As per case facts, the parents of deceased Udhey Singh filed a claim petition under the Motor Vehicles Act after their son died in a vehicle accident while traveling in ...
Neutral Citation No. ( 2026:HHC:10818 )
IN THE HIGH COURT OF HIMACHAL PRADESH AT
SHIMLA
FAO (MV) No. 4241 of 2013
with FAO (MV) No. 77 of 2014
Reserved on: 30.03.2026
Date of decision: 07.04.2026
________________________________________________
1. FAO No. 4241 of 2013:
Kalyan Singh Chauhan (since dead through his LRs) &
another.
…..Appellants.
Versus
M/s P.K. Construction & others.
…..Respondents.
2. FAO No. 77 of 2014:
The National Insurance Company Ltd.
…..Appellant.
Versus
Kalyan Singh Chauhan (since dead through his LRs) &
others.
…..Respondents.
________________________________________________
Coram
The Hon'ble Mr. Justice Sushil Kukreja, Judge.
1
Whether approved for reporting? Yes.
________________________________________________
FAO No. 4241 of 2013:
For the appellants: Mr. Shyam Singh Chauhan,
Advocate.
For respondents No. 1 & 2: Mr. Dibender Ghosh, Advocate.
For respondent No. 3: Ms. Devyani Sharma, Sr.
1
Whether reporters of Local Papers may be allowed to see the judgment?
Neutral Citation No. ( 2026:HHC:10818 )
2
Advocate, with Ms. Srishti Negi,
Advocate.
FAO No. 77 of 2014:
For the appellant: Ms. Devyani Sharma, Senior
Advocate, with Ms. Srishti Negi,
Advocate.
For respondents No. 1 & 2: Mr. Shyam Singh Chauhan,
Advocate.
For respondents No. 3 & 4: Mr. Dibender Ghosh, Advocate.
Sushil Kukreja, Judge.
Since both these appeals are the offshoots of
impugned award, dated 19.08.2013, passed by learned
Motor Accidents Claims Tribunal (II), Shimla, District Shimla,
H.P. (hereinafter for the sake of brevity referred to as “the
learned Tribunal”), they are taken up together for
consideration and disposal.
2. The appellants, who were petitioners/claimants
before the learned Tribunal below (hereinafter referred to as
“the petitioners/claimants”) preferred appeal, i.e., FAO (MV)
No. 4241 of 2013, under Section 173 of the Motor Vehicles
Act, 1988 (for short ‘the Act’) against impugned award, dated
19.08.2013, passed by learned Tribunal below, whereby
MAC Petition No. 121-S/2 of 2012/10, filed by the petitioners-
claimants, under Section 166 of the Act, was allowed and
Neutral Citation No. ( 2026:HHC:10818 )
3
they were held entitled for compensation of Rs.6,22,000/-
alongwith interest @ 9% per annum from the date of filing of
the petition till the final realization of the amount, with a
prayer to enhance the compensation amount and interest by
modifying the award. On the other hand, appellant-National
Insurance Company Limited, preferred appeal, i.e., FAO
(MV) No. 77 of 2014, under Section 173 of the Act, against
the aforesaid impugned award, with a prayer to allow the
appeal by quashing and setting-aside the impugned award
and exonerate the appellant-Insurance Company.
3. The facts giving rise to the instant appeals are
that the petitioners/claimants, being the parents of Shri
Udhey Singh (the deceased), preferred a claim petition under
Section 166 of the Act claiming compensation from the
respondents. As per the petitioners, on 17.01.2010, the
deceased alongwith Babu Ram and Prakash was travelling
in Tripper, bearing registration No. HP-63-6579, and was
going from Theog to Kiartu. The aforesaid vehicle met with
an accident, around 12:30 p.m. and rolled down into a gorge,
resultantly the deceased sustained multiple grievous injuries
and he was shifted to IGMC, Shimla, where he was declared
dead. The petitioners/claimants further averred that
Neutral Citation No. ( 2026:HHC:10818 )
4
respondent No. 2-Shri Dila, was the driver of the offending
vehicle and he, at the time of the accident, was driving the
vehicle in a rash and negligent manner. The deceased, at
the time of the accident, was only 28 years old and was MA
in History and he used to work as Site Supervisor with
respondent No. 1-M/s P.K. Constructions. The deceased
used to got monthly salary of Rs.7980/- and he also used to
assist his father in agricultural work. Lastly, the
petitioners/claimants sought compensation of rupees twenty
lacs.
4. Respondent No. 1- M/s P.K. Constructions, in its
reply raised preliminary objection that the petitioners were
stopped from filing the petition and the amount of
compensation claimed was highly exorbitant. It was denied
that the accident occurred due to rash and negligent driving
of respondent No. 2. Rest of the averments made in the
petition were admitted. Although, respondent No. 2-Shri Dila
Ram (driver of the offending vehicle), filed separate reply,
however, he took same plea, as taken by respondent No. 1.
5. Respondent No. 3-National Insurance Company,
in its reply resisted the claim petition and took preliminary
objections of maintainability, collusion between the
Neutral Citation No. ( 2026:HHC:10818 )
5
petitioners and respondents No. 1 and 2. As per the replying
respondent, at the time of the accident, respondent No. 2
was not having valid and effective driving licence and the
offending vehicle had no valid RC, fitness certificate, route
permit and the deceased was travelling in the vehicle as
gratuitous passenger. It was further averred that the
offending vehicle was being driven in contravention of the
provisions of the Motor Vehicle Act and in breach of the
terms and conditions of the insurance policy. The replying
respondent, on merits, averred that the amount claimed by
the petitioners was highly exorbitant.
6. After hearing the learned counsel for the parties,
the learned Tribunal below had allowed the claim petition and
the petitioners/claimants were held entitled for compensation
@ Rs.6,22,000/- alongwith interest @ 9% per annum from
the date of filing of the petition till the final realization of the
amount. The liability of the respondents was fixed as joint
and several. However, respondent No. 3-Insurance
Company, being insurer, was held liable to pay the award
amount as indemnifier. Hence, FAO (MV) No. 4241 of 2013,
has been preferred by the petitioners/claimants seeking
enhancement of the compensation amount as well as the
Neutral Citation No. ( 2026:HHC:10818 )
6
interest thereon and National Insurance Company preferred
FAO (MV) No. 77 of 2014 with a prayer to quash and set-
aside the impugned award and exonerate the Insurance
Company.
7. I have heard the learned Senior Counsel/counsel
for the respective parties and carefully examined the entire
records.
8. The learned counsel for the petitioners/claimants
(appellants in FAO (MV) No.4241 of 2013) contended that
the learned Tribunal below has wrongly taken the monthly
salary of the deceased at Rs.4,000/- instead of Rs.7,980/-,
which the deceased was actually drawing from his employer.
He further contended that total monthly salary of the
deceased Udhey Singh was Rs.7,980/-, which also stands
proved from his salary certificate, Ex. PW-1/J. He also
contended that the learned Tribunal below had failed to take
into consideration the income, which the deceased was
earning from agriculture. Thus, the findings rendered by the
learned Tribunal below, in assessing the reasonable and just
compensation, are based on surmises and conjectures,
therefore, the compensation awarded by the learned Tribunal
below deserves to be enhanced by modifying the award.
