FAO-5545-2022 (O&M)

and other connected matters

IN THE HIGH COURT OF PUNJAB AND HARYANA

1. FAO

ADHIRAJ SINGH CHA

Vs.

PROMILA AND OTHERS …..Respondents

2.

PROMILA AND OTHERS …..Appellants

Vs.

ADHIRAJ SINGH CHAUHAN AND OTHERS ……Respondents

3.

RELIANCE GENERAL INSURANCE CO. LTD. …..Appellant

Vs.

PROMILA AND OTHERS ……Respondents

4.

M/S LANDMARK LIFESTYLE CARS PVT. LTD. …..Appellant

Vs.

RELIANCE GENERAL INSURANCE CO. LTD. & ORS. …..Respondents

CORAM: HON’BLE MR. JUSTICE HARKESH MANUJA

Present: Mr. Amit Jain, Sr. Advocate with

Mr. Aryaman Thakur, Advocate for the appellant

in FAO

FAO-1538

Mr. Siddharth Makkar, Advocate and

for the

Mr. Vikram Singh, Advocate with

for the appellants in FAO

Mr. (Er.

for the appellant

in FAO

for the respondent

in other cases.

2022 (O&M)

and other connected matters

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH

Reserved on: 01.09.2025

Pronounced on:

1. FAO

ADHIRAJ SINGH CHAUHAN ….Appellant

PROMILA AND OTHERS …..Respondents

2. FAO

PROMILA AND OTHERS …..Appellants

ADHIRAJ SINGH CHAUHAN AND OTHERS ……Respondents

3. FAO

RELIANCE GENERAL INSURANCE CO. LTD. …..Appellant

PROMILA AND OTHERS ……Respondents

FAO

M/S LANDMARK LIFESTYLE CARS PVT. LTD. …..Appellant

RELIANCE GENERAL INSURANCE CO. LTD. & ORS. …..Respondents

HON’BLE MR. JUSTICE HARKESH MANUJA

Present: Mr. Amit Jain, Sr. Advocate with

Mr. Aryaman Thakur, Advocate for the appellant

in FAO-5349-2024 and for respondent No. 6 in

1538-2023.

Mr. Siddharth Makkar, Advocate and

for the appellant in FAO-5545-2022

Mr. Vikram Singh, Advocate with

for the appellants in FAO-644-2023.

Mr. (Er.) Sandeep Suri, Advocate

for the appellant –Reliance General Insurance Co. Ltd.

in FAO-1538-2023 and

for the respondent- Reliance General Insurance Company Ltd.

in other cases.

-.-

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH

Reserved on: 01.09.2025

Pronounced on: 17.11.2025

Uploaded on: 19.11.2025

1. FAO-5545-2022 (O&M)

UHAN ….Appellant

PROMILA AND OTHERS …..Respondents

FAO-644-2023 (O&M)

PROMILA AND OTHERS …..Appellants

ADHIRAJ SINGH CHAUHAN AND OTHERS ……Respondents

FAO-1538-2023 (O&M)

RELIANCE GENERAL INSURANCE CO. LTD. …..Appellant

PROMILA AND OTHERS ……Respondents

FAO-5349-2024 (O&M)

M/S LANDMARK LIFESTYLE CARS PVT. LTD. …..Appellant

RELIANCE GENERAL INSURANCE CO. LTD. & ORS. …..Respondents

HON’BLE MR. JUSTICE HARKESH MANUJA

Mr. Aryaman Thakur, Advocate for the appellant

2024 and for respondent No. 6 in

Reliance General Insurance Co. Ltd.

Reliance General Insurance Company Ltd.

1

RELIANCE GENERAL INSURANCE CO. LTD. & ORS. …..Respondents

FAO-5545-2022 (O&M)

and other connected matters

HARKESH MANUJA, J.

1. Vide this com

5545 of 2022, 644 of 2023, 1538 of 2023

all these appeals

Learned Motor Accident Claim Tribunal, Sonipat (hereinafter referred to as “the

Tribunal”), whereby an amount of Rs.

to the claimants/appellants in FAO No. 644 of 2023

per annum from the date of filing the petition till its final realization.

Insurance Company was held liable to first pay the amount to the

claimants/appellants and then recover the same from the driver and the owner.

However, for the sake of convenience

5545 of 2022.

FACTS

2. A claim petition came to be filed at the instance of

before the Ld. Tribunal, praying for grant of compensation to the tune of R

5,00,00,000/- (Rupees five crores only) along with interest @ 18% per annum on

account of death of Narender Singh in a vehicular accident which took place on

13.01.2019 while alleging rash and negligent driving of appellant

offending vehicle.

3. Learned Tribunal after appraisal of evidence on record held that the accident

occurred due to rash and negligent driving of appellant

vehicle and after assessing income of deceased @ Rs. 7,44,275/

accordance with the documents available on record, awarded compensation in the

following manner:

2022 (O&M)

and other connected matters

HARKESH MANUJA, J.

Vide this common judgment, the above noted 4

5545 of 2022, 644 of 2023, 1538 of 2023 and 5349 of 2024 are being decided as

appeals arise out of a common Award dated 10.11.2022 passed by

Learned Motor Accident Claim Tribunal, Sonipat (hereinafter referred to as “the

Tribunal”), whereby an amount of Rs. 92,24,000/

to the claimants/appellants in FAO No. 644 of 2023

per annum from the date of filing the petition till its final realization.

Insurance Company was held liable to first pay the amount to the

claimants/appellants and then recover the same from the driver and the owner.

r, for the sake of convenience, the facts are being culled out

A claim petition came to be filed at the instance of

before the Ld. Tribunal, praying for grant of compensation to the tune of R

(Rupees five crores only) along with interest @ 18% per annum on

account of death of Narender Singh in a vehicular accident which took place on

13.01.2019 while alleging rash and negligent driving of appellant

offending vehicle.

Learned Tribunal after appraisal of evidence on record held that the accident

occurred due to rash and negligent driving of appellant

vehicle and after assessing income of deceased @ Rs. 7,44,275/

accordance with the documents available on record, awarded compensation in the

following manner:-

mon judgment, the above noted 4 appeals, bearing FAO Nos.

and 5349 of 2024 are being decided as

common Award dated 10.11.2022 passed by

Learned Motor Accident Claim Tribunal, Sonipat (hereinafter referred to as “the

92,24,000/- was awarded as compensation

to the claimants/appellants in FAO No. 644 of 2023 along with interest @ 7.5%

per annum from the date of filing the petition till its final realization. Further, the

Insurance Company was held liable to first pay the amount to the

claimants/appellants and then recover the same from the driver and the owner.

, the facts are being culled out from FAO No.

A claim petition came to be filed at the instance of respondents No.1 to 4

before the Ld. Tribunal, praying for grant of compensation to the tune of Rs.

(Rupees five crores only) along with interest @ 18% per annum on

account of death of Narender Singh in a vehicular accident which took place on

13.01.2019 while alleging rash and negligent driving of appellant- driver of the

Learned Tribunal after appraisal of evidence on record held that the accident

occurred due to rash and negligent driving of appellant-driver of the offending

vehicle and after assessing income of deceased @ Rs. 7,44,275/- per annum in

accordance with the documents available on record, awarded compensation in the

2

appeals, bearing FAO Nos.

and 5349 of 2024 are being decided as

common Award dated 10.11.2022 passed by

Learned Motor Accident Claim Tribunal, Sonipat (hereinafter referred to as “the

was awarded as compensation

th interest @ 7.5%

Further, the

Insurance Company was held liable to first pay the amount to the

claimants/appellants and then recover the same from the driver and the owner.

from FAO No.

respondents No.1 to 4

s.

(Rupees five crores only) along with interest @ 18% per annum on

account of death of Narender Singh in a vehicular accident which took place on

driver of the

Learned Tribunal after appraisal of evidence on record held that the accident

he offending

per annum in

accordance with the documents available on record, awarded compensation in the

FAO-5545-2022 (O&M)

and other connected matters

S.No. Head of Claim

1. Annual Income of deceased

2. Addition towards future prospects (25%)

3. Total Income (Rs. 7,44,275 + Rs. 1,86,068)

4. Deduction on account of personal expenses

of deceased (1/4

5. Total loss of dependency (Rs. 9,30,343

Rs. 2,32,585)

6. Selection of multiplier and total loss of

dependency (13)

7. Funeral expenses

8. Loss of estate

9. Loss of spousal consortium to

No.1

10. Loss of parental consortium to claimants

No. 2 & 3

11. Loss of filial consortium to claimant No. 4

Total Compensation

The Learned

shall satisfy the compensation awarded

with interest and costs, from appellants

offending vehicle

4. Being aggrieved against the award dated 10.11.2022 passed by the

Learned Tribunal, the present appeals were preferred

seeking enhancement of the compensation; by the driver and owner

offending vehicle, praying for setting aside the Award

rights granted against them

Company; and by the Insurance Company

exoneration from

respectively. Facts as specified in the claim petition about the manner of accident

and the issue regarding negligence of the driver have been recorded in favour of

2022 (O&M)

and other connected matters

Head of Claim

Annual Income of deceased

Addition towards future prospects (25%)

Total Income (Rs. 7,44,275 + Rs. 1,86,068)

Deduction on account of personal expenses

of deceased (1/4

th

)

Total loss of dependency (Rs. 9,30,343

Rs. 2,32,585)

Selection of multiplier and total loss of

dependency (13)

Funeral expenses

Loss of estate

Loss of spousal consortium to claimant

No.1

Loss of parental consortium to claimants

No. 2 & 3

Loss of filial consortium to claimant No. 4

Total Compensation

Learned Tribunal further held that respondent

compensation awarded and be entitled to recover the same, along

est and costs, from appellants- driver

offending vehicle by way of execution proceedings.

Being aggrieved against the award dated 10.11.2022 passed by the

Learned Tribunal, the present appeals were preferred

seeking enhancement of the compensation; by the driver and owner

offending vehicle, praying for setting aside the Award

rights granted against them and fastening the liability upon the Insurance

Company; and by the Insurance Company, assailing the Award on the grounds of

exoneration from liability and seeking reduction of the compensation amount

. Facts as specified in the claim petition about the manner of accident

and the issue regarding negligence of the driver have been recorded in favour of

Amount (in Rs.)

Rs. 7,44,275/-

Addition towards future prospects (25%) Rs. 1,86,068/-

Total Income (Rs. 7,44,275 + Rs. 1,86,068) Rs. 9,30,343/-

Deduction on account of personal expenses Rs. 2,32,585/-

Total loss of dependency (Rs. 9,30,343 – Rs. 6,97,758/-

Selection of multiplier and total loss of Rs. 90,70,854/-

Rs. 16,500/-

Rs. 16,500/-

claimant Rs. 40,000/-

Loss of parental consortium to claimants Rs. 40,000/-

Loss of filial consortium to claimant No. 4 Rs. 40,000/-

Rs. 92,23,854/-

rounded to Rs.

92,24,000/-

Tribunal further held that respondent–Insurance Company

and be entitled to recover the same, along

driver as well as owner/agency of the

proceedings.

