HIGH COURT OF UTTARAKHAND AT NAINITAL Appeal from Order No.496 of 2014 07th November, 2025 The New India Assurance Co. Ltd. ………….Appellant Versus Smt. Sangeeta Sah and others ……..Respondents ---------------------------------------------------------------------- Presence:- Mr. M.K. Goyal, Advocate for the appellant, through video conferencing. ---------------------------------------------------------------------- Hon'ble Pankaj Purohit, J. This appeal has been preferred by the appellant - Insurance Company under section 173 of the Motor Vehicle Act, 1988 challenging the judgment and award dated 02.09.2014 passed by the MACT/District judge, Nainital, in Motor Accident Claim Petition No. 38 of 2009. By the said award, a sum of ₹9,50,200/- along with interest at the rate of 7% per annum has been granted in favour of the claimants for the death of Vikas Sah in a motor accident, fastening the liability upon the Insurance Company with liberty to recover the amount from the owner of the offending vehicle. The challenge in the present appeal, therefore, pertains to both the question of liability and the quantum of compensation awarded. 2. The brief facts of the case are that the widow, mother and unmarried sister of the deceased Vikas Sah instituted a claim petition under Sections 166 and 140 of the Motor Vehicles Act seeking compensation to the tune of ₹26,85,000/-. It was pleaded that on 06.05.2008, the deceased was travelling along with Master Harshit in Mahindra Jeep bearing registration No.UP 02 C 5712 for the purpose of inspecting agricultural land. When the 1 vehicle reached near Laxmikhan on the Bhawali- Mukteshwar motor road, the jeep, driven in a rash and negligent manner by respondent-driver Mahendra Kumar @ Guddu, fell into a deep gorge. The deceased sustained grievous multiple injuries and despite being shifted to several hospitals, he succumbed to his injuries while being taken to Delhi for advanced treatment. At the time of the accident he was stated to be between 40 and 42 years of age, engaged in running a restaurant business as well as agriculture, and earning approximately ₹15,000/- per month, on which income the claimants were wholly dependent. 3. The claimants reiterated before the Tribunal that the accident occurred solely due to the rash and negligent driving of respondent no.1 and that they had also incurred around ₹3,75,000/- towards medical treatment prior to the death of the deceased. 4. The owner-driver, however, denied negligence and contended that the accident occurred due to a sudden mechanical failure of the vehicle, and that he too suffered serious injuries. He claimed that the jeep was duly insured on the date of the accident and, therefore, the insurer alone was liable. 5. The appellant/Insurance Company, on the other hand, denied liability asserting that there had been violation of policy conditions inasmuch as the driver was not holding a valid and effective driving licence on the date of the accident and that no statutory intimation of the accident was provided and that, therefore, the insurer stood absolved of liability. The appellant/Insurance Company has argued that once the Tribunal returned a categorical finding to the effect that the driver did not 2 possess a valid licence on the date of the accident, it was impermissible in law to hold the insurer liable, even with a direction of recovery. According to the appellant, the driving licence of respondent No.1 had expired on 13.10.2007, whereas the accident occurred on 06.05.2008, and the licence was renewed only on 04.07.2008. This renewal having taken place after a gap of nearly nine months and admittedly after the date of accident, it is argued that the driver had no valid licence in the eye of law. It was submitted by the appellant/Insurance Company that the Tribunal ought to have completely exonerated the insurer, more so because in the connected M.A.C.P. No.155 of 2008, arising out of the same accident, the Tribunal had fastened the liability entirely upon the owner. Further grievance has been raised as to the quantification of compensation, alleging excessive assessment of income, erroneous application of multiplier and improper addition of future prospects. It is also asserted that since the Tribunal permitted the insurer under Section 170 of the Motor Vehicles Act to contest the claim on all grounds, it was entitled to a complete defence including absolution from liability. 6. Based on the pleadings of the parties the Tribunal framed the following issues for lawful adjudication: 1. Whether on 06-05-2008 at about 11:30 am when the deceased Vikas Sah was travelling in Mahindra Jeep No. UP 02C-5712 to village Soupi Patti, Gahana Tehsil and District Nainital, the Jeep fell into a deep gorge near Laxmikhan due to rash and negligent driving by the driver of the Jeep and Vikas Sah sustained serious injuries due to which he died while being taken to Delhi for treatment? 2. Whether on the date of accident the Jeep No. UP 02C- 6712 was not being driven by its valid licensed driver, if yes, what is the effect? 