1 2025:CGHC:59828 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1222 of 2017 1 - Branch Manager, National Insurance Company Limited Branch Office, Above Central Bank, Near R M S Office, Jagdalpur, District Bastar, Chhattisgarh., Chhattisgarh ... Appellant versus 1 - Smt. Butki Kawasi Wd/o Late Ayatu, Aged About 43 Years Caste Manida, R/o Village And Polst Pondum, Tahsil Dantewada, District South Baster, Dantewada Chhattisgarh. Applicant No. 1, Chhattisgarh 2 - Ku. Ramila, D/o Late Ayatu, Aged About 18 Years Caste Manida, R/o Village And Polst Pondum, Tahsil Dantewada, District South Baster, Dantewada Chhattisgarh. Applicant No. 2, District : Dantewada, Chhattisgarh 3 - Ku. Tiro D/o Late Ayatu, Aged About 15 Years Minor Through Mother Smt. Butki Kawasi Respondent No. 1 Caste Manida, R/o Village And Polst Pondum, Tahsil Dantewada, District South Baster, Dantewada Chhattisgarh. Applicant No. 3, District : Dantewada, Chhattisgarh 4 - Ku. Chhanko D/o Late Ayatu, Aged About 12 Years Minor Through Mother Smt. Butki Kawasi Respondent No. 1 Caste Manida, R/o Village And Polst Pondum, Tahsil Dantewada, District South Baster, Dantewada Chhattisgarh. Applicant No. 4 , District : Dantewada, Chhattisgarh Digitally signed by SHAYNA KADRI 2 5 - Ku. Kume, D/o Late Ayatu Aged About 8 Years Caste Manida, R/o Village And Polst Pondum, Tahsil Dantewada, District South Baster, Dantewada Chhattisgarh. Applicant No. 5, District : Dantewada, Chhattisgarh 6 - Mani Ram S/o Late Ayatu, Aged About 6 Years Minor Through Mother Smt. Butki Kawasi Respondent No. 1 Caste Manida, R/o Village And Polst Pondum, Tahsil Dantewada, District South Baster, Dantewada Chhattisgarh. Applicant No. 6 , District : Dantewada, Chhattisgarh 7 - Jai Singh, S/o Late Ayatu, Aged About 3 Years Caste Manida, R/o Village And Polst Pondum, Tahsil Dantewada, District South Baster, Dantewada Chhattisgarh. Applicant No. 7, District : Dantewada, Chhattisgarh 8 - Santosh Kumar Jaiswal, S/o Shri Tulsi Ram Jaiswal, Aged About 24 Years R/o Village Metapal, Bazar Para, Police Station Katekalyan, District South Bastar Dantewada, Chhattisgarh. Non Applicant No. 1, District : Dantewada, Chhattisgarh 9 - Rakesh Dandekar S/o Late Atma Ram Dandekar, Aged About 5 Years R/o Rajendra Nagar Ward No. 3 Dantewada, District Dantewada, Chhattisgarh. Non Applicant No. 2, District : Dantewada, Chhattisgarh ... Respondent(s) (Cause-title is taken from Case Information System) For Appellant : Mr. Pravesh Sahu, Advocate appearing on behalf of Mr. Dashrath Gupta, Advocate For Resp. No. 1 to 7 : Ms. Shaleeni Jangdi, Advocate appearing on behalf of Mr. A. L. Singroul, Advocate For Resp. No. 9 : Mr. Vishvanath Shriwas, Advocate appearing on behalf of Mr. Paras Mani Shriwas, Advocate 3 Hon’ble Mr. Justice Amitendra Kishore Prasad Order on Board 09/12/2025 1. This appeal has been filed under Section 173 of the Motor Vehicle Act, 1988, against the award dated 19.05.2017 passed by the learned Additional Motor Accident Claims Tribunal, Dantewada, District - South Bastar, Dantewada (C.G.), in Motor Accident Claim Case No. 333/2014. 2. Brief facts of the case, giving rise to the present appeal, are that on 18.01.2014, Ayatu was travelling back to his village in a Commander Jeep bearing registration No. CG-18-ZD-0521 after visiting Kawanar Murga. He was seated inside the jeep along with other passengers as it moved along the village road. The jeep was being driven by Santosh Kumar Jaiswal / respondent No. 8 herein, who was allegedly driving it in a rash and negligent manner. As the vehicle proceeded, the driver kept to the wrong side of the road and lost control of the jeep. Suddenly, the jeep swerved, became unstable, and overturned. During the fall, Ayatu was thrown out of the vehicle. He suffered severe injuries in the incident and died on the spot. The accident occurred solely due to the jeep being driven negligently and on the wrong side of the road, leading to the vehicle overturning and causing the fatal injuries to Ayatu. 