Neutral Citation No. ( 2026:HHC:10818 )
7
9. The learned Senior Counsel for National
Insurance Company (appellant in FAO (MV) No. 77 of 2014)
contended that the impugned award is liable to be quashed
and set-aside on the ground that the learned Tribunal has
wrongly decided the petition by holding that the Insurance
Company (appellant) is liable to indemnify the insured, as the
deceased was travelling in the offending vehicle as a
gratuitous passenger in a goods carrying commercial vehicle
and the risk of such passenger was not required to be
mandatorily covered under the Act.
10. At the very outset, it may be pertinent to mention
here that neither the insurance company nor the owner of the
offending vehicle had assailed the findings of the learned
Tribunal below so far it arrived at a finding that deceased-
Udhey Singh had died on account of rash and negligent
driving of respondent No. 2 Dila Ram, driver of offending
vehicle, i.e., tipper, having registration No. HP-63-6579.
11. Now the first question which arises for
consideration before this Court is as to what amount of
compensation the petitioners are entitled on account of death
of their deceased son Udhey Singh.
12. As per the matriculation certificate, Ex.PW-1/C,
Neutral Citation No. ( 2026:HHC:10818 )
8
tendered in evidence by PW-1 Kalyan Singh (one of the
petitioners/claimants), the date of birth of the deceased was
26.02.1982, which means that the age of the deceased, at
the time of the accident, was about 28 years. The petitioners
have placed on record salary certificate, Ex.PW-1/J, wherein
the salary of the deceased has been mentioned as
Rs.4,000/- and apart from this salary, some allowances were
also paid to the deceased and his total salary was mentioned
as Rs.7,980/-. However, the learned Tribunal below had not
taken into account the allowances for determining the
monthly income of the deceased, being the actual expenses
for house rent, travelling, ration and telephone. Therefore,
after considering the age of the deceased and his
qualification, the income of the deceased can be assessed at
Rs.5000/- per month.
13. In Sarla Verma (SMT) & others vs. Delhi Transport
Corporation & another, (2009) 6 SCC 121, the Apex Court, on
the question of deduction towards the personal and living
expenses of the deceased held that, the personal and living
expenses of the deceased should be deducted from his
monthly income, to arrive at the contribution to the
dependents. Where the deceased was married, the
Neutral Citation No. ( 2026:HHC:10818 )
9
deduction towards personal and living expenses of the
deceased should be one-third where the number of
dependent family members is 2 to 3; one-fourth where the
number of dependent family members is 4 to 6; and one-fifth
where the number of dependent family members exceeds 6.
In regard to bachelors, normally, 50% is deducted as
personal and living expenses, because it is assumed that a
bachelor would tend to spend more on himself.
14. In the instant case, since the deceased was
bachelor and his parents were dependent upon his income
at the time of accident, 50% of his income is required to be
deducted towards personal and living expenses, in view of
the law laid down by the Hon’ble Supreme Court in Sarla
Verma’s case (supra).
15. In National Insurance Company Limited vs.
Pranay Sethi & others, (2017) 16 SCC 680, it has been
held that while determining the income, in case the
deceased was self-employed or on a fixed salary and below
the age of 40 years, an addition of 40% of the established
income to the income of the deceased towards future
Neutral Citation No. ( 2026:HHC:10818 )
10
prospects should be made. Paras 59.4 of the said judgment
read as follows:
“59.4 In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established
income should be the warrant where the deceased was
below the age of 40 years. An addition of 25% where the
deceased was between the age of 40 to 50 years and 10%
where the deceased was between the age of 50 to 60
years should be regarded as the necessary method of
computation. The established income means the income
minus the tax component.”
16. In the instant case, at the time of accident, the
deceased was of 28 years of age, therefore, in view of the
law laid down by the Apex Court in Pranay Sethi’s case
(supra), an addition of 50% of the notional monthly income
of the deceased can be made towards future prospects.
17. The learned Tribunal below has assessed the
income of the deceased as Rs.5000/-. The deceased was
28 years old and while computing the future prospects @
40%, the income of the deceased comes out to Rs.7000/-
(5000/-+2000) per month. Thus, after the deduction of 50%
of the income towards the personal expenses of the
deceased, his contribution to family comes out to Rs.3500/-
per month and his annual contribution comes out to
Rs42,000/-(3500/- x 12).
18. In Sarla Verma’s case (supra), it has further been
held by the Hon’ble Supreme Court that the multiplier to be
Neutral Citation No. ( 2026:HHC:10818 )
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used should be as mentioned in column (4) of the Table
above (prepared by applying Susamma Thomas, Trilok
Chandra and Charlie), which starts with an operative
multiplier of 18 (for the age groups of 15 to 20 and 21 to 25
years), reduced by one unit for every five years, that is M-17
for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40
years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for every five years, that is, M-11
for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65
years and M-5 for 66 to 70 years. The relevant portion of the
aforesaid judgment is as under:-
‘42. We therefore hold that the multiplier to be used
should be as mentioned in column (4) of the Table
above (prepared by applying Susamma Thomas,
Trilok Chandra and Charlie), which starts with an
operative multiplier of 18 (for the age groups of 15
to 20 and 21 to 25 years), reduced by one unit for
every five years, that is M-17 for 26 to 30 years, M-
16 for 31 to 35 years, M-15 for 36 to 40 years, M-14
for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for every five years,
that is, M-11 for 51 to 55 years, M-9 for 56 to 60
years, M-7 for 61 to 65 years and M-5 for 66 to 70
years.”
19. Since the deceased was 28 years of age, as such
by applying the multiplier of ‘17’ as per the settled law, the
compensation under the head, loss of dependency is re-fixed
as Rs.7,14,000/- (42,000/- x 17).
20. Now, coming to the last aspect, i.e., the amount
under conventional heads. In Pranay Sethi’s case (supra),
Neutral Citation No. ( 2026:HHC:10818 )
12
the Hon’ble Supreme Court has held that for the
conventional heads, namely, “Loss of Estate”, “Loss of
Consortium” and “Funeral Expenses” amount of
compensation is fixed as Rs.15,000/-, Rs.40,000/- and
Rs.15,000/- respectively and the aforesaid figures quantified
by the Apex Court have to be enhanced on percentage
basis, at the rate of 10%, in a span of every three years. The
relevant portion of the aforesaid judgment is as under:
“52.….…. …..It seems to us that reasonable
figures on conventional heads, namely, loss of estate,
loss of consortium and funeral expenses should be
Rs.15,000, Rs.40,000 and Rs.15,000 respectively. The
principle of revisiting the said heads is an acceptable
principle. But the revisit should not be fact centric or
quantum-centric. We think that it would be condign
that the amount that we have quantified should be
enhanced on percentage basis in every three years
and the enhancement should be at the rate of 10% in
a span of three years. We are disposed to hold so
because that will bring in consistency in respect of
those heads.”
