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Judgment
. Heard.
The original claimants/appellants filed the present appeal against the judgment and order dated 25.02.2009 passed by learned Motor Accident Claims Tribunal, Khamgaon, in M.A.C.P. No.12/2002.
It is submission of the claimants that the deceased Aslamkha was working as a Coolie and used to earn Rs.3000/- per month from his work. On the fateful day of incident, which was taken place on 10.01.2002, due to rash and negligent driving of the offending truck bearing registration No.30/A-9014, the deceased Aslamkha succumbed to the injuries. At the time of death, he was of the age of 30 years, leaving behind the present appellants as his legal representatives. As such, the appellants had filed the claim petition before the Tribunal, thereby claiming the compensation of Rs.4 lakhs under provisions of the Motor Vehicle Act.
The said petition was highly contested by the respondent- Insurance Company. It was specific case of the Insurance Company that on the day of accident, the driver of the offending vehicle was not possessing a valid and effective driving licence. According to the Insurance Company, the licence was expired on 11.01.1999, and the same was under renewal. The application for renewal was pending and same was renewed on 14.01.2002. Hence, according to the Insurance Company, on day of incident when accident took place, the driver of the offending vehicle was not holding the effective driving licence to drive the vehicle. Hence, according to the Insurance Company, the Company is not responsible to pay the compensation amount.
In light of the above said factual position, the learned Tribunal by considering the notional income of deceased as Rs.15,000/- per annum assesses the compensation in the matter.
In the present appeal, the appellants challenged the present appeal on two grounds. Firstly, the learned Tribunal did not properly consider the assessment of compensation as per the law laid down by the Hon’ble Supreme Court and secondly, the Insurance Company is wrongly exonerated from the payment of compensation.
It is submission of the present appellants that the deceased was not at all responsible for the accident. It was rash and negligent driving of the offending vehicle and, therefore, the bread earner of the family caused untimely death in the matter. Therefore, considering this fact, the appellants are entitled for just and fair compensation in the matter.
According to the appellants, as per the law laid down by the Hon’ble Supreme Court of India in catena of cases, it is time and again held that if the driver of the vehicle was found to be not in possession of a valid driving licence, then in that case, the Insurance Company is liable to pay the compensation amount to the claimants and same can be recovered from the owner of the vehicle.
To substantiate the above submission, the appellants have relied upon the judgment of the Hon’ble Supreme Court of India, in case of Shamanna Vs. Divisional Manager Oriental Insurance Co Ltd, reported in AIR 2018 SC 3726; Sadhana Tomar and others Vs. Ashok Kushwaha and others and others reported in 2025 SCC OnLine SC 554 and Special Leave to Appeal arising out of SLP No.19830-19832/2022, The Division Manager, New India Assurance Company Ltd. Vs Shaanbasappa and others.
Per contra, learned Counsel for the Insurance Company has vehemently opposed the present appeal. According to her, once it is found that the driver was not possessing a valid and effective licence to drive the vehicle at the time of accident, same amounts to a fundamental breach of the policy and, therefore, the learned Tribunal was justified in holding that the Insurance Company cannot be held responsible to pay compensation in the matter. In support of this submission, respondent has relied upon National Insurance Company Ltd. Vs. Vidyadhar Mahariwala and others, (2008) 12 SCC 701.
In respect of the assessment of monthly income, it is submission of the appellants that, they were specifically adduced the evidence of Husainabee Aslamkha, who is the widow of deceased and one Jiaullakhan, who was a co-employee and was working as a Coolie with deceased. From their evidence, it was established that a daily income of the deceased was Rs.200/- per day. Therefore, learned Tribunal ought to have considered monthly income of deceased Rs.6000/- per month.
In the present appeal, no one appears on behalf of owner of the vehicle, though served.
