The Oriental Insurance Co. Ltd. Vs Smt. Sammat Bai

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2025:CGHC:31868

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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MAC No. 299 of 2019

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1 - The Oriental Insurance Co. Ltd. Through Branch Manager, 1st Floor, Infornt Of Rajiv Plaza, Old Bus Stand, Bilaspur, Tahsil And District- Bilaspur, Chhattisgarh..

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--- Appellant

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versus

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1 - Smt. Sammat Bai Wd/o Jawahir Baghel Aged About 40 Years

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2 - Santoshi Baghel D/o Jawahir Baghel Aged About 25 Years

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3 - Kartik Kumar Baghel S/o Late Jawahir Baghel Aged About 23 Years

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4 - Chintaram S/o Late Jawahir Baghel Aged About 21 Years

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5 - Smt. Chitkunwar Wd/o Late Mohan Baghel Aged About 72 Years No.1 to 5 all are R/o Village Vicharpurkanpa, Post- Rajpur, P.S. And TahsilTakhatpur, District- Bilaspur, Chhattisgarh..

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6 - Shekhar Singh Thakur S/o Late Shatruhan Singh Thakur Aged About 32 Years R/o Ramnagar Tikripara, P.S. And Tahsil Takhatpur, District- Bilaspur, Chhattisgarh............(Driver Of Bus No. C.G. 28g 0114).

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BALRAM PRASAD DEWANGAN

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7 - Mohd. Kalim S/o Late Abdul Gaffar R/o Bada Bazar, Subhash Ward, Mungeli, P.S. Civil Line Mungeli,tahsil And District- Mungeli,.(Regd. Owner Of Bus No. C.G.-28g 0114)..

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--- Respondents

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Digitally signed by BALRAM PRASAD DEWANGAN Date: 2025.07.23 10:43:24 +0530

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For Appellant : Mr. Hanuman Prasad Agrawal, Advocate For Respondents : None present.

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Hon'ble Shri Justice Parth Prateem Sahu

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Order On Board

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10/07/2025

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Appellant/Insurance Company has filed this appeal under Section 173 of the Motor Vehicles Act, 1988 (for short ‘the Act of 1988’) challenging the impugned award dated 30.10.2018, passed in Claim Case No.311 of 2017, whereby the learned 5^th Additional Motor Accident Claims Tribunal, Bilaspur, District – Bilaspur (C.G.) (for short ‘the Claims Tribunal’) has awarded compensation of Rs.5,50,050/- to the claimants in death case.

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Facts relevant for disposal of this appeal are that a claim application was filed by the applicants/claimants claiming compensation of Rs.5,51,178/- as against the injury suffered by them in the road accident. It was pleaded that on 09.07.2016, at around 11:00 to 12:00 noon, Jawahar Baghel was travelling from Takhatpur to Khapri on a motorcycle, with his friend Sanjay Banjare as pillion rider. As they approached near Durga Mandir on the Main Road, Jareli, close to the Narmada River Bridge, a bus bearing registration number CG 28 G 0114, coming from the opposite direction, driven by non-applicant No.1 in a rash and negligent manner collided with the motor cycle on which, Jawahar Baghel and his friend was travelling. As a result of the accident, Jawahar Baghel suffered serious and fatal injuries to his head, face, limbs, and other parts of his body. He was immediately

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taken to Community Health Center Takhatpur, from where he was referred to CIMS, Bilaspur, where during course of treatment he died. It was also pleaded that deceased Jawahar Baghel was 45 years of age at the time of accident and was working as mason and earning Rs.350/- per day.

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Non-applicant No.1 and 2 did not appear before the Claims Tribunal even after service of notice and were proceeded ex-parte. Nonapplicant No.3/Insurance Company filed reply to the claim application denying the averments made therein. Non-applicant No.3 denied the accident from the offending vehicle. Application was filed exaggerating the amount of compensation. It was also pleaded that non-applicant No.1 was not having valid and effective driving license to drive the vehicle and the offending vehicle was being plied without any permit and fitness in breach of conditions of insurance policy.

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The learned Claims Tribunal upon appreciation of the pleadings and evidence brought on record by respective parties, allowed the claim application in part, awarded total compensation of Rs.5,50,050/- and fastened the liability upon non-applicant No.3/Insurance Company to indemnify the insured.