21. In Magma General Insurance Company
Limited Vs. Nanu Ram alias Chuhru Ram & others,
reported in (2018) 18 Supreme Court Cases 130, the
Hon’ble Supreme Court has laid down that consortium is not
limited to spousal consortium and it also includes parental
consortium as well as filial consortium. The relevant portion
of the aforesaid judgment reads as under:-
“21. A Constitution Bench of this Court in Pranay
Sethi dealt with the various heads under which
compensation is to be awarded in a death case. One
Neutral Citation No. ( 2026:HHC:10818 )
13
of these heads is loss of consortium. In legal
parlance, “consortium” is a compendious term which
encompasses “spousal consortium”, “parental
consortium”, and “filial consortium”. The right to
consortium would include the company, care, help
comfort, guidance, solace and affection of the
deceased, which is a loss to his family. With respect
to a spouse, it would include sexual relations with the
deceased spouse:
21.1. Spousal consortium is general
defined as rights pertaining to the
relationship of a husband-wife which allows
compensation o the surviving spouse for
loss of “company, society, cooperation,
affection, and aid of the other in every
conjugal relation”.
21.2. Parental consortium is granted to
the child upon the premature death of a
parent, for loss of “parental aid, protection,
affection, society, discipline, guidance and
training”.
21.3. Filial consortium is the right of the
parents to compensation in the case of an
accidental death of a child. An accident
leading to the death of a child causes great
shock and agony to the parents and family
of the deceased. The greatest agony for a
parent is to lose their child during their
lifetime. Children are valued for their love
affection, companionship and their role in
the family unit.
22. Consortium is a special prism reflecting
changing norms about the status and worth of actual
relationships. Modern jurisdictions world-over have
recognized that the value of a child’s consortium far
exceeds the economic value of the compensation
awarded in the case of the death of a child. Most
jurisdictions therefore permit parents to be awarded
compensation under loss of consortium on the death
of a child. The amount awarded to the parents is a
compensation for loss of love, affection, care and
companionship of the deceased child.”
22. While placing reliance upon the judgment passed
by the Hon'ble Apex Court in Pranay Sethi’s case (supra),
the Hon’ble Supreme Court in Sunita & ors. vs. United
India Insurance Co. Ltd. & ors., Civil Appeal No.9538 of
Neutral Citation No. ( 2026:HHC:10818 )
14
2025, decided on July 17, 2025, had enhanced the
compensation under the conventional heads @ 10% after a
span of every three years w.e.f. the year 2017 and held as
follows:-
“20. Regarding the monthly income of the deceased,
we concur with the view taken by the Courts below in
assessing the same to be Rs.12,000/- per month, for
there being no error therein. Hence, in awarding
compensation which is just and fair, we are inclined
to increase the amount awarded under the
conventional heads, namely, loss of estate, loss of
consortium, and funeral expenses by 10% adverting
to the settled principle of law laid down by this Court
in National Insurance Co. Ltd. v. Pranay Sethi, that
such amount should be revised every three years.”
23. Accordingly in view of the law laid down by the
Hon’ble Supreme Court in Pranay Sethi’s as well as
Sunita’s cases (supra), by enhancing the compensation
under the conventional heads @ 10%, after every three
years from the year 2017, the petitioners are entitled to loss
of estate at Rs.19,965/-, funeral expenses at Rs.19,965/-,
petitioner No.1, being widow of the deceased, is entitled to
spousal consortium of Rs.53,240/-, and petitioners No.3 and
4, being children, are entitled to parental consortium of
Rs.53,240/- each. Accordingly, the total amount of
compensation comes out as under:
Head Amount
(i) Loss of dependency Rs.7,14,000/-
(ii) Funeral expenses Rs.19,965,/-
(iii) Loss of estate Rs.19,965/-
Neutral Citation No. ( 2026:HHC:10818 )
15
(iv) Fillial consortium Rs.1,06,480/-(Rs.53,240/-
payable to each of
petitioners/ respondents
No.3 & 4)
Total compensation awarded: Rs.8,60,410/-
24. Now, the next question which arises for
consideration is that whether the deceased was travelling in
the offending vehicle as gratuitous passenger at the time of
the accident or not.
25. Before adverting to the facts of the present case, this
Court deems it appropriate to examine the law evolved with
respect to unauthorized/gratuitous passengers travelling in
the goods vehicle. Section 147 of the 1988 Act is pari
materia to Section 95 of the 1939 Act. One of the major
differences between the two enactments was that 1939 Act
defines the expression “goods vehicle” whereas 1988 Act
defines the term “goods carriage”. As per 2(8) of the 1939
Act, “goods vehicle” means any motor vehicle constructed or
adapted for use for the carriage of goods, or any motor
vehicle not so constructed or adapted when used for the
carriage of goods solely or in addition to passengers'.
However as per 2(14) of the 1988 Act, „goods carriage
means any motor vehicle constructed or adapted for use
solely for the carriage of goods, or any motor vehicle not so
Neutral Citation No. ( 2026:HHC:10818 )
16
constructed or adapted when used for the carriage of goods.
The Hon’ble Supreme Court examined the liability of
unauthorized/gratuitous passengers in the goods vehicle in
New India Assurance Company vs. Satpal Singh & Ors.
reported as (2000 (1) SCC 237). While examining the said
question, the Hon’ble Supreme Court held that an insurance
policy covering third party risk is not required to exclude
gratuitous passenger in a vehicle no matter the vehicle is of
any type or class. Hence in view of the law laid down by the
Hon’ble Supreme Court in Satpal Singh (supra), the
Insurance Company is held liable to pay compensation even
for gratuitous passengers of the goods vehicle.
26. Subsequently, the Hon’ble Supreme Court in New
India Assurance Company Ltd Vs Asha Rani & Ors.
reported as 2003 (2) SCC 223 examined the correctness of
its earlier Judgment Satpal Singh (Supra) and overruled the
said Judgment and held as follows:
"26. In view of the changes in the relevant provisions in
1988 Act vis-a-vis 1939 Act, we are of the opinion that
the meaning of the words "any person" must also be
attributed having regard to the context in which they
have been used i.e. 'a third party'. Keeping in view the
provisions of 1988 Act, we are of the opinion that as the
provisions thereof do not enjoin any statutory liability
on the owner of a vehicle to get his vehicle insured for
any passenger travelling in a goods vehicle, the
insurers would not be liable therefor.”
27. Again, the 1988 Act was amended and Motor
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17
Vehicles (Amendment) Act, 1994 came into effect. The
material portion of the provision contained in Section 147 of
the 1988 Act, as amended by the Motor Vehicles
(Amendment) Act, 1994, reads as follows:
"147. Requirements of policies and limits of liability- (1)
In order to comply with the requirements of this
Chapter, a policy of insurance must be a policy which-
(a) xxx xxx xxx
(b) insures the person or classes of persons specified
in the policy to the extent specified in sub- section (2)
(i) against any liability which may be incurred by him in
respect of the death of or bodily injury to any person,
including owner of the goods or his authorized
representative carried in the vehicle or damage to any
property of a third party caused by or arising out of the
use of the vehicle in a public place;”
28. In National Insurance Company Ltd. vs. Baljit Kaur
reported as 2004 (2) SCC 1, the Hon’ble Supreme Court
examined the issue of whether an insurance policy in respect
of a goods vehicle would also cover gratuitous passengers,
in view of the legislative amendment in 1994 to Section 147
of the 1988 Act. The Hon’ble Supreme Court held that the
owner of the goods or his authorized representative would
now be covered by the policy of insurance in respect of a
goods vehicle. It was not the intention of the legislature to
provide for the liability of the insurer with respect to
passengers, especially gratuitous passengers, who were
neither contemplated at the time the contract of insurance
was entered into, nor any premium was paid to the extent of
Neutral Citation No. ( 2026:HHC:10818 )
18
the benefit of insurance to such category of people'. The
relevant portion of the aforesaid judgement, inter alia, reads
as follows:
"11. Admittedly, it is incumbent upon a Court of law to
eschew that interpretation of a statute that would serve
to negate its true import, or to render the words of any
provision as superfluous. Nonetheless, we find no merit
in the above submissions proffered by the learned
counsel for the respondent. The effect of the 1994
amendment on Section 147 is unambiguous. Where
earlier, the words "any person" could be held not to
include the owner of the goods or his authorized
representative travelling in the goods vehicle,
Parliament has now made it clear that such a
construction is no longer possible. The scope of this
rationale does not, however, extend to cover the class
of cases where gratuitous passengers for whom no
insurance policy was envisaged, and for whom no
insurance premium was paid, employ the goods vehicle
as a medium of conveyance.
