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REPORTABLE  

IN THE SUPREME COURT OF INDIA  

CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL NOS.9078-9079 OF 2017      

Rani & Ors.       …Appellant(s)   

:Versus:    

National Insurance Company Ltd. & Ors.  ….Respondent(s)          

 J U D G M E N T  

 A.M. Khanwilkar, J.    1. These appeals take exception to the common judgment  

and order dated 12th February, 2016 passed by the High  

Court of Karnataka at Bengaluru in M.F.A. No.5874 of 2011  

(MV) and M.F.A. No.5876 of 2011 (MV). Both these appeals  

were filed by the respondent No.1 (National Insurance Co.  

Ltd.) questioning the correctness of the judgment and  

Award passed by the Motor Accident Claims Tribunal,  

Bangalore dated 3rd January, 2011 in MVC No.7055 of 2009  

and 7056 of 2009, respectively.  

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2. The former claim petition MVC No.7055 of 2009 was  

filed by the legal representatives of Satish (the deceased)  

who had succumbed to the injuries suffered, in an accident  

which occurred on 17th March, 2009, while he was riding a  

motorcycle bearing Registration No.KA-05-EJ-4029 along  

with his friend, Anand, who was travelling with him as a  

pillion rider. Police complaint regarding the accident was  

lodged by Anand, appellant in Civil Appeal No.9079 of 2017.  

The accident was caused by a lorry bearing Registration  

No.MH-43-U-3365, which was being driven at a high speed  

in a rash and negligent manner. The said lorry came from  

behind and hit the motorcycle on which Satish and Anand  

were going from Bangalore towards Tumkur. Both of them  

fell down and suffered serious injuries. Satish, who was  

riding the motorcycle, succumbed to his injuries. The  

appellant Anand was hospitalized as an indoor patient and  

had to undergo surgeries for fracture of collies (left) and ACL  

tear with MCL tear, right knee with hemarthrosis.  

 3. Resultantly, separate claim petitions were filed before  

the MACT at Bangalore by the legal representatives of the  

deceased (Satish) and by Anand. The claim petitions

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proceeded ex parte against the owner of the offending lorry.  

After analysing the relevant evidence, the Tribunal found  

that the accident had occurred due to the rash and  

negligent driving of the driver of the offending vehicle. The  

Tribunal also noted that the respondents had not  

challenged the chargesheet materials and other documents  

to disprove the case of the claimants and as such, there was  

no material to suggest that it was a case of contributory  

negligence.   

4. Having said that, the Tribunal proceeded to determine  

the compensation amount to be paid to the claimants. While  

doing so, it has noted that the legal representatives of the  

deceased (Satish) did not produce any document to show  

his monthly income from mechanic work. The Tribunal  

noted that the age of the deceased (Satish) was around 30  

years at the relevant time when the accident occurred, and  

there were three dependents in his family namely, his wife,  

daughter and mother (claimants). In the absence of evidence  

regarding income of the deceased (Satish), the Tribunal took  

notional income at the rate of Rs.3,000/- per month and  

after providing deduction of 1/3rd amount towards personal

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expenses and applying multiplier of 17, determined the loss  

of dependency at Rs.4,08,000/-(Four Lakh Eight Thousand  

only). In addition, the Tribunal granted Rs.5,000/- towards  

transportation of dead body from hospital to home,  

Rs.10,000/- under the head of loss of consortium,  

Rs.10,000/- under the head of loss of love and affection,  

Rs.10,000/- towards loss of estate and Rs.10,000/- towards  

funeral and obsequies ceremonies. The total compensation  

amount payable to the legal representatives of the deceased  

(Satish) was determined at Rs.4,53,000/- (Four Lakh Fifty  

Three Thousand only) with interest at the rate of 6% per  

annum from the date of petition till the date of deposit by  

the respondents. The Tribunal issued further directions  

about the disbursal and appropriation of the amount  

amongst the three claimants.   

