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2026 DAILYLAW 8521 (UTT)

Basanti Bisht v. Mahendra Kumar

2026-02-13

Pankaj Purohit

body2026
JUDGMENT : Pankaj Purohit, J. These two appeals arise out of a common judgment and award and involve identical questions of fact and law. Accordingly, both the appeals are being disposed of together by this common judgment. 2. The claim petition was filed by the appellants/claimants Smt. Basanti Devi and others, under Sections 166 and 140 of the Motor Vehicles Act, 1988, seeking compensation of Rs.8,25,605/- on account of the death of Kishan Singh Bisht in a road accident. The Appeal from Order No.400 of 2012 is filed by the appellants/claimants for enhancement while Appeal from Order No.361 of 2012 by the insurance company for quashing the impugned award. 3. The brief facts of the case are that on 06.05.2008, the deceased had gone to Bhowali to sell peas and was returning to his village Bana in Jeep No. UP-02C- 5712. At about 11:30 A.M., when the vehicle reached approximately one kilometre ahead of Laxmikhan on the Bhowali–Mukteshwar motor road, the driver, due to rash and negligent driving, lost control of the vehicle. Consequently, the jeep fell into a deep gorge, resulting in the death of Kishan Singh Bisht on the spot. Other passengers travelling in the jeep also sustained serious injuries. Due to the sudden and untimely death of the deceased, petitioner no.1 was deprived of the love and companionship of her husband, while petitioner nos.2 and 3 were deprived of the love, affection, and guidance of their father. Hence, the petitioners prayed for payment of compensation against the opposite parties. 4. In Appeal No. 400 of 2012, the appellant/claimant pleaded that the deceased was the sole breadwinner of the family consisting of his wife and two children, was aged about 44 years at the time of the accident, and was earning a monthly income of Rs.4,475/- from agricultural work. Due to his untimely death, the family lost its only source of livelihood. It was further pleaded that the learned Tribunal erred in deducting one- third (1/3rd) of the income of the deceased towards personal and living expenses, whereas all three claimants were fully dependent upon him. As per settled judicial precedents, the deduction ought to have been one-fourth (1/4 th ). The claimant further contended that the Tribunal failed to consider future prospects of the deceased and wrongly assessed funeral expenses at a meagre amount of Rs.5,000/-. As per settled judicial precedents, the deduction ought to have been one-fourth (1/4 th ). The claimant further contended that the Tribunal failed to consider future prospects of the deceased and wrongly assessed funeral expenses at a meagre amount of Rs.5,000/-. It was also submitted that additional compensation ought to have been awarded under the conventional heads. Opposite Party No.1, Mahendra Kumar alias Guddu, the owner-cum-driver of the vehicle, denied the allegations for want of knowledge. He submitted that the vehicle was duly insured with Opposite Party No.2, The New India Assurance Company Limited. He further claimed that the accident occurred due to mechanical failure and not due to rash or negligent driving. According to him, the compensation claimed was exaggerated. Opposite Party No.2 (Insurance Company) denied the material allegations and pleaded that it was not liable to pay compensation as the vehicle was being driven in violation of the terms and conditions of the insurance policy. It was specifically pleaded that the driver did not possess a valid and effective driving licence on the date of the accident. The insurance company also claimed the right to contest the petition on all grounds available to the owner. 5. On the basis of the pleadings of the parties, the following issues were framed: A. Whether on 06.05.2008, Kishan Singh had gone to Bhowali to sell peas and was returning in Jeep No. UP-02C- 5712, and at about 11:30 A.M., when the vehicle reached about one kilometre ahead of Laxmikhan on the Bhowali– Mukteshwar motor road, due to rash and negligent driving, the vehicle went out of control and fell into a ditch about 25 feet deep, resulting in his death on the spot? B. Whether the jeep in question was not being driven in accordance with the insurance conditions on the date of the accident? C. Whether the driver of the jeep did not have a valid driving licence on the date of the accident, and if so, what is its effect? D. Whether the petitioners are entitled to any compensation; if so, how much and from which party? While deciding Issue No.1, the Tribunal considered both oral and documentary evidence on record. C. Whether