Neutral Citation No. - 2025:AHC-LKO:28527 Court No. - 5 Case :- FIRST APPEAL FROM ORDER No. - 437 of 2012 Appellant :- The Oriental Insurance Co. Ltd T.P.Hub Throu Its Manager Respondent :- Smt. Munni Devi And Ors. Counsel for Appellant :- Vashu Deo Mishra Counsel for Respondent :- Deepak Kumar Agarwal,S.K. Tripathi and Case :- CROSS OBJECTION No. - 10 of 2012 Objector :- Smt. Munni Devi Fafo 437 Of 2012 Respondent :- Mahendra Giri And Ors. Counsel for Objector :- Deepak Kumar Agarwal Counsel for Respondent :- Prakash Chandra,Ajai Kumar Jaiswal,Vashu Deo Mishra Hon'ble Abdul Moin,J. (Order on Appeal) 1. Heard Shri Vashu Deo Mishra, learned counsel for the appellant, Shri Deepak Kumar Agarwal, learned counsel for the respondent No.1 and and Shri Prakash Chandra, learned counsel for the respondent No.6. 2. Under challenge is the award passed by the learned Motor Accident Claims Tribunal, Lucknow in Claim Application No.134 of 2006 in Re: Smt. Munni Devi vs. Mahendra Giri and Others, whereby the learned Tribunal awarded a sum of Rs.3,97,420/- to the claimant along with interest. 3. An accident is said to have occurred on 21.11.2005 in front of Vivekanand Poly Clinic Over Bridge Nirala Nagar, Lucknow in which one Vikram tempo No. UP 32 Z-9704 is said to have met with an accident from the motorcycle being driven by Shri Rakesh Kumar Mishra, husband of the claimant, which resulted in Shri Mishra having suffered serious injuries and thereafter having died. 4. After lodging of the F.I.R. etc., the claim application has been filed. The learned Tribunal, vide the impugned award, has awarded the aforesaid amount to the claimants. 5. Being aggrieved, the insurance company has filed the instant appeal only to the extent that no right of recovery has been given to the insurance company against the owner of the tempo. 6. In this regard, learned counsel for the appellant has placed reliance on the written statement that has been filed by the vehicle owner namely Shri Mahendra Giri, a copy of which has been filed has been filed as annexure 2 to the appeal, to contend that in paragraph 21 of the written statement it was categorically stated by the owner that the permit for the aforesaid tempo was of a particular route namely Route No.22 Rajajipuram - Balaganj and the accident is said to have occurred at a place which did not fall within the route of the tempo and consequently, it has to be construed as a breach of policy conditions and thus, although, it is the insurance company which will be liable to initially pay the award but the right of recovery has to be accorded to the insurance company to recover the same from the owner. 7. On the other hand, learned counsel for the respondents has placed reliance on the judgment of this Court passed in Baljit Singh vs. Rameshwar Prasad and Others 2019: AHC-LKO: 12518 to contend that this aspect of the matter has been considered threadbare by this Court and it has been held that in case the vehicle possesses a valid permit and merely it is found at the time of accident at another place within the city limit it will not mean that there is fundamental breach of the policy as to entitle the insurance company to evade its liability. 8. 8. Placing reliance on the aforesaid judgment, the further argument of learned counsels for the respondents is that it is not the case of the insurance company that at that stretch of time and on a particular different route, the tempo was carrying passengers which could be construed as a breach of the policy condition but even if the owner has stated that the vehicle was running at a different route, the same would not be construed to be a fundamental breach of the policy conditions and, thus, the appeal filed by the insurance company merits to be dismissed. 9. Heard the learned counsels for the parties and perused the record. 10. From a perusal of the record, it emerges that an accident is said to have occurred on 21.11.2005 in which one Shri Rakesh Kumar Mishra, who was on a motorcycle, was hit by a tempo. On account of the serious injury being suffered, Shri Mishra died. The widow of the deceased filed a claim application and the learned Tribunal, vide the award impugned, has awarded a certain amount. 11. Being aggrieved, the insurance company is before this Court. 12. The only ground as raised by the learned counsel for the appellant while raising a challenge to the award impugned is that the learned Tribunal has patently erred in not granting a right of recovery to the insurance company from the owner of the tempo, more particularly, when there is fundamental breach of the policy condition whereby the tempo, which was having a permit to operate on a particular route, met with an accident at a different route which has resulted in the death of the husband of the claimant and, thus, there has been a fundamental breach of the terms and conditions of the policy inasmuch as, the insured vehicle was operating at different route than on the route which was required to be operated as per the permit and hence the right of recovery has to be accorded to the insurance company. 13. The aforesaid ground as urged by learned counsel for the appellant is found to be patently fallacious. 