Gurnam Singh vs General Manager Haryana Roadways Sirsa

FAO-2800-2002(O&M) -1-

IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
110(2) FAO-2800-2002(O&M)
Reserved on:15.10.2026
Pronounced on: 12.11.2026
Uploaded on: 13.11.2026
National Insurance Company Limited
...Appellant
Versus
Gurnam Singh(since deceased) and Others
... Respondents
2.FAO-3218-2002(O&M)
Gurnam Singh(since deceased)
...Appellant
Versus
National Insurance Company Limited
... Respondents
CORAM : HON'BLE MR. JUSTICE AMARINDER SINGH GREWAL
(As on the reserved date)
Present: Mr. Sanjiv Gupta, Senior Advocate, with
Mr. Mohit Kaushik, Advocate,
for the appellant (in FAO-3218-2002) and
for the LRs of respondent No. 1 (in FAO-2800-2002).
Mr. Rajiv Malhotra, D.A.G., Haryana.
for respondent Nos. 1 and 2 (in FAO-3218-2002) and
for respondent Nos. 2 and 3 (in FAO-2800-2002).
Mr. Sandeep Suri, Advocate (through video conferencing)
for the appellant (in FAO-2800-2002) and
for respondent No. 3 (in FAO-3218-2002)
AMARINDER SINGH GREWAL, J.
1. This order shall dispose of two appeals, i.e. FAO-2800-2002 and
FAO-3218-2002, as both appeals arise out of the same award , dated 15.02.2002
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FAO-2800-2002(O&M) -2-

passed by the learned Motor Accidents Claims Tribunal, Sirsa(hereinafter referred
to as ‘the Tribunal’) and for the convenience of the Court, the facts are taken from
FAO-2800-2002.
2. FAO-2800-2002 has been preferred by the appellant-insurance
company, seeking setting aside of the impugned Award dated 15.02.2002 passed by
the learned Tribunal, whereas, FAO-3218-2002 has been preferred by the claimant,
seeking enhancement of the compensation awarded.
3. Succinctly, the facts of the case were that on 14.06.1999, Gurman
Singh, while driving Haryana Roadways bus bearing registration No. HR-39-4848
from Sirsa to Chandigarh, which commenced its journey at about 4:20 a.m., met
with an accident at approximately 6:00 a.m. near the Water Works of village
Surewala. It was alleged that, on account of rainy weather and slippery road
conditions, the bus suddenly skidded off the road and struck against a tree, as a
result of which the claimant sustained grievous injuries, including multiple
fractures in both legs. He was initially taken to the hospital at Uklana and thereafter
shifted to Civil Hospital, Sirsa, where he remained admitted until 19.07.1999.
Subsequently, the Medical Board assessed his permanent disability at 60%.
Accordingly, the claimant instituted a petition under Section 163-A of the Motor
Vehicles Act, seeking compensation on account of the injuries and permanent
disability suffered by him in the accident.
4. Learned counsel for the appellant–Insurance Company in FAO-2800-
2002 contended that the learned Tribunal had erred in fastening liability upon the
Insurance Company despite the fact that the claimant himself was driving the bus
at the time of the accident and was allegedly not holding a valid and effective
driving licence. It was submitted that the driving licence produced by the claimant
was not genuine, as the Licensing Authority, Cuttack, had issued a certificate
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FAO-2800-2002(O&M) -3-

indicating that no such licence had been issued in his favour. It was further
contended that the insurance policy covering the offending bus was an Act Only
Policy, under which the risk of the driver was not covered, particularly in the
absence of payment of any additional premium. Learned counsel argued that the
learned Tribunal had failed to appreciate the evidence led by the Insurance
Company regarding the invalidity of the driving licence and the terms and
conditions of the insurance policy, and had wrongly rejected the statutory and
contractual defences available to the insurer. It was, thus, contended that the
findings recorded by the learned Tribunal were erroneous and unsustainable in law
and that the award fastening liability upon the appellant–Insurance Company was
liable to be set aside.
5. Learned counsel for the claimants in FAO-3218-2002 contended that
the learned Tribunal had awarded grossly inadequate compensation without
properly appreciating the nature and gravity of the injuries sustained by Gurman
Singh in the accident. It was submitted that the claimant had suffered multiple
fractures in both legs, resulting in 60% permanent disability, which had
substantially impaired his physical capacity and adversely affected his ability to
discharge his duties as a driver with Haryana Roadways. Learned counsel argued
that the learned Tribunal had failed to take into consideration the permanent
disability, its impact upon the claimant's future earning capacity, and the
consequential loss of amenities and enjoyment of life. It was further contended that
the compensation awarded towards pain and suffering and medical expenses was
wholly inadequate, particularly considering the prolonged treatment and future
medical requirements of the claimant. Learned counsel also assailed the rate of
interest awarded by the learned Tribunal at 9% per annum, contending that the
same was on the lower side and ought to have been enhanced to 15% per annum. It
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FAO-2800-2002(O&M) -4-

