VERDICTUM.

IN

2025 INSC 836

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. of 2025

(@SPECIAL LEAVE PETITION (CIVIL) NO.15191 OF 2020)

THE NEW INDIA ASSURANCE

COMPANY LIMITED …APPELLANT(S)

VERSUS

USHA DEVI AND OTHERS …RESPONDENT(S)

WITH

CIVIL APPEAL NO. of 2025

(@SPECIAL LEAVE PETITION (CIVIL) NO.9460 OF 2022)

NATIONAL INSURANCE COMPANY LIMITED …APPELLANT(S)

VERSUS

USHA DEVI AND OTHERS …RESPONDENT(S)

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JUDG MENT

Aravind Kumar, J.

1. Leave granted.

2. By these appeals to special leave, the Insurance Companies have laid

challenge to the order dated 12.02.2020 passed in Usha Devi & Ors. v. Chatar

Pal Singh Yadav & Ors. passed by the High Court of Punjab & Haryana,

whereunder the award of the tribunal which had dismissed the application for

grant of compensation came to be set aside and awarded a lumpsum

compensation of Rs.15 lakhs with interest @ 9% p.a. Hence, these appeals by

the insurers of both the vehicles involved in the accident, on whom joint several

liability is fastened.

3. Facts essential for the adjudication of the present matter are briefly

narrated. On the unfortunate night of 15.11.2006, Mr. Surender Singh was

driving a truck bearing No. HR-38L/6727, and his vehicle was hit by the

dumper bearing registration No. HR-38H-9100 in the area of Pali Crusher

Zone, and due to the impact he sustained serious injuries, and was rushed to

GTB Hospital, Delhi, where he expired away on 22.11.2006 while being

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treated. FIR No. 411 dated 15.11.2006 came to be registered u/s 279/337/

304-A IPC, 1860 at Police Station Ballabgarh against the driver of the dumper.

A claim petition under Section 163A of the Motor Vehicles Act, 1988 came to

be filed by the dependents of deceased seeking compensation of Rs.15,00,000/-

alleging Mr. Islam, driver of the offending vehicle namely crusher bearing

registration No. HR-38H-9100 was driving the vehicle in a rash and negligent

manner and had caused the accident. It was also contended that at the time of

the accident, deceased Surender Singh was working as a truck driver and

drawing monthly salary of Rs. 3,000/- and was aged 35 years. It was also

contended that he was survived by six dependents, i.e., his wife Smt. Usha

Devi, four children and his aged mother.

4. The Motor Accidents Claims Tribunal, Faridabad (hereinafter referred

to as ‘Tribunal’) by its judgment and award dated 15.10.2011 dismissed the

claim petition on the ground that it was not maintainable as claimants had failed

to prove that the accident was caused on account of rash and negligent act

attributable to Mr. Islam i.e., the driver of the crusher i.e., offending vehicle

and hence did not proceed to compute compensation.

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5. Aggrieved by the said judgment and award dated 15.10.2011, the

claimants filed an appeal u/s 173 of the Act before the Punjab & Haryana High

Court. The High Court vide impugned judgment dated 12.02.2020 allowed the

appeal in part and awarded a lump sum compensation of Rs. 15,00,000/- with

interest @ 9% p.a. to the claimants and directed that compensation amount

should be paid jointly by all the respondents therein and directed both the

insurance companies to indemnify the award initially and reserved their rights

to recover it from the owners of the respective vehicles if permissible under

the respective policies.

6. It is against this judgment of the High Court dated 12.02.2020 these two

appeals have been filed by both the Insurance Companies namely SLP (C) No.

15191/2020 has been filed by The New India Assurance Co. Ltd. (the Insurer

of the Vehicle- truck bearing registration No. HR-38L/6727 driven by the

deceased Mr. Surender Singh) and SLP (C) No. 9460/2022 has been filed by

the National Insurance Co. Ltd. Company (the Insurer of the Offending Vehicle

dumper/crusher truck bearing registration No. HR-38H-9100 driven by Mr.

Islam).

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7. Mr. Ranjan Kumar Pandey, the Ld. Counsel for Appellant/The New

India Assurance Co. Ltd. contended, inter-alia that the compensation awarded

to the claimants is exorbitant and against the settled law and hence it ought to

be reduced. He has also contended that awarding of a lump sum compensation

is against the scheme of S. 163A of the Act, since compensation has to be

determined as per the Second Schedule of the Act only. He further contended

that no amount can be provided under the heads of loss of ‘love and affection’

and ‘physical/mental pain and agony’, as the same are not provided under

Second Schedule of the Act. He has further contended that no additional

compensation can be awarded for loss of love and affection, as that forms an

integral part of loss of consortium as per the Constitution Bench judgment of

National Insurance Co. LTd. v. Pranay Sethi & Ors.1 Lastly, he contended

that u/s 163A of the Act, the liability of the insurer is limited and must be split

equally between the insurers of both vehicles.

