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S.P. JAIN (ADV.
)
B.A. (Voc.), M.A. (Pol. Scie.), M.A. (Eco.), M.A. (Socio.), LL.M.,
CC: CYBER LAW
HIMANSHU GAMBHIR (ADV.)

(B.Com., LL.B., CC: CYBER LAW, IPR)
ABHISHEK JAIN
(B.Sc. CS, CC: CYBER LAW, IPR)
39, WESTERN WING,

TIS HAZARI COURTS, DELHI
LAW CURATORS
Judicial Services Examination Coaching Institute
M. No. +91-9873304064, +91-9811045845
Email.: spjain.adv@gmail.com,
gambhir0758@gmail.com
LATEST UPDATES ON COMPENATION CASES
INDEX
S.NO. PARTICULARS PAGE NO.

1. Table of Minimum Wages 1&2
2. Notification u./s 163-A of the Motor Vehicles Act 3
3. Analysis of the notification issued by the Central 4-7
Govt. in respect of section 163-A of the Motor

Vehicles Act.
4. Main Features of Pranay Sethi Judgment 8-9
(Constitution Bench Judgment)

5. Judgment of Pranay Sethi by the Hon’ble Supreme 10 to 41
Court of India
6. Write Up in respect of judgment passed by the 41-44
Hon’ble Supreme Court in respect of the case titled

as Mukund Vs Oriental Insurance Co. Ltd.
7. Analysis of the judgment of the Hon’ble Supreme 44-46
Court of India in the case titled as Mukund Vs

Oriental Insurance Co. Ltd.
8. Judgment of Mukund Vs Oriental Insurance Co. Ltd. 47 to 97
by the Hon’ble Supreme Court of India

9. Head Notes and judgment of United India Ins. Co. 98 to 108
Ltd. Vs Laxmamma on dishonour of cheque of

premium
10. Head Notes and judgment of Raj Kumar Vs Ajay 109 to 124
Kumar by the Hon’ble Supreme Court of India, on

assessment of compensation in relation to permanent
disablement
11. An Article by Shri Himanshu Gambhir, Advocate on 125 to 130
defences of Insurance Company

12. Head Notes and judgment of Purohit and Co. Vs 131 to 147
Khatoonbee by the Hon’ble Supreme Court of India

on Limitation in filing Claim petitions before the Ld.
Tribunals
13. Head Notes and judgment of Naveen Kumar Vs Vijay 148 to 159
Kumar by the Hon’ble Supreme Court of India on the

issue of owner of the vehicle after sale of the vehicle
by the registered owner
14. Head Notes on the issue that the Insurance Company 156 to 180
that the amount of compensation can be deposited by

the Insurance Company through digital modes
15. Head Notes and judgment of R.S. Singh Vs U.P. 181 to 188
Malaria Niritshak Sangh by the Hon’ble Supreme

Court of India wherein calling of the higher officials
by the Courts is deprecated
16. Head Notes and judgment of Ms. Indra Vati Vs State 189 to198
of Delhi by the Hon’ble High Court of Delhi wherein

uncalled for observations on the professional
competence or conduct of a counsel, or any person or
authority or harsh or disparaging remarks are
deprecated
LATEST UPDATES ON COMPENSATION CASES
TABLE OF MINIMUM WAGES (DELHI)

Minimum Semi Non
Unskilled Skilled Matriculates Graduates
rates w.e.f. Skilled Matriculates
16.10.1985 414.00 468.00 552.00 477.00 560.00 662.00
01.05.1987 489.00 552.00 651.00 563.00 661.00 781.00
16.03.1988 562.00 635.00 749.00 647.00 760.00 898.00

01.05.1989
750.00 848.00 1000.00 864.00 1014.00 1198.00
)
with VDA
01.02.1990
V.
767.00 865.00 1017.00 881.00 1031.00 1215.00
- do-
01.08.1990
793.00 891.00 1043.00 907.00 1057.00 1241.00
- do-
D
01.02.1991
854.00 952.00 1104.00 968.00 1118.00 1302.00
– do-
(A
01.08.1991
891.00 989.00 1141.00 1005.00 1155.00 1339.00
–do-
01.02.1992
958.00 1056.00 1208.00 1072.00 1222.00 1406.00
– do-
01.08.1992
N
1009.00 1107.00 1259.00 1123.00 1273.00 1457.00
– do-
01.02.1993
1078.00 1176.00 1328.00 1192.00 1342.00 1526.00
– do-
AI
01.08.1993
1119.00 1217.00 1369.00 1233.00 1383.00 1567.00
– do-
15.02.1994
.J
1382.00 1548.00 1806.00 1575.00 1830.00 2142.00

– do-
01.08.1994
1420.00 1586.00 1844.00 1613.00 1868.00 2180.00
with VDA
01.02.1995
.P
1495.00 1661.00 1919.00 1688.00 1943.00 2255.00

– do-
01.08.1995
1545.00 1711.00 1969.00 1738.00 1993.00 2305.00
– do-
:S
01.02.1996
1677.00 1843.00 2101.00 1870.00 2125.00 2437.00
– do-
01.02.1997
1784.00 1950.00 2208.00 1977.00 2232.00 2544.00
– do-
BY
01.02.1998
1937.00 2103.00 2361.00 2130.00 2385.00 2697.00
– do-
01.02.1999
2348.00 2514.00 2772.00 2541.00 2796.00 3108.00
– do-
01.02.2000
2419.00 2585.00 2843.00 2612.00 2867.00 3179.00
– do-
01.08.2000
2524.00 2690.00 2948.00 2717.00 2972.00 3284.00
– do-
01.02.2001
2579.00 2745.00 3003.00 2772.00 3027.00 3339.00
– do-
01.08.2001
2592.00 2758.00 3016.00 2785.00 3040.00 3352.00
– do-
01.02.2002
2667.40 2833.40 3091.40 2860.40 3115.40 3427.40
– do-
1
01.08.2002
2679.70 2845.00 3103.70 2872.70 3127.70 3439.70
– do-
01.02.2003
2783.90 2949.00 3207.90 2976.90 3231.00 3543.90
– do-
01.02.2004
2862.90 3028.00 3286.90 3055.90 3310.90 3622.90
– do-
01.08.2004
2894.90 3060.00 3318.90 3078.90 3342.90 3654.90
– do-
01.02.2005
3044.90 3210.00 3468.90 3237.90 3492.90 3804.90
– do-
01.08.2005
3165.90 3331.00 3589.90 3358.90 3613.90 3925.90
- do-
01.02.2006
3271.00 3437.00 3695.00 3464.00 3719.00 4031.00
)
– do-
V.
01.08.2006
3312.00 3478.00 3736.00 3505.00 3760.00 4072.00
– do-
01.02.2007
3470.00 3636.00 3894.00 3663.00 3918.00 4230.00
– do-
D
01.08.2007
3516.00 3682.00 3940.00 3709.00 3964.00 4276.00
– do-
(A
01.02.2008
3633.00 3799.00 4057.00 3286.00 4081.00 4393.00
– do-
01.08.2008
3683.00 3849.00 4107.00 3876.00 4131.00 4443.00
– do-
01.02.2009
N
3934.00 4100.00 4358.00 4127.00 4382.00 4694.00
– do-
01.08.2009
3953.00 4119.00 4377.00 4146.00 4401.00 4713.00
AI
– do-
01.02.2010
5278.00 5850.00 6448.00 5850.00 6448.00 7020.00
– do-
01.02.2011
.J
6084.00 6734.00 7410.00 6734.00 7410.00 8060.00

– do-
01.10.2011
6656.00 7358.00 8112.00 6656.00 7358.00 8112.00
– do
.P
01-04-2012
7020.00 7748.00 8528.00 7020.00 7748.00 8528.00
– do
01-10-2012
7254.00 8008.00 8814.00 8008.00 8814.00 9594.00
– do
:S
01-04-2013
7722.00 8528.00 9386.00 8528.00 9386.00 10218.00
– do
01-10-2013
8086.00 8918.00 9802.00 8918.00 9802.00 10686.00
-do
BY
01-04-2014
8554.00 9438.00 10374.00 9438.00 10374.0 11310.00
-do
01-10-2014
8632.00 9542.00 10478.00 9542.00 10478.0 11414.00
-do
01-04-2015
9048.00 10010.00 10998.00 10010.00 10998.0 11986.00
-do
01-10-2015
9174.00 10136.00 11154.00 10136.00 11154.0 12142.00
-do
01-04-2016
9568.00 10582.00 11622.00 10582.00 11622.0 12662.00
-do
01-04-2017
13584.00 14958.00 16468.00 14958.00 16468.00 17916.00
-do
01-04-2018
13896.00 15296.00 16858.00 15296.00 16858.00 18332.00
-do
2
THE GAZETTE OF INDIA: EXTRAORDINARY

[PART II—SEC. 3(ii)]
MINISTRY OF ROAD TRANSPORT AND HIGHWAYS
NOTIFICATION
New Delhi, the 22nd May, 2018
S.O. 2022(E).—In exercise of the powers conferred by sub-

section (3) of section 163A of the Motor Vehicles Act, 1988 (59 of
)
1988), the Central Government, keeping in view the cost of
V.
living, hereby makes the following amendment to the Second
Schedule to the said Act, namely:—
D
In the Motor Vehicles Act, 1988, for the Second Schedule, the
(A
following Schedule shall be substituted namely:—
“THE SECOND SCHEDULE
(See Section 163A)
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SCHEDULE FOR COMPENSATION FOR THIRD PARTY
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FATAL ACCIDENTS/INJURY CASES CLAIMS

1. (a) Fatal Accidents:
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Compensation payable in case of Death shall be five lakh

rupees.
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(b) Accidents resulting in permanent disability:

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Compensation payable shall be = [Rs. 5,00,000/- × percentage

disability as per Schedule I of the Employee’s Compensation
Act, 1923 (8 of 1923)] :
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Provided that the minimum compensation in case of permanent

disability of any kind shall not be less than fifty thousand
rupees.
(c) Accidents resulting in minor injury:
A fixed compensation of twenty five thousand rupees shall be
payable:
3
2. On and from the date of 1st day of January, 2019 the

amount of compensation specified in the clauses (a) to (c) of
paragraph (1) shall stand increased by 5 per cent annually”.
3. This notification shall come into form on the date of its
publication in the Official Gazette.”
ANALYSIS OF THE NOTIFICATION ISSUED BY THE

CENTRAL GOVT. IN RESPECT OF SECTION 163-A OF
)
MOTOR VEHICLES ACT
V.
Sub-section (3) of Section 163-A of the Motor Vehicles Act,
empowers the Central Govt.to amend the Second Schedule, in
D
view of cost of living by Notification. Sub section (3) of Section
163-A of the Motor Vehicles Act reads as under:
(A
(3) The Central Government may, keeping in view the
cost of living by notification in the Official Gazette, from
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time to time amend the Second Schedule.
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Motor Vehicles Act, 1988 was amended by Act 54 of 1994,
inter alia, inserting Section 163-A and the Second Schedule
came into existence with effect from 14-11-1994.
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Since the insertion of Section 163-A in the Motor Vehicles Act,

there was no notification by the Central Govt. as per sub-
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section (3) of 163-A of the Motor Vehicles Act. The Hon‘ble

Supreme Court in various judgments pointed out the Central
:S
Govt. about the said provision in the statute, however no

notification in this regard was ever issued by the Central Govt.
The Central Govt. (Ministry of Road Transport and Highways)
BY
has now issued notification on 22nd May, 2018, which is

mentioned above.
The reading of the contents of the above notification makes it
clear that the previous Second Schedule of the Act, has been
substituted by the New Schedule.
(1) The compensation payable if any u/s 163-A of the Motor
Vehicles Act in respect of any petition filed by the claimants
for the death of the victim, would be a fixed sum of Rs.
4
5,00,000/ which can‘t be reduced or enhanced in any

circumstances.
(2) The said amount of Rs. 5,00,000/ would include
pecuniary as well as non-pecuniary amount of compensation.
(3) The minimum compensation in case of permanent
disability sustained by the claimant shall not be less than
50000/ but can be enhanced upto the maximum limit of Rs.
5,00,000/.
)
(4) In case of minor injuries, the fixed amount of
V.
compensation shall be Rs. 25000/ which can‘t be reduced or
enhanced.
D
(5) The percentage of permanent disability if any shall be as
(A
per Schedule I of Employees Compensation Act 1923.
(6) The amount of aforesaid compensation shall be increased
by 5% p.a. w.e.f. 1st January 2019.
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(7) Simple injury cases which were previously filed by the
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claimants u/s 166 of the Motor Vehicles Act on the basis of

proof of negligence would not be there. As per previous law,
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the claimant was bound to prove negligence of the offending

vehicle and then only they were entitled to get the amount of
compensation ranging from 10000/ to 150000/. Now in case
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of minor injuries they can file petition u/s 163-A and they will
get Rs. 25000/ without proof of negligence.
:S
(8) Similarly the death cases relating to the death of child

wherein the amount of compensation was payable to the
extent of Rs. 3,75000/ u/s 166 of the Motor Vehicles Act i.e.
BY
after the proof of negligence would now be filed by the

claimants u/s 163-A of the Act as the parents will get a sum
of Rs. 5,00,000/ that too without the proof of negligence.
MAIN FEATURES OF THE NOTIFICATION
(1) The notification replaces the earlier Second Schedule
in relation to the grant of amount of compensation u/s 163-A
of the Motor Vehicles Act. The notification issued by the
Central Govt. include the payment of compensation to the
5
victims of accidents who have received minor injuries in the

accident. The said insertion of payment of compensation to
the victims of accidents who have sustained minor injuries is
in contravention of section 163-A of the Motor Vehicles Act
which is applicable only in case of death or permanent
disablement and not in case of minor injuries. Section 163-A
of the Act, reads as under:
163A. Special provisions as to payment of compensation
)
on structured formula basis.—
V.
(1) Notwithstanding anything contained in this Act or in any
other law for the time being in force or instrument having the
D
force of law, the owner of the motor vehicle or the authorised
insurer shall be liable to pay in the case of death or
(A
permanent disablement due to accident arising out of the
use of motor vehicle, compensation, as indicated in the
Second Schedule, to the legal heirs or the victim, as the case
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may be.
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Explanation.—For the purposes of this sub-section,

―permanent disability‖ shall have the same meaning and
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extent as in the Workmen‘s Compensation Act, 1923 (8 of

1923).
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(2) It is not made clear in the notification whether it will be

applicable retrospectively or prospectively. In case the
notification is to be effected prospectively then only those
:S
cases will be covered wherein the accident in question had

taken place after 22.5.2018 and in case the notification is
BY
applicable retrospectively then it will be applicable to all the

pending cases also.
The principles that have to be applied for interpretation of
statutory provisions of this nature are well-established. The
first of these is that statutory provisions creating substantive
rights or taking away substantive rights are ordinarily
prospective; they are retrospective only if by express words or
by necessary implication the legislature has made them
retrospective; and the retrospective operation will be limited
only to the extent to which it has been so made by express
6
words, or necessary implication. The second rule is that the

intention of the legislature has always to be gathered from the
words used by it, giving to the words their plain, normal,
grammatical meaning.
In view of the above since there is nothing in the notification
whether it will be retrospective or prospective, the same has to
be applied prospectively as the same relates to substantive
rights.
)
(3) Although the claimants who will sustain simple injuries in
V.
the accidents, will get the amount of compensation to the
extent of Rs. 25000/ however the claimants who sustained
D
grievous injuries but did not sustain permanent disability will
be excluded from the notification. They do not have any right
(A
to claim compensation for the grievous injuries, however they
can accept the amount of Rs. 250000/ treating their injuries
as minor.
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(4) The fixed amount of compensation in both injury as well as
AI
death cases are inclusive of non-pecuniary amount of
compensation and no separate amount for non-pecuniary
compensation has to be awarded by the Ld. Tribunals.
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(5) In case of death or injury the claimants will not be entitled

to claim the amount of medical treatment, pain and suffering
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etc.
:S
(6) The notification now remove the Table altogether which

was inclusive of multiplier, deduction of self-expenses, non-
pecuniary amount of compensation, notional income etc.
BY
7
MAIN FEATURES OF PRANAYA SETHI JUDGMENT

(CONSTITUTION BENCH JUDGMENT)
MULTIPLIER TO BE APPLIED AT THE TIME OF
ASSESSMENT OF COMPENSATION
S.NO. AGE OF THE VICTIM MULTIPLIER
1. 15-25 YEARS 18
2. 26-30 YEARS 17
)
V.
3 31-35 YEARS 16
4 36-40 YEARS 15
D
5 41-45 YEARS 14
(A
6 46-50 YEARS 13
7 51-55 YEARS 11
N
8 56-60 YEARS 9
9 61-65 YEARS 7
AI
10 66-70 YEARS 5
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DEDUCTIONS FOR SELF EXPENSES OF THE DECEASED
S.NO. STATUS DEPENDANTS DEDUCTIONS

.P
1. MARRIED 2-3 1/3RD

:S
2. MARRIED 4-6 1/4TH

3. MARRIED MOREN THAN 6 1/5TH
BY
4. BACHELOR 1/2
FUTURE PROSPECTS WHEN THE INCOME OF THE
DECEASED IS HAVING PERMANENT JOB
S.NO. AGE ADDITION
1. UPTO 40 YEARS 50%

2. 40-50 30%
3. 50-60 15%
8
FUTURE PROSPECTS WHEN THE DECEASED IS SELF

EMPLOYED OR ON A FIXED SALARY
S.NO. AGE ADDITION
1. UPTO 40 YEARS 40%

2. 40-50 YEARS 25%
3. 50-60 YEARS 10%
)
CONVENTIONAL HEADS
V.
S.NO. HEADS AMOUNT
D
1. LOSS OF ESTATE 15,000/
(A
2. LOSS OF CONSORTIUM 40,000/
3. FUNERAL EXPENSES 15,000/
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Note: The aforesaid amounts should be enhanced at the rate of
AI
10% in every three years.

.J
.P
:S
BY
9
IN THE SUPREME COURT OF INDIA

CIVIL APPELALTE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL) NO. 25590 OF 2014
National Insurance Company Limited …Petitioner(s)
Versus
)
Pranay Sethi and Ors. …Respondent(s)
V.
JUDGMENT
D
DIPAK MISRA, CJI.
(A
1. Perceiving cleavage of opinion between Reshma Kumari and
others v. Madan Mohan and another and Rajesh and others v.
Rajbir Singh and others , both three-Judge Bench decisions, a
N
two-Judge Bench of this Court in National Insurance
Company Limited v. Pushpa and others thought it appropriate
AI
to refer the matter to a larger Bench for an (2013 ) 9 SCC
65 (2013) 9 SCC 54 (2015) 9 SCC 166 authoritative
pronouncement, and that is how the matters have been placed
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before us.
2. In the course of deliberation we will be required to travel

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backwards covering a span of two decades and three years

and may be slightly more and thereafter focus on the axis of
:S
the controversy, that is, the decision in Sarla Verma and

others v. Delhi Transport Corporation and another wherein
the two- Judge Bench made a sanguine endeavour to simplify
BY
the determination of claims by specifying certain parameters.
3. Before we penetrate into the past, it is necessary to note

what has been stated in Reshma Kumari (supra) and Rajesh‘s
case. In Reshma Kumari the three-Judge Bench was
answering the reference made in Reshma Kumari and others
v. Madan Mohan and another. The reference judgment noted
divergence of opinion with regard to the computation
under Sections 163-A and 166 of the Motor Vehicles Act, 1988
(for brevity, ―the Act‖) and the methodology for computation of
future prospects. Dealing with determination of future
10
prospects, the Court referred to the decisions in Sarla Dixit v.

Balwant Yadav,(2009) 6 SCC 121 (2009) 13 SCC 422 (1996) 3
SCC 179 Abati Bezbaruah v. Dy. Director General, Geological
Survey of India and the principle stated by Lord Diplock in
Mallett v. McMonagle and further referring to the statement of
law in Wells v. Wells observed:-
―46. In the Indian context several other factors should be

taken into consideration including education of the
dependants and the nature of job. In the wake of changed
)
societal conditions and global scenario, future prospects may
V.
have to be taken into consideration not only having regard to
the status of the employee, his educational qualification; his
D
past performance but also other relevant factors, namely, the
higher salaries and perks which are being offered by the
(A
private companies these days. In fact while determining the
multiplicand this Court in Oriental Insurance Co. Ltd. v.
Jashuben held that even dearness allowance and perks with
N
regard thereto from which the family would have derived
monthly benefit, must be taken into consideration.
AI
47. One of the incidental issues which has also to be

taken into consideration is inflation. Is the practice of taking
.J
inflation into consideration wholly incorrect? Unfortunately,

unlike other developed countries in India there has been no
scientific study. It is expected that with the rising inflation the
.P
rate of interest would go up. In India it does not happen. It,

therefore, may be a relevant factor which may be taken into
:S
consideration for determining the actual ground reality. No

hard-and-fast rule, however, can be laid down therefor.
BY
48. A large number of English decisions have been

placed before us by Mr Nanda to contend that inflation may
not be taken into consideration at all. While the reasonings
adopted by the English courts and its decisions may not be of
much dispute, we cannot blindly follow the same ignoring
ground realities.
49. We have noticed the precedents operating in the field

as also the rival contentions raised before us by the learned
counsel for the parties with a view to show that law is required
to be laid down in clearer terms.‖
11
4. In the said case, the Court considered the common

questions that arose for consideration. They are:-
―(1) Whether the multiplier specified in the Second

Schedule appended to the Act should be scrupulously applied
in all the cases?
(2) Whether for determination of the multiplicand, the

Act provides for any criterion, particularly as regards
determination of future prospects?‖
)
V.
5. Analyzing further the rationale in determining the laws
under Sections 163-A and 166, the Court had stated thus:-
D
―58. We are not unmindful of the Statement of Objects
and Reasons to Act 54 of 1994 for introducing Section 163-A
(A
so as to provide for a new predetermined formula for payment
of compensation to road accident victims on the basis of
age/income, which is more liberal and rational. That may be
N
so, but it defies logic as to why in a similar situation, the
injured claimant or his heirs/legal representatives, in the case
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of death, on proof of negligence on the part of the driver of a

motor vehicle would get a lesser amount than the one
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specified in the Second Schedule. The courts, in our opinion,

should also bear that factor in mind.‖
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6. Noticing the divergence of opinion and absence of any

clarification from Parliament despite the recommendations by
:S
this Court, it was thought appropriate that the controversy

should be decided by the larger Bench and accordingly it
directed to place the matter before Hon‘ble the Chief Justice of
India for appropriate orders for constituting a larger Bench.
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7. The three-Judge Bench answering the reference referred to

the Scheme under Sections 163-A and 166 of the Act and took
note of the view expressed by this Court in U.P. State Road
Transport Corporation and others v. Trilok Chandra and
others, wherein the Court had stated:-
―17. The situation has now undergone a change with the

enactment of the Motor Vehicles Act, 1988, as amended
by Amendment Act 54 of 1994. The most important change
12
introduced by the amendment insofar as it relates to

determination of compensation is the insertion of Sections
163-A and 163-B in Chapter XI entitled ‗Insurance of motor
vehicles against third-party risks‘. Section 163-A begins with
a non obstante clause and provides for payment of
compensation, as indicated in the Second Schedule, to the
legal representatives of the deceased or injured, as the case
may be. Now if we turn to the Second Schedule, we find a
Table fixing the mode of calculation of compensation for third-
party accident injury claims arising out of fatal (1996) 4 SCC
)
362 accidents. The first column gives the age group of the
V.
victims of accident, the second column indicates the multiplier
and the subsequent horizontal figures indicate the quantum
D
of compensation in thousand payable to the heirs of the
deceased victim. According to this Table the multiplier varies
(A
from 5 to 18 depending on the age group to which the victim
belonged. Thus, under this Schedule the maximum multiplier
can be up to 18 and not 16 as was held in Susamma Thomas
N
case.
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18. We must at once point out that the calculation of
compensation and the amount worked out in the Schedule
suffer from several defects. For example, in Item 1 for a victim
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aged 15 years, the multiplier is shown to be 15 years and the

multiplicand is shown to be Rs 3000. The total should be
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3000 × 15 = 45,000 but the same is worked out at Rs 60,000.

Similarly, in the second item the multiplier is 16 and the
annual income is Rs 9000; the total should have been Rs
:S
1,44,000 but is shown to be Rs 1,71,000. To put it briefly, the

Table abounds in such mistakes. Neither the tribunals nor the
courts can go by the ready reckoner. It can only be used as a
BY
guide. Besides, the selection of multiplier cannot in all cases

be solely dependent on the age of the deceased. For example,
if the deceased, a bachelor, dies at the age of 45 and his
dependants are his parents, age of the parents would also be
relevant in the choice of the multiplier. But these mistakes are
limited to actual calculations only and not in respect of other
items. What we propose to emphasise is that the multiplier
cannot exceed 18 years‘ purchase factor. This is the
improvement over the earlier position that ordinarily it should
not exceed 16. We thought it necessary to state the correct
legal position as courts and tribunals are using higher
13
multiplier as in the present case where the Tribunal used the

multiplier of 24 which the High Court raised to 34, thereby
showing lack of (1994) 2 SCC 176 awareness of the
background of the multiplier system in Davies case.‖
[Underlining is ours]
8. The Court also referred to Supe Dei v. National Insurance

Company Limited wherein it has been opined that the position
is well settled that the Second Schedule under Section 163-
A to the Act which gives the amount of compensation to be
)
determined for the purpose of claim under the section can be
V.
taken as a guideline while determining the compensation
under Section 166 of the Act.
D
9. After so observing, the Court also noted the authorities
(A
in United India Insurance Co. Ltd v. Patricia Jean
Mahajan, Deepal Girishbhai Soni v. United India Insurance
Co. Ltd., and Jashuben (supra). It is perceivable from the
pronouncement by the three-Judge Bench that it has referred
N
to Sarla Verma and observed that the said decision reiterated
AI
what had been stated in earlier decisions that the principles
relating to determination of liability and quantum of
compensation were different for claims made under Section
.J
163-A and claims made under Section 166. It was further

observed that Section 163-A and the Second Schedule in
terms did not apply to determination of (2009)4 SCC
.P
513 (2002) 6 SCC 281 (2004) 5 SCC 385 compensation in

applications under Section 166. In Sarla Verma (supra), as
:S
has been noticed further in Reshma Kumari (supra), the Court

found discrepancies/errors in the multiplier scale given in the
Second Schedule Table and also observed that application of
BY
Table may result in incongruities.
10. The three-Judge Bench further apprised itself that in

Sarla Verma (supra) the Court had undertaken the exercise of
comparing the multiplier indicated in Susamma Thomas
(supra), Trilok Chandra (supra), and New India Assurance Co.
Ltd v. Charlie and another for claims under Section 166 of the
Act with the multiplier mentioned in the Second Schedule for
claims under Section 163-A and compared the formula and
held that the multiplier shall be used in a given case in the
following manner:-
14
―42. We therefore hold that the multiplier to be used

should be as mentioned in Column (4) of the Table above
(prepared by applying Susamma Thomas, Trilok Chandra and
Charlie), which starts with an operative multiplier of 18 (for
the age groups of 15 to 20 and 21 to 25 years); reduced by one
unit for every five years, that is, M-17 for 26 to 30 years, M-
16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to
45 years, and M-13 for 46 to 50 years, then reduced by two
units for every five years, that is, M-11 for 51 to 55 years, M-9
for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70
)
years.‖ (2005) 10 SCC 720
V.
11. After elaborately analyzing what has been stated in Sarla
D
Verma (supra), the three-Judge Bench referred to the
language employed in Section 168 of the Act which uses the
(A
expression ―just‖. Elucidating the said term, the Court held
that it conveys that the amount so determined is fair,
reasonable and equitable by accepted legal standard and not
N
on forensic lottery. The Court observed ―just compensation‖
does not mean ―perfect‖ or ―absolute compensation‖ and the
AI
concept of just compensation principle requires examination
of the particular situation obtaining uniquely in an individual
case. In that context, it referred to Taff Vale Railway Co. v.
.J
Jenkins and held:-
―36. In Sarla Verma, this Court has endeavoured to

.P
simplify the otherwise complex exercise of assessment of loss

of dependency and determination of compensation in a claim
:S
made under Section 166. It has been rightly stated in Sarla

Verma that the claimants in case of death claim for the
purposes of compensation must establish (a) age of the
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deceased; (b) income of the deceased; and (c) the number of

dependants. To arrive at the loss of dependency, the Tribunal
must consider (i) additions/deductions to be made for arriving
at the income; (ii) the deductions to be made towards the
personal living expenses of the deceased; and (iii) the
multiplier to be applied with reference to the age of the
deceased. We do not think it is necessary for us to revisit the
law on the point as we are in full agreement with the view in
Sarla Verma.‖ [Emphasis is added] 1913 AC 1: (1911-13) All
ER Rep 160 (HL)
15
12. And further:-
―It is high time that we move to a standard method of

selection of multiplier, income for future prospects and
deduction for personal and living expenses. The courts in
some of the overseas jurisdictions have made this advance. It
is for these reasons, we think we must approve the Table in
Sarla Verma for the selection of multiplier in claim
applications made under Section 166 in the cases of death.
We do accordingly. If for the selection of multiplier, Column (4)
)
of the Table in Sarla Verma is followed, there is no likelihood
V.
of the claimants who have chosen to apply under Section
166 being awarded lesser amount on proof of negligence on
D
the part of the driver of the motor vehicle than those who
prefer to apply under Section 163-A. As regards the cases
(A
where the age of the victim happens to be up to 15 years, we
are of the considered opinion that in such cases irrespective
of Section 163-A or Section 166 under which the claim for
N
compensation has been made, multiplier of 15 and the
assessment as indicated in the Second Schedule subject to
AI
correction as pointed out in Column (6) of the Table in Sarla
Verma should be followed. This is to ensure that the claimants
in such cases are not awarded lesser amount when the
.J
application is made under Section 166 of the 1988 Act. In all

other cases of death where the application has been made
.P
under Section 166, the multiplier as indicated in Column (4)

of the Table in Sarla Verma should be followed.‖ This is how
the first question the Court had posed stood answered.
:S
13. With regard to the addition of income for future prospects,

this Court in Reshma Kumari (supra) adverted to Para 24 of
BY
the Sarla Verma‘s case and held:-
―39. The standardisation of addition to income for future

prospects shall help in achieving certainty in arriving at
appropriate compensation. We approve the method that an
addition of 50% of actual salary be made to the actual salary
income of the deceased towards future prospects where the
deceased had a permanent job and was below 40 years and
the addition should be only 30% if the age of the deceased was
40 to 50 years and no addition should be made where the age
of the deceased is more than 50 years. Where the annual
16
income is in the taxable range, the actual salary shall mean

actual salary less tax. In the cases where the deceased was
self-employed or was on a fixed salary without provision for
annual increments, the actual income at the time of death
without any addition to income for future prospects will be
appropriate. A departure from the above principle can only be
justified in extraordinary circumstances and very exceptional
cases.‖ The aforesaid analysis vividly exposits that
standardization of addition to income for future prospects is
helpful in achieving certainty in arriving at appropriate
)
compensation. Thus, the larger Bench has concurred with the
V.
view expressed by Sarla Verma (supra) as per the
determination of future income.
D
14. It is interesting to note here that while the reference was
(A
pending, the judgment in Santosh Devi v. National
Insurance Company Limited and others18 was delivered by a
two-Judge Bench which commented on the principle stated in
N
Sarla Verma. It said:-
AI
―14. We find it extremely difficult to fathom any rationale
for the observation made in para 24 of the judgment in Sarla
Verma case that where the deceased was self-employed or was
.J
on a fixed salary without provision for annual increment, etc.

the courts will usually take only the actual income at the time
of death and a departure from this rule should be made only
.P
in rare and exceptional cases involving special circumstances.