was, thus, prayed that the compensation awarded by the learned Tribunal be
suitably enhanced along with an appropriate rate of interest.
6. I have heard learned counsel for the parties and examined the limited
record, with their able assistance.
7. The learned Tribunal, upon appreciation of the evidence, partly allowed
the claim petition filed under Section 163-A of the Motor Vehicles Act. It held that
the claimant was entitled to compensation on the principle of no-fault liability and
rejected the Insurance Company's objections regarding the validity of the driving
licence and the nature of the insurance policy, thereby fastening joint and several
liability upon all the respondents. However, despite noticing 60% permanent
disability suffered by the claimant, the learned Tribunal declined to award
compensation towards loss of future earning capacity, primarily on the ground that
he continued to receive the same salary from Haryana Roadways. Accordingly, a
₹
total compensation of 30,453.20 was awarded along with interest at 9% per
annum. Aggrieved by the aforesaid award, the Insurance Company has preferred
FAO No. 2800 of 2002, challenging the fastening of liability upon it on the grounds
of invalidity of the driving licence and non-coverage of the driver's risk under the
Act Only Policy. On the other hand, the claimant has filed FAO No. 3218 of 2002
seeking enhancement of compensation on account of the inadequate assessment of
his injuries, permanent disability and its impact upon his earning capacity, besides
seeking enhancement under other heads and interest.
8. Thus, the controversy in the present appeals primarily revolves around
the following questions:
(i) Whether the Insurance Company has established that the
claimant was not holding a valid and effective driving licence and
that the insurance policy did not cover the risk in question?
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FAO-2800-2002(O&M) -5-

(ii) Whether the learned Tribunal was justified in declining
compensation towards loss of earning capacity despite the claimant
having suffered 60% permanent disability involving both legs?
9 The first question which arises for consideration is whether the
Insurance Company has established that the claimant was not holding a valid and
effective driving licence at the time of the accident. In this regard, the Insurance
Company primarily relied upon a certificate purportedly issued by the Licensing
Authority, Cuttack, disputing the issuance of the claimant's driving licence.
However, the record reveals that the claimant's driving licence formed part of his
service record maintained by Haryana Roadways. Further, RW-3 Sajjan Kumar, an
official from the DTO Office, Sirsa, confirmed the issuance of a duplicate licence
upon the claimant reporting the loss of his original licence. Although the witness
admitted that the original issuance of the licence had not been independently
verified from the Licensing Authority, Cuttack, the Insurance Company was
equally required to establish its allegation through cogent and reliable evidence.
The mere production of a certificate disputing the issuance of the licence, without
proving its authenticity and the underlying verification, is insufficient to
conclusively establish that the claimant was not holding a valid driving licence.
Accordingly, the Insurance Company has failed to discharge the burden of
establishing the alleged breach in this regard.
10. As regards the objection relating to the nature of the insurance policy, it
is evident from the statement of RW-5 P.C. Narang, the official of the Insurance
Company, that the policy covering the offending bus was an Act Only Policy and
no additional premium had been charged for extending any wider contractual
coverage to the driver. However, the claimant was not a gratuitous passenger or a
person borrowing the vehicle. Rather he was an employee of Haryana Roadways
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FAO-2800-2002(O&M) -6-

