National Insurance Co. Ltd. Faizabad Thru. Manager Legal vs Reeta & Ors.

Heard Shri Inder Preet Singh Chadha, learned counsel for the appellant/Insurance Company as well as Ms. Sarika Dwivedi, holding brief of Shri Mukesh Singh, learned counsel for the respondents/claimants.

The instant appeal under section 173 of the Motor Vehicle Act, 1988, has been preferred against the judgment and order dated 09.01.2024 passed by the Motor Accident Claims Tribunal, Faizabad (hereinafter referred to as the 'Tribunal') in M.A.C.P. No.21 of 2018, challenging the quantum of compensation.

On 16.11.2017 at about 10:00p.m., one Sabhajeet Tadmali was walking back home, when he reached near Bariyawan crossing, under the jurisdiction of Police Station Kotwali Akbarpur, Ambedkar Nagar, a Scorpio vehicle (bearing registration no.UP32EK7689), which was being driven rashly and negligently, dashed into him, as a result of which, he sustained serious injuries and he was taken to the District Hospital, Ambedkar Nagar. Looking into his serious condition, he was referred to the Trauma Centre Joint Hospital, Ambedkar Nagar where during the course of treatment, he succumbed to the injuries.

The First Information Report (FIR) was lodged in the concerned police station and postmortem examination of the body of deceased was conducted. Thereafter, the family members of the deceased filed a claim petition before the learned Tribunal, claiming compensation of Rs.49,70,000/- stating that at the time of the alleged accident, the deceased was 50 years of age and was engaged in the business of selling 'tadi' being a registered tadi seller. A written statement was filed by the appellant-Insurance Company, denying the factum of the accident as well as the involvement of the vehicle in question. Notices were issued to defendant Nos. 2 and 3, who are the owner and driver of the offending vehicle, respectively. Despite sufficient service of notice, none appeared on their behalf before the Tribunal. Consequently, the Tribunal proceeded against them ex parte and awarded the compensation to the claimants.

The Tribunal after perusing the pleadings framed following issues:

After perusing documents, evidence adduced by the parties, and the arguments raised by the respective counsels, the Tribunal came to the conclusion that the deceased had died because of the accident, which took place on 16.11.2017 by the offending vehicle, which was being driven in rash and negligent manner by its driver. The Tribunal further held that the driver of the offending vehicle had a valid driving licence and the offending vehicle was duly insured with the appellant/Insurance Company at the time of alleged accident. Looking into the age, earning capacity of the deceased and other relevant factors, the Tribunal awarded a compensation of Rs.7,20,000/- along with simple interest at the rate of 7% per annum in favour of the claimants by means of the impugned judgement and award.

Being aggrieved by the judgment and award passed by the Tribunal, the appellant-Insurance Company has assailed the same by filing the present appeal.

Learned counsel for the appellant-Insurance Company submitted that the offending vehicle had been stolen and the alleged accident occurred after that. He further submitted that, since the vehicle was stolen and was not in the possession or control of either the registered owner or the charge-sheeted driver at the time of the alleged accident, the Insurance Company cannot be held liable to pay the compensation.

Secondly, he submitted that the name of the driver of the offending vehicle was recorded as Mohd. Imran, son of Munir Khan, resident of Village Abdullah Purwa, Hardoi. However, the extract of the driving licence issued by the Regional Transport Officer, Hardoi, records the name of the driver as Imran Khan, son of Munir Khan. Thus, there is a discrepancy in the name of the driver, inasmuch as the word “Mohd.” is missing from the name and the word “Khan” has been added.

Lastly, he submitted that as per the Aadhaar card of the deceased, he was 51 years old at the time of the alleged accident. Consequently, the multiplier and the future prospects for computing compensation would be modified.

Per contra, Ms. Shrddha Srivastava along with Ms. Sarika Dwivedi, holding brief for Shri Mukesh Singh, learned counsel for the respondents/claimants submitted that the technical investigation report shows that there was damage on the side mirror of the offending vehicle, which goes to show that the offending vehicle had hit the deceased. She further submitted that the evidence of P.W.-2 clearly shows that the vehicle was apprehended by the police as the police had got the information of the alleged accident. She further submits that no evidence has been brought on record to establish that the offending vehicle had been stolen on the date of the alleged accident.

