Appeal (civil) 6313 of 2001


RESPONDENT: United India Insurance Co.Ltd.& Anr

DATE OF JUDGMENT: 12/03/2008

(Also reported in 2008 ACJ 1357 )




CIVIL APPEAL NO. 6313 of 2001


1. This appeal is directed against the order dated 11.7.2000 passed by the Division Bench of the Karnataka High Court whereby the Division Bench has ordered the compensation in sum of Rs. 1,65,000/- towards dependency and Rs. 10,000/- for the loss of estate & funeral expenses. Aggrieved against this order, the present appeal was

preferred by the appellant for suitable enhancement of the compensation.

Brief facts which are necessary for the disposal of this appeal are as under:

2. That one Hazi Mohammed Haneef died in a motor accident on 30.3.1993 when a tempo bearing No. CAA 6591 dashed against the motorcycle (KA-01-H-7054) which he was riding. He ultimately succumbed to injuries and died. Therefore, the claimants (the parents of the deceased) filed MVC No. 1039/1993 claiming compensation of Rs.15,12,000/- under the various heads. The Tribunal allowed the claim petition in part by judgment and award dated 23.9.1996 and held that accident took place due to negligent driving of the tempo bearing No. CAA 6591 and held that claimants were entitled to compensation of Rs.1,75,000/- with interest at 6% p.a. from the date of petition to the date of realization. The compensation amount awarded in sum of Rs. 1,65,000/- towards loss of dependency and Rs. 10,000/- towards loss of estate & funeral


3. Learned counsel for the appellant submitted that the deceased was 20 years of age and was a bachelor. His parents were aged 47 years and 42 years respectively. The deceased was studying in First Year B.Com. course and he was also the proprietor of a business carried under the name and style of H.S. Traders and was an income-tax assessee. The deceased had an income of Rs. 31,494/- in his business and had paid the income-tax on that. The Tribunal had erroneously deducted 50% towards his personal, living expenses and the contribution to the family/dependency worked out to Rs. 15,000/- per annum. The Tribunal applied multiplier of 11, looking to the age of the parents and arrived at the total loss of dependency at Rs. 1,65,000/-. Learned counsel submitted that the assessment made by the Tribunal and affirmed by the High Court was

totally erroneous. The incumbent was a bachelor, therefore, he could not spend 50% of his income on himself. But three-fourth of the income was contributed to the family and , therefore, the dependency assessed by the Tribunal and by the High Court for a sum of Rs. 15,000/- was not correct. It was also submitted that the multiplier of 11 applied by the Tribunal was also not correct.

4. After hearing learned counsel for the parties, we are of the opinion that the view taken by the High Court & Tribunal is not correct. The incumbent was a bachelor and he could not have spent more than 1/3rd of his total income for personal use and rest of the amount earned by him would certainly go to the family kitty. Therefore, determining the loss of dependency by 50% was not correct. Therefore, we assess that he must be spending 1/3rd towards personal use and contributing 2/3rd of his income to his family. Therefore, we work out that Rs. 30,000/- earned by him per annum. The loss of dependency was 2/3rd i.e. Rs. 20,000/- . The multiplier of '11' applied for loss of dependency was also not correct and as per schedule appended to the Motor Vehicles Act, 1988 it should be '12'. Applying the multiplier of 12 the total loss of dependency

will be Rs. 20,000/-x 12 = Rs. 2,40,000/- and Rs, 10,000/- towards loss of estate & funeral expenses, the total compensation comes to Rs. 2,50,000/- and incumbent is entitled for interest @ 9/% per annum from the date of the petition. The appeal is allowed with the aforesaid modification. If any amount had already been paid to

the claimant then that amount may be deducted from the total amount. Consequently, the appeal is allowed in part with no order as to costs.


SYED BASHEER AHAMED & ORS. v. MOHD. JAMEEL & ANR. [2009] INSC 12 (6 January 2009) = 2009(1)TAC 794(SC)


D.K. JAIN, J.:

10.In General Manager, Kerala State Road Transport & Ors.2, 2 (1994) 2 SCC 176 7 ( M.N. Venkatachaliah, J. as his Lordship then was) had observed that the determination of the quantum must answer what contemporary society "would deem to be a fair sum such as would allow the wrongdoer to hold up his head among his neighbours and say with their approval that he has done the fair thing". The amount awarded must not be niggardly since the "law values life and limb in a free society in generous scales". At the same time, a misplaced sympathy, generosity and benevolence cannot be the guiding factor for determining the compensation. The object of providing compensation is to place the claimant(s), to the extent possible, in almost the same financial position, as they were in before the accident and not to make a fortune out of misfortune that has befallen them.

