to just compensation,”
The Apex Court affirmed the Karnataka High Court’s decisions, where the deductions earlier made by the Motor Accident Claims Tribunal (MACT) toward group insurance amounts were removed when recalculating the compensation payable to the claimants. The Supreme Court appeals were filed by KSRTC against High Court judgments delivered in 2020 and 2021.
In one matter, the Supreme Court dealt with the death of P Visweswar, a 34-year-old team manager at Accenture in Bengaluru, earning Rs 70,000 per month. On July 30, 2018, he was riding a motorcycle when it was allegedly struck by a KSRTC bus driven in a rash manner, resulting in his death.
The MACT awarded Rs 69.07 lakh, but deducted Rs 35.48 lakh received under a group insurance scheme, and ultimately granted Rs 33.59 lakh along with 6% annual interest. The High Court later removed the deduction and restored the compensation at Rs 69.07 lakh.
The second case involved the death of 47-year-old Celestine Dsouza, employed as an Assistant Manager with Cox and Kings Ltd and earning Rs 47,000 per month. On January 20, 2015, she was riding a Honda Activa when it was hit from behind by a rashly driven bus.
She fell onto the road and was run over by the bus, leading to her death. In this case, the tribunal assessed compensation at Rs 63.04 lakh but deducted Rs 10 lakh received by the family under the employer’s group insurance scheme. The High Court subsequently modified the award and fixed compensation at Rs 59.95 lakh, without any deduction for group insurance benefits.
Before the Supreme Court, KSRTC argued that because the claimants had already received financial benefits through employer insurance schemes, those amounts should be deducted from compensation payable under the Motor Vehicles Act. It further contended that claimants should not receive “double benefits” for the same accident. The respondents countered that both incidents occurred due to negligence on the part of the bus drivers. They also argued that employer insurance benefits are independent of Motor Vehicles Act compensation and therefore cannot be deducted.
The Court examined whether benefits received under an employer’s group insurance scheme obtained for the employee without any contribution from the employee could be deducted from compensation payable for a motor accident arising from the same incident.
Referring to its decision in Rajo Devi & Anr Etc Vs Manjeet Kaur & Ors (2025), the Bench noted that the Motor Vehicles Act’s compensation scheme is beneficial in nature and intended to promote social justice. It observed that procedural considerations should not defeat that objective.
The Bench also cited Sebastiani Lakra vs National Insurance Co Ltd, where the Supreme Court held that deductions could not be made from compensation on account of insurance, pensionary benefits, gratuity, or compassionate appointment offered to the deceased’s family members.
Finding no fault in the Karnataka High Court’s approach, the Supreme Court dismissed both appeals and concluded that the High Court rulings were consistent with established legal principles governing motor accident compensation.
The Bench said,
“The impugned judgments of the high court are consistent with the settled jurisprudence governing motor accident compensation and warrant no interference by this court,”
The Court directed KSRTC to deposit the compensation amount, if it had not already been deposited, within six weeks in accordance with the High Court directions. The Bench also acknowledged the assistance provided by amicus curiae Rohit Sharma.
Case Title: The Managing Director, KSRTC Vs P Chandramouli & Ors
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