She further submits that there is no material discrepancy in the name of the driver of the offending vehicle, as the alleged discrepancy is confined only to the prefix “Mohd.”. She submits that “Mohd.” is a commonly used prefix in the names of persons belonging to a particular community and, therefore, the omission of the said prefix does not, by itself, establish that the person named in the driving licence was different from the driver of the offending vehicle.

So far as the age of the deceased, she further submitted that as per family register maintained by the Secretary of the Village Panchayat, the deceased was born in 1967. She further submitted that the date of birth mentioned in the Adhaar card is not a conclusive evidence. To buttress her argument, she placed reliance upon the judgement passed by a Division Bench of this Court in the matter of Smt. Parvati Kumari & Ors. vs. State of U.P.& Ors; Misc Bench No.13419 of 2018, wherein the Division Bench held as under:

She also placed reliance upon a judgement passed by Hon’ble Supreme Court in the matter of Saroj & Ors. v. IFFCO-TOKIO General Insurance Co. & Ors., reported in (2024 INSC 816), wherein it has been held that an Aadhaar card is proof of identity and not valid proof of date of birth/age in motor accident compensation.

Learned counsel for the respondents/claimants supports the findings of the Tribunal affirming the liability of the Insurance Company and has raised an oral cross-objection to the effect that the notional income of the deceased assessed by the Tribunal at Rs.5,000/- per month is meager and wholly inadequate. It was further submitted that the learned Tribunal failed to appreciate that the deceased was an authorised licensee engaged in the extraction of ‘tadi’ from palm trees and, at the very least, the minimum wages applicable at the relevant time ought to have been taken into consideration for determining his monthly notional income. It was further submitted that, as per the notification dated 04.01.2018 issued by the Office of the Labour Commissioner, State of Uttar Pradesh, G.T. Road, Kanpur, the minimum wages prescribed for unskilled labours were Rs.7,400.46/- per month. Therefore, the said amount ought to have been taken as the monthly income of the deceased for the purpose of computation and determination of the compensation payable to the claimants.

She further submitted that the compensation awarded under the conventional heads is not awarded as per the ratio laid down by Hon’ble Supreme Court in the matter of National Insurance Co. Ltd. vs. Pranay Sethi and others, reported in 2017 ACJ 2700. The said ratio was pronounced by the Hon’ble Supreme Court in the year 2017, wherein Hon'ble Supreme Court has clearly stated that on every three years the value of compensation under the conventional head would increase by 10% on every three years. In this case the award was passed on 09.01.2024 and accordingly 10% increased amount ought to have awarded under each heads of amount awarded under conventional heads, after every three years from the date of pronouncement of Pranay Sethi (supra).

She further submitted that each of the claimants were entitled to compensation under the head of loss of consortium. It was submitted that there were three claimants (wife, son and daughter), but the Tribunal awarded compensation towards loss of consortium to only one claimant, which is contrary to the ratio laid down by the Hon'ble Supreme Court in the matter of Magma General Insurance Company Limited Vs. Nanu Ram alias Chuhru Ram and others, reported in (2018) 18 SCC 130.

In rejoinder, learned counsel for the appellant Insurance Company vociferously opposed the oral cross-objection with regards to the quantum of compensation and submitted that no appeal seeking enhancement of the compensation has been filed by the claimants / respondents. He further contended that the claimants / respondents cannot raise such objection at the stage of present appeal.

No other argument raised by the learned counsel for the parties.

Heard learned counsel for the parties and perused the record.

The issues involved in this appeal for adjudication are as follows:

The grounds and arguments raised by the parties are dealt in seriatim.