3. Learned counsel for the appellant / insurance company submits 4 that the impugned award passed by the learned Tribunal is bad in law and on facts. The Tribunal has failed to appreciate the evidence adduced by the appellant Insurance Company and has erroneously fastened the liability upon the insurer despite clear and established breach of policy conditions. The appellant / Insurance Company duly proved before the learned Tribunal that the offending vehicle, Jeep bearing Registration No. CG-18-ZD- 0521, was insured only as a “Liability Only” private car policy. The policy further covered Personal Accident (PA) benefit for nine unnamed passengers up to Rs. 1,00,000/- each. Thus, the scope of coverage under the policy was limited, and no insurance coverage existed for passengers travelling for hire or reward. The evidence on record clearly established that the insured vehicle was a private car; however, on the date and time of the accident, it was being used as a taxi carrying fare-paying passengers. The deceased was travelling as a paid passenger along with 15–16 other passengers. Such commercial use of a private vehicle is a gross violation of the terms and conditions of the insurance policy. Hence, the appellant Insurance Company cannot be held liable to indemnify for risks not covered by the contract. The misuse of the insured vehicle as a taxi constitutes a clear contravention of policy conditions. Despite this, the learned Tribunal ignored the undisputed evidence regarding the commercial use of the vehicle. The finding of the Tribunal fastening liability upon the appellant Insurance Company is, therefore, perverse, illegal, and liable to 5 be set aside as it has been passed in complete disregard of the established breach. Even assuming without admitting that there was no breach of policy, the liability of the appellant Insurance Company would still be limited to Rs. 1,00,000/- only, since the deceased was travelling inside the insured vehicle, and only nine unnamed passengers were covered under the policy to that extent. The Tribunal erred in awarding compensation far beyond the contractual liability agreed between the insured and the insurer. In view of the proven breach of the policy terms and the limited nature of the insurance coverage, the learned Tribunal ought to have completely exonerated the appellant Insurance Company from liability. The impugned award fastening liability on the insurer is contrary to settled legal principles and deserves to be quashed. It is, therefore, prayed that the award dated 19/05/2017, passed by learned Additional Motor Accident Claims Tribunal, Dantewada, District South Bastar Dantewada (C.G.) in Claim Case No. 333/2014 (Smt. Butki Kawasi & Ors. vs. Santosh Kumar Jaiswal & Ors.), so far as it relates to fastening liability upon the appellant Insurance Company, may kindly be set aside, being bad in law and contrary to the evidence on record, in the interest of justice. 4. On the other hand, learned counsel for respondent No. 1 to 7 – claimants has filed cross objection to the appeal and has submitted that the learned Claims Tribunal committed a grave legal error in disbelieving the statements of the claimants’ 6 witnesses. The eye-witnesses and supporting witnesses produced by the claimants fully corroborated the manner of the accident as well as the income and occupation of the deceased. Their testimonies remained consistent, credible, and unshaken in cross- examination; yet, the Tribunal rejected their evidence without any cogent or legally sustainable reasoning, resulting in a perverse finding. The learned Claims Tribunal erred in assessing the income of the deceased at only Rs. 36,000/- per annum. The claimants had clearly pleaded and proved that the deceased was working as a labourer earning Rs. 8,000/- per month. In the absence of any contrary documentary evidence by the respondents, the Tribunal ought to have accepted the reasonable income asserted by the claimants, especially considering prevailing wage rates. Further, the Tribunal failed to award future prospects, which is now a settled principle as laid down in National Insurance Co. Ltd. v. Pranay Sethi, 2017 AIR SC 5157, and Neeta, W/o Kallappa Kadolkar v. Divisional Manager, MSRTC, (2015) 3 SCC 590. The non-grant of 10% addition towards future prospects in the case of a self-employed or informal worker is a manifest error contrary to binding