Being aggrieved against the award dated 10.11.2022 passed by the

Learned Tribunal, the present appeals were preferred by the claimants/appellants

seeking enhancement of the compensation; by the driver and owner/agency of the

offending vehicle, praying for setting aside the Award as regards the recovery

and fastening the liability upon the Insurance

assailing the Award on the grounds of

tion of the compensation amount

. Facts as specified in the claim petition about the manner of accident

and the issue regarding negligence of the driver have been recorded in favour of

3

Insurance Company

and be entitled to recover the same, along

of the

Being aggrieved against the award dated 10.11.2022 passed by the

by the claimants/appellants

of the

as regards the recovery

and fastening the liability upon the Insurance

assailing the Award on the grounds of

tion of the compensation amount

. Facts as specified in the claim petition about the manner of accident

and the issue regarding negligence of the driver have been recorded in favour of

FAO-5545-2022 (O&M)

and other connected matters

appellants/claimants by the Lear

need not be repeated here for the sake of brevity.

ARGUMENTS

ON BEHALF OF

5. Learned senior counsel appearing on behalf of the

that no specific objection was raised in the written statement to the effect that

Vehicle bearing no. HR

Policy. While referring to the cross

Associate Operation Manager of the respondent

senior counsel submitted that even as per his deposition, the Insurance Policy

(Ex.R.6) was issued on the basis of information and details mentioned by the

insured in the proposal form (

Certificate (Ex.P-18). He also pointed

2018-45-1 to HR

Number. He also referred to the portion of deposition w

in case, Insurance Policy was

to any particular vehicle, its engine and chassis numbers were mentioned therein.

Learned senior counsel also referred to the deposition of RW4, who ha

be the Manager, Motor Claims with Reliance General Insurance Company

Limited, and admitted that the claim of the owner was never repudiated on the

ground that Vehicle No. HR

in the cross examinatio

Company on the basis of Trade Certificate (Ex.P.18) and covered all models i.e.

Jeep, Abharth and Fiat. While referring to Ex.P.18 i.e. Trade Certificate, learned

senior counsel further submit

2022 (O&M)

and other connected matters

appellants/claimants by the Learned Tribunal, the same not being under challenge;

need not be repeated here for the sake of brevity.

ON BEHALF OF APPELLANT/AGENCY

Learned senior counsel appearing on behalf of the

that no specific objection was raised in the written statement to the effect that

Vehicle bearing no. HR-26TC-2018-45-4 was not covered under the Insurance

Policy. While referring to the cross-examination of RW3, who happens to be

ociate Operation Manager of the respondent

enior counsel submitted that even as per his deposition, the Insurance Policy

(Ex.R.6) was issued on the basis of information and details mentioned by the

insured in the proposal form (Ex.R.5) as well as on the basis of the Trade

18). He also pointed out that in the Trade Certificate

1 to HR-26TC-2018-45-10 were mentioned

. He also referred to the portion of deposition w

in case, Insurance Policy was being issued by the Insurance Company with regard

to any particular vehicle, its engine and chassis numbers were mentioned therein.

earned senior counsel also referred to the deposition of RW4, who ha

be the Manager, Motor Claims with Reliance General Insurance Company

Limited, and admitted that the claim of the owner was never repudiated on the

ground that Vehicle No. HR-26TC-2018-45-4 was not insured. RW4 also deposed

in the cross examination that the Policy (Ex.R.6) was issued by the Insurance

Company on the basis of Trade Certificate (Ex.P.18) and covered all models i.e.

Jeep, Abharth and Fiat. While referring to Ex.P.18 i.e. Trade Certificate, learned

senior counsel further submitted that the Trade Certificate number allotted to the

ned Tribunal, the same not being under challenge;

need not be repeated here for the sake of brevity.

Learned senior counsel appearing on behalf of the owner/agency submitted

that no specific objection was raised in the written statement to the effect that

4 was not covered under the Insurance

examination of RW3, who happens to be the

ociate Operation Manager of the respondent-Insurance Company, Learned

enior counsel submitted that even as per his deposition, the Insurance Policy

(Ex.R.6) was issued on the basis of information and details mentioned by the

Ex.R.5) as well as on the basis of the Trade

out that in the Trade Certificate, HR-26TC

mentioned as Trade Certificate Range

. He also referred to the portion of deposition wherein RW3 admitted that

issued by the Insurance Company with regard

to any particular vehicle, its engine and chassis numbers were mentioned therein.

earned senior counsel also referred to the deposition of RW4, who happened to

be the Manager, Motor Claims with Reliance General Insurance Company

Limited, and admitted that the claim of the owner was never repudiated on the

4 was not insured. RW4 also deposed

n that the Policy (Ex.R.6) was issued by the Insurance

Company on the basis of Trade Certificate (Ex.P.18) and covered all models i.e.

Jeep, Abharth and Fiat. While referring to Ex.P.18 i.e. Trade Certificate, learned

the Trade Certificate number allotted to the

4

ned Tribunal, the same not being under challenge;

/agency submitted

that no specific objection was raised in the written statement to the effect that

4 was not covered under the Insurance

the

earned

enior counsel submitted that even as per his deposition, the Insurance Policy

(Ex.R.6) was issued on the basis of information and details mentioned by the

Ex.R.5) as well as on the basis of the Trade

26TC-

as Trade Certificate Range

herein RW3 admitted that

issued by the Insurance Company with regard

to any particular vehicle, its engine and chassis numbers were mentioned therein.

ppened to

be the Manager, Motor Claims with Reliance General Insurance Company

Limited, and admitted that the claim of the owner was never repudiated on the

4 was not insured. RW4 also deposed

n that the Policy (Ex.R.6) was issued by the Insurance

Company on the basis of Trade Certificate (Ex.P.18) and covered all models i.e.

Jeep, Abharth and Fiat. While referring to Ex.P.18 i.e. Trade Certificate, learned

the Trade Certificate number allotted to the

FAO-5545-2022 (O&M)

and other connected matters

owner was HR-26TC

HR-26TC-2018-45

on the basis of Trade Certificate, it covered the

numbers from HR

26TC-2018-45-4 as well. He also contended that even as per Insurance Proposal

(Ex.R.5), the same was made on the basis of one inclusive Trade Certificate. He

though emphasized that on account of an inadvertent error while mentioning Trade

Certificate in specific column number of the proposal form (Ex.R.5), it was

wrongly mentioned as HR

insurance policy (Ex.R.6) as well.

1,29,053/- charged as premium against the insured declared value of Rs. 30 lacs

itself was suggestive of the fact that the insurance was in fact with respect to one

conclusive Trade Certificate and not about

number. He also submitted that an adverse inference was required to be drawn

against the respondents for having failed to produce on record duly specific terms

and conditions of Trade Certificate insurance policy so as

stand. Based on the aforesaid submission, Mr. Jain contends that recovery rights

given to the Insurance Company against the owner

aside.

ON BEHALF OF DRIVER OF THE OFFENDING VEHICLE

6. Learned

offending vehicle contended that the Learned Tribunal erred in directing recovery

of the awarded compensation from the driver.

vehicle was duly insured with the res

accident, and therefore, in terms of the valid and subsisting insurance policy, the

2022 (O&M)

and other connected matters

26TC-2018-45 which covered 10 light motor vehicles ranging from

45-1 to HR-26TC-2018-45-10 and once the insurance was issued

on the basis of Trade Certificate, it covered the

numbers from HR-26TC-2018-45-1 to HR-26TC

4 as well. He also contended that even as per Insurance Proposal

(Ex.R.5), the same was made on the basis of one inclusive Trade Certificate. He

mphasized that on account of an inadvertent error while mentioning Trade

Certificate in specific column number of the proposal form (Ex.R.5), it was

wrongly mentioned as HR-26TC-2018-45-1 which even got replicated in

insurance policy (Ex.R.6) as well. In support, he submitted that a huge sum of Rs.

charged as premium against the insured declared value of Rs. 30 lacs

itself was suggestive of the fact that the insurance was in fact with respect to one

conclusive Trade Certificate and not about any specific Trade Certificate range

number. He also submitted that an adverse inference was required to be drawn

against the respondents for having failed to produce on record duly specific terms

and conditions of Trade Certificate insurance policy so as

Based on the aforesaid submission, Mr. Jain contends that recovery rights

given to the Insurance Company against the owner

ON BEHALF OF DRIVER OF THE OFFENDING VEHICLE

Learned counsel appearing on behalf of the appellant

offending vehicle contended that the Learned Tribunal erred in directing recovery

of the awarded compensation from the driver. He

vehicle was duly insured with the respondent/Insurance Company at the time of the

accident, and therefore, in terms of the valid and subsisting insurance policy, the

45 which covered 10 light motor vehicles ranging from

10 and once the insurance was issued

on the basis of Trade Certificate, it covered the entire Trade Certificate ranging

26TC-2018-45-10, including HR

4 as well. He also contended that even as per Insurance Proposal

(Ex.R.5), the same was made on the basis of one inclusive Trade Certificate. He

mphasized that on account of an inadvertent error while mentioning Trade

Certificate in specific column number of the proposal form (Ex.R.5), it was

1 which even got replicated in the

In support, he submitted that a huge sum of Rs.

charged as premium against the insured declared value of Rs. 30 lacs

itself was suggestive of the fact that the insurance was in fact with respect to one

any specific Trade Certificate range

number. He also submitted that an adverse inference was required to be drawn

against the respondents for having failed to produce on record duly specific terms

and conditions of Trade Certificate insurance policy so as to substantiate their

Based on the aforesaid submission, Mr. Jain contends that recovery rights

given to the Insurance Company against the owner-Agency were liable to be set

ON BEHALF OF DRIVER OF THE OFFENDING VEHICLE

counsel appearing on behalf of the appellant -driver of the

offending vehicle contended that the Learned Tribunal erred in directing recovery

He submitted that the offending

pondent/Insurance Company at the time of the

accident, and therefore, in terms of the valid and subsisting insurance policy, the

5

45 which covered 10 light motor vehicles ranging from

10 and once the insurance was issued

ing

10, including HR-

4 as well. He also contended that even as per Insurance Proposal

(Ex.R.5), the same was made on the basis of one inclusive Trade Certificate. He

mphasized that on account of an inadvertent error while mentioning Trade

Certificate in specific column number of the proposal form (Ex.R.5), it was

he

In support, he submitted that a huge sum of Rs.

charged as premium against the insured declared value of Rs. 30 lacs

itself was suggestive of the fact that the insurance was in fact with respect to one

any specific Trade Certificate range

number. He also submitted that an adverse inference was required to be drawn

against the respondents for having failed to produce on record duly specific terms

to substantiate their

Based on the aforesaid submission, Mr. Jain contends that recovery rights

Agency were liable to be set

driver of the

offending vehicle contended that the Learned Tribunal erred in directing recovery

submitted that the offending

pondent/Insurance Company at the time of the

accident, and therefore, in terms of the valid and subsisting insurance policy, the

FAO-5545-2022 (O&M)

and other connected matters

liability to satisfy the award

further argued that there was no breach of

driver, nor was there any evidence on record to establish that

holding a valid and effective driving license at

contended that the Learned Tribunal ought to have fa

Insurance Company and not upon the

ON BEHALF OF INSURANCE COMPANY

7. On the other hand, learned counsel appearing on behalf of the Insurance

Company submitted

and Ex.R.6) specifically mentioned about Trade Certificate range number HR

26TC-2018-45-1, there was no question of any mistake been committed with

respect to the coverage of all the vehicles i

insurance was specifically and categorically for one Trade

number only and not with respect to the entire Trade Certificate. He also submitted

that any such kind of plea with respect to any bonafide error could not b

this belated stage as no such case was ever set up by the owner in his written

statement filed before the Learned Tribunal. Justifying

insurance company, it was submitted that the same was related to the radius/range

within which the vehicle was permitted to be plied. He submitted that under

normal circumstances

usually charged. Howeve

the insurance Policy

kms from the agency

charged thereupon.