12. We find ourselves unable, furthermore, to countenance
the contention of the respondents that the words "any
person" as used in Section 147 of the Motor Vehicles
Act, would be rendered otiose by an interpretation that
removed gratuitous NEUTRAL CITATION NO: 2023:
DHC: 2763 passengers from the ambit of the same. It
was observed by this Court in the case concerning New
India Assurance Co. Ltd. Vs. Asha Rani (supra) that the
true purport of the words "any person" is to be found in
the liability of the insurer for third party risk, which was
sought to be provided for by the enactment.
13. It is pertinent to note that a statutory liability enjoined
upon an owner of the vehicle to compulsorily insure it
so as to cover the liability in respect of a person who
was travelling in a vehicle pursuant to a contract of
employment in terms of proviso (ii) appended to
Section 95 of the 1939 Act does not occur in Section
147 of the 1988 Act. The changes effected in the 1988
Act vis-`-vis the 1939 Act as regard definitions of 'goods
vehicle', 'public service vehicle' and 'stage carriage'
have also a bearing on the subject inasmuch as the
concept of any goods carriage carrying any passenger
or any other person was not contemplated.
… … … … … … … …
17. By reason of the 1994 Amendment what was added is
"including the owner of the goods or his authorized
representative carried in the vehicle". The liability of the
owner of the vehicle to insure it compulsorily, thus, by
reason of the aforementioned amendment included only
the owner of the goods or his authorized representative
carried in the vehicle besides the third parties. The
Neutral Citation No. ( 2026:HHC:10818 )
19
intention of the Parliament, therefore, could not have
been that the words 'any person' occurring in Section
147 would cover all persons who were travelling in a
goods carriage in any capacity whatsoever. If such was
the intention there was no necessity of the Parliament
to carry out an amendment inasmuch as expression
'any person' contained in sub-clause (i) of clause (b) of
sub-section (1) of Section 147 would have included the
owner of the goods or his authorized representative
besides the passengers who are gratuitous or
otherwise”
29. Hence, the legal position as it stands today is
that the owner/authorized representative of the owner of the
goods travelling in a goods vehicle would be covered by the
insurance policy. However, a gratuitous passenger travelling
in a goods vehicle will not be covered by the insurance
policy.
30. Based on this legal position, this Court now
proceeds to examine the facts of the present case. The term
'gratuitous passenger' has no where been defined in the Act,
however, it means, one, who has taken the lift in the vehicle.
In this case, nothing of the sort has been proved by the
Insurance Company, as, the perusal of the record
demonstrates that the deceased was the employee of
respondent No. 1, i.e., owner of the offending vehicle and
was shifting the grits from one place to another.
31. In order to prove that the petitioner was a gratuitous
passenger, burden is on the insurance company to prove
that deceased was traveling as a gratuitous passenger, but it
Neutral Citation No. ( 2026:HHC:10818 )
20
has not examined any independent witness to establish that
the deceased was traveling as a gratuitous passenger. The
case of respondent No. 1 (owner of the vehicle) is that the
deceased was employed by him as Site Supervisor and he
used to supervise the working of the employees as well as of
the Tipper, bearing registration No. HP-63-6579. Shri
Promod Sud, who appeared in the witness-box as RW-1,
categorically deposed that the deceased was Site In-charge
and he was sitting in the tipper (offending vehicle). The
tipper was loaded with grits and deceased was looking after
the entire work. He further deposed that the deceased was
shifting the grits from one place to another. This witness was
cross-examined, but nothing favorable could be elicited from
him.
32. Shri Dila Ram, Driver, appeared in the witness-
box as RW-2, and deposed that vehicle, HP-63-6579 was
being driven by him on the date of the accident and
deceased was sitting with him in the same vehicle, being
Munshi of the Company and also Site Supervisor of the
Company. He further deposed that he was taking the
construction material of the company in the aforesaid vehicle
and he (deceased) had to show him the site where the
Neutral Citation No. ( 2026:HHC:10818 )
21
material was to be unloaded. As per this witness, he
(deceased) used to accompany him in the vehicle on behalf
of the owner in order to bring material, help in loading the
same in the vehicle and then unloading at particular and
desired place. This witness was also cross-examined, but
nothing favorable could be elicited from him. Moreover, RW-3
Shri Narinder Negi, the then Administrative Officer (Legal), of
the appellant National Insurance Company, Divisional Office,
Shimla, also admitted in his cross-examination that the
deceased was employee of respondent No. 1, i.e., M/s P.K.
Construction Company.
33. The appellant- insurer has not led any evidence
to prove that the risk of the owner of the goods or his
authorized representative was not covered, in terms of
Insurance Policy Ext. RW-3/A. It was for the insurer to plead
and prove that risk of owner or his authorized representative
was not covered. The insured has not committed any breach
of the terms and conditions of the Insurance Policy Ext. RW-
3/A. The appellant-Insurance Company failed to prove on
record that the deceased was travelling as gratuitous
passenger in the offending vehicle at the time of the
accident.
Neutral Citation No. ( 2026:HHC:10818 )
22
34. Hence, in view of the above settled principle of
law as well as the discussion made above, the Tribunal was
justified in recording a finding that respondent No.2, has
failed to establish that the deceased was traveling as
gratuitous passenger in the offending vehicle and there was
no breach of the terms and conditions of the insurance policy
and had further rightly fastened the liability on the appellant-
Insurance Company as indemnifier.
35. Consequently, in view of detailed discussion
made here-in-above, the impugned award stands modified to
the extent that the petitioners/claimants are held entitled to
compensation in the sum of Rs.8,60,410/-. The rest of the
terms and conditions of the award, including the interest
component, shall remain the same. The appellant-Insurance
Company shall be liable to pay the award amount as
indemnifier.
36. In view of what has been discussed hereinabove,
the appeal filed by the petitioners/claimants, i.e., FAO (MV)
No. 4241 of 2013, is partly allowed and the appeal filed by
the Insurance Company, i.e., FAO (MV) No. 77 of 2014,
being devoid of merits, is dismissed.
Neutral Citation No. ( 2026:HHC:10818 )
23
Both the appeals stand disposed of in the above
terms, so also the pending application(s), if any.