18.On the question of deduction on account of personal expenses by the deceased, there is no set formula which could be applied in every case to determine as to what should be the deduction on this account. The contention that deduction on that count cannot exceed one-third on the ground that there is some statutory recognition in the Second Schedule to the Act for such deduction, is untenable. The said deduction would depend upon the facts and circumstances of each case. In the present case, no evidence was led on this point as well. In the absence of any evidence to the contrary, the practice is to deduct towards personal and living expenses of the deceased, one- third of the income in case he was married and one-half (50%) if he was a bachelor. Thus, there is no material on record warranting interference with the consistent view of both the courts below on the point.


(SLP (C) No.20608 of 2008 Date of Judgement : 14.11.08 Dr. Arijit Pasayat and Dr. Mukundakam Sharma JJ.)

General Manager, United India Co. Ltd v M. Laxmi and others, AIR 2009 SC 626

Motor Vehicle Act (59 of 1988), S. 147 – Liability of Insurance Company – Policy of Insurance in respect of scooter was Act policy – Scooter met with accident – Death of pillion rider, a gratuitous passenger in accident – claim for compensation – Insurance Company would not be liable to pay compensation.

7. In New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003), it has been noted as follows:-

Section 147 of the 1988 Act, inter alia, prescribes compulsory coverage against the death of or bodily injury to any passenger of “public service vehicle”. Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmen's Compensation Act. It does not speak of any passenger ina “goods carriage.”

In view of the challenge in the relevant provisions in the 1988 Act vis-a-vis the 1939 Act, we are of the opinion that the meaning of the words “any person”, must also be attributed having regard to the context in which they have been used i.e. “a third party”. Keeping in view the provisions of the 1988 Act, we are of the opinion that as the provisions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger traveling in a goods vehicle, the insured would not be liable therefor.

Furthermore, Sub-Clause (i) of clause (b) of sub-section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use the vehicle in a public place, whereas sub-clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place.”

8. In United India Assurance Co. Ltd., Shimla v. Tilak Singh and Others (2006(4)SCC 404), it has been noted as follows:

“ In our view, although the observations made in Asha Rani case (supra) were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant-Insurance Company that it owed no liability towards the injuries suffered by the deceased-Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger.”

9. In view of what has been stated by this Court in Asha Rani and Tilak Singh cases (supra), the order of the High Court is clearly unsustainable and is set aside and that of the MACT is restored.”

                                XXXXX                                XXX                                        XXX                                XXXX





(Civil Appeal No.5721 of 2008 ( arising out of SLP (C) No. 13174 of 2007)

Date of Judgement: 17-09-2008.

Also reported in AIR 2009 SC 208

Motor Vehicles Act (59 of 1988 ), S. 149 – Liability of Insurance Company – Accident – Driving Licence of driver of offending vehicle was not in force on the date of accident – Insurance Company , held, exonerated from its liability.

2007 AIR SCW 1889 followed. (Para 11)

11. In Ishwar Chandra's case (supra) the three decisions referred to by the High Court were considered and it was held that the insurance company would have no liability in a the case of this nature. We are in agreement with the view. The appeal deserves to be allowed which we direct. The impugned order of the High Court is set aside. It is open to the claimant to recover the amount from the respondent No.2.






(Arising out of S.L.P. (C) No.19562/2006)

( Also reported in 2008 ACJ 2045 )

Oriental Insurance Co. Ltd. ....Appellant


Sudhakaran K.V. & Ors. ...Respondent



1. This appeal is directed against a judgment and order dated 22.3.2006 passed by the High Court of Kerala at Ernakulam in M.F.A. No. 536 of 1999 whereby and whereunder the appeal preferred by the appellant herein from the judgment and award dated 31.10.1998 passed by the Motor Accident Claims Tribunal, Perumbavoor awarding a sum of Rs.1,18,900/-(Rupees One lakh eighteen thousand and nine hundred only) together with interest thereon at the rate of 12% p.a. from the date of the filing of the claim petition till date of realization of the amount against the appellant as also against the owners of the vehicle was dismissed.

2. The basic fact of the matter is not in dispute. Thankamani (hereinafter referred to as the deceased) was travelling as a pillion rider on a scooter on 20.10.1993. She fell down from the scooter and succumbed to the injuries sustained by her. In regard to the said accident, a claim petition was filed.

******* ********

12. A Division Bench of this Court in United India Insurance Co. Ltd., Shimla v. Tilak Singh and Ors. [(2006) 4 SCC 404] extended the said principle to all other categories of vehicles also, stating as under:

"In our view, although the observations made in Asha Rani case were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant Insurance Company that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger."

