RELIANCE GENERAL INSURANCE COMPANY LIMITED vs SANTOSH KUMAR AND ANOTHER

Court
High Court of Himachal Pradesh

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
High Court of H.P.
        FAO (MV) No.       :                     41     of 20    20
 
th
 Reserved on  :                07    May, 2026
th
      Decided on                 30 :           May    , 2026
Reliance General Insurance
Company Limited                        ...Appellant
Versus
Santosh Kumar & Another            ...Respondents
Coram
The Hon’ble Mr. Justice Virender Singh, Judge.
1
Whether approved for reporting?  Yes
For the appellant       :   Mr. Jagdish Thakur, Advocate. 
For the respondents  :   Mr. Sumit Sharma, Advocate, for
respondent No.1.
Mr. Varun Chauhan, Advocate for
respondent No.2.
Virender Singh, Judge
Appellant­Reliance  General   Insurance  Company
Limited,   through   its   Manager,   has   preferred   the   present
appeal,   under   Section   173   of   the   Motor   Vehicles   Act
(hereinafter referred to as ‘the M.V. Act’), against the award
dated 31.10.2019, passed by learned Motor Accident Claims
Tribunal­II, Kinnaur at Rampur Bushehar, District Shimla,
H.P.   (hereinafter   referred   to   as   ‘the   MACT’),   in   M.A.C.T.
1
Whether the reporters of Local Papers may be allowed to see the judgment? Yes.
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Petition   No.149   of   2017,   titled   as   ‘Santosh   Kumar  versus
High Court of H.P.
Joginder Singh & Another’.
2.   By way of award dated 31.10.2019, the learned
MACT   has   allowed   the   claim   petition,   filed   by   respondent
No.1, under Section 166 of MV Act, by awarding a sum of
Rs.02,22,000/­ with interest, at the rate of 7.5% per annum,
from the date of filing of the petition, till realization of the
amount,   by   fastening   the   ultimate   liability   to   pay   the
compensation   amount,   along   with   interest,   upon   the
appellant­insurer. 
3. For the sake of convenience, the parties to the
present  lis  are, hereinafter, referred to, in the same manner,
in which, they were referred to, by the learned MACT.  
4. Brief facts, leading to the filing of present appeal,
before this Court, as emerge from the record, may be summed
up, as under:­
4.1. Petitioner   Santosh   Kumar,   has   filed   the   claim
petition,   under   Section   166   of   the   M.V.   Act,   against   the
respondents, seeking compensation on account of the injuries
sustained by him in a road side accident involving vehicle
No.HP01K­5100   (hereinafter   referred   to   as   ‘the   offending
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vehicle’), having taken place on 28.05.2015, at about 7.00
High Court of H.P.
p.m., at Kotgali, near village Kotlu, District Mandi, H.P.
4.2. According to the petitioner, he was travelling in
the   offending   vehicle,   being   driven   by   respondent   No.1­
Joginder Singh, in a rash and negligent manner and when the
offending vehicle reached at Kotlu, he could not control the
same and rolled down into the deep gorge. Consequently, the
petitioner sustained injuries.
4.3. After   the   accident,   the   petitioner   was   taken   to
CHC Anni, where first aid was given to him.  Thereafter, he
was shifted to IGMC Shimla, where, he remained admit for 21
days, as indoor patient.  According to the petitioner, he has
spent a sum of Rs.1,50,000/­, on his medical treatment and
is still under treatment.  
4.4. The information regarding the accident was given
to Police Station Karsog, District Mandi, where, FIR No.75 of
2015, dated 29.05.2015, has been registered.  The petitioner
has also asserted his bright past and bleak future by pleading
that he has become 10% permanently disabled due to the
injuries sustained by him in the accident, in question.
5. Since, the accident, in question, has solely been
attributed to the rash and negligent driving of respondent
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No.1 (owner­cum­driver), as such, the petitioner has sought
High Court of H.P.
an   amount   of   Rs.20,00,000/­   as   compensation   from   the
respondents.
6. When put to notice, the claim petition has been
contested by the respondents.
7. Respondent No.1, has filed the separate reply, by
taking the preliminary objections that the petition, as filed, is
not maintainable, as, he was neither rash nor negligent, but
the accident had taken place due to the mechanical defect,
which had suddenly occurred in the vehicle.  To buttress his
contentions, respondent No.1 has further pleaded that after
investigation,  cancellation  report   has   been  filed  before  the
Court of learned Judicial Magistrate First Class, Karsog.  He
has also taken the preliminary objections that the petitioner
has not approached the Court  with  clean hands; and the
learned MACT has no jurisdiction to try and entertain the
present petition.
8. On merits, the claim petition has been contested,
on the ground, that the accident had taken place due to the
mechanical   defect,   which   had   suddenly   occurred   in   the
offending vehicle.  Other contents of the claim petition have
also been denied mainly for want of knowledge.
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9. Insurance   Company­insurer   of   the   offending
High Court of H.P.
vehicle   filed   its   separate   reply,   by   taking   the   preliminary
objections that the claim petition is not maintainable; the
offending vehicle was being plied, in violation of the terms and
conditions of the Insurance Policy; the driver of the offending
vehicle was not holding valid and effective driving licence, at
the time of the accident; the petitioner was travelling in the
vehicle as gratuitous passenger; and the claim petition has
been filed by the petitioner in collusion with respondent No.1.
10. On merits, the contents of the claim petition have
been denied for want of knowledge.
11. Thus, the respondents have prayed for dismissal
of the claim petition.