( Sushil Kukreja )
Judge
7
th
April, 2026
(virender)
Neutral Citation No. ( 2026:HHC:10818 )
IN THE HIGH COURT OF HIMACHAL PRADESH AT
SHIMLA
FAO (MV) No. 4241 of 2013
with FAO (MV) No. 77 of 2014
Reserved on: 30.03.2026
Date of decision: 07.04.2026
________________________________________________
1. FAO No. 4241 of 2013:
Kalyan Singh Chauhan (since dead through his LRs) &
another.
…..Appellants.
Versus
M/s P.K. Construction & others.
…..Respondents.
2. FAO No. 77 of 2014:
The National Insurance Company Ltd.
…..Appellant.
Versus
Kalyan Singh Chauhan (since dead through his LRs) &
others.
…..Respondents.
________________________________________________
Coram
The Hon'ble Mr. Justice Sushil Kukreja, Judge.
1
Whether approved for reporting? Yes.
________________________________________________
FAO No. 4241 of 2013:
For the appellants: Mr. Shyam Singh Chauhan,
Advocate.
For respondents No. 1 & 2: Mr. Dibender Ghosh, Advocate.
For respondent No. 3: Ms. Devyani Sharma, Sr.
1
Whether reporters of Local Papers may be allowed to see the judgment?
Neutral Citation No. ( 2026:HHC:10818 )
2
Advocate, with Ms. Srishti Negi,
Advocate.
FAO No. 77 of 2014:
For the appellant: Ms. Devyani Sharma, Senior
Advocate, with Ms. Srishti Negi,
Advocate.
For respondents No. 1 & 2: Mr. Shyam Singh Chauhan,
Advocate.
For respondents No. 3 & 4: Mr. Dibender Ghosh, Advocate.
Sushil Kukreja, Judge.
Since both these appeals are the offshoots of
impugned award, dated 19.08.2013, passed by learned
Motor Accidents Claims Tribunal (II), Shimla, District Shimla,
H.P. (hereinafter for the sake of brevity referred to as “the
learned Tribunal”), they are taken up together for
consideration and disposal.
2. The appellants, who were petitioners/claimants
before the learned Tribunal below (hereinafter referred to as
“the petitioners/claimants”) preferred appeal, i.e., FAO (MV)
No. 4241 of 2013, under Section 173 of the Motor Vehicles
Act, 1988 (for short ‘the Act’) against impugned award, dated
19.08.2013, passed by learned Tribunal below, whereby
MAC Petition No. 121-S/2 of 2012/10, filed by the petitioners-
claimants, under Section 166 of the Act, was allowed and
Neutral Citation No. ( 2026:HHC:10818 )
3
they were held entitled for compensation of Rs.6,22,000/-
alongwith interest @ 9% per annum from the date of filing of
the petition till the final realization of the amount, with a
prayer to enhance the compensation amount and interest by
modifying the award. On the other hand, appellant-National
Insurance Company Limited, preferred appeal, i.e., FAO
(MV) No. 77 of 2014, under Section 173 of the Act, against
the aforesaid impugned award, with a prayer to allow the
appeal by quashing and setting-aside the impugned award
and exonerate the appellant-Insurance Company.
3. The facts giving rise to the instant appeals are
that the petitioners/claimants, being the parents of Shri
Udhey Singh (the deceased), preferred a claim petition under
Section 166 of the Act claiming compensation from the
respondents. As per the petitioners, on 17.01.2010, the
deceased alongwith Babu Ram and Prakash was travelling
in Tripper, bearing registration No. HP-63-6579, and was
going from Theog to Kiartu. The aforesaid vehicle met with
an accident, around 12:30 p.m. and rolled down into a gorge,
resultantly the deceased sustained multiple grievous injuries
and he was shifted to IGMC, Shimla, where he was declared
dead. The petitioners/claimants further averred that
Neutral Citation No. ( 2026:HHC:10818 )
4
respondent No. 2-Shri Dila, was the driver of the offending
vehicle and he, at the time of the accident, was driving the
vehicle in a rash and negligent manner. The deceased, at
the time of the accident, was only 28 years old and was MA
in History and he used to work as Site Supervisor with
respondent No. 1-M/s P.K. Constructions. The deceased
used to got monthly salary of Rs.7980/- and he also used to
assist his father in agricultural work. Lastly, the
petitioners/claimants sought compensation of rupees twenty
lacs.
4. Respondent No. 1- M/s P.K. Constructions, in its
reply raised preliminary objection that the petitioners were
stopped from filing the petition and the amount of
compensation claimed was highly exorbitant. It was denied
that the accident occurred due to rash and negligent driving
of respondent No. 2. Rest of the averments made in the
petition were admitted. Although, respondent No. 2-Shri Dila
Ram (driver of the offending vehicle), filed separate reply,
however, he took same plea, as taken by respondent No. 1.
5. Respondent No. 3-National Insurance Company,
in its reply resisted the claim petition and took preliminary
objections of maintainability, collusion between the
Neutral Citation No. ( 2026:HHC:10818 )
5
petitioners and respondents No. 1 and 2. As per the replying
respondent, at the time of the accident, respondent No. 2
was not having valid and effective driving licence and the
offending vehicle had no valid RC, fitness certificate, route
permit and the deceased was travelling in the vehicle as
gratuitous passenger. It was further averred that the
offending vehicle was being driven in contravention of the
provisions of the Motor Vehicle Act and in breach of the
terms and conditions of the insurance policy. The replying
respondent, on merits, averred that the amount claimed by
the petitioners was highly exorbitant.
6. After hearing the learned counsel for the parties,
the learned Tribunal below had allowed the claim petition and
the petitioners/claimants were held entitled for compensation
@ Rs.6,22,000/- alongwith interest @ 9% per annum from
the date of filing of the petition till the final realization of the
amount. The liability of the respondents was fixed as joint
and several. However, respondent No. 3-Insurance
Company, being insurer, was held liable to pay the award
amount as indemnifier. Hence, FAO (MV) No. 4241 of 2013,
has been preferred by the petitioners/claimants seeking
enhancement of the compensation amount as well as the
Neutral Citation No. ( 2026:HHC:10818 )
6
interest thereon and National Insurance Company preferred
FAO (MV) No. 77 of 2014 with a prayer to quash and set-
aside the impugned award and exonerate the Insurance
Company.
7. I have heard the learned Senior Counsel/counsel
for the respective parties and carefully examined the entire
records.
8. The learned counsel for the petitioners/claimants
(appellants in FAO (MV) No.4241 of 2013) contended that
the learned Tribunal below has wrongly taken the monthly
salary of the deceased at Rs.4,000/- instead of Rs.7,980/-,
which the deceased was actually drawing from his employer.
He further contended that total monthly salary of the
deceased Udhey Singh was Rs.7,980/-, which also stands
proved from his salary certificate, Ex. PW-1/J. He also
contended that the learned Tribunal below had failed to take
into consideration the income, which the deceased was
earning from agriculture. Thus, the findings rendered by the
learned Tribunal below, in assessing the reasonable and just
compensation, are based on surmises and conjectures,
therefore, the compensation awarded by the learned Tribunal
below deserves to be enhanced by modifying the award.
