Bajaj Allianz General Insurance Company Ltd. Vs Kamla Yadav

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2026:CGHC:11495

NAFR

AVINASH SHARMA

HIGH COURT OF CHHATTISGARH AT BILASPUR

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Digitally signed by AVINASH SHARMA Date: 2026.04.07 11:22:55 +0530

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MAC No. 1112 of 2018

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Bajaj Allianz General Insurance Company Ltd. Branch Manager, Bajaj Allianz General Insurance Company Ltd Head Office G.E. Plaza Airport Road Yarwada Pune (M.H.), Through Manager (Legal) Bajaj Allianz General Insurance Company Ltd. Shiv Mohan Bhawan Vidhan Sabha Road Pandri Raipur Chhattisgarh.

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...Appellant.

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versus

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1 - Kamla Yadav W/o Late Rajendra Prasad Yadav, Aged About 40 Years Occupation House Wife.

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2 - Ku. Shiksha Yadav D/o Late Rajrendra Prasad Yadav, Aged About 16 Years.

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3 - Disha Yadav D/o Late Rajrendra Prasad Yadav Aged About 14 Years.

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4 - Dipti Yadav D/o Late Rajrendra Prasad Yadav, Aged About 11 Years.

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5 - Sumit Yadav S/o Late Rajrendra Prasad Yadav Aged About 10 Years. Respondent Nos.2 to 5 are Minor Through their Mother Smt. Kamla Yadav. Respondent No.1 to 6 are R/o Bhatgaon Colliery Backside Of B Type Colony, P.S. Bhatgaon District Surajpur Chhattisgarh.

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6 - Deleted (Rama Yadav) (Died) Honble Court Order Dated 08/12/2023 And 12/01/2024

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2

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... Respondents.

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For Appellant : Shri Ghanshyam Patel along with Shri Shivansh Gopal, Advocates. For Respondents : None, though served. Hon’ble Mr. Justice Amitendra Kishore Prasad

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Judgment on Board

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10/03/2026

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This Appeal under Section 173 of the Motor Vehicles Act has been filed by the appellant-Insurance Company against the impugned award dated 14.12.2017 passed by the Second Additional Motor Accident Claims Tribunal, Surajpur, Place Surajpur, C.G. in Motor Accident Claim Case No.57/16, whereby the Tribunal partly allowed the claim petition filed by the claimants/respondents and awarded compensation in their favour to the tune of Rs.6,63,800/-. The said compensation was directed to carry interest @ 9 % per annum from the date of institution of claim petition i.e. 04.04.2016 till its realization.

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Facts briefly stated are that an application under Section 163-A of the Motor Vehicles Act, 1988 (in short 'the Act') was filed by respondents No. 1 to 5/ claimants, they are respectively wife, children seeking compensation for death of Rajendra Prasad Yadav in the motor accident. It was the case of the claimants that on 24.06.2015 deceased was coming to his home from Ambikapur alongwith his daughter Ku. Shiksha Yadav in his Maruti Swift Desire CG 15 CW 1323, when they reached near Sonwahi forest, he lost control over the vehicle due to Mechanical failure and met with an accident. As a result of which, driver/owner sustained injury and died on the

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spot. As per the claimants, deceased was contractor and earning Rs. 40,000/- Ρ.Α, therefore, compensation of Rs. 11,05,000/- was sought on various heads. That the present appellant, filed its reply controverting the averments made in the claim application. It was specifically pleaded by the appellant that Car bearing registration no. CG 15 CW 1323 was registered and insured in the name of the deceased and at the time of accident deceased was on the wheel of the vehicle therefore he is not a third party and claim application Under Section 163-A filed by the legal representative of deceased/owner of the vehicle is not maintainable. It was further pleaded that at the time of accident deceased himself was driving the and he himself was negligent for the accident therefore claim application is not maintainable. It was further pleaded that income of the deceased is more than Rs. 40,000/- P. A., therefore, claim application is not maintainable before the claims tribunal. To prove its contention appellant has examined its officer and proved the Insurance Policy as Exhibit- NA/ 1, FIR as ExhibitNA 2, Final Report as Exhibit- NA/3. Registration certificate as ExhibitNA /4 and payment details made by the appellant to respondent no. 1 as a legal representative of deceased payable under Personal Accident as Exhibit- NA 5. Neeraj Gaur (NAW-1) deposed that Vehicle no. CG 15 CW 1323 was registered and insured in the name of the deceased from 18.03.2015 to 17.03.2016 and Rs. 100/- has been paid for covering Personal Accident of owner to sum of Rs. 2,00,000/- which has been paid to the wife of the deceased on 22.01.2016. That deceased does not come