13. The submission of Mrs. Bhat, learned counsel, however, is that this Court should not extend the said principle to the vehicles other than the goods carriage. As at present advised, we may not go into the said question in view of some recent decisions of this Court, viz., National Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700], Oriental Insurance Co. Ltd. v. Meena Variyal [(2007) 5 SCC 428] and New India

Assurance Co. Ltd. v. Ved Wati [(2007) 9 SCC 486].

14. The provisions of the Act and, in particular, Section 147 of the Act were enacted for the purpose of enforcing the principles of social justice. It, however, must be kept confined to a third party risk. A contract of insurance which is not statutory in nature should be construed like any other contract.

15. We have noticed the terms of the contract of insurance. It was entered into for the purpose of covering the third party risk and not the risk of the owner or a pillion rider. An exception in the contract of insurance has been made, i.e., by covering the risk of the driver of the vehicle. The deceased was, indisputably, not the driver of the vehicle.

16. The contract of insurance did not cover the owner of the vehicle, certainly not the pillion rider. The deceased was travelling as a passenger, stricto sensu may not be as a gratuitous passenger as in a given case she may not be a member of the family, a friend or other relative. In the sense of the term which is used in common parlance, she might not be even a passenger.

In view of the terms of the contract of insurance, however, she would not be covered thereby.

It is not necessary for us to deal with large number of precedents operating in this behalf as the question appears to be covered by a few recent decisions of this Court.

17. In United India Insurance Company Ltd. v. Serjerao & Ors.[2007 (13) SCALE 80], it was held as under:

"16....When a statutory liability has been imposed upon the owner, in our opinion, the same cannot extend the liability of an insurer to indemnify the owner, although in terms of the insurance policy or under the Act, it would not be liable therefor.

17. In a given case, the statutory liability of an insurance company, therefore, either may be nil or a sum lower than the amount specified under Section 140 of the Act.Thus,when a separate application is filed in terms of Section 140 of the Act, in terms of Section 168 thereof, an insurer has to be given a notice in which event, it goes without saying, it would be open to the insurance company to plead and prove that it is not liable at all.

18. Furthermore, it is not in dispute that there can be more than one award particularly when a sum paid may have to be adjusted from the final award. Keeping in view the provisions of Section 168 of the Act, there cannot be any doubt whatsoever that an award for enforcing the right under Section 140 of the Act is also required to be

passed under Section 168 only after the parties concerned have filed their pleadings and have been given a reasonable opportunity of being heard. A Claims Tribunal, thus, must be satisfied that the conditions precedent specified in Section 140 of the Act have been substantiated, which is the basis for making an award.

19. Furthermore, evidently, the amount directed to be paid even in terms of Chapter-X of the Act must as of necessity, in the event of non-compliance of directions has to be recovered in terms of Section 174 of the Act. There is no other provision in the Act which takes care of such a situation. We, therefore, are of the opinion that even when objections are raised by the insurance company in regard to it liability, the Tribunal is required to render a decision upon the issue, which would attain finality and, thus, the same would be any award within the meaning of Section 173 of the Act."

It was furthermore held as under:

"8. So far as the question of liability regarding labourers travelling in trollies is concerned, the matter was considered by this Court in Oriental Insurance Company Ltd. Vs. Brij Mohan and Ors. (2007) 7 SCALE 753 and it was held that the Insurance Company has no liability...""

18. Yet again in Ghulam Mohammad Dar v. State of J&K and Ors. [(2008) 1 SCC 422], this Court opined that the words "injury to any person" as inserted by reason of the 1994 Amendment would only mean a third party and not a passenger travelling on a goods carriage whether gratuitous or otherwise. [See also The New India Insurance Company v. Darshana Devi & Ors. 2008 (2) SCALE 432]

19. The law which emerges from the said decisions, is: (i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider; (iii) the pillion rider in a two wheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle.

20. For the views we have taken, it is not necessary to refer to a large number of decisions cited at the Bar as they are not applicable in a case of this nature.