3 3. Whether the vehicle in question was not being driven in compliance with the conditions of insurance on the date of the accident, if so, what were the effects? 4. Whether the petitioners are entitled to any compensation, if so, how much and from whom? On Issue No.1, which pertained to the manner of the accident and the allegation of negligence, the Tribunal, upon a careful appreciation of the oral testimony of the eyewitnesses as well as the documentary material including the FIR, site plan, post-mortem report and other connected papers, recorded a clear finding that the accident occurred solely due to the rash and negligent driving of respondent No.1, the driver of the Mahindra Jeep. The Tribunal noted that the deceased was travelling in the jeep when the driver, while going through the Bhawali-Mukteshwar motor road, drove the vehicle in a negligent manner as a result of which it fell into a deep gorge, causing grievous and ultimately fatal injuries to the deceased. There was nothing on record to suggest any fault or contributory negligence on the part of the deceased. Consequently, Issue No.1 was decided squarely in favour of the claimants. With respect to Issues Nos.2 and 3, which concerned the validity of the driving licence of respondent No.1 and the alleged breach of policy conditions, the Tribunal undertook a detailed scrutiny of the evidence produced by both parties. The Tribunal found that the driving licence of the respondent-driver had expired on 13.10.2007 and had not been renewed up to the date of the accident, i.e., 06.05.2008. The renewal of the licence on 04.07.2008 was held to be irrelevant for the purpose of determining the validity of the licence on the crucial date. The Tribunal therefore held that the vehicle was being driven by a person who did not possess a valid and effective driving 4 licence, which amounted to a breach of the terms and conditions of the policy. However, while considering the legal effect of such breach, the Tribunal placed reliance on the authoritative pronouncements of the Hon’ble Supreme Court in National Insurance Co. Ltd. v. Swaran Singh (2004) 3 SCC 297 and United India Insurance Co. Ltd. v. S. Ayyappan (2013) 7 SCC 62. Following the principles laid down in these decisions, the Tribunal held that the mere fact that the driver did not have a valid licence does not automatically and wholly exonerate the insurer from liability towards third-party claimants. It was held that in the absence of any evidence showing that the owner had wilfully permitted an incompetent or unlicensed person to drive the vehicle, or that the breach was fundamental in nature, the insurer cannot be absolved of its statutory obligation to pay compensation to third-party victims. Accordingly, while recording that the driving licence was invalid and that there was a technical breach of policy conditions, the Tribunal held that the Insurance Company would nonetheless be liable to satisfy the award at the first instance, with the right to recover the same from the owner of the offending vehicle. While dealing with Issue No.4 relating to quantum and liability, the Tribunal examined the material placed on record regarding the income and age of the deceased. In the absence of documentary evidence to substantiate the claimed income of ₹15,000/- per month, the Tribunal assessed the monthly income at ₹4,500/- treating it as a reasonable and fair estimation based on the occupation of the deceased and the socio-economic background of the family. The Tribunal computed the annual income at ₹54,000/- accordingly. Considering the age of the deceased as 42 years, the Tribunal applied multiplier 14, 5 in accordance with the guidelines laid down by the Supreme Court in Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121 . One-third of the annual income was then deducted towards personal and living expenses of the deceased, consistent with the standard formula for a married person with dependants. The Tribunal thereafter added 30% of the income towards future prospects, since the deceased was below 50 years of age and engaged in self-employment. In addition to the loss of dependency so computed, the Tribunal awarded a sum of ₹2,45,000/- towards medical expenses, noting that the bills and prescriptions placed on record were duly proved and remained unquestioned. A further consolidated sum of ₹50,000/- was awarded under the conventional heads of funeral expenses and loss of consortium. On this basis, the Tribunal calculated the total compensation payable to the claimants at ₹9,50,200. This amount was directed to be paid along with interest at the rate of 7% per annum from the date of filing of the petition until realization. Consistent with its findings on Issues No. 2 and 3, the Tribunal fastened the liability upon the Insurance Company to pay the entire amount in the first instance, reserving liberty to the insurer to recover the same from the owner of the vehicle in accordance with law. 7. Having heard learned counsel for the appellant and carefully perused the record, this Court finds no substance in the challenge laid by the insurer. The first and principal contention is with regard to the liability of the Insurance Company in a situation wherein the driver admittedly did not possess a valid and effective driving licence on the date of accident. The factual position in the 6 present case is unequivocal. The driving licence of respondent No.1 had expired on 13.10.2007, the accident occurred on 06.05.2008, and the renewal was affected only on 04.07.2008. There is, therefore, no manner of doubt that the driver did not hold a valid licence on the date of the accident. 