In our view, it will be naïve to say that the wages or total
:S
emoluments/income of a person who is self- employed or who

is employed on a fixed salary without provision for annual
increment, etc. would remain the same throughout his life.
BY
15. The rise in the cost of living affects everyone across the
board. It does not make any distinction between rich and
poor. As a matter of fact, the effect of rise in prices which
directly impacts the cost of living is minimal on the rich and
maximum on those who are self-employed or who get fixed
income/emoluments. They are the worst affected people.
Therefore, they put in extra efforts to generate additional
income necessary for sustaining their families.
17
16. The salaries of those employed under the Central and

State Governments and their agencies/instrumentalities have
been revised from time to time to provide a cushion against
the rising prices and provisions have been made for providing
security to the families of the deceased employees. The
salaries of those employed in private sectors have also
increased manifold. Till about two decades ago, nobody could
have imagined that (2012) 6 SCC 421salary of Class IV
employee of the Government would be in five figures and total
emoluments of those in higher echelons of service will cross
)
the figure of rupees one lakh.
V.
17. Although the wages/income of those employed in
D
unorganised sectors has not registered a corresponding
increase and has not kept pace with the increase in the
(A
salaries of the government employees and those employed in
private sectors, but it cannot be denied that there has been
incremental enhancement in the income of those who are self-
N
employed and even those engaged on daily basis, monthly
basis or even seasonal basis. We can take judicial notice of the
AI
fact that with a view to meet the challenges posed by high cost
of living, the persons falling in the latter category periodically
increase the cost of their labour. In this context, it may be
.J
useful to give an example of a tailor who earns his livelihood

by stitching clothes. If the cost of living increases and the
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prices of essentials go up, it is but natural for him to increase

the cost of his labour. So will be the cases of ordinary skilled
and unskilled labour like barber, blacksmith, cobbler, mason,
:S
etc.
18. Therefore, we do not think that while making the

BY
observations in the last three lines of para 24 of Sarla Verma

judgment, the Court had intended to lay down an absolute
rule that there will be no addition in the income of a person
who is self- employed or who is paid fixed wages. Rather, it
would be reasonable to say that a person who is self-employed
or is engaged on fixed wages will also get 30% increase in his
total income over a period of time and if he/she becomes
victim of an accident then the same formula deserves to be
applied for calculating the amount of compensation.‖
18
15. The aforesaid analysis in Santosh Devi (supra) may

prima facie show that the two-Judge Bench has distinguished
the observation made in Sarla Verma‘s case but on a studied
scrutiny, it becomes clear that it has really expressed a
different view than what has been laid down in Sarla Verma
(supra). If we permit ourselves to say so, the different view has
been expressed in a distinctive tone, for the two-Judge Bench
had stated that it was extremely difficult to fathom any
rationale for the observations made in para 24 of the
judgment in Sarla Verma‘s case in respect of self-employed or
)
a person on fixed salary without provision for annual
V.
increment, etc. This is a clear disagreement with the earlier
view, and we have no hesitation in saying that it is absolutely
D
impermissible keeping in view the concept of binding
precedents.
(A
16. Presently, we may refer to certain decisions which
deal with the concept of binding precedent.
N
17. In State of Bihar v. Kalika Kuer alias Kalika Singh
AI
and others, it has been held:-
―10. … an earlier decision may seem to be incorrect to a

.J
Bench of a coordinate jurisdiction considering the question

later, on the ground that a possible aspect of the matter was
not considered or not raised before the court or more aspects
.P
should have been gone into by the court deciding the matter
earlier but it would not be a reason to say that the (2003) 5
:S
SCC 448 decision was rendered per incuriam and liable to be

ignored. The earlier judgment may seem to be not correct yet
it will have the binding effect on the later Bench of coordinate
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jurisdiction. …‖ The Court has further ruled:-
―10. … Easy course of saying that earlier decision was

rendered per incuriam is not permissible and the matter will
have to be resolved only in two ways — either to follow the
earlier decision or refer the matter to a larger Bench to
examine the issue, in case it is felt that earlier decision is not
correct on merits.‖
18. In G.L. Batra v. State of Haryana and others, the

Court has accepted the said principle on the basis of
19
judgments of this Court rendered in Union of India v. Godfrey

Philips India Ltd. , Sundarjas Kanyalal Bhatija v. Collector,
Thane, Maharashtra and Tribhovandas Purshottamdas
Thakkar v. Ratilal Motilal Patel. It may be noted here that the
Constitution Bench in Madras Bar Association v. Union of
India and another has clearly stated that the prior
Constitution Bench judgment in Union of India v. Madras Bar
Association is a binding precedent. Be it clarified, the
issues (2014) 13 SCC 759 (1985) 4 SCC 369 (1989) 3 SCC
396 AIR 1968 SC 372 (2015) 8 SCC 583 (2010) 11 SCC 1 that
)
were put to rest in the earlier Constitution Bench judgment
V.
were treated as precedents by latter Constitution Bench.
D
19. In this regard, we may refer to a passage from Jaisri Sahu
v. Rajdewan Dubey:-
(A
―11. Law will be bereft of all its utility if it should be
thrown into a state of uncertainty by reason of conflicting
decisions, and it is therefore desirable that in case of
N
difference of opinion, the question should be authoritatively
AI
settled. It sometimes happens that an earlier decision given by
a Bench is not brought to the notice of a Bench hearing the
same question, and a contrary decision is given without
.J
reference to the earlier decision. The question has also been

discussed as to the correct procedure to be followed when two
such conflicting decisions are placed before a later Bench. The
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practice in the Patna High Court appears to be that in those

cases, the earlier decision is followed and not the later. In
:S
England the practice is, as noticed in the judgment in

Seshamma v. Venkata Narasimharao that the decision of a
court of appeal is considered as a general rule to be binding
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on it. There are exceptions to it, and one of them is thus

stated in Halsbury‘s Laws of England, 3rd Edn., Vol. 22, para
1687, pp. 799-800:
―The court is not bound to follow a decision of its own if

given per incuriam. A decision is given per incuriam when the
court has acted in ignorance of a previous decision of its own
or of a Court of a co-ordinate jurisdiction which covered the
case before it, or when it has acted in ignorance of a decision
of the House of Lords.
20
In the former case it must decide which decision to

follow, and in the latter it is bound by the decision of the
House of Lords.‖ AIR 1962 SC 83 In Virayya v. Venkata
Subbayya it has been held by the Andhra High Court that
under the circumstances aforesaid the Bench is free to adopt
that view which is in accordance with justice and legal
principles after taking into consideration the views expressed
in the two conflicting Benches, vide also the decision of the
Nagpur High Court in Bilimoria v. Central Bank of India. The
better course would be for the Bench hearing the case to refer
)
the matter to a Full Bench in view of the conflicting
V.
authorities without taking upon itself to decide whether it
should follow the one Bench decision or the other. We have no
D
doubt that when such situations arise, the Bench hearing
cases would refer the matter for the decision of a Full Court.‖
(A
20. Though the aforesaid was articulated in the context of the
High Court, yet this Court has been following the same as is
N
revealed from the afore stated pronouncements including that
of the Constitution Bench and, therefore, we entirely agree
AI
with the said view because it is the precise warrant of
respecting a precedent which is the fundamental norm of
judicial discipline.
.J
21. In the context, we may fruitfully note what has been

stated in Pradip Chandra Parija and others v. Pramod
.P
Chandra Patnaik and others. In the said case, the

Constitution Bench was dealing with a situation where the
:S
two-Judge Bench disagreeing with the three-Judge Bench

decision directed the(2002) 1 SCC 1 matter to be placed before
a larger Bench of five Judges of this Court. In that scenario,
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the Constitution Bench stated:-
―6. … In our view, judicial discipline and propriety

demands that a Bench of two learned Judges should follow a
decision of a Bench of three learned Judges. But if a Bench of
two learned Judges concludes that an earlier judgment of
three learned Judges is so very incorrect that in no
circumstances can it be followed, the proper course for it to
adopt is to refer the matter before it to a Bench of three
learned Judges setting out, as has been done here, the
reasons why it could not agree with the earlier judgment. …‖
21
22. In Chandra Prakash and others v. State of U.P. & another,

another Constitution Bench dealing with the concept of
precedents stated thus:-
―22. … The doctrine of binding precedent is of utmost

importance in the administration of our judicial system. It
promotes certainty and consistency in judicial decisions.
Judicial consistency promotes confidence in the system,
therefore, there is this need for consistency in the enunciation
of legal principles in the decisions of this Court. It is in the
)
above context, this Court in the case of Raghubir Singh held
V.
that a pronouncement of law by a Division Bench of this Court
is binding on a Division Bench of the same or smaller number
D
of Judges. …‖
(A
23. Be it noted, Chandra Prakash concurred with the view
expressed in Raghubir Singh and Pradip Chandra Parija.
24. In Sandhya Educational Society and another v. Union of

N
India and others, it has been observed that judicial decorum
and discipline is paramount and, therefore, a coordinate
AI
Bench has to respect the judgments and orders passed by

another coordinate Bench. In Rattiram and others v. State of
.J
Madhya Pradesh, the Court dwelt upon the issue what would
be the consequent effect of the latter decision which had been
rendered without noticing the earlier decisions. The Court
.P
noted the observations in Raghubir Singh (supra) and

reproduced a passage from Indian Oil Corporation Ltd. v.
:S
Municipal Corporation which is to the following effect:-
―8. … The Division Bench of the High Court in Municipal

BY
Corpn., Indore v. Ratnaprabha Dhanda was clearly in error in

taking the view that the decision of this Court in Ratnaprabha
was not binding on it. In doing so, the Division Bench of the
High Court did something which even a later co- equal Bench
of this Court did not and could not do. …‖
25. It also stated what has been expressed in Raghubir Singh

(supra) by R.S. Pathak, C.J. It is as follows:-
―28. We are of opinion that a pronouncement of law by a

Division Bench of this Court is binding on a Division Bench of
22
the same or a smaller number of Judges, and in order that

such decision be binding, (2014) 7 SCC 701 (2012) 4 SCC
516 (1995) 4 SCC 96 it is not necessary that it should be a
decision rendered by the Full Court or a Constitution Bench of
the Court. …‖
26. In Rajesh (supra) the three-Judge Bench had delivered the

judgment on 12.04.2013. The purpose of stating the date is
that it has been delivered after the pronouncement made in
Reshma Kumari‘s case. On a perusal of the decision in Rajesh
)
(supra), we find that an attempt has been made to explain
V.
what the two- Judge Bench had stated in Santosh Devi
(supra). The relevant passages read as follows:-
D
―8. Since, the Court in Santosh Devi case actually
(A
intended to follow the principle in the case of salaried persons
as laid down in Sarla Verma case and to make it applicable
also to the self-employed and persons on fixed wages, it is
clarified that the increase in the case of those groups is not
N
30% always; it will also have a reference to the age. In other
AI
words, in the case of self-employed or persons with fixed
wages, in case, the deceased victim was below 40 years, there
must be an addition of 50% to the actual income of the
.J
deceased while computing future prospects. Needless to say

that the actual income should be income after paying the tax,
if any. Addition should be 30% in case the deceased was in
.P
the age group of 40 to 50 years.

:S
9. In Sarla Verma case, it has been stated that in the

case of those above 50 years, there shall be no addition.
Having regard to the fact that in the case of those self-
BY
employed or on fixed wages, where there is normally no age of

superannuation, we are of the view that it will only be just and
equitable to provide an addition of 15% in the case where the
victim is between the age group of 50 to 60 years so as to
make the compensation just, equitable, fair and reasonable.
There shall normally be no addition thereafter.‖
27. At this juncture, it is necessitous to advert to another

three- Judge Bench decision in Munna Lal Jain and another
v. Vipin Kumar Sharma and others. In the said case, the
23
three-Judge Bench commenting on the judgments stated

thus:-
―2. In the absence of any statutory and a straitjacket

formula, there are bound to be grey areas despite several
attempts made by this Court to lay down the guidelines.
Compensation would basically depend on the evidence
available in a case and the formulas shown by the courts are
only guidelines for the computation of the compensation. That
precisely is the reason the courts lodge a caveat stating
)
―ordinarily‖, ―normally‖, ―exceptional circumstances‖, etc.,
V.
while suggesting the formula.‖
D
28. After so stating, the Court followed the principle stated in
Rajesh. We think it appropriate to reproduce what has been
(A
stated by the three-Judge Bench:-
―10. As far as future prospects are concerned, in Rajesh

v. Rajbir Singh, a three-Judge Bench of this Court held that in
N
case of self-employed persons also, if the deceased victim is
below 40 years, there must be addition of 50% to the actual
AI
income of the deceased while computing future prospects.‖

.J
29. We are compelled to state here that in Munna Lal Jain

(supra), the three-Judge Bench should have been guided by
the (2015) 6 SCC 347 principle stated in Reshma Kumari
.P
which has concurred with the view expressed in Sarla Devi or

in case of disagreement, it should have been well advised to
:S
refer the case to a larger Bench. We say so, as we have already

expressed the opinion that the dicta laid down in Reshma
Kumari being earlier in point of time would be a binding
BY
precedent and not the decision in Rajesh.
30. In this context, we may also refer to Sundeep Kumar

Bafna v. State of Maharashtra and another which correctly
lays down the principle that discipline demanded by a
precedent or the disqualification or diminution of a decision
on the application of the per incuriam rule is of great
importance, since without it, certainty of law, consistency of
rulings and comity of courts would become a costly casualty.
A decision or judgment can be per incuriam any provision in a
statute, rule or regulation, which was not brought to the
24
notice of the court. A decision or judgment can also be per

incuriam if it is not possible to reconcile its ratio with that of a
previously pronounced judgment of a co- equal or larger
Bench. There can be no scintilla of doubt that an earlier
decision of co-equal Bench binds the Bench of same strength.
Though the judgment in Rajesh‘s case was delivered on a later
date, it had not apprised itself of the law stated in (2014) 16
SCC 623 Reshma Kumari (supra) but had been guided by
Santosh Devi (supra). We have no hesitation that it is not a
binding precedent on the co-equal Bench.
)
V.
31. At this stage, a detailed analysis of Sarla Verma (supra) is
necessary. In the said case, the Court recapitulated the
D
relevant principles relating to assessment of compensation in
case of death and also took note of the fact that there had
(A
been considerable variation and inconsistency in the decision
for Courts and Tribunals on account of adopting the method
stated in Nance v. British Columbia Electric Railway Co. Ltd.
N
and the method in Davies v. Powell Duffryn Associated
Collieries Ltd.. It also analysed the difference between the
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considerations of the two different methods by this Court in
Susamma Thomas (supra) wherein preference was given to
Davies method to the Nance method. Various paragraphs from
.J
Susamma Thomas (supra) and Trilok Chandra (supra) have

been reproduced and thereafter it has been observed that lack
.P
of uniformity and consistency in awarding the compensation

has been a matter of grave concern. It has stated that when
different tribunals 1951 SC 601 : (1951) 2 All ER 448
:S
(PC) 1942 AC 601 : (1942) 1 All ER 657 (HL) calculate

compensation differently on the same facts, the claimant, the
litigant and the common man are bound to be confused,
BY
perplexed and bewildered. It adverted to the observations

made in Trilok Chandra (supra) which are to the following
effect:-
―15. We thought it necessary to reiterate the method of

working out ‗just‘ compensation because, of late, we have
noticed from the awards made by tribunals and courts that
the principle on which the multiplier method was developed
has been lost sight of and once again a hybrid method based
on the subjectivity of the Tribunal/court has surfaced,
introducing uncertainty and lack of reasonable uniformity in
25
the matter of determination of compensation. It must be

realised that the Tribunal/court has to determine a fair
amount of compensation awardable to the victim of an
accident which must be proportionate to the injury caused…‖
32. While adverting to the addition of income for future

prospects, it stated thus:-
―24. In Susamma Thomas this Court increased the

income by nearly 100%, in Sarla Dixit the income was
)
increased only by 50% and in Abati Bezbaruah the income
V.
was increased by a mere 7%. In view of the imponderables and
uncertainties, we are in favour of adopting as a rule of thumb,
D
an addition of 50% of actual salary to the actual salary income
of the deceased towards future prospects, where the deceased
(A
had a permanent job and was below 40 years. (Where the
annual income is in the taxable range, the words ―actual
salary‖ should be read as ―actual salary less tax‖). The
addition should be only 30% if the age of the deceased was 40
N
to 50 years. There should be no addition, where the age of the
AI
deceased is more than 50 years. Though the evidence may
indicate a different percentage of increase, it is necessary to
standardise the addition to avoid different yardsticks being
.J
applied or different methods of calculation being adopted.

Where the deceased was self-employed or was on a fixed
salary (without provision for annual increments, etc.), the
.P
courts will usually take only the actual income at the time of
death. A departure therefrom should be made only in rare and
:S
exceptional cases involving special circumstances.‖
33. Though we have devoted some space in analyzing the

BY
precedential value of the judgments that is not the thrust of

the controversy. We are required to keenly dwell upon the
heart of the issue that emerges for consideration. The seminal
controversy before us relates to the issue where the deceased
was self-employed or was a person on fixed salary without
provision for annual increment, etc., what should be the
addition as regards the future prospects. In Sarla Verma, the
Court has made it as a rule that 50% of actual salary could be
added if the deceased had a permanent job and if the age of
the deceased is between 40 – 50 years and no addition to be
made if the deceased was more than 50 years. It is further
26
ruled that where deceased was self-employed or had a fixed

salary (without provision for annual increment, etc.) the
Courts will usually take only the actual income at the time of
death and the departure is permissible only in rare and
exceptional cases involving special circumstances.
34. First, we shall deal with the reasoning of straitjacket

demarcation between the permanent employed persons within
the taxable range and the other category where deceased was
self-employed or employed on fixed salary sans annual
)
increments, etc.
V.
35. The submission, as has been advanced on behalf of the
D
insurers, is that the distinction between the stable jobs at one
end of the spectrum and self-employed at the other end of the
(A
spectrum with the benefit of future prospects being extended
to the legal representatives of the deceased having a
permanent job is not difficult to visualize, for a comparison
between the two categories is a necessary ground reality. It is
N
contended that guaranteed/ definite income every month has
AI
to be treated with a different parameter than the person who
is self-employed inasmuch as the income does not remain
constant and is likely to oscillate from time to time. Emphasis
.J
has been laid on the date of expected superannuation and

certainty in permanent job in contradistinction to the
uncertainty on the part of a self- employed person.
.P
Additionally, it is contended that the permanent jobs are

generally stable and for an assessment the entity or the
:S
establishment where the deceased worked is identifiable since

they do not suffer from the inconsistencies and vagaries of
self-employed persons. It is canvassed that it may not be
BY
possible to introduce an element of standardization as

submitted by the claimants because there are many a
category in which a person can be self-employed and it is
extremely difficult to assimilate entire range of self-employed
categories or professionals in one compartment. It is also
asserted that in certain professions addition of future
prospects to the income as a part of multiplicand would be
totally an unacceptable concept. Examples are cited in respect
of categories of professionals who are surgeons, sports
persons, masons and carpenters, etc. It is also highlighted
that the range of self-employed persons can include unskilled
27
labourer to a skilled person and hence, they cannot be put in

a holistic whole. That apart, it is propounded that experience
of certain professionals brings in disparity in income and,
therefore, the view expressed in Sarla Verma (supra) that has
been concurred with Reshma Kumari (supra) should not be
disturbed.
36. Quite apart from the above, it is contended that the

principle of standardization that has been evolved in Sarla
Verma (supra) has been criticized on the ground that it grants
)
compensation without any nexus to the actual loss. It is also
V.
urged that even if it is conceded that the said view is correct,
extension of the said principle to some of the self-employed
D
persons will be absolutely unjustified and untenable. Learned
counsel for the insurers further contended that the view
(A
expressed in Rajesh (supra) being not a precedent has to be
overruled and the methodology stood in Sarla Verma (supra)
should be accepted.
N
37. On behalf of the claimants, emphasis is laid on the
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concept of ―just compensation‖ and what should be included
within the ambit of ―just compensation‖. Learned counsel have
emphasized on Davies method and urged that the grant of
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pecuniary advantage is bound to be included in the future

pecuniary benefit. It has also been put forth that in right to
receive just compensation under the statute, when the method
.P
of standardization has been conceived and applied, there

cannot be any discrimination between the person salaried or
:S
self-employed. It is highlighted that if evidence is not required

to be adduced in one category of cases, there is no necessity to
compel the other category to adduce evidence to establish the
BY
foundation for addition of future prospects.
38. Stress is laid on reasonable expectation of pecuniary

benefits relying on the decisions in Tafe Vale Railway Co.
(supra) and the judgment of Singapore High Court in
Nirumalan V Kanapathi Pillay v. Teo Eng Chuan. Lastly, it is
urged that the standardization formula for awarding future
income should be applied to self-employed persons and that
would be a justifiable measure for computation of loss of
dependency.
28
39. Before we proceed to analyse the principle for addition of

future prospects, we think it seemly to clear the maze which is
vividly reflectible from Sarla Verma, Reshma Kumari, Rajesh
and Munna Lal Jain. Three aspects need to be clarified. The
first one pertains to deduction towards personal and living
expenses. In paragraphs 30, 31 and 32, Sarla Verma lays
down:-
―30. Though in some cases the deduction to be made

towards personal and living expenses is calculated on the
)
basis of units indicated in Trilok Chandra, the general
V.
practice is to apply standardised deductions. Having
considered several subsequent decisions of this(2003) 3 SLR
D
(R) 601 Court, we are of the view that where the deceased was
married, the deduction towards personal and living expenses
(A
of the deceased, should be one-third (1/3rd) where the
number of dependent family members is 2 to 3, one-fourth
(1/4th) where the number of dependent family members is 4
N
to 6, and one-fifth (1/5th) where the number of dependent
family members exceeds six.
AI
31. Where the deceased was a bachelor and the

claimants are the parents, the deduction follows a different
.J
principle. In regard to bachelors, normally, 50% is deducted

as personal and living expenses, because it is assumed that a
bachelor would tend to spend more on himself. Even
.P
otherwise, there is also the possibility of his getting married in

a short time, in which event the contribution to the parent(s)
:S
and siblings is likely to be cut drastically. Further, subject to

evidence to the contrary, the father is likely to have his own
income and will not be considered as a dependant and the
BY
mother alone will be considered as a dependant. In the

absence of evidence to the contrary, brothers and sisters will
not be considered as dependants, because they will either be
independent and earning, or married, or be dependent on the
father.
32. Thus even if the deceased is survived by parents and

siblings, only the mother would be considered to be a
dependant, and 50% would be treated as the personal and
living expenses of the bachelor and 50% as the contribution to
the family. However, where the family of the bachelor is large
29
and dependent on the income of the deceased, as in a case

where he has a widowed mother and large number of younger
non- earning sisters or brothers, his personal and living
expenses may be restricted to one-third and contribution to
the family will be taken as two-third.‖
40. In Reshma Kumari, the three-Judge Bench agreed with

the multiplier determined in Sarla Verma and eventually held
that the advantage of the Table prepared in Sarla Verma is
that uniformity and consistency in selection of multiplier can
)
be achieved. It has observed:-
V.
―35. … The assessment of extent of dependency depends
D
on examination of the unique situation of the individual case.
Valuing the dependency or the multiplicand is to some extent
(A
an arithmetical exercise. The multiplicand is normally based
on the net annual value of the dependency on the date of the
deceased‘s death. Once the net annual loss (multiplicand) is
assessed, taking into account the age of the deceased, such
N
amount is to be multiplied by a ―multiplier‖ to arrive at the
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loss of dependency.‖
41. In Reshma Kumari, the three-Judge Bench, reproduced

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paragraphs 30, 31 and 32 of Sarla Verma and approved the

same by stating thus:-
.P
―41. The above does provide guidance for the appropriate

deduction for personal and living expenses. One must bear in
:S
mind that the proportion of a man‘s net earnings that he

saves or spends exclusively for the maintenance of others does
not form part of his living expenses but what he spends
BY
exclusively on himself does. The percentage of deduction on

account of personal and living expenses may vary with
reference to the number of dependent members in the family
and the personal living expenses of the deceased need not
exactly correspond to the number of dependants.
42. In our view, the standards fixed by this Court in Sarla

Verma on the aspect of deduction for personal living expenses
in paras 30, 31 and 32 must ordinarily be followed unless a
case for departure in the circumstances noted in the
preceding paragraph is made out.‖
30
42. The conclusions that have been summed up in

Reshma Kumari are as follows:-
―43.1. In the applications for compensation made

under Section 166 of the 1988 Act in death cases where the
age of the deceased is 15 years and above, the Claims
Tribunals shall select the multiplier as indicated in Column
(4) of the Table prepared in Sarla Verma read with para 42 of
that judgment.
)
43.2. In cases where the age of the deceased is up to 15
V.
years, irrespective of Section 166or Section 163-A under
which the claim for compensation has been made, multiplier
D
of 15 and the assessment as indicated in the Second Schedule
subject to correction as pointed out in Column (6) of the Table
(A
in Sarla Verma should be followed.
43.3. As a result of the above, while considering the

claim applications made under Section 166 in death cases
N
where the age of the deceased is above 15 years, there is no
necessity for the Claims Tribunals to seek guidance or for
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placing reliance on the Second Schedule in the 1988 Act.

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43.4. The Claims Tribunals shall follow the steps and

guidelines stated in para 19 of Sarla Verma for determination
of compensation in cases of death.
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43.5. While making addition to income for future

:S
prospects, the Tribunals shall follow para 24 of the judgment

in Sarla Verma.
43.6. Insofar as deduction for personal and living

BY
expenses is concerned, it is directed that the Tribunals shall

ordinarily follow the standards prescribed in paras 30, 31 and
32 of the judgment in Sarla Verma subject to the observations
made by us in para 41 above.‖
43. On a perusal of the analysis made in Sarla Verma which

has been reconsidered in Reshma Kumari, we think it
appropriate to state that as far as the guidance provided for
appropriate deduction for personal and living expenses is
concerned, the tribunals and courts should be guided by
31
conclusion 43.6 of Reshma Kumari. We concur with the same

as we have no hesitation in approving the method provided
therein.
44. As far as the multiplier is concerned, the claims tribunal

and the Courts shall be guided by Step 2 that finds place in
paragraph 19 of Sarla Verma read with paragraph 42 of the
said judgment. For the sake of completeness, paragraph 42 is
extracted below:-
)
“42. We therefore hold that the multiplier to be used
V.
should be as mentioned in Column (4) of the table above
(prepared by applying Susamma Thomas, Trilok Chandra
D
and Charlie), which starts with an operative multiplier of
18 (for the age groups of 15 to 20 and 21 to 25 years),
(A
reduced by one unit for every five years, that is M-17 for
26 to 30 years, M- 16 for 31 to 35 years, M-15 for 36 to 40
years, M-14 for 41 to 45 years, and M-13 for 46 to 50
years, then reduced by two units for every five years, that
N
is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for
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61 to 65 years and M-5 for 66 to 70 years.”
45. In Reshma Kumari, the aforesaid has been approved by

.J
stating, thus:-
―It is high time that we move to a standard method of

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selection of multiplier, income for future prospects and

deduction for personal and living expenses. The courts in
:S
some of the overseas jurisdictions have made this advance. It

is for these reasons, we think we must approve the Table in
Sarla Verma for the selection of multiplier in claim
BY
applications made under Section 166 in the cases of death.

We do accordingly. If for the selection of multiplier, Column (4)
of the Table in Sarla Verma is followed, there is no likelihood
of the claimants who have chosen to apply under Section
166 being awarded lesser amount on proof of negligence on
the part of the driver of the motor vehicle than those who
prefer to apply under Section 163-A. As regards the cases
where the age of the victim happens to be up to 15 years, we
are of the considered opinion that in such cases irrespective
of Section 163-A or Section 166 under which the claim for
compensation has been made, multiplier of 15 and the
32
assessment as indicated in the Second Schedule subject to

correction as pointed out in Column (6) of the Table in Sarla
Verma should be followed. This is to ensure that the claimants
in such cases are not awarded lesser amount when the
application is made under Section 166 of the 1988 Act. In all
other cases of death where the application has been made
under Section 166, the multiplier as indicated in Column (4)
of the Table in Sarla Verma should be followed.‖
46. At this stage, we must immediately say that insofar as the
)
aforesaid multiplicand/multiplier is concerned, it has to be
V.
accepted on the basis of income established by the legal
representatives of the deceased. Future prospects are to
D
be added to the sum on the percentage basis and ―income‖
means actual income less than the tax paid. The multiplier
(A
has already been fixed in Sarla Verma which has been
approved in Reshma Kumari with which we concur.
47. In our considered opinion, if the same is followed, it shall

N
sub-serve the cause of justice and the unnecessary contest
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before the tribunals and the courts would be avoided.
48. Another aspect which has created confusion pertains to

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grant of loss of estate, loss of consortium and funeral

expenses. In Santosh Devi (supra), the two-Judge Bench
followed the traditional method and granted Rs. 5,000/- for
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transportation of the body, Rs. 10,000/- as funeral expenses

and Rs. 10,000/- as regards the loss of consortium. In Sarla
:S
Verma, the Court granted Rs. 5,000/- under the head of loss
of estate, Rs. 5,000/- towards funeral expenses and Rs.
10,000/- towards loss of Consortium. In Rajesh, the Court
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granted Rs. 1,00,000/- towards loss of consortium and Rs.

25,000/- towards funeral expenses. It also granted Rs.
1,00,000/- towards loss of care and guidance for minor
children. The Court enhanced the same on the principle that a
formula framed to achieve uniformity and consistency on a
socio-economic issue has to be contrasted from a legal
principle and ought to be periodically revisited as has been
held in Santosh Devi (supra). On the principle of revisit, it
fixed different amount on conventional heads. What weighed
with the Court is factum of inflation and the price index. It
has also been moved by the concept of loss of consortium. We
33
are inclined to think so, for what it states in that regard. We

quote:-
―17. … In legal parlance, ―consortium‖ is the right of the

spouse to the company, care, help, comfort, guidance, society,
solace, affection and sexual relations with his or her mate.
That non-pecuniary head of damages has not been properly
understood by our courts. The loss of companionship, love,
care and protection, etc., the spouse is entitled to get, has to
be compensated appropriately. The concept of non- pecuniary
)
damage for loss of consortium is one of the major heads of
V.
award of compensation in other parts of the world more
particularly in the United States of America, Australia, etc.
D
English courts have also recognised the right of a spouse to
get compensation even during the period of temporary
(A
disablement. By loss of consortium, the courts have made an
attempt to compensate the loss of spouse‘s affection, comfort,
solace, companionship, society, assistance, protection, care
N
and sexual relations during the future years. Unlike the
compensation awarded in other countries and other
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jurisdictions, since the legal heirs are otherwise adequately
compensated for the pecuniary loss, it would not be proper to
award a major amount under this head. Hence, we are of the
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view that it would only be just and reasonable that the courts
award at least rupees one lakh for loss of consortium.‖
.P
49. Be it noted, Munna Lal Jain (supra) did not deal with the
same as the notice was confined to the issue of application of
:S
correct multiplier and deduction of the amount.
50. This aspect needs to be clarified and appositely stated.

BY
The conventional sum has been provided in the Second

Schedule of the Act. The said Schedule has been found to be
defective as stated by the Court in Trilok Chandra (supra).
Recently in Puttamma and others v. K.L. Narayana Reddy and
another it has been reiterated by stating:-
―… we hold that the Second Schedule as was enacted in

1994 has now become redundant, irrational and unworkable
due to changed scenario including the present cost of living
and current rate of inflation and increased life expectancy.‖
34
51. As far as multiplier or multiplicand is concerned, the same

has been put to rest by the judgments of this Court. Para 3 of
the Second Schedule also provides for General Damages in
case of death. It is as follows:-
―3. General Damages (in case of death): The following

General Damages shall be payable in addition to
compensation outlined above:-
(i) Funeral expenses - Rs. 2,000/-
)
(ii) Loss of Consortium, if beneficiary is the spouse –
V.
Rs.5,000/-
(iii) Loss of Estate - Rs. 2,500/-
D
(iv) Medical Expenses – actual expenses incurred before death
(A
supported by bills/vouchers but not exceeding – Rs. 15,000/-‖
52. On a perusal of various decisions of this Court, it is

manifest that the Second Schedule has not been followed
N
starting from the decision in Trilok Chandra (supra) and there
AI
has been no amendment to the same. The conventional
damage amount needs to be appositely determined. As we
notice, in different cases different amounts have been granted.
.J
A sum of Rs. 1,00,000/- was granted towards consortium in

Rajesh. The justification for grant of consortium, as we find
from Rajesh, is founded on the observation as we have
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reproduced hereinbefore.
:S
53. On the aforesaid basis, the Court has revisited the

practice of awarding compensation under conventional heads.
54. As far as the conventional heads are concerned, we find it

BY
difficult to agree with the view expressed in Rajesh. It has

granted Rs. 25,000/- towards funeral expenses, Rs.
1,00,000/- loss of consortium and Rs. 1,00,000/- towards
loss of care and guidance for minor children. The head
relating to loss of care and minor children does not exist.
Though Rajesh refers to Santosh Devi, it does not seem to
follow the same. The conventional and traditional heads,
needless to say, cannot be determined on percentage basis
because that would not be an acceptable criterion. Unlike
determination of income, the said heads have to be quantified.
35
Any quantification must have a reasonable foundation. There

can be no dispute over the fact that price index, fall in bank
interest, escalation of rates in many a field have to be noticed.
The court cannot remain oblivious to the same. There has
been a thumb rule in this aspect. Otherwise, there will be
extreme difficulty in determination of the same and unless the
thumb rule is applied, there will be immense variation lacking
any kind of consistency as a consequence of which, the orders
passed by the tribunals and courts are likely to be unguided.
Therefore, we think it seemly to fix reasonable sums. It seems
)
to us that reasonable figures on conventional heads, namely,
V.
loss of estate, loss of consortium and funeral expenses should
be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively.
D
The principle of revisiting the said heads is an acceptable
principle. But the revisit should not be fact-centric or
(A
quantum-centric. We think that it would be condign that the
amount that we have quantified should be enhanced on
percentage basis in every three years and the enhancement
N
should be at the rate of 10% in a span of three years. We
are disposed to hold so because that will bring in consistency
AI
in respect of those heads.
55. Presently, we come to the issue of addition of future

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prospects to determine the multiplicand.
56. In Santosh Devi the Court has not accepted as a principle

.P
that a self-employed person remains on a fixed salary

throughout his life. It has taken note of the rise in the cost of
:S
living which affects everyone without making any distinction

between the rich and the poor. Emphasis has been laid on the
extra efforts made by this category of persons to generate
BY
additional income. That apart, judicial notice has been taken

of the fact that the salaries of those who are employed in
private sectors also with the passage of time increase
manifold. In Rajesh‘s case, the Court had added 15% in the
case where the victim is between the age group of 15 to 60
years so as to make the compensation just, equitable, fair and
reasonable. This addition has been made in respect of self-
employed or engaged on fixed wages.
57. Section 168 of the Act deals with the concept of ―just
compensation‖ and the same has to be determined on the
36
foundation of fairness, reasonableness and equitability on

acceptable legal standard because such determination can
never be in arithmetical exactitude. It can never be perfect.
The aim is to achieve an acceptable degree of proximity to
arithmetical precision on the basis of materials brought on
record in an individual case. The conception of ―just
compensation‖ has to be viewed through the prism of fairness,
reasonableness and non- violation of the principle of
equitability. In a case of death, the legal heirs of the claimants
cannot expect a windfall. Simultaneously, the compensation
)
granted cannot be an apology for compensation. It cannot be a
V.
pittance. Though the discretion vested in the tribunal is quite
wide, yet it is obligatory on the part of the tribunal to be
D
guided by the expression, that is, ―just compensation‖. The
determination has to be on the foundation of evidence brought
(A
on record as regards the age and income of the deceased and
thereafter the opposite multiplier to be applied. The formula
relating to multiplier has been clearly stated in Sarla Verma
N
(supra) and it has been approved in Reshma Kumari (supra).
The age and income, as stated earlier, have to be established
AI
by adducing evidence. The tribunal and the Courts have to
bear in mind that the basic principle lies in pragmatic
computation which is in proximity to reality. It is a well
.J
accepted norm that money cannot substitute a life lost but an

effort has to be made for grant of just compensation having
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uniformity of approach. There has to be a balance between the

two extremes, that is, a windfall and the pittance, a bonanza
and the modicum. In such an adjudication, the duty of the
:S
tribunal and the Courts is difficult and hence, an endeavour

has been made by this Court for standardization which in its
ambit includes addition of future prospects on the proven
BY
income at present. As far as future prospects are concerned,

there has been standardization keeping in view the principle
of certainty, stability and consistency. We approve the
principle of ―standardization‖ so that a specific and certain
multiplicand is determined for applying the multiplier on the
basis of age.
58. The seminal issue is the fixation of future prospects in

cases of deceased who is self-employed or on a fixed salary.
Sarla Verma (supra) has carved out an exception permitting
the claimants to bring materials on record to get the benefit of
37
addition of future prospects. It has not, per se, allowed any

future prospects in respect of the said category.
59. Having bestowed our anxious consideration, we are

disposed to think when we accept the principle of
standardization, there is really no rationale not to apply the
said principle to the self-employed or a person who is on a
fixed salary. To follow the doctrine of actual income at the
time of death and not to add any amount with regard to future
prospects to the income for the purpose of determination of
)
multiplicand would be unjust. The determination of income
V.
while computing compensation has to include future
prospects so that the method will come within the ambit and
D
sweep of just compensation as postulated under Section
168 of the Act. In case of a deceased who had held a
(A
permanent job with inbuilt grant of annual increment, there is
an acceptable certainty. But to state that the legal
representatives of a deceased who was on a fixed salary would
N
not be entitled to the benefit of future prospects for the
purpose of computation of compensation would be inapposite.
AI
It is because the criterion of distinction between the two in
that event would be certainty on the one hand and staticness
on the other. One may perceive that the comparative measure
.J
is certainty on the one hand and uncertainty on the other but

such a perception is fallacious. It is because the price rise
.P
does affect a self-employed person; and that apart there is

always an incessant effort to enhance one‘s income for
sustenance. The purchasing capacity of a salaried person on
:S
permanent job when increases because of grant of increments

and pay revision or for some other change in service
conditions, there is always a competing attitude in the private
BY
sector to enhance the salary to get better efficiency from the

employees. Similarly, a person who is self-employed is bound
to garner his resources and raise his charges/fees so that he
can live with same facilities. To have the perception that he is
likely to remain static and his income to remain stagnant is
contrary to the fundamental concept of human attitude which
always intends to live with dynamism and move and change
with the time. Though it may seem appropriate that there
cannot be certainty in addition of future prospects to the
existing income unlike in the case of a person having a
permanent job, yet the said perception does not really deserve
38
acceptance. We are inclined to think that there can be some

degree of difference as regards the percentage that is meant
for or applied to in respect of the legal representatives who
claim on behalf of the deceased who had a permanent job
than a person who is self-employed or on a fixed salary. But
not to apply the principle of standardization on the foundation
of perceived lack of certainty would tantamount to remaining
oblivious to the marrows of ground reality. And, therefore,
degree-test is imperative. Unless the degree-test is applied and
left to the parties to adduce evidence to establish, it would be
)
unfair and inequitable. The degree-test has to have the inbuilt
V.
concept of percentage. Taking into consideration the
cumulative factors, namely, passage of time, the changing
D
society, escalation of price, the change in price index, the
human attitude to follow a particular pattern of life, etc., an
(A
addition of 40% of the established income of the deceased
towards future prospects and where the deceased was below
40 years an addition of 25% where the deceased was between
N
the age of 40 to 50 years would be reasonable.
AI
60. The controversy does not end here. The question still
remains whether there should be no addition where the age of
the deceased is more than 50 years. Sarla Verma thinks it
.J
appropriate not to add any amount and the same has been
approved in Reshma Kumari. Judicial notice can be taken of
.P
the fact that salary does not remain the same. When a person
is in a permanent job, there is always an enhancement due to
one reason or the other. To lay down as a thumb rule that
:S
there will be no addition after 50 years will be an

unacceptable concept. We are disposed to think, there should
be an addition of 15% if the deceased is between the age of 50
BY
to 60 years and there should be no addition thereafter.