So far as the first argument advanced by learned counsel for the appellant that the offending vehicle had been stolen and was not in the possession or control of either the registered owner or the charge-sheeted driver at the time of the alleged accident and, therefore, the Insurance Company cannot be held liable to pay the compensation, is concerned, no First Information Report was lodged or complaint was filed by the owner of the vehicle and nothing was brought on record to establish that the offending vehicle had been stolen prior to the date of the alleged accident. In absence of any cogent and substantial evidence establishing the theft of the offending vehicle, the submission advanced by learned counsel for the appellant cannot be accepted.

So far as the second argument advanced by learned counsel for the appellant with regards to the discrepancy in the name of driver of an offending vehicle is concerned, the Tribunal has held as under:

On a bare perusal of the finding recorded by the Tribunal with regard to the discrepancy in the name of the driver of the offending vehicle, this Court is of the considered view that the said finding is perfectly justified and does not warrant any interference.

So far as the age of the deceased is concerned, the Tribunal, relying upon the postmortem report and the family register, has held that the deceased was 50 years of age at the time of the alleged accident. So far as the postmortem report is concerned, the age mentioned therein cannot said to be a conclusive evidence of the actual age of the deceased. Although the family register has been proved, wherein the year of birth of the deceased is mentioned as 1967 but the date and month is not mentioned, no other documentary evidence has been placed on record to establish his exact date of birth. Since the alleged accident occurred on 16.11.2017, it can reasonably be presumed that the deceased was above 50 years and below 51 years of age at the time of the accident.

As per Pranay Sethi (supra), the principles of Sarla Verma v. DTC, reported in (2009) 6 SCC 121, would be applicable. Wherein a multiplier of 13 is provided for the age from 46 to 50 years and Multiplier of 11 is provided for the age from 51 to 55. The relevant extract of the ratio of Sarla Verma (supra) is hereinbelow:

The above ratio clearly creates a lacuna, as to what will be the multiplier when the age is between 50 years to 51 years. The Hon'ble Supreme Court in case of Shashikala Vs. Gangalashmamma and another (Civil Appeal No.2836 of 2015) (Arising out of SLP (Civil) No.6061 of 2014), while deciding appeal regarding MACT case, has held as under:

In the matter of Shubhankit Singh and 2 Others v. Jem Pack Enterprises through Vaqeel Ahmad, Unnao and 2 Others; reported in 2026 AHC-LKO 51053 : FAFO No. 194 of 2025, wherein, the deceased was aged 50 years and 9 months at the time of the accident, this court has considered the completed age of the deceased to be just and appropriate for determining the multiplier in a claim for compensation under the Motor Vehicles Act. The same principle was also reiterated by this court in the matter of Smt. Sabbo and Ors. v. Bharti Axa General Insurance Co. Ltd., Lko. and Ors.; reported in 2026 AHC-LKO 49365 : FAFO No. 491 of 2018.

In the absence of precise and exact age, it would be just and apt to take the lower age of 50 years as the completed age of the deceased. The object of the Motor Vehicles Act is intended to the "just compensation" to the victims and their dependents rather than to defeat legitimate claims on technicalities.

In view of the above discussion, this Court has no hesitation in holding that, for the purpose of applying the appropriate multiplier, the completed age of the deceased has to be taken into consideration. Accordingly, this Court is of the considered view that the Tribunal has rightly taken the age of the deceased as falling within the age bracket of 45–50 years for determining the applicable multiplier and the corresponding addition towards future prospects. Since the deceased had completed 50 years of age at the time of the accident, the appropriate multiplier applicable to the present case would be 13. Consequently, the Tribunal has rightly adopted the multiplier of 13, and no interference on this count is warranted.

Thus, there being no merit in the arguments advanced by the appellant-Insurance Company, Issue No. (i) is answered in negative.

Since Issue Nos.(ii) and (iii) are interrelated and dependent upon each other, they are being considered and decided together.

With regard to the quantum of compensation awarded by the Tribunal, it is evident that the Tribunal has assessed the monthly income of the deceased at Rs.5,000/-, which appears to be inadequate in view of the notification relied upon by learned counsel for the respondents/claimants. The amount awarded under the conventional heads also appears to be contrary to the principles laid down by the Hon’ble Supreme Court in Pranay Sethi (supra).