14. Apart from the fact that the aforesaid ground had never been urged by the insurance company before the learned Tribunal itself, the other aspect of the matter is that it is not the case of the insurance company that the tempo in question was plying with passengers on a different route than what the permit was accorded for. There could be a case that the said vehicle was running without carrying any passengers, may be for some personal work of the owner, but the relevant aspect of the matter would be that this Court in the case of Baljit Singh (supra) has considered this aspect of the matter threadbare and after placing reliance on various judgment of the Hon'ble Supreme Court has held as under:- "It is in this contest, if the fact scenario is seen in the present case, it would be found that the vehicle in question was being plied with a valid and subsisting permit. The insurance company had filed paper bearing number C-38 before the tribunal, it also indicated that the vehicle in question was having a valid permit for the period 16.01.2001 to 15.01.2006 for route no.6 from Naka to Medical College. Since the vehicle in question did possess a valid permit and merely it was found at the time of the accident at a place within the city limit but on a different place will not mean that there is a fundamental breach which would entitle the insurance company to evade its liability. In view of the detailed discussions, this Court is of the considered view that the finding recorded by the tribunal in respect of the issue no.4 in granting the recovery right to the insurance company is erroneous and is accordingly set aside. The reasoning gives in the case of Bajaj Allianz and Habeeba Khanum is adopted and accepted by this Court and it follows the same." 15. From a perusal of the judgment of this Court in the case of Baljit Singh (supra), it clearly emerges that this Court has held that for a breach of a policy condition, the same should be fundamentally related to the accident, failing which, the purpose of provision of Section 149 of the Motor Vehicles Act, 1988 would be lost. This Court has also held that plying of a vehicle at a different place would not amount to fundamental breach which would entitle the insurance company to evade its liability. 16. Keeping in view of the aforesaid discussion and the judgment of this Court in the case of Baljit Singh (supra), no case for interference in the impugned award, so far as it pertains to insurance company, is made out. 17. Accordingly, the appeal is dismissed. 18. The statutory amount of Rs.25,000/- under deposit before this Court be remitted to the learned Tribunal for being disbursed in accordance with law. 19. The trial court record be returned back. (Order on Cross Objection No.10 of 2012) 20. Heard Shri Deepak Kumar Agarwal, learned counsel for the objector, Shri Prakash Chandra, learned counsel for the respondent No.5 and Shri Vasu Deo Mishra, learned counsel for the respondent No.6. 21. Despite the name of Shri Ajai Kumar Jaiswal being indicated from the side of respondent, nobody has appeared on his behalf. 22. In cross objections, Shri Deepak Kumar Agarwal has argued that a perusal of the judgment passed by the learned Tribunal would indicate that although the learned Tribunal has admitted, as per the salary slip, the salary drawn by the deceased employee to be Rs.7.472/- yet it has made deductions towards DA, CCA, HRA and Washing Allowance. 23. Placing reliance on the recent judgment of the Hon'ble Supreme Court in the case of Meenakshi vs. Oriental Insurance Company Ltd. 2024 INSC 573, the argument of Shri Agarwal, learned counsel for the objector is that the Hon'ble Supreme Court, after placing reliance on various earlier judgments, as find place in the judgment, has held that allowances under the heads of Transport Allowance, House Rent Allowance, Provident Fund Loan, Provident Fund and Special Allowance ought to be added while considering the basic salary of the deceased to arrive at the dependency factor and consequently, the deductions, as made by the learned Tribunal, are patently misconceived and non est the appellant would be entitled to an enhanced amount towards the salary without considering the deductions as has been made by the learned Tribunal. 24. Shri Vasu Deo Mishra, learned counsel appearing for the insurance company fairly admits that in terms of the judgment of the Hon'ble Supreme Court in the case Meenakshi (supra), the objector would be entitled for an addition of the aforesaid amount towards his salary with the exception of festival advance, CGHS and CGEIS which amounts to Rs.205 and would be entitled to add an amount of Rs.1205/-. 25. For the sake of convenience, the judgment of the Hon'ble Supreme Court in the case of Meenakshi (supra) is reproduced below:- "6. Having heard and considered the submissions advanced by learned counsel for the parties and after going through the impugned judgments and the record, we are of the opinion that the reasoning assigned by the High Court, that the perquisites/allowances in the nature of house rent, flexible benefit plan and Company contribution to provident fund would have to be excluded from the gross income for the purpose of applying future prospects, is erroneous on the face of record. There cannot be any two views on the aspect that these perquisites/allowances admissible to a salaried employee do not remain static and continue to rise generally proportionate to the length of the service of the employee. These allowances are generally fixed on a pro rata basis with reference to the basic salary. 7. As per the service conditions and pay scales of the Government officials, the house rent allowance is payable between 8% and 30% of the basic salary. Therefore, the house rent allowance is paid in a fixed ratio proportionate to the basic salary. With the increase in basic salary, the quantum of house rent allowance also increases proportionately. The flexible benefit plan and Company contribution admissible to a person employed in private service would also not remain static and are bound to increase with the length of service. The only bone of contention in this appeal is whether perquisites/allowances referred to above should also be taken into account while applying the future prospects. Therefore, entirely excluding these components from the salary of the employee for applying the principle of future prospects would be unjustified. Consequently, we have no hesitation in holding that these allowances cannot be ignored and have to be added to the salary when assessing the rise in income due to future prospects of a person employed in private service. This Court has carved out a rational formula to fix the percentage of rise of income by future prospects. In the case at hand, the said percentage has been fixed at 50% by both, the Accident Claims Tribunal as well as the Division Bench of the High Court. In view of the discussion made supra, the perquisites/allowances have to be added to the basic salary of the deceased before applying the rise by future prospects. 