and was driving the insured bus in the course of his employment. In such
circumstances, the matter has to be examined in the light of the statutory obligation
under the proviso to Section 147(1)(b) of the Motor Vehicles Act, which requires
an insurance policy to cover the employer's liability under the Employees'
Compensation Act, 1923, in respect of bodily injury to an employee engaged in
driving the insured vehicle. Thus, the absence of additional premium may be
relevant to the extent of any wider contractual coverage, but it cannot be construed
as absolving the Insurance Company of the compulsory statutory liability in respect
of an employee-driver.
11. The aforesaid position is consistent with the law laid down by the
Hon'ble Supreme Court in National Insurance Company Limited v. Prembai
Patel , (2005) 6 SCC 172, and Sanjeev Kumar Samrat v. National Insurance
Company Limited , (2012) 13 SCC 174 , wherein it has been held that, in the case
of an Act Only Policy, the insurer's liability towards an employee is governed by
the statutory coverage contemplated under Section 147 of the Motor Vehicles Act,
and any liability beyond such statutory coverage would depend upon the terms of
the insurance contract and payment of additional premium. However, the aforesaid
decisions do not permit the insurer to escape the compulsory statutory liability
altogether. In the present case, the policy was in force on the date of the accident,
the vehicle was insured with the appellant-Insurance Company and the claimant
was an employee engaged in driving the insured vehicle. Consequently, the
objection raised by the Insurance Company, seeking complete exoneration from
liability merely on the ground that the policy was an Act Only Policy, cannot be
accepted.
12. The next issue pertains to the adequacy of compensation awarded to the
claimant, particularly in view of the 60% permanent disability assessed by the
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FAO-2800-2002(O&M) -7-

Medical Board. The learned Tribunal declined to award any compensation towards
loss of future earning capacity, primarily on the ground that the claimant continued
in the employment of Haryana Roadways and was drawing the same salary as
before the accident. However, the claimant contends that the learned Tribunal
failed to appreciate the nature of his injuries and their impact upon his ability to
discharge his duties as a professional driver.
13. At this stage, it would be apposite to notice the judgment of this Court
in Hardial Singh v. Mahinder Singh and others , FAO No.3470 of 2001 (O&M) ,
decided on 31.01.2026, wherein the claimant had sustained multiple fractures in an
accident which took place on 27.01.1999 and the claim petition had been
adjudicated under Section 163-A of the Motor Vehicles Act. The learned Tribunal
therein had declined compensation under certain heads, including loss of income
and functional disability, in the absence of sufficient evidence. This Court, relying
upon the judgment of the Hon'ble Supreme Court in Ram Murti v. Punjab State
Electricity Board, 2023 ACJ 631 , extended the benefit of the beneficial provisions
of Section 164 of the Motor Vehicles Act and converted the compensation awarded
under Section 163-A into compensation payable under Section 164 of the Act. It
was held that Section 164, being a beneficial provision providing fixed
compensation on the principle of no-fault liability, deserves to be applied in a
manner which advances the object of the legislation. Accordingly, the claimant
₹
therein was held entitled to compensation of 2,50,000/- on account of grievous
injuries, along with interest at the rate of 7% per annum from the date of filing of
the claim petition till realisation, while maintaining the liability as determined by
the learned Tribunal.
14. The aforesaid judgment squarely advances the case of the claimant in
the present appeals. The accident in question occurred on 14.06.1999, and the
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FAO-2800-2002(O&M) -8-

claim petition was instituted under Section 163-A of the Motor Vehicles Act. The
medical evidence on record establishes that the claimant sustained multiple
fractures in both legs, besides suffering 60% permanent disability. The nature of
the injuries, particularly the fractures sustained by the claimant, establishes that he
suffered grievous hurt. Consequently, the claimant is entitled to the benefit of the
beneficial provision contained in Section 164 of the Act, in view of the law laid
down in Ram Murti (supra) and followed by this Court in Hardial Singh (supra). In
view of the aforesaid position, it would not be necessary to undertake a separate
computation of compensation by applying the percentage of permanent physical
disability to the income of the claimant. The statutory compensation payable in the
₹
case of grievous hurt under Section 164 of the Act is fixed at 2,50,000/-.
15. Consequently, FAO-2800-2002 filed by the Insurance Company is
dismissed. FAO-3218-2002 filed by the claimant is allowed. The compensation is
₹
enhanced to 2,50,000/- and the same shall also carry interest @ 7.5% per annum
from the date of filing of the claim petition till its realization. The remaining
findings recorded by the learned Tribunal shall remain undisturbed.
16. Pending miscellaneous application(s), if any, shall also stand disposed
of.
17. A photocopy of this order be placed on the file of the other connected
case.
( AMARINDER SINGH GREWAL )
JUDGE
November 12, 2026
Nitin
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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