MAC.APP. 511/2014 Page 1/23

* IN THE HIGH COURT OF DELHI AT NEW DELHI

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+ MAC.APP. 511/2014 & CM APPL. 41990-41991/2023

ORIENTAL INSURANCE COMPANY LTD .....Appellant

Through: Ms. Shruti Jain, Advocate.

versus

RAJWATI & ORS .....Respondents

Through: Mr A.K Mishra and Malkeet Singh,

Advocates for R-2.

CORAM:

HON'BLE MR. JUSTICE ANISH DAYAL

JUDGMENT

ANISH DAYAL, J.

1. This appeal has been preferred against the impugned judgment dated

18

th

February 2014 passed Motor Accident Claims Tribunal, Saket Courts,

Delhi (‘MACT’), in Regn No./Case no. 200/14/06-I, whereby the Tribunal

awarded Rs.8,30,244/- along with interest @ 9% per annum from the date of

filing.

The Incident

2. Motor vehicles accident took place on 31

st

December 2005, at about

7:30 AM, when Smt. Rajwati was crossing road to board the bus near Ali

Mor, Mathur Road, when one truck bearing registration no. HR 38 L-0049

MAC.APP. 511/2014 Page 2/23

driven by Sh. Dharambir came from Badarpur side and hit respondent no. 1/

claimant and the right leg came underneath the front wheel of the truck

leading to crush injuries. Petitioner was taken to AIIMS hospital and referred

to Safdarjung Hospital, petitioner’s right leg was amputated from below the

knee, rendering her disabled.

Impugned Award

3. A claim petition was filed before the MACT seeking compensation of

Rs. 18,10,000/- on various counts. On basis of the pleadings following issues

were framed by the MACT:

(i) Whether petitioner suffered injuries in an accident which took

place on 31

st

December 2005 at about 7:30 AM involving truck

bearing No. HR 38L 0049 due to rash and negligent driving of

respondent no.1, owned by respondent no. 2 and insured with

respondent no. 3?

(ii) Whether petitioner is entitled to compensation? If so, to what

amount and against which of the respondents?

(iii) Relief.

4. Issue no. 1 was decided in favour of claimant, as the testimony was

unrebutted and there was no material on record to disbelieve the version

canvassed by claimant. Further, registration of criminal case against the

driver of offending vehicle was considered enough to record finding that the

driver of the offending vehicle is responsible for causing accident.

5. As regards Issue no. 2, in the Medico-Legal Certificate (MLC) the

injuries were described as crush injuries with partial amputation of leg and

bone and muscles exposed, as per the medical record it was established at

MAC.APP. 511/2014 Page 3/23

there was guillotine amputation in respect to the right leg below the knee the

same is evidenced from Discharge Slip dated 02

nd

February 2006, issued by

Safdarjung Hospital/ Exhibit PW1/4.

6. The Disability Certificate at Exhibit PW1/23 issued by Medical

Board, Safdarjung Hospital New Delhi and the disability was therein

recorded as 60% permanent physical impairment in relation to right lower

limb.

7. Claimant asserted that she was a maid and was earning Rs. 5,000/-

however there was no documentary proof and no one was examined to prove

employment or skill, therefore the Tribunal took the income of claimant, in

absence of income and education proof, as minimum wages payable to

unskilled worker for NCT of Delhi at the relevant time i.e. Rs.3,165/- per

month; therefore the annual income was assessed to be Rs. 37,980/-.

8. On the issue of functional disability the Tribunal noted that “an

unskilled person has to earn livelihood using all his limbs to the best of

efficiency and any deficiency, inflicted upon any of these four limbs renders

him as vulnerable of losing his earning capacity”. Thus, the functional

disability was taken to be 60% as claimant could not walk without support,

bear weight or work, considering that claimant assets to have been employed

as maid.