the driver of the jeep did not have a valid driving licence on the date of the accident, and if so, what is its effect? D. Whether the petitioners are entitled to any compensation; if so, how much and from which party? While deciding Issue No.1, the Tribunal considered both oral and documentary evidence on record. PW-3 Harshit Sah, an independent eyewitness, categorically stated that he was travelling in the jeep at the time of the accident and that the driver was driving the vehicle rashly and negligently, as a result of which the jeep went out of control and fell into a deep ditch. His testimony remained unshaken and unrebutted. A First Information Report was lodged against the driver Mahendra Kumar under Sections 279, 337, and 304-A IPC, and a charge-sheet was filed after investigation. The driver himself admitted during cross- examination that a criminal case had been registered against him. Although Opposite Party No.1 claimed mechanical failure, no specific evidence or explanation regarding the nature of such failure was produced. Upon appreciation of the evidence, the Tribunal rightly held that the accident occurred solely due to rash and negligent driving of the jeep by Opposite Party No.1, resulting in the death of Kishan Singh Bisht. Issue No.1 was accordingly decided in favour of the petitioners. Issue Nos.2 and 3, being interconnected, were decided together. From the documentary evidence, it was established that the driving licence of Mahendra Kumar was valid from 13.10.2004 to 12.10.2007 and was renewed only on 04.07.2008. The accident occurred on 06.05.2008, during which period the licence was not valid. Thus, on the date of the accident, the driver did not possess a valid and effective driving licence, amounting to a breach of the terms and conditions of the insurance policy. Accordingly, Issue Nos.2 and 3 were decided against the owner and in favour of the insurance company, subject to the principle of “pay and recover”. While deciding Issue No.4, the Tribunal considered that the deceased was aged 44 years and was earning his livelihood through farming. No documentary proof of income was produced. Therefore, treating the deceased as an ordinary labourer, his annual income was assessed at Rs.36,000/-. After deducting one-third towards personal expenses, the annual dependency was assessed at Rs.24,000/-. Applying the multiplier of 14, as per the age bracket laid down in Sarla Verma & Ors. No documentary proof of income was produced. Therefore, treating the deceased as an ordinary labourer, his annual income was assessed at Rs.36,000/-. After deducting one-third towards personal expenses, the annual dependency was assessed at Rs.24,000/-. Applying the multiplier of 14, as per the age bracket laid down in Sarla Verma & Ors. v. Delhi Transport Corporation & Anr., reported in (2009) 6 SCC 121 , the loss of dependency was calculated as Rs.3,36,000/-. Further, the petitioners were awarded Rs.5,000/- towards funeral expenses and Rs.5,000/- towards loss of consortium and mental agony. Thus, the total compensation awarded was Rs.3,46,000/-. 6. In AO No. 361 of 2012 arising out of the same incident, filed by the insurance company against the judgment and order dated 28.04.2012 passed by the M.A.C.T., it was pleaded that since the driver-cum-owner of the vehicle did not possess a valid driving licence on the date of the accident, the insurance company was not liable to pay compensation and that the entire liability should be fastened upon the owner-driver of the offending vehicle. 7. Having heard learned counsel for the parties and upon careful perusal of the pleadings, evidence on record, and the impugned judgment, this Court finds that both appeals arise out of the same motor vehicle accident and are therefore being decided together. As regards the appeal filed by the claimants seeking enhancement of compensation, this Court finds substance in the submissions advanced on their behalf. The deceased was aged about 44 years at the time of the accident. Though no documentary evidence of income was produced, the Tribunal assessed his annual income at Rs.36,000/-, which is reasonable considering the year of accident and the nature of avocation. However, the Tribunal erred in deducting one-third of the income towards personal expenses. Since the deceased left behind three dependants, the appropriate deduction should be one-fourth, as held in Sarla Verma (supra). 