Smt. Jema Kashyap Vs Kartik Nag

1 - Kartik Nag S/o Bhagirathi Nag Aged About 22 Years R/o Village Odargudapara Malgaon Police Station Nagarnar District Bastar Chhattisgarh. (Driver Of The Vehicle )

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2 - Jaduram Nag S/o Bhagirathi Nag Aged About 28 Years R/o Odargudapara Malgaon Police Station Nagarnar District Bastar Chhattisgarh. (Owner Of The Vehicle )

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3 - The New India Assurance Co. Ltd. Jagdalpur Akashwani Road M.S. Towers Nayapara Jagdalpur District Bastar Chhattisgarh. (Insurer)

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... Respondent(s)

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Digitally signed by PRAVEEN KUMAR SINHA Date: 2025.09.23 10:53:17 +0530

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____________________ For Appellant (s)	______________________________________ : Mr. Pravin Kumar Tulsyan, Advocate
For Resp. No. 1 & 2	: Mr. Mayank Chandrakar, Advocate on behalf of Mr. Vikas Shrivastava, Advocate
For Respondent No. 3 ______________________	:Ms. Pooja Yadav, Advocate appears on behalf of Mr. Shivendu Pandya, Advocate _________________________________

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S.B.: Hon'ble Shri Parth Prateem Sahu, Judge Judgment On Board

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12/08/2025

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This is claimants’ appeal filed under Section 173 of the Motor Vehicles Act, 1988 (for short “Act of 1988”) seeking enhancement of amount of compensation awarded by learned Motor Accident Claims Tribunal, Bastar at Jagdalpur vide its award dated 1^st September 2018 passed in Claim Case No.169 of 2017.

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Facts relevant for disposal of this appeal are that appellants/claimants filed an application under Section 166 (1) of the Act of 1988 before the Claims Tribunal pleading therein that on 17.08.2016 at about 8.30 p.m., when Banshidhar Kashyap was travelling on motorcycle bearing registration No.CG 17-KL-2752, on the way, near Goriyabahar Nala, Aadawal, Jagdalpur, while overtaking a running bus, respondent No. 1 drove his motorcycle rashly and negligently, dashed a cyclist and caused an accident. In the accident Banshidhar Kashyap, who was riding pillion, fell on the road, due to which he sustained serious injuries. He was admitted to Maharani Hospital, Jagdalpur for treatment where he died. In the claim application, it was pleaded that at the time of said accident, deceased Banshidhar Kashyap was aged about 25

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years, was earning Rs. 9,000/- per month by working as a Mason and Farmer. Applicants claimed total compensation of Rs. 17,32,000/(seventeen lakh thirty two thousand rupees) under all heads and from non-applicants.

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Non-applicants No. 1 & 2 were proceeded ex-parte, no reply has been filed by them.

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Non-applicant No.3/ Insurance Company in its written statement has denied the pleadings made by the claimants in his claim application and further pleaded inter alia that deceased Banshidhar Kashyap was riding pillion on the motorcycle driven by non-applicant No.1 at the time of the accident and non-applicant No.2/owner had not paid any premium for the insurance of the person riding pillion on the motorcycle. As non-applicant No.1 did not have valid and effective driving license on the date of the accident and non-applicants No. 1 & 2 violated the conditions of insurance policy, therefore, non-applicant No.3 is not liable to pay any amount of compensation to claimants and claim application is liable to be dismissed.

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Learned Claims Tribunal, on appreciation of pleadings and evidence brought on record by respective parties, held that on the date of accident, offending motorcycle was being driven by non-applicant No.1 rashly and negligently, due to which, an accident occurred in which Banshidhar Kashyap suffered grievous injuries and died. Recording a finding that breach of conditions of the insurance policy was found proved, non-applicant No.1 & 2 (Driver and Owner) of the offending vehicle were held liable to pay the amount of compensation. Assessing

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income of the appellant/claimant as Rs.5,000/- per month on notional basis, calculated amount of compensation under different heads, awarded total compensation of Rs.11,41,000/- -.