12. From   the   pleadings   of   the   parties,   the   learned
MACT   has   framed   the   following   issues,   vide   order   dated
04.04.2018:  
1.  Whether   the   petitioner   sustained   injuries   on
28.05.2015, at about 7.00 p.m., at place Kotgali
near Kotlu, due to rash and negligent driving of
driver   of   vehicle   bearing   No.HP01K­5100
(Bolero), as alleged? OPP
2. If issue No.1 is proved in affirmative, to what
amount   of   compensation,   the   petitioners   are
entitled and from whom? OPP
3.  Whether the petition is not maintainable in the
present form?   OPR 1&2
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4. Whether the petitioner has not come to the Court
with clean hands, as alleged?           OPR­1
High Court of H.P.
5. Whether the driver of the offending vehicle was
not having a valid and effective driving license at
the time of accident, as alleged? OPR­2
6. Whether   the   vehicle   was   being   plied   in
contravention   of   the   terms   and   conditions   of
insurance policy, as alleged?         OPR­2
7. Whether   the   petition   is   filed   in   collusion   with
respondent No.1? OPR­2
8. Whether   the   petitioner   was   traveling   as
gratuitous passenger in the vehicle at the time of
accident? OPR­2
9. Relief.
13. Thereafter, the parties to the   lis   were directed to
adduce evidence.
14. After   the   closure   of   evidence   and   after   hearing
learned counsel for the parties, the learned MACT has allowed
the claim petition, as referred to above.
15. Feeling aggrieved from the said award passed by
the   learned   MACT,   respondent   No.2­Insurance   Company/
insurer of the offending vehicle, has assailed the said award
before this Court, on the ground, that in the present case, the
petitioner could not prove that sine qua non for claiming the
compensation i.e., rash and negligent driving on the part of
the driver of the offending vehicle.   Although FIR has been
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lodged   against   respondent   No.1   and   the   same   has   been
High Court of H.P.
exhibited as PW­1/B, however, the police, thereafter, has filed
the cancellation report, which has now been accepted by the
learned Judicial Magistrate First Class, Karsog.
16. All these facts have been pleaded to demonstrate
that sine qua non for seeking the compensation, i.e., rash and
negligent driving of the driver of the offending vehicle, has not
been proved.   The award has been assailed on the ground
that the learned MACT has wrongly ignored the cancellation
report submitted by the police and according to the appellant­
insurer, the claim petition is required to be dismissed on this
score, by setting aside the award passed by learned MACT.
17. The award has also been assailed on the ground
that while deciding issue No.5, the learned MACT has erred in
holding that the driver of the offending vehicle was holding a
valid and effective driving licence.
18. The   amount   of   compensation,   which   has   been
awarded to the petitioner has also been prayed to be reduced
on the ground that the learned MACT has taken the monthly
income of the claimant as Rs.10,500/­, by treating him as
mason, whereas, no evidence qua this fact has been adduced
by the petitioner.
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19. Insurance Company, has thus, prayed that  in the
High Court of H.P.
absence of any evidence, the income of the petitioner can be
said to be Rs.192/­ per day or to say Rs.5760/­ per month,
on the basis of the minimum wages prevailing at the relevant
time.
20. The award has also been assailed on the ground
that the learned MACT has wrongly taken the disability as
10%.   According to the Insurance Company, the age of the
petitioner, at the time of accident has been pleaded as 46
years, as such, the learned MACT has wrongly applied the
multiplier of 13 instead of 12.  Similarly, the rate of interest,
as awarded as 7.5%, is also sought to be reduced.  
21. On   the   basis   of   the   above   facts,   Mr.   Jagdish
Thakur, Advocate, has prayed that the appeal may kindly be
allowed by setting aside the award and reducing the amount
of compensation.
22. Per   contra,   Mr.   Sumit   Sharma   and   Mr.   Varun
Chauhan,   Advocates,   appearing   for   the   respondents,   have
supported the award and argued that the learned MACT has
rightly allowed the petition and the appeal, being devoid of
any merit, may kindly be dismissed.
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23. In this case, the controversy is confined to the fact
High Court of H.P.
as to whether the amount, which has been awarded by the
learned   MACT,   falls   within   the   definition   of   ‘just
compensation’, as, the  endeavour of the Court should be to
provide “just compensation”. 
24. While holding so, the view of this Court is being
guided by the decision of the Hon’ble Apex Court in 
Oriental
Insurance   Company   Limited   vs.   Mohd.   Nasir   and
another, (2009) 2 SCC (Cri.) 987,  wherein it   has been held
that   the   provisions   of   M.V.   Act   are   beneficial   piece   of
legislation   and   the   endeavour   of   the   Court   should   be   to
provide “just compensation” to the petitioner.   The relevant
paras 23 and 24 of the judgment are reproduced as under:­
“23.   Both,   the   1923   Act   and   1988   Act   are
beneficent  legislation insofar as  they provide  for
payment   of   compensation   to   the   workmen
employed   by   the   employers   and/or   by   use   of
motor   vehicle   by   the   owner   thereof   and/or   the
insurer   to   the   petitioners   suffering   permanent
disability. The amount of compensation is to be de­
termined   in   terms   of   the   provisions   of   the
respective Acts. Whereas in terms of the 1923 Act,
the   Commissioner   who   is   a   quasi   judicial
authority, is bound to apply the principles and the
factors laid down in the Act for the purpose of de­
termining   the   compensation,   Section   168   of   the
1988 Act enjoins the Tribunal to make an award
determining the amount of compensation which ap­
pears to be just.
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24.   Both   the   Acts   aim   at   providing   for
expeditious relief to the victims of accident. In these
cases,   the   accidents   took   place   by
reason of use of motor vehicles.  Both the statutes
are beneficial ones for the workmen as also the
third   parties.   The   benefits   thereof   are   available
only to the persons specified under the Act besides
under   the   Contract   of   Insurance.   The   statutes,
therefore,   deserve   liberal   construction.   The
legislative intent contained therein is required to be
interpreted with a view to give effect thereto.” 
High Court of H.P.