Insurance Company was not liable to indem

2022 (O&M)

and other connected matters

liability to satisfy the award was to be fastened upon the insurer.

further argued that there was no breach of any policy condition attributable to the

driver, nor was there any evidence on record to establish that

holding a valid and effective driving license at

contended that the Learned Tribunal ought to have fa

Insurance Company and not upon the appellant-driver.

ON BEHALF OF INSURANCE COMPANY

On the other hand, learned counsel appearing on behalf of the Insurance

Company submitted that once the proposal form and the I

specifically mentioned about Trade Certificate range number HR

1, there was no question of any mistake been committed with

coverage of all the vehicles inclusively.

insurance was specifically and categorically for one Trade

number only and not with respect to the entire Trade Certificate. He also submitted

that any such kind of plea with respect to any bonafide error could not b

this belated stage as no such case was ever set up by the owner in his written

ed before the Learned Tribunal. Justifying

insurance company, it was submitted that the same was related to the radius/range

within which the vehicle was permitted to be plied. He submitted that under

normal circumstances upto 80 kms of driving range

usually charged. However, in the present case, as per the proposal form

the insurance Policy, the benefit of range, according to the owner w

kms from the agency as such based thereupon, the premium of Rs. 1,29,053/

charged thereupon. Thus, in view of the above

Insurance Company was not liable to indemnify the owner

upon the insurer. Learned counsel

any policy condition attributable to the

driver, nor was there any evidence on record to establish that appellant was not

the relevant time. Hence, it was

contended that the Learned Tribunal ought to have fastened the liability upon the

driver.

On the other hand, learned counsel appearing on behalf of the Insurance

that once the proposal form and the Insurance policy (Ex.R.5

specifically mentioned about Trade Certificate range number HR

1, there was no question of any mistake been committed with

nclusively. He submitted that the

insurance was specifically and categorically for one Trade Certificate range

number only and not with respect to the entire Trade Certificate. He also submitted

that any such kind of plea with respect to any bonafide error could not be raised at

this belated stage as no such case was ever set up by the owner in his written

ed before the Learned Tribunal. Justifying the premium charged by the

insurance company, it was submitted that the same was related to the radius/range

within which the vehicle was permitted to be plied. He submitted that under

upto 80 kms of driving range, premium of Rs. 40,000/- was

r, in the present case, as per the proposal form and also

, the benefit of range, according to the owner was upto 320

as such based thereupon, the premium of Rs. 1,29,053/- was

Thus, in view of the above submission it was prayed that

nify the owner-Agency.

6

Learned counsel

any policy condition attributable to the

was not

the relevant time. Hence, it was

stened the liability upon the

On the other hand, learned counsel appearing on behalf of the Insurance

rance policy (Ex.R.5

specifically mentioned about Trade Certificate range number HR-

1, there was no question of any mistake been committed with

He submitted that the

Certificate range

number only and not with respect to the entire Trade Certificate. He also submitted

e raised at

this belated stage as no such case was ever set up by the owner in his written

the premium charged by the

insurance company, it was submitted that the same was related to the radius/range

within which the vehicle was permitted to be plied. He submitted that under

was

and also

as upto 320

was

submission it was prayed that

FAO-5545-2022 (O&M)

and other connected matters

ON BEHALF OF APPELLANTS/CLAIMANTS

8. Learned counsel f

compensation awarded by the Learned Tribunal was on the lower side and di

commensurate with the loss suffered by the c

Learned Tribunal failed to correctly assess th

earning Rs. 2,00,000/

Parnami Travels Private Limited, Nathupur, District Gurugram and also the

Proprietor of M/s Parnami Travels.

the documentary evidence

the deceased. He

employees in his firm, who used to earn their livelihood from there.

counsel further argued that the

heads such as los

inadequate and require suitable enhancement.

submitting that the

record regarding the nature of occupation, earning ca

claimants, thereby resulting in an erroneous computation of

Accordingly, it wa

compensation be suitably enhanced in the interest of justice.

DISCUSSION

9. I have heard learned counsel for the parties and gone through the paper book

as well as the records of the case

behalf of the owner,

2022 and FAO- 644

2022 (O&M)

and other connected matters

ON BEHALF OF APPELLANTS/CLAIMANTS

Learned counsel for the claimants/appellants

warded by the Learned Tribunal was on the lower side and di

commensurate with the loss suffered by the claimants.

Learned Tribunal failed to correctly assess the income of the deceased

earning Rs. 2,00,000/- per month as he happened to be

Parnami Travels Private Limited, Nathupur, District Gurugram and also the

Proprietor of M/s Parnami Travels. The above stated fact

the documentary evidence brought on record in the shape of income tax returns

He also contended that the deceased had employed several

employees in his firm, who used to earn their livelihood from there.

further argued that the compensation awarded under the conventional

heads such as loss of consortium, loss of estate and

inadequate and require suitable enhancement. He

that the Learned Tribunal did not properly appreciate the evidence on

record regarding the nature of occupation, earning ca

claimants, thereby resulting in an erroneous computation of

Accordingly, it was prayed that the impugned award be modified and the

compensation be suitably enhanced in the interest of justice.

I have heard learned counsel for the parties and gone through the paper book

as well as the records of the case. I find substance in the arguments raised on

owner, driver as well as claimants in FAO

644-2023 respectively.

ON BEHALF OF APPELLANTS/CLAIMANTS

or the claimants/appellants contended that the

warded by the Learned Tribunal was on the lower side and did not

laimants. He submitted that the

e income of the deceased, who was

happened to be Director/Shareholder in

Parnami Travels Private Limited, Nathupur, District Gurugram and also the

above stated facts were duly proved from

brought on record in the shape of income tax returns of

that the deceased had employed several

employees in his firm, who used to earn their livelihood from there. Learned

awarded under the conventional

tium, loss of estate and funeral expenses were

He concluded his arguments by

Tribunal did not properly appreciate the evidence on

record regarding the nature of occupation, earning capacity, and dependency of the

claimants, thereby resulting in an erroneous computation of compensation.

s prayed that the impugned award be modified and the

compensation be suitably enhanced in the interest of justice.

I have heard learned counsel for the parties and gone through the paper book

I find substance in the arguments raised on

driver as well as claimants in FAO-5349-2024, FAO-5545

7

contended that the

not

submitted that the

who was

Director/Shareholder in

Parnami Travels Private Limited, Nathupur, District Gurugram and also the

from

of

that the deceased had employed several

Learned

awarded under the conventional

re

by

Tribunal did not properly appreciate the evidence on

pacity, and dependency of the

compensation.

s prayed that the impugned award be modified and the

I have heard learned counsel for the parties and gone through the paper book

I find substance in the arguments raised on

5545-

FAO-5545-2022 (O&M)

and other connected matters

FAO No. 5349 of 2024 AND FAO No. 5545 of 2022

10. As per the records, following facts

i. The insurance policy on record as Ex.R

proposal form Ex.R

ii. The proposal form

the Insurance of Motor Trade (Road Risk),

5 (asking for the type of cover required) that the cover is on a

Certificate basis.

iii. While providing the particulars of

given as:-

Make: “ALL MODELS OF FIAT CHRYSLER”

Model: “JEEP, ABARTH, FIAT”

iv. Ex. P-18, Trade Certificate bearing No HR/26/TC/2018/45, provides the

following details of vehicles:

S.No. Vehicle category

1. LIGHT MOTOR

VEHICLE (NT)

Moreover, contents of the Trade Certificate are reproduced hereunder for

the better understanding of the facts in hand:

Number of certification: HR/26/TC/2018/45

Full Name

Address of certificate holder: G4 B

Validity of Certification: (19

2022 (O&M)

and other connected matters

FAO No. 5349 of 2024 AND FAO No. 5545 of 2022

As per the records, following facts are not in dispute:

The insurance policy on record as Ex.R-6 was issued on the basis of the

proposal form Ex.R-5.

The proposal form in its headnote itself records that it is a proposal form for

Insurance of Motor Trade (Road Risk),

5 (asking for the type of cover required) that the cover is on a

Certificate basis.

While providing the particulars of vehicles to be insured, the details are

“ALL MODELS OF FIAT CHRYSLER”

“JEEP, ABARTH, FIAT”

18, Trade Certificate bearing No HR/26/TC/2018/45, provides the

following details of vehicles:

Vehicle category Vehicle

count

LIGHT MOTOR

VEHICLE (NT)

1-10

Moreover, contents of the Trade Certificate are reproduced hereunder for

the better understanding of the facts in hand:-

GOVERNMENT OF HARYANA

State Transport Department

FORM 17

[See Rule 35]

TRADE CERTIFICATE

Date: 19-Jun-2018 11:49:37 AM

Number of certification: HR/26/TC/2018/45

Full Name Landmark Lifestyle Cars Pvt Ltd

Address of certificate holder: G4 B

PLAZA M.G ROAD HARYANA

Validity of Certification: (19

FAO No. 5349 of 2024 AND FAO No. 5545 of 2022

are not in dispute:-

6 was issued on the basis of the

s headnote itself records that it is a proposal form for

Insurance of Motor Trade (Road Risk), specifically mentions at point

5 (asking for the type of cover required) that the cover is on a Trade

vehicles to be insured, the details are

“ALL MODELS OF FIAT CHRYSLER”

18, Trade Certificate bearing No HR/26/TC/2018/45, provides the

Vehicle

Trade Certificate

Number Range

HR/26/TC/2018/45/1

HR/26/TC/2018/45/10

Moreover, contents of the Trade Certificate are reproduced hereunder for

HARYANA

State Transport Department

[See Rule 35]

TRADE CERTIFICATE

2018 11:49:37 AM

Number of certification: HR/26/TC/2018/45

Landmark Lifestyle Cars Pvt Ltd

Address of certificate holder: G4 B-1 GROUND FLOOR, SOLITAIRE

PLAZA M.G ROAD HARYANA

Validity of Certification: (19-Jun-2018 -18Jun-2019)

8

6 was issued on the basis of the

s headnote itself records that it is a proposal form for

specifically mentions at point

Trade

vehicles to be insured, the details are

18, Trade Certificate bearing No HR/26/TC/2018/45, provides the

Trade Certificate

HR/26/TC/2018/45/1-

HR/26/TC/2018/45/10

Moreover, contents of the Trade Certificate are reproduced hereunder for

1 GROUND FLOOR, SOLITAIRE

FAO-5545-2022 (O&M)

and other connected matters

Details of the

S.No. Vehicle category

1. LIGHT MOTOR

VEHICLE (NT)

Date and Stamp of Office of Issue: Registering Authority of

Date: 19-Jun

10.1 This clearly shows that the vehicle bearing number HR/26TC/2018/45/4

was also one of the vehicles covered under this Trade Certificate

Trade Certificate range number

11. The respondent

proposal forms at Point No. 7 (where the trade certificate number was required to

be mentioned), the insured had written “

contended that the insurance was granted only in respect of this particular

Certificate, range

Certificate.

