FAO/298/2014 on 14 October 2026

(1) FAO No. 298/2014 Sunita & Ors.

…..Appellants Versus Kanta & Ors. ……Respondents

(2) FAO No. 428/2014 NIC Ltd.

…..Appellant Versus Sunita & Ors. ……Respondents ________________________________________________

Coram

The Hon'ble Mr. Justice Sushil Kukreja, Judge. 1 Whether approved for reporting? ________________________________________________ For the appellant(s): Mr. Tek Chand Sharma, Advocate, for the appellants in FAO (MV) No. 298/2014. Mr. Deepak Bhasin, Senior Advocate with Mr. Sambhav Bhasin and Ms. Shruti Dubey, Advocates, for the appellant in FAO (MV) No. 428/2014. For the respondents: Mr. Ashwani Pathak, Senior Advocate with Mr. Dev Raj, Advocate, for respondent No. 1 in FAO (MV) No. 298/2014. Mr. Deepak Bhasin, Senior Advocate with Mr. Sambhav

Whether reporters of Local Papers may be allowed to see the judgment?

Bhasin and Ms. Shruti Dubey, Advocates, for respondent No. 2 in FAO (MV) No. 298/2014 Mr. Tek Chand Sharma, Advocate, for respondents No. 1 to 5 in FAO (MV) No. 428/2014. Mr. Ashwani Pathak, Senior Advocate with Mr. Dev Raj, Advocate, for respondent for respondent No. 6 in FAO (MV) No. 428/2014. Sushil Kukreja, Judge. Since both the appeals arise out of a common award, they were heard together and are being disposed of by a common judgment.

2. FAO No. 298 of 2014 has been filed by the appellants, who were the petitioners before the learned Court below, under Section 173 of the Motor Vehicles Act (for short “the Act”), for enhancement of the award, against the award dated 26.03.2014, passed by learned Motor Accidents Claims Tribunal-III, Shimla, H.P. (for short “Tribunal below”), whereby, the petition filed by petitioners, was allowed against respondents No. 1 & 2 (owner and Insurance Company) jointly and severally and they were held entitled for compensation in a sum of Rs. 11,50,000/- alongwith interest

@ 9% per annum from the date of filing of the petition till its realization and respondent No. 2, being insurer was directed to indemnify the award. Whereas, FAO No. 428 of 2014, has been filed by the Insurance Company, who was respondent No. 2 before the learned Tribunal below, for setting aside the aforesaid award. The parties shall be referred to as they were before the learned Tribunal below.

3. The brief facts of the case are that on 24.09.2009, Jeet Singh (since deceased) was travelling in vehicle bearing registration No. HP-52A-3121, which was being driven by its driver Rishu (since deceased) in a rash and negligent manner, due to which, the vehicle went off the road and its occupants sustained injuries and Jeet Singh succumbed to the injuries on the spot. According to the petitioners, the deceased was 29 years of age and was working as mason. He was also doing the work of agriculture and his income from all sources was claimed as Rs. 11,500/- per month. The deceased was sole bread earner of the family and the petitioners were totally dependent upon him. Hence, they claimed compensation to the tune of Rs.

13,51,000/- alongwith interest.

4. In the reply filed by respondent No. 1 it has been admitted that the deceased was travelling in the vehicle in question and the vehicle was insured with respondent No. 2. It has been denied that accident took place due to rash and negligent driving of the driver.

5. Respondent No. 2/Insurance Company by filing reply resisted and contested the petition and took preliminary objections qua maintainability and collusion. It has been stated that the deceased driver Upinder alias Rishu was related to the owner of vehicle No. HP-52A-3121 and was not paid employee/driver of respondent No. 1. The occupants of the vehicle were coming from the marriage party and the vehicle was being driven in breach of terms and conditions of the Insurance Policy, as its driver had consumed alcohol.

6. On 01.10.2012, the learned Tribunal below had framed the following issues for consideration and adjudication: “1. Whether Sh. Jeet Singh died as a result of rash and negligent driving of vehicle No. HP-

52A-3121? OPP

2. If issue No. 1 is proved, to what compensation the petitioners are entitled and from whom? OPP

3. Whether the driver of vehicle No. HP-52A- 3121 have not valid and effective driving licence at the time of accident? OPR

4. Whether the vehicle was being plied without route permit, RC, etc. if so its effect? OPR

5. Relief?”

7. After the parties led evidence and after hearing the learned counsel for the parties, the petition filed by the petitioners was allowed against respondents No. 1 & 2 (owner and Insurance Company) jointly and severally and they were held entitled for compensation in a sum of Rs. 11,50,000/- alongwith interest @ 9% per annum from the date of filing of the petition till its realization and respondent No. 2, being insurer was directed to indemnify the award.

