In a significant ruling for families of pensioners killed in road accidents, the Allahabad High Court has enhanced compensation from ₹4.76 lakh to ₹15.22 lakh, holding that family pension cannot be deducted while calculating damages under the Motor Vehicles Act.
Justice Sandeep Jain delivered the judgment while allowing an appeal filed by the widow and sons of Jaiprakash Singh, who died in a road accident in 2018.
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Background of the Case
The case arose from a fatal accident on February 7, 2018, in which Jaiprakash Singh, aged about 73, lost his life. He was drawing a monthly pension of ₹23,936 at the time of the accident.
The Motor Accident Claims Tribunal (MACT), Moradabad, had awarded ₹4,76,620 with 7% annual interest. However, while calculating compensation, the Tribunal deducted the family pension of ₹14,900 that his wife began receiving after his death. This left only the “differential amount” of ₹9,036 per month as the basis for compensation.
Challenging this approach, the claimants moved the High Court seeking enhancement.
Arguments Before the Court
Counsel for the claimants argued that the Tribunal committed a legal error. Relying on Supreme Court rulings, it was submitted that pension and family pension are earned benefits and cannot be treated as financial gains arising out of the accident.
“The Tribunal was not justified in deducting family pension from the deceased’s income,” counsel argued, adding that future prospects at 20% should also have been granted under Rule 220-A of the U.P. Motor Vehicle Rules, 1998.
On the other hand, the insurance company contended that since the deceased was 73 years old and the widow was receiving family pension, no enhancement was warranted.
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Court’s Observations
Justice Jain examined key Supreme Court precedents, including Sebastiani Lakra v. National Insurance Co. Ltd. and Hanumantharaju v. M. Akram Pasha, which clearly state that pensionary benefits cannot be deducted while computing compensation under the Motor Vehicles Act.
The Court noted that pension is “deferred wages” earned by an employee and does not arise because of the accident.
“It is apparent that the family pension… was not at all to be considered for assessing the compensation,” the bench observed.
The judge further held that Rule 220-A of the U.P. Motor Vehicle Rules allows 20% addition towards future prospects for persons above 50 years, with no upper age limit prescribed. Even at 73 years, the deceased’s income was eligible for such addition.
On non-pecuniary heads like consortium, the Court relied on Constitution Bench judgment in National Insurance Co. Ltd. v. Pranay Sethi and later rulings such as Magma General Insurance Co. Ltd. v. Nanu Ram and Rahul Ganpatrao Sable v. Laxman Maruti Jadhav, which mandate separate consortium compensation for each dependent.
The Court also clarified that for persons aged above 65 years, the multiplier of 5 under the Second Schedule of the Motor Vehicles Act applies.
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Recalculation of Compensation
After correcting the errors, the Court recalculated compensation as follows:
- Monthly pension: ₹23,936
- Annual income: ₹2,87,232
- Deduction of 1/4th towards personal expenses
- Addition of 20% towards future prospects
- Multiplier of 5 applied
- Consortium of ₹40,000 each for five dependents
- ₹15,000 each for loss of estate and funeral expenses
The total compensation was recalculated at ₹15,22,545 with 7% annual interest from the date of filing of the claim petition.
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Decision
Allowing the appeal, the High Court modified the Tribunal’s award and directed the insurance company to deposit the enhanced amount within two months.
The insurer was granted liberty to adjust any amount already paid. The Tribunal was directed to distribute the enhanced compensation proportionately among the claimants based on their age and dependency.
Case Title: Smt. Mugga Devi & Others vs. Makkhan Singh & Others
Case No.: First Appeal From Order No. 1995 of 2024
Case Type: Motor Accident Compensation Appeal
Decision Date: January 12, 2026