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under the preview of third party because he is owner of the offending vehicle therefore claim application under Section 163-A is not maintainable. That the learned tribunal without considering the facts and legal preposition that owner of the vehicle does not come under the preview of third party and as per Chapter XI of the Motor Vehicle Act only third party or death of third party can file claim application before the claims tribunal under the Motor Vehicle Act. Learned tribunal has further failed to appreciate that the liability under Section 163-A of the Act is on the owner of the vehicle as a person cannot be both, a claimant as also a recipient. The heirs of owner of the vehicle could not have maintained a claim in terms of Section 163-A of the Act. For the said purpose only the terms of the contract of insurance could be taken recourse to which has already been paid, but Tribunal fastened the liability upon the appellant holding that policy is comprehensive policy therefore deceased/owner is third party . Hence, this appeal.

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Respondents contested the claim. Parties adduced evidence. The Tribunal by the impugned award partly allowed the claim petition. The claimants claimed the deceased to be a Contractor and accordingly claimed that the deceased had an earning of Rs.40,000/- per month. However, in absence of any reliable documents to support the said claim, learned Tribunal on the basis of principles laid down by this Court held the monthly income of the deceased to be Rs.4,500/- and yearly income to be Rs. 54,000/-. 1/5 of the yearly income i.e. Rs.10,800/- is calculated to be personal expenses of the

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deceased. Deducting Rs.10,800/- from the yearly income which comes to Rs.43,200/- was held to be yearly dependence. Since the deceased was self employed and following the principles laid down in the matter of National Insurance Company Limited v. Pranay Sethi And Others , reported in (2017) 16 SCC 680, 25% of the yearly income i.e. Rs.54,000/-, was calculated to be future prospects as Rs.13,500/- and by adding the amount of future prospects to yearly dependence, it will come to Rs.56,700/-. Thereafter, by applying the multiplier of 14 according to the principles laid down in the matter of Sarla Verma (Smt) And Others v. Delhi Transport Corporation And Another , reported in (2009) 6 SCC 121, the Tribunal calculated the loss of dependency as Rs.7,93,800/- (14 x 56,700). Since Insurance company/appellant herein previously had already paid the claimants/respondents a sum of Rs.2,00,000/-, therefore, by deducting the amount of Rs.2,00,000/- from Rs.7,93,800/-, total Rs.5,93,800/- was determined by the Tribunal. Thereafter, the Tribunal by adding loss of estate of Rs.15,000/-, funeral expenses of Rs.40,000/-, loss of consortium of Rs.15,000/- to Rs.5,93,800/-, finally determined Rs.6,63,800/- as compensation to be given to the claimants/ respondents.

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Learned counsel for the appellant Insurance Company submits that offending vehicle bearing registration no. CG15 CW 1323 was registered and insured in the name of deceased Rajendra Yadav. At the time of accident, deceased himself was driving the offending vehicle and no other vehicle was involved in the accident. As per chapter XI of the Motor Vehicle

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Act, only third party can file a claim application before the tribunal. Therefore, claim application under Section 163A of the MV Act is not maintainable as the deceased being owner of the insured vehicle, is not a third party. The Hon'ble Supreme Court in the matter of Oriental Insurance Company Ltd. v. Meena Variyal and Others reported in 2007 5 SCC 428 held that Section 149 (1) cannot be used to enlarge the liability if it does not exist in terms of section 147 of the MV Act in a case where a person is not a third party within the meaning of MV Act insurance company cannot be held liable and be made automatically liable and obliged u/s 149 of MV Act to satisfy the award.

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This Court as well in the matter of Oriental Insurance Company Ltd. vs Pooran Lal & Anr. reported in 2005 SCC OnLine Chh 23 held that only third party can file a claim application and owner of the vehicle cannot maintain a claim application.

