2.Reliance General Insurance Company Limited has filed these appeals questioning the correctness of final judgments and orders dated 15th October 20241 passed in CM NO.16984 of 2024 and 17th January 20232 passed in CM No.13449 of 2021, by the High Court of Punjab and Haryana at Chandigarh. The order dated 15th October 2024 was an order passed in Review of the latter. The order dated 17th January 2023 was a consequence of a clarification having been sought of order dated 18th September 2019 passed by the High Court in FAO No.2017 of 20113.
3.The facts as necessary for disposal of the appeal are: On 2nd November 2009, a motorcycle being driven by Ravinder Kumar, carrying two pillion riders, Smt. Hom Devi and Kanika respondent no.1 herein collided with a jeep, on account of the latter’s rash and negligent driving. Smt. Hom Devi passed away and the other two people on the motorcycle received multiple injuries. The deceased was employed as MPHW in PHC Chhara at Village Daboda, drawing a salary of Rs. 21805 per month. Respondent no.1 herein along with her two brothers, filed a claim petition before the Motor Accidents Claims Tribunal, 1 Order in Review 2 Clarification Order 3 Main Order Rohtak which was allowed in terms of order dated 9th October 2010. The amount awarded was Rs.8,80,000/- @7.5% interest per annum, to be borne by respondents, jointly and severally.
4.The claimants-respondents approached the High Court seeking enhancement thereof. The Court allowed the prayer for enhancement but held that the amount received by the family as per the Haryana Compassionate Assistance to Dependents of Deceased Government Employees Rules, 20064, had to be deducted from the total amount of compensation awarded to them. As such, the total compensation awarded by the High Court in terms of the Main Order was Rs. 29,09,240/- while holding that the amount received by the claimant-respondents as part of compensation under the 2006 Rules and any part of the compensation as awarded by the Tribunal, would be deducted. The claimant-respondents filed an application for clarification in so far as the deduction of the amount received as per the 2006 Rules was ordered. By way of the Clarification Order, the position of the Main Order appears to have been reversed. It was held: “ Considering the submissions made, as noted above, the order dated 18.09.2019 is hereby modified to the extent that the claimants would also 4 2006 Rules be entitled to pension, therefore the entire amount of compensation as received from the Government under the Scheme of 2006 , will not be deductible from the amount payable. In this way, the claimants would be entitled to Rs. 25,83,949/-…” The Order in Review records that the application was withdrawn seeking liberty to challenge the same.
5.The matter now stands before us. The short question to be decided is whether the amount in terms of the 2006 Rules has to be deducted from the compensation awarded by the Tribunal or not?
6.We find that the High Court, in its Main Order, relied on
the judgment of this Court in Reliance General Insurance v.
Shashi Sharma5 to hold the opposite to what it did in the
Clarification Order. The said judgment holds the field in so far
as the 2006 Rules and deductions of the amounts awarded
thereunder is concerned.
6.1 A three judge bench in the above judgment dealt
with a claim for compensation after a fatal motor acci-
dent. The deceased was a Government employee, and his
family filed a claim under the Motor Vehicles Act, 19886
against the insurer. At the same time, the dependents were
entitled to receive financial assistance under the 2006
Rules, which provide ex-gratia payments to families of
Government employees who die during service. These
benefits include amounts that replace lost pay and al-
lowances, as well as other forms of assistance not directly
related to income.
The main question before the Court was whether
amounts received under the 2006 Rules should be de-
ducted from the compensation awarded under the MVA.
It was held that only benefits that directly replace
the same type of loss, like loss income, can be deducted.