8. Feeling aggrieved and dissatisfied, the appellants/petitioners preferred the instant appeal against the impugned award dated 26.03.2014 for enhancement of the award, whereas, appellant/Insurance Company preferred the appeal against the aforesaid award for setting aside the same.

9. I have heard the learned counsel for the appellants/petitioners, learned Senior counsel for the appellant/Insurance Company, learned Senior Counsel for the respondent/owner and carefully examined the entire record.

10. Learned counsel for the appellants in FAO (MV) No. 298 of 2014 contended that the compensation awarded by the learned Tribunal below is on a lower side, as income of the deceased at the time of his death was more than Rs. 11,500/- per month since it has been proved on record that he was working as mason and besides this, he was also doing agriculture work on his land. With these submissions, he prayed that the impugned award may be enhanced.

11. On the other hand, learned counsel for the appellant/Insurance Company in FAO (MV) No. 428 of 2014 contended that the vehicle in question was being driven in breach of terms and conditions of the policy, as the driver had consumed alcohol, as such, no liability ought to have been fastened upon the Insurance Company. He further contended that the compensation awarded by the learned Tribunal below is on a higher side. With these submissions, he prayed for acceptance of the appeal by setting aside the impugned award.

12. The perusal of the material available on record reveals that on 24.09.2009 deceased Jeet Singh had died in an accident, while travelling in a vehicle bearing registration No. HP-52A-3121, which was being driven by deceased Upinder Singh alias Rishu in a rash and negligent manner. It has come on record that deceased Upinder Singh alias Rishu who was driving the offending vehicle had consumed alcohol at the time of accident.

13. Now the question which arises for consideration before this Court is as to whether the Insurance Company can be held liable when driver of the offending vehicle was driving the same under the influence of liquor. This issue is no longer res integra in view of the decision reported in Latest HLJ 2010 HP 1, Khem Chand Vs. Smt. Uma Devi and others, wherein, Coordinate Bench of this Court has held that such ground is not available to the Insurance Company as intoxication of the driver is not a ground available to the Insurance Company under Section 149 of the Act. Paragraphs 4 & 5 of the aforesaid judgment are reproduce as under:- "4. The law is very well settled that a claim which falls within the purview of an Act policy i.e. a liability falling within the ambit of Section 147 of the Motor Vehicles Act, 1988 ( the Act) can only be contested by the Insurance Company on the grounds available to it under Section 149 of the Act. It is not permitted to contest the proceedings on any other grounds. Intoxication of the driver is not a ground available to the Insurance Company under Section 149 of the Act. Therefore, the liability, which is statutory under Section 147 of the Act, has to be satisfied by the insurer. It may be clarified that in case the insurer in addition to the liability which it is bound to cover under the Act covers other liability then in case of such extended liability, it may raise the defences available to it as per terms of the policy, but as far as statutory liability is concerned, the insurer has no authority to incorporate any term in the policy which is not contemplated in terms of Section 149 of the Act. Therefore, the Insurance Company could not have been permitted to raise this defence and it could not be permitted to recover the awarded amount from the insured.

5. In this case, I also find that the clause in the policy relied upon by the insurance company is not applicable. This clause which provides that the insurance company shall not be liable if the person driving the vehicle is intoxicated with the knowledge and consent of the insured is incorporated in Section-I of the policy. This section only deals with own damage claims, i.e. damage caused to the vehicle in question. Section-II of the Act deals with third parties and does not contain a similar clause. Therefore, it is apparent that even the policy did not contemplate the the insurance company would not be liable in case of third parties in case the driver drove the vehicle in an intoxicated condition, with the knowledge of

the owner."

14. This legal position was thereafter reiterated in Oriental Insurance Company Ltd. vs. Sangeyum, 2016 ACJ 1783.

15. Adverting to the facts of the present case. It has been duly proved on record, that the vehicle in question was duly insured with the appellants/Insurance Company at the time of accident, as such, Insurance Company cannot be exonerated from paying the compensation amount, as in view of aforesaid decision rendered by Coordinate Bench of this Court in Khem Chand’s case (supra) and in terms of Section 149 of the Act, ground of intoxication of the driver is not available to the insurer. In view of the above, learned Tribunal has not committed any error in saddling the appellant-insurance company with the liability to pay the compensation to the petitioners.