Neutral Citation No. ( 2026:HHC:10818 )
7
9. The learned Senior Counsel for National
Insurance Company (appellant in FAO (MV) No. 77 of 2014)
contended that the impugned award is liable to be quashed
and set-aside on the ground that the learned Tribunal has
wrongly decided the petition by holding that the Insurance
Company (appellant) is liable to indemnify the insured, as the
deceased was travelling in the offending vehicle as a
gratuitous passenger in a goods carrying commercial vehicle
and the risk of such passenger was not required to be
mandatorily covered under the Act.
10. At the very outset, it may be pertinent to mention
here that neither the insurance company nor the owner of the
offending vehicle had assailed the findings of the learned
Tribunal below so far it arrived at a finding that deceased-
Udhey Singh had died on account of rash and negligent
driving of respondent No. 2 Dila Ram, driver of offending
vehicle, i.e., tipper, having registration No. HP-63-6579.
11. Now the first question which arises for
consideration before this Court is as to what amount of
compensation the petitioners are entitled on account of death
of their deceased son Udhey Singh.
12. As per the matriculation certificate, Ex.PW-1/C,
Neutral Citation No. ( 2026:HHC:10818 )
8
tendered in evidence by PW-1 Kalyan Singh (one of the
petitioners/claimants), the date of birth of the deceased was
26.02.1982, which means that the age of the deceased, at
the time of the accident, was about 28 years. The petitioners
have placed on record salary certificate, Ex.PW-1/J, wherein
the salary of the deceased has been mentioned as
Rs.4,000/- and apart from this salary, some allowances were
also paid to the deceased and his total salary was mentioned
as Rs.7,980/-. However, the learned Tribunal below had not
taken into account the allowances for determining the
monthly income of the deceased, being the actual expenses
for house rent, travelling, ration and telephone. Therefore,
after considering the age of the deceased and his
qualification, the income of the deceased can be assessed at
Rs.5000/- per month.
13. In Sarla Verma (SMT) & others vs. Delhi Transport
Corporation & another, (2009) 6 SCC 121, the Apex Court, on
the question of deduction towards the personal and living
expenses of the deceased held that, the personal and living
expenses of the deceased should be deducted from his
monthly income, to arrive at the contribution to the
dependents. Where the deceased was married, the
Neutral Citation No. ( 2026:HHC:10818 )
9
deduction towards personal and living expenses of the
deceased should be one-third where the number of
dependent family members is 2 to 3; one-fourth where the
number of dependent family members is 4 to 6; and one-fifth
where the number of dependent family members exceeds 6.
In regard to bachelors, normally, 50% is deducted as
personal and living expenses, because it is assumed that a
bachelor would tend to spend more on himself.
14. In the instant case, since the deceased was
bachelor and his parents were dependent upon his income
at the time of accident, 50% of his income is required to be
deducted towards personal and living expenses, in view of
the law laid down by the Hon’ble Supreme Court in Sarla
Verma’s case (supra).
15. In National Insurance Company Limited vs.
Pranay Sethi & others, (2017) 16 SCC 680, it has been
held that while determining the income, in case the
deceased was self-employed or on a fixed salary and below
the age of 40 years, an addition of 40% of the established
income to the income of the deceased towards future
Neutral Citation No. ( 2026:HHC:10818 )
10
prospects should be made. Paras 59.4 of the said judgment
read as follows:
“59.4 In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established
income should be the warrant where the deceased was
below the age of 40 years. An addition of 25% where the
deceased was between the age of 40 to 50 years and 10%
where the deceased was between the age of 50 to 60
years should be regarded as the necessary method of
computation. The established income means the income
minus the tax component.”
16. In the instant case, at the time of accident, the
deceased was of 28 years of age, therefore, in view of the
law laid down by the Apex Court in Pranay Sethi’s case
(supra), an addition of 50% of the notional monthly income
of the deceased can be made towards future prospects.
17. The learned Tribunal below has assessed the
income of the deceased as Rs.5000/-. The deceased was
28 years old and while computing the future prospects @
40%, the income of the deceased comes out to Rs.7000/-
(5000/-+2000) per month. Thus, after the deduction of 50%
of the income towards the personal expenses of the
deceased, his contribution to family comes out to Rs.3500/-
per month and his annual contribution comes out to
Rs42,000/-(3500/- x 12).
18. In Sarla Verma’s case (supra), it has further been
held by the Hon’ble Supreme Court that the multiplier to be
Neutral Citation No. ( 2026:HHC:10818 )
11
used should be as mentioned in column (4) of the Table
above (prepared by applying Susamma Thomas, Trilok
Chandra and Charlie), which starts with an operative
multiplier of 18 (for the age groups of 15 to 20 and 21 to 25
years), reduced by one unit for every five years, that is M-17
for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40
years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for every five years, that is, M-11
for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65
years and M-5 for 66 to 70 years. The relevant portion of the
aforesaid judgment is as under:-
‘42. We therefore hold that the multiplier to be used
should be as mentioned in column (4) of the Table
above (prepared by applying Susamma Thomas,
Trilok Chandra and Charlie), which starts with an
operative multiplier of 18 (for the age groups of 15
to 20 and 21 to 25 years), reduced by one unit for
every five years, that is M-17 for 26 to 30 years, M-
16 for 31 to 35 years, M-15 for 36 to 40 years, M-14
for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for every five years,
that is, M-11 for 51 to 55 years, M-9 for 56 to 60
years, M-7 for 61 to 65 years and M-5 for 66 to 70
years.”
19. Since the deceased was 28 years of age, as such
by applying the multiplier of ‘17’ as per the settled law, the
compensation under the head, loss of dependency is re-fixed
as Rs.7,14,000/- (42,000/- x 17).
20. Now, coming to the last aspect, i.e., the amount
under conventional heads. In Pranay Sethi’s case (supra),
Neutral Citation No. ( 2026:HHC:10818 )
12
the Hon’ble Supreme Court has held that for the
conventional heads, namely, “Loss of Estate”, “Loss of
Consortium” and “Funeral Expenses” amount of
compensation is fixed as Rs.15,000/-, Rs.40,000/- and
Rs.15,000/- respectively and the aforesaid figures quantified
by the Apex Court have to be enhanced on percentage
basis, at the rate of 10%, in a span of every three years. The
relevant portion of the aforesaid judgment is as under:
“52.….…. …..It seems to us that reasonable
figures on conventional heads, namely, loss of estate,
loss of consortium and funeral expenses should be
Rs.15,000, Rs.40,000 and Rs.15,000 respectively. The
principle of revisiting the said heads is an acceptable
principle. But the revisit should not be fact centric or
quantum-centric. We think that it would be condign
that the amount that we have quantified should be
enhanced on percentage basis in every three years
and the enhancement should be at the rate of 10% in
a span of three years. We are disposed to hold so
because that will bring in consistency in respect of
those heads.”
