RESHMA vs THE IFFICO TOKIO GENERAL INSURANCE CO. LTD.

Court
High Court of Himachal Pradesh

Neutral Citation No. ( 2026:HHC:29499 )
IN THE HIGH COURT OF HIMACHAL PRADESH AT
High Court of H.P.
SHIMLA

FAO(MV) No. 486 of 2016 with
FAO No. 232 of 2018

Reserved on: 16.07.2026
Date of decision: 20.07.2026
Date of uploading on website:

20.07.2026
________________________________________________
1. FAO(MV) No. 486 of 2016:
Iffico Tokio General Insurance Company Ltd.
…..Appellant.

Versus
Reshma & others
…..Respondents.
2. FAO(MV) No. 232 of 2018:
Reshma & others
…..Appellants.

Versus
Iffico Tokio General Insurance Company Ltd. & another
…..Respondents.
________________________________ ________________
Coram

The Hon'ble Mr. Justice Sushil Kukreja, Judge.
1
Whether approved for reporting? Yes.
________________________________________________
1. FAO(MV) No. 486 of 2016:
For the appellant: Ms. Shilpa Sood, Advocate.

For respondents No. 1 to 3: Mr. Pankaj Samant, Advocate,
vice Mr. Sunil Kumar, Advocate.

2. FAO(MV) No. 232 of 2018:
For the appellants: Mr. Pankaj Samant, Advocate,
vice Mr. Sunil Kumar, Advocate.

For respondent No. 1: Ms. Shilpa Sood, Advocate.


1
Whether reporters of Local Papers may be allowed to see the judgment?
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Neutral Citation No. ( 2026:HHC:29499 )
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Sushil Kukreja, Judge.

The instant appeals, being the offshoots of award
High Court of H.P.
dated 07.09.2015, passed by learned Motor Accidents
Claims Tribunal-II, Shimla, H.P. (hereinafter referred to as
“the learned Tribunal below”), are taken up together for
consideration and disposal.
2. FAO(MV) No. 486 of 2016 has been preferred by
appellant-Iffico Tokio general Insurance Company Limited
(hereinafter referred to as “the appellant-Insurance
Company”), who was respondent No. 1 before the learned
Tribunal below, under Section 173 of the Motor Vehicles Act,
1988 (for short ‘The Act’) against impugned award, dated
07.09.2015, passed in MAC Petition No. 6-R/2 of 2012,
passed by the learned Tribunal below, whereby the claim
petition filed by the petitioners-claimants was allowed, with a
prayer to set-aside the impugned award.
3. FAO(MV) No. 232 of 2018 has been preferred by
appellants, who were petitioners/claimants before the
learned Tribunal below (hereinafter referred to as “the
petitioners/claimants”) under Section 173 of the Act, against
the award dated 07.09.2015, with a prayer to enhance the
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awarded amount of compensation.
High Court of H.P.
4. The facts giving rise to the instant appeals are
that on 05.07.2011 Shri Rajnish was driving car, having
registration No. HP-10B-0650, which was owned by
respondent No. 2-Shri Rajesh Kumar, and it was insured with
respondent No. 1-Insurance Company. Around 05:45 p.m.
when the aforesaid car reached near Karalash Kenchi, Halka
Mod, Tehsil Rohru, due to mechanical defect, the vehicle
rolled down the valley side road and Rajnish (deceased)
sustained head injuries, which resulted into his death. The
petitioners averred in their claim petition that the deceased
was driving the aforesaid vehicle carefully and cautiously.
The deceased was employed as driver by respondent No. 2
on monthly salary of Rs.3300/-. The petitioners, i.e.,
Reshma, Astha and Ishita, wife and daughters of the
deceased, respectively, preferred the claim petition.
5. Respondent No. 1-Insurance Company by filing
its reply contested the claim petition. The replying
respondent raised preliminary objections qua maintainability
of the petition, violation of the terms and conditions of the
insurance policy, petition had been filed by the petitioner in
collusion with respondent No 2 (owner of the offending
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vehicle), suppression of material facts, estoppel and mis-
High Court of H.P.
joinder of parties. It was averred that the deceased was
never engaged by respondent No. 2, as paid driver and the
story of the alleged occupation has been cooked up. It was
further averred that petitioners and respondent No. 2
managed to get the FIR lodged in connivance with the police
officials to save respondent No. 2 from liability. The stand of
the replying respondent was that the accident took place due
to rash and negligent driving of the driver and not due to the
mechanical defect and the vehicle was being driven in
violation of the terms and conditions of the insurance policy,
thus the replying respondent is not liable to pay any
compensation to the petitioners.
6. Respondent No. 2 (owner of the offending
vehicle) filed his separate reply, wherein preliminary
objection qua maintainability of the claim petition was raised.
The replying respondent admitted that the deceased was
employed by him as driver on the offending vehicle and he
used to pay him Rs.3300/- per month. The replying
respondent further averred that the deceased Rajnish was
having valid and effective driving licnece to drive the vehicle
at the time of the accident and the vehicle was duly insured
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with respondent No. 1-Insurance company.
High Court of H.P.
7. On 19.09.2013 the learned Tribunal below had
framed the following issues for consideration and
adjudication:
“1. Whether deceased Rajnish died involving
vehicle bearing No. HP-10B-0650 owned by
respondent No. 2?