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Further, the Hon'ble Supreme Court in the matter of Oriental Insurance Company Limited vs Rajni Devi and Others reported in 2008 (5)SCC 736 held that it is now well settled principle of law that in case where third party is involved the liability of insurance company would be unlimited. However, where compensation is claimed for the death of owner or another passenger of the vehicle, the contract of insurance been governed by the contract qua contract, the claim of the insurance company would depend upon the terms thereof. The tribunal in our opinion was not correct in taking the view that while determining the amount of compensation the only factor

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which would be relevant would be the mere use of the motor vehicle. The liability under section 163-A of the Act is on the owner of the vehicle as a person cannot be both, a claimant as also a recipient. The heirs of Janak Raj (deceased in the said case) could not maintain a claim in terms of Section 163-A of Act. For the said purpose only the terms of contract of insurance could be taken recourse to.

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The above mentioned aspects have been supported by the judgment of the Hon'ble supreme Court in Ramkhiladi And Another vs United India Insurance Company and Another, reported in 2020 (2) SCC 550 and held that:-

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“9.5) It is true that, in a claim under section 163-A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim petition is sought to be established was due to wrongful act.. neglect or default of the owner of the vehicle concerned. It is also true that the claim petition under Section 163A of the Act is based on the principle of no fault liability. However, at the same time, the deceased has to be a third party and cannot maintain a claim under Section 163A of the Act against the owner/insurer of the vehicle which is borrowed by him as he will be in the shoes of the owner and he cannot maintain a claim under Section 163A of the Act against the owner and insurer of the vehicle bearing registration No. RJ 02 SA 7811.

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In the present case, the parties are governed by the contract of insurance and under the contract of insurance the liability of the insurance company would be qua third party only. In the present case, as observed hereinabove, the deceased cannot be said to be a third party with respect to the insured vehicle. bearing registration No. RJ 02 SA 7811. There cannot be any dispute that the liability of the insurance company would be as per the terms and conditions of the contract of insurance. As held by this Court in the case of Dhanraj v. New India Assurance Co. Ltd. {(2004) 8 SCC 553}, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorized representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. In the said decision, it is further held by this Court that Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.”

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Next, learned counsel for the appellant submits that Claim under Section 163-A is not maintainable when Income Exceeds Rs. 40,000/- Per Annum that the learned tribunal in para 16 of its judgment held that the deceased was earning Rs 40000 per month and in para 17&18 took the income of the deceased as Rs 4500 per month, the annual income of the deceased

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comes to Rs.54,000/- which is more than Rs.40,000/-. therefore, claim application under section 163A is not maintainable and liable to be dismissed.

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In the said regard, the Hon'ble Supreme Court in the matter of Deepal Girishbhai Soni and others vs. United India Insurance Co. Ltd., reported in {(2004) 5 SCC 385} has conclusively held that Section 163-A is a distinct social-security provision applicable only to those whose annual income does not exceed Rs.40,000.

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"67. We, therefore, are of the opinion that Kodala (supra) has correctly been decided. However, we do not agree with the findings in Kodala (supra) that if a person invokes provisions of Section 163-A, the annual income of Rs. 40,000/- per annual shall be treated as a cap. In our opinion, the proceeding under Section 163-A being a social security provision, providing for a distinct scheme, only those whose annual income is upto Rs. 40,000/- can take the benefit thereof. All other claims are required to be determined in terms of Chapter XII of the Act"

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10.This Court in the matter of Oriental Insurance Co. Ltd. v. Swatantra Kumar Verma, Misc. Appeal No.216/2006, also reiterates the same law. Relevant paragraphs are as under :-

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7. A bare reading of above-quoted paragraph 67 clearly shows that the Supreme Court held that Section 163-A of the

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Act, being social security provision, created a new distinct scheme only for the benefit of those whose income is only upto Rs.40,000/- per annum. In Deepal Girishbhai Soni case (supra), the Apex Court had expressed a hope that Parliament would intervene and enhance the maximum amount since the

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amendment was made in the year 1994 and Deepal Girishbhai Soni case (supra) was decided after a decade in the year 2004. This hope of the Apex Court was in vain and after 9 long years another case came up before the Supreme