8. Mr. Ambhoj Kumar Sinha, the Ld. Counsel for the Appellant/National

Insurance Co. Ltd. has contended that the deceased was not a third party, hence

not covered under the policy. He argued that it is settled law that the insurance

company cannot be held liable to pay compensation in a case like the present

1
2017 SCC OnLine SC 1270
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one, in which the victim was the driver himself and he cannot be treated as a

third party within the ambit of Section 147 of the Act, because he steps into the

shoes of the owner while driving the vehicle. He has further contended that in

a case where the insured himself cannot be fastened with any liability under the

provisions of the Act, the insurer would not be held liable to indemnify the

award only on the ground that accident occurred due to the use of the insured

vehicle. Hence, he prays for appellant being exonerated from paying the

compensation.

9. Per Contra, Mr. V. Elanchezhiyan, the Ld. Counsel for the

Respondents/Claimants contended that compensation awarded by the High

Court is just, fair and reasonable. It is also contended that FIR marked as Ex.

P3 would reveal the accident had occurred due to rash and negligent driving of

dumper/crusher vehicle and this fact was sufficiently corroborated by the

testimony of PW2 Constable Lalit Kumar and it is also proved that deceased

expired due to the injuries sustained in the accident in question and he was a

‘third-party’ in so far as dumper/crusher is concerned. To buttress his argument,

learned counsel has also drawn the attention of this Court to the certified copy

of Award marked Ex. P2 before the Tribunal, whereunder the dependents of

deceased Islam, namely, the driver of the offending dumper, was awarded

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compensation. He has further submitted that the computation of compensation

by the High Court was done on the basis of the judgment of this court, titled

National Insurance Co. LTd. v. Pranay Sethi & Ors. (supra) and there being

no error in the same, he has prayed for dismissal of the appeals.

10. We have heard the learned advocates appearing for the parties and

perused the record and we are of the considered view that following point

would arise for our consideration:

Whether the impugned judgment calls for interference at

the hands of this Court?

11. At the outset, it must be stated that the High Court was correct insofar

as setting aside the order of dismissal of the claim petition passed by the

Tribunal, whereunder the tribunal had recorded a finding that claimants had

failed to prove that deceased expired on account of the injuries sustained in the

accident caused by the driver of the dumper/ crusher namely the offending

vehicle. The High Court took note of the fact that there was collision between

two vehicles, as the claim petition had been filed under Section 163A of the

Act does not require any proof of negligence for seeking compensation. While

entertaining a claim petition u/s 163A of the Act, the question of negligence

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cannot be looked into. This court in the case of United India Insurance

Company Ltd. V. Sunil Kumar & Anr.2 has held:

“8. From the above discussion, it is clear that grant of

compensation under Section 163-A of the Act on the basis of
the structured formula is in nature of a final award and the
adjudication thereunder is required to be made without any
requirement of any proof of negligence of the driver/owner
of the vehicle(s) involved in the accident. This is made
explicit by Section 163-A(2). Though the aforesaid section of
the Act does not specifically exclude a possible defence of
the insurer based on the negligence of the claimant as
contemplated by Section 140(4), to permit such defence to
be introduced by the insurer and / or to understand the
provisions of Section 163-A of the Act to be contemplating
any such situation would go contrary to the very legislative
object behind introduction of Section 163-A of the Act,
namely, final compensation within a limited time-frame on
the basis of the structured formula to overcome situations
where the claims of compensation on the basis of fault
liability were taking an unduly long time. In fact, to
understand Section 163-A of the Act to permit the insurer to
raise the defence of negligence would be to bring a
proceeding under Section 163-A of the act on a par with the
proceeding under Section 166 of the Act which would not
only be self-contradictory but would also defeat the very
legislative intention.”

12. It would be apposite to note the judgment of this Court in National

Insurance Co. Ltd. v. Sinitha3 whereunder it has been held that Section 163 A
has an overriding effect on all other provisions of the Act and it has been further
held:
“17. As against the aforesaid, at the time of incorporation of
Section 163-A of the Act, Sections 140 and 144 of the Act

2
(2019) 12 SCC 398
3
(2012) 2 SCC 356
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were already subsisting, as such, the provisions of Section

163-A which also provided by way of a non obstante clause,
that it would have by a legal fiction overriding effect over all
existing provisions under the Act as also any other law or
instrument having the force of law “for the time being in
force”, would have overriding effect, even over the then
existing provisions in Chapter X of the Act because the same
was already in existence when Section 163-A was introduced
into the Act.

18. The importance of the instant aspect of the matter is that

Section 163-A of the Act has overriding effect over all the
provisions/sections taken into consideration by this Court
while deciding the controversy in Hansrajbhai case [(2001)
5 SCC 175 : 2001 SCC (Cri) 857] . It is therefore clear, that
none of the provisions taken into consideration in the
decision relied upon by the learned counsel for the
respondents can override the legal effect of the mandate
contained in Sec tion 163-A of the Act.”