11.1 However, this contention is i

proposal form as well as the insurance cover note itself. Had the insurance been

intended for only one specific vehicle

number “HR/26/TC/2018/45/1”, the “make” and “model”

contained vehicle

details such as “All Models of Fiat Chrysler”

Fiat” under “Model”, indicating that the insurance was intended to cover all

vehicles falling under the said trade certificate.

11.2 Secondly, as is evident from the contents of the form and the “

Motor Vehicles Rules, 1989

certificate operates as a single unit, and the respondent

2022 (O&M)

and other connected matters

Details of the vehicle(s) to be sold:

Vehicle category Vehicle

count

LIGHT MOTOR

VEHICLE (NT)

1-10

Date and Stamp of Office of Issue: Registering Authority of

Jun-2018 11:49:37 AM GURUGRAM, NORTH

This clearly shows that the vehicle bearing number HR/26TC/2018/45/4

was also one of the vehicles covered under this Trade Certificate

Trade Certificate range number.

The respondent-Insurance Company has objected on the

proposal forms at Point No. 7 (where the trade certificate number was required to

be mentioned), the insured had written “HR/26/TC/2018/45/1”. It has, therefore,

contended that the insurance was granted only in respect of this particular

number and not to other vehicles covered under the sa

However, this contention is inconsistent with the other contents of the

proposal form as well as the insurance cover note itself. Had the insurance been

intended for only one specific vehicle or Trade Certificate range number

“HR/26/TC/2018/45/1”, the “make” and “model”

contained vehicle-specific entries. Instead, the form clearly mentions

“All Models of Fiat Chrysler” under “Make” and

under “Model”, indicating that the insurance was intended to cover all

vehicles falling under the said trade certificate.

Secondly, as is evident from the contents of the form and the “

Motor Vehicles Rules, 1989” (hereinafter referred as

certificate operates as a single unit, and the respondent

Vehicle

Trade Certificate

Number Range

HR/26/TC/2018/45/1

HR/26/TC/2018/45/10

Date and Stamp of Office of Issue: Registering Authority of Region/State

2018 11:49:37 AM GURUGRAM, NORTH

This clearly shows that the vehicle bearing number HR/26TC/2018/45/4

was also one of the vehicles covered under this Trade Certificate being one of its

Insurance Company has objected on the ground that in the

proposal forms at Point No. 7 (where the trade certificate number was required to

HR/26/TC/2018/45/1”. It has, therefore,

contended that the insurance was granted only in respect of this particular Trade

number and not to other vehicles covered under the same Trade

nconsistent with the other contents of the

proposal form as well as the insurance cover note itself. Had the insurance been

or Trade Certificate range number bearing

“HR/26/TC/2018/45/1”, the “make” and “model” columns would have

specific entries. Instead, the form clearly mentions general

under “Make” and “Jeep, Abarth,

under “Model”, indicating that the insurance was intended to cover all

Secondly, as is evident from the contents of the form and the “The Central

red as ‘the 1989 Rules’), a trade

certificate operates as a single unit, and the respondent-Insurance Company has

9

Trade Certificate

HR/26/TC/2018/45/1-

HR/26/TC/2018/45/10

This clearly shows that the vehicle bearing number HR/26TC/2018/45/4

being one of its

ground that in the

proposal forms at Point No. 7 (where the trade certificate number was required to

HR/26/TC/2018/45/1”. It has, therefore,

Trade

me Trade

nconsistent with the other contents of the

proposal form as well as the insurance cover note itself. Had the insurance been

bearing

columns would have

general

“Jeep, Abarth,

under “Model”, indicating that the insurance was intended to cover all

The Central

), a trade

Insurance Company has

FAO-5545-2022 (O&M)

and other connected matters

failed to bring on record any material to show that insurance of a subset of vehicles

covered under a trade certificate is either permissible

11.3 Even assuming

trade certificate is permissible, it was incumbent upon the insurer to make a clear

endorsement to that effect. While RW

the deposition, claimed that only the specific vehicle

HR/26TC/2018/45/1 was insured, however, in this context his cross

reveals otherwise. A belated endorsement was admittedly made on 11.07.2019,

that “Notwithstanding anything contain to the contrary, it is hereby declared

and agreed that at the request of the Insured, Vehicle model may read as

JEEP COMPASS TRAILHAWK”.

arrangement adopted by the insurer to evade the

records that it was made “

request was produced

omission assumes significance as

evidence in support of the insurer’s version.

11.4 It is clear that the trade certificate in the present case was

“HR/26/TC/2018/45”

dealer that the entry of “HR/26/TC/2018/45/1” was made by mistake (or that

mentioning the first number of the series is a common practice

before the Learned

company, at the time of processing the proposal form, either verified the details,

sought an explanation or rejected the proposal for want of clarity. The failure of

the insurer to exercise due diligence at that stage directly led to the present dispute

2022 (O&M)

and other connected matters

failed to bring on record any material to show that insurance of a subset of vehicles

covered under a trade certificate is either permissible

Even assuming arguendo that insurance of a subset of vehicles under a

trade certificate is permissible, it was incumbent upon the insurer to make a clear

endorsement to that effect. While RW-3 i.e. Associate Operatio

the deposition, claimed that only the specific vehicle

HR/26TC/2018/45/1 was insured, however, in this context his cross

reveals otherwise. A belated endorsement was admittedly made on 11.07.2019,

tanding anything contain to the contrary, it is hereby declared

and agreed that at the request of the Insured, Vehicle model may read as

JEEP COMPASS TRAILHAWK”. But this appears to be an afterthought and an

arrangement adopted by the insurer to evade the

records that it was made “at the request of the insured”,

request was produced either during cross-examination or subsequently. The

omission assumes significance as any such document could have been cru

evidence in support of the insurer’s version.

It is clear that the trade certificate in the present case was

“HR/26/TC/2018/45” and not “HR/26/TC/2018/45/01”.

dealer that the entry of “HR/26/TC/2018/45/1” was made by mistake (or that

mentioning the first number of the series is a common practice

before the Learned Tribunal) could easily have been clarified had the insurance

company, at the time of processing the proposal form, either verified the details,

sought an explanation or rejected the proposal for want of clarity. The failure of

the insurer to exercise due diligence at that stage directly led to the present dispute

10

failed to bring on record any material to show that insurance of a subset of vehicles

covered under a trade certificate is either permissible or practically possible.

that insurance of a subset of vehicles under a

trade certificate is permissible, it was incumbent upon the insurer to make a clear

3 i.e. Associate Operation Manager, during

the deposition, claimed that only the specific vehicle bearing number

HR/26TC/2018/45/1 was insured, however, in this context his cross-examination

reveals otherwise. A belated endorsement was admittedly made on 11.07.2019,

tanding anything contain to the contrary, it is hereby declared

and agreed that at the request of the Insured, Vehicle model may read as

But this appears to be an afterthought and an

arrangement adopted by the insurer to evade the liability. The endorsement itself

at the request of the insured”, yet no such written

examination or subsequently. The

such document could have been crucial

It is clear that the trade certificate in the present case was

“HR/26/TC/2018/45/01”. The contention of the

dealer that the entry of “HR/26/TC/2018/45/1” was made by mistake (or that

mentioning the first number of the series is a common practice – as contended

) could easily have been clarified had the insurance

company, at the time of processing the proposal form, either verified the details,

sought an explanation or rejected the proposal for want of clarity. The failure of

the insurer to exercise due diligence at that stage directly led to the present dispute

10

failed to bring on record any material to show that insurance of a subset of vehicles

that insurance of a subset of vehicles under a

trade certificate is permissible, it was incumbent upon the insurer to make a clear

n Manager, during

bearing number

examination

reveals otherwise. A belated endorsement was admittedly made on 11.07.2019,

tanding anything contain to the contrary, it is hereby declared

and agreed that at the request of the Insured, Vehicle model may read as

But this appears to be an afterthought and an

liability. The endorsement itself

yet no such written

examination or subsequently. The

cial

It is clear that the trade certificate in the present case was

The contention of the

dealer that the entry of “HR/26/TC/2018/45/1” was made by mistake (or that

as contended

) could easily have been clarified had the insurance

company, at the time of processing the proposal form, either verified the details,

sought an explanation or rejected the proposal for want of clarity. The failure of

the insurer to exercise due diligence at that stage directly led to the present dispute

FAO-5545-2022 (O&M)

and other connected matters

and the insurance company cannot now be permitted to take advantage of its own

negligence.

12. Even the learned Tribunal made observation

requested via proposal form i.e. Ex.R

that all 10 vehicles under that certificate ought to have been covered. Nevertheless,

it fastened the liability on the insured on the basis of reasoning that the premium

had been computed on a single

Tribunal’s finding that the policy was issued on a trade

endorse its conclusion regarding fastening of liability on the insured on the basis of

premium computation only.

12.1 Once the proposal form was submitted on the basis of a trade

the presumption arises in favour of the insured that the premium was calculated for

all vehicles covered under that trade certificate. If the insurer contends

premium pertained only to a single vehicle, the burden lies upon

establish the same but that burden has not been discharged. The learned Tribunal

itself observed that there existed ambiguity in the policy. It is a settled principle of

law that any ambiguity in an insurance contract must be construed in favour

insured. Reliance in this regard can be placed upon the judgment of the Hon’ble

Apex Court in “Haris Marine Products v. Export Credit Guarantee Corporation

(ECGC) Limited”

that an ambiguous

by reading the contract in its entirety, if after that, no clarity emerges, then the term

must be interpreted in favour of the insured. Relevant para from this judgment is

reproduced hereunder:

2022 (O&M)

and other connected matters

d the insurance company cannot now be permitted to take advantage of its own

Even the learned Tribunal made observation

requested via proposal form i.e. Ex.R-5, on the basis of the trade certificate and

10 vehicles under that certificate ought to have been covered. Nevertheless,

it fastened the liability on the insured on the basis of reasoning that the premium

had been computed on a single-vehicle basis. While this Court concurs with the

ng that the policy was issued on a trade

endorse its conclusion regarding fastening of liability on the insured on the basis of

premium computation only.