8. However, the legal position governing such a situation is well settled by the Constitution Bench judgment in National Insurance Co. Ltd. v. Swaran Singh (2004) 3 SCC 297. The Supreme Court therein held that mere absence, expiry or invalidity of a driving licence does not by itself absolve the insurer from liability towards third-party claimants, except in cases of fundamental breach where the owner knowingly commits a conscious and willful violation of policy terms or where the licence is forged or fabricated. The insurer’s liability to satisfy the award in favour of third-party claimants has been repeatedly affirmed in subsequent decisions including Laxmi Narain Dhut v. New India Assurance Co. Ltd. (2007) 3 SCC 700 , United India Insurance Co. Ltd. v. S. Ayyappan (2013) 7 SCC 62, and National Insurance Co. Ltd. v. Parvathneni (2009) 8 SCC 785. 9. Applying the aforesaid principles, the present case discloses no allegation or proof of any forgery or fabrication of licence, nor any material to show that the owner willfully permitted an incompetent person to drive the vehicle. The breach here pertains solely to non- renewal of licence, which does not amount to a fundamental breach. Therefore, the Tribunal rightly held that while the insurer cannot be completely absolved of liability vis-à-vis third-party victims, it would be entitled to recover the award amount from the insured (owner) after satisfying the claim. The reliance placed by the 7 appellant upon another claim petition, M.A.C.P. No. 155 of 2008, is misconceived, for each claim petition is decided on the strength of evidence adduced therein, and any contrary finding of a different Tribunal cannot override binding Supreme Court precedent. 10. The contention regarding permission under Section 170 of the Motor Vehicles Act is equally untenable. Section 170 merely authorises the insurer to contest the claim on all grounds available to the owner. It does not enlarge the statutory defences available under Section 149(2), nor does it dilute the law laid down in Swaran Singh (supra). Even with Section 170 permission, once the policy is admitted to be valid, the insurer’s obligation to satisfy third-party claims remains unaltered. 11. On the issue of quantum, this Court finds no infirmity in the assessment of monthly income at ₹4,500/- in absence of documentary proof, particularly considering that the deceased was engaged in small business and agriculture in a rural set-up. The application of multiplier 14 is strictly in accordance with the guidelines laid down in Sarla Verma (supra). The addition of 30% towards future prospects is justified in view of Rajesh v. Rajbir Singh (2013) 9 Supreme Court Cases 54, which was applicable at the time of the award. The medical bills, running into ₹2,45,000/-, were proved on record and could not have been ignored. The conventional sums awarded for funeral expenses and loss of consortium is modest and reasonable. The total compensation of ₹9,50,200/- cannot be characterized as excessive or arbitrary. 12. Upon a comprehensive consideration of the evidence, the findings recorded by the Tribunal and the 8 submissions advanced, this Court finds that the Tribunal rendered a well-reasoned award, fully in consonance with settled legal principles. The direction requiring the insurer to pay the compensation and thereafter recover the same from the owner is entirely justified in the facts of the case and squarely supported by the binding judgments of the Supreme Court. No ground has been made out warranting interference in appellate jurisdiction. 13. In view of the foregoing discussion, the present appeal fails and is hereby dismissed. 14. The judgment and award dated 02.09.2014 passed by the Motor Accident Claims Tribunal, Nainital, in M.A.C.P. No. 38 of 2009 is affirmed in its entirety. 15. The amount deposited by the appellant-The New India Assurance Co. Ltd before the learned Tribunal or before this High Court shall be released in favour of the respondents-claimants forthwith along with interest accrued thereon. The rest of the amount of compensation shall be deposited by the appellant-Insurance Company before the learned Tribunal along with interest awarded by the learned Tribunal up to date within two months from the date of this judgment and the said amount shall be released in favour of the respondents-claimants immediately. The amount already paid, if any to the respondents-claimants shall be adjusted. (Pankaj Purohit, J.) 07.11.2025 SK 9