Sunita vs. United India Insurance Co. Ltd.

2025 INSC 867
NON- REPORTABLE
SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9538 OF 2025
(Arising out of Special Leave Petition (Civil) No. 1412 of 2024)
SUNITA & ORS. …APPELLANT(S)
Versus
UNITED INDIA INSURANCE
CO. LTD. & ORS. …RESPONDENT(S)
J U D G M E N T
SANJAY KAROL J.
Leave Granted.
2. The present appeal arises from the final judgment and
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order dated 12 December 2022, passed by the High Court of
Madhya Pradesh at Jabalpur in Misc. Appeal No. 554 of 2017,
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which, in turn, was preferred against the award dated 19
December 2016 passed in Case Claim No.22 of 2015 by the
Motor Accident Claim Tribunal, District: Seedhi (M.P).
3. The facts giving rise to the present appeal, in a nutshell
Signature Not Verified
Digitally signed by
RAJNI MUKHI
Date: 2025.07.17
16:24:41 IST
Reason:
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are that on 27 November 2013, at about 8:15 p.m., the
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deceased, namely, Gokul Prasad, aged 32 years, was returning
home from a weekly market, travelling in a vehicle i.e., TATA
1
407 Truck bearing registration No. M.P. 53G/0386 , being
driven by Respondent No. 3 herein. Upon reaching near
Kurwaiha Ghati Road, the said vehicle driven, in a rash and
negligent manner, met with an accident. As a result, the
deceased sustained severe injuries and died on the spot.
4. A claim petition was filed on behalf of the Appellants
( the legal representatives of the deceased ) under Section 166 of
the Motor Vehicles Act, 1988, before the Tribunal seeking
compensation to the tune of Rs. 49,26,000/- claiming the
income of the deceased to be Rs.12,000/- per month engaged as
a cloth-seller.
5. The Respondent Insurance Company opposed the
claimant-appellant(s)’s claim and set up a plea of breach of
Policy as the offending vehicle was being used as a loading
vehicle without a valid permit, registration and fitness
certificate. This was in violation of the conditions of the
Insurance Policy. Also, the driver of the vehicle was also not
holding a valid license. Consequently, the Insurance Company
is not liable to pay any compensation.
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6. The Tribunal vide its order dated 19 December 2016,
awarded compensation amounting to Rs.19,53,000/- along with
1 Hereinafter referred to as “Offending Vehicle”.
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interest @6% per annum. The liability to pay compensation was
fastened upon the driver and the owner of the vehicle, jointly
and severally, as there was a clear violation of the terms and
conditions of the Policy. The Tribunal held that though the
vehicle was commercial in nature but driven by the driver
possessing a license only to drive a Light Motor Vehicle, i.e., a
non-commercial vehicle. Furthermore, there was no
endorsement stating that the driver was authorized to drive the
commercial vehicle. Subsequently, the Tribunal concluded that
the offending vehicle was insured under the “ Liability Only
Policy ” which covered only third-party liability as no premium
was paid covering the driver or the owner of the vehicle.
7. Being aggrieved thereof, the owner of the offending
vehicle preferred an appeal before the High Court. The High
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Court vide impugned order dated 12 December 2022 dismissed
the appeal filed by the owner, affirming the compensation
awarded by the Tribunal. The Court observed that the Insurance
Company stood rightly exonerated by the Tribunal with liability
being fastened on the driver and owner of the vehicle. The High
Court gave the following findings by referring to the decisions
rendered by this Court:
7.1. By relying on Mukund Dewangan v. Oriental
2
Insurance Company Ltd. Limited & Others , the High
2 (2017) 14 SCC 663.
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Court held that the endorsement or any other
authorization to drive a commercial vehicle was not
required, if the driver was holding a license to drive the
Light Motor Vehicle (LMV);
7.2. The offending vehicle is insured under the “ Liability
Only Policy ”, which only fixes the liability of the
Insurance Company towards third-party liability. Since no
premium was paid to cover the liability of the driver as
well as any passenger travelling, in the light of law laid
down in New India Assurance Company Ltd. v. Vedwati
3
& Ors. , and New India Assurance Company Ltd. v.
4
Asharani & Ors. , the Court came at the conclusion that
the liability of the Insurance Company stood rightly
exonerated.
8. The present appeal has been instituted by the claimant-
appellant(s). The significant ground of challenge made is that in
view of law laid down in National Insurance Co. Ltd. v.
5
Paravathneni & Anr. wherein this Court observed that in a
case of gratuitous passenger, the Insurance Company was liable
to initially pay the compensation amount to the claimant-
