1 2026:HHC:20653 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO (MV) No. : 41 of 20 20 Reserved on : 07 th May, 2026 Decided on : 30 th May , 2026 Reliance General Insurance Company Limited ...Appellant Versus Santosh Kumar & Another ...Respondents Coram The Hon’ble Mr. Justice Virender Singh, Judge. Whether approved for reporting?1 Yes For the appellant : Mr. Jagdish Thakur, Advocate. For the respondents : Mr. Sumit Sharma, Advocate, for respondent No.1. Mr. Varun Chauhan, Advocate for respondent No.2. Virender Singh, Judge AppellantReliance General Insurance Company Limited, through its Manager, has preferred the present appeal, under Section 173 of the Motor Vehicles Act (hereinafter referred to as ‘the M.V. Act’), against the award dated 31.10.2019, passed by learned Motor Accident Claims TribunalII, Kinnaur at Rampur Bushehar, District Shimla, H.P. (hereinafter referred to as ‘the MACT’), in M.A.C.T. 1Whether the reporters of Local Papers may be allowed to see the judgment? Yes. 2 2026:HHC:20653 Petition No.149 of 2017, titled as ‘Santosh Kumar versus Joginder Singh & Another’. 2. By way of award dated 31.10.2019, the learned MACT has allowed the claim petition, filed by respondent No.1, under Section 166 of MV Act, by awarding a sum of Rs.02,22,000/ with interest, at the rate of 7.5% per annum, from the date of filing of the petition, till realization of the amount, by fastening the ultimate liability to pay the compensation amount, along with interest, upon the appellantinsurer. 3. For the sake of convenience, the parties to the present lis are, hereinafter, referred to, in the same manner, in which, they were referred to, by the learned MACT. 4. Brief facts, leading to the filing of present appeal, before this Court, as emerge from the record, may be summed up, as under: 4.1. Petitioner Santosh Kumar, has filed the claim petition, under Section 166 of the M.V. Act, against the respondents, seeking compensation on account of the injuries sustained by him in a road side accident involving vehicle No.HP01K5100 (hereinafter referred to as ‘the offending 3 2026:HHC:20653 vehicle’), having taken place on 28.05.2015, at about 7.00 p.m., at Kotgali, near village Kotlu, District Mandi, H.P. 4.2. According to the petitioner, he was travelling in the offending vehicle, being driven by respondent No.1 Joginder Singh, in a rash and negligent manner and when the offending vehicle reached at Kotlu, he could not control the same and rolled down into the deep gorge. Consequently, the petitioner sustained injuries. 4.3. After the accident, the petitioner was taken to CHC Anni, where first aid was given to him. Thereafter, he was shifted to IGMC Shimla, where, he remained admit for 21 days, as indoor patient. According to the petitioner, he has spent a sum of Rs.1,50,000/, on his medical treatment and is still under treatment. 4.4. The information regarding the accident was given to Police Station Karsog, District Mandi, where, FIR No.75 of 2015, dated 29.05.2015, has been registered. The petitioner has also asserted his bright past and bleak future by pleading that he has become 10% permanently disabled due to the injuries sustained by him in the accident, in question. 5. Since, the accident, in question, has solely been attributed to the rash and negligent driving of respondent 4 2026:HHC:20653 No.1 (ownercumdriver), as such, the petitioner has sought an amount of Rs.20,00,000/ as compensation from the respondents. 6. When put to notice, the claim petition has been contested by the respondents. 7. Respondent No.1, has filed the separate reply, by taking the preliminary objections that the petition, as filed, is not maintainable, as, he was neither rash nor negligent, but the accident had taken place due to the mechanical defect, which had suddenly occurred in the vehicle. To buttress his contentions, respondent No.1 has further pleaded that after investigation, cancellation report has been filed before the Court of learned Judicial Magistrate First Class, Karsog. He has also taken the preliminary objections that the petitioner has not approached the Court with clean hands; and the learned MACT has no jurisdiction to try and entertain the present petition. 8. On merits, the claim petition has been contested, on the ground, that the accident had taken place due to the mechanical defect, which had suddenly occurred in the offending vehicle. Other contents of the claim petition have also been denied mainly for want of knowledge. 5 2026:HHC:20653 9. Insurance Companyinsurer of the offending vehicle filed its separate reply, by taking the preliminary objections that the claim petition is not maintainable; the offending vehicle was being plied, in violation of the terms and conditions of the Insurance Policy; the driver of the offending vehicle was not holding valid and effective driving licence, at the time of the accident; the petitioner was travelling in the vehicle as gratuitous passenger; and the claim petition has been filed by the petitioner in collusion with respondent No.1. 10. On merits, the contents of the claim petition have been denied for want of knowledge. 11. Thus, the respondents have prayed for dismissal of the claim petition. 