13. In the light of aforesaid exposition of law enunciated by this Court

which we are also in agreement, and as such we are of the considered view that

compensation cannot be determined as prescribed under Section 166 of the

MV Act as sought for by the claimants, but on the other hand it requires to be

determined under Section 163A read with Second Schedule of the Act,

particularly when claim petition is filed under the said provision.

14. A perusal of the claim petition filed before the tribunal would indicate

that it is a petition filed under Section 163A of the M.V. Act, 1988 claiming

compensation of Rs.15,00,000/-. Though it is contended that the deceased was

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working as a driver and his monthly income was Rs.3,000/- or Rs.36,000/- p.a.

which has been accepted by the High Court, we are of the considered view that

having regard to the number of dependents being 6 the income of the deceased

as prescribed in Second Schedule has to be held as Rs.40,000/- per annum and

after deducting 1/3 towards personal expense i.e. 13,333/- the annual loss of

income to the claimant would be Rs.26,667/-. The deceased was aged 35 years,

hence the appropriate multiplier to be adopted as per Second Schedule is 17

and when so adopted the compensation that becomes payable would be

Rs.4,53,339/- (Rs.26,667/- X 17).

15. The general damages that would be payable as prescribed under Second

Schedule is Rs.2,000/-, Rs.5,000/- and Rs.2,500/- towards loss of consortium,

funeral expenses and loss of estate and same is hereby awarded. The claimants

have contended the amount spent towards medical expenses was around

Rs.1,00,000/-. However, Second Schedule restricts the same to Rs.15,000/- and

we have no hesitation in awarding Rs.15,000/- towards the same and

accordingly it is awarded. Thus, in all Claimants would be entitled to a sum of

Rs.4,77,839/- which shall carry interest @ 8% p.a. from the date of petition till

date of payment or deposit whichever is earlier.

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16. In the instant case, the High Court has directed the award amount to be

paid jointly and severally by all the respondents and entire compensation has

been ordered to be paid initially by the insurers of the two vehicles and

reserving their rights to recover if so permissible under their respective

insurance policies. The Tribunal had dismissed the claim petition, as already

noticed herein above on the ground that the FIR Ex. P-3, which was registered

on the strength of the statement of Shakil Ahmad who is none other than brother

of Islam (driver of the crusher) had stated that accident had occurred due to rash

and negligent driving of deceased himself. Undisputedly the said Shakil Ahmad

who was shown to be an eye witness to the accident was not examined before

the Tribunal. Thus the mode, method and manner in which the accident had

occurred has remained a mystery. Criminal proceedings against the deceased

initiated on the strength of FIR registered had stood abated. The insurer of the

offending vehicle namely, the dumper bearing registration No. HR-38H-9100

did not examine the above stated Shakil Ahmad who has been shown as an eye-

witness to the accident before the tribunal. In fact the driver of the said vehicle

namely, dumper bearing registration No. HR-38H-9100 who had also sustained

grievous injuries had succumbed to the said injuries and the claim petition

No: MACT 60/2009 filed by his dependents had been allowed and awarded

compensation by the jurisdictional tribunal and the award dated 17.05.2010

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passed in their favour was marked as Ex P-2 before the tribunal in these

proceedings.

17. In the absence of any positive evidence being placed by the insurer of

the offending vehicle to prove the manner in which accident occurred, we are

of the considered view that the deceased in the instant case would be a ‘third

party’ in so far as offending vehicle (dumper truck bearing No.HR 38H 9100)

is concerned and thus the insurer and the insured of the offending vehicle would

be liable to pay compensation jointly and severally the insurer of the offending

vehicle would be liable to indemnify the award namely the National Insurance

Company Limited would be liable to indemnify the claim and accordingly the

appeal is allowed in part.

18. Having regard to the fact that the accident had occurred 30 years back,

the award amount is ordered to be released in favour of the claimant Nos. 1 to

6 in the ratio of 50:10:10:10:10:10 respectively. It is made clear in the event of

respondent No.6 i.e., the mother of the deceased not being alive, her share shall

go to the first claimant.

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19. As a result , the appeals stand allowed in part and the amount deposited

in Special Leave Petition (Civil) No.15191 of 2020 with accrued interest shall

be refunded to the appellant/ petitioner therein. The amount deposited in

Special Leave Petition (Civil) No.9460 of 2022 to the extent above referred

shall be transmitted to the jurisdictional tribunal with accrued interest thereon

to be disbursed in favor of claimant as ordered herein above with proportionate

accrued interest and balance and shall be refunded to the appellant/petitioner

(National Assurance Company Limited) with proportionate accrued interest.

……………………………., J.
[J.K. MAHESHWARI]

.……………………………., J.
[ARAVIND KUMAR]
New Delhi;
July 14, 2025.

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