 5. As regards the claim petition filed by Anand (claimant)  

in M.V.C. No.7056 of 2009, the Tribunal noted that he had  

suffered fracture of collies (left) and ACL tear with MCL tear,  

right knee with hemarthrosis and had undergone operation  

for his left hand with K-wire. He was an indoor patient in  

the hospital for 4 days and had spent huge amounts

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towards medicine, treatment, food, conveyance and other  

charges. After analysing the evidence of PW-2 and PW-3, the  

Tribunal found that the permanent disability suffered by  

Anand was not exceeding 10% of the whole body due to  

fracture of collies and right knee injury. The Tribunal  

further held that no evidence had been produced by him to  

prove his income and therefore, the Tribunal assessed his  

notional income at Rs.3,000/- per month. The Tribunal  

then proceeded to grant compensation amount payable to  

Anand towards pain and suffering at Rs.30,000/-, medical  

expenses at Rs.26,500/-, loss of earning during laid up  

period at Rs.15,000/-, loss of future earning on account of  

permanent disability at Rs.61,200/-, loss of amenities and  

future unhappiness at Rs.15,000/-, attendant charges, diet  

and travelling at Rs.10,000/- and future medical expenses  

at Rs.15,000/-. The total compensation amount was  

Rs.1,72,700/- (One Lakh Seventy Two Thousand and Seven  

Hundred Only) payable by the respondents with interest at  

the rate of 6% per annum from the date of petition till the  

date of deposit with the rider that the amount towards

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future medical expenses would not carry any interest. The  

operative order passed by the Tribunal reads thus:  

“O R D E R    

Both the petitions M.V.C. No.7055/2009 & 7056/2009  filed by U/Sec. 166 of MV Act by the petitioners are hereby  partly allowed against the respondents with costs.   

  The petitioners in M.V.C.No.7055/2009 and  7056/2009 are awarded with total compensation amount of  

Rs.4,53,000/- (Rupees four lakhs fifty three thousand only)  and Rs.1,72,700/- (Rupees one lakh seventy two thousand  seven hundred only), respectively in both the cases, with 6%  

interest p.a. from date of petitions till date of deposit. Future  medical expenses does not carry any interest in M.V.C.  No.7056/2009.  

  Both the respondents are jointly and severally liable to  

pay above said compensation amount with costs and interest  to the petitioners. However, it is directed to 1st respondent to  deposit above compensation amounts within 30 days from  

date of this order, after deducting any amount paid as  interim compensation being insurer of offending vehicle.   

  After depositing of compensation amount awarded in  M.V.C. No.7055/2009, a sum of Rs.1,15,000/- and  

Rs.60,000/-, in names of first and third petitioners  respectively shall be deposited as FD in any nationalized or  scheduled Bank of their choice for a period of 5 years. No  

loan on said FD is permitted without permission of this  tribunal.   

  Remaining amount with occurred interest shall be  released in the names of first and third petitioner through  

account payee cheques on proper identification respectively  and separately.     

  Entire amount ordered in the name of minor second  

petitioner represented by her natural guardian and  mother/first petitioner in M.V.C. No.7055/2009 shall be  kept as FD in her name in any Nationalized or scheduled  

Bank of her choice for a period of 5 years or till she attain  the age of majority, whichever is later. No loan on FD is  

permitted without permission of this tribunal. First

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petitioner is entitled to receive periodical interest on said FD  amount for maintenance of petitioner No.2.  

  After deposit of compensation amount in M.V.C.  

No.7056/2009, a sum of Rs.85,000/- shall be kept as FD in  the name of petitioner in any Nationalized or scheduled  Bank of his choice for a period of 5 years. No loan on FD is  

permitted without permission of this tribunal.      Remaining amount together with accrued interest  

shall be released in the name of petitioner in M.V.C.  No.7056/2009 through account payee cheque on proper  

identification.      Advocate’s fees is fixed at Rs.500/- in each case.  

Draw award accordingly.”       

6. Against this common award passed by the Tribunal,  

the respondent No.1 Insurance Company carried the matter  

in appeal before the High Court being M.F.A. No.5874 of  

2011 (MV) and M.F.A. No.5876 of 2011 (MV), respectively.  

The principal issue raised by the Insurance Company was  

that the Tribunal could not have fastened the liability on the  

insurer as the offending vehicle did not possess a valid  

permit to operate in the State of Karnataka in view of  

Section 149(2)(a)(i)(a) of the Motor Vehicles Act, 1988. For,  

the permit was limited to the State of Maharashtra.   