12. From the pleadings of the parties, the learned MACT has framed the following issues, vide order dated 04.04.2018: 1. Whether the petitioner sustained injuries on 28.05.2015, at about 7.00 p.m., at place Kotgali near Kotlu, due to rash and negligent driving of driver of vehicle bearing No.HP01K5100 (Bolero), as alleged? OPP 2. If issue No.1 is proved in affirmative, to what amount of compensation, the petitioners are entitled and from whom? OPP 3. Whether the petition is not maintainable in the present form? OPR 1&2 6 2026:HHC:20653 4. Whether the petitioner has not come to the Court with clean hands, as alleged? OPR1 5. Whether the driver of the offending vehicle was not having a valid and effective driving license at the time of accident, as alleged? OPR2 6. Whether the vehicle was being plied in contravention of the terms and conditions of insurance policy, as alleged? OPR2 7. Whether the petition is filed in collusion with respondent No.1? OPR2 8. Whether the petitioner was traveling as gratuitous passenger in the vehicle at the time of accident? OPR2 9. Relief. 13. Thereafter, the parties to the lis were directed to adduce evidence. 14. After the closure of evidence and after hearing learned counsel for the parties, the learned MACT has allowed the claim petition, as referred to above. 15. Feeling aggrieved from the said award passed by the learned MACT, respondent No.2Insurance Company/ insurer of the offending vehicle, has assailed the said award before this Court, on the ground, that in the present case, the petitioner could not prove that sine qua non for claiming the compensation i.e., rash and negligent driving on the part of the driver of the offending vehicle. Although FIR has been 7 2026:HHC:20653 lodged against respondent No.1 and the same has been exhibited as PW1/B, however, the police, thereafter, has filed the cancellation report, which has now been accepted by the learned Judicial Magistrate First Class, Karsog. 16. All these facts have been pleaded to demonstrate that sine qua non for seeking the compensation, i.e., rash and negligent driving of the driver of the offending vehicle, has not been proved. The award has been assailed on the ground that the learned MACT has wrongly ignored the cancellation report submitted by the police and according to the appellant insurer, the claim petition is required to be dismissed on this score, by setting aside the award passed by learned MACT. 17. The award has also been assailed on the ground that while deciding issue No.5, the learned MACT has erred in holding that the driver of the offending vehicle was holding a valid and effective driving licence. 18. The amount of compensation, which has been awarded to the petitioner has also been prayed to be reduced on the ground that the learned MACT has taken the monthly income of the claimant as Rs.10,500/, by treating him as mason, whereas, no evidence qua this fact has been adduced by the petitioner. 8 2026:HHC:20653 19. Insurance Company, has thus, prayed that in the absence of any evidence, the income of the petitioner can be said to be Rs.192/ per day or to say Rs.5760/ per month, on the basis of the minimum wages prevailing at the relevant time. 20. The award has also been assailed on the ground that the learned MACT has wrongly taken the disability as 10%. According to the Insurance Company, the age of the petitioner, at the time of accident has been pleaded as 46 years, as such, the learned MACT has wrongly applied the multiplier of 13 instead of 12. Similarly, the rate of interest, as awarded as 7.5%, is also sought to be reduced. 21. On the basis of the above facts, Mr. Jagdish Thakur, Advocate, has prayed that the appeal may kindly be allowed by setting aside the award and reducing the amount of compensation. 22. Per contra, Mr. Sumit Sharma and Mr. Varun Chauhan, Advocates, appearing for the respondents, have supported the award and argued that the learned MACT has rightly allowed the petition and the appeal, being devoid of any merit, may kindly be dismissed. 9 2026:HHC:20653 23. In this case, the controversy is confined to the fact as to whether the amount, which has been awarded by the learned MACT, falls within the definition of ‘just compensation’, as, the endeavour of the Court should be to provide “just compensation”. 24. While holding so, the view of this Court is being guided by the decision of the Hon’ble Apex Court in Oriental Insurance Company Limited vs. Mohd. Nasir and another, (2009) 2 SCC (Cri.) 987, wherein it has been held that the provisions of M.V. Act are beneficial piece of legislation and the endeavour of the Court should be to provide “just compensation” to the petitioner. The relevant paras 23 and 24 of the judgment are reproduced as under: “23. Both, the 1923 Act and 1988 Act are beneficent legislation insofar as they provide for payment of compensation to the workmen employed by the employers and/or by use of motor vehicle by the owner thereof and/or the insurer to the petitioners suffering permanent disability. The amount of compensation is to be de termined in terms of the provisions of the respective Acts. Whereas in terms of the 1923 Act, the Commissioner who is a quasi judicial authority, is bound to apply the principles and the factors laid down in the Act for the purpose of de termining the compensation, Section 168 of the 1988 Act enjoins the Tribunal to make an award determining the amount of compensation which ap pears to be just. 10 2026:HHC:20653 24. Both the Acts aim at providing for expeditious relief to the victims of accident. In these cases, the accidents took place by reason of use of motor vehicles. Both the statutes are beneficial ones for the workmen as also the third parties. The benefits thereof are available only to the persons specified under the Act besides under the Contract of Insurance. The statutes, therefore, deserve liberal construction. The legislative intent contained therein is required to be interpreted with a view to give effect thereto.” (self emphasis supplied) 25. While determining the stand of the Insurance Company visàvis ‘just compensation’, this Court has to consider the evidence, so adduced, by the petitionerclaimant, before the learned MACT, to determine the fact as to whether the amount of compensation, which has been awarded, falls within the definition of ‘just compensation’ or not or the same is liable to be reduced, as prayed by the appellant. 