(self emphasis supplied)
25. While   determining   the   stand   of   the   Insurance
Company   vis­à­vis   ‘just   compensation’,   this   Court   has   to
consider the evidence, so adduced, by the petitioner­claimant,
before the learned MACT, to determine the fact as to whether
the amount of compensation, which has been awarded, falls
within the definition of ‘just compensation’ or not or the same
is liable to be reduced, as prayed by the appellant.
26. The   factum   of   accident   has   not   been   disputed,
but, according to the owner­cum­driver, the same had taken
place due to sudden mechanical defect, which had occurred
in the offending vehicle.  In this background, evidence of the
parties is to be discussed.   After framing issues, petitioner
Santosh   Kumar   has   tendered   in   evidence   his   affidavit   as
Ex.PW­1/A, in his examination in chief, which is based upon
the averments, as made in the application.  
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27. In   addition   to   the   affidavit,   the   petitioner   has
High Court of H.P.
tendered in evidence copy of FIR Ex.PW­1/B, discharge slip
Mark   ‘X1’,   disability   certificate   Mark   X,   School   Leaving
Certificate Ex.PW­1/D and medical bills Ex.P­1 to P­32.
28. In the cross­examination by learned counsel for
the   Insurance   Company,   the   petitioner   has   admitted   that
total nine persons were travelling in the offending vehicle, out
of them, seven had expired.   He has denied the suggestion
that being the mason, he is getting work occasionally.  Rest,
he has denied all the suggestions put to him by the learned
counsel for the Insurance Company.
29. PW­2 Sanjay Kumar, although, deposed in favour
of the  petitioner  about  the accident,  in  question, but,  his
affidavit is totally silent about the fact as to whether he was
present on the spot or not.  As such, his evidence does not
fall   within   the   definition   of   direct   evidence,   as   per   the
conditions of Section 60 of the Evidence Act (Section 55 of the
Bharatiya Sakshya Adhiniyam).
30. PW­3   Dr.   Asheesh   Sharma,   Assistant   Director,
Orthopedics,   Directorate   of   Health   Services,   Shimla,   has
proved the disability certificate Ex.PW­3/A, in which, it has
been mentioned that the Board has found 10% permanent
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disability,   with   respect   to   the   right   lower   limb   of   the
High Court of H.P.
petitioner.  He has further deposed that with 10% disability, a
person   can   perform   his   daily   routine   work,   however,   he
cannot be able to carry heavy load over long distance. 
31. On the other hand, respondent No.1, has placed
on record copy of registration certificate Ex.RW­1/A, copy of
Insurance   Policy   Ex.RW­1/B,   Contract   Carriage   Permit
Ex.RW­1/C,   Fitness   Certificate   Ex.RW­1/D   and   copy   of
Driving   Licence   Ex.RW­1/E,   whereas,   the   Insurance
Company has tendered the certified copy of the award dated
02.05.2018,   in   case   RBT   No.41­R/2   of   2016/15   Ex.R­1,
Certified copy of statements of RW­1 to RW­4 in case RBT
No.41­R/2 of 2016/15, as Ex.R­2.
32. In view of the evidence so discussed above, the
first and foremost question, which arises for determination,
before  this  Court,  is  about   the  fact   whether   the   driver   of
offending   vehicle   was   having   a   valid   and   effective   driving
licence to drive the vehicle at the relevant time.
33. As per the documentary evidence adduced on the
file, copy of RC of the offending vehicle is Ex.RW­1/A.  As per
this   document,   the   offending   vehicle   is   Bolero   LX   2WD   7
Seater and its seating capacity is 9 and the said vehicle was
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having   the   contract   carriage   permit   from   27.1.2012   to
High Court of H.P.
31.08.2015.   The accident in question had taken place on
28.5.2015.     Meaning   thereby,   at   the   relevant   time,   the
offending   vehicle   was   having   the   valid   contract   carriage
permit.  Fitness certificate was also valid and the driver was
holding a valid and effective driving licence, copy of which is
Ex.RW­1/E.   As per Ex.RW­1/E, the holder of the driving
licence was authorized to drive LMV w.e.f. 8.9.2003.
34. In view of the decision of the Hon’ble Supreme
Cout in  
Bajaj Alliance General Insurance Company Ltd.
Versus Rambha Devi & Others, (2025) 3 Supreme Court
Cases 95,   the arguments of the learned counsel appearing
for the Insurance Company qua the fact that the driver of the
offending vehicle was not having a valid and effective driving
licence,   are   devoid   of   any   merit,   as   the   Hon’ble   Supreme
Court, in the above case, has held that the driver, who is
having driving licence to drive LMV can legally drive transport
vehicle   below   the   gross   weight   of   7500   kg.     Relevant
paragraphs 175 to 181 of the judgment are reproduced as
under:­
175. The licensing regime under the  MV Act  and
the MV Rules, when read as a whole, does not
provide for a separate endorsement for operating
a ‘Transport Vehicle’, if a driver already holds a
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LMV   license.  We  must   however  clarify  that   the
exceptions carved out by the legislature for special
vehicles like e­carts and e­rickshaws, or vehicles
carrying hazardous goods, will remain unaffected
by the decision of this Court.
High Court of H.P.
176. As discussed earlier in this judgment, the
definition of LMV under Section 2(21) of the MV Act
explicitly   provides   what   a   ‘Transport   Vehicle’
‘means’.   This   Court   must   ensure   that   neither
provision i.e. the definition under Section 2(21) or
the second part of Section 3(1) which concerns the
necessity   for   a   driving   license   for   a   ‘Transport
Vehicle’   is   reduced   to   a   dead   letter   of   law.