Similarly, in case of self- employed or person on fixed salary,
the addition should be 10% between the age of 50 to 60 years.
The aforesaid yardstick has been fixed so that there can be
consistency in the approach by the tribunals and the courts.
61. In view of the aforesaid analysis, we proceed to record our

conclusions:-
(i) The two-Judge Bench in Santosh Devi should have been

well advised to refer the matter to a larger Bench as it was
39
taking a different view than what has been stated in Sarla

Verma, a judgment by a coordinate Bench. It is because a
coordinate Bench of the same strength cannot take a contrary
view than what has been held by another coordinate Bench.
(ii) As Rajesh has not taken note of the decision in Reshma

Kumari, which was delivered at earlier point of time, the
decision in Rajesh is not a binding precedent.
(iii) While determining the income, an addition of 50% of
)
actual salary to the income of the deceased towards future
V.
prospects, where the deceased had a permanent job and
was below the age of 40 years, should be made. The
D
addition should be 30%, if the age of the deceased
was between 40 to 50 years. In case the deceased was
(A
between the age of 50 to 60 years, the addition should be
15%. Actual salary should be read as actual salary less tax.
(iv) In case the deceased was self-employed or on a fixed

N
salary, an addition of 40% of the established income
should be the warrant where the deceased was below the
AI
age of 40 years. An addition of 25% where the deceased

was between the age of 40 to 50 years and 10% where the
.J
deceased was between the age of 50 to 60 years should be

regarded as the necessary method of computation. The
established income means the income minus the tax
.P
component.
:S
(v) For determination of the multiplicand, the deduction

for personal and living expenses, the tribunals and the
courts shall be guided by paragraphs 30 to 32 of Sarla
BY
Verma which we have reproduced hereinbefore.
(vi) The selection of multiplier shall be as indicated in the

Table in Sarla Verma read with paragraph 42 of that
judgment.
(vii) The age of the deceased should be the basis for

applying the multiplier.
(viii) Reasonable figures on conventional heads, namely,

loss of estate, loss of consortium and funeral expenses
40
should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/-

respectively. The aforesaid amounts should be enhanced
at the rate of 10% in every three years.
62. The reference is answered accordingly. Matters be placed

before the appropriate Bench.
…………………………….CJI.(DipakMisra)
)
…………………………………J.(A.K.Sikri)
V.
…………………………………J.(A.M.Khanwilkar)
…………………………………J.(Dr.D.Y.Chandrachud)
…………………………………J.(Ashok Bhushan )
D
New Delhi/October 31, 2017
(A
N
AI
.J
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:S
BY
41
WRITE UP IN RESPECT OF JUDGMENT PASSED BY THE

HON‟BLE SUPREME COURT IN THE CASE TITLED AS
MUKUND VERSUS ORIENTAL INSURANCE CO. LTD.
The Hon‘ble Supreme Court in the case titled as Mukund Vs
Oriental Insurance Co. Ltd. has dealt with the issue of Driving
License in respect of Light Motor Vehicle. The present
judgment is pronounced by the Larger Bench (3 Judges
Bench) of the Hon‘ble Supreme Court. Since the present
judgment is pronounced by the Larger Bench therefore the
)
V.
judgments passed by the DB are deemed to have been over-
ruled by the present judgment. It is to be pointed out that the
present judgment relates only driving licenses which are
D
issued by the Transport Authorities authorizing the drivers to
(A
drive Light Motor Vehicles and are not in relation to other
driving licenses which do not fall within the ambit and scope
of other descriptions and types of driving licenses.
N
In order to understand the real ambit and scope of the above
judgment it is necessary first to analyse various provisions of
AI
the Motor Vehicles Act 1988 which are dealing with the
subject of issuance of driving:
.J
Section 2 (10) define the meaning of driving license which

is given as under:
.P
“driving license" means the license issued by a competent

authority under Chapter II authorizing the person specified
:S
therein to drive, otherwise than as a learner, a motor vehicle

or a motor vehicle of any specified class or description;
BY
(It is worth to be noted that the word driving license is

used in respect of (i) class and (2) description) both.
The Hon‟ble Apex Court has dealt with the issue of Light
Motor Vehicle, driving license which is defined under
section 2(21) of the Motor Vehicles Act, 1988.
(21) "light motor vehicle" means a transport vehicle or
omnibus the gross vehicle weight of either of which or a
motor car or tractor or road-roller the unladen weight of any
of which, does not exceed 7,500 kilograms;
42
The definition of Light Motor Vehicle is divided in two parts

namely:
1. On the basis of gross weight pertaining to any
(a) transport vehicle or (b) omnibus
2. On the basis of unladen weight pertaining to

(a) motor car or(b) tractor or (c) road roller
However in both cases the weight shall not be more than
)
7500 kg.
V.
While defining Light Motor Vehicles various terms have
been used in the definition and the meaning of those
D
terms have further been defined in section 2 of the Motor
Vehicles Act 1988 which are given as under:
(A
(1a) "transport vehicle" means a public service vehicle 2(35), a
goods carriage 2(14), an educational institution bus 2(11) or a
N
private service vehicle; 2(33)
AI
(1b) omnibus" 2(29)
2(a) "motor car" 2(26)
.J
2(b) "tractor" 2(44)

2(c) ―road roller‖
.P
"public service vehicle" means any motor vehicle used or

adapted to be used for the carriage of passengers for hire or
:S
reward, and includes a maxi cab, a motor

cab, contract carriage, and stage carriage; 2(35)
BY
"goods carriage" means any motor vehicle constructed or

adapted for use solely for the carriage of goods, or any motor
vehicle not so constructed or adapted when used for the
carriage of goods; 2(14)
"educational institution bus" means an omnibus,
which is owned by a college, school or other educational
institution and used solely for the purpose of transporting
students or staff of the educational institution in connection
with any of its activities;2(11)
43
"private service vehicle" means a motor vehicle constructed

or adapted to carry more than six persons excluding the
driver and ordinarily used by or on behalf of the owner of
such vehicle for the purpose of carrying persons for, or in
connection with, his trade or business otherwise than
for hire or reward but does not include a motor vehicle
used for public purposes; 2(33)
„Omnibus‟ means any motor vehicle constructed or adapted to
carry more than six persons excluding the driver; (2 (29)
)
V.
“motor car” means any motor vehicle other than a transport
vehicle, omnibus, road-roller, tractor,
D
motor cycle or invalid carriage; 2(26)
"tractor" means a motor vehicle which is not itself
(A
constructed to carry any load (other than equipment
used for the purpose of propulsion); but excludes a road-
roller;2(44)
N
"unladen weight" means the weight of a vehicle or trailer
AI
including all equipment ordinarily used with the vehicle or

trailer when working, but excluding the weight of a driver or
.J
attendant; and where alternative parts or bodies are used

the unladen weight of the vehicle means the weight of the
vehicle with the heaviest such alternative part or body; 2(48)
.P
2(15) gross vehicle weight" means in respect of any vehicle

:S
the total weight of the vehicle and load certified and

registered by the registering authority as permissible for that
vehicle;
BY
ANALYSIS OF THE JUDGMENT

1. The Driving Licence wherein ―Light Motor Vehicle‖ is
mentioned the driver is authorized to drive Transport as well
as Non-Transport Vehicles however subject to definition
contained in section 2(21) of the Motor Vehicles Act, 1988.
2. The validity of three years for the purpose of driving

Transport Vehicle relates to ―Transport Vehicles‖ which is
defined u/s 2(47) of the Motor Vehicles Act. In respect of
44
Driving licences for Light Motor Vehicle, the validity for

Transport and Non-Transport will remain the same. The said
interpretation is given on the basis of Syllabus, Forms and
Amendment in the Act and Rules.
3. The most controversial issue of ―Light Motor Vehicle‖ (NT)

was not subject matter of the present SLP, therefore, the same
has not been adjudicated by the Hon‘ble Apex Court, in the
present judgment.
)
V.
4. As far as the consideration of Tractor with Trailer is
concerned, the interpretation was given in the case of
D
Nagashetty v. United India Insurance Co. Ltd. & Ors. (2001) 8
(A
SCC 56, decided on 17.8.2001 which has been ratified in the
present judgment by the Larger Bench of the Hon‘ble Supreme
Court.
N
The above position was described in the judgment pronounced
AI
by the Hon‘ble Supreme Court of India.
The law relating to Driving Licences mentioning therein ―Light
.J
Motor Vehicle‖ was valid for Transport and Non Transport

Vehicles even prior to the present judgment. Even the same
position was prevailing earlier also in view of the judgments of
.P
the Hon‘ble Apex Court in the cases of Ashok Gangadhar

Maratha v. Oriental Insurance Co. Ltd. (1999) 6 SCC 620 and
:S
S. Iyyapan v. United India Insurance Co. Ltd. and Anr. (2013)

7 SCC 62 wherein the subject matter was described on the
same terms.
BY
1. The main controversial issue of holding LMV (NT) since was

not subject matter of the present SLP therefore the same has
not been adjudicated by the Hon‘ble Apex Court, therefore, the
position remains the same that the person holding LMV (NT)
cannot drive Transport Vehicle pertaining to LMV. The RTA
still can issue such of Driving Licences as per section 10(2) (j)
of the Motor Vehicles Act. Specific endorsement of Transport
Vehicle was not required even as per Section 3 (1) of the Motor
Vehicles Act, 1988. As per section, the condition is entitlement
45
of the driver as per driving licence and not specific

endorsement.
2. The only difference made out by the present judgment is

previously LMV driving licences contained two validities used
to be mentioned on the driving licence i.e. one for non-
transport vehicle and another for transport vehicle. Now the
said distinction is removed and same validity is approved for
both types of driving licences. The Hon‘ble Apex Court has
)
V.
given the interpretation, on the basis of analysis of Forms,
Amendments and Syllabus.
D
3. The judgment in relation to Tractor-with-Trailor was subject
(A
matter of judgment in the case of Nagastey (supra) which was
decided long back in the year 2001 and after a period of about
16 years the same is ratified by the larger bench in the
N
present SLP.
AI
.J
.P
:S
BY
46

CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5826 OF 2011
MUKUND DEWANGAN …APPELLANT(S)

VERSUS
ORIENTAL INSURANCE CO. LTD. ........RESPONDENT(S)
JUDGMENT
)
V.
ARUN MISHRA, J.
1. In the reference, the main question involved is whether a
D
driver who is having a licence to drive „light motor vehicle‟
and is driving „transport vehicle‟ of that class is required
(A
additionally to obtain an endorsement to drive a transport
vehicle? (A. issue involved) There is a conflict in the
plethora of decisions of this Court. In Ashok Gangadhar
N
Maratha v. Oriental Insurance Co. Ltd. (1999) 6 SCC 620, S.
AI
Iyyapan v. United India Insurance Co. Ltd. and Anr. (2013) 7
SCC 62, Nagashetty v. United India Insurance Co. Ltd. & Ors.
(2001) 8 SCC 56, the view taken by this Court was that when
.J
a driver is holding a licence to drive ‗light motor vehicle‘, he is

competent to drive a ‗transport vehicle‘ of that category
.P
without specific endorsement to drive the transport vehicle;

whereas in New India Assurance Co. Ltd. v. Prabhu Lal (2008)
:S
1 SCC 696, a view had been taken that before 2001 also, it
was necessary for a driver possessing driving licence to drive
light motor vehicle to obtain an endorsement to drive
BY
transport vehicle of that class; whereas in National Insurance

Co. Ltd. v. Annappa Irappa Nesaria alias Nesargi & Ors.
(2008) 3 SCC 464, a distinction was made in the legal position
which existed before 28.3.2001 i.e. the date of amendment
of the form and subsequent thereto. (B. amendment of
form) It was opined that before 28.3.2001 there was no
necessity for the holder of a licence to drive light motor vehicle
to obtain an endorsement to drive transport vehicle of that
class. He could drive transport vehicle of Light Motor Vehicle
category on the basis of holding a licence to drive light motor
47
vehicle. In New India Assurance Co. Ltd. v. Roshanben

Rahemansha Fakir & Anr. (2008) 8 SCC 253 and Oriental
Insurance Co. Ltd. v. Angad Kol & Ors. (2009) 11 SCC 356,
the view had been taken that a driver holding licence to drive
light motor vehicle in order to drive ‗transport vehicle‘ of that
class has to obtain a specific endorsement on licence
authorizing him to drive a transport vehicle.
2. Following questions have been referred for decision to the
larger Bench:
)
V.
1. What is the meaning to be given to the definition of "light
motor vehicle" as defined in Section 2(21) of the MV Act?
D
Whether transport vehicles are excluded from it?
2. Whether 'transport vehicle' and 'omnibus' the "gross vehicle
(A
weight" of either of which does not exceed 7500 kg. would be a
"light motor vehicle" and also motor car or tractor or a road
roller, "unladen weight" of which does not exceed 7500 kg.
N
and holder of a licence to drive the class of "light motor
AI
vehicle" as provided in Section 10(2)(d) would be competent to
drive a transport vehicle or omnibus, the "gross vehicle
weight" of which does not exceed 7500 kgs. or a motor car or
.J
tractor or road roller, the "unladen weight" of which does not

exceed 7500 kgs.?
.P
3. What is the effect of the amendment made by virtue of Act

No. 54 of 1994 w.e.f. 14.11.1994 while substituting Clauses
:S
(e) to (h) of Section 10(2) which contained "medium goods

vehicle", "medium passenger motor vehicle", "heavy goods
vehicle" and "heavy passenger motor vehicle" by "transport
BY
vehicle"? Whether insertion of expression 'transport vehicle'

Under Section 10(2)(e) is related to said substituted classes
only or it also excluded transport vehicle of light motor vehicle
class from the purview of Sections 10(2)(d) and 2(41) of the
Act?
4. What is the effect of Amendment of Form 4 as to the
operation of the provisions contained in Section 10 as
amended in the year 1994 and whether the procedure to
48
obtain the driving licence for transport vehicle of the class of

"Light Motor Vehicle" has been changed?"
There is a conflict in the aforesaid decisions of this Court with
respect to the legal position as to pre-amended and also the
post-amendment legal position of the amendment made on
28.3.2001 in the Forms for driving licence. In order to answer
the questions, it is necessary to consider the various
provisions of the Motor Vehicles Act, 1988 (hereinafter
referred to as ‗the Act').
)
V.
3. Section 3 of the Act deals with the necessity for driving
licence which is extracted hereunder:
D
―S.3. Necessity for driving licence.-- (1) No person shall
drive a motor vehicle in any public place unless he holds an
(A
effective driving licence issued to him authorising him to drive
the vehicle; and no person shall so drive a transport vehicle
[other than 1[a motor cab or motor cycle] hired for his own
N
use or rented under any scheme made under sub-section (2)
AI
of section 75] unless his driving licence specifically entitles
him so to do.
.J
(2) The conditions subject to which sub-section (1) shall

not apply to a person receiving instructions in driving a motor
vehicle shall be such as may be prescribed by the Central
.P
Government.‖
:S
1. Subs. by Act 54 of 1994, sec. 3, for ―a motor cab‖

(w.e.f. 14-11-1994).‖
It is apparent from the provisions contained in section 3
BY
that it is necessary to have a licence to drive a motor vehicle

in any public place and in order to drive a transport vehicle,
the driving licence must specifically entitle him to do so.
The question is what is the meaning to be given to
„transport vehicle‟ under Section 3.
4. Driving licence has been defined in section 2(10) of the
Act. The section is extracted hereunder:
―2 (10) ―driving licence‖ means the licence issued by a
competent authority under Chapter II authorising the person
49
specified therein to drive, otherwise than as a learner, a motor

vehicle or a motor vehicle of any specified class or
description;”
It is apparent from the definition of driving licence that
licence is issued authorizing the person specified in the
licence to drive a motor vehicle or a motor vehicle of any
specified class or description.
Significantly, the definition of „driving licence‟
)
categorizes the licence of any specified class or
V.
description. (Further)
5. Section 10 deals with the Form and contents of the licences
D
to drive. Section 10 as it stood before its amendment made in
the year 1994 by virtue of Amendment Act 54 of 1994 is
(A
extracted hereunder:
―10. Form and contents of licences to drive.--(1) Every
N
learner's licence and driving licence, except a driving licence
issued Under Section 18, shall be in such form and shall
AI
contain such information as may be prescribed by the Central

Government.
.J
(2) A learner's licence or, as the case may be, driving

licence shall also be expressed as entitling the holder to drive
.P
a motor vehicle of one or more of the following classes,

namely:-
:S
(a) motorcycle without gear;

(b) motorcycle with gear;
(c) invalid carriage;
BY
(d) light motor vehicle;

(e) medium goods vehicle;
(f) medium passenger motor vehicle;
(g) heavy goods vehicle;
(h) heavy passenger motor vehicle;
(i) road roller;
(j) motor vehicle of a specified description.‖
It is apparent from the pre-amended provision which existed

before the amendment made in the year 1994 that class or
50
description of the vehicle for which licence used to be issued

were categorized inter alia as light motor vehicle, medium
goods vehicle, medium passenger motor vehicle, heavy goods
vehicle, heavy passenger motor vehicle and motor vehicle of a
specified description. Transport vehicle was not a separate
class, and it could be under section 10(1) (d) to (h).
6. The amendment had been made in section 10 by virtue of
Amendment Act 54 of 1994. The Statement of Objects and
Reasons of the Amendment Act being relevant is extracted
)
V.
hereunder:
―Amendment Act 54 of 1994 – Statement of Objects and
D
Reasons.-The Motor Vehicles Act, 1988 (59 of 1988)
consolidated and rationalised various laws regulating road
(A
transport. The Act came into force with effect from 1st July
1989 replacing the Motor Vehicles Act, 1939.
2. After the coming into force of the Motor Vehicles Act,
N
1988, Government received a number of representations and
AI
suggestions from the state govt. transport operators and
members of public regarding the inconvenience faced by them
because of the operation of some of the provisions of the 1988
.J
Act. A Review Committee was, therefore, constituted by the

Government in March 1990 to examine and review the 1988
.P
Act.
3. The recommendations of the Review Committee were
:S
forwarded to the State Governments for comments and they

generally agree with these recommendations. The Government
also considered a large number of representations received,
BY
after finalisation of the Report of the Review Committee, from

the transport operators and public for making amendments in
the Act.
The draft of the proposals based on the recommendation
of the Review Committee and representations from the public
were placed before the Transport Development Council for
seeking their views in the matter. The important suggestions
made by the Transport Development Council relate to, or are
on account of,-
51
(a) The introduction of newer type of vehicles and fast

increasing number of both commercial and personal
vehicles in the country.
(b) Providing adequate compensation to victims of road
accidents without going into long drawn procedure;
(c) Protecting consumers' interest in Transport Sector;
(d) Concern for road safety standards, transport of
hazardous chemicals and pollution control;
)
V.
(e) Delegation of greater powers to State Transport
Authorities and rationalising the role of public
D
authorities in certain matters;
(f) The simplification of procedures and policy
(A
liberalisation in the field of Road Transport;
(g) Enhancing penalties for traffic offenders.
N
4. Therefore, the proposed legislation has been prepared in
the light of the above background. The Bill inter alia
AI
provides for-
.J
(a) modification and amplification of certain definitions of

new type of vehicles;
.P
(b) simplification of procedure for grant of driving

licences;
:S
(c) putting restrictions on the alteration of vehicles;

(d) certain exemptions for vehicles running on non-
polluting fuels;
BY
(e) ceilings on individuals or Co. holdings removed to

curb "benami" holdings;
(f) States authorised to appoint one or more State
Transport Appellate Tribunals;
(g) punitive checks on the use of such components that
do not conform to the prescribed standards by
manufactures, and also stocking/sale by the traders;
52
(h) increase in the amount of compensation of the victims

of hit and run cases;
(i) removal of time limit for filling of application by road
accident victims for compensation;
(j) punishment in case of certain offences is made
stringent;
(k) a new pre-determined formula for payment of
compensation to road accident victims on the basis of
)
age/income, which is more liberal and rational.
V.
5. The Law Commission in its 119th Report had
D
recommended that every application for a claim be made to
the Claims Tribunal having jurisdiction over the area in which
(A
the accident occurred or to the Claims Tribunal within the
local limits of whose jurisdiction the claimant resides or
carries on business or within the local limits of whose
N
jurisdiction the Defendant resides, at the option of the
claimant. The bill also makes necessary provision to give effect
AI
to the said recommendation.‖

7. The pre-amended provision of Section 10 contained the
.J
vehicles of ten kinds in Section 10(2) (a) to (j). In order to

simplify the procedure for obtaining the licence, categories like
.P
medium goods vehicle, medium passenger motor vehicle,

heavy goods vehicle, and heavy passenger motor vehicle were
:S
deleted and one category was inserted for these four kinds of
vehicles in the form of ―transport vehicle‖ in section 10(2)(e) so
that drivers are not required to obtain the licence again and
BY
again for aforesaid four kinds of vehicles. The provision of

section 10 after amendment made by Act 54 of 1994 is
―10. Form and contents of licences to drive.--(1) Every

learner's licence and driving licence, except a driving licence
issued Under Section 18, shall be in such form and shall
contain such information as may be prescribed by the Central
Government.
53
(2) A learner's licence or, as the case may be, driving

licence shall also be expressed as entitling the holder to drive
a motor vehicle of one or more of the following classes,
namely:-
(a) motorcycle without gear;
(b) motorcycle with gear;
(c) invalid carriage;
(d) light motor vehicle;
(e) transport vehicle;
)
V.
(f) – (h)
(i) road-roller;
(j) motor vehicle of a specified description.‖
D
8. Before dilating further, it is necessary to consider other
(A
definitions as ‗gross vehicle weight‘ has co-relation with the
classification of vehicles into a light motor vehicle, medium
goods vehicle, medium passenger motor vehicle, heavy goods
N
vehicle, and heavy passenger motor vehicle.
AI
The definitions of aforesaid class of vehicles are extracted

hereunder:
.J
―2. Definitions.
(16) ―heavy goods vehicle‖ means any goods carriage the
.P
gross vehicle weight of which, or a tractor or a road-roller

the unladen weight of either of which, exceeds 12,000
:S
kilograms;
(17) ―heavy passenger motor vehicle‖ means any public
BY
service vehicle or private service vehicle or educational

institution bus or omnibus the gross vehicle weight of
any of which, or a motor car the unladen weight of
which, exceeds 12,000 kilograms;
(21) ―light motor vehicle‖ means a transport vehicle or
omnibus the gross vehicle weight of either of which or a
motor car or tractor or road-roller the unladen weight of
any of which, does not exceed 2 [7500] kilograms;
54
(23) ―medium goods vehicle‖ means any goods carriage

other than a light motor vehicle or a heavy goods vehicle;
(24) ―medium passenger motor vehicle‖ means any public
service vehicle or private service vehicle, or educational
institution bus other than a motor cycle, invalid carriage,
light motor vehicle or heavy passenger motor vehicle;‖
9. The definition of ‗gross vehicle weight‘ and ‗unladen weight‘
are also significant as the expression finds a place in the
)
aforesaid definitions.
V.
Said definitions in sections 2(15) and 2(48) are as under:
D
―2(15) ―gross vehicle weight‖ means in respect of any
vehicle the total weight of the vehicle and load certified
(A
and registered by the registering authority as permissible
for that vehicle;
―2 (48) "unladen weight" means the weight of a vehicle or
N
trailer including all equipment‘s ordinarily used with the
AI
vehicle or trailer when working, but excluding the weight
of a driver or attendant; and where alternative parts or
bodies are used the unladen weight of the vehicle means
.J
the weight of the vehicle with the heaviest such

alternative part or body;
.P
10. ‗Transport vehicle‘ has been referred in section 2(47) of the

Act thus:
:S
―2 (47) "transport vehicle" means a public service vehicle,

a goods carriage, an educational institution bus or a
private service vehicle;‖
BY
Various expressions find a place in the aforesaid

definition of ‗transport vehicle'. Each of them has been
defined separately and they are extracted thus:
―2 (11) ―educational institution bus‖ means an omnibus,
which is owned by a college, school or other educational
institution and used solely for the purpose of
transporting students or staff of the educational
institution in connection with any of its activities;
55
2 (14) ―goods carriage‖ means any motor vehicle

constructed or adapted for use solely for the carriage of
goods, or any motor vehicle not so constructed or
adapted when used for the carriage of goods;
2 (33) ―private service vehicle‖ means a motor vehicle
constructed or adapted to carry more than six persons
excluding the driver and ordinarily used by or on behalf
of the owner of such vehicle for the purpose of carrying
persons for, or in connection with, his trade or business
)
V.
otherwise than for hire or reward but does not include a
motor vehicle used for public purposes;
D
2 (35) "public service vehicle" means any motor vehicle
used or adapted to be used for the carriage of passengers
(A
for hire or reward, and includes a maxicab, a motor cab,
contract carriage, and stage carriage;‖
11. ‗Motor car', ‗omnibus' and ‗tractor' have been defined in
N
the Act thus:
AI
―2(26) ―motor car‖ means any motor vehicle other than a

transport vehicle, omnibus, road-roller, tractor, motor
.J
cycle or invalid carriage;

2(29) ―omnibus‖ means any motor vehicle constructed or
.P
adapted to carry more than six persons excluding the

driver;
:S
2(44) "tractor" means a motor vehicle which is not itself

constructed to; carry any load (other than equipment
used for the purpose of propulsion), but excludes a road-
BY
roller;‖
12. Section 9 of the Act deals with grant of driving licence. Any
person can apply for driving licence unless he is disqualified
for holding or obtaining a driving licence. The application has
to be filed in such form as may be prescribed by the Central
Government as provided in section 9(2). The applicant has to
pass a test also, as provided in section 9(3). It 13 is further
provided in section 9(4) that a person applying for the licence
to drive a transport vehicle shall possess such minimum
56
educational qualification as may be prescribed by the Central

Government. Licensing authority may refuse to issue a licence
to a habitual criminal or a habitual drunkard or who is
habitually addicted to any narcotic drug or psychotropic
substance or whose licence had been revoked earlier.
13. Prior to amendment in 1994 licence for transport vehicle
was clearly covered as per section 10(2) in five categories, i.e.,
Section 10(2)(d) light motor vehicle, Section 10(2)(e) medium
goods vehicle, Section 10(2) (f) medium passenger motor
)
V.
vehicle, Section 10(2)(g) heavy goods vehicle and Section
10(2)(h) heavy passenger motor vehicle. (E. Coverage of
transport vehicle prior to amendment) The licence for ‗light
D
motor vehicle‘ has been provided in section 10(2)(d). The
(A
expression ‗transport vehicle‘ has been inserted by virtue of
Amendment Act 54/1994 in section 10(2)(e) after deleting four
categories or classes of vehicles, i.e. medium goods vehicle,
medium passenger motor vehicle, heavy goods vehicle, and
N
heavy passenger motor vehicle. Earlier Section 10 did not
AI
contain the separate class of transport vehicles.
14. The definition of ‗light motor vehicle‘ makes it clear that
.J
for a transport vehicle or omnibus, the gross vehicle weight of

either of which or a motor car or tractor or road-roller the
unladen weight of any of which, does not exceed 7500 kgs.
.P
‗Gross vehicle weight‘ has been defined in section 2(15). The

motor car or tractor or road roller, the unladen weight of any
:S
of which does not exceed 7500 kgs. as defined in section 2(48)

of the Act, are also the light motor vehicle. No change has
been made by Amendment Act of 54/94 in the provisions
BY
contained in sections 2(21) and 10(2)(d) relating to the light

motor vehicle. The definition of ‗light motor vehicle‘ has to be
given full effect to and it has to be read with section 10(2)(d)
which makes it abundantly clear that ‗light motor vehicle‘ is
also a ‗transport vehicle‘, the gross vehicle weight or unladen
weight of which does not exceed 7500 kgs. as specified in the
provision. Thus, a driver is issued a licence as per the class of
vehicle i.e. light motor vehicle, transport vehicle or omnibus or
another vehicle of other categories as per gross vehicle weight
or unladen weight as specified in section 2(21) of the Act. The
57
provision of section 3 of the Act requires that a person in

order to drive a ‗transport vehicle‘ must have authorization.
Once a licence is issued to drive light motor vehicle, it would
also mean specific authorization to drive a transport vehicle or
omnibus, the gross vehicle weight or motor car, road roller or
tractor, the unladen weight of which, as the case may be, does
not exceed 7500 kg.
The insertion of ‗transport vehicle‘ category in section 10(2)(e)
has no effect of obliterating the already defined category of
)
V.
transport vehicles of the class of light motor vehicle. A
distinction is made in the Act of heavy goods vehicle, heavy
passenger motor vehicle, medium goods vehicle and medium
D
passenger motor vehicle on the basis of ‗gross vehicle weight‘
(A
or ‗unladen weight‘ for heavy passenger motor vehicle, heavy
goods vehicle, the weight, as the case may be, exceed 12000
kg. Medium goods vehicle shall mean any goods carriage other
than a light motor vehicle or a heavy goods vehicle; whereas
N
‗medium passenger motor vehicle‘ means any public service
AI
vehicle or private service vehicle or educational institution bus
other than a motorcycle, invalid carriage, light motor vehicle
or heavy passenger motor vehicle.
.J
Thus, the newly incorporated expression ‗transport vehicle‘ in

section 10(2)(e) would include only the vehicles of the category
.P
as defined in section 2(16) - heavy goods vehicle, section 2(17)

- heavy passenger motor vehicle, section 2(23) – medium
:S
goods vehicle and section 2(24)medium passenger motor

vehicle, and would not include the ‗light motor vehicle‘ which
means transport vehicle also of the weight specified in Section
BY
2(21).
15. Form 4 has led to some of the divergent views of this
Court which was prevalent before 28.3.2001 prescribed under
Rule 14 of the Central Motor Vehicles Rules, 1989 (hereinafter
referred to as ‗the Rules of 1989‘). The relevant portion is
―FORM 4
[See Rule 14]
58
Form of application for licence to drive a motor vehicle

To,
The Licensing Authority,
…………………………………..
I apply for a licence to enable me to drive vehicles of the
following description—
(a) Motorcycle without gear
)
(b) Motorcycle with gear
V.
(c) Invalid carriage
(d) Light motor vehicle
D
(e) Medium goods vehicle
(f) Medium passenger motor vehicle
(A
(g) Heavy goods vehicle
(h) Heavy passenger motor vehicle
(i) Road roller
N
(j) Motor vehicle of the following description.
xxx
AI
xxx
xxx
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Certificate of test of competence to drive

.P
The applicant has passed the test prescribed under Rule 15 of

the Central Motor Vehicles Rules, 1989. The test was
:S
conducted on (here enter the registration mark and

description of the vehicle) ……………………… on (date).
The applicant has failed in the test.
BY
(The details of deficiency to be listed out)

Date _________________
Signature of testing Authority
Full name and designation
Two specimen signatures of applicant:
Strike out whichever is inapplicable.‖
59
16. The aforesaid form was in vogue till 28.3.2001. In spite of

the amendment made in the year 1994, deleting section 10(2)
(e) to (h), the form in which application was required to be
made was not changed and came to be changed only in the
year 2001 so as to carry out the effect of the Amendment.)The
relevant extract of the amended Form, as amended on
28.3.2001, by which expression ‗transport vehicle' had been
inserted, is extracted hereunder:
―FORM 4
)
V.
[See Rule 14(1)]
Form of application for licence to drive a motor vehicle
D
To,
(A
…………………………………..
N
I apply for a licence to enable me to drive vehicles of the
following description—
AI
(a) Motorcycle without gear

.J
(b) Motorcycle with gear

(c) Invalid carriage
(d) Light motor vehicle
.P
(e) Transport vehicle

(f) Medium passenger motor vehicle
:S
***
(i) Road roller
(j) Motor vehicle of the following description.
BY
xxx
xxx
xxx
The applicant has passed the test prescribed under Rule 15 of
the Central Motor Vehicles Rules, 1989. The test was
conducted on (here enter the registration mark and
description of the vehicle) ……………………… on (date).
60
The applicant has failed in the test.

