Vishwas Sharda Shikshan Samiti vs Birma Devi Andors

FAO-3326 of 1999 (O&M) - 1 -
115 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
FAO- 3326 of 1999 (O&M)
Date of Decision: 31.08.2026
Vishwas Sharda Shikshan Samiti and another .....APPELLANTs

VERSUS
Birma Devi and others .....RESPONDENTS
CORAM: HON'BLE MR. JUSTICE YASHVIR SINGH RATHOR
Present : Mr. Tara Chand Dhanwal, Advocate
for the appellants.
Mr. Sandeep Kotla, Advocate for
respondents No.1 and 2.
Mr. Amit Kundra, Advocate for respondent
No.3.
*
YASHVIR SINGH RATHOR , J. (Oral)
1. This appeal has been instituted by the owner and driver
against the Award dated 06.10.1999 decided by MACT, Hisar ( for short
“Tribunal” ) in MACT Case No.30 of 1997 in a petition under Section
166 of Motor Vehicles Act, 1988 (for short ‘Act) vide which a sum of
Rs.1,50,000/- has been awarded as compensation to claimants on account
of death of their son Krishan Kumar, along with interest @ 12% per
annum from the date of filing of the claim petition till realization in a
motor vehicular accident which took place due to rash and negligent
driving on the part of respondent No.2 while driving the offending
vehicle bearing No.DL-IV/9072 ( for short ‘offending vehicle’ ), owned
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FAO-3326 of 1999 (O&M) - 2 -
by respondent No.1 having purchased the same from respondent No.4
which was insured with respondent No.3 and respondents No.1 and 2
have been held liable to pay the compensation to the claimants jointly
and severally. However, Tribunal has directed Insurance Company to pay
the compensation amount to the claimants but has been given a right to
recover the same from the insured.
2. From the pleadings of parties, following issues were framed
by the learned Tribunal:-
“1. Whether the accident in question took place due to
rash and negligent driving of Van-bus bearing No.DL-
IV/9072 by respondent No.2 Malkiat Singh?OPP
2. Whether petitioners are entitled to any compensation
on account of death of Krishan Kumar, if so, how
much and from whom?OPP
3. Whether the Van.Bus No.DL/IV/9072 was being driven
by respondent No.2 without any valid driving licence
at the time of accident, if so, its effect?OPR
4. Relief.”
Thereafter, the parties led evidence in support of their case.
3.
4. After hearing the parties and going through the material on
the file, learned Tribunal, while deciding Issue No.1, held that accident in
question had taken place on account of rash and negligent driving of the
offending vehicle on the part of respondent No.2. Under Issue No.2, it
was held that claimants are entitled to a sum of Rs.1,50,000/- as
compensation along with interest @12% per annum. It was further held
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FAO-3326 of 1999 (O&M) - 3 -
that the vehicle in question was owned by respondent No.4 who was the
registered owner and had got the vehicle insured from the Insurance
Company but he had sold the same to respondent No.1 – Sharda Shikshan
Samiti Bhuna but intimation regarding sale of vehicle was not given
to the Insurance Company within the stipulated period of 15 days and
since there was no privity of contract between the purchaser and the
Insurance Company, it was held that respondent No.1 – owner and
respondent No.2- driver shall be liable to pay compensation to the
claimant and Insurance Company was exonerated of its liability to
indemnify the insured.
5. Feeling aggrieved, the appeal in hand has been preferred by
the Insurance Company. The material on file has been perused and parties
have been heard.
6. Learned counsel for the appellants argued that the vehicle in
question was owned by respondent No.4 namely Naresh Kumar who had
got it insured from the Insurance Company/ respondent No.3 but he sold
the same to respondent No.1/ appellant. Learned counsel next contended
that once vehicle has been sold to respondent No.1 by the registered
owner, the insurance policy too shall be deemed to have been transferred
in terms of Section 157 of the Act in favour of purchaser and the
Insurance Company shall be liable to indemnify the insured as well as the
purchaser specially towards the third party claims. Learned counsel
contended that the Tribunal has committed a grave error while
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FAO-3326 of 1999 (O&M) - 4 -
exonerating the Insurance Company as the third party interest remains
protected even if the intimation regarding sale of vehicle is not given to
the Insurance Company and the insurance policy is not got transferred
and at the most, the Insurance Company cannot be held liable for
personal damages to the vehicle. Learned counsel contended that appeal
in hand be accepted and Insurance Company be held liable to indemnify
the insured as well as the appellant. In support of his contentions.