Therefore, the emphasis on ‘Transport Vehicle’ in
the licensing scheme has to be understood only in
the context of the ‘medium’ See Rule 8A of MV
Rules,’Minimum   training   required   for   driving   E­
rickshaw   or   E­cart’   See   Rule   9   of   MV   Rules,
’Educational   Qualification   for   drivers   of   goods
carriages carrying dangerous or hazardous goods’
and   ‘heavy’   vehicles.   This   harmonious   reading
also   aligns   with   the   objective   of   the   1994
amendment   in  Section   10(2)  to   simplify   the
licensing procedure.
177. The above interpretation also does not defeat
the broader twin objectives of the MV Act i.e. road
safety   and   ensuring   timely   compensation   and
relief for victims of road accidents. The aspect of
road   safety   is   earlier   discussed   at   length.   An
authoritative pronouncement by this Court would
prevent   insurance   companies   from   taking   a
technical   plea   to   defeat   a   legitimate   claim   for
compensation   involving   an   insured   vehicle
weighing   below   7,500   kgs   driven   by   a   person
holding a driving license of a ‘Light Motor Vehicle’
class.
178. In an era where autonomous or driver­less
vehicles are no longer tales of science fiction and
app­based   passenger   platforms   are   a   modern
reality, the licensing regime cannot remain static.
The amendments that have been carried out by
the Indian legislature may not have dealt with all
possible concerns. As we were informed by the
Learned   Attorney   General   that   a   legislative
exercise   is   underway,   we   hope   that   a
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15 2026:HHC:20653
comprehensive   amendment.   The   classes   medium
goods   vehicle[(10(2)(e)],   medium   passenger
vehicle[10(2)(f)],heavy   goods   vehicle[10(2)(g)]   and
heavy passenger vehicle [10(2)(h)] were deleted and
a new class ‘Transport Vehicle’ was introduced in
Section 10(2)(e) to address the statutory lacunae will
be made with necessary corrective measures.
High Court of H.P.
179. Just to flag one concern, the legislature through
the 1994 amendment in Section 10(2)(e) in order to
introduce   ‘transport   vehicle’   as   a   separate   class
could not have intended to merge light motor vehicle
(which   continued   as   a   distinct   class)   along   with
medium,   and   heavy   vehicles   into   a   single   class.
Else, it would give rise to a situation in which Sri
(our hypothetical character), wanting to participate in
the cycling sport, is put through the rigorous training
relevant only for a multisport like Triathlon, which
requires  a   much   higher  degree  of   endurance   and
athleticism. The effort therefore should be to ensure
that the statute remains practical and workable.
180. Now harking back to the primary issue and
noticing that the core driving skills (as enunciated in
the earlier paragraphs), expected to be mastered by
all drivers are universal – regardless of whether the
vehicle   falls   into   “Transport”   or   “Non­Transport”
category, it is the considered opinion of this Court
that if the gross vehicle weight is within 7,500 kg ­
the   quintessential   common   man’s   driver   Sri,   with
LMV license, can also drive a “Transport Vehicle”.
We are able to reach such a conclusion as none of
the parties in this case has produced any empirical
data   to  demonstrate   that   the  LMV  driving   licence
holder, driving a ‘Transport Vehicle’, is a significant
cause   for   road   accidents   in   India.   The   additional
eligibility   criteria   as   specified   in  MV   Act  and   MV
Rules as discussed in this judgment will apply only
to   such   vehicle   (‘medium   goods   vehicle’,   ‘medium
passenger vehicle’, ‘heavy goods vehicle’ and ‘heavy
passenger   vehicle’),   whose   gross   weight   exceeds
7,500   Kg.   Our   present   interpretation   on   how   the
licensing regime is to operate for drivers under the
statutory scheme is unlikely to compromise the road
safety concerns.   This will also effectively address
the livelihood issues for drivers operating Transport
Vehicles   (who   clock   maximum   hours   behind   the
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wheels),   in   legally   operating   “Transport   vehicles”
(below   7,500   Kg),   with   their   LMV   driving   license.
Perforce Sri must drive responsibly and should have
no occasion to be called either a maniac or an idiot
(as mentioned in the first paragraph), while he is
behind the wheels. Such harmonious interpretation
will substantially address the vexed question of law
before this Court.
High Court of H.P.
181. Our conclusions following the above discussion
are as under:­
(I) A driver holding a license for Light Motor Vehicle
(LMV) class, under Section 10(2)(d) for vehicles with
a gross vehicle weight under 7,500 kg, is permitted
to   operate   a   ‘Transport   Vehicle’   without   needing
additional authorization 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,   e­carts,   e­rickshaws,   and
vehicles carrying hazardous goods.
(II)   The   second   part   of  Section   3(1),   which
emphasizes 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.
(III) The additional eligibility criteria specified in the
  MV Act   and MV Rules generally for driving ‘transport
vehicles’   would   apply   only   to   those   intending   to
operate vehicles with gross vehicle weight exceeding
7,500   kg   i.e.   ‘medium   goods   vehicle’,   ‘medium
passenger vehicle’, ‘heavy goods vehicle’ and ‘heavy
passenger vehicle’.
(IV)   The   decision   in   Mukund   Dewangan   (2017)   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  MV Act  and MV Rules were not
considered in the said judgment.”
(self emphasis supplied)
35. If the facts and circumstances of the present case
are seen, in the light of the above decision of the Hon’ble
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Supreme Court, as per the registration certificate gross weight
High Court of H.P.
of the offending vehicle does not exceed 7500 kgs.  As such,
the arguments of learned counsel for the Insurance Company,
in this regard, are rejected.
36. The   Insurance   Company   has   also   assailed   the
award on the ground of the quantum.   Learned MACT has
taken the income of the petitioner as 350/­ per day, whereas,
the petitioner has pleaded that he was earning Rs.30,000/­
per month.  According to him, he is mason by profession and
is also earning from agricultural and horticulture pursuits.