appellant(s) and then recover the same from the insured, the
3 (2007) 9 SCC 486
4 (2003) 2 SCC 223
5 (2009) 8 SCC 785
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Courts below ought to have adopted the principle of “ pay and
recover ”.
9. We have heard learned counsel for the parties. We have
also heard the learned amicus curiae, Ms. Vidhi Pankaj Thaker,
and perused the calculation chart prepared by her, indicating
such payment of compensation to the claimant-appellant(s),
which is just and fair.
10. The findings of the Courts below reveal that the driver of
the vehicle involved in the accident was holding a valid license
to drive a Light Motor Vehicle (LMV). However, in fact, the
vehicle in question is a commercial one. We agree with the view
taken by the High Court, holding that no endorsement was
required to drive a commercial vehicle of the type in question,
by the driver who possesses a license to drive a Light Motor
Vehicle (LMV). In the present case, the offending vehicle was
TATA 407 Truck, having a gross total weight of around 4995
Kg., which does not exceed 7500 Kg. We must advert to the
recent finding of this Court laid down by the Constitutional
Bench in Bajaj Alliance General Insurance Co. Ltd. v.
6
Rambha Devi , wherein view taken by the three-Judge Bench in
Mukund Dewangan (Supra) , was affirmed while observing
that:
6 (2024) 1 SCC 818
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“181. Our conclusions following the above
discussion are as under:
181.1. A driver holding a licence for light
motor vehicle (LMV) class, under Section 10(2)
(d) for vehicles with a gross vehicle weight under
7500 kg, is permitted to operate a “transport
vehicle” without needing additional authorisation
under Section 10(2)(e) of the MV Act specifically
for the “transport vehicle” class. For licensing
purposes, LMVs and transport vehicles are not
entirely separate classes. An overlap exists
between the two. The special eligibility
requirements will however continue to apply for,
inter alia, e-carts, e-rickshaws, and vehicles
carrying hazardous goods.
181.2. The second part of Section 3(1), which
emphasises the necessity of a specific requirement
to drive a “transport vehicle”, does not supersede
the definition of LMV provided in Section 2(21)
of the MV Act.
181.3. The additional eligibility criteria
specified in the MV Act and the MV Rules
generally for driving “transport vehicles” would
apply only to those intending to operate vehicles
with gross vehicle weight exceeding 7500 kg i.e.
“medium goods vehicle”, “medium passenger
vehicle”, “heavy goods vehicle” and “heavy
passenger vehicle”.
181.4. The decision in Mukund Dewangan
(2017) [Mukund Dewangan v. Oriental Insurance
Co. Ltd., (2017) 14 SCC 663] is upheld but for
reasons as explained by us in this judgment. In the
absence of any obtrusive omission, the decision is
not per incuriam, even if certain provisions of the
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MV Act and the MV Rules were not considered in
the said judgment.”
(emphasis supplied)
Thus, in our considered view, in the present case, although the
offending vehicle is a commercial one and the driver of the said
vehicle at the time of accident possessed a license to only drive
a Light Motor Vehicle (LMV) and, considering the gross weight
of the vehicle in question is not in excess of 7500 Kg., the
driver can be said to be holding a valid license to drive the
same.
11. Then, the question which would arise is as to whether the
liability could have been fastened upon the Insurer or not. In our
considered view, not so, solely for the reason that the risk stood
not covered, as no premium was paid.
12. The next question which arises for our consideration is
whether the Insurance Company is liable to indemnify the
compensation amount to the claimant-appellant and, thereafter,
recover the same from the driver and owner of the vehicle.
13. Adverting to the facts in hand, from a bare perusal of the
record, it is borne that the vehicle in question was insured with
“ Liability Only Policy ” and no premium was paid to cover the
driver, owner, or a gratuitous passenger travelling therein.
However, even then, in our view, the Courts below erred in
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holding that the Insurance Company is not liable to pay the
compensation to the claimant-appellants, for the principle of
“ Pay and Recover ” ought to have been invoked. As such, we
are inclined to interfere with the above findings of the Courts
below.
14. We must advert to the exposition of this Court in
7
National Insurance Co. Ltd. v. Baljit Kaur . The deceased
therein was travelling as a gratuitous passenger, and due to the
rash and negligent driving of the offending vehicle, lost his life.
The Insurance Company was directed to satisfy the amount
awarded by the Courts below and recover the same from the
owner of the vehicle, as the premium was not paid by the owner
of the vehicle towards gratuitous passenger.
15. The above position has been followed by this Court in

