The New India Assurance Co Ltd vs Kamla Devi And Ors

Court
Punjab and Haryana High Court

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
215
Date of decision: 27.08.2026
1. FAO-13-2002
NEW INDIA ASSURANCE COMPANY LTD. ....Appellant
Versus
BABY & ORS ...Respondents
2. XOBJC-48-CII-2018
NEW INDIA ASSURANCE COMPANY LTD. ....Appellant
Versus
BABY & ORS ...Respondents
3. FAO-14-2002
NEW INDIA ASSURANCE COMPANY LTD. ....Appellant
Versus
KAMLA DEVI & ORS. ...Respondents
4. XOBJC-49-CII-2018
NEW INDIA ASSURANCE COMPANY LTD. ....Appellant
Versus
KAMLA DEVI & ORS. ...Respondents
CORAM: HON'BLE MR. JUSTICE YASHVIR SINGH RATHOR
Present : Mr. Deepak Suri, Advocate and
Mr. Brij Bhushan Sharma, Advocate
for the appellant-Insurance Company.
Ms. Kulwinder Kaur, Advocate for respondent No.2 .
Mr. Arvind Kashyap, Advocate and
Ms. Abha Kashyap, Advocate
for respondent No.3 in FAO-13-2002
and for respondent No.4 in FAO-14-2002.
Mr. Vijay Lath, Advocate for
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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cross-objector No.1 in FAO-13-2002 and
for cross-objectors No.1 and 2 in FAO-14-2002.
YASHVIR SINGH RATHOR. J.(Oral)
1. This judgment shall dispose of the above-mentioned two appeals filed
by the Insurance Company along with the corresponding two cross-objections
filed by the claimants, as they have arisen out of the same motor vehicle accident
and have been directed against the common Award dated 06.08.2001 passed by
the Motor Accident Claims Tribunal, Rupnagar ( hereinafter referred to as the
“Tribunal” ) in MACT Case No.5 of 1.3.1999 and MACT Case No. 4 of 1.3.1999,
vide which compensation in the sum of Rs. 3,77,200/- has been awarded to the
claimants in Case No.5 of 1999 and Rs. 2,78,800/- has been awarded to the
claimants in Case No. 4 of 1999 along with interest at the rate of 9% per annum
from the date of filing of the petitions till realization on account of the deaths of
driver Lal Chand and cleaner Daljit Singh, respectively.
2. From the pleadings of the parties, the following issues were framed
by the learned Tribunal:—
“1. Whether the accident arose out of the use of motor vehicle bearing No. HP-
15-2998 in which Lal Chand driver and Daljit Singh cleaner had died? OPA
2. Whether the driver was not holding a valid and effective driving licence at the
time of accident? OPR
3. Whether the petition is not maintainable? OPR
4. Whether claimants are entitled to get compensation? If so to what extent and
from whom? OPA
5. Relief.”
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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3. Thereafter, the parties led evidence in support of their case.
4. After hearing the parties and on going through the material on the
file, learned Tribunal held under issue No.1 that the deaths of driver Lal Chand
and cleaner Daljit Singh had occurred in an accident on 14.10.1998 arising out of
the use of the motor vehicle Tata 407 bearing registration No. HP-15-2998, which
lost control and fell into a 500 feet deep ditch on the Kiratpur Sahib Mandi road
near village Khagu Dhudal. Issue No. 2 was decided against the appellant-
Insurance Company as it failed to lead any evidence to prove that the driver was
not holding a valid and effective driving licence. Under issue No. 3, the Tribunal
held that the petitions under Section 163-A of the Motor Vehicles Act, 1988
( hereinafter referred to as the 'Act' ) were maintainable and rejected the insurer's
plea that the claimants' sole remedy lay under the Workmen's Compensation Act,
1923 ( hereinafter referred to as 'Act of 1923' ), by relying on Section 167 of the
Act and the law laid down in 2000 ACJ 801 Rita Devi & Ors. Vs. New India
Assurance Co. Ltd. & Anr . Consequently, under issue No. 4, the Tribunal held the
owner and the Insurance Company jointly and severally liable to pay the
compensation to the claimants.
5. Feeling aggrieved, the present appeals have been preferred by the
appellant-Insurance Company, while the respondents-claimants have preferred
cross-objections (XOBJ-C-48-CII-2018 and XOBJ-C-49-CII-2018) seeking
enhancement of the compensation. The material on file has been perused and
learned counsel for the parties have been heard.