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Court, ie., Puttamma v. K.L. Narayana Reddy , (2013) 15 SCC 45 . In this case the Apex Court again reiterated what was said in Deepal Girishbhai Soni case (supra). It was pointed out that though inflation had increased and wages are gone up, no change has been made by the Government. The pertinent observations in this regard are in paragraph 58 of the judgment in Puttamma case (supra), which reads as follows:

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"58. The Central Government was bestowed with duties to amend the Second Schedule in view of Section 163-A(3), but it failed to do so for 19 years in spite of repeated observations of this Court. For the reasons recorded above, we deem it proper to issue specific directions to the Central Government through the Secretary, Ministry of Road Transport and

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Highways to make proper amendments to the Second Schedule table keeping in view the present cost of living, subject to amendment of the Second Schedule as proposed or may be made by Parliament. Accordingly, we direct the Central Government to do so immediately. Till such amendment is made by the Central Government in exercise of power vested under sub-section (3) of Section 163-A of the 1988 Act or amendment is made by Parliament, we hold and direct that children up to the age of 5 years shall be entitled to a fixed compensation of Rs.1,00,000 (Rupees one lakh) and persons more than 5 years of age shall be entitled to a fixed compensation of Rs.1,50,000 (Rupees one lakh and fifty thousand) or the amount determined in terms of the Second Schedule, whichever is higher. Such amount is to be paid if any application is filed under Section 163-A of the 1988 Act."

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Therefore, the only change made by the Apex Court was that for children upto the age of 5 years, amount of Rs.1,00,000/- shall be the fixed minimum compensation and for persons of more than the age of 5 years, the amount of Rs. 1,50,000/- shall be the minimum compensation. No other change was made. The judgment rendered in Deepal Girishbhai Soni case (supra) still holds the field.

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11.Further, this Court in the matter of Mahadev Sahu vs Yogeshwar@ yadram sahu and others decided on 14/9/2020 in MAC no. 607 of 2014 held that claim application under S.163A is not maintainable if the Annual income is more than Rs.40,000 and which cannot have been clipped or reduced by the claimants by putting an artificial cap.

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12.In case of the death of owner of insured vehicle, insurance company is only liable under the contract to the extent of contractual liability. He submits that the offending vehicle no. CG 15 CW 1323 was insured from 18/3/2015 to 17/3/2016 as per Exhibit N/A-1 in the name of Rajendra Yadav and insurance company had taken premium to cover the risk of owner under the personal accident Rs.100/- and insurance company liable to pay Rs 2,00,000/- under the contract. The insurance company on 22/1/2016 has paid the contractual liability of Rs 2,00,000/- and the same has been credited to the legal heirs of the deceased Kamla Yadav Exhibit NA -5, the same has been fortified from the deposition of NAW-1 Neeraj Gaur. The insurance company has already discharged its obligation under the contract therefore the award passed by the tribunal directing the insurance company to pay Rs. 6,63,800 is liable to be set aside.

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Learned counsel further submits that the learned tribunal has committed grave illegality in holding that deceased/insured is third party and claim application is maintainable. Because an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including owner of the goods or his authorised representative) carried in

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the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle under the statute. He submits that learned tribunal has failed to appreciate that under the law of torts, the principal wrong doer is the driver of the vehicle who has caused the accident due to his rash and negligent driving. In a case of this nature the driver being the principal wrong doer has to be held jointly and severally liable to pay the compensation alongwith the owner and though the insurance company may be directed to deposit the compensation, the insurance company is only to indemnify the owner in terms of the policy. No person can be a plaintiff and a defendant at the same time. And also the claimants, who were the legal heirs of Rajendra Prasad cannot claim compensation for the death of Rajendra Prasad when he himself was the owner/insured of the vehicle. The Insurance Company was to indemnify insured for any compensation he may be liable to pay due to the negligence of his or his driver to third parties. That the learned tribunal has filed to appreciate that the owner himself was driving the vehicle which due to his negligence dashed with a tree on the roadside and as a result of which he died and claim on behalf of his legal heirs was not maintainable, because the owner of the vehicle as a person cannot be both, a claimant as also a recipient. That the learned tribunal has failed to consider that as per Chapter XI of the Motor Vehicle

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Act only third party clan file claim application. Considering the backdrop, he submits that this appeal may be allowed.