21. In Magma General Insurance Company
Limited Vs. Nanu Ram alias Chuhru Ram & others,
reported in (2018) 18 Supreme Court Cases 130, the
Hon’ble Supreme Court has laid down that consortium is not
limited to spousal consortium and it also includes parental
consortium as well as filial consortium. The relevant portion
of the aforesaid judgment reads as under:-
“21. A Constitution Bench of this Court in Pranay
Sethi dealt with the various heads under which
compensation is to be awarded in a death case. One
Neutral Citation No. ( 2026:HHC:10818 )
13
of these heads is loss of consortium. In legal
parlance, “consortium” is a compendious term which
encompasses “spousal consortium”, “parental
consortium”, and “filial consortium”. The right to
consortium would include the company, care, help
comfort, guidance, solace and affection of the
deceased, which is a loss to his family. With respect
to a spouse, it would include sexual relations with the
deceased spouse:
21.1. Spousal consortium is general
defined as rights pertaining to the
relationship of a husband-wife which allows
compensation o the surviving spouse for
loss of “company, society, cooperation,
affection, and aid of the other in every
conjugal relation”.
21.2. Parental consortium is granted to
the child upon the premature death of a
parent, for loss of “parental aid, protection,
affection, society, discipline, guidance and
training”.
21.3. Filial consortium is the right of the
parents to compensation in the case of an
accidental death of a child. An accident
leading to the death of a child causes great
shock and agony to the parents and family
of the deceased. The greatest agony for a
parent is to lose their child during their
lifetime. Children are valued for their love
affection, companionship and their role in
the family unit.
22. Consortium is a special prism reflecting
changing norms about the status and worth of actual
relationships. Modern jurisdictions world-over have
recognized that the value of a child’s consortium far
exceeds the economic value of the compensation
awarded in the case of the death of a child. Most
jurisdictions therefore permit parents to be awarded
compensation under loss of consortium on the death
of a child. The amount awarded to the parents is a
compensation for loss of love, affection, care and
companionship of the deceased child.”
22. While placing reliance upon the judgment passed
by the Hon'ble Apex Court in Pranay Sethi’s case (supra),
the Hon’ble Supreme Court in Sunita & ors. vs. United
India Insurance Co. Ltd. & ors., Civil Appeal No.9538 of
Neutral Citation No. ( 2026:HHC:10818 )
14
2025, decided on July 17, 2025, had enhanced the
compensation under the conventional heads @ 10% after a
span of every three years w.e.f. the year 2017 and held as
follows:-
“20. Regarding the monthly income of the deceased,
we concur with the view taken by the Courts below in
assessing the same to be Rs.12,000/- per month, for
there being no error therein. Hence, in awarding
compensation which is just and fair, we are inclined
to increase the amount awarded under the
conventional heads, namely, loss of estate, loss of
consortium, and funeral expenses by 10% adverting
to the settled principle of law laid down by this Court
in National Insurance Co. Ltd. v. Pranay Sethi, that
such amount should be revised every three years.”
23. Accordingly in view of the law laid down by the
Hon’ble Supreme Court in Pranay Sethi’s as well as
Sunita’s cases (supra), by enhancing the compensation
under the conventional heads @ 10%, after every three
years from the year 2017, the petitioners are entitled to loss
of estate at Rs.19,965/-, funeral expenses at Rs.19,965/-,
petitioner No.1, being widow of the deceased, is entitled to
spousal consortium of Rs.53,240/-, and petitioners No.3 and
4, being children, are entitled to parental consortium of
Rs.53,240/- each. Accordingly, the total amount of
compensation comes out as under:
Head Amount
(i) Loss of dependency Rs.7,14,000/-
(ii) Funeral expenses Rs.19,965,/-
(iii) Loss of estate Rs.19,965/-
Neutral Citation No. ( 2026:HHC:10818 )
15
(iv) Fillial consortium Rs.1,06,480/-(Rs.53,240/-
payable to each of
petitioners/ respondents
No.3 & 4)
Total compensation awarded: Rs.8,60,410/-
24. Now, the next question which arises for
consideration is that whether the deceased was travelling in
the offending vehicle as gratuitous passenger at the time of
the accident or not.
25. Before adverting to the facts of the present case, this
Court deems it appropriate to examine the law evolved with
respect to unauthorized/gratuitous passengers travelling in
the goods vehicle. Section 147 of the 1988 Act is pari
materia to Section 95 of the 1939 Act. One of the major
differences between the two enactments was that 1939 Act
defines the expression “goods vehicle” whereas 1988 Act
defines the term “goods carriage”. As per 2(8) of the 1939
Act, “goods vehicle” means any motor vehicle constructed or
adapted for use for the carriage of goods, or any motor
vehicle not so constructed or adapted when used for the
carriage of goods solely or in addition to passengers'.
However as per 2(14) of the 1988 Act, „goods carriage
means any motor vehicle constructed or adapted for use
solely for the carriage of goods, or any motor vehicle not so
Neutral Citation No. ( 2026:HHC:10818 )
16
constructed or adapted when used for the carriage of goods.
The Hon’ble Supreme Court examined the liability of
unauthorized/gratuitous passengers in the goods vehicle in
New India Assurance Company vs. Satpal Singh & Ors.
reported as (2000 (1) SCC 237). While examining the said
question, the Hon’ble Supreme Court held that an insurance
policy covering third party risk is not required to exclude
gratuitous passenger in a vehicle no matter the vehicle is of
any type or class. Hence in view of the law laid down by the
Hon’ble Supreme Court in Satpal Singh (supra), the
Insurance Company is held liable to pay compensation even
for gratuitous passengers of the goods vehicle.
26. Subsequently, the Hon’ble Supreme Court in New
India Assurance Company Ltd Vs Asha Rani & Ors.
reported as 2003 (2) SCC 223 examined the correctness of
its earlier Judgment Satpal Singh (Supra) and overruled the
said Judgment and held as follows:
"26. In view of the changes in the relevant provisions in
1988 Act vis-a-vis 1939 Act, we are of the opinion that
the meaning of the words "any person" must also be
attributed having regard to the context in which they
have been used i.e. 'a third party'. Keeping in view the
provisions of 1988 Act, we are of the opinion that as the
provisions thereof do not enjoin any statutory liability
on the owner of a vehicle to get his vehicle insured for
any passenger travelling in a goods vehicle, the
insurers would not be liable therefor.”
27. Again, the 1988 Act was amended and Motor
Neutral Citation No. ( 2026:HHC:10818 )
17
Vehicles (Amendment) Act, 1994 came into effect. The
material portion of the provision contained in Section 147 of
the 1988 Act, as amended by the Motor Vehicles
(Amendment) Act, 1994, reads as follows:
"147. Requirements of policies and limits of liability- (1)
In order to comply with the requirements of this
Chapter, a policy of insurance must be a policy which-
(a) xxx xxx xxx
(b) insures the person or classes of persons specified
in the policy to the extent specified in sub- section (2)
(i) against any liability which may be incurred by him in
respect of the death of or bodily injury to any person,
including owner of the goods or his authorized
representative carried in the vehicle or damage to any
property of a third party caused by or arising out of the
use of the vehicle in a public place;”
28. In National Insurance Company Ltd. vs. Baljit Kaur
reported as 2004 (2) SCC 1, the Hon’ble Supreme Court
examined the issue of whether an insurance policy in respect
of a goods vehicle would also cover gratuitous passengers,
in view of the legislative amendment in 1994 to Section 147
of the 1988 Act. The Hon’ble Supreme Court held that the
owner of the goods or his authorized representative would
now be covered by the policy of insurance in respect of a
goods vehicle. It was not the intention of the legislature to
provide for the liability of the insurer with respect to
passengers, especially gratuitous passengers, who were
neither contemplated at the time the contract of insurance
was entered into, nor any premium was paid to the extent of
Neutral Citation No. ( 2026:HHC:10818 )
18
the benefit of insurance to such category of people'. The
relevant portion of the aforesaid judgement, inter alia, reads
as follows:
"11. Admittedly, it is incumbent upon a Court of law to
eschew that interpretation of a statute that would serve
to negate its true import, or to render the words of any
provision as superfluous. Nonetheless, we find no merit
in the above submissions proffered by the learned
counsel for the respondent. The effect of the 1994
amendment on Section 147 is unambiguous. Where
earlier, the words "any person" could be held not to
include the owner of the goods or his authorized
representative travelling in the goods vehicle,
Parliament has now made it clear that such a
construction is no longer possible. The scope of this
rationale does not, however, extend to cover the class
of cases where gratuitous passengers for whom no
insurance policy was envisaged, and for whom no
insurance premium was paid, employ the goods vehicle
as a medium of conveyance.
