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NON- REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5985 OF 2013

JOSPHINE JAMES      ... APPELLANT VS.

UNITED INDIA INSURANCE CO. LTD. & ANR.  .. RESPONDENTS

J U D G M E N T

V. Gopala Gowda, J.

This  civil  appeal  is  directed  against  the  

judgment  and  award  dated  13.01.2012  passed  by  the  

High Court of Delhi in MAC Appeal No. 433 of 2005 by

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allowing  the  appeal  of  the  respondent  herein  and  

reducing  the  compensation  awarded  by  the  Motor  

Accidents Claims Tribunal (in short ‘the Tribunal’)  

in  suit  No.  778  of  2003  urging  various  facts  and  

legal contentions.

2. The  appellant  widow  is  the  mother  of  the  

deceased who filed claim petition before the Tribunal  

claiming compensation on account of the death of her  

son who was aged about 21 years, in a car accident  

which  occurred  on  12.06.1998.  The  car  (bearing  

registration No. DL 2C F 3431), which he was driving  

from Jaipur to Delhi, was hit by a truck (bearing  

registration No. RJ 14 G 7596), which was owned by  

respondent No.2. and insured with respondent No.1.   

3. The claim petition was filed by the appellant  

before the Tribunal claiming compensation from the  

respondent for the death of her son caused by the  

accident. The claim was contested by the respondents.  

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Five witnesses were examined including the appellant  

herein  who  produced  documentary  evidence  in  

justification of her claim.  The Tribunal accepted  

the claim of the appellant and awarded compensation  

of Rs. 9,00,000/- towards the loss of dependency of  

the appellant which was determined by the Tribunal by  

applying  the  multiplier  of  15  to  the  multiplicand  

which  was  arrived  at  by  taking  two-third  of  the  

monthly salary of the deceased and multiplying the  

amount by 12 months. Under the conventional heads,  

the Tribunal also awarded Rs.15,000/- towards funeral  

expenses and  Rs. 50,000/- towards loss of filial  

affection of the mother. It has further awarded Rs.  

3,42,000/-   in  lump  sum  towards  repair  of  the  

appellant’s  car  which  met  with  the  accident.   In  

total, a sum of Rs. 13,07,000/- was awarded by the  

Tribunal as compensation for the death of her son and  

the  damage  caused  to  her  car  which  met  with  a  

roadside accident, with an interest at the rate of 6%  

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per annum from the date of filing the petition till  

the date of actual payment.

4. The said judgment and award of the Tribunal was  

challenged by the Insurance Company without obtaining  

permission from the Tribunal under Section 170 (b) of  

the Motor Vehicle Act, 1988 (in short ‘the M.V. Act’)  

urging  various  legal  contentions  questioning  the  

correctness of the quantum of compensation awarded in  

favour of the appellant.   

5. The  learned  Judge  of  the  High  Court  in  the  

appeal filed under Section 173 of the M.V. Act, 1988,  

by the Insurance Company, reduced the compensation  

from  Rs.  9,00,000/-  to  Rs.  6,75,000/-  which  was  

arrived at by the following calculation: (Rs. 3750 x  

12 x 15) while affirming the rest of the award.  The  

main  objection  of  the  appellant  was  the  

maintainability  of  the  appeal  by  the  Insurance  

Company on the ground that it is not open to the  

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Insurance  Company  to  challenge  the  quantum  of  

compensation awarded by the Tribunal in favour of the  

appellant.  The High Court, by placing reliance upon  

the judgment of this Court in the case of  United  

India Insurance Co. vs. Bhushan Sachdeva & Ors1, has  

held that the words ‘failed to contest’ in Section  

170 (b) of the MV Act must mean failed to file an  

appeal since appeal is a continuation of the original  

proceedings. The court also noted that the insured  

has not filed an appeal and therefore, permitted the  

Insurance Company to file an appeal for reduction of  

quantum of compensation as awarded by the Tribunal in  

favour  of  the  appellant.  On  the  basis  of  such  

statement, the compensation awarded by the Tribunal  

was reduced by allowing the appeal.   

6. Aggrieved by the order of the learned Single Judge  

of the Delhi High Court, the appellant filed Review  

Petition No. 80 of 2007 in which she has raised the  

1 (2002) 2 SCC 265

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objection on the maintainability of the appeal filed  

by the Insurance Company for reduction of the quantum  

of compensation awarded by the Tribunal. The learned  

counsel for the appellant contended that it is not  

open  for  the  Insurance  Company  to  challenge  the  

quantum  of  compensation  awarded  by  the  Tribunal  

unless it files an application under Section 170(b)  

of the M.V. Act before the Tribunal for obtaining  

permission to contest the case on merits. Otherwise,  

the  Insurance  Company  has  only  limited  right  to  

appeal as per Section 149 (2) of the M.V. Act. The  

Insurance  Company  has  placed  reliance  upon  the  

judgment  of  this  Court  in  the  case  of  Bhushan  

Sachdeva (supra)  decided  by  two  Judge  Bench  on  18.1.2002. The same came to be over-ruled by a three  

Judge Bench of this Court in the case of  National  

Insurance  Company  vs.  Nicolletta  Rohtagi2.  