26. The factum of accident has not been disputed, but, according to the ownercumdriver, the same had taken place due to sudden mechanical defect, which had occurred in the offending vehicle. In this background, evidence of the parties is to be discussed. After framing issues, petitioner Santosh Kumar has tendered in evidence his affidavit as Ex.PW1/A, in his examination in chief, which is based upon the averments, as made in the application. 11 2026:HHC:20653 27. In addition to the affidavit, the petitioner has tendered in evidence copy of FIR Ex.PW1/B, discharge slip Mark ‘X1’, disability certificate Mark X, School Leaving Certificate Ex.PW1/D and medical bills Ex.P1 to P32. 28. In the crossexamination by learned counsel for the Insurance Company, the petitioner has admitted that total nine persons were travelling in the offending vehicle, out of them, seven had expired. He has denied the suggestion that being the mason, he is getting work occasionally. Rest, he has denied all the suggestions put to him by the learned counsel for the Insurance Company. 29. PW2 Sanjay Kumar, although, deposed in favour of the petitioner about the accident, in question, but, his affidavit is totally silent about the fact as to whether he was present on the spot or not. As such, his evidence does not fall within the definition of direct evidence, as per the conditions of Section 60 of the Evidence Act (Section 55 of the Bharatiya Sakshya Adhiniyam). 30. PW3 Dr. Asheesh Sharma, Assistant Director, Orthopedics, Directorate of Health Services, Shimla, has proved the disability certificate Ex.PW3/A, in which, it has been mentioned that the Board has found 10% permanent 12 2026:HHC:20653 disability, with respect to the right lower limb of the petitioner. He has further deposed that with 10% disability, a person can perform his daily routine work, however, he cannot be able to carry heavy load over long distance. 31. On the other hand, respondent No.1, has placed on record copy of registration certificate Ex.RW1/A, copy of Insurance Policy Ex.RW1/B, Contract Carriage Permit Ex.RW1/C, Fitness Certificate Ex.RW1/D and copy of Driving Licence Ex.RW1/E, whereas, the Insurance Company has tendered the certified copy of the award dated 02.05.2018, in case RBT No.41R/2 of 2016/15 Ex.R1, Certified copy of statements of RW1 to RW4 in case RBT No.41R/2 of 2016/15, as Ex.R2. 32. In view of the evidence so discussed above, the first and foremost question, which arises for determination, before this Court, is about the fact whether the driver of offending vehicle was having a valid and effective driving licence to drive the vehicle at the relevant time. 33. As per the documentary evidence adduced on the file, copy of RC of the offending vehicle is Ex.RW1/A. As per this document, the offending vehicle is Bolero LX 2WD 7 Seater and its seating capacity is 9 and the said vehicle was 13 2026:HHC:20653 having the contract carriage permit from 27.1.2012 to 31.08.2015. The accident in question had taken place on 28.5.2015. Meaning thereby, at the relevant time, the offending vehicle was having the valid contract carriage permit. Fitness certificate was also valid and the driver was holding a valid and effective driving licence, copy of which is Ex.RW1/E. As per Ex.RW1/E, the holder of the driving licence was authorized to drive LMV w.e.f. 8.9.2003. 34. In view of the decision of the Hon’ble Supreme Cout in Bajaj Alliance General Insurance Company Ltd. Versus Rambha Devi & Others, (2025) 3 Supreme Court Cases 95, the arguments of the learned counsel appearing for the Insurance Company qua the fact that the driver of the offending vehicle was not having a valid and effective driving licence, are devoid of any merit, as the Hon’ble Supreme Court, in the above case, has held that the driver, who is having driving licence to drive LMV can legally drive transport vehicle below the gross weight of 7500 kg. Relevant paragraphs 175 to 181 of the judgment are reproduced as under: 175. The licensing regime under the MV Act and the MV Rules, when read as a whole, does not provide for a separate endorsement for operating a ‘Transport Vehicle’, if a driver already holds a 14 2026:HHC:20653 LMV license. We must however clarify that the exceptions carved out by the legislature for special vehicles like ecarts and erickshaws, or vehicles carrying hazardous goods, will remain unaffected by the decision of this Court. 176. As discussed earlier in this judgment, the definition of LMV under Section 2(21) of the MV Act explicitly provides what a ‘Transport Vehicle’ ‘means’. This Court must ensure that neither provision i.e. the definition under Section 2(21) or the second part of Section 3(1) which concerns the necessity for a driving license for a ‘Transport Vehicle’ is reduced to a dead letter of law. Therefore, the emphasis on ‘Transport Vehicle’ in the licensing scheme has to be understood only in the context of the ‘medium’ See Rule 8A of MV Rules,’Minimum training required for driving E rickshaw or Ecart’ See Rule 9 of MV Rules, ’Educational Qualification for drivers of goods carriages carrying dangerous or hazardous goods’ and ‘heavy’ vehicles. This harmonious reading also aligns with the objective of the 1994 amendment in Section 10(2) to simplify the licensing procedure. 