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14.None appears on behalf of respondents despite service of notice.

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15.I have heard learned counsel for the appellant and perused the material available with the appeal.

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16.In the present case, on 24.06.2015 deceased was coming to his home from Ambikapur alongwith his daughter Ku. Shiksha Yadav in his Maruti Swift Desire CG 15 CW 1323, when they reached near Sonwahi forest, he lost control over the vehicle due to Mechanical failure and met with an accident. As a result of which, driver/owner sustained injury and died on the spot. As per the claimants, deceased was contractor and earning Rs. 40,000/- Ρ.Α, therefore, compensation of Rs. 11,05,000/- was sought on various heads. That the present appellant, filed its reply controverting the averments made in the claim application. It was specifically pleaded by the appellant that Car bearing registration no. CG 15 CW 1323 was registered and insured in the name of the deceased and at the time of accident deceased was on the wheel of the vehicle therefore he not a third party and claim application Under Section 163-A filed by the legal representative of deceased/owner of the vehicle is not maintainable. It was further pleaded that at the time of accident deceased himself was driving the and he himself was negligent for the accident therefore claim application is not maintainable. It was further pleaded that income of the deceased is more than Rs. 40,000/- P. A., therefore, claim application is not maintainable before the claims tribunal.

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The legal position in this regard stands settled by the Hon’ble Supreme Court in the matter of Oriental Insurance Co. Ltd. v. Rajni Devi and Others¹ , Ramkhiladi and Another v. United India Insurance Co. And Another² , and Dhanraj v. New India Assurance Co. Ltd.³ , wherein it has been held that the owner of the vehicle cannot be regarded as a third party and the insurer’s statutory liability under Chapter XI of the Motor Vehicles Act does not extend to the death of the owner-driver, except to the extent of contractual coverage.

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18.In the present case, the insurance policy (Ex. NA/1) demonstrates that an additional premium of Rs.100/- was paid towards Personal Accident cover for owner-driver for a sum assured of Rs.2,00,000/-. The said amount of Rs.2,00,000/-has already been paid to respondent No.1/claimant which is evident from perusal of impugned award as well as from payment details (Ex.NA/5). Thus, strictly speaking, the statutory liability of the insurer does not extend beyond the contractual coverage.

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19.However, considering that the claim petition was entertained and adjudicated by the learned Tribunal under Section 163-A of the Act and compensation has been determined applying structured formula principles, and further taking into account the peculiar facts and circumstances of the case, this Court is of the opinion that complete exoneration of the insurer at this stage may not subserve the ends of justice.

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1 (2008) 5 SCC 736

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2 (2020) 2 SCC 550

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3 (2008) 5 SCC 553

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20.At the same time, the Tribunal committed an error in enlarging the liability of the Insurance Company and awarding compensation of Rs.6,63,800/-, which is not strictly sustainable in view of the settled legal position governing claims involving owner-driver.

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Therefore, in order to balance the contractual limitations of liability and the object of beneficial legislation under the Act, this Court deems it appropriate to modify the impugned award and restrict the total compensation payable to the claimants/respondents to Rs.5,00,000/- (Rupees Five Lakhs only) inclusive of the amount of Rs.2,00,000/-(Two Lakhs) already paid under the Personal Accident cover.

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The appeal is accordingly partly allowed . The impugned award dated 14.12.2017 passed by the learned Second Additional Motor Accident Claims Tribunal, Surajpur in MAC case No.57/2016 stands modified to the extent indicated hereinabove. The claimants/respondents shall be entitled to a total compensation of Rs.5,00,000/- with interest @ 9% per annum from the date of filing of the claim petition till realization. The amount already paid shall be duly adjusted.

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23.Rest of the conditions of the impugned award shall remain intact.

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Sd/-

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(Amitendra Kishore Prasad) Judge

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Avinash

Bajaj Allianz General Insurance Company Ltd. v. Kamla Yadav

Case brief

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Bajaj Allianz General Insurance Company Ltd. v. Kamla Yadav

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