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2026 Supreme(Ori) 313

IN THE HIGH COURT OF ORISSA AT CUTTACK
G. SATAPATHY, J. 
Ramakrishna Upadhyay And Another - Appellants
Versus
Rajesh Kumar Pandey And Another - Respondents
MACA Nos.966, 1243 of 2023
Decided On : 06-03-2026

Advocates Appeared:
For the Appellant :Mr. D.C. Dey, Advocate
For the Respondent:Mr. B. Dasmohapatra, Advocate

The court affirmed that compensation for loss of life must adhere to statutory provisions, ensuring that penalties for late payment are not imposed contrary to law.

Headnote:(A) Motor Vehicles Act, 1988 - Section 173(1) and Section 166 - Compensation for death in motor accident - The Insurance Company is directed to pay a sum of Rs. 1,14,51,118/- with simple interest @ 6% per annum. Legal representatives claimed losses due to the death of sole breadwinner. (Paras 2 and 3)

(B) Penal Interest - Imposition of penal interest at 12% per annum was found unsustainable under the law, which allows for only regular interest as per Section 171 of the Act. (Para 8)

(C) Quantum of Compensation - Tribunal calculated the monthly loss of dependency to Rs. 6,22,914/- resulting in a total compensation of Rs. 1,13,10,452/- after considering future prospects and deductions. (Paras 9 and 10)

Facts of the case:
The appeals arise from a vehicular accident that occurred on 03.09.2019 leading to the death of a sole breadwinner, Suryakant Upadhyay, resulting in claims for compensation by his legal representatives. (Para 3)

Findings of Court:
The learned tribunal rightly calculated the income and dependency loss based on proved salary, yet erred in imposing penal interest which was waived. The overall compensation was modified to Rs. 1,13,10,452/-. (Para 10)

Issues: The court examined the validity of imposing penal interest, computations of dependency loss, and handling of the rehabilitation assistance claim under statutory schemes. (Para 6)

Ratio Decidendi: The court affirmed the necessity of adhering to statutory provisions regarding interest rates and compensation calculations ensuring just recompense for the loss of life.

Result: The appeal by the insurer is allowed in part; the appeal by the claimants is dismissed.

Table of Content
1. compensation awarded for death in accident (Para 2 , 3)
2. disputes regarding liability and claims (Para 4 , 6)
3. calculation of loss of dependency (Para 5 , 9)
4. issues concerning imposition of penal interest (Para 7 , 8)
5. modification of judgment and compensation order (Para 10)

JUDGMENT :

G. Satapathy, J.

1. Since these two appeals involve common question of facts and law, the same are taken up and heard together and disposed of by this common judgment.

2. The impugned judgment dated 16.09.2023 passed by learned 3rd Motor Accident Claims Tribunal, Cuttack (hereinafter referred to as “the learned tribunal) in MAC Case No.1258 of 2019 is under challenge in both these appeals filed U/S.173(1) of the Motor Vehicles Act, 1988 (in short “the Act”).

2.1 By the impugned judgment, the Insurance Company-M/S. New India Assurance Co. Ltd. (in short the “insurer”) is directed to pay a sum of Rs. 1,14,51,118/- together with simple interest @ 6% per annum w.e.f. 14.10.2019 till its actual realization to the claimants- applicants as compensation for the death of one Suryakant Upadhyay (hereinafter referred to as “the deceased”) in a motor vehicular accident with further stipulation of payment of penal interest @ 12% per annum on the compensation amount so assessed, if the same is not paid within two months from the date of passing of the impugned judgment.

3. These two appeals arise out of one proceeding for compensation before learned tribunal for the death of the deceased in vehicular accident that took place on 03.09.2019 at about 10.50 AM when the deceased was coming from NTPC Darlipali to Sundargarh along with his colleague namely Susmita Kaviraj on a scooty bearing Registration No.TS-22A-7481, suddenly a trailer bearing Registration No. OD-16-D-3941 (hereinafter referred to as the “offending vehicle”) coming in a rash and negligent manner and dashed the scooty at Sadar Chowk, Bandhapali, Sundargarh resulting in death of the deceased. The accident was in fact registered vide Sundargarh Sadar PS Case No. 170 of 2019 which culminated in submission of charge sheet, but the legal representatives(claimants) of the deceased approached the learned tribunal in an application U/S. 166 of the Act, for grant of compensation towards death of the deceased by impleading the owner and the insurer of the offending vehicle and claiming the deceased to be earning Rs. 70,439/- per month from his salary and the accident causing loss of not only the life of their sole bread earner, but also for losing the amount so contributed by the deceased to the family. Accordingly, the claim of the applicants was registered vide MAC Case No. 1258 of 2019.

4. In response to the notice in MAC Case No. 1258 of 2019, the owner of the offending vehicle did not appear and he was accordingly set exparte, but the insurer of the offending vehicle contested the claim by filing written statement denying its liability and inter-alia asserting the claim to be not maintainable either in law or facts on the ground of deceased dying in the motor vehicular accident due to his own negligence. In addition, the insurer in its written statement had not only disputed the age, occupation and income the deceased, but also had disowned its liability to indemnify the owner of the offending vehicle for the driver being not in possession of a valid and effective driving license.

5. On inter se pleadings between the parties, the learned tribunal stuck as many as five issues and allowed the parties to lead the evidence. The claimant accordingly examined three witnesses vide PW1 to PW3 and relied upon 23 documents under Ext.1 to Ext.23 as against no evidence whatsoever by the insurer. After analyzing the evidence on record upon hearing the parties, the learned tribunal passed the impugned judgment directing the insurer to pay the compensation amount as indicated supra. Being aggrieved with the impugned judgment, the claimants-applicants preferred appeal in MACA No.966 of 2023 challengin

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