Once the proposal form was submitted on the basis of a trade

the presumption arises in favour of the insured that the premium was calculated for

all vehicles covered under that trade certificate. If the insurer contends

premium pertained only to a single vehicle, the burden lies upon

establish the same but that burden has not been discharged. The learned Tribunal

itself observed that there existed ambiguity in the policy. It is a settled principle of

law that any ambiguity in an insurance contract must be construed in favour

insured. Reliance in this regard can be placed upon the judgment of the Hon’ble

“Haris Marine Products v. Export Credit Guarantee Corporation

(ECGC) Limited” bearing neutral citation 2022 INSC 471,

that an ambiguous term in an insurance contract is to be construed harmoniously

by reading the contract in its entirety, if after that, no clarity emerges, then the term

must be interpreted in favour of the insured. Relevant para from this judgment is

reproduced hereunder:-

11

d the insurance company cannot now be permitted to take advantage of its own

Even the learned Tribunal made observation that the insurance was

5, on the basis of the trade certificate and

10 vehicles under that certificate ought to have been covered. Nevertheless,

it fastened the liability on the insured on the basis of reasoning that the premium

While this Court concurs with the

ng that the policy was issued on a trade-certificate basis, it cannot

endorse its conclusion regarding fastening of liability on the insured on the basis of

Once the proposal form was submitted on the basis of a trade certificate,

the presumption arises in favour of the insured that the premium was calculated for

all vehicles covered under that trade certificate. If the insurer contends that the

premium pertained only to a single vehicle, the burden lies upon the insurer only to

establish the same but that burden has not been discharged. The learned Tribunal

itself observed that there existed ambiguity in the policy. It is a settled principle of

law that any ambiguity in an insurance contract must be construed in favour of the

insured. Reliance in this regard can be placed upon the judgment of the Hon’ble

“Haris Marine Products v. Export Credit Guarantee Corporation

2022 INSC 471, wherein it was held

term in an insurance contract is to be construed harmoniously

by reading the contract in its entirety, if after that, no clarity emerges, then the term

must be interpreted in favour of the insured. Relevant para from this judgment is

11

d the insurance company cannot now be permitted to take advantage of its own

that the insurance was

5, on the basis of the trade certificate and

10 vehicles under that certificate ought to have been covered. Nevertheless,

it fastened the liability on the insured on the basis of reasoning that the premium

While this Court concurs with the

certificate basis, it cannot

endorse its conclusion regarding fastening of liability on the insured on the basis of

certificate,

the presumption arises in favour of the insured that the premium was calculated for

that the

to

establish the same but that burden has not been discharged. The learned Tribunal

itself observed that there existed ambiguity in the policy. It is a settled principle of

of the

insured. Reliance in this regard can be placed upon the judgment of the Hon’ble

“Haris Marine Products v. Export Credit Guarantee Corporation

wherein it was held

term in an insurance contract is to be construed harmoniously

by reading the contract in its entirety, if after that, no clarity emerges, then the term

must be interpreted in favour of the insured. Relevant para from this judgment is

FAO-5545-2022 (O&M)

and other connected matters

2022 (O&M)

and other connected matters

“16. It is entrenched in our jurisprudence that an ambiguous term

in an insurance contract is to be construed harmoniously by

reading the contract in its entirety. If after that, no clarity

emerges, then the term must be interpreted in favour of the

insured, i.e., against the drafter of the policy. In deciding the

applicability of a cover note on houses swept away by floods,

a Constitution Bench of this Court in

Society Ltd. v. Chandumull Jain, (1966) 3 SCR 500

held as follows:

"In other respects there is no difference between a

contract of insurance and any other contract except that in a

contract of insurance there is a requirement of uberrima fides

i.e., good faith on the part of the assured and the contract is

likely to be construed contra proferentem that is against the

company in case of ambiguity or doubt... (I)n interpreting

documents relating to a contract of insurance, the duty of the

court is to interpret the words in which the contract is

expressed by the parties,

make a new contract, however reasonable, if the parties have

not made it themselves".

(emphasis supplied)

While the court ultimately denied insurer's liability, it

laid down the manner in which ambiguities were to be

interpreted. Since then, a catena of judgments has upheld this

approach. In United India Insurance Co. Ltd. v. Pushpalaya

Printers, (2004) 3 SCC 694

Court was confronted with interpreting the term `impact' in

an insurance policy for protection against damage caused to

the insured building. Interpreting the term to include damage

caused by strong vibrations by heavy vehicles without `

impact, this Court held-

"The only point that arises for consideration is

whether the word "impact" contained in clause 5 of the

insurance policy covers the damage caused to the

building and machinery due to driving of the bulldozer

on the road close to the building... (I)t is also settled

12

It is entrenched in our jurisprudence that an ambiguous term

in an insurance contract is to be construed harmoniously by

reading the contract in its entirety. If after that, no clarity

emerges, then the term must be interpreted in favour of the

insured, i.e., against the drafter of the policy. In deciding the

applicability of a cover note on houses swept away by floods,

a Constitution Bench of this Court in General Assurance

Society Ltd. v. Chandumull Jain, (1966) 3 SCR 500, para 11

"In other respects there is no difference between a

contract of insurance and any other contract except that in a

contract of insurance there is a requirement of uberrima fides

i.e., good faith on the part of the assured and the contract is

e construed contra proferentem that is against the

company in case of ambiguity or doubt... (I)n interpreting

documents relating to a contract of insurance, the duty of the

court is to interpret the words in which the contract is

expressed by the parties, because it is not for the court to

make a new contract, however reasonable, if the parties have

While the court ultimately denied insurer's liability, it

laid down the manner in which ambiguities were to be

rpreted. Since then, a catena of judgments has upheld this

United India Insurance Co. Ltd. v. Pushpalaya

Printers, (2004) 3 SCC 694, para 6, a Division Bench of this

Court was confronted with interpreting the term `impact' in

cy for protection against damage caused to

the insured building. Interpreting the term to include damage

caused by strong vibrations by heavy vehicles without `direct'

"The only point that arises for consideration is

rd "impact" contained in clause 5 of the

insurance policy covers the damage caused to the

building and machinery due to driving of the bulldozer

on the road close to the building... (I)t is also settled

12

It is entrenched in our jurisprudence that an ambiguous term

in an insurance contract is to be construed harmoniously by

reading the contract in its entirety. If after that, no clarity

emerges, then the term must be interpreted in favour of the

insured, i.e., against the drafter of the policy. In deciding the

applicability of a cover note on houses swept away by floods,

General Assurance

, para 11

"In other respects there is no difference between a

contract of insurance and any other contract except that in a

contract of insurance there is a requirement of uberrima fides

i.e., good faith on the part of the assured and the contract is

e construed contra proferentem that is against the

company in case of ambiguity or doubt... (I)n interpreting

documents relating to a contract of insurance, the duty of the

court is to interpret the words in which the contract is

because it is not for the court to

make a new contract, however reasonable, if the parties have

While the court ultimately denied insurer's liability, it

laid down the manner in which ambiguities were to be

rpreted. Since then, a catena of judgments has upheld this

United India Insurance Co. Ltd. v. Pushpalaya

, para 6, a Division Bench of this

Court was confronted with interpreting the term `impact' in

cy for protection against damage caused to

the insured building. Interpreting the term to include damage

direct'

"The only point that arises for consideration is

rd "impact" contained in clause 5 of the

insurance policy covers the damage caused to the

building and machinery due to driving of the bulldozer

on the road close to the building... (I)t is also settled

FAO-5545-2022 (O&M)

and other connected matters

2022 (O&M)

and other connected matters

position in law that if there is any ambiguity or a t

is capable of two possible interpretations, one

beneficial to the insured should be accepted consistent

with the purpose for which the policy is taken, namely,

to cover the risk on the happening of certain event...

Where the words of a document are amb

shall be construed against the party who prepared the

document. This rule applies to contracts of insurance

and clause 5 of the insurance policy even after reading

the entire policy in the present case should be

construed against the insurer".

Similarly, in Sushilaben Indravadan Gandhi v. New India

Assurance Company Ltd., (2021) 7 SCC 151

charted the evolution of the rule of contra proferentem, and relied

inter alia on its explanation as provided

England:

[21*]

[21* 5th Edn., vol. 60, para 105.]

"Contra proferentem rule.

policy the court will apply the contra proferentem rule.

Where a policy is produced by the insurers, it is their

business to see that precision and clarity are attained and, if

they fail to do so, the ambiguity will be resolved by adopting

the construction favourable to the insured. Similarly, as

regards language which emanates from the insured, such as

the language used in answer to questions in the proposal or

in a slip, a construction favourable to the insurers will

prevail if the insured has created any ambiguity. This rule,

however, only becomes operative where the words are truly

ambiguous; it is a rule for resolving ambig

be invoked with a view to creating a doubt. Therefore, where

the words used are free from ambiguity in the sense that,

fairly and reasonably construed, they admit of only one

meaning, the rule has no application."

The rule of contra proferentem thus protects the insured from the

vagaries of an unfavourable interpretation of an ambiguous term to

13

position in law that if there is any ambiguity or a term

is capable of two possible interpretations, one

beneficial to the insured should be accepted consistent

with the purpose for which the policy is taken, namely,

to cover the risk on the happening of certain event...

Where the words of a document are ambiguous, they

shall be construed against the party who prepared the

document. This rule applies to contracts of insurance

and clause 5 of the insurance policy even after reading

the entire policy in the present case should be

construed against the insurer".

(emphasis supplied).

Sushilaben Indravadan Gandhi v. New India

Assurance Company Ltd., (2021) 7 SCC 151, paras 37-42 this Court

charted the evolution of the rule of contra proferentem, and relied

inter alia on its explanation as provided under Halsbury's Laws of

[21* 5th Edn., vol. 60, para 105.]

"Contra proferentem rule.-Where there is ambiguity in the

policy the court will apply the contra proferentem rule.

Where a policy is produced by the insurers, it is their

see that precision and clarity are attained and, if

they fail to do so, the ambiguity will be resolved by adopting

the construction favourable to the insured. Similarly, as

regards language which emanates from the insured, such as

wer to questions in the proposal or

in a slip, a construction favourable to the insurers will

prevail if the insured has created any ambiguity. This rule,

however, only becomes operative where the words are truly

ambiguous; it is a rule for resolving ambiguity and it cannot

be invoked with a view to creating a doubt. Therefore, where

the words used are free from ambiguity in the sense that,

fairly and reasonably construed, they admit of only one

meaning, the rule has no application."

The rule of contra proferentem thus protects the insured from the

vagaries of an unfavourable interpretation of an ambiguous term to

13

erm

is capable of two possible interpretations, one

beneficial to the insured should be accepted consistent

with the purpose for which the policy is taken, namely,

to cover the risk on the happening of certain event...

iguous, they

shall be construed against the party who prepared the

document. This rule applies to contracts of insurance

and clause 5 of the insurance policy even after reading

the entire policy in the present case should be

(emphasis supplied).

Sushilaben Indravadan Gandhi v. New India

42 this Court

charted the evolution of the rule of contra proferentem, and relied

under Halsbury's Laws of

Where there is ambiguity in the

policy the court will apply the contra proferentem rule.

