Rule 87(3) authorization is mandatory only for national permit vehicles operating outside their state of registration.

The Insurance Company appealed against the awards dated 13.01.2020 passed by the 1st Additional Motor Accident Claims Tribunal (MACT), Ambikapur.

The claims arose from a common motor vehicle accident involving an offending vehicle registered in the State of Chhattisgarh.

On the date of the accident, which occurred within Chhattisgarh, the vehicle held a national permit but lacked specific authorization under Rule 87(3) of the Central Motor Vehicles Rules, 1989.

The insurer sought exoneration based on this lack of authorization.

Simultaneously, the claimants in MAC No. 928 of 2020 filed cross-objections seeking enhancement of compensation, arguing that the Tribunal undervalued the deceased's income and awarded insufficient amounts under conventional heads.

1. Whether the Insurance Company can be exonerated from liability on the ground that the vehicle, despite having a national permit, lacked authorization under Rule 87(3) of the Central Motor Vehicles Rules, 1989, when the accident occurred within the State of registration.

2. Whether the compensation awarded in MAC No. 928 of 2020 requires enhancement based on the Chhattisgarh Minimum Wages Notification and established judicial precedents regarding future prospects and conventional heads.

Rule 87(3) of the Central Motor Vehicles Rules, 1989, concerning national permit authorizations.

The Supreme Court precedent Shri Binod Kumar Singh v. National Insurance Company Ltd. (SLP (Civil) No. 13060 of 2020), which established that authorization fees for a national permit are mandatory only when the vehicle operates outside its home state.

Regarding the quantum of compensation, the court followed the principles laid down in National Insurance Company Ltd. v. Pranay Sethi (2017) for future prospects and conventional heads, Sarla Verma & Ors. v. Delhi Transport Corporation & Ors. (2009) for multipliers and deductions, and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors. (2018) for consortium.

The court dismissed the Insurance Company's contention regarding the lack of Rule 87(3) authorization.

Citing Shri Binod Kumar Singh, the court reasoned that since the offending vehicle was registered in Chhattisgarh and the accident occurred within the same state, the payment of additional authorization fees was not a prerequisite for the validity of the permit for intrastate movement.

Regarding the cross-objection, the court found that the MACT’s assessment of the deceased’s monthly income at ₹4,500 was erroneous.

It determined that the income should be ₹6,000 per month as per the Chhattisgarh Minimum Wages Notification applicable at the relevant time.

The court then recalculated the dependency by adding 40% for future prospects, applying a multiplier of 18, and deducting 50% for personal expenses.

Additionally, the court enhanced the awards for loss of estate, funeral expenses, and consortium to align with the standardized rates adjusted for inflation as per Pranay Sethi.

The Court allowed the cross-objection in MAC No. 928 of 2020, enhancing the total compensation from ₹7,50,400 to ₹9,91,200.

The respondent/insurer was directed to deposit the additional amount of ₹2,40,800 within three months, carrying an interest rate of 8% per annum from the date of the claim application until realization.

All other conditions of the original award remained intact.