In the background of rival submission of both the parties, I am of the opinion that though driver of the offending vehicle was not possessing effective licence on the day of accident, it is not the case that driver was not eligible to hold valid licence. On the contrary, same was under renewal. No evidence is made available on record that owner of the offending vehicle was aware of this factual position and even then he authorised diver to ply the vehicle. In such circumstances, claimants of the deceased cannot be put on hold from receiving the compensation amount for which they are legally entitled.
Furthermore, the Hon’ble Supreme Court consistently of the opinion that in such cases, the principle of ‘Pay and Recover’ is to be followed. In this regard, the judgment of National Insurance Co. Ltd. Vs. Swaran Singh (2004) 3 SCC 297 and National Insurance Co. Ltd. Vs. Baljit Kaur and ors. (2004) ACJ 428 are landmark judgment, which according to me is necessary to follow in the present matter.
In addition to this, it is pertinent to note that recently the Hon’ble Supreme Court of India in case of Akula Narayana Vs. The Oriental Insurance Company Limited and Ors. MANU/SC/1507/2025 on 10.11.2025 in Civil Appeal No. 13509 of 2025, has again held that principle of pay and recover is a recognized principle and consistently followed by the Hon’ble Supreme Court in catena of the cases. Hence, applying the said principle, the Hon’ble Supreme Court has observed in paragraph 12 of the judgment as under:
“12.Where the contract of insurance is not disputed, even on breach of insurance conditions, this Court had allowed recovery of compensation from the insurer by giving right to the insurer to recover the same from the vehicle owner3. The pay and recover principle has been consistently followed even though it was doubted in a reference which remained unanswered. Taking a conspectus of various pronouncements, this Court recently in Rama Bai v. Amit Minerals MANU/SC/1331/2025 again applied the said principle and while allowing the appeal of the claimant directed that the insurance company shall satisfy the award and may recover from the insured.”
In view of this consistent view of the Hon’ble Supreme Court, I am of the opinion that though on the day of accident, the driver of the offending vehicle was not holding the effective licence, the Insurance Company cannot be exonerated from payment of compensation to the claimants.
In respect of assessment of income of the deceased, admittedly, the appellant No.1 and one Jiaullakhan were examined before the Tribunal. Both these witnesses categorically stated that at the time of accident, the deceased was earning Rs.6000/- per month. This evidence is not shaken during cross-examination, at the incident of respondent. So also, no contrary evidence is placed on record by the Tribunal.
In light of this factual position, the learned Counsel for the appellants have relied upon the judgment of Hon’ble Supreme Court of India in case of Chandra and Ors. Vs. Mukesh Kumar Yadav and Ors. decided on 01.10.2021, in Civil Appeal No. 6152 of 2021. In para 10 as under:
“10.It is the specific case of the claimants that the deceased was possessing heavy vehicle driving licence and was earning Rs. 15000/- 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. 15000/-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 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. 15000/- per month. In the case of Minu Rout and Anr. v. Satya Pradyumna Mohapatra and Ors. MANU/SC/0912/2013 : (2013) 10 SCC 695 this Court while dealing with the claim relating to an accident which occurred on 08.11.2004 has taken the salary of the driver of light motor vehicle at Rs.6000/- per month. In this case the accident was on 27.02.2016 and it is clearly proved that the deceased was in possession of heavy vehicle driving licence and was driving such vehicle on the day of accident. Keeping in mind the enormous growth of vehicle population and demand for good drivers and by considering oral evidence on record we may take the income of the deceased at Rs. 8000/- per month for the purpose of loss of dependency. Deceased was aged about 32 years on the date of the accident and as he was on fixed salary, 40% enhancement is to be made towards loss of future prospects. At the same time deduction of 1/3rd is to be made from the income of the deceased towards his personal expenses. Accordingly the income of the deceased can be arrived 19-11-2025 (Page 3 of 4) Bombay at Rs. 7467/- per month. By applying the multiplier of '16' the claimants are entitled for compensation of Rs. 14,33,664/-. As an amount of Rs. 10,99,700/- is already paid towards the loss of dependency the Appellant-parents are entitled for differential compensation of Rs. 3,33,964/-. Further in view of the judgment of this Court in the case of Magma General Insurance Co. Limited v. Nanu Ram @ Chuhru Ram and Ors. MANU/SC/1012/2018 : (2018) 18 SCC 130 the Appellants are also entitled for parental consortium of Rs. 40,000/- each. The finding of the Tribunal that parents cannot be treated as dependents runs contrary to the judgment of this Court in the case of Sarla Verma (Smt.). and Ors. v. Delhi Transport Corporation and Anr. MANU/SC/0606/2009 : (2009) 6 SCC 121. The judgment in the case of Kirti and Anr. v. Oriental Insurance Co. Limited MANU/SC/0004/2021 : (2021) 2 SCC 166 relied on by the counsel for the Respondent would not render any assistance in support of his case having regard to facts of the case and the evidence on record.”