Where a policy is produced by the insurers, it is their

see that precision and clarity are attained and, if

they fail to do so, the ambiguity will be resolved by adopting

the construction favourable to the insured. Similarly, as

regards language which emanates from the insured, such as

wer to questions in the proposal or

in a slip, a construction favourable to the insurers will

prevail if the insured has created any ambiguity. This rule,

however, only becomes operative where the words are truly

uity and it cannot

be invoked with a view to creating a doubt. Therefore, where

the words used are free from ambiguity in the sense that,

fairly and reasonably construed, they admit of only one

The rule of contra proferentem thus protects the insured from the

vagaries of an unfavourable interpretation of an ambiguous term to

FAO-5545-2022 (O&M)

and other connected matters

12.2 Apart from the testimonies of RW

evidence to suggest that the

cumulative analysis of the deposition made by RW

abundantly clear that the insurance company itself was of the conscious

understanding that the Inssurance cover/policy was issued on the basis of trade

certificate exhibit P

certificate range number HR/26/TC/2018/45/1 to HR/26/TC/2018/45/10. Portion

from the cross examination of RW3

Reliance General Insurance company Limited is extracted here being relevant:

2022 (O&M)

and other connected matters

which it did not agree. The rule assumes special significance in

standard form insurance policies, called contract d' adhes

boilerplate contracts, in which the insured has little to no

countervailing bargaining power.

highlighted in the facts of this case, since the risks that ECGC is

mandated to cover is its business, and other insurers rarely

into the field.”

Apart from the testimonies of RW-3 and RW

evidence to suggest that the policy was intended to cover only one vehicle.

cumulative analysis of the deposition made by RW

abundantly clear that the insurance company itself was of the conscious

understanding that the Inssurance cover/policy was issued on the basis of trade

certificate exhibit P-18 and the said trade certificate find mentioned trade

e number HR/26/TC/2018/45/1 to HR/26/TC/2018/45/10. Portion

from the cross examination of RW3 – Salman Saifi, Associate operation Manager,

Reliance General Insurance company Limited is extracted here being relevant:

“I have seen the copy of trade certifi

related to Insurance Policy in question is Ex.R6. Since the no. of

trade certificate mentioned there in tallies with the no. mentioned in

proposal form as well as in insurance policy i.e.

HR/26/TC/2018/45/1. Self stated said insurance

that vary single vehicle bearing no. HR/26TC/2018/45/1 only. It is

correct that engine no. & chassis no. of the insured vehicle are

neither mentioned in proposal form Ex.R5 nor in trade certificate

Ex.P18, As well as in the insurance po

the proposal form Ex.R5 as well as in insurance policy Ex.R6 with

regard to make and model of the insured vehicle

CHRYSLER (JEEP, ABHARTH, FIAT) have been mentioned. Self

stated our company issued endors

insured with regard to the model of the vehicle as Jeep Compass

TrailHawk. That endorsement was issued 11/7/2019. It is correct

that in the insurance policy issued by the Insurance Company with

regard to any particular vehicle,

are mentioned. Self stated that are mention when the insurance

policy is issued on the basis of Registration Certificate, but since in

the instant case, the policy has been issued on the basis of trade

14

which it did not agree. The rule assumes special significance in

standard form insurance policies, called contract d' adhesion or

boilerplate contracts, in which the insured has little to no

countervailing bargaining power.

[22*]

This consideration is

highlighted in the facts of this case, since the risks that ECGC is

mandated to cover is its business, and other insurers rarely foray

3 and RW-4, there is no documentary

policy was intended to cover only one vehicle. In fact,

cumulative analysis of the deposition made by RW-3 and RW-4 makes it

abundantly clear that the insurance company itself was of the conscious

understanding that the Inssurance cover/policy was issued on the basis of trade

18 and the said trade certificate find mentioned trade

e number HR/26/TC/2018/45/1 to HR/26/TC/2018/45/10. Portion

Salman Saifi, Associate operation Manager,

Reliance General Insurance company Limited is extracted here being relevant:-

“I have seen the copy of trade certificate Ex.P18, which is

related to Insurance Policy in question is Ex.R6. Since the no. of

trade certificate mentioned there in tallies with the no. mentioned in

proposal form as well as in insurance policy i.e.

HR/26/TC/2018/45/1. Self stated said insurance policy is ment for

that vary single vehicle bearing no. HR/26TC/2018/45/1 only. It is

correct that engine no. & chassis no. of the insured vehicle are

neither mentioned in proposal form Ex.R5 nor in trade certificate

Ex.P18, As well as in the insurance policy Ex.R6. it is correct that in

the proposal form Ex.R5 as well as in insurance policy Ex.R6 with

regard to make and model of the insured vehicle. All model of FIAT

CHRYSLER (JEEP, ABHARTH, FIAT) have been mentioned. Self

stated our company issued endorsement on the request of the

insured with regard to the model of the vehicle as Jeep Compass

TrailHawk. That endorsement was issued 11/7/2019. It is correct

that in the insurance policy issued by the Insurance Company with

regard to any particular vehicle, engine no. & chassis no. there of

are mentioned. Self stated that are mention when the insurance

policy is issued on the basis of Registration Certificate, but since in

the instant case, the policy has been issued on the basis of trade

14

which it did not agree. The rule assumes special significance in

ion or

boilerplate contracts, in which the insured has little to no

This consideration is

highlighted in the facts of this case, since the risks that ECGC is

foray

4, there is no documentary

In fact,

4 makes it

abundantly clear that the insurance company itself was of the conscious

understanding that the Inssurance cover/policy was issued on the basis of trade

18 and the said trade certificate find mentioned trade

e number HR/26/TC/2018/45/1 to HR/26/TC/2018/45/10. Portion

Salman Saifi, Associate operation Manager,

cate Ex.P18, which is

related to Insurance Policy in question is Ex.R6. Since the no. of

trade certificate mentioned there in tallies with the no. mentioned in

proposal form as well as in insurance policy i.e.

policy is ment for

that vary single vehicle bearing no. HR/26TC/2018/45/1 only. It is

correct that engine no. & chassis no. of the insured vehicle are

neither mentioned in proposal form Ex.R5 nor in trade certificate

licy Ex.R6. it is correct that in

the proposal form Ex.R5 as well as in insurance policy Ex.R6 with

. All model of FIAT

CHRYSLER (JEEP, ABHARTH, FIAT) have been mentioned. Self

ement on the request of the

insured with regard to the model of the vehicle as Jeep Compass

TrailHawk. That endorsement was issued 11/7/2019. It is correct

that in the insurance policy issued by the Insurance Company with

engine no. & chassis no. there of

are mentioned. Self stated that are mention when the insurance

policy is issued on the basis of Registration Certificate, but since in

the instant case, the policy has been issued on the basis of trade

FAO-5545-2022 (O&M)

and other connected matters

Furthermore, t

supported its case by producing the premium calculation sheet or detailed terms

and conditions of the insurance, but it failed to do so. Hence, an adverse inference

is liable to be drawn against it as it ch

which were readily available with it. It is also significant that the present insurance

cover was a continuation of an earlier policy, and even the terms of the preceding

policy could have been produced to substanti

no such evidence was brought on record.

12.3 At this stage, Rule 39 (1) of the Central Motor Vehicles Rules, 1989 also

becomes relevant which is reproduced below:

The said Rule contemplates that, at any given time, a trade certificate

may be used in respect of only one vehicle. Therefore, if only vehicle under the

trade certificate could be used at a particular point of time, it becomes immaterial

which specific veh

also not the case of the insurer that

used for multiple vehicles

stands corroborated by

2022 (O&M)

and other connected matters

certificate, in which engine no. & chassis no. are not mentioned, As

such the same have not been mentioned in the insurance Policy

Ex.R6. It is correct that in the trade certificate Ex.P18, vehicle no.

HR/26/TC/2018/45/1 – HR/26/TC/2018/45/10 are mentioned.”

Furthermore, the respondent-Insurance Company could have

supported its case by producing the premium calculation sheet or detailed terms

and conditions of the insurance, but it failed to do so. Hence, an adverse inference

is liable to be drawn against it as it chose to withhold the documentary evidence

which were readily available with it. It is also significant that the present insurance

cover was a continuation of an earlier policy, and even the terms of the preceding

policy could have been produced to substantiate the insurer’s contention. However,

no such evidence was brought on record.

At this stage, Rule 39 (1) of the Central Motor Vehicles Rules, 1989 also

becomes relevant which is reproduced below:

“39. Use of trade registration mark and

trade registration mark and number shall not be used upon more

than one vehicle at a time or upon any vehicle other than a vehicle

bona fide in the possession of the dealer in the course of his business

or on any type of vehicle other than

certificate is issued.”

The said Rule contemplates that, at any given time, a trade certificate

may be used in respect of only one vehicle. Therefore, if only vehicle under the

trade certificate could be used at a particular point of time, it becomes immaterial

which specific vehicle, among those covered by the certificate, was in use.

also not the case of the insurer that the trade certificate was being simultaneously

used for multiple vehicles caring, different trade certificate range

stands corroborated by the survey report on record.

15

h engine no. & chassis no. are not mentioned, As

such the same have not been mentioned in the insurance Policy

Ex.R6. It is correct that in the trade certificate Ex.P18, vehicle no.

HR/26/TC/2018/45/10 are mentioned.”

Insurance Company could have easily

supported its case by producing the premium calculation sheet or detailed terms

and conditions of the insurance, but it failed to do so. Hence, an adverse inference

ose to withhold the documentary evidence

which were readily available with it. It is also significant that the present insurance

cover was a continuation of an earlier policy, and even the terms of the preceding

ate the insurer’s contention. However,

At this stage, Rule 39 (1) of the Central Motor Vehicles Rules, 1989 also

“39. Use of trade registration mark and number.-- (1) A

trade registration mark and number shall not be used upon more

than one vehicle at a time or upon any vehicle other than a vehicle

bona fide in the possession of the dealer in the course of his business

or on any type of vehicle other than the one for which the trade

The said Rule contemplates that, at any given time, a trade certificate

may be used in respect of only one vehicle. Therefore, if only vehicle under the

trade certificate could be used at a particular point of time, it becomes immaterial

icle, among those covered by the certificate, was in use. It is

the trade certificate was being simultaneously

caring, different trade certificate range. This position

the survey report on record.

15

h engine no. & chassis no. are not mentioned, As

such the same have not been mentioned in the insurance Policy

Ex.R6. It is correct that in the trade certificate Ex.P18, vehicle no.

easily

supported its case by producing the premium calculation sheet or detailed terms

and conditions of the insurance, but it failed to do so. Hence, an adverse inference

ose to withhold the documentary evidence

which were readily available with it. It is also significant that the present insurance

cover was a continuation of an earlier policy, and even the terms of the preceding

ate the insurer’s contention. However,

At this stage, Rule 39 (1) of the Central Motor Vehicles Rules, 1989 also

A

trade registration mark and number shall not be used upon more

than one vehicle at a time or upon any vehicle other than a vehicle

bona fide in the possession of the dealer in the course of his business

the one for which the trade

The said Rule contemplates that, at any given time, a trade certificate

may be used in respect of only one vehicle. Therefore, if only vehicle under the

trade certificate could be used at a particular point of time, it becomes immaterial

It is

the trade certificate was being simultaneously

. This position

FAO-5545-2022 (O&M)

and other connected matters

Further,

expressly provides that a trade certificate can be used for only one vehicle at a

time, even though the certificate may cover several vehicles in a fleet.