16. The learned counsel for the appellant/Insurance Company next contended that the learned Tribunal below has wrongly assessed the monthly income of the deceased at Rs. 5,000/- without there being any documentary proof with respect to the income of the deceased and the learned Tribunal below ought to have taken the income of the deceased on the basis of minimum wages prevalent at the time of the accident. However, this contention of learned counsel for the appellant/Insurance Company is devoid of any force. In Chandra Vs. Mukesh Kumar Yadav, (2022) 1 SCC 198, it has been held by the Hon’ble Supreme Court that in the absence of any documentary evidence on record, the minimum wage notification can be a yardstick but at the same time cannot be an absolute one to fix the income of the deceased. Merely because the claimants were unable to produce documentary evidence to show the monthly income of the deceased, same does not justify adoption of lowest tier of minimum wage while computing the income. Relevant portion of the aforesaid judgment reads as under:- “9. It is the specific case of the claimants that the deceased was possessing heavy vehicle driving licence and was earning Rs 15,000 per month. Possessing such licence and driving of heavy vehicle on the date of accident is proved from the evidence on record. Though the wife of the deceased has categorically deposed as AW 1 that her husband Shivpal was earning Rs 15,000 per month, same was not considered only on the ground that salary certificate was not filed. The Tribunal has fixed the monthly income of the deceased by adopting minimum wage notified for the skilled labour in the year 2016. In absence of salary certificate the minimum wage notification can be a yardstick but at the same time cannot be an absolute one to fix the income of the deceased. In absence of documentary evidence on record some amount of guesswork is required to be done. But at the same time the guesswork for assessing the income of the deceased should not be totally detached from reality. Merely because the claimants were unable to produce documentary evidence to show the monthly income of Shivpal, same does not justify adoption of lowest tier of minimum wage while computing the income. There is no reason to discard the oral evidence of the wife of the deceased who has deposed that late Shivpal was earning around Rs 15,000 per month.”

17. In National Insurance Company Limited Vs. Pranay Sethi & others, (2017) 16 SCC 680, a Constitution Bench of the Hon’ble Apex Court held that the compensation has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. Para 55 of the judgment is reproduced as under:- “55. Section 168 of the Act deals with the concept of “just compensation” and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of “just compensation” has to be viewed through the prism of fairness, reasonableness and non- violation of the principle of equitability. In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance. Though the discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be guided by the expression, that is, “just compensation”. The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla Verma (supra) and it has been approved in Reshma Kumari (supra). The age and income, as stated earlier, have to be established by adducing evidence. The tribunal and the Courts have to bear in mind that the basic principle lies in pragmatic computation which is in proximity to reality. It is a well accepted norm that money cannot substitute a life lost but an effort has to be made for grant of just compensation having uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. In such an adjudication, the duty of the tribunal and the Courts is difficult and hence, an endeavour has been made by this Court for standardization which in its ambit includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency. We approve the principle of “standardization” so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age.”

18. The case of the petitioners is that the deceased was working as mason and his income was Rs. 11,500/- per month. PW-3A, Sunita, widow of the deceased, also deposed that the deceased was working as mason and the petitioners were dependents upon his income. PW-3, Kishan Lal, deposed that the deceased was working as labourer and he was having 10-12 bighas of land. He further deposed that the deceased was earning Rs. 150/- to Rs. 200/- per day and was also sowing cash crop in the agricultural land. However, no documentary evidence has been placed on record by the petitioners to prove the income of the deceased. Since the deceased was hale and hearty and young man of 29 years at the time of accident, the learned Tribunal below had rightly taken the monthly income of the deceased at Rs. 5,000/-. However, the learned Tribunal below had erred while deducting one fifth of the income towards personal expenses of the deceased, whereas, it should have been one fourth of the income, as number of dependents in the present case is five.

19. In Sarla Verma and others Versus Delhi Transport Corporation and another, (2009) 6 SCC 121, the Apex Court, on the question of deduction towards the personal and living expenses of the deceased held that, the personal and living expenses of the deceased should be deducted from his monthly income, to arrive at the contribution to the dependents. Where the deceased was married, the deduction towards personal and living expenses of the deceased should be one-third where the number of dependent family members is 2 to 3; one-fourth where the number of dependent family members is 4 to 6; and one-fifth where the number of dependent family members exceeds 6. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependent and the mother alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependent on the father. Thus, even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependent, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.

20. In the case on hand, the number of dependant family members is ‘5’, therefore, 1/4th of the amount from the total income has to be deducted towards personal and living expenses of the deceased. Therefore, after deducting 1/4th share towards his personal expenses, the notional monthly income of the deceased comes to Rs. 3,750/- (Rs. 5,000- 1250) and after adding 40% of the monthly income towards future prospects, the total dependency comes to Rs. 5250/-

(3750+1500) per month. By applying the multiplier of ‘17’ as per the settled law, the compensation under the head loss of dependency is re-fixed as Rs. 10,71,000/- (5250 x 12 x 17).

