Govt Bodies Can't Escape Accident Compensation Liability Even If Statutory Fund Isn't Maintained: Delhi High Court

Government Bodies Cannot Avoid Compensation

The Delhi High Court has held that government bodies cannot escape liability to pay accident compensation merely because a statutory fund meant for such payments was not maintained. The ruling addresses a situation where a public authority sought to avoid its obligation on the ground that the fund contemplated under the relevant statute had not been kept in place.

The court's position is that the duty to compensate does not depend on whether the authority complied with its own obligation to maintain a fund. The absence of the fund is a failure on the part of the government body, not a defence available to it. The liability to pay compensation therefore survives regardless of the administrative lapse.

Why It Matters For Businesses

For organisations engaged with government bodies, whether as contractors, employers or parties to claims, the decision reinforces that statutory or administrative gaps do not extinguish compensation obligations. Public authorities remain answerable for accidents arising in the course of their functions, and claimants are not required to establish that a designated fund exists before pursuing relief.

The ruling also signals that courts will look at the substantive duty to compensate rather than procedural or financial arrangements within the authority. For compliance teams, this means that reliance on the non-existence of a statutory fund as a defence is unlikely to succeed. Entities dealing with government departments in matters involving accidents, works contracts or public infrastructure should note that compensation claims may proceed on the same footing as those against private parties.

The judgment is consistent with a broader judicial approach that prioritises the rights of victims of accidents over the internal administrative convenience of state bodies. It also places an implicit obligation on authorities to make budgetary provisions for such liabilities rather than treating the abse…