9. Considering the age of claimant at the time of accident was between

46-50 years, multiplier was taken as 13. Accordingly, loss of future income

was calculated as Rs.22,788- (60% of the annual income of Rs.37,980),

multiplied with relevant multiplier of 13, resulting in Rs.2,96,244/-

calculated as loss of future income.

MAC.APP. 511/2014 Page 4/23

10. Under the remaining heads of compensation, the Tribunal awarded a

sum of Rs.4,000/- towards medical expenses, taking note of the fact that

petitioner had availed treatment from a Government Hospital. A further sum

of Rs.10,000/- was awarded towards conveyance charges and Rs.20,000/-

towards special diet, considering the prolonged treatment and follow-up

necessitated by the below-knee amputation.

11. The Tribunal also granted Rs.1,50,000/- towards attendant charges,

keeping in view the permanent disability and lifelong requirement of

assistance. In addition thereto, Rs.1,50,000/- was awarded towards pain and

suffering, Rs.50,000/- towards loss of amenities and enjoyment of life, and

Rs.50,000/- on account of disfigurement. An amount of Rs.1,00,000/- was

further awarded towards future treatment and prosthetics.

12. As regards liability, Tribunal held that the driving license of the driver

was duly proved and could not be treated as fake or invalid. However, it was

found that the offending vehicle did not possess a valid permit at the time of

the accident, as the owner failed to produce the same despite service of

notice under Order XII Rule 8 Code of Civil Procedure, 1908. This

constituted a breach of the terms and conditions of the insurance policy

attributable to the owner. Nevertheless, liability of the insurer towards an

innocent third-party victim provided under Section 149(2)(a) of Motor

Vehicle Act, 1988 (‘MV Act’) the Insurance Company was directed to satisfy

the Award in the first instance, with liberty to recover the awarded amount

from the owner of the offending vehicle for not having obtained valid permit.

MAC.APP. 511/2014 Page 5/23

Submission of Counsel for Appellant

13. Ms. Shruti Jain, counsel for appellant assailed the impugned award on

the following grounds:

(i) That the Disability Certificate was not furnished and the same

was not proved on record by examining member of disability

board and thus Tribunal has wrongly relied on the same.

(ii) There was no employment record therefore, no future loss of

income should be awarded.

(iii) The amount of Rs.1,50,000/- awarded for pain and suffering is

excessive should accordingly be reduced.

(iv) Tribunal erred in law in fastening liability upon the Insurance

Company to satisfy the award even at the first instance despite

granting recovery right, in view of clear evidence that the

offending vehicle was being plied without a valid permit. It is

submitted that plying of a vehicle without a permit constitutes a

fundamental statutory violation, attracting the defence available

to the insurer under Section 149(2) of the MV Act. Therefore,

instead of right to recovery being granted, the insurance

company should have been exonerated from paying

compensation in first instance.

Submissions of Counsel for Respondent

14. In response, counsel for respondent no.1/ claimant contended the

following:

MAC.APP. 511/2014 Page 6/23

(i) Income of the petitioner was calculated on minimum wages of

unskilled worker, as she was working as a maid and could not

produce any documentary evidence.

(ii) Right to recovery has already been awarded to the insurance

company as is evident from paragraph 31 under the impugned

Award, there can be no exoneration of insurance company from

liability to pay compensation even in case of breach of policy.

Analysis

15. Considering that there is no issue raised with respect to the finding by

the MACT on issue no.1 relating causation, the only issues in dispute, relate

to the compensation.

Minimum Wages

16. The first issue which has been raised is with regard to taking the

benchmark income as minimum wages payable to an unskilled worker for

National Capital Territory of Delhi, considering there was no documentary

proof and no one was examined to prove the employment. The assertion of

the Insurance Company in this regard is completely untenable, considering

that the courts have consistently held that if there is no documentary proof,

minimum wages notifications can be acted upon. Reference in this regard

can be made to the Supreme Court Judgment in Jitendra v. Sadiya &

Ors. 2025 INSC 166. The relevant paragraph is extracted below:

“10. We have heard the learned counsel for the

Appellant. We are unable to agree with the view taken

by the Tribunal and High Court on the income of the

Appellant and the functional disability suffered by him.

