Uttarakhand High Court
Smt. Basanti Bisht And Others … vs Mahendra Kumar And Another on 13 February, 2026
Author: Pankaj Purohit
Bench: Pankaj Purohit
HIGH COURT OF UTTARAKHAND AT NAINITAL
Appeal from Order No.400 of 2012
Smt. Basanti Bisht and others .....Appellants
Vs.
Mahendra Kumar and another .....Respondents
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Presence:-
Mr. Raveendra Singh Bisht, Advocate for the appellants.
Mr. M.K. Goyal, Advocate for the respondents.
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With
Appeal from Order No.361 of 2012
The New India Assurance Co. Ltd. .....Appellant
Vs.
Basanti Bisht and others .....Respondents
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Presence:-
Mr. M.K. Goyal, Advocate for the appellant.
Mr. R.S. Bisht, Advocate for the respondent/claimant.
There is no representation for respondent no.4.
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Hon'ble Pankaj Purohit, J.
These two appeals arise out of a common
judgment and award and involve identical questions of fact
and law. Accordingly, both the appeals are being disposed
of together by this common judgment.
2. The claim petition was filed by the
appellants/claimants Smt. Basanti Devi and others, under
Sections 166 and 140 of the Motor Vehicles Act, 1988,
seeking compensation of ₹8,25,605/- on account of the
death of Kishan Singh Bisht in a road accident. The Appeal
from Order No.400 of 2012 is filed by the
appellants/claimants for enhancement while Appeal from
Order No.361 of 2012 by the insurance company for
quashing the impugned award.
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3. The brief facts of the case are that on
06.05.2008, the deceased had gone to Bhowali to sell peas
and was returning to his village Bana in Jeep No. UP-02C-
5712. At about 11:30 A.M., when the vehicle reached
approximately one kilometre ahead of Laxmikhan on the
Bhowali-Mukteshwar motor road, the driver, due to rash
and negligent driving, lost control of the vehicle.
Consequently, the jeep fell into a deep gorge, resulting in
the death of Kishan Singh Bisht on the spot. Other
passengers travelling in the jeep also sustained serious
injuries. Due to the sudden and untimely death of the
deceased, petitioner no.1 was deprived of the love and
companionship of her husband, while petitioner nos.2 and
3 were deprived of the love, affection, and guidance of their
father. Hence, the petitioners prayed for payment of
compensation against the opposite parties.
4. In Appeal No. 400 of 2012, the
appellant/claimant pleaded that the deceased was the sole
breadwinner of the family consisting of his wife and two
children, was aged about 44 years at the time of the
accident, and was earning a monthly income of ₹4,475/-
from agricultural work. Due to his untimely death, the
family lost its only source of livelihood. It was further
pleaded that the learned Tribunal erred in deducting one-
third (1/3rd) of the income of the deceased towards personal
and living expenses, whereas all three claimants were fully
dependent upon him. As per settled judicial precedents, the
deduction ought to have been one-fourth (1/4th). The
claimant further contended that the Tribunal failed to
consider future prospects of the deceased and wrongly
assessed funeral expenses at a meagre amount of ₹5,000/-.
It was also submitted that additional compensation ought
to have been awarded under the conventional heads.
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Opposite Party No.1, Mahendra Kumar alias Guddu, the
owner-cum-driver of the vehicle, denied the allegations for
want of knowledge. He submitted that the vehicle was duly
insured with Opposite Party No.2, The New India Assurance
Company Limited. He further claimed that the accident
occurred due to mechanical failure and not due to rash or
negligent driving. According to him, the compensation
claimed was exaggerated.
Opposite Party No.2 (Insurance Company) denied the
material allegations and pleaded that it was not liable to
pay compensation as the vehicle was being driven in
violation of the terms and conditions of the insurance
policy. It was specifically pleaded that the driver did not
possess a valid and effective driving licence on the date of
the accident. The insurance company also claimed the right
to contest the petition on all grounds available to the
owner.
5. On the basis of the pleadings of the parties, the
following issues were framed:
A. Whether on 06.05.2008, Kishan Singh had gone to
Bhowali to sell peas and was returning in Jeep No. UP-02C-
5712, and at about 11:30 A.M., when the vehicle reached
about one kilometre ahead of Laxmikhan on the Bhowali-
Mukteshwar motor road, due to rash and negligent driving,
the vehicle went out of control and fell into a ditch about 25
feet deep, resulting in his death on the spot?