It is well settled that the Courts are bound to award just and reasonable compensation. Therefore, this Court cannot turn a blind eye to the objection raised by the respondents/claimants, particularly when the grounds raised by them for enhancement of compensation have sufficient merit.

Now a question arises for consideration before this court as to whether, in absence of any appeal seeking enhancement of compensation, can this Court enhance the amount of compensation awarded by the Tribunal.

Since it is the statutory obligation of the Tribunal and also the Court to do complete justice to the parties and award ‘just compensation’, there is no restriction to enhance the compensation in appropriate case even in absence of any cross-appeal or an appeal seeking enhancement of compensation.

The provisions of the Motor Vehicles Act, 1988 gives paramount importance to the concept of 'just and fair' compensation. It is a beneficial legislation which has been framed with the object of providing relief to the victims or their families. Section 168 of the MV Act deals with the concept of 'just compensation' which ought to be determined on the foundation of fairness, reasonableness and equitability. It is also essential to note that in the scheme of the Motor Vehicle Act, 1988, the burden of awarding the compensation is imposed upon the Tribunal in terms of the mandate of Section 168, which reads as under:

Although the determination of compensation can never be arithmetically exact or perfect, an endeavor should be made by the Court to award just and fair compensation irrespective of the amount claimed by the claimants. In the matter of Sarla Verma (supra), the Hon’ble Supreme Court has held as under:

It is also essential to note the procedure and powers of the claims tribunal, which are enumerated in Section 169 of the Motor Vehicle Act reads as under:

It is also essential to note that the appeals are prescribed against the award of a Claims Tribunal to the High Court under section 173 of the Motor Vehicle Act, 1988. Although the nature and procedure to be followed in exercise of jurisdiction to be exercised by the Claims Tribunal is prescribed under Section 169, the procedure to be followed by the High Court in appeals is silent in the Act and even in the Rules framed by the State of Uttar Pradesh, namely, The Uttrar Pradesh Motor Vehicles Rules, 1998.

Order XLI of the Code of Civil Procedure, 1908 (hereinafter referred as ‘CPC’), lays down the general provisions governing appeals before the High Court. Order XLI Rule 33 of the CPC confers wide powers upon the appellate court to pass such decree or order as the case may require. Before proceeding further, this Court deems it appropriate to look into the provisions of Order XLI Rule 33 of the CPC, which is reproduced herein-under:

From bare perusal of Order 41, Rule 33 of CPC, it is clear that the appellate courts are empowered to make whatever order it thinks fit and proper to do complete justice, not only between the appellant and the respondent but also between one respondent and another respondent. It empowers the appellate court not only to give or refuse relief to the appellant by allowing or dismissing the appeal, but also to give such other relief to any of the respondent as the case may require.

The Hon’ble Supreme Court in the matter of Mahant Dhangir v. Madan Mohan, reported in 1987 Supp SCC 528, has explained the provisions of Order XLI Rule 33 C.P.C. in following words :

In the matter of Pralhad v. State of Maharashtra, reported in (2010) 10 SCC 458, the Hon’ble Supreme Court has held as under :

In fact, the ambit of this provision has come up for consideration in several decisions of the Hon'ble Supreme Court as well as various High Courts. Commenting on this power, Mulla (Civil Procedure Code, 15th Edn., p. 2647) observed that this Rule is modeled on Order 59 Rule 10(4) of the Supreme Court of Judicature of England, and Mulla further opined that this rule gives the court ample power to make the order appropriate with a purpose to do complete justice between the parties.