(The details of deficiency to be listed out)
Date _________________
Signature of testing Authority Full name & designation
Two specimen signatures of applicant:
1.
)
2.
V.
Strike out whichever is inapplicable.‖
Though Form 4 has undergone other changes with respect to
D
Item
(A
(a) - motorcycle without gear, same is not relevant for our
purpose. Form 4 makes it apparent that ‗light motor vehicle‘ is
a description of the kind of vehicle as defined in section 2(21).
N
A transport vehicle of a light motor vehicle category is not at
all excluded from the Form. Even otherwise the Form cannot
AI
control the substantive provisions carved out in section

10(2)(d) and 10(2)(e). The interpretation of the Form is also to
.J
be in tune with the Statement of Objects & Reasons and the

provisions of the Act inserted by virtue of the Amendment.
.P
Though it appears that in the amended Form, ‗medium

passenger motor vehicle‘ remains, that appears to be more
due to oversight. Thus, as intended, the simplification of the
:S
procedures and policy liberalization has taken place by

introducing in the form category of ‗transport vehicle‘ instead
of medium goods vehicle, medium passenger motor vehicle,
BY
heavy goods vehicle and heavy passenger motor vehicle. The

policy of liberalization became necessary with an introduction
of newer types of vehicles and fast increasing numbers of both
personal and commercial vehicles in the country. In case it
was intended to take transport vehicle out of the category of
the light motor vehicle then it was necessary to amend section
2(21) and section 10(2)(d) also which has not been done. Thus,
the intendment of the Amendment has to be taken by addition
of ‗transport vehicle‘ of aforesaid categories of medium and
61
heavy vehicles only so that a person is required to apply for

licence, only once to drive aforesaid four kinds of vehicles as
per the amended provision of section 10(2)(e) and the Form.
17. Our aforesaid conclusion is also fortified by the
inclusion of Rule 8 of the 1989 Rules which provides for
minimum educational qualification for driving transport
vehicles to be 8th standard. The proviso to the rule makes it
clear that the said qualification shall not apply in the case of
renewal of driving licence to drive a transport vehicle and/or
)
V.
addition of another class of transport vehicle to the driving
licence already obtained before commencement of the Motor
Vehicles Act, 2007. Amended Rule 8 as inserted w.e.f.
D
10.4.2007 is quoted below:
(A
“8. Minimum educational qualification for driving
transport vehicles.—The minimum educational
qualification in respect of an applicant for obtaining a
N
licence to drive a transport vehicle shall be a pass in the
eighth standard:
AI
Provided that the minimum educational qualification

specified in this Rule shall not apply in the case of—
.J
(i) renewal of a driving licence to drive a transport

vehicle; or
.P
(ii) addition of another class of transport vehicle to

:S
the driving licence; already held before the

commencement of the Motor Vehicles (Amendment)
Rules, 2007.”
BY
The backdrop history indicates that earlier aforesaid

Rule 8 existed.
It was omitted on 28.10.1989. It had been re-inserted
in 2007. Rule 8 contemplates the addition of transport
vehicle of another category than the existing one in the
licence. In 2007, the existing category of transport
vehicle could be only of the light motor vehicle in section
10(2)(d) and another category of the transport vehicle to
be added is only as in the amended provision 10(2)(e).
62
Rule 8 refers to the addition of transport vehicle to light

motor vehicle category, otherwise no purpose would be
left behind insertion of Rule 8 again in the year 2007, in
case transport vehicles of all categories are read into
section 10(2)(e), Rule 8 also unambiguously lends support
to the legislative intent behind section 10(2)(e). Any other
interpretation would make it a redundant rule. An
exercise in futility is not undertaken by legislation.
18. Driving licence is issued in Form 6 as provided in Rule 16
)
V.
of the Rules of 1989. Form 6 is extracted hereunder:
―FORM 6
D
[See Rule 16(1)]
(A
(To be printed in book form of the size six centimeters by eight
centimeters)
Form of Driving Licence
N
Name of the licence holder
AI
Son/Wife/Daughter of ………………………
Name to be written across the photograph ………………………
(Part of the seal and signature of the Licensing Authority to be
.J
on the photograph and part on the driving licence) Specimen

signature/ thumb impression of the holder of the licence
.P
Signature and designation of the

Licensing Authority.
:S
Driving licence number ……………………..

Date of issue ……………………..
BY
Name ……………………..
Son/Wife/Daughter of ……………………..
Temporary address/official address (if any) ……………………..
Permanent address ……………………..
Date of birth ..……………………
Educational qualifications ……………………..
Optional Blood group ……………………..
Rh factor ……………………..
The holder of this licence is licensed to drive throughout India

vehicles of the following description—
63
Motorcycle without gear

Motorcycle with gear
Invalid carriage
Light motor vehicle
Transport vehicle
Medium passenger motor vehicle
A motor vehicle of the following description:
The licence to drive a motor vehicle The licence to drive
)
transport other than transport vehicle is valid vehicle is
V.
valid from ……….. from ………….. to ………….. to ………….
Name and designation of the Signature and designation of
D
Authority who conducted the Licencing Authority driving
test.
(A
Authorisation to drive transport vehicle Number
…………………
N
Date ………………….
AI
Authorised to drive transport vehicle with effect from
……………..
.J
Badge Number …………………

Signature ……………..
Designation of the Licensing Authority.
.P
Name and designation of the authority who conducted the

:S
driving test.
Space for addition of other classes of vehicles Number
BY
……………………. Date …………………

Also authorised to drive the following class of or description of
motor vehicles—
Name and designation of the Authority who conducted the
driving test.
Signature and designation of Licensing Authority.
Date: ……………..
Space for renewal of driving licence.
64
The licence to drive motor vehicles The licence to drive

transport other than transport vehicles is vehicles is
hereby renewed hereby renewed.
From ……………. to ……………. From…………to……………
Signature of Licensing Authority. Signature of Licensing Auth.
From ……………. to ……………. From…………to……………
Signature of Licensing Authority. Signature of Licensing Auth.
)
Signature of Licensing Authority.
V.
Space for endorsement by Court
Date Section and Rule Fine or other Sign of the punishment
D
Endorsing Authority
………………………………………………………………………
(A
1234
Space for endorsement by Licensing Authority.
N
Date Proceedings number Disqualification Sign. of the
AI
Authority and date Period Licencing Authority

………………………………………………………………………
.J
1234‖
19. Form 6 provides for ‗light motor vehicle‘ and ‗transport
.P
vehicle‘ separately. Though the form contains separate validity

period for a motor vehicle other than transport vehicles, the
:S
aforesaid form and period of validity have to be understood in

the light of the aforesaid discussion made by us of the light
motor vehicle and transport vehicle. The form cannot govern
BY
the interpretation of the provision of Sections 10(2) (d) and

10(2) (e) otherwise also form has to be interpreted
harmoniously with the Act and cannot be in conflict with the
statutory provisions. The provision of the Light motor vehicle
has to be given full effect and it is enjoined upon the
authorities to issue the licence in terms of the discussion
made by us in the order and validity period has to be
construed accordingly.
65
The validity period of transport vehicle of light motor

vehicle licence which means the vehicle as defined in
section 2(21), has to be the same as that of other light
motor vehicle of non-transport category and there cannot
be any distinction made with respect to the validity
period of the class of light motor vehicle. (P. The validity
of light motor vehicle for transport and non-transport will
remain the same) The separate prescription for the
validity of transport vehicle in Form 6 is only to take care
)
of the provisions inserted in section 10(2)(e) by deleting
V.
the provisions of Section 10(2)(e) to (h). It would apply to
those categories.
D
20. Rule 17 of the Rules of 1989 provides for the addition to
(A
driving licence. The application has to be filed for addition in
driving licence in Form 8 as provided in Rule 17. Rule 17 and
Form 8 are extracted hereunder:
N
―17. Addition to driving licence.—(1) An application for
addition of another class or description of motor vehicle
AI
to the driving licence shall be made in Form 8 to the

licensing authority and shall be accompanied from—
.J
(a) an effective learner‘s licence and driving licence held by the

applicant;
.P
(b) in the case of an application for addition of a transport

vehicle, the driving certificate in Form 5;
:S
(c) * * *
(d) appropriate fee as specified in Rule 32.
BY
(2) The provisions of sub-section (1), sub-section (3) and sub-

section (4) of Section 9 shall, insofar as may be, apply in
relation to an application under sub-rule (1) as they apply in
relation to an application for the grant of a driving licence.‖
―FORM 8
[See Rule 17(1)]
Application for the addition of a new class of vehicle to a
driving licence
66
To,
…………………………
I, Shri/Smt/Kumari ………………… hereby apply for the
addition of the following class/classes of motor vehicle to the
attached licence—
(a) Motorcycle without gear,
)
(b) Motorcycle with gear,
V.
(c) Invalid carriages,
(d) Light motor vehicles,
D
(e) Transport vehicle,
(f) Medium passenger motor vehicles,
(A
(g)-(h) * * *
(i) Road rollers,
(j) Motor vehicles of the following description.
N
I enclose,
AI
(a) a Medical Certificate in Form 1-A,

(b) Learner‘s licence in Form 3,
.J
(c) Driving licence in Form 6/7,
I hereby apply for the addition of the following:

.P
(d) Driving certificate in Form 5 if the application is to

drive a transport vehicle,
:S
(e) I have paid the fee of Rs…………

Dated: ………… Signature or thumb impression of the
BY
applicant
The applicant has passed/failed in the test specified in Rule
15 of the Central Motor Vehicles Rules, 1989. The test was
conducted on a ……..
(here enter description of vehicle) on date ……………
Signature of testing authority
67
Name and designation‖

It is apparent that an application has to be made for the
addition of another class of vehicle. Light motor vehicle and
transport vehicle are separately defined. Thus, it is clear that
in the aforesaid Forms 4, 6 and 8, transport vehicle has to
be understood for the categories of vehicles for which
provision has been amended by section 10(2)(e).
21. The trade certificate has been dealt with in Rule 34. Rules
)
V.
34 (2) provides that separate application shall be made for the
classes of vehicles prescribed therein. Rule 34 is extracted
hereunder:
D
―34. Trade certificate.—(1) An application for the grant or
(A
renewal of a trade certificate shall be made in Form 16
and shall be accompanied by appropriate fee as specified
in Rule 81.
N
(2) Separate application shall be made for each of the
AI
following classes of vehicles, namely—
(a) motorcycle;
.J
(b) invalid carriage;

(c) light motor vehicle;
(d) medium passenger motor vehicle;
.P
(e) medium goods vehicle;

(f) heavy passenger motor vehicle;
:S
(g) heavy goods vehicle;

(h) any other motor vehicle of a specified description.‖
BY
The aforesaid rule also makes a distinction between light

motor vehicle, medium passenger motor vehicle, medium
goods vehicle, heavy passenger motor vehicle and heavy goods
vehicles. For all types of vehicles, it is necessary that
prototype of every motor vehicle qualify a test by the Vehicle
Research & Development Establishment of the Ministry of
Defence of the Government of India or Automotive Research
Association of India as provided in Rule 126. The vehicles
must conform to the provisions of the Rules made under
section 110 of the Act. The relevant information has to be
68
inserted as per section 41 of the Act in the registration

particulars as may be prescribed by the Central Government
i.e. class of vehicle, gross vehicle weight, as well as unladen
weight, are required to be mentioned in the registration
particulars in Form 20.
22. The interpretation made by us is also supported by the
syllabus which is prescribed for light vehicles and separately
for medium and heavy vehicles driving practice. Rule 31 of the
Rules contains the syllabus for imparting instructions in the
)
V.
driving of motor vehicles in schools or establishments. The
syllabus is divided into Parts A to K thus:
D
―36. Rule 31 of the Rules contains a syllabus for
imparting instructions in the driving of motor vehicles in
(A
schools or establishments. That syllabus is divided in Parts A
to K.
Part A deals with driving theory-1.
N
B- Traffic education-I.
AI
C- Light vehicles driving practice.

D- Vehicle mechanism and repairs.
.J
E- Medium and heavy vehicle driving.

F- Traffic education-II.
G- Public relations for drivers.
.P
H- Heavy vehicle driving practice.

I- Fire hazards.
:S
J- Vehicle maintenance.
K- First-aid.‖
BY
It is apparent from the aforesaid syllabus that no separate

syllabus has been provided for transport vehicles.
Transport vehicles have been included in the syllabus as
per the class of vehicles, that is to say, syllabus of the
light motor vehicle would include the syllabus of transport
vehicles of that class. The syllabus has been formulated as
per the weight of the vehicles.
23. The State Government has to maintain a register of motor

vehicles under Rule 75 as provided in Form 41 which includes
69
gross vehicle weight, unladen weight etc. The Central

Government has the power to frame rules under Section 27,
inter alia, regarding minimum qualification, forms, and
contents of the licences etc. Thus, we are of the considered
opinion that the definition of „light motor vehicle‟ under
Section 2(21) of the Act includes transport vehicle of the
class and weight defined therein. The transport vehicle or
omnibus would be light motor vehicle, gross vehicle
weight of which, and also a motor car or tractor or road
)
roller, unladen weight of, which, does not exceed 7500
V.
kg., and can be driven by holder of licence to drive light
motor vehicle and no separate endorsement is required to
D
drive such transport vehicle. (R. Coverage of light motor
vehicle and that no separate endorsement is required for
(A
driving transport light motor vehicle)
24. It is a settled proposition of law that while interpreting a
legislative provision, the intention of the Legislature, motive
N
and the philosophy of the relevant provisions, the goals to be
AI
achieved by enacting the same, have to be taken into
consideration.
.J
25. In Principles of Statutory Interpretation by Justice G.P.

Singh, it has been observed that a statute is an edict of a
legislature and the conventional way of interpreting or
.P
construing a statute is to seek the intention of its maker. The

duty of the judicature is to act upon the true intention of the
:S
legislature – men's or sentential logic. If a statutory provision

is open to more than one interpretation, the Court has to
choose that interpretation which furthers the intention of the
BY
legislature as laid down in Venkataswamy Naidu R. v.

Narasram Naraindas AIR 1966 SC 361 and District Mining
Officer vs. Tata Iron and Steel Co. AIR 2001 (7) SCC 358. Lord
Cranworth L.C. in Jane Straford Boyse v. John T.
Rossborough 10 ER 1192 (HL) has observed: "There is no
possibility of mistaking midnight for noon, but at what precise
moment Twilight becomes darkness is hard to determine." As
observed in Muray v. Foyle Meats Ltd. (1999) 3 All ER 769,
faced with such problems, the Court is also conscious of a
dividing line, but Court has to be conscious not to divert its
70
attention from the language used in the statutory provision

and encourage an approach not intended by the legislature.
The first and primary rule of construction is that the intention
of the legislature must be found in the words used by
Legislature itself, as held in Kannai Lal Sur v. Paramnidhi
Sadhukhan AIR 1967 SC 907. Each word, phrase or sentence
is to be construed in the light of the general purpose of the Act
itself as held in Poppatlal Shah v. State of Madras AIR 1953
SC 274, Girdharilal & Sons v. Balbir Nath Mathur (1986) 2
)
SCC 237 and Atma Ram Mittal v. Ishwar Singh Punia (1988) 4
V.
SCC 284.
26. It was held in Reserve Bank of India v. Pearless General
D
Finance and Investment Co. (1987) 1 SCC 424 that
(A
interpretation must depend on the text and the context. They
are the bases of interpretation. One may well say that if the
text is the texture, context is what gives colour.
N
Neither of them can be ignored. Both are important. That
interpretation is best which makes the textual interpretation
AI
match the contextual. A statute is best interpreted when we

know why it was enacted. In Atmaram Mittal v. Ishwar Singh
.J
Punia (1998) 4 SCC 284 the Court has referred to ―Blackstone

Commentaries on the Laws of England‖, and it has been
observed that the fairest and rational method for interpreting
.P
a statute is by exploring the intention of the legislature

through the most natural and probable signs which are ‗either
:S
the words, the context, the subject matter, the effects and
consequence, and the facts and reasons of law'. The correct
interpretation is one that best harmonises the words with the
BY
object of the statute. A right construction of the Act can only

be attained if the whole object and scope together with
circumstances in which it is enacted are taken into
consideration. Lord Porter in Bhagwan Baksh Singh (Raja) v.
Secretary of State, AIR 1940 PC 82 has further referred that
the statute has to be read as a whole in its context.
So as to arrive at the meaning of a certain provision in a
statute, it is not only legitimate but proper to read that
provision in its context. The context here means the statute as
71
a whole, the previous state of law, other statutes in pari

materia, the general scope of the statute and the mischief that
was intended to remedy as observed in R.S. Raghunath v.
State of Karnataka, 1992 (1) SCC 335, Powdrill v. Watson
(1995) 2 All ER 65, R. v. Secretary of State for the Home
Department, Ex-parte Daly, (2001) 3 All ER 433 and a
decision of the Constitution Bench of this Court in Union of
India v. Elphinstone Spinning and Weaving Co. Ltd.& Ors.
(2001) 4 SCC 139. To ascertain the meaning of a clause, the
)
Court must look at the whole statute at what precedes and at
V.
what succeeds and not merely at the clause itself as observed
in Queen v. Eduljee Byramjee, (1946) 3 MIA 468 and National
D
Insurance Co. Ltd. v. Anjana Shyam & Ors. (2007) 7 SCC 445.
It was also observed that the same word by the author may
(A
mean one thing in one context and another in a different
context. For this reason, the same word used in different
sections of a statute or even when used at different places in
N
the same clause or section of the statute may bear different
meanings. The conclusion, that the language used by the
AI
legislature is plain or ambiguous can only be arrived at by

studying the statute as a whole. Every word and expression
.J
which the legislature uses have to be given its proper and

effective meaning, as the Legislature uses no expression
.P
without purpose and meaning. The principle that the statute

must be read as a whole is equally applicable to different parts
of the same section. The section must be construed as a whole
:S
whether or not one of the parts is a saving clause or a proviso.

It is not permissible to omit any part of it, the whole section
should be read together as held in The State of Bihar v. Hira
BY
Lal Kejriwal & Anr., AIR 1960 SC 47.

27. The author has further observed that the courts strongly
lean against a construction which reduces the statutes to a
futility as held in M. Pentiah & Ors. v. Muddala
Veeramallappa AIR 1961 SC 1107 and Tinsukhia Electric
Supply Co. Ltd. v. State of Assam & Ors. (1989) 3 SCC 709.
When the words of a statute are clear or unambiguous i.e.
they are reasonably susceptible to only one meaning, the
courts are bound to give effect to that meaning irrespective of
72
the consequences as held in Nelson Motis v. Union of India &

Anr. (1992) 4 SCC 711, Gurudevdatta VKSSS Maryadit & Ors.
v. State of Maharashtra & Ors., (2001) 4 SCC 534 and Nathi
Devi v. Radha Devi Gupta (2005) 2 SCC 271. It is also a
settled proposition of law that when the language is plain and
unambiguous and admits of only one meaning no question of
construction of a statute arises for the Act speaks for itself as
held in State of Uttar Pradesh v. Vijay Anand Maharaj AIR
1963 SC 946.
)
V.
28. In Crawford v. Spooner (1846) 6 Moo. PC 1 which has
been referred to in Nalinakhya Bysack v. Shyam Sunder
Haldar & Ors., AIR 1953 SC 148 it has been held that ―the
D
Court cannot aid the Legislature‘s defective phrasing of an Act
(A
or add and amend or, by construction, make up deficiencies
which are left in the Act.‖ In British India General Insurance
Co. Ltd. v. Captain Itbar Singh & Ors., AIR 1959 SC 1331
while construing section 96(2) of the Motor Vehicles Act, 1939,
N
this Court refused to add the word ‗also‘ after the words ‗on
AI
any of the following grounds‘. It was observed that the rule of
interpretation does not permit the Court to do unless the
section, as it stands, is meaningless or is of doubtful meaning.
.J
While interpreting Section 621-A(1) of Companies Act, 1956 in

VLS Finance Ltd. v. Union of India (2013) 6 SCC 278 this
.P
Court held that the Court must avoid rejection or addition of

words and resort to that only in exceptional circumstances.
:S
29. The words cannot be read into an Act, unless the clear
reason for it is to be found within the four corners of the Act
itself. It is one of the principles of statutory interpretation that
BY
may matter which should have been, but has not been
provided for in a statute, cannot be supplied by courts, as to
do so will be legislation and not construction as held in
Hansraj Gupta v. Dehra Dun-Mussoorie Electric Tramway Co.
Ltd. AIR 1933 PC 63, Kamalrajan Roy v. Secretary of State AIR
1938 PC 281 and Karnataka State Financial Corporation v. N.
Narsimahaiah (2008) 5 SCC 176. The court cannot supply
casus omissus.
73
30. From the aforesaid principles, it is apparent that plain and

simple meaning has to be given to section 10(2). When the
legislature has not amended the provision, we cannot re-write
the definition of section 2(21) of light motor vehicle and
section 10(2)(d) and full effect has to be given to the omission
which has been made in the provisions of section 10(2) (e) to
(h), by substituting transport vehicle under section 10(2)(e),
and plain and literal interpretation of existing provisions and
amended provisions has to be made. When the legislature has
)
not amended the aforesaid provisions it is not for the Court to
V.
legislate by making insertion in section 10(2)(e). What has not
been provided in the statute with a purpose, cannot be
D
supplied by the courts. Court has to construe a provision and
not to act as a legislature. In other words, interpretation as
(A
suggested by Insurers would mean rewriting of the provision,
which is not permissible in the light of the aforesaid
discussion.
N
31. In Skandia Insurance Co. Ltd. v. Kokilaben
AI
Chandravandan (1987) 2 SCC 654, this Court has laid down
that the motive and philosophy of a provision should be
probed, keeping in mind the goals to be achieved by enacting
.J
the same, and the defense built upon an exclusion clause by

insurer cannot succeed because on a true interpretation of the
.P
relevant clause which interpretation is at peace with section

96 of the Motor Vehicles Act, the condition excluding driving
:S
by a person not duly licensed is not absolute. The promisor is

exculpated when he does everything in his power to keep
promise. The Court has laid down thus:
BY
―12. The defence built on the exclusion clause cannot

succeed for three reasons, viz.:
(1) On a true interpretation of the relevant Clause which
interpretation is at peace with the conscience of Section 96,
the condition excluding driving by a person not duly licensed
is not absolute and the promisor is absolved once it is shown
that he has done everything in his power to keep, honour and
fulfil the promise and he himself is not guilty of a deliberate
breach.
74
(2) Even if it is treated as an absolute promise, there is

substantial compliance therewith upon an express or implied
mandate being given to the licensed driver not to allow the
vehicle to be left unattended so that it happens to be driven by
an unlicensed driver.
(3) The exclusion Clause has to be "read down" in order
that it is not at war with the "main purpose" of the provisions
enacted for the protection of victims of accidents so that the
promisor is exculpated when he does everything in his power
)
V.
to keep the promise.
13. In order to divine the intention of the legislature in
D
the course of interpretation of the relevant provisions there
can scarcely be a better test than that of probing into the
(A
motive and philosophy of the relevant provisions keeping in
mind the goals to be achieved by enacting the same.
Ordinarily it is not the concern of the legislature whether the
N
owner of the vehicle insures his vehicle or not. If the vehicle is
not insured any legal liability arising on account of third party
AI
risk will have to be borne by the owner of the vehicle. Why

then has the legislature insisted on a person using a motor
.J
vehicle in a public place to insure against third-party risk by

enacting Section 94? Surely the obligation has not been
imposed in order to promote the business of the insurers
.P
engaged in the business of automobile insurance. The

provision has been inserted in order to protect the members of
:S
the community travelling in vehicles or using the roads from

the risk attendant upon the user of motor vehicles on the
roads. The law may provide for compensation to victims of the
BY
accidents who sustain injuries in the course of an automobile

accident or compensation to the dependants of the victims in
the case of a fatal accident. However, such protection would
remain a protection on paper unless there is a guarantee that
the compensation awarded by the courts would be recoverable
from the persons held liable for the consequences of the
accident. A court can only pass an award or a decree. It
cannot ensure that such an award or decree results in the
amount awarded being actually recovered, from the person
held liable who may not have the resources. The exercise
75
undertaken by the law courts would then be an exercise in

futility. And the outcome of the legal proceedings which by the
very nature of things involve the time cost and money cost
invested from the scarce resources of the community would
make a mockery of the injured victims, or the dependants of
the deceased victim of the accident, who themselves are
obliged to incur not inconsiderable expenditure of time, money
and energy in litigation. To overcome this ugly situation the
legislature has made it obligatory that no motor vehicle shall
)
be used unless a third party insurance is in force. To use the
V.
vehicle without the requisite third party insurance being in
force is a penal offence (Section 94 of the Motor Vehicles Act).
D
The legislature was also faced with another problem. The
insurance policy might provide for liability walled in by
(A
conditions which may be specified in the contract of policy. In
order to make the protection real, the Legislature has also
provided that the judgment obtained shall not be defeated by
N
the incorporation of exclusion clauses other than those
authorised by Section 96 and by providing that except and
AI
save to the extent permitted by Section 96 it will be the

obligation of the insurance Co. to satisfy the judgment
.J
obtained against the persons insured against third party risk

(vide Section 96). In other words, the legislature has insisted
.P
and made it incumbent on the user of a motor vehicle to be

armed with an insurance policy covering third party risks
which is in conformity with the provisions enacted by the
:S
legislature. It is so provided in order to ensure that the injured

victims of automobile accidents or the dependants of the
victims of fatal accidents are really compensated in terms of
BY
money and not in terms of promise.

Such a benign provision enacted by the legislature
having regard to the fact that in the modern age the use of
motor vehicles notwithstanding the attendant hazards, has
become an inescapable fact of life, has to be interpreted in a
meaningful manner which serves rather than defeats the
purpose of the legislation. The provision has therefore to be
interpreted in the twilight of the aforesaid perspective.
76
14. Section 96(2)(b)(ii) extends immunity to the

Insurance Co. if a breach is committed of the condition
excluding driving by a named person or persons or by any
person who is not fully licensed, or by any person who has
been disqualified from holding or obtaining a driving licence
during the period of disqualification.
The expression "breach" is of great significance. The
dictionary meaning of "breach" is "infringement or violation of
a promise or obligation" (See Collins English Dictionary). It is
)
V.
therefore abundantly clear that the insurer will have to
establish that the insured is guilty of an infringement or
violation of a promise that a person who is duly licensed will
D
have to be in charge of the vehicle. The very concept of
(A
infringement or violation of the promise that the expression
"breach" carries within itself induces an inference that the
violation or infringement on the part of the promisor must be
a wilful infringement or violation. If the insured is not at all at
N
fault and has not done anything he should not have done or is
AI
not amiss in any respect how can it be conscientiously posited
that he has committed a breach? It is only when the insured
himself places the vehicle in charge of a person who does not
.J
hold a driving licence, that it can be said that he is "guilty" of

the breach of the promise that the vehicle will be driven by a
.P
licensed driver.
It must be established by the Insurance Co. that the
:S
breach was on the part of the insured and that it was the
insured who was guilty of violating the promise or
infringement of the contract. Unless the insured is at fault
BY
and is guilty of a breach the insurer cannot escape from the

obligation to indemnify the insured and successfully contend
that he is exonerated having regard to the fact that the
promisor (the insured) committed a breach of his promise.
Not when some mishap occurs by some mischance.
When the insured has done everything within his power
inasmuch as he has engaged a licensed driver and has placed
the vehicle in charge of a licensed driver, with the express or
77
implied mandate to drive himself it cannot be said that the

insured is guilty of any breach.
And it is only in case of a breach or a violation of the
promise on the part of the insured that the insurer can hide
under the umbrella of the exclusion clause. In a way the
question is as to whether the promise made by the insured is
an absolute promise or whether he is exculpated on the basis
of some legal doctrine. The discussion made in para 239 of
Breach of Contract by Carter (1984 Edn.) under the head
)
V.
Proof of Breach, gives an inkling of this dimension of the
matter. In the present case even if the promise were to be
treated as an absolute promise the grounds for exculpation
D
can be found from Section 84 of the Act which reads thus:
(A
„84. Stationary vehicles.– No person driving or in
charge of a motor vehicle shall cause or allow the vehicle to
remain stationary in any public place, unless there is in the
N
driver's seat a person duly licensed to drive the vehicle or
unless the mechanism has been stopped and a brake or
AI
brakes applied or such other measure taken as to ensure that

the vehicle cannot accidentally be put in motion in the
.J
absence of the driver.‘

In view of this provision apart from the implied mandate
.P
to the licensed driver not to place an unlicensed person in

charge of the vehicle, there is also a statutory obligation on
:S
the said person not to leave the vehicle unattended and not to
place it in charge of an unlicensed driver. What is prohibited
by law must be treated as a mandate to the employee and
BY
should be considered sufficient in the eye of law for excusing

non-compliance with the conditions. It cannot, therefore, in
any case, be considered as a breach on the part of the
insured. To construe the provision differently would be to
rewrite the provision by engrafting a rider to the effect that in
the event of the motor vehicle happening to be driven by an
unlicensed person, regardless of the circumstances in which
such a contingency occurs, the insured will not be liable
under the contract of insurance. It needs to be emphasised
that it is not the contract of insurance which is being
78
interpreted. It is the statutory provision defining the

conditions of exemption which is being interpreted. These
must, therefore, be interpreted in the spirit in which the same
have been enacted accompanied by an anxiety to ensure that
the protection is not nullified by the backward looking
interpretation which serves to defeat the provision rather than
to fulfil its life-aim. To do otherwise would amount to
nullifying the benevolent provision by reading it with a non-
benevolent eye and with a mind not tuned to the purpose and
)
philosophy of the legislation without being informed of the
V.
true goals sought to be achieved. What the legislature has
given, the Court cannot deprive of by way of an exercise in
D
interpretation when the view which renders the provision
potent is equally plausible as the one which renders the
(A
provision impotent. In fact, it appears that the former view is
more plausible apart from the fact that it is more desirable.
When the option is between opting for a view which will
N
relieve the distress and misery of the victims of accidents or
AI
their dependants on the one hand and the equally plausible
view which will reduce the profitability of the insurer in regard
to the occupational hazard undertaken by him by way of
.J
business activity, there is hardly any choice. The Court cannot

but opt for the former view. Even if one were to make a strictly
.P
doctrinaire approach, the very same conclusion would emerge

in obeisance to the doctrine of "reading down" the exclusion
:S
Clause in the light of the "main purpose" of the provision so

that the "exclusion clause" does not cross swords with the
"main purpose" highlighted earlier.
BY
The effort must be to harmonize the two instead of

allowing the exclusion Clause to snipe successfully at the
main purpose. This theory which needs no support is
supported by Carter's "Breach of Contract" vide paragraph
251. To quote:
‗Notwithstanding the general ability of contracting parties
to agree to exclusion clauses which operate to define
obligations there exists a rule, usually referred to as the "main
purpose rule", which may limit the application of wide
79
exclusion clauses defining a promisor's contractual

obligations. For example, in Glynn v. Margetson & Co. (1893
AC 351, 357, Lord Halsbury, L.C. stated:
―It seems to me that in construing this document, which
is a contract of carriage between the parties, one must in the
first instance look at the whole instrument and not at one part
of it only.
Looking at the whole instrument, and seeing what one
)
must regard... as its main purpose, one must reject words,
V.
indeed whole provisions, if they are inconsistent with what
one assumes to be the main purpose of the contract.‖ ‘
D
Although this Rule played a role in the development of
the doctrine of fundamental breach, the continued validity of
(A
the Rule was acknowledged when the doctrine was rejected by
the House of Lords in Suissee Atlantique Societe d' Armement
Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale (1967) 1
N
AC 361, 393, 412-413, 427-428, 430. Accordingly, wide
AI
exclusion clauses will be read down to the extent to which
they are inconsistent with the main purpose, or object of the
contract.‖ (emphasis in original)
.J
32. The aforesaid decision has been approved by this Court in

