Company Ltd v. United India Insurance

25.04.2008, the deceased, Smt. Pushpa, wife of the claimant Prahlad Singh Barfal, was travelling along with her relatives in a private car, Alto No. PB11 AD-8188, from Shama to Munsyari. The car was being driven by Kamal Ram, who, while driving rashly and negligently, lost control over the vehicle. The car fell from the upper road to the lower road near village Ramari, resulting in the instantaneous death of all the occupants, including Smt. Pushpa and her son Mayank. The accident was reported at Police Station Kapkot, recorded as G.D. No.18 at 13:50 hours on 25.04.2008. The deceased occupants - Pushpa was aged about 40 years, a homemaker, and her income was stated to be ₹3,000/- per month. The claimant sought compensation of ₹5,00,000/- for the untimely death of his wife. The deceased Mayank was aged about 13 years and he was a school student for which the claimant again sought a compensation of ₹5,00,000/- for the untimely death of his son.

4. The respondent/claimant contended that the accident occurred solely due to rash and negligent driving of the driver Kamal Ram, resulting in the death of his wife and son. The vehicle was duly insured with United India Insurance Company Ltd., and therefore, the insurer was liable to pay compensation under the Motor Vehicles Act. It was further submitted that the deceased was a homemaker and her contribution to the family was significant, both economically and emotionally. 2

5. The Insurance Company, its written statement, denied any liability. It was contended that the accident was not reported to the insurer as required under the Act and the policy conditions. It was also argued that the deceased did not fall within the definition of a “third party” as she was the wife of the vehicle owner and was travelling in the vehicle as an owner’s representative or beneficiary. The appellant further asserted that the policy covered only third-party risks, and therefore, it was not liable to pay compensation for the death of the owner’s wife. The claim amount, according to the insurer, was highly exaggerated and without legal basis. AO No. 207 Of 2014:

6. On the basis of the pleadings of the parties, the Tribunal framed the following issues for adjudication:

1. Whether on 25.04.2008, between 1:00 p.m. to 2:00 p.m., when the deceased Smt. Pushpa, wife of the petitioner Prahlad Singh Barfal, was going to her relative's house in vehicle Alto No. PB11 AD-8188 from Shama to Munsyari, the driver Kamal Ram drove the car rashly and negligently, causing it to fall off the road, resulting in her death? If so, its effect? 2. Whether the vehicle Alto No. PB11 AD-8188 was insured with Opposite Party No. 2, United India Insurance Company Ltd., Haldwani, at the time of the accident? If so, its effect?

3. Whether the petitioner is entitled to compensation, and if so, how much and from whom?

4. Whether the deceased fall under the category of third party as stated by the insurance company?

5. Whether the petitioner can claim compensation insurance against himself as alleged by company?

7. After considering the oral and documentary evidence, the Tribunal returned the following findings: 3 On Issue No. 1 the Tribunal found that the accident occurred due to rash and negligent driving by Kamal Ram. The General Diary entry and the testimony of the claimant (PW1) established that the car went off the road, resulting in the death of all occupants, including the deceased Pushpa. On Issue No. 2 the Tribunal found that the vehicle in question was insured under a comprehensive/package policy issued by United India Insurance Company Ltd. The driver possessed a valid and effective driving licence on the date of the accident. The Tribunal relied upon the judgments of the Hon’ble Kerala High Court in Babu Mathew v. Biju Mathew (2009 (1) TAC 530) and the Hon’ble Supreme Court in Oriental Insurance Co. Ltd. v. Surendra Nath Loomba (2012 ACC 786 (SC), holding that under a package policy, the insurer’s liability extends to occupants of a private car. On Issue No. 3 the Tribunal determined the deceased’s notional income at ₹3,000/- per month (₹36,000/- per annum). After deducting one-third towards personal expenses, the dependency was assessed at ₹27,000/- per annum. Applying a multiplier of 15, compensation was calculated at ₹4,05,000/-. An additional ₹10,000/- was awarded towards funeral expenses and loss of consortium, making the total compensation ₹4,15,000/-, with interest at 6% per annum from the date of filing of the petition till realization. The entire liability was fastened upon the Insurance Company. On Issues Nos.4 and 5 the Tribunal held that the deceased did not fall under the strict category of “third party,” but since the vehicle was insured under a 4 package policy, the insurer was nevertheless liable to pay compensation to the legal representatives of the deceased occupants. The insurance company failed to adduce any evidence to the contrary. AO No.208 Of 2014:

8. On the basis of the pleadings of the parties, the Tribunal framed the following issues for adjudication:

1. Whether on 25.04.2008, between 1:00 p.m. to 2:00 p.m., when the deceased Smt. Pushpa, wife of the petitioner Prahlad Singh Barfal, was going to her relative's house in vehicle Alto No. PB11 AD- 8188 from Shama to Munsyari, the driver Kamal Ram drove the car rashly and negligently, causing it to fall off the road, resulting into multiple injuries caused to the son of the claimant who ultimately caused the death of his son - Mayank? If so, its effect?

2. Whether the vehicle Alto No. PB11 AD-8188 was insured with Opposite Party No. 2, United India Insurance Company Ltd., Haldwani, at the time of the accident? If so, its effect?

3. Whether the petitioner is entitled to compensation, and if so, how much and from whom?

4. Whether the deceased fall under the category of third party as stated by the insurance company? 5. Whether the petitioner can claim compensation against himself as alleged by the insurance company? On Issue No. 1 the Tribunal found that the accident occurred due to rash and negligent driving by Kamal Ram. The General Diary entry and the testimony of the claimant (PW1) established that the car went off the road, resulting in the death of all occupants, including the deceased son- Mayank. On Issue No. 2 the Tribunal found that the vehicle in question was insured under a comprehensive/package policy issued by United India Insurance Company Ltd. 5 The driver possessed a valid and effective driving licence on the date of the accident. The Tribunal relied upon the judgments of the Hon’ble Kerala High Court in Babu Mathew v. Biju Mathew (2009 (1) TAC 530) and the Hon’ble Supreme Court in Oriental Insurance Co. Ltd. v. Surendra Nath Loomba (2012 ACC 786 (SC), holding that under a package policy, the insurer’s liability extends to occupants of a private car. On issue no. 3 the Tribunal observed that in the case of R.K. Malik & Another v. Kiran Pal & Others, (2009) 14 SCC 1, a large number of innocent children had died when a school bus fell into the Yamuna River, and in that context, the Hon’ble Supreme Court had fixed a uniform compensation of ₹1,55,000/- for each deceased child below the age of 15 years, with an additional amount of ₹75,000/- to be paid future prospects as per the legal provisions. It was further held that the claimant must have incurred expenses for the last rites of his deceased son and also suffered deep mental agony due to his sudden accidental death. Therefore, it would be just and proper to grant ₹5,000/- each towards funeral expenses loss of love and affection. Thus, compensation payable to the claimant as compensation for the death of his minor son, Mayank, was determined at ₹2,40,000/-. Since the vehicle Alto Car No. PB11 AD- 8188 was duly insured with United India Insurance Company Ltd. on the date of the accident, the insurer was held liable to pay the said amount to the claimant. On Issues Nos. 4 and 5 the Tribunal held that the deceased did not fall under the strict category of “third party,” but since the vehicle was insured under a package policy, the insurer was nevertheless liable to pay compensation to the legal representatives of the deceased 6 occupants. The insurance company failed to adduce any evidence to the contrary.