At the outset, we must refer to the exposition of this

Court in Gurpreet Kaur and Ors. v. United India

MAC.APP. 511/2014 Page 7/23

Insurance Company Ltd. and Ors., wherein it was stated

the notifications under the Minimum Wages Act can be

a guiding factor in cases where there is no evidence

available to evaluate monthly income.”

(emphasis supplied)

17. Considering that the benchmark income has been considered as

minimum wages for an unskilled worker, there is no reason why loss of

future income should not be granted since it is a critical part of awarding

compensation to an injured/claimant. In any event, in a case of amputation,

there cannot be an argument that the capacity of injured/claimant to earn in

the future would not be affected. On the contrary, there would be huge

impact on her working to earn livelihood and she would have very restricted

opportunities in which she would be able to work. Reliance can be placed on

the judgment of Supreme Court in Mohd. Sabeer v. U.P. SRTC, (2023) 20

SCC 774 wherein the Supreme Court in a similar situation of amputation

below knee granted future prospect @ 40% and noted as regards loss of

future income as under:

“17. It is a well-settled position of law that in cases of

permanent disablement caused by a motor accident, the

claimant is entitled to not just future loss of income, but

also future prospects. It has been reiterated by this

Court in multiple instances that “just compensation”

must be interpreted in such a manner as to place the

claimant in the same position as he was before the

accident took place.”

18. In light of observation of Supreme Court, the assertion on behalf of

the Insurance Company, as regards loss of future income, is untenable and,

therefore rejected.

MAC.APP. 511/2014 Page 8/23

Evidence to Assess Functional Disability

19. The second issue which is raised by the Insurance Company relates to

the Disability Certificate issued by the Medical Board, Safdarjung Hospital,

wherein the disability was recorded at 60%. The Disability Certificate was

exhibited as PW-1/23 though no one from the Medical Board was produced

to prove the same.

20. PW-1 (injured/claimant), in her evidence by way of affidavit, stated

that due to amputation, she became handicapped and is totally dependent

upon others. The permanent Disability Certificate is exhibited as PW-1/23.

In her cross-examination, a suggestion was put to her that the document

(PW-1/23) was false, which she denied. The Court, having perused the said

Disability Certificate, finds that it has been issued on 31

st

March 2006 by the

Office of the Medical Superintendent, Safdarjung Hospital with due

signatures and seal of each of the members of the Medical Board. It has been

further counter-endorsed by the Additional Medical Superintendent,

Safdarjung Hospital with the signature and seal, and contains the photograph

of the injured as well. The same is extracted as under for reference:

MAC.APP. 511/2014 Page 9/23

21. There is no reason for this Court to disbelieve the said certificate.

Where there is no testimony in support of a Disability Certificate issued by

an authorized entity, it is for the Court to assess and accept the same, and not

to dismiss it summarily. As regards disability certificate, the Supreme Court

vide order dated 16

th

November 2021 in W.P.(C) 543/2020 passed the

following direction:

“(iv) As far as the aspect of the issuance of certificate on

disability of victims is concerned, it is reiterated that the

guidelines laid down by this Court in Raj Kumar v. Ajay

MAC.APP. 511/2014 Page 10/23

Kumar and Anr., (2011) 1 SCC 343 mandatorily must

be followed by the MACTs, in respect of loss of income

due to injury/disablement. The District Medical Board

is also directed to follow the guidelines issued by the

Ministry of Social Justice and Empowerment,

Government of India vide Gazette Notification S. No.