12. We find ourselves unable, furthermore, to countenance
the contention of the respondents that the words "any
person" as used in Section 147 of the Motor Vehicles
Act, would be rendered otiose by an interpretation that
removed gratuitous NEUTRAL CITATION NO: 2023:
DHC: 2763 passengers from the ambit of the same. It
was observed by this Court in the case concerning New
India Assurance Co. Ltd. Vs. Asha Rani (supra) that the
true purport of the words "any person" is to be found in
the liability of the insurer for third party risk, which was
sought to be provided for by the enactment.
13. It is pertinent to note that a statutory liability enjoined
upon an owner of the vehicle to compulsorily insure it
so as to cover the liability in respect of a person who
was travelling in a vehicle pursuant to a contract of
employment in terms of proviso (ii) appended to
Section 95 of the 1939 Act does not occur in Section
147 of the 1988 Act. The changes effected in the 1988
Act vis-`-vis the 1939 Act as regard definitions of 'goods
vehicle', 'public service vehicle' and 'stage carriage'
have also a bearing on the subject inasmuch as the
concept of any goods carriage carrying any passenger
or any other person was not contemplated.
… … … … … … … …
17. By reason of the 1994 Amendment what was added is
"including the owner of the goods or his authorized
representative carried in the vehicle". The liability of the
owner of the vehicle to insure it compulsorily, thus, by
reason of the aforementioned amendment included only
the owner of the goods or his authorized representative
carried in the vehicle besides the third parties. The
Neutral Citation No. ( 2026:HHC:10818 )
19
intention of the Parliament, therefore, could not have
been that the words 'any person' occurring in Section
147 would cover all persons who were travelling in a
goods carriage in any capacity whatsoever. If such was
the intention there was no necessity of the Parliament
to carry out an amendment inasmuch as expression
'any person' contained in sub-clause (i) of clause (b) of
sub-section (1) of Section 147 would have included the
owner of the goods or his authorized representative
besides the passengers who are gratuitous or
otherwise”
29. Hence, the legal position as it stands today is
that the owner/authorized representative of the owner of the
goods travelling in a goods vehicle would be covered by the
insurance policy. However, a gratuitous passenger travelling
in a goods vehicle will not be covered by the insurance
policy.
30. Based on this legal position, this Court now
proceeds to examine the facts of the present case. The term
'gratuitous passenger' has no where been defined in the Act,
however, it means, one, who has taken the lift in the vehicle.
In this case, nothing of the sort has been proved by the
Insurance Company, as, the perusal of the record
demonstrates that the deceased was the employee of
respondent No. 1, i.e., owner of the offending vehicle and
was shifting the grits from one place to another.
31. In order to prove that the petitioner was a gratuitous
passenger, burden is on the insurance company to prove
that deceased was traveling as a gratuitous passenger, but it
Neutral Citation No. ( 2026:HHC:10818 )
20
has not examined any independent witness to establish that
the deceased was traveling as a gratuitous passenger. The
case of respondent No. 1 (owner of the vehicle) is that the
deceased was employed by him as Site Supervisor and he
used to supervise the working of the employees as well as of
the Tipper, bearing registration No. HP-63-6579. Shri
Promod Sud, who appeared in the witness-box as RW-1,
categorically deposed that the deceased was Site In-charge
and he was sitting in the tipper (offending vehicle). The
tipper was loaded with grits and deceased was looking after
the entire work. He further deposed that the deceased was
shifting the grits from one place to another. This witness was
cross-examined, but nothing favorable could be elicited from
him.
32. Shri Dila Ram, Driver, appeared in the witness-
box as RW-2, and deposed that vehicle, HP-63-6579 was
being driven by him on the date of the accident and
deceased was sitting with him in the same vehicle, being
Munshi of the Company and also Site Supervisor of the
Company. He further deposed that he was taking the
construction material of the company in the aforesaid vehicle
and he (deceased) had to show him the site where the
Neutral Citation No. ( 2026:HHC:10818 )
21
material was to be unloaded. As per this witness, he
(deceased) used to accompany him in the vehicle on behalf
of the owner in order to bring material, help in loading the
same in the vehicle and then unloading at particular and
desired place. This witness was also cross-examined, but
nothing favorable could be elicited from him. Moreover, RW-3
Shri Narinder Negi, the then Administrative Officer (Legal), of
the appellant National Insurance Company, Divisional Office,
Shimla, also admitted in his cross-examination that the
deceased was employee of respondent No. 1, i.e., M/s P.K.
Construction Company.
33. The appellant- insurer has not led any evidence
to prove that the risk of the owner of the goods or his
authorized representative was not covered, in terms of
Insurance Policy Ext. RW-3/A. It was for the insurer to plead
and prove that risk of owner or his authorized representative
was not covered. The insured has not committed any breach
of the terms and conditions of the Insurance Policy Ext. RW-
3/A. The appellant-Insurance Company failed to prove on
record that the deceased was travelling as gratuitous
passenger in the offending vehicle at the time of the
accident.
Neutral Citation No. ( 2026:HHC:10818 )
22
34. Hence, in view of the above settled principle of
law as well as the discussion made above, the Tribunal was
justified in recording a finding that respondent No.2, has
failed to establish that the deceased was traveling as
gratuitous passenger in the offending vehicle and there was
no breach of the terms and conditions of the insurance policy
and had further rightly fastened the liability on the appellant-
Insurance Company as indemnifier.
35. Consequently, in view of detailed discussion
made here-in-above, the impugned award stands modified to
the extent that the petitioners/claimants are held entitled to
compensation in the sum of Rs.8,60,410/-. The rest of the
terms and conditions of the award, including the interest
component, shall remain the same. The appellant-Insurance
Company shall be liable to pay the award amount as
indemnifier.
36. In view of what has been discussed hereinabove,
the appeal filed by the petitioners/claimants, i.e., FAO (MV)
No. 4241 of 2013, is partly allowed and the appeal filed by
the Insurance Company, i.e., FAO (MV) No. 77 of 2014,
being devoid of merits, is dismissed.
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23
Both the appeals stand disposed of in the above
terms, so also the pending application(s), if any.
( Sushil Kukreja )
Judge
7
th
April, 2026
(virender)
Legal Notes
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