177. The above interpretation also does not defeat the broader twin objectives of the MV Act i.e. road safety and ensuring timely compensation and relief for victims of road accidents. The aspect of road safety is earlier discussed at length. An authoritative pronouncement by this Court would prevent insurance companies from taking a technical plea to defeat a legitimate claim for compensation involving an insured vehicle weighing below 7,500 kgs driven by a person holding a driving license of a ‘Light Motor Vehicle’ class. 178. In an era where autonomous or driverless vehicles are no longer tales of science fiction and appbased passenger platforms are a modern reality, the licensing regime cannot remain static. The amendments that have been carried out by the Indian legislature may not have dealt with all possible concerns. As we were informed by the Learned Attorney General that a legislative exercise is underway, we hope that a 15 2026:HHC:20653 comprehensive amendment. The classes medium goods vehicle[(10(2)(e)], medium passenger vehicle[10(2)(f)],heavy goods vehicle[10(2)(g)] and heavy passenger vehicle [10(2)(h)] were deleted and a new class ‘Transport Vehicle’ was introduced in Section 10(2)(e) to address the statutory lacunae will be made with necessary corrective measures. 179. Just to flag one concern, the legislature through the 1994 amendment in Section 10(2)(e) in order to introduce ‘transport vehicle’ as a separate class could not have intended to merge light motor vehicle (which continued as a distinct class) along with medium, and heavy vehicles into a single class. Else, it would give rise to a situation in which Sri (our hypothetical character), wanting to participate in the cycling sport, is put through the rigorous training relevant only for a multisport like Triathlon, which requires a much higher degree of endurance and athleticism. The effort therefore should be to ensure that the statute remains practical and workable. 180. Now harking back to the primary issue and noticing that the core driving skills (as enunciated in the earlier paragraphs), expected to be mastered by all drivers are universal – regardless of whether the vehicle falls into “Transport” or “NonTransport” category, it is the considered opinion of this Court that if the gross vehicle weight is within 7,500 kg the quintessential common man’s driver Sri, with LMV license, can also drive a “Transport Vehicle”. We are able to reach such a conclusion as none of the parties in this case has produced any empirical data to demonstrate that the LMV driving licence holder, driving a ‘Transport Vehicle’, is a significant cause for road accidents in India. The additional eligibility criteria as specified in MV Act and MV Rules as discussed in this judgment will apply only to such vehicle (‘medium goods vehicle’, ‘medium passenger vehicle’, ‘heavy goods vehicle’ and ‘heavy passenger vehicle’), whose gross weight exceeds 7,500 Kg. Our present interpretation on how the licensing regime is to operate for drivers under the statutory scheme is unlikely to compromise the road safety concerns. This will also effectively address the livelihood issues for drivers operating Transport Vehicles (who clock maximum hours behind the 16 2026:HHC:20653 wheels), in legally operating “Transport vehicles” (below 7,500 Kg), with their LMV driving license. Perforce Sri must drive responsibly and should have no occasion to be called either a maniac or an idiot (as mentioned in the first paragraph), while he is behind the wheels. Such harmonious interpretation will substantially address the vexed question of law before this Court. 181. Our conclusions following the above discussion are as under: (I) A driver holding a license for Light Motor Vehicle (LMV) class, under Section 10(2)(d) for vehicles with a gross vehicle weight under 7,500 kg, is permitted to operate a ‘Transport Vehicle’ without needing additional authorization under Section 10(2)(e) of the MV Act specifically for the ‘Transport Vehicle’ class. For licensing purposes, LMVs and Transport Vehicles are not entirely separate classes. An overlap exists between the two. The special eligibility requirements will however continue to apply for, inter alia, ecarts, erickshaws, and vehicles carrying hazardous goods. (II) The second part of Section 3(1), which emphasizes the necessity of a specific requirement to drive a ‘Transport Vehicle,’ does not supersede the definition of LMV provided in Section 2(21) of the MV Act. (III) The additional eligibility criteria specified in the MV Act and MV Rules generally for driving ‘transport vehicles’ would apply only to those intending to operate vehicles with gross vehicle weight exceeding 7,500 kg i.e. ‘medium goods vehicle’, ‘medium passenger vehicle’, ‘heavy goods vehicle’ and ‘heavy passenger vehicle’. (IV) The decision in Mukund Dewangan (2017) is upheld but for reasons as explained by us in this judgment. In the absence of any obtrusive omission, the decision is not per incuriam, even if certain provisions of the MV Act and MV Rules were not considered in the said judgment.” (self emphasis supplied) 35. If the facts and circumstances of the present case are seen, in the light of the above decision of the Hon’ble 17 2026:HHC:20653 Supreme Court, as per the registration certificate gross weight of the offending vehicle does not exceed 7500 kgs. As such, the arguments of learned counsel for the Insurance Company, in this regard, are rejected. 