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Learned counsel for the appellants submits that claimants have filed this appeal seeking enhancement of amount of compensation on the ground that Claims Tribunal assessed income of deceased only Rs.5,000/- per month for accident which occurred on 17.08.2016, on the date of accident deceased was aged about 25 years as assessed by learned Claims Tribunal. He next contended that learned Claims Tribunal applied multiplier of 17 instead of 18 . According to decision of Hon’ble Supreme Court in case of Sarla Verma (Smt.) and Ors. Vs. Delhi Transport Corporation and Anr. (2009) 6 SCC 121, for death of person aged between 21 to 25 years, appropriate multiplier is shown to be 18 and multiplier of 17 will apply where deceased was in between 26-30 years on the date of accident. He also contended that Claims Tribunal has not awarded compensation under head of loss of consortium to claimants No. 2 to 5 who are children and parents of deceased. It is contended that as per dictum of Hon’ble Supreme Court in case of Magma General Insurance Co. Ltd. Vs. Nanu Ram alias Chuhru Ram & Ors. (2018) 18 SCC 130, children are entitled for parental consortium and parents are entitled for filial consortium of Rs.40,000/- each. Learned counsel for the appellants submits that as the insurance company is exonerated on the ground that on the date of accident, driver of offending vehicle was not possessing valid and effective driving licence and therefore a direction be issued to respondent No.3 to first pay amount of compensation and thereafter to

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recover the same from the owner and driver of the offending vehicle.

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Learned counsel for respondents No. 1 & 2 submits that learned Claims Tribunal awarded just amount of compensation which does not call for any interference. In absence of proof of occupation and income of deceased, Claims Tribunal justified in assessing income of Rs.5000/- per month notionally.

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Learned counsel for respondent No.3 insurance company would oppose the submission of learned counsel for the appellants on enhancement of amount of compensation and would submit that learned Claims Tribunal upon appreciation of evidence available on record awarded just and fair compensation which does not call for any interference. He also contended that Claims Tribunal has rightly exonerated insurance company from its liability as the driver of the offending vehicle was not possessed with valid and effective driving licence.

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

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So far as the first submission of learned counsel for the appellants with regard to assessment of income of deceased is concerned, in the claim application, claimants have pleaded occupation of deceased to be Mason and earning Rs.9,000/- per month. Said pleading could not be proved by placing clinching evidence, accordingly, Claims Tribunal proceeded to assess income of deceased on notional basis which cannot be said to be erroneous. True it is that claimants have failed to prove income of deceased by placing admissible piece of evidence, however, in absence of admissible evidence, learned Claims Tribunal

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ought to have assessed income of deceased considering other factors like cost of living, price index, wage rates prevailing in the area and also minimum wages fixed by the Competent Authority under the Minimum Wages Act for ‘unskilled labourer’ prevailing on the date of accident.

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As there is no substantive piece of evidence of wages prevalent at the place of residence of deceased at the time of accident, I find it appropriate to take help of the Notification issued by the Competent Authority under Minimum Wages Act, 1948, according to which, for period from 01.04.2016 to 30.09.2016 minimum wages for ‘unskilled labourer’ is fixed as Rs.6107- per month. Therefore, I find it appropriate to assess monthly income of deceased as Rs.6107/- per month. It is ordered accordingly.

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Learned Claims Tribunal has rightly added 40% of the assessed income towards future prospects, deduction of ¼ towards personal and living expenses is also correct considering five claimants in the claim application and if not five, four dependents. Claims Tribunal applied multiplier of 17 even after assessing age of deceased as 25 years.

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Application of multiplier was considered and settled by Hon’ble Supreme Court in case of Sarla Verma (supra) wherein it is held that if deceased on the date of accident was in between 21-25 years multiplier of 18 should be applied and application of multiplier of 17 would be only when deceased was in between 26-30 years. There is no evidence to show that deceased has attained age of 26 years or

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more and therefore application of multiplier of 17 is erroneous. Accordingly, it is set aside and it is held that appropriate multiplier in the facts of case would be 18 instead of 17. It is ordered accordingly.