Therefore, it is contended by the appellant in the  

review petition that the judgment passed by the High  

2 (2002) 7 SCC 456

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Court  in  the  appeal  of  the  Insurance  Company  is  

contrary to the law laid down by this Court in the  

Nicolletta Rohtagi’s case referred to supra.     

7. The learned Judge of the High Court, accepting  

the legal contentions urged by the appellant, allowed  

the review petition. But, the learned Judge of the  

High  Court  had  erroneously  reduced  the  overall  

compensation  from  Rs.13,07,000/-  awarded  by  the  

Tribunal to an amount of Rs. 8,12,000/- by reducing  

the amount under loss of dependency.   

8. Aggrieved by the impugned judgment and award  

passed by the High Court in MAC Appeal no. 433/2005  

and the review petition, the present appeal is filed  

by the appellant urging certain grounds and assailing  

the impugned judgment in allowing the appeal of the  

Insurance Company without following the law laid down  

by this Court in  Nicolletta Rohtagi’s  case (supra)  

and  instead,  placing  reliance  upon  the  Bhushan  

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Sachdeva’s  case  (supra).  Nicolletta  Rohtagi’s  case  

was exhaustively discussed by a three judge bench in  

the case of United India Insurance Company Vs. Shila  

Datta3.   Though  the  Court  has  expressed  its  

reservations  against  the  correctness  of  the  legal  

position in  Nicolletta Rohtagi decision on various  

aspects, the same has been referred to higher bench  

and has not been overruled as yet. Hence, the ratio  

of Nicolletta Rohtagi’s case will be still applicable  

in  the  present  case.  The  appellant  claimed  that  

interference by the High Court with the quantum of  

compensation  awarded  by  the  Tribunal  in  favour  of  

appellant  and  considerably  reducing  the  same  by  

modifying the judgment of the Tribunal is vitiated in  

law.  Therefore, the impugned judgments and awards  

are liable to be set aside.  

9. It is further urged by the learned counsel on  

behalf of the appellant that the learned Judge of the  

3 (2011) 10 SCC 509

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High Court committed serious error in reducing the  

quantum  of  compensation  and  not  considering  the  

future  prospects  of  the  deceased.  He  further  

contended that the learned Judge of the High Court  

has erred in not awarding interest at the rate of 9%  

per  annum  as  awarded  by  this  Court  in  Municipal  

Council of Delhi Vs. Association of Victims of Uphaar  

Tragedy4  which was decided on 13.10.2011 whereas the  

review  petition  for  recalling  its  judgment  was  

decided  on  13.2.2012,  but  on  the  other  hand,  has  

further reduced the compensation.

10. Another ground of assailing the impugned judgment  

by the appellant is that the learned Judge of the  

High Court has ignored the second Schedule to the  

M.V. Act in view of the decision of this Court in the  

case of  Baby Radhika Gupta Vs.   Oriental Insurance  Co.  Ltd5.  by  reducing  the  compensation  from  Rs.  6,75,000/-  to 4,20,000/-,  under the non-pecuniary  

4 (2011) 4 SCC 481 5  (2009) 17 SCC 627

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damages without taking into consideration the fact  

that the appellant’s age was 41 years at the time  

when her son met with the accident. The multiplier of  

15  taken  by  the  Tribunal  is  legal  and  valid  by  

following the decision of this Court in the case of  

Kerala State Road Transport Corporation Vs.  Susamma  

Thomas6.   Hence,  the  learned  counsel  for  the  

appellant  has  prayed  for  allowing  this  appeal  and  

restoring  the  judgment  and  award  of  the  Tribunal  

wherein  it  has  awarded  Rs.9,65,000/-  under  non-

pecuniary damages towards the loss of dependency and  

also under the conventional heads.   

11. The  learned  counsel  for  the  respondent  

Insurance  Company  sought  to  justify  the  impugned  

judgment  and  award  passed  by  the  High  Court  

contending that the appellate court in exercise of  

its jurisdiction has appreciated the pleadings and  

evidence on record and reduced the compensation by  

6 ( 1994 ) 2 SCC 176

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passing the impugned judgment. Therefore, the same  

does  not  call  for  interference  by  this  Court  in  

exercise of its jurisdiction. Hence, they requested  

for dismissal of appeal.