Sohan Lal Passi v. P. Sesh Reddy & Ors. (1996) 5 SCC 21. It
.P
has been laid down that the insurer has also to satisfy the
tribunal or the court that such violation or infringement on
:S
the part of the insured was wilful. If the insured has taken all
precautions by appointing a duly licensed driver to drive the
vehicle in question and it had not been established that it was
BY
the insured who allowed the vehicle to be driven by a person

not duly licensed, then the insurance company cannot
repudiate its statutory liability. In National Insurance Co. Ltd.
v. Swaran Singh & Ors. (2004) 3 SCC 297, this Court has laid
down that to avoid its liability towards the insured, the
insurer has to prove that the former was guilty of negligence
and failed to exercise reasonable care in the matter of fulfilling
the condition of the policy regarding use of vehicles by duly
licensed driver or by one who was not qualified to drive at the
relevant time. The insurer must prove that the breach was on
80
the part of the owner of the vehicle and burden to prove would
be on them. The tribunals in interpreting the policy conditions
would apply ―the rule of the main purpose‖ and the concept of
―fundamental breach‖ to allow defences available to the
insured under section 149(2) of the Act. Whether the owner
has taken reasonable care, has to be found out in each case.
Swaran Singh (supra) had been referred to in Oriental
Insurance Co. Ltd. v. Zaharulnisha (2008) 12 SCC 385 and it
has been observed that if a person who has been given a
)
licence for a particular type of vehicle, he cannot be said to
V.
have no licence for driving another type of vehicle which is of
the same category but of a different type. As for example,
D
when a person is granted a licence to drive a light motor
vehicle, he can drive either a car or a jeep and it is not
(A
necessary that he must have driving licence both for car and
jeep separately. In Zaharulnisha case (supra), this Court has
laid down thus:
N
―18. A three-Judge Bench of this Court in National
AI
Insurance Co. Ltd. v. Swaran Singh (2004) 3 SCC 297 has
extensively dealt with the meaning, application and
interpretation of various provisions, including Sections 3(2),
.J
4(3), 10(2) and 149 of the MV Act. In para 47 of the judgment,

the learned Judges have held that if a person has been given a
.P
licence for a particular type of vehicle as specified therein, he

cannot be said to have no licence for driving another type of
:S
vehicle which is of the same category but of different

type. As for example, when a person is granted a licence
for driving a light motor vehicle he can drive either a car
BY
or a jeep and it is not necessary that he must have driving

licence both for car and jeep separately….”
However as the scooterist was possessing a driving licence
to drive heavy motor vehicle, and he was driving a
different class of vehicle, it was held to be in violation of
section 10(2) of the Act, as the scooterist had no driving
licence to drive a scooter.
33. It is apparent from the aforesaid decisions, that the court
has to interpret a provision so as to give it full effect it intends
81
and the motivated philosophy of the relevant provision cannot

be ignored or overlooked. The object of the Amendment Act,
itself makes it clear that it had been made in order to simplify
the procedures faced with the situation of increase in different
kinds of vehicles. It nowhere intended to invalidate the licence
held before the Amendment had been made.
34. Coming to conflicting decisions of this Court entailing
reference in Ashok Gangadhar Maratha (supra), this Court
has considered the definition of ‗light motor vehicle' and held
)
V.
thus:
―10. The definition of ―light motor vehicle‖ as given in
D
clause (21) of Section 2 of the Act can apply only to a ―light
goods vehicle‖ or a ―light transport vehicle‖. A ―light motor
(A
vehicle‖ otherwise has to be covered by the definition of ―motor
vehicle‖ or ―vehicle‖ as given in clause (28) of Section 2 of the
Act. A light motor vehicle cannot always mean a light
N
goods carriage. Light motor vehicle can be a non-transport
vehicle as well.” (S. Light motor vehicle can be a non-
AI
transport vehicle also)

No doubt about it, that in addition thereto the Court
.J
while dealing with the matter comprehensively has gone in

question as to the pleadings and the evidence adduced and it
.P
was observed that since there was neither a pleading nor a

permit produced on record, the vehicle remained a light motor
:S
vehicle. If we proceed on the basis of the definition itself,

we reach to the same conclusion that for driving transport
vehicle of light motor vehicle category, no separate
BY
endorsement is required on a licence. Even when a light

motor vehicle is used for carrying goods or for hire or
rewards, it becomes a transport vehicle, though it remains
included in the category of light motor vehicle as per
Section 2(21) of the Act. (T. No separate endorsement is
required for transport vehicle in the driving licence of
light motor vehicle)The interpretation of the definition in
Ashok Gangadhar Maratha (supra), makes it clear that light
motor vehicle cannot always be a light goods carriage. It can
be a non-transport vehicle as well. The definition of a light
82
motor vehicle includes light goods vehicle and light transport

vehicle also. The interpretation of the definition of light motor
vehicle in aforesaid extracted para 10 is sound and we are in
unison with the same. It was not necessary for the Court to go
into the question of pleadings and evidence in Ashok
Gangadhar Maratha (supra).
35. In Prabhu Lal (supra), this Court has taken a contrary

view and held that when a driver was holding the valid licence
)
to ply only light motor vehicle, and no endorsement was made
V.
on the licence enabling him to drive a transport vehicle, it was
held to be a breach by the owner and he could not claim any
D
indemnification from the insurer. It was held that the goods
carrier would be a transport vehicle. The accident took place
(A
on 17.4.1998. The District Forum held that the goods carrier
was a transport vehicle whereas the State Commission held
that it was a light motor vehicle relying on the gross weight of
N
the vehicle. This Court set aside the order of the Commission
and affirmed the finding of the District Forum. In Prabhu Lal
AI
(supra), this Court has considered Ashok Gangadhar Maratha

(supra) and laid down thus:
.J
―38. We find considerable force in the submission of the

learned counsel for the Insurance Company. We also find that
.P
the District Forum considered the question in its proper

perspective and held that the vehicle driven by Ram Narain
:S
was covered by the category of transport vehicle under clause

(47) of Section 2 of the Act. Section 3, therefore, required the
driver to have an endorsement which would entitle him to ply
BY
such vehicle. It is not even the case of the complainant that

there was such endorsement and Ram Narain was allowed to
ply transport vehicle. On the contrary, the case of the
complainant was that it was Mohd. Julfikar who was driving
the vehicle. To us, therefore, the District Forum was right in
holding that Ram Narain could not have driven the vehicle in
question.
39. The learned counsel for the complainant, however, heavily
relied upon Ashok Gangadhar. In that case, the appellant was
the owner of a truck, light motor vehicle, which was insured
83
with the respondent Insurance Company. The vehicle met

with an accident and a claim was lodged by the complainant
before the Consumer Commission. It was contended by the
Insurance Company that the truck was a goods carriage or a
transport vehicle and since the driver of the truck was holding
a driving licence issued in Form 6 to drive light motor vehicle
only, he was not authorised to drive transport vehicle as there
was no endorsement on his driving licence authorising him to
drive such transport vehicle. The aggrieved complainant
)
approached this Court.
V.
Allowing the appeal and setting aside the order passed
by the Commission, this Court held that the driver of the
D
vehicle was holding a valid driving licence for driving a light
(A
motor vehicle and there was no material on record to show
that he was disqualified from holding an effective valid licence
at the time of an accident. In view of those facts, the Court
held that the policy did not insist on the driver to have a
N
licence to drive a transport vehicle by obtaining a specific
AI
endorsement. Considering the definition of "light motor
vehicle" as given in clause (21) of Section 2 of the Act, this
Court held that such light motor vehicle (LMV) cannot always
.J
mean a light goods carriage. A light motor vehicle (LMV) can

be a non-transport vehicle as well. The Court proceeded to
.P
observe that since there was neither a pleading nor a permit

produced on record, the vehicle remained as a light motor
:S
vehicle. And though it can be said to have been designed to be

used as a transport vehicle or a goods carriage, it could not be
so held on account of the statutory prohibition contained in
BY
Section 66 of the Act to be a transport vehicle. It was,

therefore, held that the Commission was not right in rejecting
the claim of the claimant.
Accordingly, this Court set aside the order passed by the
Commission and directed the Insurance Company to pay
compensation to the complainant.
40. It is no doubt true that in Ashok Gangadhar in spite of the
fact that the driver was holding valid driving licence to ply
light motor vehicle (LMV), this Court upheld the claim and
84
ordered the Insurance Company to pay compensation. But, in

our considered opinion, the learned counsel for the Insurance
Company is right in submitting that it was because of the fact
that there was neither pleading nor proof as regards the
permit issued by the Transport Authority. In absence of
pleading and proof, this Court held that it could not be said
that the driver had no valid licence to ply the vehicle which
met with an accident and he could not be deprived of the
compensation. This is clear if one reads para 11 of the
)
judgment, which reads thus: (SCC p. 626)
V.
11. To reiterate, since a vehicle cannot be used as a
transport vehicle on a public road unless there is a permit
D
issued by the Regional Transport Authority for that purpose
(A
and since in the instant case there is neither a pleading to
that effect by any party nor is there any permit on record, the
vehicle in question would remain a light motor vehicle.
N
The respondent also does not say that any permit was
granted to the appellant for plying the vehicle as a transport
AI
vehicle under Section 66 of the Act. Moreover, on the date of

the accident, the vehicle was not carrying any goods and
.J
though it could be said to have been designed to be used as a

transport vehicle or a goods carrier, it cannot be so held on
account of the statutory prohibition contained in Section 66 of
.P
the Act.‘
(emphasis supplied)
:S
41. In our judgment, Ashok Gangadhar did not lay down that
the driver holding licence to drive a light motor vehicle need
BY
not have an endorsement to drive transport vehicle and yet he

can drive such vehicle. It was on the peculiar facts of the case,
as the Insurance Company neither pleaded nor proved that
the vehicle was transport vehicle by placing on record the
permit issued by the Transport Authority that the Insurance
Company was held liable.
42. In the present case, all the facts were before the District
Forum. It considered the assertion of the complainant and
defence of the Insurance Company in the light of the relevant
documentary evidence and held that it was established that
85
the vehicle which met with an accident was a ―transport

vehicle‖. Ram Narain was having a licence to drive light motor
vehicle only and there was no endorsement as required by
Section 3 of the Act read with Rule 16 of the Rules and Form
6. In view of necessary documents on record, the Insurance
Company was right in submitting that Ashok Gangadhar does
not apply to the case on hand and the Insurance Company
was not liable.‖
36. In our considered opinion Prabhu Lal‘s (supra)
)
V.
question has not decided correctly. The intendment and
definition of the light motor vehicle which was clearly
interpreted in Ashok Gangadhar Maratha (supra) in para 10
D
have not been taken into consideration in the correct
(A
perspective. Interpretation of Form 6 was also not correctly
made. Even assuming that Ashok Gangadhar Maratha (supra)
did not lay down that the driver holding licence to drive a light
motor vehicle need not have an endorsement to drive a
N
transport vehicle, but what emerges from the aforesaid
AI
discussion made by us it is clear that there is no necessity of
such an endorsement for driving a transport vehicle of the
category of light motor vehicle, which is not statutorily
.J
enjoined or provided for. The intendment of section 3 has also

not been correctly appreciated. It has to be read along with
.P
Section 10(2)(d) and (e) and those classes of vehicles which are
included in a category 10(2) (a) to (j) can be driven by a
:S
person without any further specific endorsement to drive

a particular vehicle.
Thus, the decision in Prabhu Lal (supra) does not lay
BY
down correct proposition of law and is hereby overruled.

37. In New India Assurance Company Ltd. v. Roshanben
Rahemansha Fakir & Anr. (2008) 8 SCC 253 the driver was
the holder of a licence to drive a three-wheeler. This Court
noted that the licence was not meant to be used to drive a
transport vehicle. The vehicle involved was an auto rickshaw
delivery van and was a goods carrier. It was contended that
the driver was not the holder of a legal and valid licence. This
Court came to the conclusion that since the licence was
86
issued or renewed for a period of 20 years from the date of

issuance or renewal, the driver was not holding the licence to
drive a transport vehicle as transport licence is not issued for
such duration. The decision in the aforesaid case also cannot
hold the field in the light of the law discussed in the
instant matters and as the driver driving such a vehicle
i.e. three-wheeler was holding the licence to drive a light
motor vehicle, the restricted duration of renewal would
not be applicable to the light transport vehicle. The
)
discussion to the contrary in Roshan Lal (supra) cannot hold
V.
the field.
38. In Annappa Irappa Nesaria (supra), a Division Bench
D
of this Court has considered the question with respect to an
(A
accident which took place on 9.12.1999. The driver was
driving a Matador van, a ―goods carriage‖ vehicle, holding a
licence to drive light motor vehicle. This Court referred to
Forms 4 and 6 and Rules 14 and 16 of the Rules of 1989 and
N
opined that as Form 4 has been amended w.e.f. 28.3.2001,
AI
transport vehicle has been substituted for medium goods
vehicle and heavy goods vehicle and provision in the form at
the relevant time, covered both ―light passenger carriage
.J
vehicle‖ and ―light goods carriage vehicle‖. The driver who had
a valid driving licence to drive a light motor vehicle, therefore,
.P
was authorized to drive a light goods vehicle (transport

vehicle) as well. The view taken with respect to the pre-
:S
amended position, before the amendment of Form 4 on

28.3.2001 appears to be correct for the reasons discussed by
us. However, no change has been brought about by insertion
BY
of Form 4 after 28.3.2001 with respect to LMV category

transport vehicle, thus, Annappa Irappa Nesaria (supra)
cannot be taken to be laying down correct legal position
applicable after 28.3.2001. With respect to the post-
amendment legal position, the decision cannot be said to
be laying down the correct law. However, this Court has
rightly opined in the aforesaid case that the person
holding a licence to drive “light motor vehicle” could have
driven “light passenger carriage vehicle” and “light goods
87
carriage vehicle” also. Thus, the decision is partially

overruled to the aforesaid extent only.
39. In Oriental Insurance Co. Ltd. v. Angad Kol & Ors.
(2009) 11 SCC 356, this Court has considered the decisions in
Annappa Irappa Nesaria (supra) and Prabhu Lal (supra). The
accident took place on 31.10.2004. A mini dor auto dashed
against the insured. The question arose whether the driver
was not having an effective driving licence to drive ―goods
carriage vehicle‖ since he was holding the licence to drive the
)
V.
motorcycle and light motor vehicle. It was granted for a period
of 20 years and as such this Court presumed that it was
meant for the purpose of driving a vehicle other than a
D
transport vehicle. This Court has observed thus:
(A
―21. Licence having been granted for a period of 20 years,
a presumption, therefore, arises that it was meant for the
purpose of a vehicle other than a transport vehicle. Had the
N
driving licence been granted for a transport vehicle, the tenure
thereof could not have exceeded to three years.‖
AI
This Court observed that for grant of licence to drive a

transport vehicle, provision in Section 10(2) (e) became
.J
effective from 28.3.2001, that is, the date on which form

was amended and held that the vehicle was a “goods
.P
vehicle” as such the driver did not hold a valid driving

licence for a “goods vehicle”. The legal position cannot be
:S
said to have been correctly appreciated in Angad Kol‟s

case (supra), for the reasons discussed by us, as the
vehicle was of light motor vehicle class. Thus, the
BY
decision is required to be overruled as the vehicle which

was driven was the light motor vehicle, though, it was
goods carriage vehicle i.e. transport vehicle.
40. In S. Iyyapan (supra), this Court has considered the
decisions in Ashok Gangadhar (supra), Annappa Irappa
Nesaria (supra) as well as Prabhu Lal (supra) and has laid
down thus:
―18. In the instant case, admittedly the driver was
holding a valid driving licence to drive light motor vehicle.
88
There is no dispute that the motor vehicle in question, by

which accident took place, was Mahindra Maxi Cab. Merely
because the driver did not get any endorsement in the driving
licence to drive Mahindra Maxi Cab, which is a light motor
vehicle, the High Court has committed the grave error of law
in holding that the insurer is not liable to pay compensation
because the driver was not holding the licence to drive the
commercial vehicle. The impugned judgment (Civil Misc.
Appeal No.1016 of 2002, order dated 31.10.2008 (Mad)) is,
)
therefore, liable to be set aside.‖
V.
This Court has rightly held in S. Iyyapan (supra) that it
was not necessary for the driver to get any endorsement in the
D
driving licence to drive Mahindra Maxi Cab as he was
(A
authorized to drive a light motor vehicle.
41. In Kulwant Singh v. Oriental Insurance Co. Ltd.
(2015) 2 SCC 186, this Court has referred to the decisions in
N
S. Iyyapan (supra) and Annappa Irappa Nesaria (supra) and
has laid down that once the driver is holding a licence to drive
AI
light motor vehicle, he can drive commercial vehicle of that

category. In Kulwant Singh (supra) it has been laid down thus:
.J
―8. We find that the judgments relied upon cover the

issue in favour of the Appellants. In Annappa Irappa Nesaria
.P
(2008) 3 SCC 464, this Court referred to the provisions of

Sections 2(21) and (23) of the Motor Vehicles Act, 1988, which
:S
are definitions of "light motor vehicle" and "medium goods

vehicle" respectively and the Rules prescribing the forms for
the licence i.e. Rule 14 and Form 4. It was concluded: (SCC p.
BY
468, para 20)

―20. From what has been noticed hereinbefore, it is
evident that 'transport vehicle' has now been substituted for
'medium goods vehicle' and 'heavy goods vehicle'. The light
motor vehicle continued, at the relevant point of time to cover
both 'light passenger carriage vehicle' and 'light goods carriage
vehicle'. A driver who had a valid licence to drive a light motor
vehicle, therefore, was authorised to drive a light goods vehicle
as well.‖
89
9. In S. Iyyapan (2013) 7 SCC 62, the question was

whether the driver who had a licence to drive "light motor
vehicle" could drive "light motor vehicle" used as a commercial
vehicle, without obtaining endorsement to drive a commercial
vehicle. It was held that in such a case, the insurance Co.
could not disown its liability. It was observed: (SCC p. 77,
para 18)
―18. In the instant case, admittedly the driver was
holding a valid driving licence to drive light motor vehicle.
)
V.
There is no dispute that the motor vehicle in question, by
which accident took place, was Mahindra Maxi Cab.
D
Merely because the driver did not get any endorsement in
the driving licence to drive Mahindra Maxi Cab, which is a
(A
light motor vehicle, the High Court has committed grave error
of law in holding that the insurer is not liable to pay
compensation because the driver was not holding the licence
N
to drive the commercial vehicle. The impugned judgment [Civil
AI
Misc. Appeal No. 1016 of 2002, order dated 31-10-2008 (Mad)]
is, therefore, liable to be set aside.‖
.J
10. No contrary view has been brought to our notice.

11. Accordingly, we are of the view that there was no
.P
breach of any condition of insurance policy, in the present

case, entitling the Insurance Company to recovery rights.‖
:S
Though, as held above, and for the reasons assigned by

us, the conclusion in Kulwant Singh (supra) was correct,
however for the post-amended position after 28.3.2001 also
BY
the law continues to be the same for LMV class of vehicles.

42. In Nagashetty (supra), the vehicle involved was a
tractor which was used for carrying goods. The goods were
carried in a trailer attached to it.
It was held that if a driver was holding an effective
licence to drive a tractor, he could validly drive the tractor
attached to a trailer. The contention that it was a transport
vehicle, as the tractor was attached to a trailer and as such
90
the driver was not holding a valid licence, was rejected. This
Court has laid down thus:
―9. Relying on these definitions, Mr. S.C. Sharda submitted

that admittedly the trailer was filled with stones. He submitted
that once a trailer was attached to the tractor the tractor
became a transport vehicle as it was used for carriage of
goods. He submitted that Section 10(2) of the Motor Vehicles
Act provides for grant of licences to drive specific types of
)
vehicles. He submitted that the driver only had a licence to
V.
drive a tractor. He submitted that the driver did not have a
licence to drive a transport vehicle. He submitted that
D
therefore it could not be said that the driver had an effective
and valid driving licence to drive a goods carriage or a
(A
transport vehicle. He submitted that thus the driver did not
have a valid driving licence to drive the type of vehicle he was
driving.
N
He submitted that as the driver did not have a valid
AI
driving licence to drive a transport vehicle, the Insurance Co.
could not be made liable. He submitted that the High Court
was right in so holding.
.J
10. We are unable to accept the submissions of Mr.

S.C. Sharda. It is an admitted fact that the driver had a
.P
valid and effective licence to drive a tractor. Undoubtedly

Under Section 10, a licence is granted to drive specific
:S
categories of motor vehicles. (U. Specific category)

The question is whether merely because a trailer was
BY
attached to the tractor and the tractor was used for carrying
goods, the licence to drive a tractor becomes ineffective. If the
argument of Mr. S.C. Sharda is to be accepted, then every
time an owner of a private car, who has a licence to drive a
light motor vehicle, attaches a roof carrier to his car or a
trailer to his car and carries goods thereon, the light motor
vehicle would become a transport vehicle and the owner would
be deemed to have no licence to drive that vehicle. It would
lead to absurd results. Merely because a trailer is added either
to a tractor or to a motor vehicle by itself does not make that
91
tractor or motor vehicle a transport vehicle. The tractor or

motor vehicle remains a tractor or motor vehicle. If a person
has a valid driving licence to drive a tractor or a motor vehicle,
he continues to have a valid licence to drive that tractor or
motor vehicle even if a trailer is attached to it and some goods
are carried in it. In other words, a person having a valid
driving licence to drive a particular category of vehicle does
not become disabled to drive that vehicle merely because a
trailer is added to that vehicle.
)
V.
11. In this case, we find that the Insurance Company
when issuing the insurance policy, had also so understood.
The insurance policy has been issued for a tractor. In this
D
insurance policy, an additional premium of Rs. 12 has been
(A
taken for a trailer. Therefore the insurance policy covers not
just the tractor but also a trailer attached to the tractor. The
insurance policy provides as follows for the "persons or
classes of persons entitled to drive": ‗Persons or classes of
N
persons entitled to drive
AI
Any person including insured provided that the person

driving holds an effective driving licence at the time of the
.J
accident and is not disqualified from holding or obtaining

such a licence:
.P
Provided also that the person holding an effective

learner's licence may also drive the vehicle when not used for
:S
the transport of goods at the time of the accident and that

such a person satisfies the requirements of Rule 3 of the
Central Motor Vehicles Rules, 1989, limitations as to use.‘
BY
12. The policy is for a tractor. The "effective driving

licence" is thus for a tractor. The restriction on a learner
driving the tractor when used for transporting goods shows
that the policy itself contemplates that the tractor could be
used for carriage of goods. The tractor by itself could not carry
goods. The goods would be carried in a trailer attached to it.
That is why the extra premium for a trailer. The restriction
placed on a person holding a learner's licence i.e. not to drive
when goods are being carried is not there for a permanent
licence-holder. Thus a permanent licence-holder having an
92
effective/valid licence to drive a tractor can drive even when

the tractor is used for carrying goods. When the policy itself so
permits, the High Court was wrong in coming to the
conclusion that a person having a valid driving licence to drive
a tractor would become disqualified to drive the tractor if a
trailer was attached to it."
43. Section 10(2) (a) to (j) lays down the classes of vehicles
to be driven not a specific kind of motor vehicles in that
class. If a vehicle falls into any of the categories, a licence
)
V.
holder holding licence to drive the class of vehicle can
drive all vehicles of that particular class. (V. wrongly
written as (j) relates to motor vehicle of a specified
D
description) No separate endorsement is to be obtained nor
(A
provided, if the vehicle falls in any of the particular classes of
section 10(2). This Court has rightly observed in Nagashetty
(supra) that in case submission to the contrary is accepted,
then every time an owner of a private car, who has a licence to
N
drive a light motor vehicle, attaches a roof carrier to his car or
AI
a trailer to his car and carries goods thereon, the light motor
vehicle would become a transport vehicle and the owner would
be deemed to have no licence to drive that vehicle. It would
.J
lead to absurd results. Merely because a trailer is added either

to a tractor or to a motor vehicle it by itself does not mean
.P
that driver ceased to have valid driving licence. In our

considered opinion, even if such a vehicle is treated as
:S
transport vehicle of the light motor vehicle class, legal position

would not change and driver would still have a valid driving
licence to drive transport vehicle of light motor vehicle class,
BY
whether it is a transport vehicle or a private car/tractor

attached with trolley or used for carrying goods in the form of
transport vehicle. The ultimate conclusion in Nagashetty
(supra) is correct, however, for the reasons as explained by us.
44. In Natwar Parikh & Co. Ltd. v. State of Karnataka & Ors.
(2005) 7 SCC 364, this Court was concerned with the taxation
under the Karnataka Motor Vehicles Taxation Act, 1957 and
question arose whether the tractor along with trailer for
transporting goods was to constitute distinct category of goods
carrier which requires permission under Section 2(14) of the
93
Motor Vehicles Act, 1957 and absence thereof would render it

liable to tax under Section 3(2). This court held that the
tractor when attached with the trailer carrying goods, would
become a transport vehicle for the purpose of taxation. This
Court has discussed the question thus:
"Section 2(28) is a comprehensive definition of the words
"motor vehicle". Although a "trailer" is separately defined in
Section 2(46) to mean any vehicle drawn or intended to be
drawn by a motor vehicle, it is still included in the definition
)
V.
of the words "motor vehicle" under Section 2(28). Similarly,
the word ―tractor‖ is defined in Section 2(44) to mean a motor
vehicle which is not itself constructed to carry any load.
D
Therefore, the words "motor vehicle" have been defined in the
(A
comprehensive sense by the legislature.
Therefore, we have to read the words "motor vehicle" in
the broadest possible sense keeping in mind that the Act has
N
been enacted in order to keep control over motor vehicles,
transport vehicles, etc. A combined reading of the afore stated
AI
definitions under Section 2, reproduced hereinabove, shows

that the definition of "motor vehicle" includes any
.J
mechanically propelled vehicle apt for use upon roads

irrespective of the source of power and it includes a trailer.
Therefore, even though a trailer is drawn by a motor vehicle, it
.P
by itself is a motor vehicle, the tractor-trailer would constitute

a "goods carriage" under Section 2(14) and consequently, a
:S
"transport vehicle" under Section 2(47). The test to be applied

in such a case is whether the vehicle is proposed to be used
for transporting goods from one place to another. When a
BY
vehicle is so altered or prepared that it becomes apt for use for

transporting goods, it can be stated that it is adapted for the
carriage of goods. Applying the above test, we are of the view
that the tractor-trailer in the present case falls under Section
2(14) as a "goods carriage‖ and consequently, it falls under the
definition of ―transport vehicle‖ under Section 2(47) of the MV
Act, 1988.‖
There is no dispute with the aforesaid proposition,
that tractor if drawing a trailer with goods would
94
constitute goods carrier and consequently would be a

transport vehicle. The aforesaid discussion was with
respect to taxation and not with respect to the
competence of driver holding light motor vehicle licence
to drive the tractor attached with trailer/trolley carrying
goods. The driver had the competence to drive such a
vehicle, tractor with a trailer carrying goods being of light
motor vehicle category transport vehicle which is the
question involved in the instant case. Therefore, the
)
decision renders no help with the cause espoused by the
V.
insurer.
45. Transport vehicle has been defined in section 2(47) of the
D
Act, to mean a public service vehicle, a goods carriage, an
(A
educational institution bus or a private service vehicle. Public
service vehicle has been defined in section 2(35) to mean any
motor vehicle used or adapted to be used for the carriage of
passengers for hire or reward and includes a maxi cab, a
N
motor cab, contract carriage, and stage carriage. Goods
AI
carriage which is also a transport vehicle is defined in section
2(14) to mean a motor vehicle constructed or adapted for use
solely for the carriage of goods, or any motor vehicle not so
.J
constructed or adapted when used for the carriage of goods. It

was rightly submitted that a person holding licence to drive
.P
light motor vehicle registered for private use, who is driving a

similar vehicle which is registered or insured, for the purpose
:S
of carrying passengers for hire or reward, would not require

an endorsement as to drive a transport vehicle, as the same is
not contemplated by the provisions of the Act. It was also
BY
rightly contended that there are several vehicles which

can be used for private use as well as for carrying
passengers for hire or reward. When a driver is authorised
to drive a vehicle, he can drive it irrespective of the fact
whether it is used for a private purpose or for purpose of
hire or reward or for carrying the goods in the said
vehicle. It is what is intended by the provision of the Act,
and the Amendment Act 54/1994. (W. Driver who is
authorised can drive non transport or transport vehicle)
95
46. Section 10 of the Act requires a driver to hold a

licence with respect to the class of vehicles and not with
respect to the type of vehicles. In one class of vehicles,
there may be different kinds of vehicles. If they fall in the
same class of vehicles, no separate endorsement is
required to drive such vehicles. As light motor vehicle
includes transport vehicle also, a holder of light motor
vehicle licence can drive all the vehicles of the class
including transport vehicles. It was pre-amended position
)
as well the post-amended position of Form 4 as amended
V.
on 28.3.2001. (X. Pre amendment and post amendment
position is same and driver of one class can drive all vehicles
D
of that class) Any other interpretation would be repugnant to
the definition of ―light motor vehicle‖ in section 2(21) and the
(A
provisions of section 10(2) (d), Rule 8 of the Rules of 1989,
other provisions and also the forms which are in tune with the
provisions. Even otherwise the forms never intended to
N
exclude transport vehicles from the category of „light
motor vehicles‟ and for light motor vehicle, the validity
AI
period of such licence hold good and apply for the

transport vehicle of such class also and the expression in
.J
Section 10(2)(e) of the Act „Transport Vehicle‟ would

include medium goods vehicle, medium passenger motor
.P
vehicle, heavy goods vehicle, heavy passenger motor

vehicle which earlier found place in section 10(2)(e) to (h)
and our conclusion is fortified by the syllabus and rules
:S
which we have discussed. (Y. The form never intended to

exclude transport vehicle). Thus we answer the questions
which are referred to us thus: (Z. Summary of the case)
BY
(i) ‗Light motor vehicle‘ as defined in section 2(21) of the

Act would include a transport vehicle as per the weight
prescribed in section 2(21) read with section 2(15) and 2(48).
Such transport vehicles are not excluded from the definition of
the light motor vehicle by virtue of Amendment Act
No.54/1994.
(ii) A transport vehicle and omnibus, the gross vehicle
weight of either of which does not exceed 7500 kg. would be a
light motor vehicle and also motor car or tractor or a road
96
roller, ‗unladen weight‘ of which does not exceed 7500 kg. and
holder of a driving licence to drive class of ―light motor vehicle‖
as provided in section 10(2)(d) is competent to drive a
transport vehicle or omnibus, the gross vehicle weight of
which does not exceed 7500 kg. or a motor car or tractor or
road-roller, the ―unladen weight‖ of which does not exceed
7500 kg. That is to say, no separate endorsement on the
licence is required to drive a transport vehicle of light motor
vehicle class as enumerated above. A licence issued under
)
section 10(2)(d) continues to be valid after Amendment Act
V.
54/1994 and 28.3.2001 in the form.
(iii) The effect of the amendment made by virtue of Act
D
No.54/1994 w.e.f. 14.11.1994 while substituting clauses (e) to
(A
(h) of section 10(2) which contained ―medium goods vehicle‖ in
section 10(2)(e), medium passenger motor vehicle in section
10(2)(f), heavy goods vehicle in section 10(2)(g) and ―heavy
passenger motor vehicle‖ in section 10(2)(h) with expression
N
‗transport vehicle‘ as substituted in section 10(2)(e) related
AI
only to the aforesaid substituted classes only. It does not
exclude transport vehicle, from the purview of section 10(2)(d)
and section 2(41) of the Act i.e. light motor vehicle.
.J
(iv) The effect of amendment of Form 4 by insertion of

―transport vehicle‖ is related only to the categories which were
.P
substituted in the year 1994 and the procedure to obtain

driving licence for transport vehicle of class of ―light motor
:S
vehicle‖ continues to be the same as it was and has not been

changed and there is no requirement to obtain separate
endorsement to drive transport vehicle, and if a driver is
BY
holding licence to drive light motor vehicle, he can drive

transport vehicle of such class without any endorsement to
that effect.
47. In the light of aforesaid answer, let matters be placed for
hearing on merits before the appropriate Bench.
…..…J.(ARUN MISHRA)
………..…J.(AMITAVA ROY)
……J.(SANJAY KISHAN KAUL)
JULY 3, 2017/NEW DELHI
97
HEAD NOTES: DISHONOUR OF THE CHEQUE OF

PREMIUM
The Hon‟ble Supreme Court has held that:
In case the policy is cancelled prior to the date of accident for

the reason that the cheque given by the insured for the
insurance of the vehicle is dishonoured then the insurance
company is not liable to pay any compensation to the
claimants.
)
V.
In case the policy is cancelled subsequent to the accident then
the insurer is liable to pay compensation to the claimants and
recover it from the insured. (Paras No. 19, 20 and 21)
D
(A
[Civil Appeal No. 3589 of 2012 arising out of SLP(C) No.
23511 of 2009]
N
United India Insurance Company Ltd.
AI
Vs.
.J
Laxmamma & Ors.

