The tribunal should first determine the full amount of compensation under the Motor Vehicle Act (MVA). After that, the legal representatives can withdraw the compensation provided by the government to the dependent of the deceased employee, provided they file an affidavit or declaration before the executing Court stating whether they have received or will receive any financial assistance from the government under which the deceased was employed. If such assistance is eventually granted or has already been received, the corresponding amount, including interest, should then be deducted from the compensation awarded under MVA to avoid double recovery. The practical effect is that no provisional deduction should be made at the award stage based on assumptions. Compensation under the MVA should be paid in full initially, with adjustments made later. This ensures that the dependents receive their rightful compensation without the risk of receiving double benefits.
Families receive full compensation for the loss caused by the accident, at the same time, they are not paid twice for the same financial loss. The Court’s decision clarifies that when calculating compensation, only overlapping or equivalent benefits are taken into account for deduction, leaving unrelated assistance intact.
Deduction is permissible only to the extent that financial assistance overlaps with the same pecuniary loss for which compensation is awarded under the MVA, most notably the loss of income. Benefits that are not in the nature of income substitution, or that are otherwise unconnected to the accident-related loss, are not deductible. The decision is therefore concerned with the nature and scope of deductible benefits.
It is not justified 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. It is, therefore, required that compensation under the MVA be determined in full, with a declaration mechanism to adjust the award later if overlapping assistance is in fact received.