36. The Insurance Company has also assailed the award on the ground of the quantum. Learned MACT has taken the income of the petitioner as 350/ per day, whereas, the petitioner has pleaded that he was earning Rs.30,000/ per month. According to him, he is mason by profession and is also earning from agricultural and horticulture pursuits. This stand was reiterated by the petitioner, while appearing in the witnessbox, as PW1. The assertion, qua his income as Rs.30,000/ per month, has not been suggested to be false by the learned counsel for the Insurance Company. 37. PW2, Sanjay Kumar, has been examined by the petitioner to prove that his daily wages were Rs.600/ per day as the petitioner was working as skilled mason. In the cross examination, a suggestion was given to this witness that the daily wages of mason was Rs.300/, but, he volunteered that it was Rs.600/. Admittedly, the work of a mason is seasonal one. At the relevant time, the minimum wages of the skilled worker, including mason was Rs.214.17/ per day or to say 18 2026:HHC:20653 Rs.6425/ per month. However, in the present case, the petitioner has deposed, on oath, that he was earning Rs.30,000/ per month. In such situation, this Court has to take a holistic view by holding that considering the urbanization in the State, it cannot be expected from a skilled mason to work on minimum wages. Atleast, petitioner might be earning Rs.300/ per day, or to say Rs.9,000/ per month. 38. So far as the disability is concerned, as per the document Ex.PW3/A, the Board found 10% disability, which is permanent in nature, in relation to his right lower limb. This certificate has been proved by PW3, Dr. Asheesh Sharma, who has categorically stated that with this disability, petitioner can perform his daily routine work, however, he cannot carry heavy load over long distance. 39. Hon’ble Supreme Court in Govind Yadav versus New India Assurance Company Ltd., 2012 ACJ 28 has held that while assessing the amount of compensation, disability of a person is to be taken into consideration, as, an injured is not only to be compensated for the physical injury, but, also for the loss, which he suffered, as a result of such injury. Relevant paragraphs 12 to 16 of the judgment are reproduced as under: 19 2026:HHC:20653 12. In Reshma Kumari v. Madan Mohan (2009) 13 SCC 422, this Court reiterated that the compensation awarded under the Act should be just and also identified the factors which should be kept in mind while determining the amount of compensation. The relevant portions of the judgment are extracted below: "The compensation which is required to be determined must be just. While the claimants are required to be compensated for the loss of their dependency, the same should not be considered to be a windfall. Unjust enrichment should be discouraged. This Court cannot also lose sight of the fact that in given cases, as for example death of the only son to a mother, she can never be compensated in monetary terms. The question as to the methodology required to be applied for determination of compensation as regards prospective loss of future earnings, however, as far as possible should be based on certain principles. A person may have a bright future prospect; he might have become eligible to promotion immediately; there might have been chances of an immediate pay revision, whereas in another (sic situation) the nature of employment was such that he might not have continued in service; his chance of promotion, having regard to the nature of employment may be distant or remote. It is, therefore, difficult for any court to lay down rigid tests which should be applied in all situations. There are divergent views. In some cases it has been suggested that some sort of hypotheses or guess work may be inevitable. That may be so. In the Indian context several other factors should be taken into consideration including education of the dependants and the nature of job. In the wake of changed societal conditions and global scenario, future prospects may have to be taken into consideration not only having regard to the status of the employee, his educational qualification; his past performance but also other relevant factors, namely, the higher salaries and perks which are being offered by the private companies these days. In fact while determining the m ultiplicand this Court in O riental Insurance 20 2026:HHC:20653 Co. Ltd. v. Jas huben held that even dearness allowance and perks with regard thereto from which the family would have derived monthly benefit, must be taken into consideration. One of the incidental issues which has also to be taken into consideration is inflation. Is the practice of taking inflation into consideration wholly incorrect? Unfortunately, unlike other developed countries in India there has been no scientific study. It is expected that with the rising inflation the rate of interest would go up. In India it does not happen. It, therefore, may be a relevant factor which may be taken into consideration for determining the actual ground reality. No hardandfast rule, however, can be laid down therefor." (emphasis supplied) 13. In Arvind Kumar Mishra v. New India Assurance Company Limited (2010) 10 SCC 254, the Court considered the plea for enhancement of compensation made by the appellant, who was a student of final year of engineering and had suffered 70% disablement in a motor accident. After noticing factual matrix of the case, the Court observed: "We do not intend to review in detail state of authorities in relation to assessment of all damages for personal injury. Suffice it to say that the basis of assessment of all damages for personal injury is compensation. The whole idea is to put the claimant in the same position as he was insofar as money can. Perfect compensation is hardly possible but one has to keep in mind that the