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Learned counsel for the appellant/Insurance Company submits that the present appeal has been filed challenging the quantum of compensation awarded, on two specific ground firstly that learned Claims Tribunal overlooking the evidence of the claimant No.1 (AW-1) that claimant No.2 to 4 are major and married children of deceased and residing along with their own family, considered them to be dependent upon deceased, which is erroneous. He submits that when

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there is specific evidence of claimant No.1 that claimant No.2 is daughter of deceased and married will definitely be residing with her husband at her matrimonial home, therefore, she cannot be treated to be dependent upon deceased on the date of accident. He next contended that as per evidence of claimant No.1, (mother of claimant No.3 and 4), claimant No.3 and 4 are major and married son of deceased and they are residing along with their family, which shows that claimant No.3 and 4 are also earning members and were not dependent on deceased, hence, they also cannot be treated to be dependent. Therefore, appropriate deduction towards personal living expenses of the deceased in the facts of the case would be 1/3 considering the claimant No.1 and claimant No.5 only to be dependent upon the deceased. He next contended that learned Claims Tribunal erred in fastening liability upon the appellant-Insurance Company overlooking the fact that on the date of accident offending vehicle was not having valid fitness certificate issued by the competent authority. Fitness certificate issued for offending vehicle was expired on 25.05.2017, whereas, the accident is dated 26.05.2017.

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I have heard learned counsel for the parties and perused the records of the claim case.

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With respect to the first ground raised by the learned counsel for the appellant/Insurance Company, that the learned Claims Tribunal erred in applying a deduction of 1/4 instead of 1/3 by treating Claimants No. 2 to 4 as dependents of the deceased, is concerned, perusal of evidence of Smt. Sammat Bai, widow of the deceased would show that she is widow and claimant No.2 and 4 are children and claimant

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No.5 is mother of deceased. In cross-examination, she admitted that Claimant No. 2, Santoshi Baghel, daughter of the deceased, was married and residing in her matrimonial home with her husband. She also stated that Claimants No. 3 and 4 are the major married sons of the deceased, living along with their respective families. In the facts of the case, in absence of any other evidence that for any reason, they were dependent upon the income of the deceased, who was working as mason it cannot be considered that claimant No.2 to 4 would be dependent upon the income of the deceased. In the aforementioned facts of the case, in the opinion of this Court, the learned Claims Tribunal erred in applying the deduction of 1/4 towards personal and living expenses of deceased instead of 1/3. The correct deduction would be 1/3. It is ordered accordingly.

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As this Court is interfering with the computation of compensation awarded to the claimants I find it appropriate to consider whether the compensation awarded by the learned Claims Tribunal to the claimants was just and fair so as to reduce the compensation in an appeal filed by the appellant/Insurance Company. The deceased on the date of accident was 45 years of age, he was shown to be working as Mason. The learned Claims Tribunal has assessed his income as Rs.4,500/- per month treating occupation of the deceased as labourer. The accident is of May, 2017, even if, occupation of the deceased is considered as labourer, according to minimum wages under the Minimum Wages Act, 1948 prevailing on the date of accident, fixed by the competent authority was Rs.7,800/-. Claims Tribunal though has rightly added 10% towards future prospects in the assessed income of

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the deceased. The Claims Tribunal has further awarded Rs.60,000/under other conventional head i.e. Rs.40,000/- towards loss of consortium, Rs.10,000/- towards loss of estate and Rs.10,000/towards loss of funeral expenses, which is also in the opinion of this Court in view of the decision in case of National Insurance Company Limited. Vs. Pranay Sethi & Ors, reported in (2017) 16 SCC 680 and the decision in case of Magma General Insurance Company Limited vs. Nanu Ram alias Chuhru Ram & ors reported in (2018) 18 SCC 130 is less.

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The Hon’ble Supreme Court in case of Pranay Sethi (supra) has fixed the amount of compensation under the head of loss of estate and funeral expenses Rs.15,000/- each and Rs.40,000/- towards funeral expenses. Further, in the case of Nanu Ram alias Chuhru Ram (supra), the Hon’ble Supreme Court recognized three types of consortium: spousal consortium for the widow or widower, loss of parental consortium for the children, and filial consortium for the parents. In view of the above discussions, the compensation awarded to the claimants would be :-

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SN	Head	Amount(in Rs.).
1.	Annual income	: 7,800 x 12 = 93,600.00
2.	Addition of 40% towards future prospects	: 93,600.00 + 9,360.00 = 1,02,960.00
3.	1/4 deduction towards personal expenses	: 1,02,960.00 – 25,740.00 = 77,220.00
4.	Loss of dependency after application of multiplier of 11	: 77,220 x 11= 8,49,420.00
5.	For loss of spousal, parental and filial consortium to the appellants No.1 to 5 of Rs.40,000/- each(Rs.40,000 x	:2,00,000.00