B. Whether the jeep in question was not being driven in
accordance with the insurance conditions on the date of
the accident?
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C. Whether the driver of the jeep did not have a valid
driving licence on the date of the accident, and if so, what
is its effect?
D. Whether the petitioners are entitled to any
compensation; if so, how much and from which party?
While deciding Issue No.1, the Tribunal considered both
oral and documentary evidence on record. PW-3 Harshit
Sah, an independent eyewitness, categorically stated that
he was travelling in the jeep at the time of the accident and
that the driver was driving the vehicle rashly and
negligently, as a result of which the jeep went out of control
and fell into a deep ditch. His testimony remained
unshaken and unrebutted. A First Information Report was
lodged against the driver Mahendra Kumar under Sections
279, 337, and 304-A IPC, and a charge-sheet was filed after
investigation. The driver himself admitted during cross-
examination that a criminal case had been registered
against him. Although Opposite Party No.1 claimed
mechanical failure, no specific evidence or explanation
regarding the nature of such failure was produced. Upon
appreciation of the evidence, the Tribunal rightly held that
the accident occurred solely due to rash and negligent
driving of the jeep by Opposite Party No.1, resulting in the
death of Kishan Singh Bisht. Issue No.1 was accordingly
decided in favour of the petitioners.
Issue Nos.2 and 3, being interconnected, were decided
together. From the documentary evidence, it was
established that the driving licence of Mahendra Kumar
was valid from 13.10.2004 to 12.10.2007 and was renewed
only on 04.07.2008. The accident occurred on 06.05.2008,
during which period the licence was not valid. Thus, on the
date of the accident, the driver did not possess a valid and
5effective driving licence, amounting to a breach of the terms
and conditions of the insurance policy. Accordingly, Issue
Nos.2 and 3 were decided against the owner and in favour
of the insurance company, subject to the principle of “pay
and recover”.
While deciding Issue No.4, the Tribunal considered that the
deceased was aged 44 years and was earning his livelihood
through farming. No documentary proof of income was
produced. Therefore, treating the deceased as an ordinary
labourer, his annual income was assessed at ₹36,000/-.
After deducting one-third towards personal expenses, the
annual dependency was assessed at ₹24,000/-. Applying
the multiplier of 14, as per the age bracket laid down in
Sarla Verma & Ors. v. Delhi Transport Corporation & Anr.,
reported in (2009) 6 SCC 121, the loss of dependency was
calculated as ₹3,36,000/-. Further, the petitioners were
awarded ₹5,000/- towards funeral expenses and ₹5,000/-
towards loss of consortium and mental agony. Thus, the
total compensation awarded was ₹3,46,000/-.
6. In AO No. 361 of 2012 arising out of the same
incident, filed by the insurance company against the
judgment and order dated 28.04.2012 passed by the
M.A.C.T., it was pleaded that since the driver-cum-owner of
the vehicle did not possess a valid driving licence on the
date of the accident, the insurance company was not liable
to pay compensation and that the entire liability should be
fastened upon the owner-driver of the offending vehicle.
7. Having heard learned counsel for the parties and
upon careful perusal of the pleadings, evidence on record,
and the impugned judgment, this Court finds that both
appeals arise out of the same motor vehicle accident and
are therefore being decided together. As regards the appeal
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filed by the claimants seeking enhancement of
compensation, this Court finds substance in the
submissions advanced on their behalf. The deceased was
aged about 44 years at the time of the accident. Though no
documentary evidence of income was produced, the
Tribunal assessed his annual income at ₹36,000/-, which
is reasonable considering the year of accident and the
nature of avocation. However, the Tribunal erred in
deducting one-third of the income towards personal
expenses. Since the deceased left behind three dependants,
the appropriate deduction should be one-fourth, as held in
Sarla Verma (supra).
8. Further, the Tribunal failed to grant any amount
towards future prospects. In view of the Constitution Bench
judgment of the Hon’ble Supreme Court in National
Insurance Company Limited v. Pranay Sethi & Ors., reported
in (2017) 16 SCC 680, an addition towards future prospects
is mandatory even in the case of self-employed persons.
Since the deceased was below 50 years of age, an addition
of 25% is warranted. Accordingly, the annual income
stands enhanced to ₹45,000/-. After deducting one-fourth
towards personal expenses, the annual dependency comes
to ₹33,750/-. Applying the multiplier of 14, the loss of
dependency is ₹4,72,500/-. Under conventional heads, the
claimants are entitled to ₹40,000/- towards loss of
consortium, ₹15,000/- towards loss of estate, and
₹15,000/- towards funeral expenses. Thus, the total
compensation is recalculated at ₹5,42,500/-.