 7. The appellants did not file substantive appeals but  

filed cross objections in the appeals filed by the insurer  

bearing M.F.A. Crob. Nos.187 and 188 of 2013. The said

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cross objections, however, came to be dismissed for non  

compliance of office objections. Nevertheless, in the appeal  

filed by the Insurance Company against compensation  

amount awarded to the deceased (Satish), the High Court  

chose to enhance the compensation amount payable to the  

legal heirs of the deceased (Satish) by taking into account  

his notional income as Rs.10,000/- per month. This was  

done by the High Court without overturning the finding  

recorded by the Tribunal that no evidence was produced by  

the claimants to substantiate the monthly income of the  

deceased (Satish) at the relevant time. What the High Court  

instead did was to rely upon the driving licence of the  

deceased and a training certificate of the deceased issued by  

Bajaj Auto limited, mentioning that Satish had attended the  

training. As aforementioned, the High Court redetermined  

the compensation amount payable to the legal  

representatives of the deceased (Satish) on a higher notional  

income of the deceased at the rate of Rs.10,000/- per month  

and arrived at the following calculation on the basis of  

which the appeal was disposed of in the following words:  

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“9. The total compensation payable in M.F.A.  No.5874/2011 comes to Rs.16,00,068/-, which is rounded  

off to Rs.16,00,000/- and the break up is as follows:-    

(i) Towards loss of dependency      : Rs.13,60,068/-  (ii) Towards loss of consortium to R1 : Rs.  1,00,000/-   (iii) Towards loss of love and affection : Rs.  1,00,000/-  

to R2  (iv) Conventional heads                     : Rs.     40,000/-                                                                 ---------------------------  

Total  Rs.16,00,068/-        --------------------------  

10. Accordingly, M.F.A.No.5874/2011 is allowed and the  impugned judgment and award passed by the Tribunal in  M.V.C. No.7055/2009 stands modified granting a  

compensation of Rs.16,00,000/- instead of Rs.4,53,000/-  (enhanced compensation comes to Rs.11,47,000/-). The  

enhanced compensation shall carry interest at 6% p.a., from  the date of petition till its deposit. The Secretary, Legal  Services Committee is directed to communicate the order to  

the owner of the offending vehicle and also intimate him to  deposit the amount within a period of three months. In case  of failure to deposit the amount by the owner of the offending  

vehicle, the Legal Services Committee to take action as per  law.”  

As regards the appeal preferred by the insurer against the  

Award passed in favour of Anand, appellant in Civil Appeal  

No.9079 of 2017, the same was disposed of on the following  

terms:  

“11. In M.F.A. No.5876/2011 the contention is liability  cannot be fastened on the insurer as there is violation of  

permit by admittedly plying the vehicle in Karnataka.  Therefore, liability is to be fastened on the owner.    

12. M.F.A. No.5876/2011 is disposed of. The owner is  directed to satisfy the award. The amount in deposit is  

directed to be refunded to the insurer-appellant.”  

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8. The insurer succeeded before the High Court, as the  

liability to pay compensation amount has been restricted to  

that of the owner of the offending vehicle. Therefore, the  

insurer did not file appeal against the enhancement of  

compensation amount payable to the legal representatives  

of the deceased (Satish). The present appeal (Civil Appeal  

No.9078 of 2017), however, has been filed by the widow and  

daughter of the deceased (Satish). They have challenged not  

only the correctness of the view taken by the High Court  

absolving the insurer from the liability to pay compensation  

but also for further enhancement of  compensation amount.  

Similarly, Anand, the injured pillion rider, has also filed a  

separate appeal challenging the decision of the High Court  

in restricting the liability to pay compensation amount to  

that of the owner of the offending vehicle but also on the  

quantum of compensation amount. In both the appeals, it is  

alternatively urged that the compensation amount payable  

to the respective claimants should be first paid by the  

Insurance Company with liberty to recover the same from  

the owner of the offending vehicle, respondent No.2 herein.  

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9. The respondent No.1 Insurance Company, on the other  

hand, submits that by virtue of statutory provisions, it  

cannot be made liable to pay the compensation amount as  

the offending vehicle did not have a valid permit for being  

operated in the State of Karnataka. It is also contended that  

no direction be issued against the Insurance Company to  

pay and recover as it may be difficult for the Insurance  

Company to trace the owner of the offending vehicle. For,  

the owner of the offending lorry has not chosen to appear  

even before this Court.  

10. We have heard Mr. Anand Sanjay M. Nuli, learned  

counsel appearing for the appellants and Mr. Parmanand  

Gaur, learned counsel for the respondents.  

11. Taking the appeal filed by the legal representatives of  

the deceased (Satish) first, as mentioned earlier, they did  

not file any appeal challenging the award passed by the  

Tribunal determining the compensation amount payable to  

them at Rs.4,53,000/- (Four Lakh Fifty Three Thousand  

only) with interest at the rate of 6% per annum from the  

date of petition till the date of deposit. It is respondent No.1

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Insurance Company who had challenged the award in  

favour of the claimants and in those appeals, the claimants  

(including appellants in Civil Appeal No.9078 of 2017) filed  

cross objections which, however, came to be dismissed for  

non- removal of office objections. Nevertheless, the High  

Court enhanced the compensation amount payable to them  

by invoking power under Order 41 Rule 33 of the Civil  

Procedure Code (C.P.C.). The Insurance Company has not  

challenged the said view taken by the High Court as it has  

already succeeded in getting a finding from the High Court  

that the liability to pay compensation amount was restricted  

to that of the owner of the offending vehicle, namely  

respondent No.2 herein.   