.P
JUDGMENT
R.M. Lodha, J.
:S
1. Leave granted.
BY
2. The only question that arises for consideration in this

appeal by special leave is: whether the appellant, United India
Insurance Company Limited (insurer) is absolved of its
obligations to the third party under the policy of insurance
because the cheque given by the owner of the vehicle towards
the premium got dishonored and subsequent to the accident,
the insurer cancelled the policy of insurance.
3. The above question arises in this way. M. Nagaraj (husband

of respondent no. 1 and father of respondent nos. 2 and 3)
was travelling in a bus bearing registration no. KA 018116 on
98
May 11, 2004. At about 8.50 a.m. on that day due to negligent
application of brake by the bus driver, the back door of the
bus suddenly opened and M. Nagaraj standing near the door
fell down. He sustained grievous injuries and subsequently
died. The respondent nos. 1 to 3, to be referred as claimants,
filed a claim petition before the Motor Accident Claims
Tribunal, Bangalore (for short, Tribunal) seeking
compensation of Rs. 15 lakhs. The present appellant insurer
was imp leaded as respondent no. 2 while the owner of the
bus was imp leaded as respondent no. 1. The owner and the
)
insurer contested the claim petition on diverse grounds. The
V.
insurer raised the plea in the written statement that the
insurance policy dated April 14, 2004 issued by it covering the
D
said bus for the period April 16, 2004 to April 15, 2005was
not valid as the premium was paid through cheque and the
(A
cheque got dishonoured and, therefore, there was no liability
on it to cover the third party risk.
N
4. The Tribunal on recording the evidence and after hearing
the parties held that the claimants were successful in proving
AI
that on May 11, 2004 at 8.50 a.m. the deceased M. Nagaraj
was travelling in the bus and he fell down from the bus
through the door by sudden application of brake negligently
.J
by the driver and died due to the injuries sustained in that

accident. The Tribunal also recorded the finding of fact on
.P
examination of the documentary and oral evidence that

cancellation of policy because of non-payment of the premium
was done by the insurer after the accident had taken place
:S
and intimation of cancellation was given to the owner on May

21, 2004 whereas accident took place on May 11, 2004. The
Tribunal, thus, held that the insurer was liable to the
BY
claimants. The Tribunal in its award dated June 28, 2006

held that claimants were entitled to compensation in the sum
of Rs. 6,01,244/- and apportioned that amount amongst
claimants. Aggrieved by the award of the Tribunal, the insurer
preferred appeal before the High Court. The High Court
dismissed the insurers appeal on November 11, 2008. It is
from this order that the present appeal has arisen.
5. Mr. A.K. De, learned counsel for the appellant strenuously

urged that having regard to the undisputed fact that the
cheque issued by the owner of the vehicle towards the
99
premium for insurance of vehicle was dishonoured, the

contract of insurance became void and the insurer could not
be compelled to perform its part of promise under the policy.
He submitted that no liability can be fastened on the insurers
qua third party if the policy of insurance is rendered void for
want of consideration to the insurer. Learned counsel
submitted that the view taken by this Court in Oriental
Insurance Co. Ltd. v. Inderjit Kaur and others has been
diluted by the later decisions of this Court in the case of
National Insurance Co. Ltd. v. Seema Malhotra and others
)
and Deddappa and others v. Branch Manager, National
V.
Insurance Co. Ltd. In the alternative, learned counsel for the
insurer submitted that if the Court holds that the insurer is
D
liable to pay compensation to the claimants, the amount so
paid by the insurer to the claimants must be allowed to be
(A
recovered from the insured.
6. Mr. P.R. Ramasesh, learned counsel for respondent no. 4

N
(owner) supported the view of the High Court. He submitted
that on the date of the accident, the policy was subsisting and
AI
the liability of the insurer continued and, therefore, the
insurer cannot recover the amount paid to the claimants from
the insured.
.J
7. Section 64-VB of the Insurance Act, 1938 (for short,

Insurance Act) provides as under: 64-VB. No risk to be
.P
assumed unless premium is received in advance.-

:S
a. No insurer shall assume any risk in India in respect of any

insurance business on which premium is not ordinarily
payable outside India unless and until the premium payable is
BY
received by him or is guaranteed to be paid by such person in

such manner and within such time as may be prescribed or
unless and until deposit of such amount as may be
prescribed, is made in advance in the prescribed manner.
b. For the purposes of this section, in the case of risks for

which premium can be ascertained in advance, the risk may
be assumed not earlier than the date on which the premium
has been paid in cash or by cheque to the insurer.
Explanation.-Where the premium is tendered by postal money
order or cheque sent by post, the risk may be assumed on the
100
date on which the money order is booked or the cheque is

posted, as the case may be.
c. Any refund of premium which may become due to an

insured on account of the cancellation of a policy or alteration
in its terms and conditions or otherwise shall be paid by the
insurer directly to the insured by a crossed or order cheque or
by postal money order and a proper receipt shall be obtained
by the insurer from the insured, and such refund shall in no
case be credited to the account of the agent.
)
V.
d. Where an insurance agent collects a premium on a policy of
insurance on behalf of an insurers, he shall deposit with, or
D
dispatch by post to, the insurer, the premium so collected in
full without deduction of his commission within twenty-four
(A
hours of the collection excluding bank and postal holidays.
e. The Central Government, may, by rules, relax the

requirements of sub-section (1) in respect of particular
N
categories in insurance policies.
AI
f. The Authority may, from time to time, specify, by the

regulations made by it, the manner of receipt of premium by
.J
the insurer. The above provision states that no risk is

assumed by the insurer unless premium payable is received in
advance.
.P
8. The Motor Vehicles Act, 1988 (for short, the M.V. Act) in
:S
Chapter XI deals with insurance of motor vehicles against

third party risks. Section 145 in that Chapter provides for
definitions:
BY
a. authorised insurer,
b. certificate of insurance,
c. liability,
d. policy of insurance,
e. property,
f. reciprocating country and
g. third party.
9. Section 146 mandates insurance of a motor vehicle against

third party risk. Inter alia, it provides that no person shall use
101
the motor vehicle in a public place unless a policy of

insurance has been taken with regard to such vehicle
complying with requirements as set out in Chapter XI. The
owner of vehicle, thus, is statutorily mandated to obtain
insurance for the motor vehicle to cover the third party risk
except in exempted and exception categories as set out in
Section 146 itself.
10. Section 147 makes provision for requirements of policies

and limits of liability. Sub-section (5) thereof is relevant for the
)
present purposes which reads as follows: S. 147.
V.
Requirements of policies and limits of liability.-
D
(1) ) to (4) xxx xxx xxx xxx xxx xxx
(A
(5) Notwithstanding anything contained in any law for the time
being in force, an insurer issuing a policy of insurance under
this section shall be liable to indemnify the person or classes
of persons specified in the policy in respect of any liability
N
which the policy purports to cover in the case of that person
or those classes of persons.
AI
11. Section 149 deals with the duty of insurers to satisfy

.J
judgments and awards against persons insured in respect of

third party risks. Sub-section (1) which is relevant for the
present purposes reads asunder: S.149.- Duty of insurers to
.P
satisfy judgments and awards against persons insured in

respect of third party risks.- (1) If, after a certificate of
:S
insurance has been issued under sub-section (3) of section

147 in favour of the person by whom a policy has been
effected, judgment or award in respect of any such liability as
BY
is required to be covered by a policy under clause (b) of sub-

section (1) of section 147 (being a liability covered by the
terms of the policy) or under the provisions of section 163A is
obtained against any person insured by the policy, then,
notwithstanding that the insurer may be entitled to avoid or
cancel or may have avoided or cancelled the policy, the
insurer shall, subject to the provisions of this section, pay to
the person entitled to the benefit of the decree any sum not
exceeding the sum assured payable there under, as if he were
the judgment debtor, in respect of the liability, together with
any amount payable in respect of costs and any sum payable
102
in respect of interest on that sum by virtue of any enactment

relating to interest on judgments.
12. The above provisions came up for consideration in the

case of Inderjit Kaur. That was a case where a bus met with
an accident. The policy of insurance was issued by the
Oriental Insurance Company Limited on November 30, 1989.
The premium for the policy was paid by cheque but the
cheque was dishonoured. The insurance company sent a letter
to the insured on January 23, 1990 that the cheque towards
)
premium had been dishonoured and, therefore, the insurance
V.
company was not at risk. The premium was paid in cash on
May 2, 1990 but in the meantime on April 19, 1990 the
D
accident took place, the bus collided with the truck and the
truck driver died. The truck driver‘s wife and minor sons filed
(A
claim petition. A three-Judge Bench of this Court noticed the
above provisions and then held in paragraphs 9, 10 and 12
(pages 375 and 376) as under:
N
9. We have, therefore, this position. Despite the bar
AI
created by Section 64-VB of the Insurance Act, the appellant,
an authorised insurer, issued a policy of insurance to cover
the bus without receiving the premium there for. By reason of
.J
the provisions of Sections 147(5) and 149(1) of the Motor

Vehicles Act, the appellant became liable to indemnify third
parties in respect of the liability which that policy covered and
.P
to satisfy awards of compensation in respect thereof

notwithstanding its entitlement (upon which we do not
:S
express any opinion) to avoid or cancel the policy for the

reason that the cheque issued in payment of the premium
thereon had not been honoured.
BY
10. The policy of insurance that the appellant issued was

a representation upon which the authorities and third parties
were entitled to act. The appellant was not absolved of its
obligations to third parties under the policy because it did not
receive the premium. Its remedies in this behalf lay against
the insured. 12. It must also be noted that it was the
appellant itself who was responsible for its predicament. It
had issued the policy of insurance upon receipt only of a
cheque towards the premium in contravention of the
provisions of Section 64-VB of the Insurance Act. The public
103
interest that a policy of insurance serves must, clearly, prevail

over the interest of the appellant.
13. In Inderjit Kaur, the Court invoked the doctrine of public

interest and held that the insurance company was liable to
indemnify third parties in respect of the liability which the
policy covered despite the bar created by Section 64-VB of the
Insurance Act. The Court did leave open the question of
insurer‘s entitlement to avoid or cancel the policy as against
insured when the cheque issued for payment of the premium
)
was dishonoured.
V.
14. In New India Assurance Co. Ltd. v. Rula and others, the
D
Court was concerned with a question very similar to the
question posed before us. That was a case where the
(A
insurance policy was issued by the New India Assurance Co.
Ltd. in terms of the requirements of the M.V. Act but the
cheque by which the owner had paid the premium bounced
and the policy was cancelled by the insurance company but
N
before the cancellation of the policy, accident had taken place.
AI
A two-Judge Bench of this Court considered the statutory
provisions contained in the M.V. Act and the judgment in
Inderjit Kaur. In paragraph 13 (at page 200), the Court held as
.J
under: 13. This decision, which is a three-Judge Bench

decision, squarely covers the present case also. The
subsequent cancellation of the insurance policy in the instant
.P
case on the ground that the cheque through which premium

was paid was dishonoured, would not affect the rights of the
:S
third party which had accrued on the issuance of the policy

on the date on which the accident took place. If, on the date of
accident, there was a policy of insurance in respect of the
BY
vehicle in question, the third party would have a claim against

the Insurance Company and the owner of the vehicle would
have to be indemnified in respect of the claim of that party.
Subsequent cancellation of the insurance policy on the ground
of non-payment of premium would not affect the rights
already accrued in favour of the third party (Emphasis
supplied)
15. In Seema Malhotra, the Court was concerned with the

question whether the insurer is liable to honour the contract
of insurance where the insured gave a cheque to the insurer
104
towards the premium amount but the cheque was

dishonoured by the drawee bank due to insufficiency of funds
in the account of the drawer. In the case of Seema Malhotra,
the above question arose from the following facts : the owner
of a Maruti car entered into an insurance contract with
National Insurance Company Limited on December 21, 1993;
on the same day the owner gave a cheque of Rs. 4,492/-
towards the first instalment of the premium; the insurance
company issued a cover note as contemplated in Section 149
of the M.V. Act; the car met with an accident on December 31,
)
1993 in which the owner died and the car was completely
V.
damaged; on January 10, 1994 the bank on which the cheque
was drawn by the insured sent an intimation to the insurance
D
company that the cheque was dishonoured as there were no
funds in the account of the drawer and on January 20, 1994
(A
the business concern of the owner was informed that the
cheque having been dishonoured by the bank, the insurance
policy is cancelled with immediate effect and the company is
N
not at risk. The widow and children of the owner filed a claim
for the loss of the vehicle with the insurance company. When
AI
the claim was repudiated, they moved the State Consumer
Protection Commission (for short, Commission).The
Commission rejected the claim of the claimants and held that
.J
insurer was justified in repudiating the contract as soon as

cheque got bounced. The claimants moved the Jammu and
.P
Kashmir High Court. The High Court reversed the order of the
Commission and held that the insurance company chose to
cancel the insurance policy from the date of issuance of
:S
communication and not from the date the cheque was issued
which got bounced. The matter reached this Court from the
above judgment of the High Court. The Court referred to
BY
Section 64-VB of the Insurance Act, Sections25, 51,52,54 and

65 of the Indian Contract Act and the decisions of this Court
in Inderjit Kaur and Rula and held (at pages 156 and 157) as
under:
17. In a contract of insurance when the insured gives a

cheque towards payment of premium or part of the premium,
such a contract consists of reciprocal promise. The drawer of
the cheque promises the insurer that the cheque, on
presentation, would yield the amount in cash. It cannot be
forgotten that a cheque is a bill of exchange drawn on a
105
specified banker. A bill of exchange is an instrument in

writing containing an unconditional order directing a certain
person to pay a certain sum of money to a certain person. It
involves a promise that such money would be paid.
18. Thus, when the insured fails to pay the premium

promised, or when the cheque issued by him towards the
premium is returned dishonoured by the bank concerned the
insurer need not perform his part of the promise. The
corollary is that the insured cannot claim performance from
)
the insurer in such a situation.
V.
19. Under Section 25 of the Contract Act an agreement
D
made without consideration is void. Section 65 of the Contract
Act says that when a contract becomes void any person who
(A
has received any advantage under such contract is bound to
restore it to the person from whom he received it. So, even if
the insurer has disbursed the amount covered by the policy to
the insured before the cheque was returned dishonoured, the
N
insurer is entitled to get the money back.
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20. However, if the insured makes up the premium even

after the cheque was dishonoured but before the date of
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accident it would be a different case as payment of

consideration can be treated as paid in the order in which the
nature of transaction required it. As such an event did not
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happen in this case, the Insurance Company is legally

justified in refusing to pay the amount claimed by the
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respondents.
16. In Deddappa, the Court was concerned with the plea of

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the insurance company that although the vehicle was insured

by the owner for the period October 17, 1997 to October 16,
1998 but the cheque issued there for having been
dishonoured, the policy was cancelled and, thus, it was not
liable. That was a case where for the above period of policy,
the cheque was issued by the owner on October 15, 1997; the
bank issued are turn memo on October 21, 1997 disclosing
dishonour of the cheque with remarks fund insufficient and
the insurance company, thereafter, cancelled the policy of
insurance by communicating to the owner of the vehicle and
106
an intimation to the concerned RTO. The accident occurred on

February 6, 1998 after the cancellation of the policy.
17. The Court in Deddappa again considered the relevant

statutory provisions and decisions of this Court including the
above three decisions in Inderjit Kaur, Rula and Seema
Malhotra. In para 24 (at page 601) of the Report, the Court
observed as under: 24. We are not oblivious of the distinction
between the statutory liability of the insurance company vis-a
-vis a third party in the context of Sections 147 and 149 of the
)
Act and its liabilities in other cases. But the same liabilities
V.
arising under a contract of insurance would have to be met if
the contract is valid. If the contract of insurance has been
D
cancelled and all concerned have been intimated thereabout,
we are of the opinion, the insurance company would not be
(A
liable to satisfy the claim. Then in para 26 (at page 602), the
Court invoked extraordinary jurisdiction under Article 142 of
the Constitution of India and directed the insurance company
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to pay the amount of claim to the claimants and recover the
same from the owner of the vehicle.
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18. We find it hard to accept the submission of the learned

counsel for the insurer that the three-Judge Bench decision in
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Inderjit Kaur has been diluted by the subsequent decisions in

Seema Malhotra and Deddappa. Seema Malhotra and
Deddappa turned on the facts obtaining therein. In the case of
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Seema Malhotra, the claim was by the legal heirs of the

insured for the damage to the insured vehicle. In this peculiar
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fact situation, the Court held that when the cheque for
premium returned dishonoured, the insurer was not obligated
to perform its part of the promise. Insofar as Deddappa is
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concerned, that was a case where the accident of the vehicle

occurred after the insurance policy had already been cancelled
by the insurance company.
19. In our view, the legal position is this : where the

policy of insurance is issued by an authorized insurer on
receipt of cheque towards payment of premium and such
cheque is returned dishonoured, the liability of authorized
insurer to indemnify third parties in respect of the
liability which that policy covered subsists and it has to
satisfy award of compensation by reason of the provisions
107
of Sections 147(5) and 149(1)of the M.V. Act unless the

policy of insurance is cancelled by the authorized insurer
and intimation of such cancellation has reached the
insured before the accident. In other words, where the
policy of insurance is issued by an authorized insurer to
cover a vehicle on receipt of the cheque paid towards
premium and the cheque gets dishonored and before the
accident of the vehicle occurs, such insurance company
cancels the policy of insurance and sends intimation
thereof to the owner, the insurance company's liability to
)
indemnify the third parties which that policy covered
V.
ceases and the insurance company is not liable to satisfy
awards of compensation in respect thereof.
D
20. Having regard to the above legal position, insofar as
(A
facts of the present case are concerned, the owner of the
bus obtained policy of insurance from the insurer for the
period April 16, 2004 to April 15, 2005for which premium
N
was paid through cheque on April 14, 2004. The accident
occurred on May 11, 2004. It was only thereafter that the
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insurer cancelled the insurance policy by communication
dated May 13, 2004 on the ground of dishonour of cheque
which was received by the owner of the vehicle on May
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21, 2004. The cancellation of policy having been done by

the insurer after the accident, the insurer became liable
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to satisfy award of compensation passed in favour of the

claimants.
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21. In view of the above, the judgment of the High Court

impugned in the appeal does not call for any interference.
Civil appeal is dismissed. However, the insurer shall be at
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liberty to prosecute its remedy to recover the amount

paid to the claimants from the insured.
.....................J. (R.M. Lodha)
.....................J. (H. L. Gokhale)
NEW DELHI/APRIL 17, 2012.
108
HEAD NOTES:
-Heads of compensation for pecuniary and non-pecuniary
described in para No. 5 of the judgment.
-Meaning of Permanent Disability, Temporary Disability,
Partial or Total Permanent Disability is described in para No.
6 of the judgment.
-Meaning of functional disability is described in para No. 9
of the judgment.
)
V.
- It may be noted that when compensation is awarded by
treating the loss of future earning capacity as 100% (or even
D
anything more than 50%), the need to award compensation
separately under the head of loss of amenities or loss of
(A
expectation of life may disappear and as a result, only a token
or nominal amount may have to be awarded under the head of
loss of amenities or loss of expectation of life, as otherwise
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there may be a duplication in the award of compensation. Be
that as it may. (Para No. 10)
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- The Tribunal may invariably make it a point to require the

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evidence of the Doctor who treated the injured or who

assessed the permanent disability. (Para No. 12)
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CIVIL APPELLATE JURISDICTION
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CIVIL APPEAL NO.8981 OF 2010

(Arising out of SLP (C) No. 10383 of 2007)
BY
Raj Kumar ....Appellant

Versus
Ajay Kumar & Anr. .... Respondents
ORDER
R.V.RAVEENDRAN, J.
1. Leave granted. Heard.
109
2. The appellant was injured in a motor accident on 1.10.1991

and sustained fracture of both bones of left leg and fracture of
left radius. He was under treatment from 1.10.1991 to
16.6.1992. The Motor Accident Claims Tribunal, by award
dated 20.7.2002, awarded compensation of Rs. 94,700/-,
with interest at 9% per annum from the date of petition till
date of realization. The amount awarded was made up of Rs.
11,000/- towards medical expenses, conveyance and special
diet; Rs. 3600/- towards loss of earning during period of
)
treatment; Rs. 25,000/- for pain and suffering; and Rs.
V.
55,080 towards loss of future earnings. For calculating the
loss of future earnings, the Tribunal took the minimum wage
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as the monthly income of the appellant, that is Rs. 891/-
rounded off to Rs. 900/- and deducted one-third therefrom
(A
towards the personal and living expenses; and by assuming
the percentage of disability (45%) shown in disability
certificate to be the economic disability, the Tribunal arrived
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at loss of future earnings as 45% of Rs. 600/-, that is Rs.
270/- per month or Rs. 3,240/- per annum. By applying a
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multiplier of 17, it arrived at Rs. 55,080/- as the loss of

future earnings. The appellant filed an appeal seeking
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increase in compensation. The High Court rejected the said

appeal by the impugned judgment dated 31.1.2007 on the
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ground that the disability certificate produced by the

appellant was not reliable. The said judgment of the High
Court is challenged in this appeal by special leave.
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3. The appellant puts forth two grievances:

(i) the assessment of monthly income at Rs. 900/- was very
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low; and
(ii) deduction of one third of the income (towards personal and
living expenses) while assessing the future loss of earning
was not warranted. The questions that therefore arise for our
consideration are whether the principles adopted for assessing
the compensation were erroneous and whether compensation
awarded requires to be increased.
General principles relating to compensation in injury cases
110
4. The provision of the Motor Vehicles Act, 1988 (`Act' for

short) makes it clear that the award must be just, which
means that compensation should, to the extent possible, fully
and adequately restore the claimant to the position prior to
the accident. The object of awarding damages is to make good
the loss suffered as a result of wrong done as far as money
can do so, in a fair, reasonable and equitable manner. The
court or tribunal shall have to assess the damages objectively
and exclude from consideration any speculation or fancy,
)
though some conjecture with reference to the nature of
V.
disability and its consequences, is inevitable. A person is not
only to be compensated for the physical injury, but also for
D
the loss which he suffered as a result of such injury. This
means that he is to be compensated for his inability to lead a
(A
full life, his inability to enjoy those normal amenities which he
would have enjoyed but for the injuries, and his inability to
earn as much as he used to earn or could have earned.
N
(See C. K. Subramonia Iyer vs. T. Kunhikuttan Nair - AIR
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1970 SC 376, R. D. Hattangadi vs. Pest Control (India) Ltd.-
1995 (1) SCC 551 and Baker vs. Willoughby - 1970 AC 467).
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5. The heads under which compensation is awarded in

personal injury cases are the following:
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Pecuniary damages (Special Damages)

(i) Expenses relating to treatment, hospitalization,
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medicines, transportation, nourishing food, and

miscellaneous expenditure.
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(ii) Loss of earnings (and other gains) which the injured

would have made had he not been injured, comprising:
(a) Loss of earning during the period of treatment;
(b) Loss of future earnings on account of permanent
disability.
(iii) Future medical expenses.
Non-pecuniary damages (General Damages)
111
(iv) Damages for pain, suffering and trauma as a

consequence of the injuries.
(v) Loss of amenities (and/or loss of prospects of
marriage).
(vi) Loss of expectation of life (shortening of normal
longevity).
In routine personal injury cases, compensation will be
awarded only under heads (i), (ii) (a) and (iv). It is only in
)
serious cases of injury, where there is specific medical
V.
evidence corroborating the evidence of the claimant, that
compensation will be granted under any of the heads (ii) (b),
D
(iii), (v) and (vi) relating to loss of future earnings on account
of permanent disability, future medical expenses, loss of
(A
amenities (and/or loss of prospects of marriage) and loss of
expectation of life. Assessment of pecuniary damages under
item (i) and under item (ii)(a) do not pose much difficulty as
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they involve reimbursement of actuals and are easily
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ascertainable from the evidence. Award under the head of
future medical expenses - item (iii) -- depends upon specific
medical evidence regarding need for further treatment and
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cost thereof.
Assessment of non-pecuniary damages - items (iv), (v) and
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(vi)-- involves determination of lump sum amounts with

reference to circumstances such as age, nature of
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injury/deprivation/ disability suffered by the claimant and the

effect thereof on the future life of the claimant. Decision of
this Court and High Courts contain necessary guidelines for
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award under these heads, if necessary. What usually poses

some difficulty is the assessment of the loss of future earnings
on account of permanent disability - item (ii)(a). We are
concerned with that assessment in this case.
Assessment of future loss of earnings due to permanent
disability
6. Disability refers to any restriction or lack of ability to
perform an activity in the manner considered normal for a
human-being. Permanent disability refers to the residuary
112
incapacity or loss of use of some part of the body, found

existing at the end of the period of treatment and
recuperation, after achieving the maximum bodily
improvement or recovery which is likely to remain for the
remainder life of the injured.
Temporary disability refers to the incapacity or loss of use
of some part of the body on account of the injury, which
will cease to exist at the end of the period of treatment
and recuperation.
)
V.
Permanent disability can be either partial or total Partial
permanent disability refers to a person's inability to
D
perform all the duties and bodily functions that he could
perform before the accident, though he is able to perform
(A
some of them and is still able to engage in some gainful
activity. Total permanent disability refers to a person's
inability to perform any avocation or employment related
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activities as a result of the accident. The permanent
disabilities that may arise from motor accidents injuries,
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are of a much wider range when compared to the physical

disabilities which are enumerated in the Persons with
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Disabilities (Equal Opportunities, Protection of Rights and

Full Participation) Act, 1995 („Disabilities Act' for short).
But if any of the disabilities enumerated in section 2(i) of
.P
the Disabilities Act are the result of injuries sustained in a

motor accident, they can be permanent disabilities for the
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purpose of claiming compensation.

7. The percentage of permanent disability is expressed by the
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Doctors with reference to the whole body, or more often than

not, with reference to a particular limb. When a disability
certificate states that the injured has suffered permanent
disability to an extent of 45% of the left lower limb, it is not
the same as 45% permanent disability with reference to the
whole body. The extent of disability of a limb (or part of the
body) expressed in terms of a percentage of the total functions
of that limb, obviously cannot be assumed to be the extent of
disability of the whole body. If there is 60% permanent
disability of the right hand and 80% permanent disability of
113
left leg, it does not mean that the extent of permanent

disability with reference to the whole body is 140% (that is
80% plus 60%). If different parts of the body have suffered
different percentages of disabilities, the sum total thereof
expressed in terms of the permanent disability with reference
to the whole body, cannot obviously exceed 100%.
8. Where the claimant suffers a permanent disability as a
result of injuries, the assessment of compensation under the
head of loss of future earnings, would depend upon the effect
)
V.
and impact of such permanent disability on his earning
capacity.
D
The Tribunal should not mechanically apply the percentage of
permanent disability as the percentage of economic loss or
(A
loss of earning capacity. In most of the cases, the percentage
of economic loss, that is, percentage of loss of earning
capacity, arising from a permanent disability will be different
N
from the percentage of permanent disability. Some Tribunals
wrongly assume that in all cases, a particular extent
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(percentage) of permanent disability would result in a

corresponding loss of earning capacity, and consequently, if
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the evidence produced show 45% as the permanent disability,

will hold that there is 45% loss of future earning capacity. In
most of the cases, equating the extent (percentage) of loss of
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earning capacity to the extent (percentage) of permanent

disability will result in award of either too low or too high a
:S
compensation. What requires to be assessed by the Tribunal

is the effect of the permanently disability on the earning
capacity of the injured; and after assessing the loss of earning
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capacity in terms of a percentage of the income, it has to be

quantified in terms of money, to arrive at the future loss of
earnings (by applying the standard multiplier method used to
determine loss of dependency). We may however note that in
some cases, on appreciation of evidence and assessment, the
Tribunal may find that percentage of loss of earning capacity
as a result of the permanent disability, is approximately the
same as the percentage of permanent disability in which case,
of course, the Tribunal will adopt the said percentage for
determination of compensation (see for example, the decisions
114
of this court in Arvind Kumar Mishra v. New India Assurance

Co. Ltd.-2010(10) SCALE 298 and Yadava Kumar v. D.M.,
National Insurance Co. Ltd. - 2010 (8) SCALE 567).
9. Therefore, the Tribunal has to first decide whether there is
any permanent disability and if so the extent of such
permanent disability. This means that the tribunal should
consider and decide with reference to the evidence:
(i) whether the disablement is permanent or temporary;
)
(ii) if the disablement is permanent, whether it is permanent
V.
total disablement or permanent partial disablement,
D
(iii) if the disablement percentage is expressed with
reference to any specific limb, then the effect of such
(A
disablement of the limb on the functioning of the entire
body, that is the permanent disability suffered by the
person. If the Tribunal concludes that there is no
N
permanent disability then there is no question of
proceeding further and determining the loss of future
AI
earning capacity. But if the Tribunal concludes that there

is permanent disability then it will proceed to ascertain
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its extent. After the Tribunal ascertains the actual extent

of permanent disability of the claimant based on the
medical evidence, it has to determine whether such
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permanent disability has affected or will affect his earning

capacity.
:S
10. Ascertainment of the effect of the permanent disability on

the actual earning capacity involves three steps.
BY
The Tribunal has to first ascertain what activities the claimant

could carry on in spite of the permanent disability and what
he could not do as a result of the permanent ability (this is
also relevant for awarding compensation under the head of
loss of amenities of life).
The second step is to ascertain his avocation, profession and
nature of work before the accident, as also his age.
The third step is to find out whether
115
(i) the claimant is totally disabled from earning any kind of

livelihood, or
(ii) whether in spite of the permanent disability, the claimant
could still effectively carry on the activities and functions,
which he was earlier carrying on, or
(iii) whether he was prevented or restricted from discharging
his previous activities and functions, but could carry on some
other or lesser scale of activities and functions so that he
)
continues to earn or can continue to earn his livelihood. For
V.
example, if the left hand of a claimant is amputated, the
permanent physical or functional disablement may be
D
assessed around 60%. If the claimant was a driver or a
carpenter, the actual loss of earning capacity may virtually be
(A
hundred percent, if he is neither able to drive or do carpentry.
On the other hand, if the claimant was a clerk in government
service, the loss of his left hand may not result in loss of
N
employment and he may still be continued as a clerk as he
could perform his clerical functions; and in that event the loss
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of earning capacity will not be 100% as in the case of a driver

or carpenter, nor 60% which is the actual physical disability,
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but far less. In fact, there may not be any need to award any
compensation under the head of `loss of future earnings', if
the claimant continues in government service, though he may
.P
be awarded compensation under the head of loss of amenities

as a consequence of losing his hand.
:S
Sometimes the injured claimant may be continued in service,

but may not found suitable for discharging the duties
BY
attached to the post or job which he was earlier holding, on

account of his disability, and may therefore be shifted to some
other suitable but lesser post with lesser emoluments, in
which case there should be a limited award under the head of
loss of future earning capacity, taking note of the reduced
earning capacity.
It may be noted that when compensation is awarded by
treating the loss of future earning capacity as 100% (or
even anything more than 50%), the need to award
compensation separately under the head of loss of
116
amenities or loss of expectation of life may disappear and

as a result, only a token or nominal amount may have to
be awarded under the head of loss of amenities or loss of
expectation of life, as otherwise there may be a
duplication in the award of compensation. Be that as it
may.
11. The Tribunal should not be a silent spectator when
medical evidence is tendered in regard to the injuries and
their effect, in particular the extent of permanent disability.
)
V.
Sections 168 and 169 of the Act make it evident that the
Tribunal does not function as a neutral umpire as in a civil
suit, but as an active explorer and seeker of truth who is
D
required to `hold an enquiry into the claim' for determining
(A
the `just compensation'. The Tribunal should therefore take
an active role to ascertain the true and correct position so that
it can assess the `just compensation'. While dealing with
personal injury cases, the Tribunal should preferably equip
N
itself with a Medical Dictionary and a Handbook for evaluation
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of permanent physical impairment (for example the Manual
for Evaluation of Permanent Physical Impairment for
Orthopaedic Surgeons, prepared by American Academy of
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Orthopaedic Surgeons or its Indian equivalent or other

authorized texts) for understanding the medical evidence and
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assessing the physical and functional disability. The Tribunal

may also keep in view the first schedule to the Workmen's
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Compensation Act, 1923 which gives some indication about

the extent of permanent disability in different types of injuries,
in the case of workmen. If a Doctor giving evidence uses
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technical medical terms, the Tribunal should instruct him to

state in addition, in simple non-medical terms, the nature and
the effect of the injury. If a doctor gives evidence about the
percentage of permanent disability, the Tribunal has to seek
clarification as to whether such percentage of disability is the
functional disability with reference to the whole body or
whether it is only with reference to a limb. If the percentage of
permanent disability is stated with reference to a limb, the
Tribunal will have to seek the doctor's opinion as to whether it
is possible to deduce the corresponding functional permanent
117
disability with reference to the whole body and if so the

percentage.
12. The Tribunal should also act with caution, if it proposed
to accept the expert evidence of doctors who did not treat the
injured but who give `ready to use' disability certificates,
without proper medical assessment. There are several
instances of unscrupulous doctors who without treating the
injured, readily giving liberal disability certificates to help the
claimants. But where the disability certificates are given by
)
V.
duly constituted Medical Boards, they may be accepted
subject to evidence regarding the genuineness of such
certificates. The Tribunal may invariably make it a point
D
to require the evidence of the Doctor who treated the
(A
injured or who assessed the permanent disability.
Mere production of a disability certificate or Discharge
Certificate will not be proof of the extent of disability stated
N
therein unless the Doctor who treated the claimant or who
medically examined and assessed the extent of disability of
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claimant, is tendered for cross- examination with reference to

the certificate. If the Tribunal is not satisfied with the medical
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evidence produced by the claimant, it can constitute a Medical

Board (from a panel maintained by it in consultation with
reputed local Hospitals/ Medical Colleges) and refer the
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claimant to such Medical Board for assessment of the

disability.
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13. We may now summarise the principles discussed above:

(i) All injuries (or permanent disabilities arising from injuries),
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do not result in loss of earning capacity.

