Pension of Deceased Not to be Deducted; Total Compensation Raised to 15.22 Lakhs
The Allahabad High Court has delivered a significant judgment on January 12, 2026, enhancing the compensation awarded to the family of Jaiprakash Singh, who died in a road accident in 2018. The court ruled that the pension received by the deceased at the time of the accident should not be deducted while calculating compensation under the Motor Vehicles Act, 1988. The family pension received by the legal heirs post-accident was also deemed irrelevant for deduction purposes.
Presiding over the appeal, Justice Sandeep Jain emphasized that statutory rights such as pensions should not be considered as pecuniary advantages deductible from compensation. The decision aligns with precedents set by the Supreme Court, particularly the judgments in Sebastiani Lakra and Hanumantharaju B. through LR v. M. Akram Pasha, which clarified that pension benefits cannot be deducted when computing compensation for accident victims.
The deceased, Jaiprakash Singh, was a 73-year-old pensioner at the time of his death. The initial compensation of ?4,76,620 awarded by the Motor Accident Claims Tribunal, Moradabad, was based on a deduction of the family pension received by his widow, which the High Court found erroneous. The High Court has now redetermined the compensation at 15,22,545, inclusive of future prospects and enhanced non-pecuniary damages.
The judgment also highlighted the claimants' entitlement to additional compensation for future prospects, as per Rule 220-A of the U.P. Motor Vehicle Rules, 1998. Despite the deceased being over 50 years of age, the rule mandates a 20% addition towards future prospects, which the Tribunal had initially overlooked.
Justice Jain further ordered that the compensation should include enhanced amounts for loss of consortium, loss of estate, and funeral expenses, following the guidelines from landmark cases like Pranay Sethi and Magma General Insurance Co. Ltd.
The court directed the insurer of the offending vehicle to pay the enhanced compensation with an interest rate of 7% per annum from the date of filing the claim until the actual payment. The insurance company is required to deposit the revised amount within two months, and any previously paid amounts will be adjusted.
This judgment not only provides financial relief to the claimants but also reinforces the legal principles governing compensation calculations in motor accident cases, ensuring that statutory benefits are preserved for the beneficiaries.
Bottom Line:
Pension of a deceased cannot be deducted for calculating compensation under the Motor Vehicles Act, and family pension received by the legal heirs post-accident should not be considered for such deduction.
Statutory provision(s): Motor Vehicles Act, 1988 Section 173, U.P. Motor Vehicle Rules, 1998 Rule 220-A, Motor Vehicles Act, 1988 Second Schedule
Smt. Mugga Devi v. Makkhan Singh, (Allahabad) : Law Finder Doc id # 2837916