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Learned Claims Tribunal has awarded compensation of Rs.40,000/towards loss of consortium to claimant No.1/wife, however, claimants No. 2 & 3 are minor children and claimants No. 4 & 5 are parents of deceased, were not awarded any compensation towards loss of parental consortium and loss of filial consortium respectively as held in Nanu Ram (supra).

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In view of the above discussions, it is held that claimants No. 2 & 3 /children and claimants No. 4 & 5/parents will also be entitled for compensation of Rs.40,000/- each towards loss of parental consortium and loss of filial consortium respectively. It is ordered accordingly. Claims Tribunal has further awarded Rs.15,000/- each towards loss of estate and funeral expenses which is as per the settled law.

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In the case of National Insurance Company Ltd. Vs. Pranay Sethi and Ors. (2017) 16 SCC 680, Hon’ble Supreme Court has observed that loss of compensation awarded under other conventional heads like loss of estate, funeral expenses, and loss of consortium is to be increased by 10% after every three years and, therefore, in the opinion of this Court, amount of compensation under other conventional heads is to be enhanced by 10% . It is ordered accordingly.

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In the aforementioned facts of the case, I find it appropriate to re-

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compute the amount of compensation as under:-

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S. N.	Heads		Compensation
1.	(A)Loss of Income/dependency 6107 x 12 = 73284 (B)Addition towards future prospects @ 40%(73284x 40% =29314) 73284+29314= 102598 (C)Deduction of 1/4 towards personal and living expenses ( 102598 x1/4 =25650) 102598-25650= 76948 (D)Multiplier of 18 76948x18=13,85,064	:	Rs. 13,85,064
2.	Funeral Expenses (15000 + 10 % =16500)	:	(+) Rs. 16,500
3.	Loss of Estate (15000 + 10 % =16500)	:	(+) Rs. 16,500
4.	Loss of Consortium to claimants No. 1 to 5 of Rs.44,000/- each (40000 + 10% = 44000) (44000 x 5 = 2,20,000/-)	:	(+) Rs. 2,20,000
	Total compensation	:	Rs. 16,38,064

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Now the appellants/claimants are awarded total compensation of Rs. 16,38,064/- instead of Rs.11,41,400/- as awarded by the Claims Tribunal.

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Enhanced amount of compensation shall carry interest @ 8% per annum from the date of filing of claim application till its realization. Any amount of compensation already paid to the claimant shall be adjustable from the

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total amount of compensation which has now been calculated and awarded by this Court. Other conditions of impugned award shall remain intact.

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So far as the submission of learned counsel for the appellants of issuance of direction to respondent No.3 insurance company to first pay amount of compensation and thereafter to recover the same from owner and driver of offending vehicle is concerned, perusal of impugned award would show that learned Claims Tribunal in para-22 has settled the issue of breach of policy conditions and it is held that criminal case was registered against non-applicant No. 1 driver of offending vehicle for the offence under Sections 3/181, 5/180 of the Act of 1988 apart from other offence, nonapplicants No. 1 & 2 have not produced copy of driving licence before Claims Tribunal also, and has held that offending vehicle was being driven by person/non-applicant No.1 without there being any valid and effective driving licence in his name and exonerated insurance company.