Learned counsel has relied upon 2017(15) SCC 674 – Firdaus Vs.
Oriental Insurance Co. Ltd. & Ors., Law Finder Doc Id#539879 –
Mallamma (Dead) By Lrs Vs. National Insurance Co. Ltd., and
others, Law Finder Doc ID#29197 – C. Govindan Vs. New India
Assurance Co. Ltd., judgment dated 14.02.2023 passed in FAO
No.5482 of 2016 – Jaibir Singh versus The New India Assurance Co.
Ltd., and others, 2025 AIR Supreme Court 3750 – Brij Bihari Gupta
versus Manmet and Ors and (1996) 1 Supreme Court Cases 221
Complete Insuations (P) Ltd. Versus New India Assurance Co. Ltd.
7. On the other hand, learned counsel for Insurance Company
argued that the vehicle was sold by the registered owner in favour of
respondent No.1 and no intimation regarding sale was given to the
Insurance Company and there cannot be automatic transfer of insurance
policy even qua claims of third party and learned Tribunal thus rightly
exonerated the Insurance Company of its liability to indemnify the
insured & he sought dismissal of the appeal.
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FAO-3326 of 1999 (O&M) - 5 -
8. Learned counsel for respondents No.1 and 2 argued that
inadequate compensation has been awarded by the Tribunal. Learned
counsel next contended that income of the deceased has been assessed on
lower side and future prospects have also not been added to the monthly
income of the deceased contrary to settled provisions of law. Learned
counsel next contended that no compensation has been awarded under
conventional heads i.e. loss of consortium, loss of estate and funeral
expenses and he prayed that compensation be awarded under all the
heads and same be suitably enhanced. Learned counsel next contended
that despite the fact that the claimants have not filed any appeal or cross-
objections for enhancement of compensation, this Court has vide powers
to enhance the compensation even in an appeal instituted by the owner
and driver against the award in terms of order 41 Rule 33 CPC. In
support of his contentions, learned counsel has relied upon Law Finder
Doc ID #2884320, United India Insurance Co. Ltd. Vs. Taraqqi Lal
(Since Deceased) and others , 2025 ACJ 1624 titled Karuna Parmar
Vs. Prakash Sinha and others, 2009(6) SCC 121 Sarla Verma and
others Vs. Delhi Transport Corporation and Another, 2017 (16) SCC
680 National Insurance Co. Ltd Vs. Pranay Sethi and Other , 2018 (4)
R.C.R. (Civil) 333, ‘Magma General Insurance Co. Ltd. v. Nanu Ram
alias Chuhru Ram & Others and (2021) 11 SCC 780 , United India
Insurance Co. Ltd. Vs. Satinder Kaur.
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Issue of Liability
9. As per version of respondent No.4, he had sold the vehicle to
respondent No.1. First point to be determined is as to whether Insurance
Company can be exonerated of its liability to indemnify the insured
specially qua third party claims in case the offending vehicle had been
sold in favour of some other person but the Insurance Policy had not been
got transferred. However, it is not in dispute that offending vehicle was
duly insured as on the date of accident. It has come in evidence that
respondent No.4 is the registered owner who had sold the vehicle to
respondent No.1 but vehicle continued to be registered in the name of
respondent No.4 and it was not transferred in favour of subsequent
purchaser. The insurance policy also continued in the name of
respondent No.4 and in these circumstances, Insurance Company cannot
be exonerated of its liability towards third party risks. Even if, it is
assumed that vehicle had been sold and not transferred in favour of
subsequent purchaser, it shall be deemed that the policy stood transferred
along with the vehicle in view of Section 157 of the Act. Hon’ble
Supreme Court in Mallamma’s case (supra) , has held that whenever
there is sale of vehicle, there shall be deemed transfer of insurance policy
in favour of new owner by virtue of Section 157 of the Act. A co-
ordinate Bench of this Court while deciding Jaibir Singh Vs. The New
India Assurance Co. Ltd. & Others’ case (supra) while relying upon
FAO-2837 of 2001 titled Om Parkash through LRs Vs. Ravinder
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FAO-3326 of 1999 (O&M) - 7 -
Kumar & Others and FAO No.893 of 1997 titled United India
Insurance Company Limited Vs. Rajvinder Kaur & Others, has held
that as per Section 157 of the MV Act, liability of insurer continues even
when the vehicle is transferred in favour of purchaser but the intimation
of transfer is not given to the insurance company. It has been further held
that Insurance Company cannot be absolved of its liability to pay the
amount of compensation and there is deemed transfer of Insurance Policy
along with the transfer of vehicle and Insurance Company is liable by a
deemed transfer even in the absence of information by subsequent
purchaser or his vendor. In these circumstances, the Insurance Company
cannot be absolved of its liability to indemnify the registered owner
namely respondent No.4 as well as purchaser of the vehicle. Resultantly,
finding on issue No.2 in this regard is reversed and same is decided
against Insurance Company.
