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2025 Supreme(P&H) 227
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
HARKESH MANUJA, J.
United India Insurance Co. Ltd. - Appellant
Versus
Nirmla Devi and Others - Respondents
FAO No. 3087 of 1999, XOBJC No. 92-CII of 2014
Decided On : 24-06-2025
For the Appellant : Sanjiv Pabbi
For the Respondents: Kanchan Sindhu, Pritam Saini
Insurance companies retain liability even when drivers lack valid licenses if public interests dictate, per statutory interpretations.
Headnote:The appeal by the Insurance Company seeks to set aside the award of compensation of Rs. 2,56,000/- with interest, granted by the Tribunal to the claimants for death due to a motor vehicular accident. The Court noted the failure of the appellant to serve certain respondents and upheld the Tribunal's finding of liability due to evidence of rash driving, rejecting claims of insufficient licensing. The main questions were around the liability of the insurance company in light of the driver’s expired license. The Court quoted relevant precedents, establishing that insurance companies may be held liable even if the driver's license was not valid at the time of the accident if the insurance was granted in good faith and protection of claimants took precedence. The final decision dismissed the appeal of the Insurance Company while enhancing the compensation awarded to the claimants to Rs. 7,51,200/- and ordered immediate payment of this amount, following deductions for previously awarded sums.
| Table of Content |
|---|
| 1. failure to serve respondents results in dismissal for lack of prosecution. (Para 1 , 2) |
| 2. rash and negligent driving established as grounds for liability. (Para 3 , 4 , 6) |
| 3. valid license status critically affects insurance liability. (Para 7 , 8 , 9 , 10) |
| 4. enhancement of compensation based on proper assessments of income and deductions. (Para 11 , 12 , 13) |
| 5. court's decision favors claimants' rights over procedural lapses of the insurance company. (Para 14 , 15 , 16) |
JUDGMENT :
HARKESH MANUJA, J.
1. Before dealing with the merits of the present appeal, it may be taken note of at this stage that notice of motion to Respondents No. 4 & 5 was issued on 26.10.1999 and since then even after more than 25 long years the appellant/insurance company has neither been able to furnish their complete and correct address nor even it has been able to serve them through dasti process. The two last service reports as recorded by the concerned branch in this regard are reproduced hereunder:-
“Cross objection no. 92-CII of 2014 in/and FAO 3087 of 1999
(Ist report)
Dasti notice issued to Resp no. 4 & 5 has not been received back served or otherwise.
Counsel for appellant has not filed the correct address of Resp no. 4 & 5 so notice could not be issued.
Submitted for 10/07/2014.”
(2nd report)
Counsel for appellant has not file the correct address of Resp no. 4 & 5 so notice could not be issued.
Submitted for 17/09/2014.”
Furthermore, even at the time of hearing on 30.04.2025, no request was ever made on behalf of the appellant/insurance company so as to serve Respondents No. 4 & 5; accordingly, the present appeal filed on behalf of appellant/insurance company qua Respondents No. 4 & 5 is hereby ordered to be dismissed for want of prosecution.
2. Further, by way of present appeal filed at the instance of Insurance Company, prayer has been made for setting aside of the decision dated 19.03.1999 passed by learned Motor Accident Claims Tribunal, Kurukshetra (hereinafter referred to as “Tribunal”) whereby, Rs.2,56,000/- along with interest @ 12% per annum was awarded as compensation to respondent No.1 to 3/claimants; whereas, in this appeal, cross objections under Order 41 Rule 22 read with Section 151 CPC have also been filed at the instance of respondent Nos.1 to 3/cross-objector seeking enhancement/modification of the award passed by the Tribunal.
Brief Facts
3. Respondent Nos.1 to 3 being dependents upon the deceased, filed claim petition before the learned Tribunal for grant of compensation to the tune of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) on account of death of Ram Pal in a motor vehicular accident which took place on 02.12.1996, while alleging rash and negligent driving of respondent No. 4- driver.
4. Learned Tribunal after appraisal of evidence and record held that accident occurred due to rash and negligent driving of respondent No.4-driver; found appellant and respondent No. 4 & 5 jointly and severally liable and awarded compensation in the following manner:-
| S. No. | Nature | Amount in Rupees |
| 1. | Loss of dependency (16000 x 16 multiplier) | Rs. 2,56,000/- |
| TOTAL | Rs. 2,56,000/- |
5. Being aggrieved the present appeal was preferred by the appellant/Insurance Company, for setting aside the award on the point of liability and also in the alternative for reduction of compensation as awarded by the learned Tribunal; whereas the cross objections were filed by respondent No.1 to 3/cross-objector, praying for enhancement of compensation.
Arguments
6. Learned counsel for the appellant/Insurance Company assailed the award on the ground that the learned Tribunal failed to consider the fact that respondent No. 4-driver of the alleged vehicle bearing registration no.HR-11/1554 was not having a valid driving license on the date of accident i.e. 02.12.1996 and therefore the liability for payment of compensation could not have been fastened on the insurer. It was pointed from the impugned award that after 11.11.1995, the driving license was got renewed only on 26.0