This stand was reiterated by the petitioner, while appearing in
the witness­box, as PW­1.  The assertion, qua his income as
Rs.30,000/­ per month, has not been suggested to be false by
the learned counsel for the Insurance Company.
37. PW­2, Sanjay Kumar, has been examined by the
petitioner to prove that his daily wages were Rs.600/­ per day
as the petitioner was working as skilled mason.  In the cross­
examination, a suggestion was given to this witness that the
daily wages of mason was Rs.300/­, but, he volunteered that
it was Rs.600/­.  Admittedly, the work of a mason is seasonal
one.  At the relevant time, the minimum wages of the skilled
worker, including mason was Rs.214.17/­ per day or to say
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Rs.6425/­   per   month.     However,   in  the   present  case,   the
High Court of H.P.
petitioner   has   deposed,   on   oath,   that   he   was   earning
Rs.30,000/­ per month.  In such situation, this Court has to
take   a   holistic   view   by   holding   that   considering   the
urbanization in the State, it cannot be expected from a skilled
mason  to work on minimum wages.  Atleast, petitioner might
be earning Rs.300/­ per day, or to say Rs.9,000/­ per month.
38. So far as the disability is concerned, as per the
document Ex.PW­3/A, the Board found 10% disability, which
is permanent in nature, in relation to his right lower limb.
This   certificate   has   been   proved   by   PW­3,   Dr.   Asheesh
Sharma, who has categorically stated that with this disability,
petitioner can perform his daily routine work, however, he
cannot carry heavy load over long distance.  
39. Hon’ble Supreme Court in  Govind Yadav versus
New India Assurance Company Ltd., 2012 ACJ 28   has
held   that   while   assessing   the   amount   of   compensation,
disability of a person is to be taken into consideration, as, an
injured is not only to be  compensated for the physical injury,
but, also for the loss, which he suffered, as a result of such
injury.   Relevant paragraphs 12 to 16 of the judgment are
reproduced as under:­
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12. In Reshma Kumari v. Madan Mohan (2009) 13
SCC   422,   this   Court   reiterated   that   the
compensation awarded under the Act should be
just and also identified the factors which should
be kept in mind while determining the amount of
compensation.   The   relevant   portions   of   the
judgment are extracted below:
High Court of H.P.
"The   compensation   which   is   required   to   be
determined must be just. While the claimants are
required to be compensated for the loss of their
dependency, the same should not be considered
to   be   a   windfall.   Unjust   enrichment   should   be
discouraged. This Court cannot also lose sight of
the fact that in given cases, as for example death
of the only son to a mother, she can never be
compensated in monetary terms. The question as
to   the   methodology   required   to   be   applied   for
determination   of   compensation   as   regards
prospective loss of future earnings, however, as
far   as   possible   should   be   based   on   certain
principles.   A   person   may   have   a   bright   future
prospect;   he   might   have   become   eligible   to
promotion   immediately;   there   might   have   been
chances of an immediate pay revision, whereas in
another (sic situation) the nature of employment
was such that he might not have continued in
service; his chance of promotion, having regard to
the   nature   of   employment   may   be   distant   or
remote. It is, therefore, difficult for any court to lay
down rigid tests which should be applied in all
situations.   There   are   divergent   views.   In   some
cases it has been suggested that some sort of
hypotheses   or   guess   work   may   be   inevitable.
That may be so.
In the Indian context several other factors should
be taken into consideration including education of
the   dependants   and   the   nature   of   job.   In   the
wake of changed societal conditions and global
scenario, future prospects may have to be taken
into consideration not only having regard to the
status   of   the   employee,   his   educational
qualification; his past performance but also other
relevant factors, namely, the higher salaries and
perks   which   are   being   offered   by   the   private
companies these days. In fact while determining
the m ultiplicand this Court in O riental Insurance
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Co. Ltd. v. Jas huben held that even dearness
allowance   and   perks   with   regard   thereto   from
which   the   family   would   have   derived   monthly
benefit, must be taken into consideration.
High Court of H.P.
One of the incidental issues which has also to be
taken   into   consideration   is   inflation.   Is   the
practice   of   taking   inflation   into   consideration
wholly   incorrect?   Unfortunately,   unlike   other
developed countries in India there has been no
scientific study. It is expected that with the rising
inflation the rate of interest would go up. 
In India it does not happen. It, therefore, may be a
relevant   factor   which   may   be   taken   into
consideration for determining the actual ground
reality. No hard­and­fast rule, however, can be
laid down therefor."
(emphasis supplied)
13.   In  Arvind   Kumar   Mishra   v.   New   India
Assurance Company Limited (2010) 10 SCC 254,
the Court considered the plea for enhancement of
compensation made by the appellant, who was a
student   of   final   year   of   engineering   and   had
suffered   70%   disablement   in  a   motor   accident.
After noticing factual matrix of the case, the Court
observed:
"We   do   not   intend   to   review   in   detail   state   of
authorities   in   relation   to   assessment   of   all
damages for personal injury. Suffice it to say that
the   basis   of   assessment   of   all   damages   for
personal injury is compensation. The whole idea
is to put the claimant in the same position as he
was insofar as money can. Perfect compensation
is hardly possible but one has to keep in mind
that   the   victim   has   done   no   wrong;   he   has
suffered at the hands of the wrongdoer and the
court   must   take   care   to   give   him   full   and   fair
compensation for that he had suffered."