21. Now the next question which arises for consideration before this Court is as to what amount of total compensation the petitioners are entitled for.

22. In Magma General Insurance Company Limited Vs. Nanu Ram alias Chuhru Ram and others, reported in (2018) 18 Supreme Court Cases 130, the Hon’ble Supreme Court has laid down that consortium is not limited to spousal consortium and it also includes parental consortium as well as filial consortium. The relevant portion of the aforesaid judgment reads as under:- “21. A Constitution Bench of this Court in Pranay Sethi dealt with the various heads under which compensation is to be awarded in a death case. One of these heads is loss of consortium. In legal parlance, “consortium” is a compendious term which encompasses “spousal consortium”, “parental consortium”, and “filial consortium”. The right to consortium would include the company, care, help comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse:

21.1. Spousal consortium is general defined as rights pertaining to the relationship of a husband-wife which allows compensation o the surviving spouse for loss of “company, society, cooperation, affection, and aid of the other in every conjugal relation”.

21.2. Parental consortium is granted to the child upon the premature death of a parent, for loss of “parental aid, protection, affection, society, discipline, guidance and training”.

21.3. Filial consortium is the right of the parents to compensation in the case of an accidental death of a child. An accident leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued for their love affection, companionship and their role in the family unit.

22. Consortium is a special prism reflecting changing norms about the status and worth of actual relationships. Modern jurisdictions world-over have recognized that the value of a child’s consortium far exceeds the economic value of the compensation awarded in the case of the death of a child. Most jurisdictions therefore permit parents to be awarded compensation under loss of consortium on the death of a child. The amount awarded to the parents is a compensation for loss of love, affection, care and companionship of the deceased child.”

23. While placing reliance upon the judgment passed by the Hon'ble Apex Court in Pranay Sethi’s case (supra), the Hon’ble Supreme Court in Sunita & ors. Vs. United India Insurance Co. Ltd. & ors., had enhanced the compensation under the conventional heads @ 10% after a span of every three years w.e.f. the year 2017 and held as follows:- “20. Regarding the monthly income of the deceased, we concur with the view taken by the Courts below in assessing the same to be Rs.12,000/- per month, for there being no error therein. Hence, in awarding compensation which is just and fair, we are inclined to increase the amount awarded under the conventional heads, namely, loss of estate, loss of consortium, and funeral expenses by 10% adverting to the settled principle of law laid down by this Court in National Insurance Co. Ltd. v. Pranay Sethi, that such amount should be revised every three years.”

24. Accordingly in view of the law laid down by the Hon’ble Supreme Court in Pranay Sethi’s as well as Sunita’s cases (supra), by enhancing the compensation under the conventional heads @ 10%, after every three years from the year 2017, the petitioners are entitled to loss of estate at Rs. 19,965/-, funeral expenses at Rs.19,965/-. Petitioner No. 1, being widow of the deceased, is entitled to spousal consortium of Rs. 53,240/-, petitioners No. 2, 3 & 4, being children, are entitled to parental consortium of Rs. 53,240/- each and petitioner No. 4, being mother, is entitled to filial consortium of Rs. 53,240/-. Accordingly, the total amount of compensation comes out as under:- “Head Amount

(i) Loss of dependency Rs. 10,71,000/-

(ii) Funeral expenses Rs. 19,965/-

(iii) Loss of estate Rs. 19,965/-

(iv) Spousal consortium Rs. 53,240/- (payable to petitioner No.1)

(v) Parental consortium Rs.1,59,720/- (Rs.53,240/- each to petitioners No.2 to 4)

(vi) Filial consortium Rs.53,240/- (payable to petitioner No. 5)

Total compensation awarded is Rs. 13,77,130/-

25. No other point was urged before me.

26. Consequently, in view of detailed discussion made here-in-above and the law laid down by the Hon'ble Apex Court, the appeal filed by the appellants/petitioners is partly allowed and the impugned award dated 26.03.2014, passed by the learned Tribunal below, is modified to the extent that the petitioners are entitled to compensation to the tune of Rs. 13,77,130/-, whereas, the appeal filed by the Insurance Company is dismissed. The remaining part and terms of the impugned award, including the interest component, shall remain the same. The appeals stand disposed of in the above terms, so also the pending application(s), if any.

( Sushil Kukreja )

Judge October 14, 2026 (raman)