(ii) The percentage of permanent disability with reference to
the whole body of a person, cannot be assumed to be the
percentage of loss of earning capacity. To put it differently, the
percentage of loss of earning capacity is not the same as the
percentage of permanent disability (except in a few cases,
where the Tribunal on the basis of evidence, concludes that
percentage of loss of earning capacity is the same as
percentage of permanent disability).
118
(iii) The doctor who treated an injured-claimant or who

examined him subsequently to assess the extent of his
permanent disability can give evidence only in regard the
extent of permanent disability. The loss of earning capacity is
something that will have to be assessed by the Tribunal with
reference to the evidence in entirety.
(iv) The same permanent disability may result in different
percentages of loss of earning capacity in different persons,
depending upon the nature of profession, occupation or job,
)
V.
age, education and other factors.
14. The assessment of loss of future earnings is explained
D
below with reference to the following illustrations:
Illustration „A‟: The injured, a workman, was aged 30 years
(A
and earning Rs. 3000/- per month at the time of accident. As
per Doctor's evidence, the permanent disability of the limb as
a consequence of the injury was 60% and the consequential
N
permanent disability to the person was quantified at 30%. The
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loss of earning capacity is however assessed by the Tribunal
as 15% on the basis of evidence, because the claimant is
continued in employment, but in a lower grade. Calculation of
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compensation will be as follows:

a) Annual income before the accident: Rs. 36,000/-.
.P
b) Loss of future earning per annum

(15% of the prior annual income): Rs. 5400/-.
:S
c) Multiplier applicable with reference to age: 17

d) Loss of future earnings: (5400 x 17): Rs. 91,800/-
BY
Illustration „B‟: The injured was a driver aged 30 years,

earning Rs. 3000/- per month. His hand is amputated and his
permanent disability is assessed at 60%. He was terminated
from his job as he could no longer drive. His chances of
getting any other employment was bleak and even if he got
any job, the salary was likely to be a pittance. The Tribunal
therefore assessed his loss of future earning capacity as 75%.
Calculation of compensation will be as follows:
a) Annual income prior to the accident: Rs. 36,000/-.
b) Loss of future earning per annum
119
(75% of the prior annual income): Rs. 27000/-.

c) Multiplier applicable with reference to age: 17
d) Loss of future earnings: (27000 x 17): Rs. 4,59,000/-
Illustration „C‟: The injured was 25 years and a final year

Engineering student. As a result of the accident, he was in
coma for two months, his right hand was amputated and
vision was affected.
The permanent disablement was assessed as 70%. As the
)
injured was incapacitated to pursue his chosen career and as
V.
he required the assistance of a servant throughout his life, the
loss of future earning capacity was also assessed as 70%. The
D
calculation of compensation will be as follows:
(A
a) Minimum annual income he would have got
if had been employed as an Engineer :Rs. 60,000/-
b) Loss of future earning per annum (70%):Rs. 42000/-
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of the expected annual income)
c) Multiplier applicable (25 years) : 18
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d) Loss of future earnings: (42000 x 18) :Rs. 7, 56,000/-
[Note: The figures adopted in illustrations (A) and (B) are

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hypothetical. The figures in Illustration (C) however are based

on actuals taken from the decision in Arvind Kumar Mishra
.P
(supra)].
15. After the insertion of section 163-A in the Act (with effect
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from 14.11.1994), if a claim for compensation is made under

that section by an injured alleging disability, and if the
quantum of loss of future earning claimed, falls under the
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second schedule to the Act, the Tribunal may have to apply

the following principles laid down in Note (5) of the Second
Schedule to the Act to determine compensation:
"5. Disability in non-fatal accidents:
The following compensation shall be payable in case of
disability to the victim arising out of non-fatal accidents: -
Loss of income, if any, for actual period of disablement not
exceeding fifty two weeks.
120
PLUS either of the following:-

(a) In case of permanent total disablement the amount payable
shall be arrived at by multiplying the annual loss of income by
the Multiplier applicable to the age on the date of determining
the compensation, or
(b) In case of permanent partial disablement such percentage
of compensation which would have been payable in the case of
permanent total disablement as specified under item (a)
)
above.
V.
Injuries deemed to result in Permanent Total Disablement/
Permanent Partial Disablement and percentage of loss of
D
earning capacity shall be as per Schedule I under Workmen's
Compensation Act, 1923.
(A
16. We may in this context refer to the difficulties faced by
claimants in securing the presence of busy Surgeons or
N
treating Doctors who treated them, for giving evidence. Most of
them are reluctant to appear before Tribunals for obvious
AI
reasons either because their entire day is likely to be wasted

in attending the Tribunal to give evidence in a single case or
.J
because they are not shown any priority in recording evidence

or because the claim petition is filed at a place far away from
the place where the treatment was given. Many a time, the
.P
claimants are reluctant to take coercive steps for summoning

the Doctors who treated them, out of respect and gratitude
:S
towards them or for fear that if forced to come against their

wishes, they may give evidence which may not be very
favourable. This forces the injured claimants to approach
BY
`professional' certificate givers whose evidence most of the

time is found to be not satisfactory. Tribunals should realize
that a busy Surgeon may be able to save ten lives or perform
twenty surgeries in the time he spends to attend the Tribunal
to give evidence in one accident case. Many busy Surgeons
refuse to treat medico-legal cases out of apprehension that
their practice and their current patients will suffer, if they
have to spend their days in Tribunals giving evidence about
past patients. The solution does not lie in coercing the
Doctors to attend the Tribunal to give evidence. The solution
121
lies in recognizing the valuable time of Doctors and

accommodating them. Firstly, efforts should be made to
record the evidence of the treating Doctors on commission,
after ascertaining their convenient timings. Secondly, if the
Doctors attend the Tribunal for giving evidence, their evidence
may be recorded without delay, ensuring that they are not
required to wait. Thirdly, the Doctors may be given specific
time for attending the Tribunal for giving evidence instead of
requiring them to come at 10.30 A.M. or 11.00 A.M. and wait
)
in the Court Hall. Fourthly, in cases where the certificates are
V.
not contested by the respondents, they may be marked by
consent, thereby dispensing with the oral evidence. These
D
small measures as also any other suitable steps taken to
ensure the availability of expert evidence, will ensure
(A
assessment of just compensation and will go a long way in
demonstrating that Courts/Tribunals show concern for
litigants and witnesses.
N
Assessment of compensation
AI
17. In this case, the Tribunal acted on the disability

certificate, but the High Court had reservations about its
.J
acceptability as it found that the injured had been treated in

the Government Hospital in Delhi whereas the disability
certificate was issued by a District Hospital in the State of
.P
Uttar Pradesh. The reason given by the High Court for

rejection may not be sound for two reasons. Firstly though the
:S
accident occurred in Delhi and the injured claimant was

treated in a Delhi Hospital after the accident, as he hailed
from Chirori Mandi in the neighbouring District of Ghaziabad
BY
in Uttar Pradesh, situated on the outskirts of Delhi, he might

have continued the treatment in the place where he resided.
Secondly the certificate has been issued by the Chief Medical
Officer, Ghaziabad, on the assessment made by the Medical
Board which also consisted of an Orthopaedic Surgeon. We
are therefore of the view that the High Court ought not to have
rejected the said disability certificate.
122
18. The Tribunal has proceeded on the basis that the

permanent disability of the injured-claimant was 45% and the
loss of his future earning capacity was also 45%. The Tribunal
overlooked the fact that the disability certificate referred to
45% disability with reference to left lower limb and not in
regard to the entire body. The said extent of permanent
disability of the limb could not be considered to be the
functional disability of the body nor could it be assumed to
result in a corresponding extent of loss of earning capacity, as
)
the disability would not have prevented him from carrying on
V.
his avocation as a cheese vendor, though it might impede in
his smooth functioning. Normally, the absence of clear and
D
sufficient evidence would have necessitated remand of the
case for further evidence on this aspect. However, instead of
(A
remanding the matter for a finding on this issue, at this
distance of time after nearly two decades, on the facts and
circumstances, to do complete justice, we propose to assess
N
the permanent functional disability of the body as 25% and
the loss of future earning capacity as 20%.
AI
19. The evidence showed that at the time of the accident, the
appellant was aged around 25 years and was eking his
.J
livelihood as a cheese vendor. He claimed that he was earning

a sum of Rs. 3000/- per month. The Tribunal held that as
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there was no acceptable evidence of income of the appellant, it

should be assessed at Rs. 900/- per month as the minimum
:S
wage was Rs. 891 per month. It would be very difficult to

expect a roadside vendor to have accounts or other documents
regarding income. As the accident occurred in the year 1991,
BY
the Tribunal ought to have assumed the income as at least Rs.

1500/- per month (at the rate of Rs. 50/- per day) or Rs.
18,000/- per annum, even in the absence of specific
documentary evidence regarding income.
20. In the case of an injured claimant with a disability, what is
calculated is the future loss of earning of the claimant,
payable to claimant, (as contrasted from loss of dependency
calculated in a fatal accident, where the dependent family
members of the deceased are the claimants). Therefore there is
123
no need to deduct one-third or any other percentage from out

of the income, towards the personal and living expenses.
21. As the income of the appellant is assessed at Rs. 18000/-
per annum, the loss of earning due to functional disability
would be 20% of Rs. 18000/- which is Rs. 3600/- per annum.
As the age of appellant at the time of accident was 25, the
multiplier applicable would be 18. Therefore, the loss of future
earnings would be 3600 x 18 = Rs. 64,800/- (as against Rs.
55,080/- determined by the Tribunal). We are also of the view
)
V.
that the loss of earning during the period of treatment
(1.10.1991 to 16.6.1992) should be Rs. 12750/- at the rate of
Rs. 1500/- for eight and half months instead of Rs. 3600/-
D
determined by the Tribunal. The increase under the two heads
(A
is rounded off to Rs. 20,000/-.
22. In view of the above, we allow this appeal in part and
increase the compensation by Rs. 20,000/- which shall carry
N
interest at the rate awarded by the Tribunal, from the date of
petition to the date of payment.
AI
.J
.......................J. (R. V. Raveendran)

.P
.........................J (H. L. Gokhale)

New Delhi; October 18, 2010.
:S
BY
124
DEFENCES OF INSURANCE COMPANIES: AT A

GLANCE
AN ARTICLE BY HIMANSHU GAMBHIR: ADVOCATE
In order to put forth the defences of Insurance Companies at
the time of contesting the cases on their behalf, I would like to
bring your knowledge the following essential material, which
will not only improve our capability and capacity to contest
the cases on behalf of Insurance Company but to represent
)
the Insurance Company in a better and efficient manner,
V.
before the Tribunals, dealing MACT cases.
Although the provisions of Motor Vehicles Act, 1988 are
D
drafted keeping in mind to protect the rights of road accident
(A
victims and to award just compensation to them, so that in
case of injury they may get proper and suitable treatment as
per their needs and in case of death, the legal heirs/legal
N
representatives may not face financial hardships, yet as per
various provisions of the Motor Vehicles Act, the Insurance
AI
Companies have been given defences which they can raise
either to absolve themselves from the payment of
.J
compensation or to make payment to the victims of accidents

and then to recover the same from the insured. It means the
insurer has no blanket liability to pay the entire/part
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compensation in every case of road accidents and their

liability to pay compensation is dependent upon various
:S
defences/factors. The legislature has given right to the

Insurance Companies to contest the case by raising valid
defences in case of breach of terms and conditions of policy.
BY
Twin objective is sought to be achieved by the legislature by

providing limited defences to the insurer of the vehicles i.e. to
ensure payment of compensation to the victims of accidents
despite the breach of the terms and conditions of the policy
entered between the insured and insurer of the vehicle and
secondly the insured must comply with the traffic rules and
not to violate them, and in case of violation, his
responsibility/liability has also to be affixed.
125
Section 147 of the Motor Vehicles Act defines the liability of

the insurance company in case there is a valid insurance
policy at the relevant time of accident. Section provides
minimum coverage of the liability of insurance company,
however, the insured can get more coverage by making extra
premium to the Insurance Company in case there is any
limitation put on the liability of the Insurance Company.
Under section 147 of the Act, in case if the insured gets his
vehicle third party insured (as mentioned in the types of
)
policies) then the insurance company will be held liable to pay
V.
the amount of compensation to the persons which are
mentioned under the section itself.
D
It is worthwhile to mention here that although the concept of
(A
limited liability has been abolished by amending the act which
came into effect from 1.7.1989, still there are cases wherein
the liability of the Insurance Company is limited, if no extra
premium is charged by the Insurance Company viz a viz in
N
case of property damage the liability of the Insurance
AI
Company is limited to the extent of Rs. 6000/ only and
similarly in case of driver or employees of the insured, the
liability of the insurance company is limited to the extent of
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liability as per Workman Compensation Act. Beyond the

coverage of policy, the owner is liable to pay the amount of
.P
compensation to the owners of properties or to his employees.

However the liability of insurance companies in these limited
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liability insurance policies can be increased by making

extra/additional premium to the Insurance Company by the
insured.
BY
Although the insurance company can raise many defences as

mentioned under section 149 of the Motor Vehicles Act,
however the most important defences which are usually and
generally raised by the insurer at the time of contesting the
cases before the Motor Accident Claims Tribunals are
mentioned as under:
DRIVING LICENCE:
Breach of the terms and conditions qua driving licence is the
most important defences, raised by the Insurance Companies
126
at the time of contesting the case before the Motor Accident

Claims Tribunals. The defence of Insurance Company in order
to get rid of their liability qua driving licence are given as
under:
1. The driver is not holding any driving licence
2. The driving licence of the driver was expired prior to the
accident and at the time of accident, it was not valid being not
renewed.
)
3. The driver was holding driving licence for one category and
V.
was driving the vehicle of another category for example driving
Heavy Transport Vehicle while holding driving licence to drive
D
Light Motor Vehicle.
(A
4. The driver was holding Learning Driving Licence and at the
time of accident he was not accompanied by the holder of
permanent driving licence
N
5. The driver was holding fake driving licence, i.e. a driving
AI
licence which has not been issued by the Transport Authority.
These five defences relates to breach of the terms and
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conditions of policy qua driving licence and in case after

verification it is transpired that the insured has committed
breach of the terms and conditions of the policy then the
.P
Insurance Company by raising their defences wants to get

absolved from payment of compensation to the victims of
:S
accidents or they may get rights of recovery as per various

judgments pronounced by the Hon‘ble higher courts in this
regard.
BY
From the bare reading of the above it is also clear that the
insurance company can avoid their liability or they can be
absolved from their liability in case it is covered under 149(2)
(iii)(b) of the Act which is in relation to obtaining policy by
material concealment.
VIOLATION OF PERMIT
As far as violation of the permit of the vehicle is concerned
127
there are two types of violations which falls within this

category i.e.
1. Wherein the vehicle is not covered by any permit like private
cars, however the said vehicle is used for commercial
purposes for which permit is required. For example if any
owner of private car plies his vehicle by taking fare then it will
be violation of section 149(2) and falls within the violation of
Section 149(2)(i)(a).
)
2. When the vehicle is used for a different purpose for which
V.
the permit is given. For example if the permit is given for
carrying passengers and it is being used for carrying goods or
D
if the permit is given for carrying goods and it is used for
carrying passengers.
CHEQUE DISHONOUR:
(A
Many times the cheque given towards premium to the insurer
N
is dishonored and the insurer did not get any premium
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towards entering into the contract. Since the insurer issues
the cover note/certificate of insurer at the time of taking the
Cheque towards premium of the policy, then question arises
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whether the insurer has to pay the amount of compensation

to the victims of the accidents or they may get absolved from
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their liability altogether. In order to understand the defence of

insurance company in such type of cases, it is necessary to go
:S
through the judgments passed by the Hon‘ble higher courts in

this regard and then to contest the cases on behalf of
insurance company.
BY
1. Oriental versus inderjeet 1997 (2) ACC 478

2. New India Assurance Co. Ltd vs Rula & Ors on 7 March,
2000
3. National Insurance Company Ltd vs Seema Malhotra
decided on 20 February, 2001 Appeal (civil) 1350 of 2001
4. Dedappa v. National Insurance Co. Ltd. [(2008) 2 SCC 595
5. United India Insurance Company Ltd. Vs. Laxmamma &
Ors. [Civil Appeal No. 3589 of 2012 arising out of SLP(C)
No. 23511 of 2009]
128
The rights of the insurer are not limited to contest the cases
only on the available defences enumerated and described
under section 149 of the Motor Vehicles Act, the insurer can
contest the cases of MACT on negligence and quantum of
compensation also. Some important judgments on the
relevant subjects are given as under:
RELEVANT JUDGMENTS ON NEGLIGENCE:

1. The Oriental Insurance vs Meena Variyal decided on 2-4-
)
V.
2007 CA No 5825 of 2006
2. Lachoo Ram Vs. Himachal Road 2014 (1) TAC 724 SC
3. Surender Kumar Arora Vs Manoj Bisla 2012 (3) TAC 353
D
SC
(A
4. Kamlesh Vs Attar Singh 2015 (4) TAC 611 SC
5. New India Ass. Vs Harsh Mishra 2015 (4) TAC 274
6. ICICI Lombard Gen. Vs Jitender Kumar II (2015) ACC 521
7. National Ins. Vs. Islavath Chinnamma IV (2006) ACC 843
N
8. National Insurance Vs. Prem Bhai Patel ACC (Il) 2005 361.
AI
9. Bijoy Kumar Dugar Vs. Bidyadhar II 2006 ACC 36 SC
RELEVANT JUDGMENTS ON PERMANENT DISABILITY
.J
1. Neerupal Mohan Mathur Vs New India III (2013) ACC 1 SC

2. S.N. Kaushik Vs Pal Vij I (2013) ACC 462 DHC
.P
3. Mohd. Tahir Vs Charan Singh IV (2011) ACC 267 DHC

4. Azad Vs Barun Brakamachari II (2011) ACC 313 DHC
5. G. Dhanase Vs M.D. Metropolitan Transport I (2014) 593
:S
SC
6. Raj Kumar Vs Ajay Kumar 2011 (1) TAC 785 SC
BY
7. K. Suresh Vs New India 2012 (4) TAC 711 SC

8. Naresh Kumar Vs National Insurance 2013 (3) TAC 45 DHC
9. Mithusinh Psanasinh Vs Guj State 2015(4) TAC 1(SC)
RELEVANT JUDGMENT ON ASSESSMENT OF

COMPENSATION IN DEATH CASES (CONSTITUTION
BENCH)
National Insurance Company Limited Vs Pranay Sethi and
Ors. Special Leave Petition (Civil) No. 25590 OF 2014 Decided
on 31.10.2017
[
129
RELEVANT JUDGMENTS ON GRATITUOUS PASSENGERS

1. Sanju Devi Vs Ram Dhan I (2016) ACC 411 DHC
2. National Ins. Co. Vs Jethu Ram II (1998) ACC 612
3. Yallwwa Vs National Ins. Co. Ltd. III (2007) ACC 269 SC
4. New India Ins. Co. Ltd. Vs Asha Rani III (2002) ACC 753
SC
5. Oriental Ins. Co. Ltd. Vs. Imlineken II (2001) ACC 232 (SC)
6. New India Ass. Co. Ltd. Vs. Asha III (2002) ACC 753 (SC)
)
7. National Ins. Co. Vs Challa Bharatha III (2004) ACC 292
V.
(SC)
8. MV Jaya Vs. Oriental Gen. Ins. Co. I (2005) ACC 472 (SC)
D
9. National Ins. Co. Ltd. Vs. Bommitthi III (2005) ACC 423
(SC)
(A
10. New India Ass. Co. Ltd. Vs. VedwatiI (2008) ACC 924
(SC)
11. Thokchom Vs. Oriental Ins.Co.Ltd. IV (2007) ACC 370
N
(SC)
12. National Ins. Co. Ltd. Vs. Cholleti (2008) ACC 225 (SC)
AI
13. National Ins. Co. Ltd. Vs. Surat Singh V (2008) ACC 48
14. National Ins. Co. Ltd. Vs. Bhukya II (2009) ACC 545(SC)
.J
.P
HIMANSHU GAMBHIR
ADVOCATE
:S
Mobile No: 9999700758

Email: gambhir0758@gmail.com
BY
130
HEAD NOTES
LIMITATION: Claim petition was filed after a period of 28

years.
It is not as if, it can be open to all and sundry, to approach a

Motor Accident Claims Tribunal, to raise a claim for
compensation, at any juncture, after the accident had taken
place. The individual concerned, must approach the Tribunal
within a reasonable time.
)
V.
[Civil Appeal No.2555 of 2017 Arising out of SLP (C)
No.25760 of 2015]
D
M/s. Purohit and Company
Vs.
(A
N
Khatoonbee and ANR.
AI
Jagdish Singh Khehar, CJI
1. Heard learned counsel for the rival parties.

.J
2. The daughter of the respondents died in a motor accident

on 02.02.1977. A claim petition was filed, under Section 166
.P
of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the

1988 Act'), seeking compensation on account of the motor
:S
accident, wherein the respondents' daughter had died, on

23.02.2005 i.e., after a period of more than 28 years. The
Motor Accident Claims Tribunal (hereinafter referred to as 'the
BY
Tribunal') entertained the above claim.
A prayer made to reject the claim petition, for the reason, that
the said claim had been raised 28 years after the accident in
question, was rejected. It is in these circumstances, that M/s
Purohit and Company (the petitioner herein) approached the
High Court, wherein, the matter was re-adjudicated.
Again, a prayer was made at the hands of the petitioner, that

the claim had been made belatedly, and was not a surviving
claim. The High Court, upheld the justiciability of the claim
131
petition, on the short ground, that no period of limitation had

been provided for raising a claim for compensation, under the
Motor Vehicles Act, 1988. The judgment rendered by the High
Court on 07.07.2015, has been assailed by M/s Purohit &
Company through the instant petition for special leave to
appeal.
3. Leave granted.
4. While raising a challenge to the impugned judgment, in the
)
first instance, a reference was made to Section 110- A of the
V.
Motor Vehicles Act, 1939 (hereinafter referred to as 'the 1939
Act'), in order to demonstrate, that a period of limitation, at
D
the time, was provided for, referable to the date when the
accident had taken place. Section 110A aforementioned is
(A
being extracted hereunder:
"110-A. Application for compensation.-

N
(1) An application for compensation arising out of an accident
of the nature specified in sub-section (1) of Section 110 may
AI
be made-
.J
(a) by the person who has sustained the injury; or
(aa) by the owner of the property; or

.P
(b) where death has resulted from the accident, by all or any
of the legal representatives of the deceased; or
:S
(c) by any agent duly authorised by the person injured or all

or any of the legal representatives of the deceased, as the case
BY
may be: Provided that where all the legal representatives of

the deceased have not joined in any such application for
compensation, the application shall be made on behalf of or
for the benefit of all the legal representatives of the deceased
and the legal representatives who have not so joined, shall be
impleaded as respondents to the application.
(2) Every application under sub-section (1) shall be made to

the Claims Tribunal having jurisdiction over the area in which
the accident occurred, and shall be in such form and shall
contain such particulars as may be prescribed.
132
Provided that where any claim for compensation under

Section 92- A is made in such application, the application
shall contain a separate statement to that effect immediately
before the signature of the applicant;
(3) No application for such compensation shall be entertained

unless it is made within six months of the occurrence of the
accident:
Provided that the Claims Tribunal may entertain the
)
application after the expiry of the said period of six months if
V.
it is satisfied that the applicant was prevented by sufficient
cause from making the application in time."
D
(emphasis is ours)
(A
A perusal of the provision of Section 110A of the 1939 Act,
extracted above, reveals, that a period of limitation of six
months (from the date of occurrence of the accident) was
N
provided for, to raise a claim for compensation.
AI
5. In the successor legislation, namely, the Motor Vehicles

Act, 1988, Section 166(3), as originally enacted, also provided
.J
for limitation of a period of six months for filing a claim

petition. Section 166 aforementioned is extracted hereunder:
.P
"166.Application for compensation.-
(1) An application for compensation arising out of an accident

:S
of the nature specified in sub- section (1) of section 165 may

be made-
BY
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of
the legal representatives of the deceased; or
(d) by any agent duly authorised by the person injured or all

or any of the legal representatives of the deceased, as the case
may be:
133
Provided that where all the legal representatives of the

deceased have not joined in any such application for
compensation, the application shall be made on behalf of or
for the benefit of all the legal representatives of the deceased
and the legal representatives who have not so joined, shall be
impleaded as respondents to the application.
(2) Every application under sub-section (1) shall be made, at

the option of the claimant, either to the Claims Tribunal
having jurisdiction over the area in which the accident
)
occurred, or to the Claims Tribunal within the local limits of
V.
whose jurisdiction the claimant resides or carries on business
or within the local limits of whose jurisdiction the defendant
D
resides, and shall be in such form and contain such
particulars as may be prescribed:
(A
Provided that where no claim for compensation under section
140 is made in such application, the application shall contain
a separate statement to that effect immediately before the
N
signature of the applicant.
AI
(3) No application for such compensation shall be entertained

unless it is made within six months of the occurrence of the
.J
accident:
Provided that the Claims Tribunal may entertain the

.P
application after the expiry of the said period of six months

but not later than twelve months, if it is satisfied that the
:S
applicant was prevented by sufficient cause from making the

application in time.
(4) The Claims Tribunal shall treat any report of accidents

BY
forwarded to it under sub-section (6) of section 158 as an

application for compensation under this Act.
(emphasis is ours)
A perusal of the original provision of Section 166 of the 1988

Act, extracted above reveals, that once again a period of
limitation of six months (from the date of occurrence of the
accident) was provided for. However, on this occasion, a bar
was introduced for entertaining a claim petition, arising out of
134
a motor accident after twelve months (from the date of

occurrence of the accident). Obviously, the period of limitation
provided for through Section 166(3) of the 1988 Act, could be
relaxed upto twelve months, by demonstrating that there was
sufficient cause for such delay.
6. It would however, be pertinent to mention, that the period

of limitation provided under Section 166(3) aforementioned
was completely done away with, with effect from 14.11.1994,
as Section 166(3) came to be deleted, from the Motor Vehicles
)
Act, 1988. The question which has arisen for consideration, in
V.
the instant appeal, is the consequence of the omission of sub-
Section (3) of Section 166 of the 1988 Act. Does the above
D
omission have the effect of allowing a claimant, to file a claim
application, at any time, and whenever he chooses? Even after
(A
a decade!
7. The contention of the respondents-claimants to overcome

the period of limitation was based on two judgments. Firstly,
N
it is based on the judgment in Dhannalal vs. D.P.
AI
Vijayvargiya, (1996) 4 SCC 652, wherein, this Court had held
as under:
.J
"7.In this background, now it has to be examined as to what

is the effect of omission of sub-section (3) of Section 166 of the
Act. From the Amending Act it does not appear that the said
.P
sub-section (3) has been deleted retrospectively. But at the

same time, there is nothing in the Amending Act to show that
:S
benefit of deletion of sub- section (3) of Section 166 is not to

be extended to pending claim petitions where a plea of
limitation has been raised. The effect of deletion of sub-
BY
section (3) from Section 166 of the Act can be tested by an

illustration. Suppose an accident had taken place two years
before 14.11.1994 when sub-section (3) was omitted from
Section 166. For one reason or the other no claim petition had
been filed by the victim or the heirs of the victim till
14.11.1994. Can a claim petition be not filed after 14.11.1994
in respect of such accident?
Whether a claim petition filed after 14.11.1994 can be rejected

by the Tribunal on the ground of limitation saying that the
period of twelve months which had been prescribed when sub-
135
section (3) of Section 166 was in force having expired the right
to prefer the claim petition had been extinguished and shall
not be revived after deletion of sub-section (3) of Section 166
w.e.f. 14.11.1994? According to us, the answer should be in
negative.
When sub-section (3) of Section 166 has been omitted, then

the Tribunal has to entertain a claim petition without taking
note of the date on which such accident had taken place. The
claim petitions cannot be thrown out on the ground that such
)
claim petitions were barred by time when sub-section (3) of
V.
Section 166 was in force. It need not be impressed that
Parliament from time to time has introduced amendments in
D
the old Act as well as in the new Act in order to protect the
interests of the victims of the accidents and their heirs if the
(A
victims die. One such amendment has been introduced in the
Act by the aforesaid Amendment Act 54 of 1994 by
substituting sub-section (6) of Section 158 which provides:
N
"158. (6)As soon as any information regarding any accident
AI
involving death or bodily injury to any person is recorded or
report under this section is completed by a police officer, the
officer in charge of the police station shall forward a copy of
.J
the same within thirty days from the date of recording of

information or, as the case may be, on completion of such
report to the Claims Tribunal having jurisdiction and a copy
.P
thereof to the concerned insurer and where a copy is made

available to the owner, he shall also within thirty days of
:S
receipt of such report, forward the same to such Claims

Tribunal and Insurer."
BY
In view of sub-section (6) of Section 158 of the Act the officer

in-charge of the police station is enjoined to forward a copy of
information/report regarding the accident to the Tribunal
having jurisdiction. A copy thereof has also to be forwarded to
the insurer concerned. It also requires that where a copy is
made available to the owner of the vehicle, he shall within
thirty days of receipt of such copy forward the same to the
Claims Tribunal and insurer. In this background, the deletion
of sub-section (3) from Section 166 should be given full effect
so that the object of deletion of the said section by Parliament
is not defeated.
136
If a victim of the accident or heirs of the deceased victim can

prefer claim for compensation although not being preferred
earlier because of the expiry of the period of limitation
prescribed, how the victim or the heirs of the deceased shall
be in a worse position if the question of condonation of delay
in filing the claim petition is pending either before the
Tribunal, the High Court or the Supreme Court. The present
appeal is one such case.
The appellant has been pursuing from the Tribunal to this
)
Court. His right to get compensation in connection with the
V.
accident in question is being resisted by the respondents on
the ground of delay in filling the same. If he had not filed any
D
petition for claim till 14.11.1994 in respect of the accident
which took place on 4.12.1990, view of the Amending Act he
(A
became entitled to file such claim petition, the period of
limitation having been deleted, the claim petition which has
been filed and is being pursued upto this Court cannot be
N
thrown out on the ground of limitation."
AI
(emphasis is ours)
The second judgment on which reliance was placed, was The

.J
New India Assurance Co. Ltd. vs. C. Padma, (2003) 7 SCC

713, wherein also, the matter was adjudicated on the same
lines by observing as under:
.P
"10. The ratio laid down in Dhannalal's case (supra) applies

:S
with full force to the facts of the present case. When the claim
petition was filed sub-section (3) of Section 166 had been
omitted. Thus, the Tribunal was bound to entertain the claim
BY
petition without taking note of the date on which the accident

took place. Faced with this situation, Mr. Kapoor submitted
that Dhannalal's case does not consider Section 6-A of the
General Clauses Act and therefore, needs to be reconsidered.
We are unable to accept the submission.
Section 6-A of the General Clauses Act, undoubtedly, provides

that the repeal of a provision will not affect the continuance of
the enactment so repealed and in operation at the time of
repeal. However, this is subject to "unless a different intention
appears". In Dhannalal's case the reason for the deletion of
137
sub-section (3) of Section 166 has been set out. It is noted

that Parliament realized the grave injustice and injury caused
to heirs and legal representatives of the victims of accidents if
the claim petition was rejected only on the ground of
limitation. Thus "the different intention" clearly appears and
Section 6A of the General Clauses Act would not apply.
11. Mr. Kapoor, learned counsel for the appellant, has placed
reliance on the decision rendered by this Court in Vinod
Gurudas Raikar vs. National Insurance Co. Ltd., AIR 1991 SC
)
2156. The facts of that case were that the appellant was
V.
injured in an accident, which took place on 22.1.1989. The
claim petition of the appellant was filed on 15.3.1990 with a
D
prayer for condonation of delay. The Tribunal held that in
view of sub-section (3) of Section 166 of the new Motor
(A
Vehicles Act, which came into force on 1.7.1989, the delay of
more than six months could not be condoned. In the facts and
circumstances of that case this Court held that the case of the
N
appellant was covered by the new Act and the delay for a
longer period than six months could not be condoned. In our
AI
view, the facts of the case in Vinod Gurudas (supra) are
different from the facts of the present case, as noticed above.
.J
12. The learned counsel for the appellant, next contended that
since no period of limitation has been prescribed by the
legislature, Article 137 of the Limitation Act may be invoked,
.P
otherwise, according to him, stale claims would be

encouraged leading to multiplicity of litigation for non-
:S
prescribing the period of limitation. We are unable to

countenance the contention of the appellant for more than
one reason.
BY
Firstly, such an Act like the Motor Vehicles Act is a beneficial

legislation aimed at providing relief to the victims or their
families, if otherwise the claim is found genuine.
Secondly, it is a self-contained Act which prescribes the mode

of filing the application, procedure to be followed and award to
be made. The Parliament, in its wisdom, realised the grave
injustice and injury being caused to the heirs and legal
representatives of the victims who suffer bodily injuries/die in
accidents, by rejecting their claim petitions at the threshold
138
on the ground of limitation, and purposely deleted sub-section

(3) of Section 166, which provided the period of limitation for
filing the claim petitions and this being the intendment of the
legislature to give effective relief to the victims and the families
of the motor accidents untrammelled by the technicalities of
the limitation, invoking of Article 137 of the Limitation Act
would defeat the intendment of the Legislature."
(emphasis is ours)
)
Based on the aforesaid determination rendered by this Court,
V.
the High Court, by its impugned order dated 07.07.2015,
arrived at the conclusion, that there being no period of
D
limitation at the juncture, when the claim petition was filed on
23.02.2005, the same could not have been rejected, merely for
(A
reason of delay.
8. Dissatisfied with the impugned order passed by the High