Apart from the above, there can be situation from the other side of lens, where the Insurance Company files an appeal challenging the award granted by the Tribunal, the Claimant without filing a cross appeal or cross objection possesses the right to defend the amount which has been granted by the Tribunal. The two Judges Bench of the Hon’ble Supreme Court has considered this aspect in the matter of Ranjana Prakash v. Divl. Manager, reported in (2011) 14 SCC 639, wherein it was held as under :

While addressing a case where the bench of Bombay High Court has declined to grant enhancement of compensation on the ground that the claimants fail to file cross appeal, the Three-Judge Bench of Hon'ble Supreme Court in the matter of Surekha v. Santosh, reported in (2021) 16 SCC 467 ; Civil Appeal No. 476 of 2020, set aside the High Court’s refusal to enhance the compensation and awarded enhanced and just compensation to the claimants. The Hon’ble Supreme Court clearly observed that it is a well-settled principle of law that, while dealing with claims for compensation arising out of motor accidents, the Court should not adopt a hyper-technical approach. The primary duty of the Court is to ensure "just compensation" which is to be awarded to the affected person or claimants. The relevant para is extracted as under :

Also, in the matter of The Oriental Insurance Co. Ltd. V. Sardar Singh & Ors., (SLP (C) No(s). 14319 of 2020), the Hon’ble Supreme Court recently affirmed the judgment passed by the Delhi High Court, wherein the High Court enhanced the award in an appeal filed by the Insurance Company, despite there being no cross-appeal or cross-objection filed by the claimants/family members. The Hon'ble Supreme Court while affirming the decision of the High Court has opined as under :

A similar issue was raised before this court in the matter of New India Assurane Co. Ltd. v. Neelam Jaiswal, reported in 2020 SCC OnLine All 85, wherein the issue before the Court was whether, in an appeal preferred by the Insurance Company on a ground other than the quantum of compensation, and in the absence of any cross-appeal or cross-objection by the claimants, the Court would be justified in enhancing the amount of compensation in exercise of the powers conferred under Order XLI Rule 22 of the Code of Civil Procedure, 1908. The said issue was considered in detail by this Court with reference to the decisions of the Hon’ble Supreme Court, and, upon such consideration, the Court ultimately held as under:

Even in the matter of New India Assurance Co. Ltd. v. Anil Kumar, reported in 2023 SCC OnLine All 3226, this court has held as under :

This court also in the matter of United India Insurance Co. Ltd. v. Smt. Sunita Devi; reported in 2026 AHC 103621 ; (FAFO No.2223 of 2016), has taken the same view with regard to awarding ‘just compensation’ to the claimants, even in the absence of a cross-appeal or cross-objection. The relevant para is extracted as under :

In view of the foregoing discussion, this Court is of the considered view that there is no legal embargo against enhancement of compensation by the Court. Rather, the mandate of law is to ensure that the claimants are awarded ‘just compensation’ in accordance with the applicable statutory provisions and settled principles of law. In discharge of such mandate, the Court is empowered to enhance the compensation awarded where the amount determined by the Tribunal is found to be inadequate or not in accordance with law, and also not in sync with the ratio laid down by the Hon’ble Supreme Court in its various judgements. Such exercise of jurisdiction is legally permissible even in the absence of an appeal or cross-objection preferred by the claimants, particularly in view of the law laid down by the Hon’ble Supreme Court in Surekha (supra).

Therefore, it is clear that where an appeal is preferred by the Insurance Company challenging the award, the claimants are not precluded from contending that the compensation awarded by the Tribunal does not constitute ‘just compensation’ as per law. The mere absence of an appeal or cross-objection on the part of the claimants cannot operate as a legal impediment to the Court determining and awarding just compensation in accordance with law. Once the correctness and adequacy of the award are brought under consideration in the appeal and even if the claimants have not specifically raised the issue with regards to enhancement of compensation, the Court is duty-bound to examine whether the compensation awarded conforms to the statutory mandate and, if found deficient, the Court is duty-bound to enhance the same so as to ensure that the claimants receive ‘just compensation’ as per law.

Thus, there being no merit in the arguments advanced by the appellant-Insurance Company, Issue No.(ii) and (iii) are also answered in negative and in favour of the Claimants/respondents.

In view of the aforesaid legal position, this Court proceeds to determine the just and reasonable compensation payable to the claimants.

The Tribunal has assessed the monthly income of the deceased at Rs.5,000/-, as no evidence has been brought on record to prove his income.