victim has done no wrong; he has suffered at the hands of the wrongdoer and the court must take care to give him full and fair compensation for that he had suffered." (emphasis supplied) 14. In Raj Kumar v. Ajay Kumar (2011) 1 SCC 343, the Court considered some of the precedents and held: "The provision of the Motor Vehicles Act, 1988 ("the Act", for short) makes it clear that the award 21 2026:HHC:20653 must be just, which means that compensation should, to the extent possible, fully and adequately restore the claimant to the position prior to the accident. The object of awarding damages is to make good the loss suffered as a result of wrong done as far as money can do so, in a fair, reasonable and equitable manner. The court or the Tribunal shall have to assess the damages objectively and exclude from consideration any speculation or fancy, though some conjecture with reference to the nature of disability and its consequences, is inevitable. A person is not only to be compensated for the physical injury, but also for the loss which he suffered as a result of such injury. This means that he is to be compensated for his inability to lead a full life, his inability to enjoy those normal amenities which he would have enjoyed but for the injuries, and his inability to earn as much as he used to earn or could have earned. The heads under which compensation is awarded in personal injury cases are the following: Pecuniary damages (Special damages) (i) Expenses relating to treatment, hospitalisation, medicines, transportation, nourishing food, and miscellaneous expenditure. (ii) Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising: (a) Loss of earning during the period of treatment; (b) Loss of future earnings on account of permanent disability. (iii) Future medical expenses. Nonpecuniary damages (General damages) (iv) Damages for pain, suffering and trauma as a consequence of the injuries. (v) Loss of amenities (and/or loss of prospects of marriage). (vi) Loss of expectation of life (shortening of normal longevity). 22 2026:HHC:20653 In routine personal injury cases, compensation will be awarded only under heads (i), (ii)(a) and (iv). It is only in serious cases of injury, where there is specific medical evidence corroborating the evidence of the claimant, that compensation will be granted under any of the heads (ii)(b), (iii), (v) and (vi) relating to loss of future earnings on account of permanent disability, future medical expenses, loss of amenities (and/or loss of prospects of marriage) and loss of expectation of life." (emphasis supplied) 15. In our view, the principles laid down in Arvind Kumar Mishra v. New India Assurance Company Ltd. (supra) and Raj Kumar v. Ajay Kumar (supra) must be followed by all the Tribunals and the High Courts in determining the quantum of compensation payable to the victims of accident, who are disabled either permanently or temporarily. If the victim of the accident suffers permanent disability, then efforts should always be made to award adequate compensation not only for the physical injury and treatment, but also for the loss of earning and his inability to lead a normal life and enjoy amenities, which he would have enjoyed but for the disability caused due to the accident. 16. We shall now consider whether the compensation awarded to the appellant is just and reasonable or he is entitled to enhanced compensation under any of the following heads: (i) Loss of earning and other gains due to the amputation of leg. (ii) Loss of future earnings on account of permanent disability. (iii) Future medical expenses. (iv) Compensation for pain, suffering and trauma caused due to the amputation of leg. (v) Loss of amenities including loss of the prospects of marriage. (vi) Loss of expectation of life. 23 2026:HHC:20653 40. This Court has to determine the amount of compensation under various heads, which is accordingly assessed, as under: 1. NON PECUNIARY DAMAGES: (a) PAIN AND SUFFERINGS: 41. The learned MACT has awarded a sum of Rs.10,000/, under this head. As per the petitioner, after the accident, he was taken to CHC Anni, from where, he was referred to IGMC Shimla, where, he remained admit for a period of 21 days. The period of hospitalization must be painful and traumatic for the petitioner, for which, he is held entitled to a sum of Rs.2000/ per day. As such, the petitioner is entitled to a sum of Rs.2000x21= Rs.42,000/, under this head. (b) LOSS OF ENJOYMENT OF LIFE: 42. The learned MACT has awarded a sum of Rs.5,000/ under this head. As discussed hereinabove, the period of hospitalization has been held to be 21 days and Medical Board has assessed the disability of the petitioner as 10% permanent in nature. After the discharge from the hospital, he might have taken atleast three months for convalescence. Thus, during the said period, he could not have enjoyed the life of a normal human being. Although. 