21. For the reasons aforementioned, the impugned judgment cannot be sustained. It is set aside accordingly. The appeal is allowed. No costs

[S.B. Sinha] and [Lokeshwar Singh Panta].........JJ



Appeal (civil) 2090 of 2008

PETITIONER: Laxmi Devi & Others


RESPONDENT: Mohammad Tabbar & Another

DATE OF JUDGMENT: 25/03/2008

BENCH: S.B. Sinha & V.S. Sirpurkar ........JJ

(Also reported in 2008 ACJ 1488 and 2008 (2) T.A.C. 384 SC


(Arising out of SLP (C) No.16034 of 2007)



2. This appeal is filed by the widow and five children of one Rajendra Singh who died in an accident on 12.4.2004 when he was riding on his bicycle and was given a dash by the offending vehicle, a Canter Truck bearing Registration No.UA-04-1486. Rajendra Singh died on the spot. The driver of the offending vehicle was caught on the spot. The claimants, therefore, filed the claim before the Motor Accidents Claims Tribunal on the basis that Rajendra Singh used to earn Rs.140/- per day and Rs.4200/-

per month and that his age at the time of accident was barely 35 years. In support of the claim, three witnesses including Laxmi Devi, the wife of the deceased were examined and the Tribunal, on the basis of the evidence, held that the deceased Rajendra Singh died on account of the injuries sustained by him in the accident on 12.4.2004 which accident had occurred due to rash and negligent driving of the offending vehicle. As

regards the income, the Tribunal assessed the same at Rs.15,000/- per annum on the basis of the notional income prescribed in Second Schedule under Section 163-A of the Motor Vehicles Act. After deducting 1/3rd of the said amount as the personal expenses of the deceased, the claimants dependency was assessed at Rs.10,000/- per month and by multiplying the annual dependency of Rs.10,000/- with the multiplier of 16, the

compensation was worked out to Rs.1,60,000/-. The other claims were also awarded being Rs.2,000/- for funeral expenses, Rs.5,000/- for loss of consortium to the widow and Rs.2,000/- for loss of estate. Thus a total sum of Rs.1,69,000/- was awarded as compensation to the claimants. The Tribunal directed the payment of interest on the amount of compensation at the rate of 6% per annum from the date of claim petition.

4. The High Court confirmed the earlier findings regarding the negligence of death. However, the High Court came to the conclusion that though the claim of the income of Rs.4200/- per month was not reliable, the notional income should have been held to be Rs.36,000/- per annum, i.e., Rs.3,000/- per month. For this proposition the High Court held that the notional income of Rs.15,000/- in the Second Schedule was prescribed in the year 1994 while the accident had taken place in the year 2004. The second reason given by the High Court was that even an unskilled labourer, these days, can easily earn Rs.100/- per day and Rs.3,000/- per month and, therefore, the High Court held the income to be Rs.36,000/- per annum and by deducting 1/3rd of the income of the deceased for his personal expenses, the claimants dependency was assessed at Rs.24,000/- per annum. However, the High Court reduced the multiplier of 16 applied by the Tribunal to 12. For this action, the High Court relied on the aforementioned judgment in T.N. Transports Corporations case. The High Court thus applied the multiplier of 12 instead of 16 and ultimately the High Court arrived at the figure of Rs.2,88,000/- and to this the other compensation on account of funeral expenses, loss of consortium to the widow and loss of estate, which were granted by the Tribunal, were added and the total compensation of Rs.2,97,000/- was awarded by the High Court. The claimants, dissatisfied with this finding,

have filed this appeal before us.

7. Considering the above principles in this case, we must say that the High Court has definitely erred in bringing down the multiplier to 12. It is to be seen that in this case the deceased was 35 years old. The claimants are his wife and four minor daughters. Even as per the Second Schedule the multiplier in case of the persons between 35 to 40 years is 16. In the present case the rate of interest granted is only 6% considering the general rate of interest prevalent in 2004. In our opinion, therefore, the proper

multiplier would be 14 as the value of the notional income has been increased. It was nobodys case that the deceased was not working at all. His wife has entered in the witness box and had asserted that he earned Rs.140/- per day. Even if we ignore the exaggeration, the figure arrived at by the High Court at Rs.100/- per day and Rs.3,000/- per month appears to be correct. However, considering that the claimant would get only 6% interest, we would chose to grant the multiplier of 14 instead of 12. Accordingly the notional income as applied would be Rs.24,000 x 14 = Rs.3,36,000/- and to this will be added the other compensation like Rs.2,000/- as funeral expenses, Rs.5,000/- for the loss of consortium to the widow and Rs.2,000/- for the loss of estate. The claimants would,

therefore, be entitled to a sum of Rs.3,45,000/-. The said sum shall carry the interest at the rate of 6% per annum from the date of claim petition.

8. In view of the above, the appeal is allowed. There would be no order as to costs.



PETITIONER: Sudhir Kumar Rana


RESPONDENT: Surinder Singh & Ors

DATE OF JUDGMENT: 06/05/2008


S.B. Sinha & Lokeshwar Singh Panta

( Also reported in 2008 ACJ 1834 )


[Arising out of SLP (Civil) No. 8262 of 2007]


1. Leave granted.

2. Appellant was driving a two-wheeler bearing registration No. DL-45 AQ 0731 on 30.10.2003. He was aged about 17 = years. He met with an accident, as allegedly respondent No.1 was driving a mini-truck rashly and negligently. He suffered the following injuries in the said accident:

"1. Crush injury over right root.