61, dated 05.01.2018, for issuance of disability

Certificate in order to bring Pan India uniformity. The

consequence is that the MACT would ascertain that

permanent disability certificate issued by the District

Medical Board or body authorized by it is in

accordance with the Gazette Notification alone. Once

the certificate is issued in this manner, the same can be

marked for purposes of being taken into consideration

as evidence without the necessity of summoning the

concerned witness to give formal proof of the documents

unless there is some reason for suspicion on the

document;”

(emphasis supplied)

22. Additionally, reference may be made to Supreme Court order dated

16

th

October 2025 in Special Leave Petition (Civil) 15621/2025 titled as “S.

Ettiappan v. D. Kumar & Anr.” wherein the Court was dealing with

physical disability assessed by the doctors at 70%, and the Tribunal had

substituted its view to arrive at a conclusion that functional disability was

50%. The Court stated that the Tribunal could not sit in an armchair of an

expert and reassess the disability, particularly when there is clear evidence

available and their being no other evidence tendered by the insurer or the

insured.

23. In that case, the Supreme Court had considered the functional

disability at 100%. Relevant paragraph of the said judgment is as under:

MAC.APP. 511/2014 Page 11/23

“7.1 While assessing the compensation in case of claims

arising out of motor vehicle accident, it would be the

functional disability which will have to be taken into

consideration for award of future loss of income. In the

instant case, though the doctors have assessed physical

disability to whole body at 70%, the tribunal has

substituted its view to that of the experts inspite of there

being no contra-material available before it to arrive at

a conclusion that functional disability being 50%. This

Court has time and again stated that tribunal would not

sit in the armchair of an expert and re-assess the

disability, particularly, when there is clear evidence

available. In the instant case, the disability assessment

certificate Exhibit-C1 revealed that appellant had

suffered 70% physical disability as certified by the

Medical Board. There being no other evidence tendered

by the insurer or the insured, the tribunal could not have

substituted its view by assessing the disability at 50%.

This erroneous view of the tribunal has been rightly set

aside by the High Court. However, the High Court while

reappreciating the evidence has restricted the

whole-body disability at 70% on the basis of Medical

Board Certificate (Ex. C-1) without noticing the fact

that on account of said disability suffered by the

claimant, his functional disability would be 100%. It is

not in dispute that appellant was working as a loader

who used to discharge his duties of loading and

unloading vegetables into the vehicles. This physical or

manual activity would require support of both legs or in

other words claimant is required to use both the legs for

discharging his duties as a loader. By virtue of

amputation of his right leg below the knee, he has

become immobile or in other words, he is not in a

position to discharge his daily routine work as a loader.

It is not the case of insurer or insured that claimant was

carrying on any other avocation and as such the

disability of 70% suffered would not come in the way of

his earning. To earn his bread, he had to work by

MAC.APP. 511/2014 Page 12/23

loading or unloading vegetable into the vehicle which

was the only avocation he was carrying on. Now by

virtue of amputation of his leg below the knee appellant

is not only unable to work as a loader but even unable to

stand without support. As such the functional disability

requires to be considered at 100% and not 70% as held

by High Court.”

(emphasis supplied)

24. Therefore, there is no reason to disbelieve the Disability Certificate or

depart from the assessment of functional disability at 60%, particularly

considering that injured was working as a maid and, therefore, required full

mobility in order to earn her livelihood. The MACT rightly observed that she

could not walk without support, bear weight, or work, especially in view of

the guillotine amputation of her right leg below the knee. There is no reason

to modify or reject the finding of the MACT in this regard.

Pain and Suffering

25. The third issue concerns the amount of Rs. 1,50,000/- awarded

towards pain and suffering. Reliance may be placed on the judgment of the

Supreme Court in K.S. Muralidhar v. R. Subbulakshmi and Anr. 2024 SCC

Online SC 3385, observed that ‘pain and suffering’ cannot be captured by

any fixed definition, drawing on legal, medical, and philosophical sources to

emphasise its deeply subjective and life-altering nature. It recognised that

translating such profound human loss into money is an inherently artificial

exercise, yet courts must ensure fairness, consistency, and sensitivity to the

victim’s lifelong deprivation. The Court stressed that in cases of severe or

100% disability, compensation must meaningfully reflect the permanent

rupture in the victim’s physical, emotional, and existential well-being.