Benefits under the 2006 Rules that correspond to pay and
allowances the deceased would have earned must there-
fore be offset against the compensation awarded under
MVA, to prevent double recovery. Other components of
the 2006 Rules, such as pensions, life insurance, or unre-
lated allowances, remain unaffected and cannot be de-
ducted. The relevant extract is as under:-
“26. Indeed, similar statutory exclusion of claim
receivable under the 2006 Rules is absent. That,
however, does not mean that the Claims Tribunal
6 MVA
should remain oblivious to the fact that the claim to-
wards loss of pay and wages of the deceased has
already been or will be compensated by the em-
ployer in the form of ex gratia financial assistance
on compassionate grounds under Rule 5(1). The
Claims Tribunal has to adjudicate the claim and de-
termine the amount of compensation which appears
to it to be just. The amount receivable by the de-
pendants/claimants towards the head of “pay and al-
lowances” in the form of ex gratia financial assist-
ance, therefore, cannot be paid for the second time to
the claimants. True it is, that the 2006 Rules would
come into play if the government employee dies in
harness even due to natural death. At the same time,
the 2006 Rules do not expressly enable the depend-
ants of the deceased government employee to claim
similar amount from the tortfeasor or insurance com-
pany because of the accidental death of the deceased
government employee. The harmonious approach for
determining a just compensation payable under the
1988 Act, therefore, is to exclude the amount re-
ceived or receivable by the dependants of the de-
ceased government employee under the 2006 Rules
towards the head financial assistance equivalent to
“pay and other allowances” that was last drawn by
the deceased government employee in the normal
course. This is not to say that the amount or payment
receivable by the dependants of the deceased gov-
ernment employee under Rule 5(1) of the Rules, is
the total entitlement under the head of “loss of in-
come”. So far as the claim towards loss of future es-
calation of income and other benefits is concerned, if
the deceased government employee had survived the
accident can still be pursued by them in their claim
under the 1988 Act. For, it is not covered by the
2006 Rules. Similarly, other benefits extended to the
dependants of the deceased government employee in
terms of sub-rule (2) to sub-rule (5) of Rule 5 in-
cluding family pension, life insurance, provident
fund, etc., that must remain unaffected and cannot be
allowed to be deducted, which, any way would be
paid to the dependants of the deceased government
employee, applying the principle expounded
in Helen C. Rebello [Helen C. Rebello v. Maha-
rashtra SRTC, (1999) 1 SCC 90 : 1999 SCC (Cri)
197] and Patricia Jean Mahajan [United India In-
surance Co. Ltd. v. Patricia Jean Mahajan, (2002) 6
SCC 281 : 2002 SCC (Cri) 1294] cases.”
This ruling ensures even scales - families receive
full compensation for the loss caused by the accident, at
the same time, they are not paid twice for the same finan-
cial loss. The Court’s decision clarifies that when calcu-
lating compensation, only overlapping or equivalent ben-
efits are taken into account for deduction, leaving unre-
lated assistance intact.
6.2 The claimant-respondents contend in their counter
affidavit that the subsequent decision of the Court in Na-
tional Insurance Company Ltd. v. Birender & Ors.7 sub
silentio and per incuriam to the earlier judgment in
Shashi Sharma (supra). Before getting into that submis-
sion let us examine what the holding therein was. The
Court once again dealt with how amounts receivable un-
der the 2006 Rules, which provide compassionate assis-
tance to the dependents of deceased Government employ-
ees, should be treated when calculating compensation un-
der the MVA. The High Court had ordered the deduction
of a part of the financial assistance under the 2006 Rules
from the MVA compensation, on the assumption that the
legal representatives of the deceased were entitled to it.
The Court held that this deduction was not correct
because there was no clear evidence on record showing
that the legal representatives were actually eligible for the
assistance or that they had received it. A deduction from
the MVA compensation can only be made once eligibility
and receipt of the assistance are established, rather than
assumed without proof.
The Court explained that the Tribunal should first
determine the full amount of compensation under the
MVA. After that, the legal representatives can withdraw
the compensation, provided they file an affidavit or dec-
laration before the executing Court stating whether they
have received or will receive any financial assistance un-
der the 2006 Rules. If such assistance is eventually
granted or has already been received, the corresponding
amount, including interest, should then be deducted from
the compensation to avoid double recovery. The practical
effect is that no provisional deduction should be made at
the award stage based on assumptions. Compensation un-
der the MVA should be paid in full initially, with adjust-
ments made later if the legal representatives actually re-
ceive amounts under the 2006 Rules. This ensures that
the dependents receive their rightful compensation with-
out the risk of receiving double benefits.
6.3 On a close reading of the two judgments, Shashi
Sharma (supra) and Birender (supra) it can be con-
cluded that they are not inconsistent on any point of law.
Both decisions operate within the same conceptual frame-
work governing the deduction of financial assistance un-
der the 2006 Rules from compensation awarded under the
MVA.
The rule laid down in Shashi Sharma is essentially
substantive in character. It clarifies that deduction is per-
missible only to the extent that financial assistance over-
laps with the same pecuniary loss for which compensa-
tion is awarded under the MVA, most notably the loss of
income. Benefits that are not in the nature of income sub-
stitution, or that are otherwise unconnected to the acci-
dent-related loss, are not deductible. The decision is
therefore concerned with the nature and scope of de-
ductible benefits.