2. Fracture fifth M.T. bone and joint.

3. Fracture P.P. little toe. (Total 3 fractures)

4. Abrasions over left side trunk, right-foot, right-leg, right-hand and left-knee

5. Profusely Bleeding.

6. Abrasions and blunt injuries all over body."

3. Appellant filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 (for short "the Act"). The Tribunal opined that as the appellant did not possess a driving licence, he must be held to have contributed to the accident. Although a sum of Rs. 30,000/- was awarded by way of compensation, in view of the finding that he was guilty of contributory negligence on his part, found to be entitled to a sum of Rs.

12,000/- only. The High Court by reason of the impugned judgment has dismissed the appeal preferred by him under Section 173 of the Act.

4. The question which arises for consideration is as to whether the appellant can be said to have guilty of contributory negligence. Ordinarily, the doctrine of contributory negligence is not applicable in case of children with the same force as in the case of adults.

5. We do not intend to lay down a law that a child can never be guilty of contributory negligence but ordinarily the same is a question of fact. [See Muthuswamy and another v. S.A.R. Annamalai and others [1990 ACJ 974]

6. A contributory negligence may be defined as negligence in not avoiding the consequences arising from the negligence of some other person, when means and opportunity are afforded to do so. The question of contributory negligence would arise only when both parties are found to be negligent.

7. The question is, negligence for what? If the complainant must be guilty of an act or omission which materially contributed to the accident and resulted in injury and damage, the concept of contributory negligence would apply. [See New India Assurance Company Ltd. v. Avinash 1988 ACJ 322 (Raj.)]

In T.O. Anthony v. Kavarnan & Ors. [(2008) 3 SCC 748, it was held

"6. 'Composite negligence' refers to the negligence on the part of two or more persons. Where a person is injured as a result of negligence on the part of two or more wrong doers, it is said that the person was injured on account of the composite negligence of those wrong-doers. In such a case, each wrong doer, is jointly and severally liable to

the injured for payment of the entire damages and the injured person has the choice of proceeding against all or any of them. In such a case, the injured need not establish the extent of responsibility of each wrong-doer separately, nor is it necessary for the court to determine the extent of liability of each wrong-doer separately. On the other hand where a person suffers injury, partly due to the negligence on the part of another person or persons, and partly as a result of his own negligence, then the negligence of the part of the injured which contributed to the accident is referred to as his contributory negligence. Where the injured is guilty of some negligence, his claim for damages is not defeated merely by reason of the negligence on his part but the damages recoverable by him in respect of the injuries stands reduced in proportion to his contributory negligence.

7. Therefore, when two vehicles are involved in an accident, and one of the drivers claims compensation from the other driver alleging negligence, and the other driver denies negligence or claims that the injured claimant himself was negligent, then it becomes necessary to consider whether the injured claimant was negligent and if

so, whether he was solely or partly responsible for the accident and the extent of his responsibility, that is his contributory negligence. Therefore where the injured is himself partly liable, the principle of 'composite negligence' will not apply nor can there be an automatic inference that the negligence was 50:50 as has been assumed in this case. The Tribunal ought to have examined the extent of contributory negligence of the appellant

and thereby avoided confusion between composite negligence and contributory negligence. The High Court has failed to correct the said error."

8. If a person drives a vehicle without a licence, he commits an offence. The same, by itself, in our opinion, may not lead to a finding of negligence as regards the accident. It has been held by the courts below that it was the driver of the mini-truck which was being driven rashly and negligently. It is one thing to say that the appellant was not possessing any licence but no finding of fact has been arrived at that he was driving the two-wheeler rashly and negligently. If he was not driving rashly and negligently which contributed to the accident, we fail to see as to how, only because he was not having a licence, he would be held to be guilty of contributory negligence.

9. The matter might have been different if by reason of his rash and negligent driving, the accident had taken place.

10. We, therefore, are of the opinion that the impugned judgment cannot be sustained which is set aside accordingly. Appellant is entitled to the said sum of Rs. 30,000/- by way of compensation with interest at the rate of 7=% per annum from the date of the award till making of the payment. Even otherwise there is no reason as to why in view of the nature of the injuries he has suffered, he should be deprived of even the petty sum of Rs.30,000/- by way of compensation. The appeal is allowed with the aforementioned

direction. No costs.