9. Having heard the submissions of all the parties and after perusal of the material on record, this Court is of the considered opinion that the learned Tribunal has rightly appreciated the facts and evidence available before it and passed a well-reasoned award in both the claim petitions arising out of the same accident. The Tribunal has correctly held that the accident occurred due to rash and negligent driving of the driver Kamal Ram, resulting in the death of Smt. Pushpa and her minor son Mayank. The finding of negligence is based on the uncontroverted testimony of the claimant and the documentary evidence, including the General Diary entry of the concerned Police Station. No material was produced by the appellant/Insurance Company to rebut the same. As regards the contention of the appellant that the deceased were not covered under the insurance policy since they were not “third parties,” this Court finds that such contention cannot be sustained in view of the settled position of law. The Tribunal has rightly relied upon the judgments of the Hon’ble Supreme Court in Oriental Insurance Co. Ltd. v. Surendra Nath Loomba (2012) 13 SCC 792 and that of the Kerala High Court in Babu Mathew v. Biju Mathew 2009 (1) TAC 530, which clearly lay down that when a vehicle is insured under a comprehensive or package policy, the liability of the insurer extends not only to third parties but also to the occupants of a private car. The Insurance Regulatory and Development Authority (IRDA) has also, through its circulars, recognized that in the case of comprehensive or package policies, the insurer’s liability includes all occupants of a private vehicle and the pillion rider on a 7 two-wheeler. In present case, appellant/Insurance Company has not produced any evidence to show that the policy was limited to third- party risk only. Therefore, the learned Tribunal has rightly held that the insurer is liable to indemnify the insured and pay compensation representatives of the deceased occupants.

10. Coming to the quantum of compensation, this Court finds no error or excess in the computation made by the Tribunal. In the case of deceased Smt. Pushpa, who was 40 years of age and a homemaker, the Tribunal assessed her notional income at ₹3,000/- per month and after deducting one-third towards her personal expenses, arrived at the dependency of ₹27,000/- per annum. By applying the multiplier of 15, consistent with the principles laid down by the Hon’ble Supreme Court in Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121, the Tribunal awarded ₹4,05,000/- as loss of dependency and added ₹10,000/- towards funeral expenses and loss of consortium, thereby awarding a total of ₹4,15,000/- with interest at the rate of 6% per annum. This assessment is fully justified and based on the structured formula prescribed under the Second Schedule to the Motor Vehicles Act, 1988. The amount awarded neither appears excessive nor inadequate; it meets the ends of justice.

11. In respect of the deceased minor Mayank, aged about 13 years, the Tribunal has correctly relied upon the decision of the Hon’ble Supreme Court in R.K. Malik & Another v. Kiran Pal & Others (2009) 14 SCC 1, wherein uniform compensation was awarded for the death of school children who perished when a school bus fell into the Yamuna River. The Hon’ble Apex Court therein 8 granted ₹1,55,000/- for each deceased child below the age of 15 years, along with an additional ₹75,000/- towards future prospects and non-pecuniary damages. Following the same principle, the Tribunal awarded a total sum of ₹2,40,000/- for the death of Mayank, including amounts for funeral expenses and loss of love and affection. This Court finds the award to be in consonance with the ratio laid down by the Supreme Court and consistent with the facts of the present case. The compensation is reasonable and does not warrant any interference.

12. The appellant/Insurance Company has failed to show any violation of policy conditions, any contributory negligence, or any legal bar disentitling the claimants from compensation. Both the awards are supported by cogent reasoning and based on settled legal principles. The Tribunal has assessed the evidence in a fair and judicious manner, and this Court finds no error of law or fact that calls for interference in appellate jurisdiction under Section 173 of the Motor Vehicles Act.

13. Accordingly, this Court finds that the findings of the learned Tribunal on all issues are well-founded and justified. The argument of the insurer that its liability is limited only to third-party risks is devoid of merit in view of the comprehensive nature of the policy and the binding judicial precedents.

14. Consequently, both the appeals filed by the appellant/United India Insurance Company Ltd. are dismissed.

15. The impugned awards dated 20.02.2014 passed by learned Motor Accident Claims Tribunal/First Additional District Judge, Nainital, are 9 affirmed in their entirety.

16. The amount deposited by the appellant- Insurance Company in both these appeals before the learned Tribunal or before this High Court shall be released in favour of the respondent-claimant forthwith along with entire interest accrued thereon adjusting the amount which has already been received by respondent- claimant under the orders of this Court. SK (Pankaj Purohit, J.) 09.10.2025 10