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	5)
6.	For funeral expenses :	15,000.00
7.	For loss of estate :	15,000.00
	Grand Total :	10,79,420.00

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Accordingly, the claimants could be entitled for total compensation of Rs. 10,79,420, however, Claims Tribunal awarded Rs.5,50,050. The award of compensation is not challenged by claimants, seeking enhancement. In the aforementioned facts of the case I am not inclined to reduce the compensation awarded by the learned Claims Tribunal even finding that learned Claims Tribunal has applied the wrong deduction of 1/4 instead of 1/3.

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11. With regard to the second ground raised by the learned counsel for the appellant-Insurance Company, that on the date of the accident, fitness certificate of offending vehicle was expired, therefore, learned Claims Tribunal erred in holding the insurance company liable to indemnify the award. To appreciate the said submission in appropriate manner, perusal of the record would show that appellant/Non-applicant No.3 has examined Sushil Ekka as witness No.1, who is Assistant Manager of Oriental Insurance Company, Main Branch at Bilaspur. Copy of the registration certificate is filed as Ex.D-2. In the said documents, there is mention that the validity of the fitness of vehicle issued by the competent authority is valid up till 25.5.2017. The accident as per Ex.A-1, first information report, occurred on 26.05.2017 in between 1112 o'clock.

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12. In the proceeding before learned Claims Tribunal notices have been issued to non-applicant No.1 and 2, who are driver and owner of the offending vehicle. The learned Claims Tribunal in the impugned award

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recorded that they did not appear even after service of notice and were proceeded ex-parte. Police during the course of investigation have seized the offending vehicle and the other documents like RC book, insurance policy, permit and driving license of driver from driver of the offending vehicle. However, copy of fitness certificate was not produced by him. Date of accident is dated 26.05.2017, whereas as per the property seizure memo (Ex.A-2), aforementioned documents and bus was seized on 02.06.2017 in the afternoon. It was upon driver and owner of the offending vehicle to produce all the necessary relevant documents before the authority during the course of investigation/inquiry. If for any reason they failed to produce the same before the police, they could have produced it before the learned Claims Tribunal in their support to show that on the date of accident the vehicle was plied following the provisions of Motor Vehicle Act and Rules framed thereunder. In absence of specific evidence brought on record by the owner and driver, it will be presumed that on the date of accident vehicle was being plied without having fitness certificate. It is ordered accordingly.

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As per Section 56 of the Act of 1988, any Transport Vehicle shall not be deemed to be validly registered for the purpose of Section 39 of the Act of 1988, unless, it carries a certificate of Fitness in the prescribed form issued by the prescribed authority. Section 56 of the Act of 1988 reads thus:-

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“ 56. Certificate of fitness of transport vehicles .—(1) Subject to the provisions of Sections 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of Section 39, unless it

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carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorized testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made thereunder:

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Provided that where the prescribed authority or the authorized testing station refuses to issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such refusal.

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[Provided further that no certificate of fitness shall be granted to a vehicle, after such date as may be notified by the Central Government, unless such vehicle has been tested at an automated testing station.]

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[(2) The “authorised testing station” referred to in subsection (1) means any facility, including automated testing facilities, authorised by the State Government, where fitness testing may be conducted in accordance with the rules made by the Central Government for recognition, regulation and control of such stations.]

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(3) Subject to the provisions of sub-section (4), a certificate of fitness shall remain effective for such period as may be prescribed by the Central Government having regard to the objects of this Act.

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(4) The prescribed authority may for reasons to be recorded in writing cancel a certificate of fitness at any time, if satisfied that the vehicle to which it relates no longer complies with all the requirements of this Act and the rules made thereunder; and on such cancellation the certificate of registration of the vehicle and any permit granted in respect of the vehicle under Chapter

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V shall be deemed to be suspended until a new certificate of fitness has been obtained:

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[Provided that no such cancellation shall be made by the prescribed authority unless,—

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( a ) such prescribed authority holds such technical qualification as may be prescribed by the Central Government and where the prescribed authority does not hold the technical qualification, such cancellation is made on the basis of the report of an officer having such qualification; and

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( b ) the reasons recorded in writing cancelling a certificate of fitness are confirmed by an authorised testing station chosen by the owner of the vehicle whose certificate of fitness is sought to be cancelled:

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Provided further that if the cancellation is confirmed by the authorised testing station, the cost of undertaking the test shall be borne by the owner of the vehicle being tested and in the alternative by the prescribed authority.]

