The Madras High Court clarified that compensation awarded under the Motor Vehicles Act 1988 is payable in full to the dependants of a deceased road-accident victim, even where they have already received benefits under the Employees' State Insurance Act, rejecting the insurer’s claim for a set-off.
Background & Facts
The Dispute
The appellants - claimants are the wife, four daughters and the mother of the deceased A. Kumar, together with the father of the deceased (the sixth claimant, O. Arumugam, who died on 16.10.2025). They filed a claim before the Motor Accident Claims Tribunal (MACT) against the owner of the offending lorry, Mr. Soundararajan, and his insurer, Go Digit General Insurance Company Ltd, seeking compensation for the fatal accident that occurred on 29.06.2021.
Key Facts
- 29.06.2021: A. Kumar was riding a two-wheeler on Wallajabad - Vandalur Road, Chennai, when a lorry driven negligently struck him. He died at the scene.
- 2021: FIR (Crime No. 728) lodged at C3 Manimangalam Police Station against the lorry driver.
- The deceased was covered under the Employees' State Insurance (ESI) Scheme and his dependants were receiving monthly pension benefits.
- The MACT determined total compensation of Rs.29,24,992/-, rounded to Rs.29,25,000/-, under the Motor Vehicles Act, 1988.
- The Tribunal ordered the insurer to pay the amount with interest at 7.5% per annum from the date of the claim petition, subject to deduction of the sum already received under the ESI Scheme.
- 16.10.2025: The father of the deceased, O. Arumugam, died; the cause-title was amended accordingly.
- 24.10.2025: The award dated and passed by the MACT (MCOP No.2957 of 2021).
- 23.08.2023: Interim order directing the insurer to deposit the entire award amount with interest.
- 31.07.2024: The pension received by the first and second claimants under the ESI Act up to this date.
- 01.08.2024: The date from which the ESI pension would cease if the full MV compensation is paid.
Procedural History
- 29.06.2021: Accident occurred.
- 2021: Claim petition filed before the MACT.
- 24.10.2025: MACT award passed (Rs.29,25,000 with interest).
- Date not specified: Insurance company filed a counter-claim seeking deduction of ESI benefits.
- Appeal: Civil Miscellaneous Appeal No.2106 of 2026 filed under Section 173 of the Motor Vehicles Act, challenging the deduction.
- 05.08.2026: Judgment delivered by Justice N. Anand Venkatesh.
Parties' Positions
- Appellants (claimants): Argue that Section 53 of the ESI Act bars deduction only when the claim is made against the employer in the capacity of an employee; a tort claim against a third-party driver falls outside its sweep.
- Respondent (insurer): Contends that a combined reading of Sections 53 and 61 of the ESI Act prohibits any double recovery, requiring deduction of the ESI pension from the MV compensation.
Relief Sought
The appellants sought a declaration that the full compensation awarded by the MACT should be payable without any deduction for the ESI pension, along with interest at 7.5% per annum and directions for the insurer to deposit the amount within six weeks of the judgment.