8. Further, the Tribunal failed to grant any amount towards future prospects. In view of the Constitution Bench judgment of the Hon’ble Supreme Court in National Insurance Company Limited v. Pranay Sethi & Ors., reported in (2017) 16 SCC 680 , an addition towards future prospects is mandatory even in the case of self-employed persons. Since the deceased was below 50 years of age, an addition of 25% is warranted. Accordingly, the annual income stands enhanced to Rs.45,000/-. Since the deceased was below 50 years of age, an addition of 25% is warranted. Accordingly, the annual income stands enhanced to Rs.45,000/-. After deducting one-fourth towards personal expenses, the annual dependency comes to Rs.33,750/-. Applying the multiplier of 14, the loss of dependency is Rs.4,72,500/-. Under conventional heads, the claimants are entitled to Rs.40,000/- towards loss of consortium, Rs.15,000/- towards loss of estate, and Rs.15,000/- towards funeral expenses. Thus, the total compensation is recalculated at Rs.5,42,500/-. 9. Turning now to the appeal preferred by the insurance company, it stands established from the evidence on record that the driving licence of the owner- cum-driver was valid from 13.10.2004 to 12.10.2007 and was renewed only on 04.07.2008, whereas the accident occurred on 06.05.2008. The renewal having been effected beyond the statutory period contemplated under Section 15 of the Motor Vehicles Act, 1988, there was a clear break in continuity and the driver did not possess a valid and effective driving licence on the date of accident. The finding of breach recorded by the Tribunal, therefore, warrants no interference. 10. The question, however, is whether such breach would completely absolve the insurer from liability towards third-party claimants. 11. The law on the subject has been authoritatively settled by the Hon’ble Supreme Court in the case of National Insurance Co. Ltd. v. Swaran Singh reported in (2004) 3 SCC 297 . Relevant paragraph of the said judgment reads as under: “83. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does not mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. The right to avoid liability in terms of sub-section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading.” 12. The said principle has been consistently reaffirmed, including in the case of Shamanna v. Divisional Manager, The Oriental Insurance Co. Ltd. reported in (2018) 9 SCC 650 , wherein the Hon’ble Supreme Court deprecated the practice of leaving claimants to recover compensation from owners or other parties and reiterated that “pay and recover” is an equitable and legally permissible course where circumstances so demand. Applying the aforesaid principles to the facts of the present case, this Court is of the considered view that the ends of justice would be best served by directing the appellant–State to satisfy the award in the first instance, with liberty to recover the amount so paid from the person(s) ultimately found responsible in accordance with law. Such a course balances the equities between the parties and ensures that the claimant is not made to suffer on account of disputes beyond his control. Accordingly, while the appeal preferred by the State challenging its liability is liable to be dismissed, the appellant–State shall have the right to recover the amount of compensation from the owner and driver of the offending vehicle, after satisfying the award. 13. In view of the above authoritative pronouncements and considering that the present case involves a third-party claim under Section 166 of the Act, complete exoneration of the insurer would defeat the beneficial object of Chapter XI of the Motor Vehicles Act. The breach established is in the nature of non-renewal beyond the statutory grace period and not a case of fake licence or disqualification. The breach established is in the nature of non-renewal beyond the statutory grace period and not a case of fake licence or disqualification. The principle of “pay and recover” appropriately balances contractual rights and statutory obligations under this beneficial legislation. 14. Accordingly, the insurance company shall pay the compensation to the claimants in the first instance, with liberty to recover the same from the owner-driver of the offending vehicle. 15. AO No.400 of 2012 is partly allowed and the compensation is enhanced to Rs.5,42,500/- with applicable interest. 16. AO No. 361 of 2012 is dismissed, subject to the insurance company’s right to recover the amount from the owner-driver. 17. The claimants are entitled to a compensation of Rs.5,42,500/- along with interest at the rate of 7% per annum from the date of filing of the claim petition till actual payment. The amount shall be deposited before the Claims Tribunal concerned along with accrued interest within two months from today, adjusting the amount of compensation, if any, already received by the appellants/claimants.