8. In Raghuvir Singh Matolya and Others v. Hari Singh Malviya and Others 4 (2009) 15 SCC 363, this Court held that the house rent allowance ought to be included for determining the income of the deceased. The relevant paras are extracted hereinbelow for ready reference:- "6. Dearness allowance, in our opinion, should form a part of the income, House rent allowance is paid for the benefit of the family members and not for the employee alone. What would constitute an income, albeit in a different fact situation, came up for consideration before this Court in National Insurance Co. Ltd. v. Indira Srivastava [(2008) 2 SCC 763] wherein it was held: "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: '(iii) 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 [(1861-73) All ER Rep 918]). "It is as large a word as can be used" to denote a person's receipts (per Jessel, M.R., Huggins, ex p., Re [51 LJ Ch 935]). Income is not confined to receipts from business only and means periodical receipts from one's work, lands, investments, etc. Secy. to the Board of Revenue, Income Tax v. Al. Ar. Rm. Arunachalam Chettiar & Bros. [AIR 1921 Mad 427] Ref. Vulcun Insurance Co. Ltd. v. Corpn. of Madras [AIR 1930 Mad 626 (2)].' 21. If the dictionary meaning of the word 'income' is taken to its logical conclusion, it should include those benefits, either in terms of money or otherwise, which are taken into consideration for the purpose of payment of income tax or professional tax although some elements thereof may or may not be taxable or would have been otherwise taxable but for the exemption conferred thereupon under the statute. To the same effect is the decision of this Court in Oriental Insurance Company Limited v. Ram Prasad Varma and Others [(2009) 2 SCC 712: (2009) 1 SCC (Cri) 853: (2009) 1 Scale 598]. 7. We therefore, are of the opinion that "dearness allowance" and "house rent allowance payable to the deceased should bave been included for determining the income of the deceased and.consequently the amount of compensation." (emphasis supplied) 9. Recently in a judgment dated 11 July, 2024 in National Insurance Company Ltd. v. Nalini and Ors. [Petition for Special Leave to Appeal (C) No. 4230/2019], this Court held that, allowances under the heads of transport allowance, house rent allowance, provident fund loan, provident fund and special allowance ought to be added while considering the basic salary of the victim/deceased to arrive at the dependency factor. 10. Therefore, components of house rent allowance, flexible benefit plan and company contribution to provident fund have to be included in the salary of the deceased while applying the component of rise in income by future prospects to determine the dependency factor. The Accident Claims Tribunal was justified in factoring these components into the salary of the deceased, before applying 50% rise by future prospects due to future prospects, while calculating the total compensation payable to the appellant. 11. Clearly, the High Court erred in accepting the appeal filed by the respondent No. 1- Insurance Company and reducing the compensation payable to the appellant from a sum of ₹1,04,01,000/- (Rupees One crore four lakh one thousand only) awarded by the Accident Claims Tribunal to 49,57,035/-(Rupees Forty nine lakh fifty seven thousand and thirty five ₹ only). 12. We, therefore, hold that the High Court has erred while omitting to add the components of house rent allowance, flexible benefit plan and Company contribution to provident fund to the basic salary of the deceased while applying the principle of rise in income by future prospects." (emphasis by Court) 27. Accordingly, considering the judgment of the Hon'ble Supreme Court in the case of Meenakshi (supra) as well as the fair submission made by Shri Vasu Deo Mishra, learned counsel for the respondent insurance company, it is provided that the salary of the applicant without deductions would be treated to be Rs.7,267/- (Rs.6767 + Rs.500/-). The deduction would be 1/3 of the aforesaid amount. There is no dispute pertaining to multiplier as applied by the learned Tribunal which is said to be 13. 28. The future prospects would be 30%. As per the UP motor vehicle Rules, 1998 (as amended in the year 2011), the rate of interest would stand at 7% per annum. 29. The claimants would be entitled to a sum of Rs.40,000/- towards consortium, Rs.15,000/- towards funeral expenses and towards Rs.15,000/- towards loss of estate in terms of the judgment of the Hon'ble Supreme Court in the case of National Insurance Company Limited vs. Pranay Sethi and Others 2017 (4) T.A.C. 673 (S.C.). 30. The aforesaid amount shall be calculated by the insurance company within four weeks and the said amount would be deposited after adjusting the amount already paid before the learned Tribunal within the next four weeks of it being calculated. The claimant would be entitled to withdraw the aforesaid amount in accordance with law. 31. Whatever amount has already been paid would be clearly indicated in the calculation chart to be filed by the insurance company before the learned Tribunal. 32. The cross-objection stands allowed accordingly. Order Date :- 15.5.2025 S. Shivhare Digitally signed by :- SHASHANK SHIVHARE High Court of Judicature at Allahabad, Lucknow Bench