(emphasis supplied)
14. In Raj Kumar v. Ajay Kumar (2011) 1 SCC
343, the Court considered some of the precedents
and held:
"The   provision   of   the  Motor   Vehicles   Act,   1988
("the Act", for short) makes it clear that the award
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must   be   just,   which   means   that   compensation
should,   to   the   extent   possible,   fully   and
adequately  restore   the   claimant   to   the   position
prior   to   the   accident.   The   object   of   awarding
damages is to make good the loss suffered as a
result of wrong done as far as money can do so,
in a fair, reasonable and equitable manner. The
court   or  the   Tribunal  shall  have   to  assess   the
damages   objectively   and   exclude   from
consideration   any   speculation   or   fancy,   though
some conjecture with reference to the nature of
disability and its consequences, is inevitable. A
person   is   not   only   to   be   compensated   for   the
physical injury, but also for the loss which he
suffered as a result of such injury. This means
that he is to be compensated for his inability to
lead a full life, his inability to enjoy those normal
amenities which he would have enjoyed but for
the injuries, and his inability to earn as much as
he used to earn or could have earned.
High Court of H.P.
The heads under which compensation is awarded
in personal injury cases are the following:
Pecuniary damages (Special damages)
(i) Expenses relating to treatment, hospitalisation,
medicines,   transportation,   nourishing   food,   and
miscellaneous expenditure.
(ii) Loss of earnings (and other gains) which the
injured   would   have   made   had   he   not   been
injured, comprising:
(a) Loss of earning during the period of treatment;
(b)   Loss   of   future   earnings   on   account   of
permanent disability.
(iii) Future medical expenses.
Non­pecuniary damages (General damages)
(iv) Damages for pain, suffering and trauma as a
consequence of the injuries.
(v) Loss of amenities (and/or loss of prospects of
marriage).
(vi)   Loss   of   expectation   of   life   (shortening   of
normal longevity).
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In   routine   personal   injury   cases,   compensation
will be awarded only under heads (i), (ii)(a) and
(iv). It is only in serious cases of injury, where
there   is   specific   medical   evidence   corroborating
the evidence of the claimant, that compensation
will be granted under any of the heads (ii)(b), (iii),
(v) and (vi) relating to loss of future earnings on
account  of  permanent  disability, future  medical
expenses,   loss   of   amenities   (and/or   loss   of
prospects of marriage) and loss of expectation of
life."
High Court of H.P.
(emphasis supplied) 
15. In our view, the principles laid down in Arvind
Kumar Mishra v. New India Assurance Company
Ltd. (supra) and Raj Kumar v. Ajay Kumar (supra)
must be followed by all the Tribunals and  the
High   Courts   in   determining   the   quantum   of
compensation payable to the victims of accident,
who   are   disabled   either   permanently   or
temporarily. If the victim of the accident suffers
permanent disability, then efforts should always
be  made   to  award   adequate  compensation   not
only for the physical injury and treatment, but
also for the loss of earning and his inability to
lead a normal life and enjoy amenities, which he
would have enjoyed but for the disability caused
due to the accident.
16.   We   shall   now   consider   whether   the
compensation  awarded  to  the  appellant  is   just
and   reasonable   or   he   is   entitled   to   enhanced
compensation under any of the following heads:
(i)  Loss  of  earning  and  other gains  due  to  the
amputation of leg.
(ii)   Loss   of   future   earnings   on   account   of
permanent disability.
(iii)  Future medical expenses.
(iv) Compensation for pain, suffering and trauma
caused due to the amputation of leg.
(v)   Loss   of   amenities   including   loss   of   the
prospects of marriage.
(vi)    Loss of expectation of life.
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40. This   Court   has   to   determine   the   amount   of
High Court of H.P.
compensation   under   various   heads,   which   is   accordingly
assessed, as under:­
1. NON PECUNIARY DAMAGES:
(a) PAIN AND SUFFERINGS:
41. The   learned   MACT   has   awarded   a   sum   of
Rs.10,000/­, under this head.  As per the petitioner, after the
accident, he was taken to CHC Anni, from where, he was
referred to IGMC Shimla, where, he remained admit for a
period of 21 days.   The period of hospitalization must be
painful and traumatic for the petitioner, for which, he is held
entitled   to   a   sum   of   Rs.2000/­   per   day.     As   such,   the
petitioner is entitled to a sum of Rs.2000x21= Rs.42,000/­,
under this head.
(b) LOSS OF ENJOYMENT OF LIFE:
42. The   learned   MACT   has   awarded   a   sum   of
Rs.5,000/­ under this head.   As discussed hereinabove, the
period of hospitalization has been held to be 21 days and
Medical Board has assessed the disability of the petitioner as
10%   permanent   in   nature.     After   the   discharge   from   the
hospital,   he   might   have   taken   atleast   three   months   for
convalescence.   Thus, during the said period, he could not
have enjoyed the life of a normal human being.   Although.
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there is 10% disability permanent in nature, but, the said
High Court of H.P.
disability is to be considered under the head ‘loss of earning
capacity’,   as   such,   the   said   disability   is   not   liable   to   be
assessed   here,   as,   the   same   would   amount   to   double
enrichment, which is prohibited under the law.
43. Considering   the   period   of   hospitalization   and
convalescence, this Court is of the view that the petitioner is
entitled to a sum of Rs.50,000/­, under the head ‘loss of
enjoyment of life’.  
(c) SHORTEN EXPECTANCY OF LIFE:
44.  There is no evidence on the record to prove or to
suggest that due to disability suffered and injury sustained,
the life span of the petitioner has been shortened.  As such,
no amount of compensation is being awarded, under this
head.
2. PECUNIARY DAMAGES:
(a) LOSS OF EARNINGS AND EARNING CAPACITY:
45.  The monthly income of the petitioner is held to be
Rs.9,000/­ per month.   The period of hospitalization and
convalescence is held to be about four months.  During that
period, he could not work.  As such, he is entitled to a sum of
Rs.9,000/­ x 4 = Rs.36,000/­, whereas, learned MACT has
given a sum of Rs.10,500/­, by holding that the petitioner
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was unable to work for a period of more than one month.
High Court of H.P.
The said approach of the learned MACT, does not sustain in
the judicial scrutiny by this Court, as it cannot be expected
from a person, who had suffered 10% permanent disability in
nature and remain admitted for a period of 21 days, would
commence his work, after discharge from hospital.  