Consequently, when the vehicle in question met with an

certificate range

HR/26/TC/2018/45/04) becomes immaterial, as all such vehicles fall under the

same trade certificate. Unless the insur

being used simultaneously under the same trade certificate, the insurance coverage

must be treated as applicable to the vehicle involved in the incident. The survey

report confirming that only one vehicle was in u

substantiates this position and negates the insurer’s contention that the policy

restricted to a single range number

12.4 Furthermore, it is admitted case of the insurer that when insurance is

granted on the basis of a registration number, the engine and chassis numbers are

mandatorily required to be mentioned, which is not

present case, since neither the chassis number nor engine number nor any specific

make and model were confin

by the trade certificate could be used for trail or demonstration purposes, and it

was not necessary that only the vehicle bearing serial No. “01” could be used. The

only requirement was that the vehic

under the trade certificate.

13. In view of the aforesaid discussion, this Court does not agree with the

finding of the learned Tribunal that the respondent

liable to indemnify the owner of the vehicle and may recover the compensation

amount from the owner. Accord

2022 (O&M)

and other connected matters

Further, Rule 39 (1) of the Central Motor Vehicles Rules, 1989,

expressly provides that a trade certificate can be used for only one vehicle at a

time, even though the certificate may cover several vehicles in a fleet.

ently, when the vehicle in question met with an

certificate range number (for example, HR/26/TC/2018/45/01 or

HR/26/TC/2018/45/04) becomes immaterial, as all such vehicles fall under the

same trade certificate. Unless the insurer establishes that multiple vehicles were

being used simultaneously under the same trade certificate, the insurance coverage

must be treated as applicable to the vehicle involved in the incident. The survey

report confirming that only one vehicle was in u

substantiates this position and negates the insurer’s contention that the policy

restricted to a single range number-vehicle.

Furthermore, it is admitted case of the insurer that when insurance is

he basis of a registration number, the engine and chassis numbers are

mandatorily required to be mentioned, which is not

present case, since neither the chassis number nor engine number nor any specific

make and model were confined in the policy, any vehicle within the range covered

by the trade certificate could be used for trail or demonstration purposes, and it

was not necessary that only the vehicle bearing serial No. “01” could be used. The

only requirement was that the vehicle used should belong to the range covered

under the trade certificate.

In view of the aforesaid discussion, this Court does not agree with the

finding of the learned Tribunal that the respondent

liable to indemnify the owner of the vehicle and may recover the compensation

amount from the owner. Accordingly, the said findings are reversed and the

16

Rule 39 (1) of the Central Motor Vehicles Rules, 1989,

expressly provides that a trade certificate can be used for only one vehicle at a

time, even though the certificate may cover several vehicles in a fleet.

ently, when the vehicle in question met with an accident, the specific trade

number (for example, HR/26/TC/2018/45/01 or

HR/26/TC/2018/45/04) becomes immaterial, as all such vehicles fall under the

er establishes that multiple vehicles were

being used simultaneously under the same trade certificate, the insurance coverage

must be treated as applicable to the vehicle involved in the incident. The survey

report confirming that only one vehicle was in use at the relevant time further

substantiates this position and negates the insurer’s contention that the policy was

Furthermore, it is admitted case of the insurer that when insurance is

he basis of a registration number, the engine and chassis numbers are

mandatorily required to be mentioned, which is not the situation here. In the

present case, since neither the chassis number nor engine number nor any specific

ed in the policy, any vehicle within the range covered

by the trade certificate could be used for trail or demonstration purposes, and it

was not necessary that only the vehicle bearing serial No. “01” could be used. The

le used should belong to the range covered

In view of the aforesaid discussion, this Court does not agree with the

finding of the learned Tribunal that the respondent-Insurance Company is not

liable to indemnify the owner of the vehicle and may recover the compensation

said findings are reversed and the

16

Rule 39 (1) of the Central Motor Vehicles Rules, 1989,

expressly provides that a trade certificate can be used for only one vehicle at a

time, even though the certificate may cover several vehicles in a fleet.

accident, the specific trade

number (for example, HR/26/TC/2018/45/01 or

HR/26/TC/2018/45/04) becomes immaterial, as all such vehicles fall under the

er establishes that multiple vehicles were

being used simultaneously under the same trade certificate, the insurance coverage

must be treated as applicable to the vehicle involved in the incident. The survey

se at the relevant time further

was

Furthermore, it is admitted case of the insurer that when insurance is

he basis of a registration number, the engine and chassis numbers are

situation here. In the

present case, since neither the chassis number nor engine number nor any specific

ed in the policy, any vehicle within the range covered

by the trade certificate could be used for trail or demonstration purposes, and it

was not necessary that only the vehicle bearing serial No. “01” could be used. The

le used should belong to the range covered

In view of the aforesaid discussion, this Court does not agree with the

Insurance Company is not

liable to indemnify the owner of the vehicle and may recover the compensation

said findings are reversed and the

FAO-5545-2022 (O&M)

and other connected matters

insurance company is held liable to pay the entire compensation amount to the

claimant and shall not be entitled to recover the

owner and driver of the offending vehicle.

FAO No. 644 of 2023 AND FAO No. 1538 of 2023

14. With respect to determination of compensation, the record contains

evidence of postmortem report, ITRs of deceased for the years 2016

2018 and 2018-2019. Consequently, this Court shall adjudicate th

in accordance with the documentary evidence on the record.

QUESTION OF INCOME ASSESSED

15. In the present case,

deceased relied upon the Income Tax Return for the assessment year 2018

However, the Income Tax Returns for the preceding assessment years 2017

and 2016–2017, though available on record, were n

deceased was engaged in business activity

knowledge that the income of a businessman is liable to fluctuate from year to year

depending upon prevailing market and business conditions. Therefore

and reasonable assessment of the actual income of the deceased, the Learned

Tribunal ought to have considered the average income as reflected in the ITRs for

the three consecutive assessment years 2016

instead of basing its finding solely on the ITR for a single year.

considered opinion of this Court, the income of Narender Singh (deceased) is taken

as Rs. 8,49,350/- per annum

16. The Hon’ble Supreme Court in the case of

others vs. Delhi Transport Corporation and another,”

(Civil) 77, wherein it was held that in case the number of dependent family

2022 (O&M)

and other connected matters

insurance company is held liable to pay the entire compensation amount to the

claimant and shall not be entitled to recover the

owner and driver of the offending vehicle.

644 of 2023 AND FAO No. 1538 of 2023

With respect to determination of compensation, the record contains

evidence of postmortem report, ITRs of deceased for the years 2016

2019. Consequently, this Court shall adjudicate th

in accordance with the documentary evidence on the record.

QUESTION OF INCOME ASSESSED

In the present case, Learned Tribunal while assessing the income of the

deceased relied upon the Income Tax Return for the assessment year 2018

However, the Income Tax Returns for the preceding assessment years 2017

2017, though available on record, were n

s engaged in business activity, and it is a matter of common

knowledge that the income of a businessman is liable to fluctuate from year to year

depending upon prevailing market and business conditions. Therefore

and reasonable assessment of the actual income of the deceased, the Learned

Tribunal ought to have considered the average income as reflected in the ITRs for

the three consecutive assessment years 2016–2017, 2017

f basing its finding solely on the ITR for a single year.

considered opinion of this Court, the income of Narender Singh (deceased) is taken

per annum.

The Hon’ble Supreme Court in the case of

others vs. Delhi Transport Corporation and another,”

wherein it was held that in case the number of dependent family

17

insurance company is held liable to pay the entire compensation amount to the

claimant and shall not be entitled to recover the same from the appellants i.e.

644 of 2023 AND FAO No. 1538 of 2023

With respect to determination of compensation, the record contains

evidence of postmortem report, ITRs of deceased for the years 2016-2017, 2017

2019. Consequently, this Court shall adjudicate the compensation

in accordance with the documentary evidence on the record.

Learned Tribunal while assessing the income of the

deceased relied upon the Income Tax Return for the assessment year 2018–2019.

However, the Income Tax Returns for the preceding assessment years 2017–2018

2017, though available on record, were not taken into consideration. The

, and it is a matter of common

knowledge that the income of a businessman is liable to fluctuate from year to year

depending upon prevailing market and business conditions. Therefore, for a fair

and reasonable assessment of the actual income of the deceased, the Learned

Tribunal ought to have considered the average income as reflected in the ITRs for

2017, 2017–2018, and 2018–2019,

f basing its finding solely on the ITR for a single year. Therefore, in the

considered opinion of this Court, the income of Narender Singh (deceased) is taken

The Hon’ble Supreme Court in the case of “Smt. Sarla Verma and

others vs. Delhi Transport Corporation and another,” reported as 2009(3) RCR

wherein it was held that in case the number of dependent family

17

insurance company is held liable to pay the entire compensation amount to the

same from the appellants i.e.

With respect to determination of compensation, the record contains

2017, 2017-

e compensation

Learned Tribunal while assessing the income of the

2019.

2018

ot taken into consideration. The

, and it is a matter of common

knowledge that the income of a businessman is liable to fluctuate from year to year

, for a fair

and reasonable assessment of the actual income of the deceased, the Learned

Tribunal ought to have considered the average income as reflected in the ITRs for

2019,

Therefore, in the

considered opinion of this Court, the income of Narender Singh (deceased) is taken

rla Verma and

2009(3) RCR

wherein it was held that in case the number of dependent family

FAO-5545-2022 (O&M)

and other connected matters

members were 4 to 6, 1/4

income. Relevant para of the judgment is culled out as under:

QUESTION OF COMPENSATION UNDER CONVENTIONAL HEADS

17. Furthermore, in view of the judgment of the Hon’ble Apex Court in

Sarla Verma’s case (supra)

others” reported as

Satinder Kaur”,

conventional heads are also required to be assessed accordingly.

Appellants/claimants are thus, held entitled for Rs. 18,000/

funeral head and Rs. 18,000/

assessed to the tune

spouse, child and parents of deceased are also entitled for spousal and parental and

filial consortium.

18. Now, the question arises how t

the legal heirs. In this regard, it may be taken into account that from the material

available on record it is evident that appellant No. 1 (widow of deceased) did not

remarry and she along with her child

2022 (O&M)

and other connected matters

members were 4 to 6, 1/4

th

would be deducted as personal expenses from the total

Relevant para of the judgment is culled out as under:

“30. Though in some cases the deduction to be made towards

personal and living expenses is calculated on the basis of units

indicated in Trilok Chandra[(1996) 4 SCC 362], the general

practice is to apply standardized deductions. Having considered

several subsequent decisions of this Court, we are of the view that

where the deceased was married, deduction towards personal and

living expenses of the deceased, should be one

the number of dependent family members is 2 to 3, one

where the number of dependent family members is 4 to 6, and one

fifth (1/5

th

) where the number of dependent family member exceeds

six.”