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The issue with respect to issuance of direction to the insurance company to first pay the amount of compensation and thereafter, to recover the same from the owner and driver was firstly considered by the Hon’ble Supreme Court in case of National Insurance Company Vs. Swaran Singh (2004) 3 SCC 297 . Relying upon the decision in case of Swaran Singh (supra), Hon’ble Supreme Court in case of Shamanna & Anr. Vs. Divisional Manager, Oriental Insurance Company Ltd. & Ors. (2018) 9 SCC 650 has considered the issue with regard to issuance of direction to pay and recover, in a case of no driving license with the driver on the date of accident and observed in para 5, 6 and 13 as under :-

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“5. In the case of third-party risks, as per the decision in National Insurance Co. Ltd. v. Swaran Singh [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] , the insurer had to indemnify the compensation amount payable to the third-party and the insurance company may recover the same from the insured. Doctrine of “pay and recover” was considered by the Supreme Court in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] wherein the Supreme Court examined the liability of the insurance company in cases of breach of policy condition due to disqualifications of the driver or invalid driving licence of the driver and held that in case of third-party risks, the insurer has to indemnify the compensation amount to the third-party and the insurance company may recover the same from the insured. Elaborately considering the insurer's contractual liability as well as statutory liability vis-à-vis the claims of third parties, the Supreme Court issued detailed guidelines as to how and in what circumstances, “pay and recover” can be ordered. In para 110, the Supreme Court summarised its conclusions as under : (SCC pp. 341-42)

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“110. The summary of our findings to the various issues as raised in these petitions is as follows:

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(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third-party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.

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(ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of Section 149(2)(a)(ii) of the said Act.

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(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in subsection (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time.

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(iv) Insurance companies, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish “breach” on the part of the owner of the vehicle; the burden of proof wherefor would be on them.

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(v) The court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.

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(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of

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main purpose” and the concept of “fundamental breach” to allow defences available to the insurer under Section 149(2) of the Act.

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(vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

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(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.

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(ix) The Claims Tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of thirdparty arising in use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between the insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.

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(x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third-party

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under the award of the Tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal.

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(xi) The provisions contained in sub-section (4) with the proviso thereunder and subsection (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.”

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(emphasis supplied)

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6. As per the decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] , onus is always upon the insurance company to prove that the driver had no valid driving licence and that there was breach of policy conditions. Where the driver did not possess the valid driving licence and there are breach of policy conditions, “pay and recover” can be ordered in case of third-party risks. The Tribunal is required to consider “as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver … does not fulfil the requirements of law or not will have to be determined in each case”.

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13. Since the reference to the larger Bench in Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] followed in Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment [Shamanna v. Laxman, 2016 SCC OnLine Kar 6928] of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored.”

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Hon’ble Supreme Court in the case of Oriental Insurance Co. Ltd. Vs. Nanjappan & Ors. (2004) 13 SCC 224 while dealing the issue to first pay

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the amount of compensation and thereafter to recover the same from driver or owner of offending vehicle, has observed thus:

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“8 . Therefore, while setting aside the judgment of the High Court we direct in terms of what has been stated in Baljit Kaur's case (supra) that the insurer shall pay the quantum of compensation fixed by the Tribunal, about which there was no dispute raised, to the respondents-claimants within three months from today. For the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer”…………...

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Considering the aforementioned decisions of Hon’ble Supreme Court and facts and circumstances of the case, it is directed that respondent No.3/Insurance Company, even though it has been exonerated from its liability to indemnify the insured, however, considering the fact that respondent No.3/insurance company had issued insurance policy with respect to offending vehicle and therefore to protect the interest of claimant in the interest of justice, I find it appropriate to allow the prayer made by learned counsel for the appellants and to issue a direction to respondent No.3/insurance company to first satisfy the amount of compensation as ordered by this Court and thereafter to recover the same from respondents/Non-applicant No.1 & 2 i.e. Driver and Owner of the offending vehicle. However, it is made clear that for

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recovery of the said amount, insurance company is not required to file separate proceedings and can recover in the manner as held by Honb’le Supreme Court in the case of Nanjappan (supra).

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In the result, appeal is allowed in part. Impugned award is modified to the extent as indicated herein above.

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/ Sd/- Sd/-

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(Parth Prateem Sahu) Judge

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Praveen

Smt. Jema Kashyap v. Kartik Nag

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Smt. Jema Kashyap v. Kartik Nag

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