 12. Assuming that the legal representatives of the  

deceased (Satish) (appellant in Civil Appeal No.9078 of  

2017) could ask for enhancement of the compensation  

amount in the present appeal whilst challenging the finding  

of the High Court to absolve the Insurance Company of its  

liability to pay the compensation amount, the question is  

whether the appellants are justified in claiming further  

enhanced compensation amount.  

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13. The Tribunal has found that no evidence regarding the  

income of the deceased (Satish) was produced by the  

claimants. That finding has not been over turned by the  

High Court. The High Court, however, relied upon the  

driving licence of the deceased and training certificate of the  

deceased issued by Bajaj Auto Limited and on that basis,  

determined the notional income of Satish (Deceased) at the  

time of accident at Rs.10,000/- per month. Neither the  

driving licence nor the certificate could per se be made the  

basis to assume or infer that the deceased (Satish) was  

gainfully employed at the relevant time and moreso was  

earning income of Rs.10,000/- per month. In other words,  

the reason assigned by the High Court for enhancing the  

notional income of the deceased (Satish) from Rs. 3000/- to  

Rs.10,000/- per month is irrational and tenuous. No  

tangible logic has been assigned to discard the just finding  

recorded by the Tribunal in the backdrop of lack of evidence  

regarding the monthly income of the deceased (Satish).   

14. We are of the view that the High Court has already  

granted more than just compensation amount to the legal

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representatives of the deceased (Satish). In that, even if the  

claim of the appellants regarding future prospects,  

additional medical expenses and additional interest amount  

was to be accepted, on the basis of the notional income of  

Rs.5000/- (Rupees five thousand) per month, the question  

of awarding additional or further compensation amount to  

the appellants in M.F.A. No.5874 of 2011 does not arise.  

The appeal, however, would succeed to the limited extent  

that the amount of compensation determined by the High  

Court shall be first paid by the respondent No.1 Insurance  

Company with liberty to recover the same from the owner of  

the offending vehicle (respondent No.2 herein). We are  

inclined to allow the appeal to this limited extent, keeping in  

mind the exposition in Singh Ram Vs. Nirmala and Ors.1  

and Pappu and Ors. Vs. Vinod Kumar Lamba and Anr. 2   

15. Reverting to the appeal preferred by respondent No.1  

Insurance Company against Anand (M.F.A. No.5876 of  

2011), as noted in paragraph Nos.11 and 12 of the  

impugned judgment reproduced above, the High Court  

                                                           1  (2018) 3 SCC 800  2   (2018) 3 SCC 208

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disposed of the said appeal by absolving the insurer from  

the liability to pay compensation amount. As noticed earlier,  

the appellant (Anand) did not file any appeal against the  

award passed by the Tribunal for enhancement of  

compensation amount and the cross objection filed by him  

in the appeal filed by the Insurance Company came to be  

dismissed for non- prosecution. Even in respect of this  

appeal, the Tribunal had found that he failed to produce  

any evidence regarding his monthly income and the  

permanent disability suffered by him had been determined  

as not exceeding 10% to the whole body and compensation  

had been awarded to him on that basis. Resultantly, we  

intend to dispose of this appeal on the same basis by  

directing the respondent No.1 Insurance Company to pay  

the compensation amount awarded to the claimant (Anand)  

in the first place, with liberty to recover the same from the  

owner of the offending vehicle (respondent No.2).   

 16. In view of the above, the appeals are partly allowed by  

directing the respondent No.1 Insurance Company to first  

pay the compensation amount to the respective claimants  

as determined by the High Court and Tribunal as the case

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may be, with liberty to recover the same from the owner of  

the offending vehicle, respondent No.2. The impugned  

judgment and order passed by the High Court stands  

modified to this limited extent.    

17. The appeals are allowed in the aforementioned terms  

with no order as to costs.  

    ……………………………...CJI.  

          (Dipak Misra)  

…..…….…………………..….J.                (A.M. Khanwilkar)     

…..…….…………………..….J.                (Dr. D.Y. Chandrachud)   

   New Delhi;  JULY 31, 2018.