24 2026:HHC:20653 there is 10% disability permanent in nature, but, the said disability is to be considered under the head ‘loss of earning capacity’, as such, the said disability is not liable to be assessed here, as, the same would amount to double enrichment, which is prohibited under the law. 43. Considering the period of hospitalization and convalescence, this Court is of the view that the petitioner is entitled to a sum of Rs.50,000/, under the head ‘loss of enjoyment of life’. (c) SHORTEN EXPECTANCY OF LIFE: 44. There is no evidence on the record to prove or to suggest that due to disability suffered and injury sustained, the life span of the petitioner has been shortened. As such, no amount of compensation is being awarded, under this head. 2. PECUNIARY DAMAGES: (a) LOSS OF EARNINGS AND EARNING CAPACITY: 45. The monthly income of the petitioner is held to be Rs.9,000/ per month. The period of hospitalization and convalescence is held to be about four months. During that period, he could not work. As such, he is entitled to a sum of Rs.9,000/ x 4 = Rs.36,000/, whereas, learned MACT has given a sum of Rs.10,500/, by holding that the petitioner 25 2026:HHC:20653 was unable to work for a period of more than one month. The said approach of the learned MACT, does not sustain in the judicial scrutiny by this Court, as it cannot be expected from a person, who had suffered 10% permanent disability in nature and remain admitted for a period of 21 days, would commence his work, after discharge from hospital. 46. The petitioner has been held to be mason by profession. In view of the deposition of PW3, qua the fact that the petitioner cannot carry heavy load over long distance, this Court is of the view that considering the nature of the job, 10% disability can be considered as 20% functional disability. 47. In order to grant just compensation, some amount is liable to be added in the monthly income, which has been held to be Rs.9,000/, in view of the decision of Hon’ble Supreme Court in Sidram versus Division Manager, United India Insurance Company Limited & Another, (2023) 3 Supreme Court Cases 439. Relevant paragraphs 31 to 34 of the judgment, are reproduced, as under: 31. It is now a well settled position of law that even in cases of permanent disablement incurred as a result of a motoraccident, the claimant can seek, apart from compensation for future loss of income, amounts for future prospects as well. We 26 2026:HHC:20653 have come across many orders of different tribunals and unfortunately affirmed by different High Courts, taking the view that the claimant is not entitled to compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement. That is not a correct position of law. There is no justification to exclude the possibility of compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement. Such a narrow reading is illogical because it denies altogether the possibility of the living victim progressing further in life in accident cases – and admits such possibility of future prospects, in case of the victim’s death. 32. This Court has emphasised time and again that “just compensation” should include all elements that would go to place the victim in as near a position as she or he was in, before the occurrence of the accident. Whilst no amount of money or other material compensation can erase the trauma, pain and suffering that a victim undergoes after a serious accident, (or replace the loss of a loved one), monetary compensation is the manner known to law, whereby society assures some measure of restitution to those who survive, and the victims who have to face their lives. 33. In Santosh Devi v. National Insurance Company Limited and Others, (2012) 6 SCC 421, this Court held that: “14. We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma case [Sarla Verma v. DTC, (2009) 6 SCC 121] that where the deceased was selfemployed or was on a fixed salary without provision for annual increment, etc., the Courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be nave to say that the wages or total emoluments/income of a person who is self employed or who is employed on a fixed salary 27 2026:HHC:20653 without provision for annual increment, etc., would remain the same throughout his life. 15. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are selfemployed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put in extra efforts to generate additional income necessary for sustaining their families. 16. The salaries of those employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one lakh. 17. Although the wages/income of those employed in unorganised sectors has not registered a corresponding increase and has not kept pace with the increase in the salaries of the government employees and those employed in private sectors, but it cannot be denied that there has been incremental enhancement in the income of those who are self employed and even those engaged on daily basis, monthly basis or even seasonal basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who earns his livelihood by stitching cloths. If the cost of living increases and the prices of essentials go up, it is but natural for him to increase the cost of his labour. So will be 28 2026:HHC:20653 the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason etc. 18. Therefore, we do not think that while making the observations in the last three lines of para 24 of Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC 121] judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is self employed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is selfemployed or is engaged on fixed wages will also get 30% increase in his total income over a period of time and if he/she becomes the victim of an accident then the same formula deserves to be applied for calculating the amount of compensation.” 34. In Jagdish v. Mohan and Others, (2018) 4 SCC 571, the victim, a carpenter, suffered permanent disablement, and his claim for compensation including for loss of future prospects was considered by a threeJudge Bench which included, incidentally, the judges who had decided National Insurance Company (supra). This Court held that: “13. In the judgment of the Constitution Bench in Pranay Sethi [National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680], this Court has held that the benefit of future prospects should not be confined only to those who have a permanent job and would extend to selfemployed individuals. In the case of a selfemployed person, an addition of 40% of the established income should be made where the age of the victim at the time of the accident was below 40 years. Hence, in the present case, the appellant would be entitled to an enhancement of Rs. 2400 towards loss of future prospects. 