Assessment of Compensation
10. The next point to be decided is as to whether this Court
while deciding an appeal instituted by the driver and owner of truck
against the award of compensation can enhance the compensation
without any appeal or cross-objections having been filed by the
claimants. The answer to this question is certainly in the affirmative. A
Co-ordinate Bench of this Court in Taraqqi Lal’s case (supra) , while
placing reliance upon the judgment of the Hon’ble Supreme Court in
(2021) 16 SCC 467, Surekha and Ors. Vs. Santosh and Ors., has held
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FAO-3326 of 1999 (O&M) - 8 -
that the Appellate Court has jurisdiction to enhance compensation even
when claimant has not filed cross-appeal or cross-objections as
assessment of just compensation is the statutory duty of the court and
procedural technicalities cannot deprive claimant of his legitimate
entitlement. In Surekha Vs. Santosh’s case (supra) , High Court of
Judicature at Bombay while deciding the appeal filed by the Insurance
Company had held that compensation amount payable to claimants ought
to have been Rs.49,85,376/- but declined to grant enhancement merely on
the ground that claimants/appellants had failed to file cross-appeal.
However, Hon’ble Supreme Court held that in the matter of insurance
claim compensation in reference to the motor accident cases, the courts
should not take hypertechnical approach and should ensure that just
compensation is awarded to the affected person or the claimants and
awarded the enhanced compensation as assessed by Bombay High Court.
As such, it is held that compensation can be reassessed by this Court
without any appeal having been filed by the claimants.
11. The next point is to be decided as to how much
compensation should be awarded to the claimants. The term `just
compensation’ has been elaborated by Hon’ble Supreme Court in 2009(1)
RCR (Civil) 867 (SC), Syed Basheer Ahamed and Others Vs. Mohd.
Jameel and Another , and it has been held that while assessing
compensation in a motor accident claims case, the Tribunal should award
compensation which appears to be just. The expression “which appears to
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FAO-3326 of 1999 (O&M) - 9 -
be just” vests a wide discretion in the Tribunal in the matter of
determination of compensation. Nevertheless, the wide amplitude of such
power does not empower the Tribunal to determine the compensation
arbitrarily, or to ignore settled principles relating to determination of
compensation. It has been further held that although the Act is a
beneficial legislation, it can neither be allowed to be used as a source of
profit, nor as a windfall to the persons affected nor should it be punitive
to the persons liable to pay compensation and that determination of
compensation must be based on certain data establishing reasonable
nexus between the loss incurred by the victim or dependents. It has been
further held that misplaced sympathy, generosity and benevolence cannot
be the guiding factors for determining the compensation. As such,
compensation is required to be assessed by taking into consideration
above-said parameters.
12. As per version of claimants, their son Krishan Kumar was 20
th
years of age and was a student of 10 class. He also used to sell milk.
Claimants also examined PW3- Ram Parshad who stated that Krishan
Kumar – deceased had been engaged by him to collect milk on his behalf
and he used to pay him Rs.1600/- per month. Ld. Tribunal held that
statement of PW3 is inconsistent with the pleadings of the claimants
wherein it has been pleaded that Krishan Kumar used to earn Rs.2,000/-
per month by sale of milk. Learned Tribunal held that deceased was 17
years of age and awarded a lump-sum compensation of Rs.1,50,000/-.
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FAO-3326 of 1999 (O&M) - 10 -
However, Hon’ble Supreme Court in Karuna Parmar’s case (supra)
while relying upon judgment rendered by the Hon’ble Supreme Court in
2024 SCC Online SC 3692, Baby Sakshi Greola Vs. Manzoor Ahmad
Simon, has held that minimum wages payable to a skilled worker in the
concerned State have to be taken into consideration while assessing
income in the case of death of a child because that would be the
minimum amount which a child would have earned on attaining the age
of majority. In Karuna Parmar’s case (supra) , a girl aged 6 years had
died and taking into consideration the minimum wages for skilled
workers in the year 2014 to be Rs.223 per day, annual income was
assessed as Rs.80,280/- and thereafter, future prospects were applied and
after applying multiplier of 18, the compensation was assessed.