46. The   petitioner   has   been   held   to   be   mason   by
profession.   In view of the deposition of PW­3, qua the fact
that   the   petitioner   cannot   carry   heavy   load   over   long
distance, this Court is of the view that considering the nature
of   the   job,   10%   disability   can   be   considered   as   20%
functional disability.
47. In order to grant just compensation, some amount
is liable to be added in the monthly income, which has been
held  to   be  Rs.9,000/­, in  view   of  the  decision  of  Hon’ble
Supreme   Court   in   versus
Sidram     Division   Manager,
United   India   Insurance   Company   Limited   &   Another,
(2023) 3 Supreme Court Cases 439 .  Relevant paragraphs
31 to 34 of the judgment, are reproduced, as under:­
31.  It is now a well settled position of law that
even in cases of permanent disablement incurred
as a result of a motor­accident, the claimant can
seek, apart from compensation for future loss of
income, amounts for future prospects as well. We
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have   come   across   many   orders   of   different
tribunals and unfortunately affirmed by different
High Courts, taking the view that the claimant is
not entitled to compensation for future prospects in
accident cases involving serious injuries resulting
in permanent disablement. That is not a correct
position of law. There is no justification to exclude
the possibility of compensation for future prospects
in   accident   cases   involving   serious   injuries
resulting   in   permanent   disablement.   Such   a
narrow   reading   is   illogical   because   it   denies
altogether   the   possibility   of   the   living   victim
progressing further in life in accident cases – and
admits such possibility of future prospects, in case
of the victim’s death.
High Court of H.P.
32. This Court  has  emphasised  time  and  again
that   “just   compensation”   should   include   all
elements that would go to place the victim in as
near a position as she or he was in, before the
occurrence of the accident. Whilst no amount of
money or other material compensation can erase
the   trauma,   pain   and   suffering   that   a   victim
undergoes after a serious accident, (or replace the
loss of a loved one), monetary compensation is the
manner known to law, whereby society assures
some measure of restitution to those who survive,
and the victims who have to face their lives.
33.   In  Santosh   Devi   v.   National   Insurance
Company Limited and Others, (2012) 6 SCC 421,
this Court held that:
“14. We find it extremely difficult to fathom any
rationale for the observation made in paragraph 24
of the judgment in Sarla Verma case [Sarla Verma
v.   DTC,   (2009)   6   SCC   121]   that   where   the
deceased   was  self­employed   or  was  on  a  fixed
salary without provision for annual increment, etc.,
the Courts will usually take only the actual income
at the time of death and a departure from this rule
should be made only in rare and exceptional cases
involving special circumstances. In our view, it will
be   nave   to   say   that   the   wages   or   total
emoluments/income   of   a   person   who   is   self­
employed or who is employed on a fixed salary
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without provision for annual increment, etc., would
remain the same throughout his life.
High Court of H.P.
15. The rise in the cost of living affects everyone
across the board. It does not make any distinction
between rich and poor. As a matter of fact, the
effect of rise in prices which directly impacts the
cost of living is minimal on the rich and maximum
on those who are self­employed or who get fixed
income/emoluments. They are the worst affected
people.   Therefore,   they   put   in   extra   efforts   to
generate   additional   income   necessary   for
sustaining their families.
16.   The   salaries   of   those   employed   under   the
Central   and   State   Governments   and   their
agencies/instrumentalities have been revised from
time to time to provide a cushion against the rising
prices   and   provisions   have   been   made   for
providing security to the families of the deceased
employees.   The   salaries   of   those   employed   in
private sectors have also increased manifold. Till
about   two   decades   ago,   nobody   could   have
imagined that salary of Class IV employee of the
Government   would   be   in   five   figures   and   total
emoluments of those in higher echelons of service
will cross the figure of rupees one lakh.
17. Although the wages/income of those employed
in   unorganised   sectors   has   not   registered   a
corresponding increase and has not kept pace with
the   increase   in   the   salaries   of   the   government
employees and those employed in private sectors,
but   it   cannot   be   denied   that   there   has   been
incremental enhancement in the income of those
who are self­ employed and even those engaged
on daily basis, monthly basis or even seasonal
basis. We can take judicial notice of the fact that
with a view to meet the challenges posed by high
cost   of   living,   the   persons   falling   in   the   latter
category   periodically   increase   the   cost   of   their
labour. In this context, it may be useful to give an
example of a tailor who earns his livelihood by
stitching cloths. If the cost of living increases and
the prices of essentials go up, it is but natural for
him to increase the cost of his labour. So will be
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the cases of ordinary skilled and unskilled labour,
like, barber, blacksmith, cobbler, mason etc.
High Court of H.P.
18. Therefore, we do not think that while making
the observations in the last three lines of para 24
of Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC
121]   judgment,   the   Court   had   intended   to   lay
down   an   absolute   rule   that   there   will   be   no
addition in the income of a person who is self­
employed or who is paid fixed wages. Rather, it
would be reasonable to say that a person who is
self­employed or is engaged on fixed wages will
also get 30% increase in his total income over a
period of time and if he/she becomes the victim of
an accident then the same formula deserves to be
applied   for   calculating   the   amount   of
compensation.”
34. In Jagdish v. Mohan and Others, (2018) 4 SCC
571, the victim, a carpenter, suffered permanent
disablement,   and   his   claim   for   compensation
including   for   loss   of   future   prospects   was
considered   by   a   three­Judge   Bench   which
included, incidentally, the judges who had decided
National Insurance Company  (supra). This Court
held that:
“13. In the judgment of the Constitution Bench in
Pranay   Sethi   [National   Insurance   Co.   Ltd.   v.