Birender does not revisit or alter this substantive
rule. Instead, it addresses the stage at which such deduc-
tions may be made and the evidentiary basis required for
doing so. The Court held that the High Court was not jus-
tified in deducting a portion of the financial assistance
merely on the assumption that the claimants were entitled
to it. It emphasized that eligibility or actual receipt must
be established on record before any deduction is effected.
The Court, therefore, required that compensation under
the MVA be determined in full, with a declaration mecha-
nism to adjust the award later if overlapping assistance is
in fact received.
Thus, the two decisions are consistent in principle.
Shashi Sharma defines what is deductible, while Biren-
der clarifies when and how such deductions should be
made. The latter does not depart from the former; rather,
it ensures that the substantive rule is applied with appro-
priate procedural safeguards and without speculative as-
sumptions. Together, they form a coherent legal position
governing both the nature and the timing of deductions
under the 2006 Rules.
7.The next aspect to be considered in assessing the correctness of the impugned orders, is whether it was open for the Court to, while entertaining an application for clarification, to make a substantive change to the award i.e., alter the amount of compensation to be paid by the appellant. When a High Court decides an appeal under Section 173 of the MVA, it is exercising civil appellate jurisdiction. The MVA does not create any independent procedural mechanism called a “clarification” of a concluded appellate judgment. Consequently, an application styled as one for clarification must be located within the limited corrective powers recognised by the Code of Civil Procedure, 19088, principally Sections 151 and 152. It cannot operate as a parallel or substitute procedure. 7.1 Section 152 CPC permits correction only of clerical, arithmetical mistakes or errors arising from accidental slips or omissions. The Supreme Court has consistently confined this provision to its narrow textual limits. In Jayalakshmi Coelho v. Oswald Joseph Coelho9, this Court held that Section 152 is attracted only where the error is accidental and does not extend to re-determining issues or altering the substance of the decree. [See also: Neeraj Kumar Sainy v. State of U.P.10] The Court emphasised that the provision cannot be used to modify, add to, or subtract from the terms of a judgment once pronounced. Similarly, in State of Punjab v. Darshan 8 ‘CPC or ‘the Code’ Singh11, this Court reiterated that Section 152 cannot be invoked to change the operative part of a judgment on merits; it is confined to correcting clerical or accidental errors and cannot be pressed into service to vary substantive rights. 7.2 The limits of inherent power under Section 151 CPC are also no longer res integra. In Padam Sen v. State of Uttar Pradesh12, the Court held that inherent powers cannot be exercised in a manner inconsistent with the express provisions of the Code, or in other words that these inherent powers have to be exercised, with due respect to the other provisions of the Code. They exist to supplement the procedure, not to override it. A threejudge bench in My Palace Mutually Aided Coop. Society v. B. Mahesh13, followed this position. 7.3 Therefore, the position is clear. In such an appeal, the High Court may correct clerical or accidental errors under Section 152 CPC, or issue limited clarificatory directions under Section 151 CPC to give effect to what was originally decided. However, it cannot, for example, alter findings on negligence, modify the quantum of com11 (2004) 1 SCC 328, 12 AIR 1961 SC 218 pensation, redistribute liability, or otherwise affect substantive rights under the guise of clarification. Any such exercise would, in law, amount to a review in substance and must satisfy the strict requirements of review under Order XLVII CPC.
8.In that view of the matter, appeals are allowed. The Order in Review is set aside, and the Main Order is restored. The amount received by the claimant-respondents in terms of the 2006 Rules will be deducted from the award as modified by the Main Order. The rate of interest as awarded by the Tribunal will remain unchanged, payable from the date of institution of the claim petition. Let an affidavit be filed before the Tribunal, by the claimant-respondents, indicating the sum so received, if any, enabling the Tribunal to make suitable orders for disbursal of the money by appellant herein. Once such an order is made, the sum shall be released in favour of the claimant-respondent within six weeks therefrom. We clarify that if no amount is received or receivable under the 2006 Rules, the claimant-respondents shall be entitled to claim the entire amount in terms of the main order passed by the High Court. The details of the bank account of the claimant-respondent be supplied to the appellant by the respective counsel before the Tribunal, when they appear before the Tribunal on 27th February 2026. Registry is directed to send a copy of this judgment to the Registrar General of the Punjab and Haryana High Court for ensuring onward compliance. Pending application(s) if any, shall stand closed and, in the circumstances, there will be no order as to costs. (SANJAY KAROL) (AUGUSTINE GEORGE MASIH) New Delhi; February 24, 2026