1 2025:HHC:20621-DB IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA FAO No.4144 of 2013 Reserved on: March 21, 2025 Date of Decision: July 1, 2025 Oriental Insurance Company Limited ….Appellant. Versus Kanta Devi and others ..Respondents. Coram: The Hon’ble Mr. Justice Vivek Singh Thakur, Judge. Whether approved for reporting?1 Yes For the Appellant: Dr.Lalit K. Sharma, Advocate. For the Respondents: Mr.Ashwani Kaundal, Advocate, for respondents No.1 to 6. Mr.Divya Raj Singh, Advocate, for respondents No.7 to 9. Vivek Singh Thakur, J. Appellant-Insurance Company has preferred this appeal, under Section 173 of the Motor Vehicles Act, 1988 (in short ‘M.V. Act’), against the impugned Award dated 19.06.2013 passed by Motor Accident Claims Tribunal, Una, Himachal Pradesh, (MACT), in M.A.C.P. No.30 of 2011, titled as Kanta Devi & others vs. Subhash Chand and others, whereby Claim Petition preferred by respondents No.1 to 6-claimants, has been allowed by awarding compensation of `19,15,670/- alongwith interest @ 7% per annum from the date of filing of Claim Petition, till payment/deposit of the amount in favour 1 Whether reporters of the local papers may be allowed to see the judgment? 2 2025:HHC:20621-DB of the respondents-claimants, payable by appellant-Insurance Company. 2. Facts emerging from the record, in present case, are that on 11.07.2011 at about 2.30 p.m. Janak Raj (deceased) was going on left side of Una-Nangal road towards Una, when he reached near opposite side of gate of Government College, a Tipper bearing Registration No.HP-19B-0764, owned and possessed by Subhash Chand and Sat Pal, being driven by driver Madan Lal in a rash and negligent manner, hit and crushed Janak Raj under front tyre of the Tipper causing multiple injuries to Janak Raj, who was taken to Regional Hospital, Una, where he succumbed to injuries. 3. Regarding this incident, an FIR No.172, dated 11.07.2011 under Sections 279 and 304-A of the Indian Penal Code was registered against Madan Lal, driver of Tipper, for causing accident due to rash and negligent driving of Tipper. 4. 52 years old deceased Janak Raj was serving as Beldar in HP PWD, Sub-Division Haroli. He was getting salary of `15045/- per month. 5. Respondents No.1 to 6-claimants filed Claim Petition before MACT, Una, claiming for award of compensation of `25,00,000/-. After completion of pleadings and framing of issues, parties led their respective evidence. 6. After taking into consideration the material on record, MACT has passed Award, in the terms referred supra. 7. Appellant-Insurance Company has approached this Court mainly on three counts that finding returned by MACT regarding rash and negligent driving of the driver of the Tipper only, 3 2025:HHC:20621-DB ignoring negligence of the deceased, on the basis of FIR Ex.PW.3/A only is erroneous; determination of compensation to the claimants by the MACT on the basis of Gross salary of deceased amounting to `1,50,915/- instead of calculating compensation on Net pay after statutory deduction of `11680/- is contrary to the settled principles for determining the compensation; and lastly that Madan Lal was not having valid driving licence as RW.4-Prem Singh serving at Registration and Licensing Authority (in short ‘RLA’), Mandi, has proved that no driving licence was issued in favour of Madan Lal and, thus, Tipper was being driven by a person not having valid driving licence to drive the same and, therefore, liability fastened upon Insurance Company, despite breach on the part of the owner and driver, deserves to be set aside and compensation, if any, is payable by the owner and driver of the Tipper. 8. Claimants have examined six witnesses to substantiate their claim. Whereas, owners and driver have examined four witnesses, RW.1-Rajesh Paul, RW.2-Mandeep Kumar, RW.3-Madan Lal and RW.5-Satpal. Whereas, appellant-Insurance Company has examined RW.4-Prem Singh, Licensing Clerk, RLA, Mandi. 9. PW.1-Dr.Sumit Dubey has proved postmortem of the deceased. PW.2-Vijay Kumar has proved Date of Birth of deceased as 04.04.1969. RW.1-Rajesh Paul has proved validity of Route Permit and deposit of fee for plying the Tipper at the relevant point of time. These facts are not in dispute in this appeal. 10. For proving rash and negligent driving of Madan Lal driver of the Tipper, claimants have examined PW.3-HHC Ashok Kumar, Police Station Sadar, Una, H.P., who has proved registration 4 2025:HHC:20621-DB of FIR by verifying copy of FIR Ex.PW.3/A placed on record to be true copy according to original record with further deposition that on 11.08.2011 challan was presented against Madan Lal driver of the Tipper. 