Considering the law laid down by the Hon’ble Supreme Court, wherein it is categorically held that in a case that, the oral evidence is available on record, which established monthly income of the deceased than without justified reason, adoption of lowest tire of minimum wages while computing the income is not permissible. Hence, according to me, when the evidence was made available before the Tribunal, to assess the income of deceased, the same needs to accept in the matter. For the aforesaid reasons, the indulgence of this Court is necessary in the matter.
In view of the judgment of Sarla Verma Vs. Delhi Transport Corporation and another (2009) 6 SCC 121 and National Insurance Company Limited Vs. Pranay Sethi and others reported in (2017) 16 SCC 680, according to me, the appellants/claimants are entitled for the compensation by considering his monthly income of Rs.6000/- as under:
Calculation of Compensation
| Compensation Heads Amount Awarded | Amount Awarded | Monthly Income |
| Monthly Income | Rs.6000/- (200 x 30 days) | National Insurance Co. Ltd. Vs Pranay Sethi (2017) 16 SCC 680 Para 37, 39, 41, 42 and 59.4 |
| Yearly Income | Rs.72,000/- (6000 x 12M) | |
| Future prospectus (40%) (Age being 30 years) | (72,000 + 28,800) = RS 1,00,800/- | |
| Deduction (1/5) | Rs.1,00,800/- (-) 20,160 = Rs. 80,640/- | |
| Multiplier (17) | Rs.80,640/- X 17 years = Rs 13,70,880/- | |
| Loss of Income of the Deceased. | Rs 13,70,880/- | |
| Loss of Estate | Rs. 15,000/- | National Insurance Co. Ltd. Vs. Pranay Sethi. |
| Loss of Funeral Expenses Loss of Consortium | Rs.15,000/-Rs. 40,000 x 5 = Rs 2,00,000/- | (2017) 16 SCC 680 Para no. 59.8 |
| Total 16,00,880/- | ||
Hence, I proceed to pass the following order:
ORDER
The First Appeal is partly allowed. ii) The judgment and order passed by learned Motor Accident Claims Tribunal, Khamgaon dated 25.02.2009 in M.A.C.P. No.12/2002 is hereby modified to the extent that the appellants are entitled for compensation of Rs.16,00,880/- together with interest at the rate of 7.5% per annum from the date of petition, till the amount is fully realized.
iii) The order of the Tribunal rejecting in the claim petition against the Insurance Company is hereby quashed and set aside.
iv) Needless to mention that amount already paid or deposited shall deduct from enhanced compensation amount.
The respondent- Insurance Company is hereby directed to deposit the compensation amount to the Registry of this Court within a period of four months.
vi) The Insurance Company is at liberty to recover the said amount by filing the execution proceeding against the owner of the offending vehicle.
vii) After depositing the amount before the Registry of this Court, the present appellants are entitled to withdraw the compensation amount, subject to the satisfaction of the Registrar (Judicial).
viii) Decree be drawn up accordingly.
The First Appeal stands disposed of in above terms. No order as to the costs.