Legal Analysis: Sarla Devi & Ors. v. Reliance General Insurance Company Limited & Ors

Citation: 2026 INSC 575
Court: Supreme Court of India
Bench: A Division Bench comprising Justice Vijay Bishnoi and another judge (as per the judgment, authored by Justice Vijay Bishnoi)
Date of Decision: May 26, 2026
Nature of Judgment: Civil Appeal arising out of SLP (Civil) No. 13979 of 2018 against the order of the Punjab and Haryana High Court.

Synopsis of the Judgment

The appellants, legal heirs of a deceased government employee who died in a motor accident, challenged the High Court’s order deducting the ex‑gratia financial assistance payable under the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 (2006 Rules) from the compensation awarded under the Motor Vehicles Act, 1988 (MVA). The High Court, following Reliance General Insurance Co. Ltd. v. Shashi Sharma (2016), deducted ₹29,21,400/- (being 15 years’ salary) from the total MVA compensation of ₹36,91,800/-, leaving a balance of ₹7,70,400/-. The Supreme Court upheld the principle of deduction for overlapping loss of income, but held that the mother of the deceased, who was not eligible for financial assistance under the 2006 Rules (since the deceased was survived by a widow and daughter), could not be deprived of her share of compensation under the MVA. The Court directed that the mother’s 1/3rd share of the loss of dependency (₹11,30,600/-) be added back to the compensation, resulting in a total award of ₹19,01,000/-.

1. Basic Information of the Judgment

• Case Title: Sarla Devi & Ors. v. Reliance General Insurance Company Limited & Ors.

• Citation: 2026 INSC 575

• Civil Appeal No.: Arising out of SLP (Civil) No. 13979 of 2018

• Bench: Division Bench (Justice Vijay Bishnoi)

• Date of Decision: May 26, 2026

• Court: Supreme Court of India (Civil Appellate Jurisdiction)

• Impugned Order: Order dated 12.09.2017 of the Punjab and Haryana High Court in F.A.O. No. 3633 of 2015.

2. Legal Framework

Major Laws and Provisions Involved

• Motor Vehicles Act, 1988 – Section 166 (claim for compensation), Section 168 (award of just compensation).

• Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 2006 – Rule 5(1) (financial assistance equivalent to last drawn salary for a specified period based on age of deceased).

• Family Pension Scheme, 1964 – Para 4(ii) and (iii) (definition of “family” for eligibility

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