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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6. Learned counsel for the Insurance Company argued that the learned
Tribunal has gravely erred while holding the Insurance Company liable to pay
compensation in respect of deaths of the driver and cleaner of the insured vehicle
in the petition under Section 163-A of the Act filed by the dependents of both the
deceased. Learned counsel further contended that the facts of the case and material
on file have not been appreciated in the correct perspective, whereas the claim
petitions were not maintainable as both the deceased who were driver and cleaner
will not fall within the definition of third party and the claimants could have
claimed compensation only under Act of 1923, as they died during the course of
their employment under the owner/insured of the offending vehicle and he prayed
that the appeals instituted by the insurance company be allowed and insurance
company be exonerated of its liability to indemnify the insured. In support of his
contention, learned counsel has relied upon 2005(2) RCR (Civil) National
Insurance Company Vs. Prembai Patel and Others.
7. On the other hand, learned counsel for the claimants as well as
insured argued that the insurance policy was not an Act policy and it was a
comprehensive policy in which premium is paid for seeking compensation in the
case of of death of the driver and cleaner as well and the case law relied upon by
the Insurance Company is not applicable to the facts of the case in hand. Learned
counsel for the claimants further argued that now Section 164 has been inserted in
place of Section 163-A in the Motor Vehicles Act, according to which, the
claimants are entitled to the compensation to the extent of Rs.5,00,000/- on
account of death of a person under ‘no fault liability’ and Hon’ble Supreme Court
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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in 2023 ACJ 631 Ram Murti & Ors. Vs. Punjab State Electricity Board has
retrospectively applied the provision contained in Section 164 of the Act and has
granted compensation to the tune of Rs.5,00,000/- to claimants in the case of death
which had taken place prior to Motor Vehicles (Amendment) vide Act No.32 of
2019 and the claimants too are thus entitled to enhanced compensation of
Rs.5,00,000/- each in both the petitions.
8. After hearing the contentions raised by both the parties and going
through the material on file, I find no force in the contention raised by learned
counsel for the Insurance Company.
9. Learned counsel for Insurance Company has fairly admitted that as
per previous order dated 16.04.2026 passed by this Court, he has verified that
Insurance Policy was a comprehensive policy and not an Act policy and in this
view of the matter, the insurance company is liable to indemnify the insured even
in the case of death of the employees of the insured and Prembai Patel’s case
(supra) is thus not applicable to the facts of the case in hand.
10. Now the next question is to be decided is as to how much
compensation should be awarded to the claimants/appellants.
11. XOBJC-48-CII-2018 has been filed by the claimants in FAO-13-
2002, whereas XOBJC-49-CII-2018 has been filed by the claimants in FAO-14-
2002.
12. Hon’ble Supreme Court in Ram Murti’s case (supra) has held as
under:-
“7. The provisions of Section 140 which formed a part of Chapter 10 of the
Motor Vehicles Act 1988 were omitted by Act 32 of 2019. Simultaneously,
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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Chapter 11 was substituted of which Section 164 provides for payment of
compensation in the case of death in the sum of Rs.5,00,000 and in the case of
grievous hurt of Rs.2,50,000/-.” “8. We are inclined to give the appellants the
benefit of the beneficial provisions which have been enacted by Parliament.
Hence, in modification of the order of the High Court, we direct that the
appellants shall be entitled to an amount of Rs.5,00,000/- as compensation.
However, if the amount of Rs.50,000 which has been awarded by the High Court
has already been paid over, the balance (or the entirety of Rs.5,00,000/- if no
amount has been paid) shall be paid over to the appellants by 30 November
2022.”