MAC.APP. 511/2014 Page 13/23

Relevant paragraphs are extracted as under:

“13. While acknowledging that ‘pain and suffering’, as

a concept escapes definition, we may only refer to

certain authorities, scholarly as also judicial wherein

attempts have been made to set down the contours

thereof.

13.1 The entry recording the term ‘pain and suffering’

in P. Ramanatha Iyer's Advanced Law Lexicon

9

reads

as under:—

“Pain and suffering. The term ‘Pain and suffering’

mean physical discomfort and distress and include

mental and emotional trauma for which damages

can be recovered in an accident claim.

This expression has become almost a term of art,

used without making fine distinction between pain

and suffering. Pain and suffering which a person

undergoes cannot be measured in terms of money

by any mathematical calculation. Hence the Court

awards a sum which is in the nature of a

conventional award [Mediana, The, [1900] A.C.

113, 116]”

…

13.5 In determining non-pecuniary damages, the

artificial nature of computing compensation has been

highlighted in Heil v. Rankin

16

, as referred to

in Attorney General of St. Helenav. AB

17

as under:—

“23. This principle of ‘full compensation’ applies to

pecuniary and non-pecuniary damage alike. But, as

Dickson J indicated in the passage cited from his

judgment in Andrews v. Grand & Toy Alberta Ltd.,

83 DLR (3d) 452, 475-476, this statement

immediately raises a problem in a situation where

what is in issue is what the appropriate level of ‘full

compensation’ for non-pecuniary injury is when the

compensation has to be expressed in pecuniary

terms. There is no simple formula for converting the

pain and suffering, the loss of function, the loss of

MAC.APP. 511/2014 Page 14/23

amenity and disability which an injured person has

sustained, into monetary terms. Any process of

conversion must be essentially artificial. Lord

Pearce expressed it well in H West & Son

Ltd. v. Shephard, [1964] A.C. 326 when he said:

‘The court has to perform the difficult and

artificial task of converting into monetary

damages the physical injury and deprivation

and pain and to give judgment for what it

considers to be a reasonable sum. It does not

look beyond the judgment to the spending of the

damages.’

24. The last part of this statement is undoubtedly right.

The injured person may not even be in a position to

enjoy the damages he receives because of the injury

which he has sustained. Lord Clyde recognised this

in Wells v. Wells, [1999] A.C. 345, 394H when he

said:‘One clear principle is that what the successful

plaintiff will in the event actually do with the award is

irrelevant.”

…

14. In respect of ‘pain and suffering’ in cases where

disability suffered is at 100%, we may notice a few

decisions of this Court:—

14.1 In R.D Hattangadi v. Pest Control (India) (P) Ltd.

It was observed:

“17. The claim under Sl. No. 16 for ‘pain and

suffering’ and for loss of amenities of life under Sl.

No. 17, are claims for non-pecuniary loss. The

appellant has claimed lump sum amount of Rs.

3,00,000 each under the two heads. The High Court

has allowed Rs. 1,00,000 against the claims of Rs.

6,00,000. When compensation is to be awarded for

‘pain and suffering’ and loss of amenity of life, the

special circumstances of the claimant have to be

taken into account including his age, the unusual

deprivation he has suffered, the effect thereof on his

future life. The amount of compensation for

MAC.APP. 511/2014 Page 15/23

non-pecuniary loss is not easy to determine but the

award must reflect that different circumstances

have been taken into consideration. According to

us, as the appellant was an advocate having good

practice in different courts and as because of the

accident he has been crippled and can move only on

wheelchair, the High Court should have allowed an

amount of Rs. 1,50,000 in respect of claim for ‘pain

and suffering’ and Rs. 1,50,000 in respect of loss of

amenities of life. We direct payment of Rs. 3,00,000

(Rupees three lakhs only) against the claim of Rs.