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(5) A certificate of fitness issued under this Act shall, while it remains effective, be valid throughout India.

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[(6) All transport vehicles with a valid certificate of fitness issued under this section shall carry, on their bodies, in a clear and visible manner such distinguishing mark as may be prescribed by the Central Government.

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(7) Subject to such conditions as the Central Government may prescribe, the provisions of this section may be extended to non-transport vehicles.]”

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In the matter of Pareed Pillai Vs. Oriental Insurance Co. Ltd., reported in 2019 ACJ 16 , the Kerala High Court has observed that it is

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a mandatory requirement of every permit that the vehicle to which the permit relates shall carry valid certificate of fitness issued under Section 56 at all times, absence of which will automatically lead to a situation that the vehicle shall not be deemed having a valid permit and thus, there is violation of insurance policy. The five Judges Bench of Kerala High Court while dealing with breach relating to nonavailability of fitness certificate has observed thus:-

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“17. The stipulations under the above provisions clearly substantiate the importance and necessity to have a valid Fitness Certificate to the transport vehicle at all times. The above prescription converges on the point that Certificate of Registration, existence of valid Permit and availability of Fitness Certificate, all throughout, are closely interlinked in the case of a transport vehicle and one requirement cannot be segregated from the other. The transport vehicle should be completely fit and road worthy, to be plied on the road, which otherwise may cause threat to the lives and limbs of passengers and the general public, apart from damage to property. Only if the transport vehicle is having valid Fitness Certificate, would the necessary Permit be issued in terms of Section 66 of the Act and by virtue of the mandate under Section 56 of the Act, no transport vehicle without Fitness Certificate will be deemed as a validly registered vehicle for the purpose of Section 39 of the Act, which stipulates that nobody shall drive or cause the motor vehicle to be driven without valid registration in public place or such other place, as the case may be. These requirements are quite 'fundamental' in nature; unlike a case where a transport vehicle carrying more passengers than the permitted capacity or a goods carriage carrying excess quantity of goods than the permitted extent or a case where a transport vehicle was plying through a deviated route than the one shown in the route permit which instances could rather be

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branded as 'technical violations'. In other words, when a transport vehicle is not having a Fitness Certificate, it will be deemed as having no Certificate of Registration and when such vehicle is not having Permit or Fitness Certificate, nobody can drive such vehicle and no owner can permit the use of any such vehicle compromising with the lives, limbs, properties of the passengers/general public. Obviously, since the safety of passengers and general public was of serious concern and consideration for the law makers, appropriate and adequate measures were taken by incorporating relevant provisions in the Statute, also pointing out the circumstances which would constitute offence; providing adequate penalty. This being the position, such lapse, if any, can only be regarded as a fundamental breach and not a technical breach and any interpretation to the contrary, will only negate the intention of the law makers.”

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Considering the aforementioned provisions of Section 56 of the Act, 1988 as also the aforesaid decision, the finding recorded by the learned Claims Tribunal that the appellant/Insurance Company failed to prove the breach of conditions of insurance policy is not sustainable and accordingly it is set-aside and it is held that on the date of accident, the offending vehicle was being plied in breach of policy conditions.

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As there was breach of conditions of insurance policy, the Insurance Company is exonerated from the liability to satisfy the impugned award. However, in the facts of the case taking note of the decision of Hon’ble Supreme Court in case of Manuara Khatun v. Rajesh Kr. Singh, (2017) 4 SCC 796 as also the decision of Hon’ble Supreme Court in case of Shivraj Vs. Rajendra & Another , reported in (2018) 10 SCC 432, Amrit Paul Singh v. TATA AIG General Insurance Co.

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Ltd. , reported in (2018) 7 SCC 558, the Insurance Company/appellant is directed to first pay the amount of compensation and thereafter to recover the same from owner of the vehicle. It is made clear that the Insurance Company can recover the amount of compensation so paid in the same proceedings as observed by the Hon’ble Supreme Court in case of Oriental Insurance Co. Ltd. v. Nanjappan, (2004) 13 SCC 224. Rest of the conditions of the impugned award shall remain intact.

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Accordingly, the appeal is allowed.

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Balram

The Oriental Insurance Co. Ltd. v. Smt. Sammat Bai

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The Oriental Insurance Co. Ltd. v. Smt. Sammat Bai

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