2. If issue No. 1 is proved in affirmative, the
petitioners are entitled for compensation, if
so, what amount and from whom? OPP

3. Whether the petition is not maintainable?
OPR

4. Whether the vehicle was being driven in
breach of terms and conditions of insurance
policy? OPR-1

5. Whether the deceased was driving the
vehicle at the time of accident being paid
driver of respondent No. 2? OPP

6. Whether petition is collusive between
petitioners and respondent No. 2? OPR-1

7. Whether the driver of above vehicle was not
having valid and effective driving licence at
the time of accident? OPR-1

8. Relief.”


8. After the parties led their evidence and after
hearing the learned counsel for the parties, the claim petition
was allowed by the learned Tribunal below and
petitioners/claimants were held entitled for compensation in
the sum of Rs.7,58,600/- alongwith interest @ 7.5% per
annum from the date of filing of the petition till the realization
of the amount from respondent No. 1-Insurance Company.
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9. Feeling aggrieved and dissatisfied, appellant-
High Court of H.P.
Insurance Company, preferred FAO(MV) No. 486 of 2016,
against the impugned award dated 07.09.2015, with prayer
to allow the appeal by setting-aside the impugned award.
On the other hand, appellants (petitioners/claimants) also
preferred FAO(MV) No. 232 of 2018, against the impugned
award with a prayer to enhance the amount of compensation
by allowing their appeal.
10. Learned counsel for the Insurance Company
contended that the learned Tribunal below has erred in law in
granting compensation to the petitioners/claimants under
Section 166 of the Act despite the fact that the
petitioners/claimants had sought compensation under
specific provisions of Section 163A of the Act. She further
contended that the learned Tribunal below ought to have
granted compensation to the petitioners/claimants in
accordance with Schedule-II under Section 163A of the Act.
11. Conversely, learned vice counsel for the
petitioners/claimants contended that the petitioners/claimants
have also filed an appeal for enhancement of compensation
on the ground that the compensation amount, as awarded by
the learned Tribunal below, is on the lower side and the
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same is inadequate.
High Court of H.P.
12. I have heard the learned Counsel for the
Insurance Company, learned vice counsel for the
petitioners/claimants and carefully examined the entire
records.
13. The perusal of available material on record
reveals that the petitioners had filed the claim petition under
Section 163A of the Act for grant of compensation on
account of death of Rajnish, who was the husband of
petitioner No. 1-Smt. Reshma and father of petitioners No. 2
and 3, i.e., Ms Astha and Ms Ishita, respectively. However,
the learned Tribunal below awarded the compensation in the
sum of Rs.7,58,600/-, as if it was a petition under Section
166 of the Act.
14. Although the Act is a beneficial one and, thus,
deserves liberal construction with a view to implement the
legislative intent but it is trite that where such beneficial
legislation has a scheme of its own and there is no
vagueness or doubt therein, the court would not travel
beyond the same and extend the scope of the statute on the
pretext of extending the statutory benefit to those who are
not covered thereby. Needless to state that section 163A of
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the Act contains a special provision as to the payment of
High Court of H.P.
compensation on structured formula basis, as indicated in
Schedule-II to the Act. As per Schedule-II under Section
163A of the Act, compensation has to be assessed on the
basis of structured formula. Any claim made under
Section 163A of the Motor Vehicles Act, 1988 exempts the
claimant from proving the negligence on the part of the
offending vehicle. It is a settled principle of law that even if
the claimant is at fault; he can resort to Section 163 A of the
