The court enhanced compensation by applying minimum wage standards and conventional heads, and applied the "pay and recover" principle, directing the insurer to satisfy the award for innocent third-party victims first, despite a policy breach due to lack of a valid permit.

Order on Board

1. This appeal has been filed by the appellants/claimants under Section 173 of the Motor Vehicles Act, 1988 (for short “Act of 1988”) seeking enhancement in the compensation amount, against the impugned award dated 02.05.2019 passed by the Learned 2nd Additional Motor Accident Claims Tribunal, Chhattisgarh (for short “Claims Tribunal”) in Claim Case No. 352/2018, whereby the Claims Tribunal allowed the claimants’ application and awarded Rs. 9,77,200/- along with interest for death of Gangoli Dhritlahare.

2. Learned counsel for the appellants, would submit that the Claims Tribunal has erred in awarding the less compensation. He would also submit that the Claims Tribunal erred in assessing income of the deceased Rs. 6000/- per month which should be Rs. 8190/- per month as per Chhattisgarh Minimum Wages Notification issued by the office of the Labour Commissioner, Chhattisgarh. He would further submit that under the head of consortium amount has not been awarded by the Claims Tribunal which is liable to be awarded. Learned counsel for the appellant/claimants further submits that the learned Claims Tribunal ought to have applied the principle of "pay and recover" by directing the insurance company to satisfy the award in the first instance with liberty to recover the amount from the owner of the offending vehicle.

3. Learned counsel for the respondents No. 2 would oppose the prayer made by learned counsel for the appellant and submit that compensation awarded by the Claims Tribunal is no higher side which is liable to be reduced.

4. Learned counsel for the respondent/Insurance Company submits that the Claims Tribunal has rightly exonerated the respondent/Insurance Company from its liability to pay the compensation, as the breach of the terms and conditions of the insurance policy stood duly established. He further submits that the offending vehicle was being used without a valid and effective permit on the date of the accident, thereby constituting a breach of the terms and conditions of the insurance policy. It is further submitted that the Insurance Company has successfully proved such breach and, therefore, cannot be held liable to indemnify the owner of the vehicle or to satisfy the award.

5. I have heard learned counsel for the parties, considered their rival submissions made herein above and gone through the records minutely.

6. Learned Claims Tribunal assessed the monthly income of deceased to be 4,500/- however, in the opinion of this Court, as per the Chhattisgarh Minimum Wages Notification issued by the office of Labour Commissioner, Chhattisgarh, the monthly income of the deceased should be 8190/- (as per minimum wages prescribed at relevant time). Accordingly, the monthly income of the deceased is liable to be reassessed at Rs. 8190/-. It is further submitted that the Claims Tribunal has not awarded compensation under the conventional heads in accordance with the prevailing rates, namely, Rs. 18,000/- towards funeral expenses, Rs. 18,000/- towards loss of estate, and Rs. 88,000/- towards parental consortium payable to the mother and father of the deceased. Accordingly, the compensation awarded under the aforesaid conventional heads deserves to be enhanced.

7. Thus, in light of the aforesaid discussion and in light of the judgments of the Supreme Court rendered in the matters of National Insurance Company Ltd. V. Pranay Sethi , 1(2017) 16 SCC 680, Sarla Verma & Ors. Vs. Delhi Transport Corporation & Ors²(2009) 6 SCC 121 and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors.³(2018) 18 SCC 130, this Court is computing the compensation as below:-

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