13. In Ram Murti’s case (supra), the petition was filed under Section
166 of Motor Vehicles Act, 1988, which had been dismissed and the accident had
taken place on 03.01.1996 when Section 164 of Act had not come into existence.
However, Hon’ble Supreme Court observed that the Motor Vehicles Act is a
beneficial provision and applied the beneficial provision of Section 164 of Motor
Vehicles Act retrospectively in cases of no-fault liability under Section 163-A and
awarded a lump sum compensation of Rs.5,00,000/- to the claimant.
14.
In the present case, the accident took place on 14.10.1998, resulting
in the deaths of Lal Chand and Daljit Singh on account of use of vehicle bearing
No. HP-15-2998. Initially, the claim petitions were filed and decided under
Section 163-A of the Act. Now, the amendment in Motor Vehicles Act has come
into force w.e.f. 01.04.2022, vide which Section 163-A of the Act has been
repealed and replaced by Section 164 of the Act. However, before this amendment
came into force, the Government by way of Motor Vehicle (Amendment) Act,
2019, vide Act No.32 of 2019 w.e.f. 01.09.2019 had replaced Section 163-A of the
Act with Section 164 and as such, Section 164 had infact come into force w.e.f.
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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01.09.2019, under which claimants are held entitled to compensation to the extent
of Rs.5,00,000/- each. Accordingly, in view of the law laid down in Ram Murti’s
case (supra) , it is held that the claimants are entitled to compensation of
Rs.5,00,000/- each on account of the deaths of driver Lal Chand and cleaner Daljit
Singh, as against the respective sums of Rs.3,77,200/- and Rs.2,78,800/- awarded
by the learned Tribunal.
16. As a result of the aforesaid discussion, the appeals filed by the
appellant-Insurance Company (FAO-13-2002 and FAO-14-2002) are hereby
dismissed with no order as to costs, while the cross-objections filed by the
claimants (XOBJ-C-48-CII-2018 and XOBJ-C-49-CII-2018) are allowed. Smt.
Baby etc. (claimants in FAO-13-2002) are held entitled to the enhanced
compensation of Rs.1,22,800/- (Rs. 5,00,000/- - Rs. 3,77,200/-) (rounded off to
Rs.1,23,000/-, and Smt. Kamla Devi & Anr. (claimants in FAO-14-2002) are held
entitled to enhanced compensation of Rs.2,21,200/- (Rs. 5,00,000/- - Rs.
2,78,800/-) (rounded off to Rs.2,21,000/-) along with interest @ 9% per annum
from the date when Section 164 of the Act came into force i.e. 01.09.2019, till
realization, payable by respondents-Insurance Company and owner of the vehicle
in question jointly and severally.
17. Registry is directed to email the authenticated copy of this judgment
to the respondents/Insurance Companies in terms of directions issued by the
Hon’ble Supreme Court in Writ Petition (Civil) No.534 of 2020 titled Bajaj
Allianz General Insurance Company Versus Union of India and others,
decided on 16.03.2021 and Insurance Companies shall comply with the directions
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment

FAO-13-2002 (O&M), XOBJC-48-CII-2018 (O&M), FAO-14-2002 &

XOBJC-49-CII-2018 (O&M)


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as issued under Clause (F) of the said judgment.
18. Pending misc. application(s), if any, shall also stand disposed of.
(YASHVIR SINGH RATHOR)
27.08.2026 JUDGE
amandeep
Whether speaking/reasoned. : Yes/No
Whether Reportable. : Yes/No
AMANDEEP GOSAIN
2026.09.02 11:20
I attest to the accuracy and
integrity of this
order/judgment