wherein the injured person was travelling as a gratuitous
passenger and was not covered under the Insurance Policy, the
driver and owner of the vehicle was held liable for payment of
compensation amount. This Court applied the principle of “ Pay
and Recover ” and directed the Insurance Company to pay the
amount and, thereafter, recover the same from the owner of the
vehicle.
7 (2004) 2 SCC 1.
8 (2020) 20 SCC 632.
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16. The aforementioned principle was adopted by this Court
in various judgments of this Court in Amrit Lal
9
Sood v. Kaushalya Devi Thapar ; New India Assurance Co.
10
Ltd. v. C.M. Jaya ; National Insurance Co. Ltd. v. Challa
11 12
Upendra Rao ; New India Assurance Co. Ltd. v. Vimal Devi ;
13
National Insurance Co. Ltd. v. Saju P. Paul ; Manuara
14
Khatun v. Rajesh Kumar Singh ; and Puttappa v. Rama
15
Naik .
17. Applying the above expositions of law, the Courts below
ought to have directed the Insurance Company to indemnify the
amount and thereafter recover the same.
18. Therefore, in light of the attending facts and
circumstances of the case, we are of the view that the Insurance
Company is liable to indemnify the compensation amount
awarded by the Tribunal and recover the same only from the
owner of the offending vehicle.
19. In view of the above discussion, the driver of the
offending vehicle is not liable as he was holding a valid driving
license to drive the offending vehicle i.e., TATA 407 Truck.
9 (1998) 3 SCC 744.
(2002) 2 SCC 278.
10
(2004) 8 SCC 517.
11
2010 SCC OnLine SC 49.
12
13 (2013) 2 SCC 41.
14 (2017) 4 SCC 796.
15 2018 SCC OnLine SC 3496.
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20. Regarding the monthly income of the deceased, we
concur with the view taken by the Courts below in assessing the
same to be Rs.12,000/- per month, for there being no error
therein. Hence, in awarding compensation which is just and fair,
we are inclined to increase the amount awarded under the
conventional heads, namely, loss of estate, loss of consortium,
and funeral expenses by 10% adverting to the settled principle
of law laid down by this Court in National Insurance Co. Ltd.
16
v. Pranay Sethi , that such amount should be revised every
three years.
21. In view of the aforesaid, the compensation now payable
to the claimant-appellant(s) in accordance with law, is as
follows:
CALCULATION OF COMPENSATION

16 (2017) 16 SCC 680.
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Thus, the difference in compensation is as under:

22. In that view of the foregoing discussion, the appeal filed
by the claimant-appellants succeed and is allowed. The
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impugned Award dated 19 December 2016 passed in Case
Claim No.22 of 2015 by the Motor Accident Claim Tribunal,
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District: Seedhi (M.P.), as modified vide the impugned order
th
dated 12 December 2022, passed in Misc. Appeal No. 554 of
2017, by the High Court of Madhya Pradesh at Jabalpur.
Interest be awarded in accordance with the direction of the
Tribunal, at 6% per annum.
23. Let the amount be directly remitted into the bank amount
of the claimant-appellant(s). The particulars of the bank account
are to be immediately supplied by the learned counsel for the
appellant(s) to the learned counsel for the respondent. The
amount be remitted positively within a period of four weeks
thereafter.
Pending application(s), if any, shall stand disposed of.
……………………J.
(Sanjay Karol)
……………………J.
(Joymalya Bagchi)
New Delhi;
July 17, 2025

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