Pranay Sethi, (2017) 16 SCC 680], this Court has
held that the benefit of future prospects should not
be confined only to those who have a permanent
job and would extend to self­employed individuals.
In the case of a self­employed person, an addition
of 40% of the established income should be made
where   the   age   of   the   victim   at   the   time   of   the
accident   was   below   40   years.   Hence,   in   the
present case, the appellant would be entitled to an
enhancement of Rs. 2400 towards loss of future
prospects.
14. In making the computation in the present case,
the   court   must   be   mindful   of   the   fact   that   the
appellant   has   suffered   a   serious   disability   in
which he has suffered a loss of the use of both his
hands. For a person engaged in manual activities,
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it requires no stretch of imagination to understand
that a loss of hands is a complete deprivation of
the ability to earn. Nothing —at least in the facts of
this case—can restore lost hands. But the measure
of compensation must reflect a genuine attempt of
the law to restore the dignity of the being. Our
yardsticks   of   compensation   should   not   be   so
abysmal as to lead one to question whether our
law values human life. If it does, as it must, it
must provide a realistic recompense for the pain of
loss   and   the   trauma   of   suffering.   Awards   of
compensation are not law's doles. In a discourse of
rights, they constitute entitlements under law. Our
conversations   about   law   must   shift   from   a
paternalistic subordination of the individual to an
assertion   of   enforceable   rights   as   intrinsic   to
human dignity.
High Court of H.P.
15. The Tribunal has noted that the appellant is
unable to even eat or to attend to a visit to the
toilet without the assistance of an attendant. In
this background, it would be a denial of justice to
compute  the  disability  at   90%.   The  disability  is
indeed   total.   Having   regard   to   the   age   of   the
appellant, the Tribunal applied a multiplier of 18.
In the circumstances, the compensation payable to
the   appellant   on   account   of   the   loss   of   income,
including future prospects, would be Rs 18,14,400.
In addition to this amount, the appellant should be
granted an amount of Rs 2 lakhs on account of
pain, suffering and loss of amenities. The amount
awarded   by   the   Tribunal   towards   medical
expenses (Rs 98,908); for extra nourishment (Rs
25,000) and for attendant's expenses (Rs 1 lakh) is
maintained. The Tribunal has declined to award
any   amount   towards   future   treatment.   The
appellant should be allowed an amount of Rs 3
lakhs   towards   future   medical   expenses.   The
appellant   is   thus   awarded   a   total   sum   of
Rs.25,38,308   by   way   of   compensation.   The
appellant would be entitled to interest at the rate
of 9% p.a. on the compensation from the date of
the filing of the claim petition. The liability to pay
compensation has been fastened by the Tribunal
and by the High Court on the insurer, owner and
driver jointly and severally which is affirmed. The
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amount   shall   be   deposited   before   the   Tribunal
within a period of 6 weeks from today and shall be
paid   over   to   the   appellant   upon   proper
identification.”
High Court of H.P.
(Self emphasis supplied)
48. The age of the petitioner at the time of accident
was 46 years and in view of the decision of Hon’ble Supreme
Court in  National Insurance Company Ltd.  Versus   Pranay
Sethi & Others, (2017) 16 Supreme Court Cases , 25%
amount is liable to be added towards future prospects of the
petitioner.   Thus, his income, for the purpose of assessing
the loss of earning capacity, comes to Rs.9,000/­+ Rs.2250/­
(25% of Rs.9,000/­)  = Rs.11,250/­.
49. The functional disability of the petitioner, in the
present case, is held to be 20%, as such, his loss of earning
capacity comes to Rs.2250/­ (20% of Rs.11250) per month.
Keeping in view the age of the petitioner, which is held to be
46   years,   multiplier   of   ‘13’   is   required   to   be   applied   to
determine   the   amount   of   compensation.       Therefore,   the
petitioner   is   held   entitled   to   Rs.2250/­x12x13=
Rs.3,51,000/­, under the head ‘loss of earning capacity’.
TRANSPORTATION CHARGES :
50. The learned MACT has not awarded any amount,
under this head, but, taking judicial notice of the fact that
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the accident had taken place at Kotgali near village Kotlu,
High Court of H.P.
and the petitioner was taken to CHC Anni, from where, he
was   referred   to   IGMC   Shimla,   he   might   have   spent
Rs.10,000/­ on taxi charges.  As such, the petitioner is held
to be entitled to Rs.10,000/­ under this head.
(c) SPECIAL DIET AND ATTENDANT CHARGES:
51.  Learned MACT has awarded a sum of Rs.10,000/­
towards special diet and Rs.10,000/­ as attendant charges.
The period of hospitalization and convalescence, has been
held   to   be   four   months.     Meaning   thereby,   during   that
period,   the   petitioner   might   have   taken   special   diet   and
might   have   required   assistance   of   some   attendants,   for
which, it would be just and appropriate to award a sum of
Rs.200/­ per day, under this head.  Thus, the compensation,
under this head, comes to Rs.120x200=Rs.24,000/­.
52. Considering all these facts, the petitioner is held
entitled   to   a   sum   of   Rs.5,13,000/­   (Rs.42,000/­+
Rs.50,000/­+Rs.36,000/­+   Rs.3,51,000/­   +   Rs.10,000/­
+Rs.24,000/­), as compensation.
53. In view of  the above  discussions, the appeal is
dismissed, however, the award passed by the learned MACT
is modified and the amount of compensation is enhanced
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from Rs.2,22,000/­ to Rs.5,13,000/­, along with interest @
High Court of H.P.
7.5% per annum, from the date of filing of the petition, till
the realization of the whole amount.
54. However,   keeping   in   view   the   facts   and
circumstances, there shall be no order so as to costs.
55. Memo of costs be prepared.
56.  Pending application(s), if any, are also disposed of.
Record be sent back.
                          (Virender Singh)
( ps )
May 30, 2026         Judge
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