Nearly a decade after a 25-year-old Army officer died in a road accident, the Punjab and Haryana High Court has ruled that amounts received under a group insurance scheme cannot be deducted from compensation awarded under the Motor Vehicles Act. The decision restored the original award of Rs 98.43 lakh, overturning a Motor Accident Claims Tribunal (MACT) order that had reduced it to Rs 38.43 lakh by subtracting Rs 60 lakh paid under the scheme.
Background of the Case
The officer lost his life on September 13, 2016. His family initially received Rs 60 lakh under a group insurance scheme provided by the Army. When the MACT, Kurukshetra, assessed the total compensation at Rs 98.43 lakh, it deducted the insurance amount, leaving only Rs 38.43 lakh payable. The family challenged this deduction in 2018 before the Punjab and Haryana High Court.
High Court's Ruling
Justice Pankaj Jain, hearing the appeal, resolved the matter in a single hearing. The court drew a clear distinction between benefits from a group insurance scheme and financial assistance provided by the State under service rules. Justice Jain observed: "The group insurance scheme cannot be related to financial assistance given by the state under Service Rules, wherein the compensation is paid by the insurer after receiving the premium."
The Bench held that the tribunal erred in deducting the Rs 60 lakh. "This Court finds that the tribunal erred in deducting the amount of Rs 60 lakh from the compensation awarded. Accordingly, the award to that effect is set aside," Justice Jain stated.
Additional Compensation for Consortium and Estate
The High Court also noted that the tribunal had not awarded any amount for loss of consortium or loss of estate. Justice Jain directed that the claimant receive Rs 48,400 for loss of consortium and Rs 18,000 for loss of estate, in addition to the restored compensation.
Significance of the Judgment
The ruling reinforces the principle that insurance payouts under group schemes are independent of statutory compensation under the Motor Vehicles Act. Legal experts say this judgment clarifies that such payments cannot be used to reduce the liability of the tortfeasor or the insurer. The decision provides relief to families of defence personnel who often receive multiple benefits after a death in service.
