1. Appeal against the dismissal of an appeal by the High Court, challenging a motor accident compensation award following the coercive extraction of an undertaking from the insurer. (Para 2 , 3 , 4 )
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2026 Supreme(SC) 158
SUPREME COURT OF INDIA
Rajesh Bindal, Vijay Bishnoi, JJ.
National Insurance Co. Ltd. – Appellant
Versus
Rathlavath Chandulal and Others – Respondents
Civil Appeal Nos. 490-491 of 2026 (Arising out of SLP (Civil) No(s). 3255-3256 of 2026)
Decided On : 23-01-2026
Advocates Appeared:
For the Petitioner: Ms. Meenakshi Arora, Sr. Adv. Ms. Hetu Arora Sethi, AOR, Mr. Rahul Jain, Adv., Mr. Sanidhya Kumar, Adv. Ms. Kanak Bathwal, Adv.
For the Petitioner: Ms. Meenakshi Arora, Sr. Adv. Ms. Hetu Arora Sethi, AOR, Mr. Rahul Jain, Adv., Mr. Sanidhya Kumar, Adv. Ms. Kanak Bathwal, Adv.
The High Court must examine appeals on their merits; an undertaking given under pressure does not preclude rights to challenge an award substantively.
Headnote:(A) Motor Vehicles Act - Compensation for personal injury - Compensation of Rs. 2,72,03,416/- awarded by Tribunal upheld by High Court; Insurance Company challenged award claiming perversity. Court noted urgency in execution of award led to undue pressure on Insurance Company's manager resulting in a coerced undertaking. Procedural injustices recognized. (Paras 4, 15, 16)
(B) High Court's duty in first appeal - High Court must consider merits of compensation claim, mere undertaking cannot justify dismissal of appeal. (Paras 14, 15)
Facts of the case:
Respondent suffered severe injuries in a road accident at 22 years old; claimed Rs. 1,00,00,000/-, awarded Rs. 2,72,03,416/- including 100% disability. (Paras 4, 3)
Findings of Court:
Appeal dismissed without merit consideration; procedural fairness breached; case remitted to High Court for fresh consideration. (Paras 15, 16)
Issues: Did High Court err in dismissing the appeal based solely on an undertaking? Was the compensation awarded excessive and unjust?
Ratio Decidendi: Mere submission of an undertaking by an officer does not negate rights to appeal on merits; urgency in execution undermined judicial review; High Court failed to rule on substantive issues of the appeal. (Paras 14, 15)
Result: Appeals allowed, case remitted to High Court for reconsideration.
Act Referred
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Table of Contents
2. The appellant contends the award is perverse and the undertaking before the tribunal was coerced, while suggesting the High Court failed to adjudicate the appeal on merits. (Para 5 , 6 , 7 )
3. The High Court erred in dismissing the appeal solely based on a coerced undertaking without considering the merits of the compensation award. (Para 10 , 13 , 14 )
4. An undertaking to satisfy an award does not preclude a party's right to appeal and obtain a decision on the merits of the underlying dispute. (Para 10 , 14 )
5. The impugned orders are set aside, and the matter is remitted to the High Court for fresh adjudication on merits within six months. (Para 9 , 15 , 16 )
6. Does an undertaking to comply with a tribunal's award impliedly waive the right to appeal?
No. An undertaking to satisfy an award, particularly when extracted under pressure or in the absence of a stay, does not constitute a waiver of the statutory right to challenge the merits of the award in an appellate court. (Para 10 , 14 )
7. Is an appellate court justified in dismissing an appeal solely because an undertaking was furnished before the executing court?
No. The appellate court is mandated to adjudicate an appeal on its merits even if an undertaking to satisfy the award has been given, as such an undertaking does not negate the requirement for judicial scrutiny of the award. (Para 10 , 14 )
8. What is the appropriate procedure for a trial court executing a decree when the respondent is a public sector entity?
Executing courts must exercise judicial discretion before ordering attachment of essential operational office assets like computers and furniture, especially against public sector entities, and should prefer less disruptive methods of recovery. (Para 13 )
ORDER :
Rajesh Bindal, J.
1. Leave granted.
2. The appellant-Insurance Company has approached this Court impugning the order1[MACMA No.1503 of 2025] dated 19.11.2025 passed by the High Court2[High Court for the State of Telangana at Hyderabad] in appeal whereby the award3[MVOP No.1011 of 2021 dated 20.09.2024 ] passed by the Tribunal4[MACT: CUM: XI Additional Chief Judge, City Civil Courts at Hyderabad ] was upheld. Vide the aforesaid order, on account of injuries suffered by the respondent no.1, compensation of Rs. 2,72,03,416/- awarded to him was upheld. Order5[I.A. No.4 of 2025] dated 06.01.2026 is also under challenge vide which the review application filed by the appellant was dismissed by the High Court.
3. Briefly noticing, the facts of the case are that the respondent no.1 suffered severe injuries in a road accident, which took place on 13.02.2020. He filed a claim petition before the Tribunal seeking compensation of Rs.1,00,00,000/-. He was 22 years of age at the time of the accident. His functional disability was assessed as 100%. He was a second year student at Government ITI College at Dindi, Nalwada Distt. Accepting the claim made by the respondent no.1 that he was assisting his father in farming, his income was assessed to be Rs.25,000/- per month. While adding the amount under various heads, total compensation of Rs.2,72,03,416/- along with interest @ 6% per annum was awarded.
4. Aggrieved against the same, the appellant-Insurance Company preferred appeal before the High Court. On the other hand, the respondent no.1 filed Execution Petition6[Execution Petition No.183 of 2025 in MVOP No.1011 of 2021]. Attachment of the properties of the appellant by issuance of warrants under Order XXI Rule 43, 64 and 66 of C.P.C. was sought. In the execution proceedings, an undertaking was furnished by the local manager of the appellant-Insurance Company, undertaking to satisfy the award. The High Court dismissed the appeal on the basis of the said undertaking. Even the Review Application was dismissed by adopting the same reasoning.
5. Learned counsel for the appellant submitted that the order passed by the Tribunal awarding compensation of Rs.2,72,03,416/- was totally perverse as the claim of the respondent no.1 was only to the tune of Rs.1,00,00,000/-. While assessing the compensation, despite the fact that the respondent no.1 was a student, his monthly income was taken as Rs.25,000/-. Further, keeping in view the functional disability of 100%, total amount was assessed as loss of income. The percentage on account of future prospects was awarded on a higher side. Additionally, compensation towards disability was granted for which there is no discussion in the award passed by the Tribunal. Even under other heads, the compensation awarded is against the settled principles.
6. The appellant had filed the appeal before the High Court impugning the award of the Tribunal. While the same was pending, Execution Petition was filed by the respondent no.1 before the Tribunal where furniture, fixtures and computers of the local office of the appellant were attached. It was under that pressure that the local manager of the company had given the undertaking before the Tribunal to comply with the award within two weeks from the date of the undertaking. The aforesaid undertaking was furnished by him on 30.10.2025. On the other side, the High Court had adjourned the appeal on 27.10.2025 to 03.11.2025. On the next date of hearing, though notice had not been issued to the respondent/claimant, however, the counsel for the claimant appeared and stated before the Court that the appellant-company had given an undertaking to satisfy the award. The matter was adjourned to 06.11.2025 to enable the counsel to produce the copy of the order. On 19.11.2025, the High Court, noticing that the undertaking had been given by the appellant before the Tribunal regarding compliance of the award, dismissed the appeal without even touching the merits of the controversy.
6.