11. Registration of FIR and contents thereof have not been disputed by the owner, driver and Insurance Company. 12. Apart from proving the FIR, claimants have also examined PW.5-Harkesh Kumar as a spot witness, who had witnessed the accident and had shifted Janak Raj from the spot to the Hospital. His examination-in-chief, corroborating pleadings regarding rash and negligent driving of Madan Lal has been placed on record as Ex.PW.5/A. In his cross-examination, nothing material could be elucidated by the owner, driver or Insurance Company so as to impeach his veracity and credibility. 13. To rebut evidence with respect to rash and negligent driving of Madan Lal, no evidence has been led by the respondents except examining Madan Lal as RW.3 and Sat Pal owner as RW.5. However, in their cross-examination it was admitted by Madan Lal as well as Sat Pal that FIR was registered against Madan Lal and he was facing a criminal trial and Tipper was taken into possession by the police after the accident and further that he had not made any complaint alleging that false FIR had been registered against him. Therefore, it cannot be said that the MACT had arrived at a conclusion only on the basis of FIR that there was rash and negligent driving by the driver of the Tipper. 14. As per extract of driving licence of Madan Lal, he was having valid licence to drive the Tipper at the relevant point of time. 5 2025:HHC:20621-DB 15. With respect to licence, co-owner RW.5-Sat Pal and driver RW.3-Madan Lal have placed reliance upon extract of driving licence proved by RW.2-Mandeep Kumar, Licensing Clerk, RLA Office, Amb, who has proved extract of licence of Madan Lal on the basis of record of RLA, Amb as RW.2/A. In his examination-in-chief, RW.2-Mandeep Kumar has confirmed that driving licence of Madan Lal was issued originally on 10.01.1991 by RLA Mandi and was renewed from RLA Amb on 24.07.2009 and was valid up to 23.07.2012. He has also proved that as per record, Madan Lal was authorized to drive Heavy Transport Vehicle (HTV). 16. In cross-examination, RW.2-Mandeep Kumar reaffirmed renewal of licence of Madan Lal from RLA Amb on 24.07.2009. He also admitted that renewal of driving licence was done by the Authority after proper verification from the original Authority wherefrom original licence was issued. Further that on verifying the fact by writing a letter and only after confirmation from the original Authority, licence is renewed, and during this process, licence issued by original Authority is deposited with renewing Authority. He admitted that he had not brought the original driving licence and verification received from the original Authority Mandi with clarification that no such record was summoned from him. He denied that before renewal no verification was done. 17. From the aforesaid evidence on record, extract of driving licence Ex.RW.2/A stands proved on the basis of record of RLA Amb, which indicates that Madan Lal was having driving licence authorized to drive HTV, including Tipper at the time of accident, 6 2025:HHC:20621-DB i.e. 11.07.2011 as the licence renewed by RLA Una on 24.07.2009 was valid up to 23.07.2012. 18. Though Insurance Company has examined RW.4-Prem Singh, Licensing Clerk, RLA Mandi, who in his examination-in-chief stated that driving licence dated 10.01.1991 was not issued from RLA Mandi in favour of Madan Lal. However, in his cross- examination, he has stated that he had not brought record of the driving licence of Licencing Number referred in Madan Lal’s licence. However, he admitted that at the time of renewal, verification is done from the original Licensing Issuing Authority and only thereafter licence is renewed. 19. Even if, it is considered that claim of Madan Lal about issuance of original licence from Mandi is false, even then, there is no breach on the part of owners in handing over the Tipper to Madan Lal for driving, for the reason, as has been stated in examination-in-chief of RW.5-Sat Pal, before employing Madan Lal as a driver, he alongwith co-owner Subhash Chand had seen the licence of Madan lal and had verified its renewal from RLA Amb and after receiving information about validity and renewal of licence of Madan Lal, a test drive was taken and only thereafter, Madan Lal was employed as it was found that he was driving Tipper properly and, thereafter also, he continued to drive the Truck/Tipper properly. 