QUESTION OF COMPENSATION UNDER CONVENTIONAL HEADS

Furthermore, in view of the judgment of the Hon’ble Apex Court in

Sarla Verma’s case (supra), “National Insurance Co. Ltd. vs. Pranay Sethi and

reported as (2017) 16 SCC 680 and “United India Insurance Co.Ltd. vs.

reported as (2021) 11 SCC 780,

conventional heads are also required to be assessed accordingly.

Appellants/claimants are thus, held entitled for Rs. 18,000/

funeral head and Rs. 18,000/- towards loss of es

assessed to the tune of Rs. 1,92,000/- (Rs. 48,000 x 4

spouse, child and parents of deceased are also entitled for spousal and parental and

, the question arises how the compensation is to be distributed among

the legal heirs. In this regard, it may be taken into account that from the material

available on record it is evident that appellant No. 1 (widow of deceased) did not

remarry and she along with her children were solely dependent upon the deceased,

18

would be deducted as personal expenses from the total

Relevant para of the judgment is culled out as under:-

Though in some cases the deduction to be made towards

personal and living expenses is calculated on the basis of units

indicated in Trilok Chandra[(1996) 4 SCC 362], the general

ly standardized deductions. Having considered

several subsequent decisions of this Court, we are of the view that

where the deceased was married, deduction towards personal and

living expenses of the deceased, should be one-third (1/3

rd

) where

f dependent family members is 2 to 3, one-fourth (1/4

th

where the number of dependent family members is 4 to 6, and one

) where the number of dependent family member exceeds

QUESTION OF COMPENSATION UNDER CONVENTIONAL HEADS

Furthermore, in view of the judgment of the Hon’ble Apex Court in Smt.

“National Insurance Co. Ltd. vs. Pranay Sethi and

“United India Insurance Co.Ltd. vs.

(2021) 11 SCC 780, compensation awarded under

conventional heads are also required to be assessed accordingly.

Appellants/claimants are thus, held entitled for Rs. 18,000/- as compensation under

towards loss of estate. Loss of consortium is

(Rs. 48,000 x 4) as the appellants, being

spouse, child and parents of deceased are also entitled for spousal and parental and

he compensation is to be distributed among

the legal heirs. In this regard, it may be taken into account that from the material

available on record it is evident that appellant No. 1 (widow of deceased) did not

solely dependent upon the deceased,

18

would be deducted as personal expenses from the total

Though in some cases the deduction to be made towards

personal and living expenses is calculated on the basis of units

indicated in Trilok Chandra[(1996) 4 SCC 362], the general

ly standardized deductions. Having considered

several subsequent decisions of this Court, we are of the view that

where the deceased was married, deduction towards personal and

) where

th

)

where the number of dependent family members is 4 to 6, and one-

) where the number of dependent family member exceeds

Smt.

“National Insurance Co. Ltd. vs. Pranay Sethi and

“United India Insurance Co.Ltd. vs.

compensation awarded under

conventional heads are also required to be assessed accordingly.

as compensation under

tate. Loss of consortium is

) as the appellants, being

spouse, child and parents of deceased are also entitled for spousal and parental and

he compensation is to be distributed among

the legal heirs. In this regard, it may be taken into account that from the material

available on record it is evident that appellant No. 1 (widow of deceased) did not

solely dependent upon the deceased,

FAO-5545-2022 (O&M)

and other connected matters

accordingly appellant No. 1 is held entitled for 60% of the compensation amount,

whereas appellant No. 2

held entitled for 1

aforementioned ratio of 60:3

appellants/claimants shall separately/individually be entitled for consortium as all

the appellants/claimants shall separately/individually be entitled for consortium in

their favour.

CONCLUSION

19. In view of the discussion made herein above, the appellants/claimants are

held entitled for the grant of compensation in the following manner:

S.No. Nature

1. Annual Income of Deceased

2. Add 25% Future Prospects

3. Total Income

4. Deduction (1/4

5. Net Income (Rs. 10,61,687.5

2,65,421.8)

6. Loss of Income after applying multiplier

of 13 as per age of 46 years (7,96,265.7 x

13)

7. Funeral Expenses

8. Loss of Estate

9. Loss of Consortium (48,000 x 4)

10. Total Compensation

11. Amount Awarded by the Tribunal

12. Enhanced Compensation

Thus, the appellant No. 1/widow is entitled for Rs. 63,47,672.46/

appellants No. 2 & 3 are entitled for Rs. 31,73,836.23/

appellant No. 4 is entitled for Rs. 10,57,945.41/

20. The grant of interest @ 7.5% per annum is not equitable and just in view of

the observation made by the Hon’ble Supreme Court in

2022 (O&M)

and other connected matters

accordingly appellant No. 1 is held entitled for 60% of the compensation amount,

whereas appellant No. 2 & 3 be granted 30% in equal shares and appell

held entitled for 10% of the amount. It may be clarified

aforementioned ratio of 60:30:10 would be minus the consortium as all the

appellants/claimants shall separately/individually be entitled for consortium as all

the appellants/claimants shall separately/individually be entitled for consortium in

of the discussion made herein above, the appellants/claimants are

held entitled for the grant of compensation in the following manner:

Nature

Annual Income of Deceased

Add 25% Future Prospects

Total Income

Deduction (1/4

th

)

Net Income (Rs. 10,61,687.5

2,65,421.8)

Loss of Income after applying multiplier

of 13 as per age of 46 years (7,96,265.7 x

13)

Funeral Expenses

Loss of Estate

Loss of Consortium (48,000 x 4)

Total Compensation

Amount Awarded by the Tribunal

Enhanced Compensation

Thus, the appellant No. 1/widow is entitled for Rs. 63,47,672.46/

appellants No. 2 & 3 are entitled for Rs. 31,73,836.23/

appellant No. 4 is entitled for Rs. 10,57,945.41/- as compensation.

ant of interest @ 7.5% per annum is not equitable and just in view of

the observation made by the Hon’ble Supreme Court in

19

accordingly appellant No. 1 is held entitled for 60% of the compensation amount,

0% in equal shares and appellant No. 4 is

It may be clarified here that the

would be minus the consortium as all the

appellants/claimants shall separately/individually be entitled for consortium as all

the appellants/claimants shall separately/individually be entitled for consortium in

of the discussion made herein above, the appellants/claimants are

held entitled for the grant of compensation in the following manner:-

Amount (in Rs.)

Rs. 8,49,350/-

Rs. 2,12,337.5/-

Rs. 10,61,687.5/-

Rs. 2,65,421.8/-

Net Income (Rs. 10,61,687.5 –Rs. Rs. 7,96,265.7/-

Loss of Income after applying multiplier

of 13 as per age of 46 years (7,96,265.7 x

Rs.

1,03,51,454.1/-

Rs. 18,000/-

Rs. 18,000/-

Rs. 1,92,000/-

Rs.

1,05,79,454.1/-

Amount Awarded by the Tribunal Rs. 92,24,000/-

Rs. 13,55,454.1/-

Thus, the appellant No. 1/widow is entitled for Rs. 63,47,672.46/-

appellants No. 2 & 3 are entitled for Rs. 31,73,836.23/- in equal proportions and

as compensation.

ant of interest @ 7.5% per annum is not equitable and just in view of

the observation made by the Hon’ble Supreme Court in Smt. Supe Dei and others

19

accordingly appellant No. 1 is held entitled for 60% of the compensation amount,

ant No. 4 is

the

would be minus the consortium as all the

appellants/claimants shall separately/individually be entitled for consortium as all

the appellants/claimants shall separately/individually be entitled for consortium in

of the discussion made herein above, the appellants/claimants are

-,

in equal proportions and

ant of interest @ 7.5% per annum is not equitable and just in view of

Smt. Supe Dei and others

FAO-5545-2022 (O&M)

and other connected matters

Vs. National Insurance Company Limited and other, (2009) (4) SCC 513

confirmed in a subsequent judgment titled as

Naryana Reddy and another, 2014 (1) RCR (Civil) 443,

enhanced to 9% per annum on the amount of compensation awarded to the

claimant from the date of institutio

said amount is not paid within three months, the same shall be payable thereafter

along with 12% interest from the expiry of period of three months from today.

Needless to mention here that the amount o

claimant shall be deducted from the enhanced compensation.

21. Accordingly, the appeal filed at the instance of appellant/Insurance

Company is dismissed, the appeal filed by the appellants/owner and driver of the

offending vehicle is allowed and

appellants/claimants is disposed of with the aforesaid modification of the Award

passed by the learned Tribunal.

22. Pending miscellaneous application(s) if

November 17, 2025 (HARKESH MANUJA)

sanjay

Whether speaking/reasoned?

Whether Reportable?

2022 (O&M)

and other connected matters

Vs. National Insurance Company Limited and other, (2009) (4) SCC 513

confirmed in a subsequent judgment titled as Puttamma and others Vs. K.L.

Naryana Reddy and another, 2014 (1) RCR (Civil) 443,

enhanced to 9% per annum on the amount of compensation awarded to the

claimant from the date of institution of claim petition till its realization. In case the

said amount is not paid within three months, the same shall be payable thereafter

along with 12% interest from the expiry of period of three months from today.

Needless to mention here that the amount of compensation already paid to the

claimant shall be deducted from the enhanced compensation.

Accordingly, the appeal filed at the instance of appellant/Insurance

Company is dismissed, the appeal filed by the appellants/owner and driver of the

offending vehicle is allowed and the appeal filed at the instance of

appellants/claimants is disposed of with the aforesaid modification of the Award

passed by the learned Tribunal.

Pending miscellaneous application(s) if

, 2025 (HARKESH MANUJA)

Whether speaking/reasoned?

Whether Reportable?

20

Vs. National Insurance Company Limited and other, (2009) (4) SCC 513

Puttamma and others Vs. K.L.

Naryana Reddy and another, 2014 (1) RCR (Civil) 443, thus, the interest is

enhanced to 9% per annum on the amount of compensation awarded to the

n of claim petition till its realization. In case the

said amount is not paid within three months, the same shall be payable thereafter

along with 12% interest from the expiry of period of three months from today.

f compensation already paid to the

claimant shall be deducted from the enhanced compensation.

Accordingly, the appeal filed at the instance of appellant/Insurance

Company is dismissed, the appeal filed by the appellants/owner and driver of the

the appeal filed at the instance of

appellants/claimants is disposed of with the aforesaid modification of the Award

Pending miscellaneous application(s) if any shall also stand disposed of.

, 2025 (HARKESH MANUJA)

JUDGE

Yes/No

Yes/No

20

Vs. National Insurance Company Limited and other, (2009) (4) SCC 513

Puttamma and others Vs. K.L.

thus, the interest is

enhanced to 9% per annum on the amount of compensation awarded to the

n of claim petition till its realization. In case the

said amount is not paid within three months, the same shall be payable thereafter

along with 12% interest from the expiry of period of three months from today.

f compensation already paid to the

Accordingly, the appeal filed at the instance of appellant/Insurance

Company is dismissed, the appeal filed by the appellants/owner and driver of the

the appeal filed at the instance of

appellants/claimants is disposed of with the aforesaid modification of the Award

and disposed of.