12.  We  have  carefully  examined  the  factual  rival  

contentions and perused the record.  With a view to  

find  out  whether  the  impugned  judgment  and  award  

warrant interference by this Court in exercise of its  

jurisdiction,  the  said  point  which  calls  for  our  

consideration is answered in favour of the appellant  

for the following reasons:

13. It is an undisputed fact that the son of the  

appellant  died  in  a  motor  vehicle  accident  on  

12.6.1998, who was the sole earning member of the  

family.   The  respondent  driver  and  insurer  were  

initially impleaded as parties but notice could not  

be  served  to  the  driver  despite  repeated  efforts.  

The driver was therefore later on deleted from the  

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array of parties on the basis of the decisions of  

various  High  Courts  including  Delhi  High  Court  

wherein it was held that non-impleadment of driver of  

the offending vehicle is not fatal to the proceedings  

in view of the fact that the liability of the owner  

and the insurer of the offending vehicle is joint and  

several.   The insured was placed ex-parte since he  

remained absent despite the service of notice upon  

him in the proceeding whereas the Insurance Company  

filed written statement wherein it has admitted that  

on the date of accident the offending truck stood  

duly insured with it and the insured was respondent  

No. 2 in the proceedings before the Tribunal.   

14. The Tribunal has answered the compensation issue  

on the basis of pleadings and evidence available on  

record and held that the son of the appellant died in  

a motor vehicle accident on 12.6.1998 on account of  

rash and negligent driving of the offending truck.  

Accordingly, the first issue was answered by it by  

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recording reasons.  Issue Nos. 2 and 3 framed by the  

Tribunal are whether the appellant is entitled to any  

compensation  and  if  yes,  then  what  should  be  the  

amount  and  who  will  pay  the  same.  Both  of  these  

issues are answered in favour of the appellant. On an  

appraisal  of  the  oral  and  documentary  evidence  

particularly, considering the evidence of PW-2 and  

PW-5 the co-worker and employer of the deceased, the  

Tribunal placed reliance upon the salary certificate  

issued  by  the  employer  for  assessing  the  monthly  

income of the deceased.  The Tribunal, being a fact  

finding  authority,  on  the  basis  of  proper  

appreciation  of  pleadings  and  legal  evidence  on  

record, has recorded the finding on issue No. 2 and  

held that the appellant is entitled to compensation  

of  Rs.9,65,000/-  by  accepting  the  evidence  of  the  

appellant regarding monthly income of the deceased at  

Rs. 5,000/-which was being earned by the deceased and  

was sent to his mother- the appellant and her three  

daughters  for  their  maintenance.  The  same  was  not  

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challenged.  The  loss  of  dependency  determined  at  

Rs.9,00,000/-  by  taking  multiplier  of  15,  is  in  

conformity with the judgment of this Court in the  

case of Baby Radhika Gupta (supra).  

15. Further,  the  Tribunal,  by  applying  the  

principle  laid  down  in  the  case  Susamma  Thomas  (supra),  has  awarded  Rs.15,000/-  towards  funeral  

expenses  and  Rs.50,000/-  for  loss  of  love  and  

affection. Under the heading of pecuniary damages, a  

sum of Rs. 3,42,000/- is awarded towards the damage  

caused to the car of the appellant in the accident.  

In  total,  a  sum  of  Rs.  13,07,000/-  is  awarded  as  

compensation in favour of the appellant.  

16.  The  Insurance  Company  has  challenged  the  

correctness of the judgment of the Tribunal before  

the  High  Court  by  filing  an  appeal.  The  same  was  

partly  allowed  vide  judgment  dated  8.1.2007  by  

reducing  the  monthly  contribution  given  by  the  

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deceased  son  to  his  mother   at  Rs.3750/-  for  her  

maintenance  holding  that  the  mother  would  not  be  

entitled  to  more  than  50%  of  the  income  of  the  

deceased. The sisters of the deceased did not join  

the  appellant  as  claimants.  Hence,  the  High  Court  

held that no compensation could be awarded to them.  

Therefore, the High Court awarded a compensation of  

Rs. 6,75,000/- by applying a multiplier of 15 to the  

multiplicand.  

17. The said order was reviewed by the High Court  

at  the  instance  of  the  appellant  in  view  of  the  

aforesaid decision on the question of maintainability  

of  the  appeal  of  the  Insurance  Company.  The  High  

Court, in the review petition, has further reduced  

the  compensation  to  Rs.  4,20,000/-  from  Rs.  

