Social Security Benefits Can't Be Deducted From MV Act Compensation: Supreme Court

The Supreme Court has held that money received by the family of a deceased person under employer-provided group insurance or other contractual or social security benefits cannot be deducted from the compensation awarded under the Motor Vehicles Act, 1988.

A Bench of Justices Pankaj Mithal and Prasanna B Varale said such benefits come from an independent contractual relationship and have no connection with the statutory compensation payable in a motor accident death case.

“The principle of balancing loss and gain cannot therefore be invoked to diminish the statutory entitlement of the claimants to just compensation,” the Bench observed.

The Apex Court upheld the Karnataka High Court’s decisions, which had removed the deductions made by the Motor Accident Claims Tribunal (MACT) towards group insurance amounts while recalculating compensation payable to the claimants.

The appeals before the Supreme Court were filed by KSRTC challenging the high court judgments passed in 2020 and 2021.

One of the cases related to the death of P Visweswar, a 34-year-old team manager at Accenture, Bengaluru, who was earning Rs 70,000 per month. On July 30, 2018, he was riding a motorcycle when it was hit by a rashly driven KSRTC bus, leading to his death.

The MACT awarded compensation of Rs 69.07 lakh but deducted Rs 35.48 lakh received under a group insurance scheme and finally granted Rs 33.59 lakh with 6% annual interest. The High Court later removed the deduction and restored the full compensation amount of Rs 69.07 lakh.

The second case concerned the death of 47-year-old Celestine Dsouza, who worked as an Assistant Manager at Cox and Kings Ltd and earned Rs 47,000 per month. On January 20, 2015, the Honda Activa she was riding was hit from behind by a rashly driven bus. She fell on the road and was run over by the bus, resulting in 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 later modified the award and fixed compensation at Rs 59.95 lakh without making any deduction towards group insurance benefits.

Before the Supreme Court, KSRTC argued that since the claimants had already received financial benefits under employer-provided insurance schemes, the same should be deducted from the compensation awarded under the Motor Vehicles Act. It also argued that claimants should not receive double benefits arising from the same accident.

The respondents, however, argued that both accidents occurred because of the negligence of the bus drivers. They further contended that employer insurance benefits are independent of compensation payable under the Motor Vehicles Act and therefore cannot be deducted.

Court examined whether compensation received through an employer’s group insurance scheme, secured for the employee without any contribution from the employee, could be deducted from motor accident compensation arising out of the same incident.

Referring to its judgment in Rajo Devi & Anr Etc Vs Manjeet Kaur & Ors (2025), the Bench noted that compensation provisions under the Motor Vehicles Act are beneficial in nature and aimed at advancing social justice. The court said procedural technicalities should not defeat that objective.

The Bench also referred to Sebastiani Lakra vs National Insurance Co Ltd, where the Supreme Court had held that deductions cannot be made from compensation on account of insurance, pensionary benefits, gratuity, or compassionate appointment granted to the deceased’s family members.

Finding no error in the Karnataka High Court’s approach, the Supreme Court dismissed both appeals and held that the high court judgments were in line with settled law governing motor accident compensation.

“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 Bench said.

Court directed KSRTC to deposit the compensation amount, if not already deposited, within six weeks in terms of the high court’s directions. The Bench also appreciated the assistance rendered by amicus curiae Rohit Sharma.

Case Title: The Managing Director, KSRTC Vs P Chandramouli & Ors

Bench: Justices Pankaj Mithal and Prasanna B Varale

Date of Judgment: March 16, 2026