The Hon’ble Supreme Court in the matter of Chandra @ Chanda @ Chandraram & Anr. v. Mukesh Kumar Yadav & Ors., reported in (2022) 1 SCC 198, has clearly held that the notional income ought to be determined by the yardstick of Minimum Wages applicable in the respective area at the relevant point of time, in absence of any documentary evidence, but at the same time it cannot be treated as the absolute basis for determining the income. The relevant para is extracted as under :

In the present case, the deceased was engaged in the job of extracting ‘tadi’ from the palm trees and was an authorized licensee. In a worst scenario, even if assuming that he was working as unskilled labour at the time of alleged accident, the awarded notional income seems to be inadequate. As per the Notification dated 04.01.2018, issued by the Office of Labour Commission Uttar Pradesh, the minimum wages for an unskilled labour was Rs.7400.46/- per month, on the date of the accident. Thus, treating the deceased as an unskilled worker, it would be appropriate to determine the compensation payable to the claimants by taking the notional monthly income of the deceased at Rs.7,400.46/- per month.

As far as the compensation awarded under the conventional head i.e. Rs.15,000/- towards funeral expenses, Rs.15,000/- towards loss of estate and Rs.40,000/- towards loss of consortium are concerned, the same are already awarded by the Tribunal in accordance with the ratio laid down by the Hon’ble Supreme Court in the matter of National Insurance Co. Ltd. vs. Pranay Sethi and others, reported in 2017 ACJ 2700. However, as per the ratio of Pranay Sethi (supra), the amount awarded under the conventional heads is to be enhanced by 10% every three years from the date of the judgment. The relevant para is extracted as under :

The said ratio laid down by the Hon'ble Supreme Court was delivered on 31.10.2017. In the present case, the award of the Tribunal was passed on 09.01.2024, i.e., after more than 6 years from the date of the said ratio. Therefore, the amount awarded under the conventional heads has to be enhanced by 10% in a span of every three years from the date of judgement passed by the Hon’ble Supreme Court in Pranay Sethi (supra). Accordingly, the loss of consortium amounts to Rs.44,000/- (Rs.40,000/- + 10% of Rs.40,000/-) after first three years and thereafter to Rs.48,400/- (Rs.44,000/- + 10% of Rs.44,000/-). Similarly, the amount towards funeral expenses comes to Rs.18,150/-, and the loss of estate amounts to Rs.18,150/-.

It is now well settled by the The Hon'ble Supreme Court in the matter of New India Assurance Co. Ltd. v. Somwati, reported in (2020) 9 SCC 644, that the loss of love and affection as well as loss of consortium are not two different heads. The relevant extract of Somwati (supra) is hereinbelow:

In the present case, a sum of Rs. 40,000/- has been awarded under the head of “loss of love and affection”. However, in view of the ratio laid down in Somwati (supra), “loss of love and affection” is no longer a separate head of compensation and is subsumed within the head of “loss of consortium”.

Further, even awarding a sum of Rs. 40,000/- towards consortium is also contrary to the ratio laid down by the Hon’ble Supreme Court in Pranay Sethi (supra) and Magma General Insurance Company Limited Vs. Nanu Ram alias Chuhru Ram and others, reported in (2018) 18 SCC 130.

With regard to the award of separate consortium to each of the claimants, the same ought to have been awarded at the rate of Rs. 48,400/- to each claimant. The relevant para of Nanu Ram (supra) is extracted as under :

In view of the aforesaid settled legal position, and since in the present case, there are three claimants (wife and two children), wife is entitled to get loss of spousal consortium of Rs.48,400/- and children is entitled to get loss of parental consortium of Rs.48,400/- each. Thus, this court has to award enhanced amount of Rs.48,400/- under the head of loss of consortium separately to all three claimants who had preferred the claim before the Tribunal.

In view of the aforesaid discussion and observation, the impugned judgment and order dated 09.01.2024 passed by the Tribunal in M.A.C.P. No.21 of 2018 is modified to the following extent:

The Tribunal while providing the amount in terms of this judgment shall adjust the amount, if any, already paid/ provided to the appellants.

With the above modification, the instant appeal is disposed of.

Let lower court record be immediately returned to Court concerned along with a certified copy of this judgment for necessary compliance.