6,00,000 under the heads “‘pain and suffering’”

and “Loss of amenities of life”.

14.2 This Judgment was recently referred to by this

Court in Sidram v. United India Insurance Company

Ltd reference was also made to Karnataka

SRTC v. Mahadeva Shetty (irrespective of the

percentage of disability incurred, the observations are

instructive), wherein it was observed:

“18. A person not only suffers injuries on account of

accident but also suffers in mind and body on

account of the accident through out his life and a

feeling is developed that his no more a normal man

and cannot enjoy the amenities of life as another

normal person can. While fixing compensation for

pain and suffering as also for loss of amenities,

features like his age, marital status and unusual

deprivation he has undertaken in his life have to be

reckoned…”

(emphasis added)

26. In light of the observations of the Supreme Court noted above, this

Court is of the opinion that, considering this is a case of amputation, there

can be no question of diluting the compensation awarded under the head of

pain and suffering. The Supreme Court has consistently adopted a liberal

and realistic approach in such cases, as is evident from the judgment in

MAC.APP. 511/2014 Page 16/23

Mohd. Sabeer v. U.P. SRTC (supra), wherein, in a similar situation

involving amputation below the knee, the Supreme Court awarded Rs.

2,00,000/- towards pain and suffering. The Supreme Court observed as

under:

“Non-pecuniary compensation

24… this Court is of the opinion that the compensation

provided by the High Court for non-pecuniary heads is

inadequate.

25. In R.D. Hattangadi v. Pest Control (India) (P)

Ltd. [R.D. Hattangadi v. Pest Control (India) (P) Ltd.,

(1995) 1 SCC 551 : 1995 SCC (Cri) 250] dealing with

the different heads of compensation in injury cases this

Court held that : (SCC p. 556, para 9)

“9. Broadly speaking while fixing the amount of

compensation payable to a victim of an accident,

the damages have to be assessed separately as

pecuniary damages and special damages.

Pecuniary damages are those which the victim has

actually incurred and which are capable of being

calculated in terms of money; whereas

non-pecuniary damages are those which are

incapable of being assessed by arithmetical

calculations. In order to appreciate two concepts

pecuniary damages may include expenses incurred

by the claimant : (i) medical attendance; (ii) loss of

earning of profit up to the date of trial; (iii) other

material loss. So far as non-pecuniary damages are

concerned, they may include : (i) damages for

mental and physical shock, pain and suffering,

already suffered or likely to be suffered in the

future; (ii) damages to compensate for the loss of

amenities of life which may include a variety of

MAC.APP. 511/2014 Page 17/23

matters i.e. on account of injury the claimant may

not be able to walk, run or sit; (iii) damages for the

loss of expectation of life i.e. on account of injury

the normal longevity of the person concerned is

shortened; (iv) inconvenience, hardship,

discomfort, disappointment, frustration and mental

stress in life.”

26. In light of the above decision of this Court and the

facts and circumstances of the case at hand, the

compensation to be awarded is as follows:

I. Compensation for pain and suffering — Rs

2,00,000

II. Compensation for loss of amenities of life — Rs

2,00,000

III. Compensation for disability and disfigurement

— Rs 2,00,000

Conclusion

27. We are of the opinion that while awarding

compensation in cases of permanent disability caused to

claimants, the courts must look at the case in totality,

and must consider the socio-economic background of

the claimants. The appellant herein comes from an

economically weaker section of the society.

28. It is almost universally seen that persons from

marginalised backgrounds often face an additional

layer of discrimination due to bodily disabilities. This is

because persons from marginalised sections of the

society already face severe discrimination due to a lack

of social capital, and a new disability more often than

not compounds to such discrimination. In such

circumstances, to preserve the essence of justice, it

becomes the duty of the Court to at the very least restore

the claimant as best as possible to the position he was in

MAC.APP. 511/2014 Page 18/23

before the occurrence of the disability, and to do so

must award compensation in a liberal manner.