judicial precedents. The findings recorded by the learned Claims Tribunal run contrary to the documentary and oral evidence available on record. The Tribunal failed to appreciate the evidence in its proper perspective, ignored material facts favourable to the claimants, and adopted an unduly restrictive approach in the computation of 7 compensation. The assessment of income, deduction, and multiplicand is thus perverse and liable to be modified. A fair consideration of the evidence would entitle the claimants to a substantially higher compensation. The learned Claims Tribunal erred in awarding only simple interest at the rate of 9% per annum, whereas the settled practice and judicial pronouncements favour awarding 12% per annum in cases of death compensation. The rate of interest must be commensurate with prevailing commercial rates and intended to provide just and reasonable compensation to the dependents of the deceased. It is, therefore, prayed that this Court may kindly be pleased to modify and enhance the impugned award by granting an additional amount of Rs. 7,87,000/- over and above the compensation already awarded by the learned Claims Tribunal in Claim Case No. 333/2014, in the interest of justice. 5. Having heard learned counsel for the appellant / insurance company and upon careful perusal of the entire evidence available on record, this Court finds that the principal ground urged by the appellant–Insurance Company, namely that the deceased was travelling as a gratuitous or fare-paying passenger in a private vehicle, is not borne out from the evidence. The eye- witness, whose testimony has remained consistent and unshaken in cross-examination, has clearly stated that no passenger, including the deceased, had paid any fare for travelling in the jeep, and that all occupants were travelling only because of their 8 acquaintance with the driver. He further clarified that in his police statement (Ex. D-1), he had not stated that 15–16 persons were travelling in the jeep. Thus, the contention of the insurance company that the deceased was a fare-paying or gratuitous passenger is not supported by any credible evidence and stands rejected as being without factual foundation. 6. Further, for the terms of the insurance policy are concerned, the record reveals that although the vehicle was registered as a private car, the policy clearly shows that premium had been paid for coverage of nine unnamed passengers, to the extent of Rs. 1,00,000/- each. When the insurer has accepted premium for passenger coverage, and when there is no evidence of fare- paying passengers travelling in violation of the policy conditions, the Insurance Company cannot escape liability by contending that the vehicle was misused for commercial purpose. The Tribunal was therefore justified in fastening liability upon the insurer, and no material has been placed to dislodge this finding. However, this Court also finds substance in the submission of the appellant that the liability of the Insurance Company cannot exceed the contractual limit. The policy explicitly restricts liability for unnamed passengers to Rs. 1,00,000/- per occupant. Therefore, even though the insurer cannot be fully exonerated, it also cannot be saddled with liability beyond the extent of coverage purchased under the contract. 7. Hon’ble Supreme Court in the matter of Akula Narayana vs. The 9 Oriental Insurance Company Limited and Anr., reported in 2025 SCC OnLine SC 2377, wherein it was held as under “12. Where the contract of insurance is not disputed, even on breach of insurance conditions, this Court had allowed recovery of compensation from the insurer by giving right to the insurer to recover the same from the vehicle owner. The pay and recover principle has been consistently followed even though it was doubted in a reference which remained unanswered. Taking a conspectus of various pronouncements, this Court recently in Rama Bai v. Amit Minerals (2025 SCC OnLine SC 2067) again applied the said principle and while allowing the appeal of the claimant directed that the insurance company shall satisfy the award and may recover from the insured. Following the aforesaid decisions, we deem it appropriate to allow the appeal by directing that the first respondent (i.e., the insurer) shall satisfy the award, though, however, it can recover the amount so paid from the insured (i.e., owner of the vehicle).” 