6,75,000/-  which  was  earlier  awarded  by  it.  This  

approach is contrary to the facts and law laid down  

by  this  Court.  The  High  Court,  in  reducing  the  

quantum of compensation under the heading of loss of  

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dependency of the appellant, was required to follow  

the decision rendered by three judge Bench of this  

Court in  Nicolletta Rohtagi case (supra)and earlier  

decisions  wherein  this  Court  after  interpreting  

Section 170 (b) of the M. V. Act, has rightly held  

that in the absence of permission obtained by the  

Insurance  Company  from  the  Tribunal  to  avail  the  

defence  of  the  insured,  it  is  not  permitted  to  

contest  the  case  on  merits.  The  aforesaid  legal  

principle is applicable to the fact situation in view  

of the three judge bench decision referred to supra  

though the correctness of the aforesaid decision is  

referred to larger bench.  This important aspect of  

the  matter  has  been  overlooked  by  the  High  Court  

while  passing  the  impugned  judgment  and  the  said  

approach is contrary to law laid down by this Court.  

18. In view of the aforesaid reasons, the Insurance  

Company is not entitled to file appeal questioning  

the quantum of compensation awarded in favour of the  

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appellant  for  the  reasons  stated  supra.  In  the  

absence of the same, the Insurance Company had only  

limited  defence  to  contest  in  the  proceedings  as  

provided  under  Section  149  (2)  of  the  M.V.  Act.  

Therefore, the impugned judgment passed by the High  

Court  on  13.1.2012  reducing  the  compensation  to  

4,20,000/- under the heading of loss of dependency by  

deducting 50% from the monthly income of the deceased  

of   Rs.  5,000/-  and  applying  14  multiplier,  is  

factually and legally incorrect. The High Court has  

erroneously arrived at this amount by applying the  

principle of law laid down in  Sarla Verma v. Delhi  

Transport  Corporation7 instead  of  applying  the  

principle  laid  down  in  Baby  Radhika  Gupta’s case  

(supra) regarding the multiplier applied to the fact  

situation  and  also  contrary  to  the  law  applicable  

regarding  the  maintainability  of  appeal  of  the  

Insurance  Company  on  the  question  of  quantum  of  

compensation  in  the  absence  of  permission  to  be  

7 (2009) 6 SCC 121

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obtained by it from the Tribunal under Section 170  

(b) of the M.V. Act. In view of the aforesaid reason,  

the High Court should not have allowed the appeal of  

the Insurance Company as it has got limited defence  

as provided under section 149(2) of the M.V. Act.  

Therefore,  the  impugned  judgment  and  award  is  

vitiated in law and hence, is liable to be set aside  

by allowing the appeal of the appellant.

19. Further, the award of interest at the rate of  

6% per annum on the compensation as has been awarded  

both by the Tribunal and the High Court is also bad  

in law for the reason that in the case of Association  

of Victims of Uphaar Tragedy (supra), this Court has  

awarded interest at the rate of 9% per annum on the  

compensation  awarded  in  favour  of  the  appellant.  

There is no justification for them in not applying  

the  ratio  of  the  abovementioned  case  to  the  fact  

situation of the present case. We therefore, grant  

interest  at  the  rate  of  9%  per  annum  on  the  

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compensation amount awarded by the Tribunal as the  

Insurance  Company  has  been  contesting  the  case  

without  any  justifiable  reason.    Further,  the  

Insurance Company has deprived the appellant of the  

benefit  of  her  legitimate  claim  of  getting  the  

compensation and she was made to approach the court  

for determination of the claim even after passing of  

the  award  by  the  Tribunal  since  the  same  was  

contested by the Insurance Company by filing appeal  

by  urging  wholly  untenable  grounds  which  are  not  

maintainable in law. Accordingly, we allow the appeal  

by setting aside the impugned judgment and award of  

the High Court and restore the compensation awarded  

by the Tribunal of Rs. 13,07,000/- both under the  

heads of pecuniary and non-pecuniary damages and the  

said amount  carries 9% interest per annum from the  

date of filing of the application till the date of  

payment  of  the  amount.  We  direct  the  Insurance  

Company to deposit 50% of the awarded amount with  

proportionate  interest  in  any  of  the  nationalized  

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Banks of the choice of the appellant for a period of  

3  years.  During  the  said  period,  if  she  wants  to  

withdraw a portion or entire deposited amount for her  

personal  or  any  other  expenses,  then  she  is  at  

liberty to file application before the Tribunal which  

may be considered by it and pass appropriate order in  

this regard. If the amount of compensation has not  

yet  been  paid  by  the  Insurance  Company  to  the  

appellant, the same shall be paid within six weeks by  

obtaining demand draft in favour of the appellant.

…………………………………………………………J  [G.S. SINGHVI]

…………………………………………………………J.     [V. GOPALA GOWDA]

New Delhi, August 14, 2013

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