13. In the present case, deceased was 17 years of age and the
accident had taken place on 19.9.1997 and during those days, minimum
wages earned by a skilled person in State of Haryana were around
Rs.2,000/- per month and accordingly, income of deceased is taken as
Rs.2,000/- per month .
14. Since, deceased was 17 years of age, 40% amount has to be
added to the income of the deceased towards future prospects in view of
law laid down in Pranay Sethi’s case (supra), which takes his income to
Rs.2,800/- per month (Rs.2,000/- + Rs.800/-).
15. As per law laid down in Sarla Verma’s case (supra), 50%
of the earnings have to be deducted towards personal and living expenses
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FAO-3326 of 1999 (O&M) - 11 -
as deceased was a bachelor. After deducting 50% of income towards
personal expenses, the monthly loss of dependency comes out to
Rs.1,400/- and the annual loss of dependency comes out to Rs.16,800/-
(Rs.1,400/- X 12).
16. Since deceased was 17 years of age, multiplier of 18 has to
be applied in view of the guidelines laid down in Sarla Verma’s case
(supra) and after applying the same, the total loss of dependency comes
out to Rs.3,02,400/- (Rs.16,800/- X 18).
17. As per law laid down in Pranay Sethi’s case (supra), a sum
of Rs.70,000/- is payable towards conventional heads i.e. Rs.40,000/-
towards loss of consortium, Rs.15,000/- towards loss of estate and
Rs.15,000/- on account of funeral expenses. However, the judgment in
Pranay Sethi’s case (supra) was passed in the year 2017 and taking into
consideration the price index prevalent in the year 7
199 when the
accident took place, claimants No.1 and 2, who are parents of deceased
are held entitled to a sum of Rs.20,000/- each towards loss of filial
consortium , and Rs.7,500/- each for loss of estate and funeral expenses
,
to father- claimant No.2 which takes the compensation to Rs.3,57,400/-.
18. Accordingly, the compensation to be awarded to the
claimants/respondents No.1 and 2 is assessed as under:-
S.No. Under Head Compensation assessed by
this Court
1. Age of deceased 17 years
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2. Monthly income of deceased Rs.2,000/- per month
3. Future prospects @ 40% Rs.800/-
4. Total income Rs.2,800/- per month
5. Number of dependents 2
6. Deduction towards personal Rs.1,400/-
expenses of the deceased (50%)
7. Monthly loss of dependency Rs.1,400/-
8. Annual loss of dependency Rs.16,800/-
9. Multiplier 18
10. Compensation on account of Loss Rs.3,02,400/-
of dependency
11. Compensation under conventional
heads i.e. loss of estate and funeral
expenses to respondent No.2
Rs.15,000/-
(Rs.7,500/- X 2)
12. Loss of filial consortium to
respondents No.1 and 2/parents of
the deceased
Rs.40,000/-
(Rs.20,000 X 2)
Total Compensation Rs.3,57,400/-
(Rounded off to
Rs.3,57,000/-)
Interest 9% per annum
19. Resultantly, with the aforesaid modification in the Award
regarding enhancement of compensation, the appeal filed by the owner
and driver stands allowed. Claimants/respondents No.1 and 2 are held
entitled to a sum of Rs.3,57,000/- as compensation in equal shares. The
enhanced compensation thus comes out to Rs.2,07,400/- (Rs.3,57,000/- –
Rs.1,50,000/-) over and above the compensation awarded by the Tribunal
alongwith interest at the rate of 9% per annum from the date of filing of
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FAO-3326 of 1999 (O&M) - 13 -
claim petition i.e. 18.11.1997, till realization, payable by driver, owner &
insurer of offending vehicle jointly and severally.
18. Registry is directed to email the authenticated copy of the
judgment to the respondent Insurance Company in terms of directions
issued by the Hon’ble Supreme Court in Writ Petition (Civil) No.534 of
2020 titled Bajaj Allianz General Insurance Company Versus Union
of India and others, decided on 16.03.2021 and Insurance Company
shall comply with the directions as issued under Clause (F) of the said
judgment.
19. Pending misc. application (s), if any, shall also stand
disposed of.
(YASHVIR SINGH RATHOR)
JUDGE
31.08.2026
renu
Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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