9. Turning now to the appeal preferred by the
insurance company, it stands established from the
evidence on record that the driving licence of the owner-
cum-driver was valid from 13.10.2004 to 12.10.2007 and
was renewed only on 04.07.2008, whereas the accident
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occurred on 06.05.2008. The renewal having been effected
beyond the statutory period contemplated under Section 15
of the Motor Vehicles Act, 1988, there was a clear break in
continuity and the driver did not possess a valid and
effective driving licence on the date of accident. The finding
of breach recorded by the Tribunal, therefore, warrants no
interference.
10. The question, however, is whether such breach
would completely absolve the insurer from liability towards
third-party claimants.
11. The law on the subject has been authoritatively
settled by the Hon’ble Supreme Court in the case of
National Insurance Co. Ltd. v. Swaran Singh reported in
(2004) 3 SCC 297. Relevant paragraph of the said judgment
reads as under:
“83. Sub-section (5) of Section 149 which imposes a
liability on the insurer must also be given its full effect.
The insurance company may not be liable to satisfy the
decree and, therefore, its liability may be zero but it
does not mean that it did not have initial liability at all.
Thus, if the insurance company is made liable to pay
any amount, it can recover the entire amount paid to
the third party on behalf of the assured. If this
interpretation is not given to the beneficent provisions of
the Act having regard to its purport and object, we fail
to see a situation where beneficent provisions can be
given effect to. Sub-section (7) of Section 149 of the Act,
to which pointed attention of the Court has been drawn
by the learned counsel for the petitioner, which is in
negative language may now be noticed. The said
provision must be read with sub-section (1) thereof. The
right to avoid liability in terms of sub-section (2) of
Section 149 is restricted as has been discussed
hereinbefore. It is one thing to say that the insurance
companies are entitled to raise a defence but it is
another thing to say that despite the fact that its
defence has been accepted having regard to the facts
and circumstances of the case, the Tribunal has power
to direct them to satisfy the decree at the first instance
and then direct recovery of the same from the owner.
These two matters stand apart and require contextual
reading.”
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12. The said principle has been consistently
reaffirmed, including in the case of Shamanna v. Divisional
Manager, The Oriental Insurance Co. Ltd. reported in (2018)
9 SCC 650, wherein the Hon’ble Supreme Court deprecated
the practice of leaving claimants to recover compensation
from owners or other parties and reiterated that “pay and
recover” is an equitable and legally permissible course
where circumstances so demand. Applying the aforesaid
principles to the facts of the present case, this Court is of
the considered view that the ends of justice would be best
served by directing the appellant-State to satisfy the award
in the first instance, with liberty to recover the amount so
paid from the person(s) ultimately found responsible in
accordance with law. Such a course balances the equities
between the parties and ensures that the claimant is not
made to suffer on account of disputes beyond his control.
Accordingly, while the appeal preferred by the State
challenging its liability is liable to be dismissed, the
appellant-State shall have the right to recover the amount
of compensation from the owner and driver of the offending
vehicle, after satisfying the award.
13. In view of the above authoritative
pronouncements and considering that the present case
involves a third-party claim under Section 166 of the Act,
complete exoneration of the insurer would defeat the
beneficial object of Chapter XI of the Motor Vehicles Act.
The breach established is in the nature of non-renewal
beyond the statutory grace period and not a case of fake
licence or disqualification. The principle of “pay and
recover” appropriately balances contractual rights and
statutory obligations under this beneficial legislation.
14. Accordingly, the insurance company shall pay
the compensation to the claimants in the first instance,
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with liberty to recover the same from the owner-driver of
the offending vehicle.
15. AO No.400 of 2012 is partly allowed and the
compensation is enhanced to ₹5,42,500/- with applicable
interest.
16. AO No. 361 of 2012 is dismissed, subject to the
insurance company’s right to recover the amount from the
owner-driver.
17. The claimants are entitled to a compensation of
₹5,42,500/- along with interest at the rate of 7% per
annum from the date of filing of the claim petition till
actual payment. The amount shall be deposited before the
Claims Tribunal concerned along with accrued interest
within two months from today, adjusting the amount of
compensation, if any, already received by the
appellants/claimants.
(Pankaj Purohit, J.)
13.02.2026
SK