Motor Vehicle Act, 1988. The basis on which the dependents
of a deceased in case of his death, or the victim himself in
case of permanent disability can be entitled to compensation
under Section 166 of the Motor Vehicles Act are different
from the requirements of section 163A of the Motor Vehicles
Act, 1988.The principles of law settled by the court or a
precedent in respect of an application under Section 166 of
the Motor Vehicles Act cannot be used as a strait jacket
formula in respect of a petition under Section 163A of the
Motor Vehicles Act. Hence, this Court is of the considered
view that the principles of law as enunciated in National
Insurance Company Limited Versus Pranay Sethi &
others, (2017) 16 SCC 680, and Sarla Verma & others vs.
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Delhi Transport Corporation & another, (2009) 6 SCC 121
High Court of H.P.
regarding adding additional amount towards future prospects
in case of applications under section 166 of the Motor
Vehicles Act, 1988, cannot as a general rule be applied in
respect of an application filed under Section 163 A of the
Motor Vehicles Act, 1988
15. In the case on hand, the petitioners have claimed
that the deceased was earning Rs.3300/- per month and the
learned Tribunal below had rightly assessed the income of
the deceased @ Rs.3300/- per month at the time of his
death. Since there were three family members who were
dependent upon the income of the deceased at the time of
accident, therefore, on the basis of structured formula, 1/3rd
of his income is required to be deducted towards personal
rd
and living expenses. After deducting 1/3 of the amount
from the monthly income of the deceased, the loss of
dependency comes to Rs.2200/- per month. Admittedly the
age of the deceased was 31 years at the time of the
accident. Thus, by applying the multiplier of 17, the
compensation under the head loss of dependency is fixed at
Rs.4,48,800/- (2200/- x 12 x 17)
16. In addition, the Tribunal has chosen to award
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Rs.1,00,000/- towards loss of consortium and Rs.25,000/-
High Court of H.P.
towards funeral expenses. In the opinion of this court, when
a claim is made under Section 163-A, the conventional
damages shall be in accordance with Schedule-II to the Act
and the principles of law under general damages cannot be
applied to an application under Section 163A of Motor
Vehicle Act, 1988 because Section 163A of the Motor Vehicle
Act in no uncertain manner envisages that as per clause 3(i),
funeral expenses awardable shall be Rs.2,000/-, as per
clause 3(ii), compensation for loss of consortium shall be
Rs.5000/-. Clause 3(iii) states that a sum of Rs.2500/- shall
be payable as compensation for loss of estate which the
Tribunal has omitted to do. So this Court is of the considered
view that under the conventional heads, the claimants are
entitled to general damages of Rs.9,500/- only.
17. All the above aspects will go to show that the
Tribunal has committed a grave error in passing the above
said award in every respect. The award of the Tribunal is
defective, infirm and unsustainable in law, which has got to
be interfered with and corrected by this Court in exercise of
its appellate powers.
18. Hence, in view of what has been discussed
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hereinabove, the appeal filed by the Insurance Company
High Court of H.P.
(FAO(MV) 486 of 2016) is partly allowed and the appeal filed
by the petitioners/claimants (FAO(MV) No. 232 of 2018) is
dismissed. The petitioners (claimants) are held entitled to
compensation in the sum of Rs.4,58,300/- (4,48,800/-
+9500/-) from Iffico Tokio General Insurance Company
Limited only. The remaining terms of the impugned award,
including the interest component as well as the
apportionment amongst the claimants, shall remain the
same.
19. Both the appeals stand disposed of in the above
terms, also the pending application(s), if any.

( Sushil Kukreja )
Judge
th
20 July, 2026
(virender)






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