20. For proper verification by owners of the vehicle, before employing the driver and for absence of any evidence led by Insurance Company to prove breach or violation of terms and conditions of Policy by the owners of the Tipper, plea of the 7 2025:HHC:20621-DB Insurance Company that there is breach of terms and conditions of the Policy by the owners, is not sustainable. In this regard pronouncement of the Supreme Court in National Insurance Co. Ltd. vs. Swaran Singh and others, (2004) 3 SCC 297, is relevant which has been also referred by the Supreme Court in subsequent judgment passed in Pepsu Road Transport Corporation vs. National Insurance Company, (2013) 10 SCC 217, with following observations:- “10. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh’s case (supra). If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the insurance company is not liable for the compensation.” 8 2025:HHC:20621-DB 21. Claimants have proved receipt of Gross salary by the deceased as `15045/- per month and Net pay `11680/- by producing on record Ex.PW.4/A. Plea of Insurance Company that instead of Gross salary Net salary has to be taken for determining compensation is not tenable. 22. In National Insurance Co. Ltd. vs. Indira Srivastava and others, (2008) 2 SCC 763, the Apex Court has held that Gross salary of the deceased has to be taken into consideration for determining just and fair compensation. 23. In judgment passed by the Apex Court in Raj Rani and others vs. Oriental Insurance Company Limited and others, (2009) 13 SCC 654, it has been observed that allowances payable to the employee which were beneficial to the entire family should have been taken for consideration for the purpose of computation of annual income. 24. In subsequent judgment placing reliance upon Indira Srivastava’s judgment, the Apex Court in judgment passed in Yerramma and others vs. G. Krishnamurthy and another, (2014) 15 SCC 65, has observed as under:- “12. In our considered view, since the deceased at the time of his death was approximately 53 years of age, therefore, as per law laid down by this Court in the Sarla Verma vs. DTC, (2009) 6 SCC 121, 30% of actual salary for future prospects of the deceased cannot be taken for the purpose of awarding compensation under loss of dependency in favour of the appellants. 13. Further, with regard to gross annual income of the deceased, to determine the loss of dependency of the appellants, we refer to the case of National 9 2025:HHC:20621-DB Insurance Co. Ltd. v. Indira Srivastava, (2008) 2 SCC 763, wherein this Court has held as under:(SCC p.772, paras19-20) “19. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted. 20. The term 'income' in P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn.) has been defined as under: ‘The value of any benefit or perquisite whether convertible into money or not, obtained from a company either by a director or a person who has substantial interest in the company, and any sum paid by such company in respect of any obligation, which but for such payment would have been payable by the director or other person aforesaid, occurring or arising to a person within the State from any profession, trade or calling other than agriculture.’ It has also been stated : ‘ “Income” ‘ signifies 'what comes in' (per Selborne, C., Jones v. Ogle, (1872) LR 8 Ch App 192. “It is as large a word as can be used” to denote a person's receipts (per Jessel, M.R.,Huggins, In re, ex p Huggins, (1882) 21 Ch D 85. Income is not confined to receipts from business only and means periodical receipts from one's work, lands, investments, etc. Boasrd of Revenue, Income Tax v. Al. Ar. Rm. Arunachalam Chettiar and Bros., AIR 1921 Mad 427. Ref. Vulcan Insurance Co. Ltd. v. Corpn. Of Madras, AIR 1930 Mad 626."” 10 2025:HHC:20621-DB 25. It is also settled that contribution in the nature of savings cannot be deducted from the salary for calculating the amount of compensation. However, deduction towards income tax should be made in appropriate case where income is falling in the slab attracting levy of income tax. 26. In present case, annual income of the deceased comes to be `1,80,540/- which was falling in the slab for which no income tax was payable. Therefore, no tax is deductible. 27. No other point is urged or raised. 28. In view of above discussion, I am of the considered opinion, there is no merit in the grounds pressed for allowing the appeal as there is no illegality, irregularity or perversity in determining the liability as well as just and fair compensation payable to claimants by MACT and, thus, no interference is warranted in the impugned Award. 29. Accordingly, appeal is dismissed and disposed of, in aforesaid terms, so also pending application(s), if any. (Vivek Singh Thakur), Judge. July 1, 2025 (Purohit)