14. In making the computation in the present case, the court must be mindful of the fact that the appellant has suffered a serious disability in which he has suffered a loss of the use of both his hands. For a person engaged in manual activities, 29 2026:HHC:20653 it requires no stretch of imagination to understand that a loss of hands is a complete deprivation of the ability to earn. Nothing —at least in the facts of this case—can restore lost hands. But the measure of compensation must reflect a genuine attempt of the law to restore the dignity of the being. Our yardsticks of compensation should not be so abysmal as to lead one to question whether our law values human life. If it does, as it must, it must provide a realistic recompense for the pain of loss and the trauma of suffering. Awards of compensation are not law's doles. In a discourse of rights, they constitute entitlements under law. Our conversations about law must shift from a paternalistic subordination of the individual to an assertion of enforceable rights as intrinsic to human dignity. 15. The Tribunal has noted that the appellant is unable to even eat or to attend to a visit to the toilet without the assistance of an attendant. In this background, it would be a denial of justice to compute the disability at 90%. The disability is indeed total. Having regard to the age of the appellant, the Tribunal applied a multiplier of 18. In the circumstances, the compensation payable to the appellant on account of the loss of income, including future prospects, would be Rs 18,14,400. In addition to this amount, the appellant should be granted an amount of Rs 2 lakhs on account of pain, suffering and loss of amenities. The amount awarded by the Tribunal towards medical expenses (Rs 98,908); for extra nourishment (Rs 25,000) and for attendant's expenses (Rs 1 lakh) is maintained. The Tribunal has declined to award any amount towards future treatment. The appellant should be allowed an amount of Rs 3 lakhs towards future medical expenses. The appellant is thus awarded a total sum of Rs.25,38,308 by way of compensation. The appellant would be entitled to interest at the rate of 9% p.a. on the compensation from the date of the filing of the claim petition. The liability to pay compensation has been fastened by the Tribunal and by the High Court on the insurer, owner and driver jointly and severally which is affirmed. The 30 2026:HHC:20653 amount shall be deposited before the Tribunal within a period of 6 weeks from today and shall be paid over to the appellant upon proper identification.” (Self emphasis supplied) 48. The age of the petitioner at the time of accident was 46 years and in view of the decision of Hon’ble Supreme Court in National Insurance Company Ltd. Versus Pranay Sethi & Others, (2017) 16 Supreme Court Cases, 25% amount is liable to be added towards future prospects of the petitioner. Thus, his income, for the purpose of assessing the loss of earning capacity, comes to Rs.9,000/+ Rs.2250/ (25% of Rs.9,000/) = Rs.11,250/. 49. The functional disability of the petitioner, in the present case, is held to be 20%, as such, his loss of earning capacity comes to Rs.2250/ (20% of Rs.11250) per month. Keeping in view the age of the petitioner, which is held to be 46 years, multiplier of ‘13’ is required to be applied to determine the amount of compensation. Therefore, the petitioner is held entitled to Rs.2250/x12x13= Rs.3,51,000/, under the head ‘loss of earning capacity’. TRANSPORTATION CHARGES: 50. The learned MACT has not awarded any amount, under this head, but, taking judicial notice of the fact that 31 2026:HHC:20653 the accident had taken place at Kotgali near village Kotlu, and the petitioner was taken to CHC Anni, from where, he was referred to IGMC Shimla, he might have spent Rs.10,000/ on taxi charges. As such, the petitioner is held to be entitled to Rs.10,000/ under this head. (c) SPECIAL DIET AND ATTENDANT CHARGES: 51. Learned MACT has awarded a sum of Rs.10,000/ towards special diet and Rs.10,000/ as attendant charges. The period of hospitalization and convalescence, has been held to be four months. Meaning thereby, during that period, the petitioner might have taken special diet and might have required assistance of some attendants, for which, it would be just and appropriate to award a sum of Rs.200/ per day, under this head. Thus, the compensation, under this head, comes to Rs.120x200=Rs.24,000/. 52. Considering all these facts, the petitioner is held entitled to a sum of Rs.5,13,000/ (Rs.42,000/+ Rs.50,000/+Rs.36,000/+ Rs.3,51,000/ + Rs.10,000/ +Rs.24,000/), as compensation. 53. In view of the above discussions, the appeal is dismissed, however, the award passed by the learned MACT is modified and the amount of compensation is enhanced 32 2026:HHC:20653 from Rs.2,22,000/ to Rs.5,13,000/, along with interest @ 7.5% per annum, from the date of filing of the petition, till the realization of the whole amount. 54. However, keeping in view the facts and circumstances, there shall be no order so as to costs. 55. Memo of costs be prepared. 56. Pending application(s), if any, are also disposed of. Record be sent back. (Virender Singh) May 30, 2026 (ps) Judge

RELIANCE GENERAL INSURANCE COMPANY LIMITED v. SANTOSH KUMAR AND ANOTHER

Judgment text