29. While no material compensation can completely

negate the trauma and suffering that the injured and his

family faces, the law only knows the language of

monetary compensation in such cases. It then becomes

the duty of the court to translate the provisions of

monetary compensation into a fabrication that helps the

injured and his family in coping with their loss.”

(emphasis supplied)

27. Considering the observations of the Supreme Court and the fact that

the present case involves amputation, the compensation awarded towards

pain and suffering cannot be reduced. On the contrary, it must reflect the

permanent physical and emotional trauma suffered by the claimant. The

award of Rs.1,50,000/- under head of pain and suffering is therefore justified

and warrants no interference.

Pay and Recover

28. With regard to the contention raised by the Insurance Company that

the offending vehicle was being plied without a valid permit and, therefore,

the Insurance Company ought to have been completely exonerated instead of

being granted the right of pay and recover, this Court is of the view that the

issue of ‘pay and recover’ stands conclusively settled by the Supreme Court

in National Insurance Co. Ltd. v. Swaran Singh and Ors. (2004) 3 SCC

297.

29. In Swaran Singh (supra), the Supreme Court emphasised that the

right of a road accident victim to claim compensation is a statutory one,

rooted in the social welfare object of the MV Act. In that light, the Supreme

MAC.APP. 511/2014 Page 19/23

Court held that even where the insurer succeeds in establishing a statutory

defence under Section 149(2) of the MV Act, the liability to satisfy the award

vis-à-vis the third-party claimant subsists at the first instance, with liberty

reserved to the insurer to recover the amount from the insured/owner or

driver of the offending vehicle. The Court, after an elaborate consideration

of the statutory scheme and prior precedents, reaffirmed that the principle of

‘pay and recover’ had consistently held the field and should not be unsettled.

Emphasising the need for certainty in the law governing third-party rights,

the Court observed as under:

“104. It is, therefore, evident from the discussions made

hereinbefore that the liability of the insurance company

to satisfy the decree at the first instance and to recover

the awarded amount from the owner or driver thereof

has been holding the field for a long time.

105. Apart from the reasons stated hereinbefore, the

doctrine of stare decisis persuades us not to deviate

from the said principle.

106. It is a well-settled rule of law and should not

ordinarily be deviated from. (See Bengal Immunity Co.

Ltd. v. State of Bihar [AIR 1955 SC 661 : (1955) 2 SCR

603] , SCR at pp. 630-32, Keshav Mills Co.

Ltd. v. CIT [AIR 1965 SC 1636 : (1965) 2 SCR 908] ,

SCR at pp. 921-22, Union of India v. Raghubir

Singh [(1989) 2 SCC 754 : (1989) 3 SCR 316] , SCR at

pp. 323, 327, 334, Gannon Dunkerley and Co. v. State

of Rajasthan [(1993) 1 SCC 364] , Belgaum Gardeners

Coop. Production Supply and Sale Society Ltd. v. State

of Karnataka [1993 Supp (1) SCC 96 (1)]

and Hanumantappa Krishnappa Mantur v. State of

Karnataka [1992 Supp (2) SCC 213 : 1992 SCC (Cri)

667].)”

(emphasis supplied)

MAC.APP. 511/2014 Page 20/23

30. Reference can also be made to the decision of Supreme Court in

National Insurance Co. Ltd. v. Challa Upendra Rao & Ors. (2004) 8 SCC

517, wherein the Supreme Court held that even where a breach of policy

conditions by insured is established and a statutory defence under Section

149 of MV Act is available to insurer, thereby absolving insurer of liability,

the insurer may still be directed to satisfy the award in the first instance

having regard to the beneficial object of the Act. Accordingly, in order to

ensure expeditious compensation to the claimant, the insurer shall pay the

awarded amount with liberty to recover the same from the owner/insured in

accordance with law. The relevant paragraph is extracted as under:

“13. The residual question is what would be the

appropriate direction. Considering the beneficial object

of the Act, it would be proper for the insurer to satisfy

the award, though in law it has no liability. In some

cases the insurer has been given the option and liberty

to recover the amount from the insured. For the purpose

of recovering the amount paid from the owner, the

insurer shall not be required to file a suit. It may initiate

a proceeding before the executing court concerned as if

the dispute between the insurer and the owner was the

subject-matter of determination before the Tribunal and

the issue is decided against the owner and in favour of

the insurer. Before release of the amount to the

claimants, owner of the offending vehicle shall furnish

security for the entire amount which the insurer will pay

to the claimants. The offending vehicle shall be

attached, as a part of the security. If necessity arises the

executing court shall take assistance of the Regional

Transport Authority concerned. The executing court

shall pass appropriate orders in accordance with law as

to the manner in which the owner of the vehicle shall

make payment to the insurer. In case there is any default

it shall be open to the executing court to direct

MAC.APP. 511/2014 Page 21/23

realisation by disposal of the securities to be furnished

or from any other property or properties of the owner of

the vehicle i.e. the insured. In the instant case,

considering the quantum involved, we leave it to the

discretion of the insurer to decide whether it would take

steps for recovery of the amount from the insured.”

(emphasis supplied)

31. In any event, the Supreme Court in Amrit Paul Singh & Anr. v. Tata

AIG General Insurance Co. Ltd. & Ors. (2018) 7 SCC 558, considered a

similar contention where the offending vehicle did not have a valid permit to

ply the offending vehicle.

32. In that case, the decision in Swaran Singh (supra) was relied on

however, the same dealt with the situation where the driver was not having a

valid license. Referring to Challa Upendra Rao (supra), where the issue of

absence of permit was directly considered, the Court held that plying a

vehicle without a permit constitutes an infraction and may absolve the

insurer of statutory liability qua the insured.

33. However, in Amrit Paul Singh (supra), the Court, despite recognizing

that there was no valid permit to ply the offending vehicle and the liability

cannot be attributed on the insurer, nevertheless upheld the direction to pay

and recover, observing as under:

“24…Therefore, the Tribunal as well as the High Court

had directed that the insurer was required to pay the

compensation amount to the claimants with interest

with the stipulation that the insurer shall be entitled to

recover the same from the owner and the driver. The

said directions are in consonance with the principles

stated in Swaran Singh and other cases pertaining to

pay and recover principle.”

(emphasis supplied)

MAC.APP. 511/2014 Page 22/23

34. In view of the settled position of law as discussed above, and bearing

in mind the beneficial and social welfare object of the MV Act, the MACT

rightly directed the Insurance Company to satisfy the award with liberty to

recover the same from the owner, as recorded in paragraph 31 of the

impugned award. This Court finds no infirmity in the said finding of the

MACT. Accordingly, the ground raised by the Insurance Company seeking

complete exoneration is rejected.

Direction

35. Vide order dated 13

th

August 2014, this Court stayed the impugned

judgment subject to deposit of entire awarded amount with the Registrar

General of this Court and 75% of the amount was released in favour of the

injured/ claimant as per the directions in the Award. The balance amount was

kept in fixed deposit with the UCO Bank, Delhi High Court Branch with

auto renewal mode.

36. However, during the pendency of the present appeal Rajwati/ injured

expired on 23

rd

December 2021, leaving behind the following legal heirs:

MAC.APP. 511/2014 Page 23/23

37. Therefore, the balance amount along with accrued interest shall be

apportioned equally between the Legal Representatives of deceased Rajwati.

38. Appeal is, therefore, dismissed. Pending applications are rendered

infructuous.

39. Statutory deposit, if any, be refunded to the appellant.

40. Judgment be uploaded on the website of this Court.

(ANISH DAYAL)

JUDGE

MARCH 10, 2026/ak/zb