Judgment reserved on:-03.09.2025 Judgment delivered on:-26.09.2025

HIGH COURT OF UTTARAKHAND AT NAINITAL

Appeal from Order No.338 of 2010

The New India Assurance

Company Ltd. …..Appellant

Vs.

Smt. Laxmi and others …..Respondent ----------------------------------------------------------------------

Presence:-

Mr. V.K. Kohli, learned Senior Advocate assisted by Mr. Kanti Ram Sharma, Advocate holding brief of Mr. I.P. Kohli, Advocate for the

appellant.

Mr. Rajesh Joshi, Advocate for respondent nos.1 and 2.

Mr. B.D. Pande, Advocate for respondent nos.3/1 to 3/6.

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Hon'ble Pankaj Purohit, J.

This appeal has been filed by the appellant–

Insurance Company under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as “the Act”), challenging the judgment and award dated 17.08.2010 passed by the Motor Accident Claims Tribunal, Dehradun, in Motor Accident Claim Petition No.378 of 2006, Smt Laxmi and another Vs. The New India Assurance Company Limited and others, whereby compensation of ₹3,89,000/- with interest has been awarded in favour of the claimants on account of the death of one Kusum in a motor accident dated

21.11.2006.

2. The insured/owner (respondent no. 3) has also filed a cross-objection, essentially challenging the Tribunal’s finding regarding the validity of the driver’s

license and praying that the liability fastened upon him under the doctrine of “pay and recover” be set aside.

3. The brief facts of the case are that on 21.11.2006 at about 04:00 P.M., the deceased-Kusum, aged about 17 years, was walking alongside a road, when a Truck No. UA-12-5156, being driven rashly and negligently, hit her. He sustained grievous injuries and succumbed to death. An F.I.R. was lodged promptly, and the post-mortem report confirmed death due to multiple injuries.

4. The claimants, being the parents of the deceased, filed a Claim Petition No.378 of 2006 under Section 166 of the Act, claiming compensation of ₹15,10,000/- from the appellant/insurer. It was alleged that the deceased was earning about ₹4,500/- per month, by taking tuition classes and knitting-sewing work and was contributing to the family income. The parents were dependent on her.

5. The appellant/insurer submits that the Tribunal erred in fastening liability upon the insurer despite the admitted fact that the driver of the offending truck did not possess a valid driving license at the time of the accident. It is urged that such absence is not a mere technical breach but a fundamental violation of Section 3 of the Act and the terms of the policy. By directing the insurer to satisfy the award, the Tribunal has diluted the contractual obligations under Section 149(2) of the Act. The appellant placed reliance on a judgment rendered by Apex Court in the case of National Insurance Co. Ltd. v. Kusum Rai reported in (2006 (2) TAC 1 SC), Sardari & Ors. Vs. Sushil Kumar & Ors. Reported in (2008 ACC 426 SC), and National Insurance Co. Ltd. Vs. Rattani & Ors. reported in (2009 ACJ 925), to contend that in cases of a fundamental breach, the insurer cannot be made liable to pay compensation at all.

6. It is further submitted that the Tribunal misapplied the principle laid down by the Apex Court in the case of National Insurance Co. Ltd. v. Swaran Singh reported in (2004 (3) SCC 297), inasmuch as the said judgment does not lay down a blanket proposition that insurers must invariably satisfy awards in all cases of absence of license. The appellant/insurer submits that the Tribunal’s approach wrongly equated a case of wholly unlicensed driving with cases of minor irregularities, thereby undermining the deterrent object of the licensing regime.

7. On the quantum of compensation, the appellant submits that the Tribunal erred in assessing the income of the deceased at ₹3,000/- per month without any documentary proof. At the relevant time, the structured formula in the Second Schedule prescribed notional income at only ₹15,000/- per