8. In these circumstances, and keeping in view the benevolent object of the Motor Vehicles Act, as well as the law laid down by the Hon’ble Supreme Court in the doctrine of “pay and recovery”, this Court holds that the Insurance Company is liable to satisfy the award only to the extent of Rs. 1,00,000/- in respect of the deceased. For the remaining amount of compensation, the owner of the offending vehicle shall be liable. The Insurance Company shall first pay the entire compensation to the claimants in order to 10 ensure that the victims are not left remediless. After making such payment, the Insurance Company shall be entitled to recover from the owner the amount paid in excess of Rs. 1,00,000/-. 9. Accordingly, the appeal filed by appellant / insurance company is partly allowed to the extent indicated hereinabove. 10. So far as the cross-appeal preferred by claimants / respondents No. 1 – 7 is concerned, upon meticulous examination of the evidence and material available on record, this Court finds that the learned Tribunal committed an error in assessing the monthly income of the deceased at Rs. 3,000/- per month. 11. The accident occurred on 18.01.2014, and as per the Minimum Wages Notification applicable between 01.10.2013 and 31.03.2014, the wages payable to an unskilled labourer were Rs. 5,163/- per month. Therefore, the income of the deceased ought to have been computed on the basis of Rs. 5,163/- per month and not Rs. 3,000/- as done by the Tribunal. Further, the Tribunal has erred in not awarding future prospects, which is now a mandatory component of compensation calculation in terms of the law laid down by the Hon’ble Supreme Court in National Insurance Co. Ltd. v. Pranay Sethi. The deceased was 45 years of age, and therefore the claimants are entitled to 25% addition towards future prospects. The deduction of 1/5th towards personal and living expenses, considering the size of the family, as well as the 11 application of multiplier of 14, has been correctly assessed by the Tribunal and is accordingly affirmed. 12. The claimants are further entitled for Rs. 18,000/- towards loss of estate (increase of 10% in every three years) and Rs. 18,000/- for funeral expenses (increase of 10% in every three years). As per 'Magma General Insurance Co. Ltd. (supra), the claimants are further entitled for Rs. (40,000/-X7+10%+10%) each (with increase of 10% in every three years) i.e. Rs. 3,36,000/- for consortium. 13. Upon reassessment, based on correct legal principles, this Court re-determines the compensation amounts as follows: Income 5,163 p.m. Annual Income 5,163 x 12 25% future Prospective (15,489/-) Personal Expenses(1/5) (15,489/-) Net Income Multiplier (x14) Loss of Income Rs. 61,956/- +15,489/- Rs. 77,445/- (-15,489) Rs. 61,956/- Rs. 8,67,384/- Loss of Consortirum @ Rs. 40,000/- per person (with an increase of 10% per 3 years) Rs.48,000/-x7 Rs. 3,36,000/- Funeral Expenses (with an increase of 10% in every 3 years) Rs. 18,000/- Loss of Estate (with an increase of 10% in every 3 years) Rs. 18,000/- Total Rs. 12,39,384/- 14. Thus, the total compensation is recomputed as Rs. 12,39,384/-. 12 After deducting Rs. 6,28,200/- as awarded by the tribunal, the enhancement would be Rs. 6,11,184/-. 15. The claimant shall be entitled for the enhanced amount of Rs. 6,11,184/- in addition to what is already awarded by the claims Tribunal. The enhanced amount will carry interest @ 6% from the date of enhancement of the award till its realization. Thus, the cross-appeal filed by respondents No. 1 to 7 / claimants is partly allowed. The compensation is enhanced to the extent indicated above. 16. The rest of the findings of the learned Tribunal on quantum remain undisturbed. It is clarified that the enhanced amount shall form part of the total compensation payable, and the direction already issued in paragraphs 5 to 8 of this judgment regarding “pay and recover” shall equally apply to the enhanced compensation. Sd/- (Amitendra Kishore Prasad) Judge Shayna