Court on 07.07.2015, M/s Purohit and Company has
N
approached this Court, by filing the instant appeal.
AI
9. The solitary contention advanced at the hands of the

learned counsel for the appellant was, that even though there
.J
may no longer be a defined period of limitation, for

approaching the Motor Accident Claims Tribunal, to raise a
claim for compensation (under the provisions of the Motor
.P
Vehicles Act, 1988), yet a claimant must approach a Court,

for raising such a claim within a reasonable time. It was
:S
submitted, that after a period of time, the claim would be stale

and will have to be treated as a dead claim. Such a claim, it
was submitted, could not be treated as a surviving claim.
BY
To demonstrate situations when an accident's claim would no

longer be considered to be a surviving claim, illustratively it
was submitted, that in a given case when the evidence to
establish the rival claims, would not be available, for the mere
reason of lapse of time. Either, the witnesses would not be
available, or accessible, on account of lapse of time, resulting
in lapse of memory and a situation in which truthful evidence
can no longer be recorded. The contention was, that in such
background, it was imperative for the concerned Court, to
determine whether, in the facts and circumstances of a
139
particular case, the claim could be considered as a surviving

claim, on the date when the claim petition was filed before the
Motor Accident Claims Tribunal.
10. In support of the contention advanced at the hands of the

learned counsel for the appellant, as has been noticed in the
foregoing paragraph, learned counsel invited our attention to
Corporation Bank vs. Navin J. Shah, (2000) 2 SCC 628,
wherein a claim for compensation had been raised under the
Consumer Protection Act, 1986, wherein also, there was no
)
period of limitation prescribed (at the time, when the claim
V.
was raised). Dealing with the question in hand, this Court had
recorded the following observations:
D
"12. We may further notice that there is another strong
(A
reason as to why the claim made by the respondent should
not have been granted. The transactions in question took
place in the years 1979 and 1981. The difficulties in
realisation of the amounts due from the consignee also
N
became clear at the time when the claim was made before the
AI
Corporation and the claim had been made as early as on 19-
12-1982. The petition before the Commission was filed on 25-
9-1992 that is clearly a decade after a claim had been made
.J
before the Corporation. A claim could not have been filed by

the respondent at this distance of time. Indeed at the relevant
time there was no period of limitation under the Consumer
.P
Protection Act to prefer a claim before the Commission but

that does not mean that the claim could be made even after
:S
an unreasonably long delay.
The Commission has rejected this contention by a wholly

BY
wrong approach in taking into consideration that the foreign

exchange payable to Reserve Bank of India was still due and,
therefore, the claim is alive. The claim of the respondent is
from the Bank. At any rate, as stated earlier, when the claim
was made for indemnifying the losses suffered from the
Corporation, it was clear to the parties about the futility of
awaiting any longer for collecting such amounts from the
foreign bank.
In those circumstances, the claim, if at all was to be made,

ought to have been made within a reasonable time thereafter.
140
What is reasonable time to lay a claim depends upon the facts

of each case. In the legislative wisdom, three years' period has
been prescribed as the reasonable time under the Limitation
Act to lay a claim for money. We think, that period should be
the appropriate standard adopted for computing reasonable
time to raise a claim in a matter of this nature. For this
reason also we find that the claim made by the respondent
ought to have been rejected by the Commission."
(emphasis is ours)
)
V.
It would be pertinent to mention, that the claim raised under
the Consumer Protection Act, in the above judgment, was
D
delayed by a period of 10 years, and even though, no period of
limitation was prescribed, this Court held, that the same was
(A
not maintainable.
11. Reliance was also placed on Haryana State Coop. Land

Development Bank Vs. Neelam (2005) 5 SCC 91, wherein, this
N
Court held as under:
AI
"17. In Nedungadi Bank Ltd. (2001) 6 SCC 222, a Bench of

this Court, where S. Saghir Ahmad was a member [His
.J
Lordship was also a member in Ajaib Singh (supra), opined:

(SCC pp.459-60, para 6) "6. Law does not prescribe any time-
limit for the appropriate Government to exercise its powers
.P
under Section 10 of the Act. It is not that this power can be

exercised at any point of time and to revive matters which had
:S
since been settled. Power is to be exercised reasonably and in

a rational manner.
There appears to us to be no rational basis on which the

BY
Central Government has exercised powers in this case after a

lapse of about seven years of the order dismissing the
respondent from service. At the time reference was made no
industrial dispute existed or could be even said to have been
apprehended. A dispute which is stale could not be the
subject-matter of reference under Section 10 of the Act. As to
when a dispute can be said to be stale would depend on the
facts and circumstances of each case. When the matter has
become final, it appears to us to be rather incongruous that
the reference be made under Section 10 of the Act in the
141
circumstances like the present one. In fact it could be said

that there was no dispute pending at the time when the
reference in question was made."
18. It is trite that the courts and tribunals having plenary

jurisdiction have discretionary power to grant an appropriate
relief to the parties. The aim and object of the Industrial
Disputes Act may be to impart social justice to the workman
but the same by itself would not mean that irrespective of his
conduct a workman would automatically be entitled to relief.
)
The procedural laws like estoppel, waiver and acquiescence
V.
are equally applicable to the industrial proceedings. A person
in certain situation may even be held to be bound by the
D
doctrine of acceptance sub silentio.
(A
The respondent herein did not raise any industrial dispute
questioning the termination of her services within a
reasonable time. She even accepted an alternative
employment and has been continuing therein from 10.8.1988.
N
In her replication filed before the Presiding Officer of the
AI
Labour Court while traversing the plea raised by the appellant
herein that she is gainfully employed in HUDA with effect
from 10.8.1988 and her services had been regularized therein,
.J
it was averred:
"6. The applicant workman had already given replication to

.P
the A.L.C.-cum- Conciliation Officer, stating therein that she

was engaged by HUDA from 10.8.1988 as clerk-cum-typist on
:S
daily wage basis. The applicant workman has the right to

come to the service of the management and she is interested
to join them."
BY
19. She, therefore, did not deny or dispute that she had been
regularly employed or her services had been regularized. She
merely exercised her right to join the service of the appellant.
20. It is true that the respondent had filed a writ petition

within a period of three years but indisputably the same was
filed only after the other workmen obtained the same relief
from the Labour Court in a reference made in that behalf by
the State. Evidently in the writ petition she was not in a
position to establish her legal right so as to obtain a writ of or
142
in the nature of mandamus directing the appellant herein to

reinstate her in service. She was advised to withdraw the writ
petition presumably because she would not have obtained any
relief in the said proceeding.
Even the High Court could have dismissed the writ petition on
the ground of delay or could have otherwise refused to
exercise its discretionary jurisdiction. The conduct of the
respondent in approaching the Labour Court after more than
seven years had, therefore, been considered to be a relevant
)
factor by the Labour Court for refusing to grant any relief to
V.
her. Such a consideration on the part of the Labour Court
cannot be said to be an irrelevant one. The Labour Court in
D
the aforementioned situation cannot be said to have exercised
its discretionary jurisdiction injudiciously, arbitrarily and
(A
capriciously warranting interference at the hands of the High
Court in exercise of its discretionary jurisdiction under Article
226 of the Constitution.
N
21. The matter might have been different had the respondent
AI
been appointed by the appellant in a permanent vacancy.
22. Both HUDA and the appellant are statutory organizations.

.J
The service of the respondent with the Appellant was an ad

hoc one. She served the appellant only for a period of one year
three months; whereas she had been serving HUDA for more
.P
than sixteen years. Even if she is directed to be reinstated in

the services of the appellant without back wages as was
:S
directed by the High Court, the same would remain an ad hoc

one and, thus, her services can be terminated upon
compliance of the provisions of the Industrial Disputes Act.
BY
It is also relevant to note that there may or may not now be

any regular vacancy with the appellant-Bank. We have
noticed hereinbefore that in the year 1996, the vacancies had
been filled up and a third party right had been created. It has
not been pointed out to us that there exists a vacancy. Having
considered the equities between the parties, we are of the
opinion that it was not a fit case where the High Court should
have interfered with the discretionary jurisdiction exercised by
the Labour Court.
143
23. For the reasons aforementioned, the impugned judgment

cannot be sustained which is set aside accordingly. This
appeal is allowed. However, in the facts and circumstances of
the case, there shall be no order as to costs."
(emphasis is ours)
It would be relevant to mention, that the above judgment was

rendered in a matter, where the challenge was raised under
the provisions of the Industrial Disputes Act, 1947, wherein
)
also no period of limitation is prescribed to approach the
V.
Industrial Tribunal. Despite the above, this Court arrived at
the conclusion, that a claim raised after a period of 7 years,
D
was not a surviving claim. And therefore, the claim petition
was held to be not maintainable.
(A
12. Drawing an analogy to the judgments rendered under the
Consumer Protection Act, 1986, as also, under the Industrial
Disputes Act, 1947, it was the submission of the learned
N
counsel for the appellant, that even though no period of
limitation remains prescribed, after the amendment of Section
AI
166 of the Motor Vehicles Act, 1988, whereby sub-Section (3)

of Section 166 came to be deleted (with effect from
.J
14.11.1994), yet it would be imperative to determine, whether

at the juncture when the claimant approached the Motor
Accident Claims Tribunal, the claim was a live and surviving
.P
claim.
:S
13. We are satisfied, that the submission advanced at the

hands of the learned counsel for the appellant merits
acceptance. The judgments on which the High Court had
BY
relied, and on which the respondents have emphasised, in our

considered view, are not an impediment, to the acceptance of
the submission canvassed on behalf of the appellant. We say
so, because in Dhannalal's case (supra) the question of
inordinate delay in approaching the Motor Accident Claims
Tribunal, was not considered.
In the second judgment in C. Padma's case (supra), it was

considered. And in the C. Padma's case, the first conclusion
drawn in paragraph 12 was "... if otherwise the claim is found
genuine...". We are of the considered view, that a claim raised
144
before the Motor Accident Claims Tribunal, can be considered

to be genuine, so long as it is a live and surviving claim. We
are satisfied in accepting the declared position of law,
expressed in the judgments relied upon by the learned
counsel for the appellant. It is not as if, it can be open to all
and sundry, to approach a Motor Accident Claims
Tribunal, to raise a claim for compensation, at any
juncture, after the accident had taken place. The
individual concerned, must approach the Tribunal within
a reasonable time.
)
V.
14. The question of reasonability would naturally depend on
the facts and circumstances of each case. We are however,
D
satisfied, that a delay of 28 years, even without reference to
any other fact, cannot be considered as a prima facie
(A
reasonable period, for approaching the Motor Accident Claims
Tribunal. The only justification indicated by the respondents,
for initiating proceedings after a lapse of 28 years, emerges
N
from paragraph 4, contained in the application for
condonation of delay, filed by the claimants, before the
AI
Tribunal. Paragraph 4 aforementioned is extracted hereunder:
"4. That the Petitioners are poor person and they have no
.J
knowledge about the Law. Also the Respondent has not pay
the single pie towards any compensation."
.P
15. Having given our thoughtful consideration to the

justification expressed at the behest of the respondents, for
:S
approaching the Tribunal, after a period of 28 years, we are of

the view, that the explanation tendered, cannot be accepted.
Undoubtedly, the claim (pertaining to an accident which had
BY
occurred on 02.02.1977), in the facts and circumstances of

the instant case, was stale, and ought to have been treated as
a dead claim, at the point of time, when the respondents
approached the Tribunal by filing a claim petition, on
23.02.2005.
16. In view of the reasons recorded hereinabove, we hereby set

aside the impugned order dated 07.07.2015, and allow the
instant appeal, by holding, that the claim raised by the
respondents before the Motor Accident Claims Tribunal, was
145
not a surviving claim, when the respondents approached the

said Tribunal.
17. Before concluding this order, it is relevant to notice, that

by a motion bench order dated 14.09.2015, the appellant
herein was directed to deposit a sum of Rs.25,000/- towards
litigation expenses, payable to the respondents. The aforesaid
deposit was actually made (as has been noticed, in the motion
bench order, dated 12.07.2016). Since the deposit was made,
and was payable to the respondents, we consider it just and
)
appropriate, in the facts and circumstances of this case, to
V.
direct the Registry of this Court, to transmit the aforesaid
amount of Rs.25,000/- to the respondents, by way of a
D
cheque, drawn in the name of respondent No.1.
(A
..........................CJI. (JAGDISH SINGH KHEHAR)
N
............................J. (N.V. RAMANA)
AI
............................J. (Dr. D.Y. CHANDRACHUD)

.J
NEW DELHI;
.P
FEBRUARY 9, 2017.
:S
BY
146
HEAD NOTES:
DEFINTION OF OWNER:
TRANSFER OF VEHICLE AND LIABILITY TO PAY
COMPENSATION
The vehicle was transferred several times before the accident,
however the registration of the vehicle remained the same.
It is held:
)
12 The consistent thread of reasoning which emerges from the
V.
above decisions is that in view of the definition of the
expression ‗owner‘ in Section 2(30), it is the person in whose
D
name the motor vehicle stands registered who, for the
purposes of the Act, would be treated as the ‗owner‘. However,
(A
where a person is a minor, the guardian of the minor would
be treated as the owner. Where a motor vehicle is subject to
an agreement of hire purchase, lease or hypothecation, the
N
person in possession of the vehicle under that agreement is
AI
treated as the owner. In a situation such as the present where
the registered owner has purported to transfer the vehicle but
continues to be reflected in the records of the registering
.J
authority as the owner of the vehicle, he would not stand

absolved of liability. Parliament has consciously introduced
.P
the definition of the expression ‗owner‘ in Section 2(30),

making a departure from the provisions of Section 2(19) in the
:S
earlier Act of 1939. The principle underlying the provisions of

Section 2(30) is that the victim of a motor accident or, in the
case of a death, the legal heirs of the deceased victim should
BY
not be left in a state of uncertainty. A claimant for

compensation ought not to be burdened with following a trail
of successive transfers, which are not registered with the
registering authority. To hold otherwise would be to defeat the
salutary object and purpose of the Act. Hence, the
interpretation to be placed must facilitate the fulfilment of the
object of the law.
147

CIVIL APPEAL NO 1427 OF 2018
NAVEEN KUMAR ..Appellant

VERSUS
VIJAY KUMAR AND ORS ..Respondents
JUDGMENT
)
Dr D Y CHANDRACHUD, J.
V.
1 An accident took place at about 7:30 pm on 27 May 2009
D
when Smt. Jai Devi and her nephew Nitin were walking down
a street in their village. A motor vehicle driven by Rakesh in
(A
the reverse gear hit them. Nitin was run over by the rear wheel
of the car and died on the spot. Smt. Jai Devi received
multiple injuries. Two claim petitions were filed before the
N
Motor Accident Claims Tribunal (‗the Tribunal‘). One of them
was by Smt. Jai Devi. The second was by Somvir and Smt.
AI
Saroj, the parents of Nitin. The vehicle involved in the accident

(a Maruti-800 bearing Registration DL-3CC-3684) was
.J
registered in the name of Vijay Kumar, the First respondent.

According to the First respondent, he had sold the vehicle
to the Second respondent on 12 July 2007 prior to the
.P
accident and had handed over possession of the vehicle

together with relevant documents including the
:S
registration certificate, and forms 29 and 30 for transfer

of the vehicle. The Second respondent stated before the
Tribunal that he sold the vehicle to the Third respondent
BY
on 18 September 2008. The Third respondent in turn

claimed before the Tribunal to have sold the vehicle to the
petitioner. The petitioner, in the course of his written
statement claimed that he had sold the vehicle to Meer
Singh. The succession of transfers was put forth as a
defence to the claim.
2 By its award dated 6 October 2012, the Tribunal granted
compensation in the amount of Rs 10,000/- to Smt. Jai Devi
and of Rs.3,75,000/- on account of the death of Nitin, to his
148
parents. The Tribunal noted that the registration

certificate of the offending vehicle continued to be in the
name of the First respondent. The Tribunal held the First
respondent jointly and severally liable together with the
driver of the vehicle. The vehicle was uninsured on the
date of the accident.
3 The award of the Tribunal was challenged by the First
respondent in appeal before the High Court of Punjab and
Haryana. A learned Single Judge of the High Court allowed
)
V.
the appeal on 25 January 3 2016 on the ground that there
was no justification for the Tribunal to pass an award against
the registered owner when there was evidence that he had
D
transferred the vehicle and the last admitted owner was the
(A
appellant herein. In the view of the High Court, the Tribunal
ought to have passed an award only against the appellant as
the owner. In coming to this conclusion the High Court relied
upon two decisions of this Court: HDFC Bank Limited v
N
Reshma1 and Purnya Kala Devi v State of Assam.
AI
4 On behalf of the appellant, it has been submitted that the

High Court has proceeded on a manifestly erroneous
.J
construction of the legal position. It has been urged that

Section 2(30) of the Motor Vehicles Act, 1988 indicates that
the person in whose name a motor vehicle is registered is the
.P
owner and the only two exceptions to that principle are where
such a person is a minor or where the subject vehicle is under
:S
a hire purchase agreement. The decision of this Court in

Purnya Kala Devi (supra), it has been submitted, related to a
situation where the offending vehicle had been requisitioned
BY
by a state government. Similarly, the decision in Reshma

(supra) dealt with a situation where the vehicle had been
financed against a hypothecation agreement. It was in this
background that this Court held that the person in possession
of the vehicle under a hypothecation agreement was to be
treated as the owner. Having regard to the definition
contained in Section 2(30), it was urged that the High Court
was in error in foisting the liability on the appellant who is not
the registered owner of the vehicle. Learned counsel appearing
on behalf of the appellant submitted that in Pushpa alias
149
Leela v Shakuntala, the position has been clarified by holding

that where notwithstanding the sale of a vehicle, neither the
transferor nor the transferee have taken any step for change
in the name of owner in the certificate of registration, the
person in whose name the registration stands must be
deemed to continue as the owner of the vehicle for the
purposes of the Act.
5 On the other hand, learned counsel appearing on behalf of
the First respondent supported the judgment of the Tribunal
)
V.
by submitting that the appellant as the person in physical
possession and control of the vehicle was liable. Learned
counsel appearing on behalf of the First respondent also relied
D
on the decisions of this Court in Purnya Kala Devi and
(A
Reshma. Learned counsel submits:
(i) ―The sale of a vehicle also results in a presumable change of
physical possession and control of the vehicle from the vendor
N
to the vehicle. The registered owner at the best can be
regarded as an ostensible owner of the vehicle but not the real
AI
owner after the sale of the vehicle, even if his name is there on
the Registration Certificate of the vehicle;
.J
(ii) The definition of owner in the Section 2(30) of the Act, is

not a complete code and the exceptions contained therein are
.P
not exhaustive;
(iii) The Court/Tribunal should apply the test whether the
:S
registered owner has, through legitimate means, fully

relinquished his possession and control over the vehicle or
not. If the answer is in the affirmative, he cannot be made
BY
liable and the person who is in physical possession and

control of the vehicle should be made liable; and
(iv) Section 50 casts the onus of changing the name in the
registration certificate, on both the transferor as well as the
transferee, and hence the transferor (the registered owner)
cannot be made liable, and the transferee who has control
over the use of vehicle should be made liable.‖
6 The expression ‗owner‘ is defined in Section 2(30) of the Act,
1988, thus:
150
―2(30) ―owner‖ means a person in whose name a motor vehicle

stands registered, and where such person is a minor, the
guardian of such minor, and in relation to a motor vehicle
which is the subject of a hire-purchase agreement, or an
agreement of lease or an agreement of hypothecation, the
person in possession of the vehicle under that agreement.‖
The person in whose name a motor vehicle stands registered
is the owner of the vehicle for the purposes of the Act. The use
of the expression ‗means‘ is a clear indication of the position
)
V.
that it is the registered owner who Parliament has regarded as
the owner of the vehicle. In the earlier Act of 1939, the
expression ‗owner‘ was defined in Section 2(19) as follows:
D
―11…2. (19) ‗owner‘ means, where the person in possession of
(A
a motor vehicle is a minor, the guardian of such minor, and in
relation to a motor vehicle which is the subject of a hire-
purchase agreement, the person in possession of the vehicle
N
under that agreement.‖
AI
Evidently, Parliament while enacting the Motor Vehicles Act,
1988 made a specific change by recasting the earlier
definition. Section 2(19) of the earlier Act stipulated that
.J
where a person in possession of a motor vehicle is a minor the

guardian of the minor would be the owner and where the
.P
motor vehicle was subject to a hire purchase agreement, the

person in possession of the vehicle under the agreement
:S
would be the owner. The Act of 1988 has provided in the first
part of Section 2(30) that the owner would be the person in
whose name the motor vehicle stands registered. Where such
BY
a person is a minor the guardian of the minor would be the

owner. In relation to a motor vehicle which is the subject of an
agreement of hire purchase, lease or hypothecation, the
person in possession of the vehicle under that agreement
would be the owner. The latter part of the definition is in the
nature of an exception which applies where the motor vehicle
is the subject of a hire purchase agreement or of an agreement
of lease or hypothecation. Otherwise the definition stipulates
that for the purposes of the Act, the person in whose name the
motor vehicle stands registered is treated as the owner.
151
7 Section 50 deals with the procedure for transfer of

ownership, and provides as follows:
“50. Transfer of ownership.—(1) Where the ownership of any
motor vehicle registered under this Chapter is transferred,—
(a) the transferor shall,—
(i) in the case of a vehicle registered within the same State,
within fourteen days of the transfer, report the fact of transfer,
in such form with such documents and in such manner, as
)
may be prescribed by the Central Government to the
V.
registering authority within whose jurisdiction the transfer is
to be effected and shall simultaneously send a copy of the said
D
report to the transferee; and
(ii) in the case of a vehicle registered outside the State, within
(A
forty-five days of the transfer, forward to the registering
authority referred to in sub-clause (i)—
N
(A) the no objection certificate obtained under section 48; or
AI
(B) in a case where no such certificate has been obtained,—
(I) the receipt obtained under sub-section (2) of section 48; or
.J
(II) the postal acknowledgement received by the transferred if

he has sent an application in this behalf by registered post
.P
acknowledgement due to the registering authority referred to

in section 48,
:S
together with a declaration that he has not received any

communication from such authority refusing to grant such
certificate or requiring him to comply with any direction
BY
subject to which such certificate may be granted;

(b) the transferee shall, within thirty days of the transfer,
report the transfer to the registering authority within whose
jurisdiction he has the residence or place of business where
the vehicle is normally kept, as the case may be, and shall
forward the certificate of registration to that registering
authority together with the prescribed fee and a copy of the
report received by him from the transferor in order that
152
particulars of the transfer of ownership may be entered in the

certificate of registration.
(2) Where—
(a) the person in whose name a motor vehicle stands
registered dies, or
(b) a motor vehicle has been purchased or acquired at a public
auction conducted by, or on behalf of, Government,
)
the person succeeding to the possession of the vehicle or, as
V.
the case may be, who has purchased or acquired the motor
vehicle, shall make an application for the purpose of
D
transferring the ownership of the vehicle in his name, to the
registering authority in whose jurisdiction he has the
(A
residence or place of business where the vehicle is normally
kept, as the case may be, in such manner, accompanied with
such fee, and within such period as may be prescribed by the
N
Central Government.
AI
(3) If the transferor or the transferee fails to report to the
registering authority the fact of transfer within the period
specified in clause (a) or clause (b) of sub-section (1), as the
.J
case may be, or if the person who is required to make an

application under sub-section (2) (hereafter in this section
.P
referred to as the other person) fails to make such application

within the period prescribed, the registering authority may,
:S
having regard to the circumstances of the case, require the

transferor or the transferee, or the other person, as the case
may be, to pay, in lieu of any action that may be taken against
BY
him under section 177 such amount not exceeding one

hundred rupees as may be prescribed under sub-section (5):
Provided that action under section 177 shall be taken against
the transferor or the transferee or the other person, as the
case may be, where he fails to pay the said amount.
(4) Where a person has paid the amount under sub-section
(3), no action shall be taken against him under section 177.
(5) For the purposes of sub-section (3), a State Government
may prescribe different amounts having regard to the period of
153
delay on the part of the transferor or the transferee in

reporting the fact of transfer of ownership of the motor vehicle
or of the other person in making the application under sub-
section (2). 32
(6) On receipt of a report under sub-section (1), or an
application under sub-section (2), the registering authority
may cause the transfer of ownership to be entered in the
certificate of registration.
)
(7) A registering authority making any such entry shall
V.
communicate the transfer of ownership to the transferor and
to the original registering authority, if it is not the original
D
registering authority.‖
8 The decision of the Bench of two judges of this Court in
(A
Pushpa alias Leela (supra) was in a case where the offending
vehicle was registered in the name of J who had sold it to S on
2 February 1993 and had given possession to the transferee.
N
On the date of the transfer the truck was covered by a valid
AI
policy of insurance. Despite the sale of the vehicle the change
of ownership was not reflected in the certificate of registration.
The policy of insurance expired on 24 February 1993.
.J
Subsequently S took out an insurance policy in the name of

the registered owner and it was valid and subsisting when the
.P
accident took place on 7 May 1994. The Tribunal held that no

liability to pay compensation attached to J since he had
:S
ceased to be the owner of the vehicle after its sale on 2

February 1993. S alone was held to be liable for the payment
of compensation to the claimants. On these facts the Bench of
BY
two judges of this Court held as follows:

―11. It is undeniable that notwithstanding the sale of the
vehicle neither the transferor Jitender Gupta nor the
transferee Salig Ram took any step for the change of the name
of the owner in the certificate of registration of the vehicle. In
view of this omission Jitender Gupta must be deemed to
continue as the owner of the vehicle for the purposes of the
Act, even though under the civil law he ceased to be its owner
after its sale on 2-2-1993.‖ (Id at page 244)
154
In the course of its decision, the two judge Bench referred to

the earlier decision in Dr T V Jose v Chacko, which had arisen
under the Motor Vehicles Act 1939. In that context, this Court
had held thus:
―12…There can be transfer of title by payment of consideration
and delivery of the car. The evidence on record shows that
ownership of the car had been transferred. However, the
appellant still continued to remain liable to third parties as
his name continued in the records of RTO as the owner. The
)
V.
appellant could not escape that liability by merely joining Mr
Roy Thomas in these appeals.‖ (Id at page 244)
D
The decision in Dr T V Jose was followed in P P Mohammed v
K Rajappan. Noticing that the decision in Dr T V Jose was
(A
rendered under the Motor Vehicles Act, 1939, the Court in
Pushpa held that the ratio of the decision ―shall apply with
equal force to the facts of the cases arising under the 1988
N
Act‖ in view of the provisions of Section 2(30) and Section 50.
Consequently, the view of this Court was that the person
AI
whose name continues in the record of the registering

authority as the owner of the vehicle is equally liable together
.J
with the insurer.

9 The decision of a three judge Bench of this court in Purnya
.P
Kala Devi (supra) involved a situation where the registered

owner of a vehicle involved in an accident denied his liability
:S
to compensate the legal heirs of the deceased victim on the

ground that the state government had requisitioned the
vehicle. On the date of the accident, the vehicle stood
BY
requisitioned under the Assam Requisition and Control of

Vehicles Act, 1968. The state failed to establish that the
vehicle was released from requisition after service of a notice
in writing to the owner, to take delivery, as required by
Section 5(1) of the state Act. Under the Assam Act, it was only
upon the service of a notice to that effect that no lability for
compensation would lie with the requisitioning authority. The
High Court absolved the state government on the basis of the
definition of the expression ‗owner‘ in Section 2(30) of the
155
Motor Vehicles Act, 1988. Reversing the judgment, this Court

held thus:
―16..the High Court, without adverting to Section 5 of the
Assam Act, merely on the basis of the definition of ―owner‖ as
contained in Section 2(30) of the 1988 Act, mulcted the award
payable by the owner of the vehicle. The High Court failed to
appreciate that at the relevant time the offending vehicle was
under the requisition of Respondent 1 State of Assam under
the provisions of the Assam Act. Therefore, Respondent 1 was
)
V.
squarely covered under the definition of ―owner‖ as contained
in Section 2(30) of the 1988 Act. The High Court failed to
appreciate the underlying legislative intention in including in
D
the definition of ―owner‖ a person in possession of a vehicle
(A
either under an agreement of lease or agreement of
hypothecation or under a hire-purchase agreement to the
effect that a person in control and possession of the vehicle
should be construed as the ―owner‖ and not alone the
N
registered owner. The High Court further failed to appreciate
AI
the legislative intention that the registered owner of the
vehicle should not be held liable if the vehicle was not in his
possession and control. The High Court also failed to
.J
appreciate that Section 146 of the 1988 Act requires that no

person shall use or cause or allow any other person to use a
.P
motor vehicle in a public place without an insurance policy

meeting the requirements of Chapter XI of the 1988 Act and
:S
the State Government has violated the statutory provisions of

the 1988 Act. The Tribunal also erred in accepting the
allegation of Respondent 2 that the vehicle was released on
BY
the date of the accident at 10.30 a.m. and the accident

occurred at 10.30 a.m. without any evidence even though in
the claim petition, it was stated that the accident had
occurred at 10.15 a.m.‖ (Id at page 147)
10 The above observations would indicate that a combination
of circumstances cumulatively weighed with this Court.
Significantly, for the purposes of the present discussion, what
emerges from the above judgment is the circumstance that the
motor vehicle was on the date of the accident requisitioned by
the state government. Requisitioning by its very nature is
156
involuntary insofar as the person whose property is

requisitioned is concerned. This Court observed that it is the
person in control and possession of a vehicle which is under
an agreement of lease, hypothecation or hire purchase who is
construed as the owner and not the registered owner. The
same analogy was drawn to hold that where the vehicle had
been requisitioned, it was the state and not the registered
owner who had possession and control and would hence be
held liable to compensate. Purnya Kala Devi does not hold
)
that a person who transfers the vehicle to another but
V.
continues to be the registered owner under Section 2(30) in
the records of the registering authority is absolved of liability.
D
The situation which arose before the court in that case must
be borne in mind because it was in the context of a
(A
compulsory act of requisitioning by the state that this Court
held, by analogy of reasoning, that the registered owner was
not liable.
N
11 The subsequent decision of a Bench of three judges of this
AI
Court in HDFC Bank Limited v Reshma (supra) involved an
agreement of hypothecation. The Tribunal held the financier of
the vehicle to jointly and severally liable together with the
.J
owner on the ground that it was under an obligation to ensure

that the borrower had not neglected to get the vehicle insured.
.P
The High Court had dismissed the appeal filed by the Bank
against the order of the Tribunal holding it liable together with
:S
the owner. In the appeal before this Court, Justice Dipak

Misra (as the learned Chief Justice then was) adverted during
the course of the judgment to the principles laid down by this
BY
Court in several earlier decisions, including of this Court.

Noticing that the case before the court involved a
hypothecation agreement, this Court held:
―22. In the present case, as the facts have been unfurled, the
appellant Bank had financed the owner for purchase of the
vehicle and the owner had entered into a hypothecation
agreement with the Bank. The borrower had the initial
obligation to insure the vehicle, but without insurance he
plied the vehicle on the road and the accident took place. Had
157
the vehicle been insured, the insurance company would have

been liable and not the owner. There is no cavil over the fact
that the vehicle was the subject of an agreement of
hypothecation and was in possession and control of
Respondent 2.‖(id at page 693)
Since the Second respondent was in control and possession of
the vehicle this Court held that the High Court was in error in
fastening the liability on the financier. The failure of the
Second respondent to effect full payment for obtaining an
)
V.
insurance cover was neither known to the financier nor was
there any collusion on its part. Consequently, the High Court
was held to be in error in fastening liability on the financier.
D
12 The consistent thread of reasoning which emerges
(A
from the above decisions is that in view of the definition
of the expression „owner‟ in Section 2(30), it is the person
in whose name the motor vehicle stands registered who,
N
for the purposes of the Act, would be treated as the
„owner‟. However, where a person is a minor, the guardian
AI
of the minor would be treated as the owner. Where a

motor vehicle is subject to an agreement of hire purchase,
.J
lease or hypothecation, the person in possession of the

vehicle under that agreement is treated as the owner. In a
situation such as the present where the registered owner
.P
has purported to transfer the vehicle but continues to be

reflected in the records of the registering authority as the
:S
owner of the vehicle, he would not stand absolved of

liability. Parliament has consciously introduced the
definition of the expression „owner‟ in Section 2(30),
BY
making a departure from the provisions of Section 2(19)

in the earlier Act of 1939. The principle underlying the
provisions of Section 2(30) is that the victim of a motor
accident or, in the case of a death, the legal heirs of the
deceased victim should not be left in a state of
uncertainty. A claimant for compensation ought not to be
burdened with following a trail of successive transfers,
which are not registered with the registering authority. To
hold otherwise would be to defeat the salutary object and
purpose of the Act. Hence, the interpretation to be placed
158
must facilitate the fulfilment of the object of the law. In

the present case, the First respondent was the ‗owner‘ of the
vehicle involved in the accident within the meaning of Section
2(30). The liability to pay compensation stands fastened upon
him. Admittedly, the vehicle was uninsured. The High Court
has proceeded upon a misconstruction of the judgments of
this Court in Reshma and Purnya Kala Devi.
13 The submission of the Petitioner is that a failure to
intimate the transfer will only result in a fine under Section
)
V.
50(3) but will not invalidate the transfer of the vehicle. In Dr T
V Jose, this Court observed that there can be transfer of title
by payment of consideration and delivery of the car. But for
D
the purposes of the Act, the person whose name is reflected in
(A
the records of the registering authority is the owner. The
owner within the meaning of Section 2(30) is liable to
compensate. The mandate of the law must be fulfilled.
N
14 For the above reasons we allow the appeal and direct that
the liability to compensate the claimants in terms of the
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judgment of the Tribunal will stand fastened upon the First

respondent. The judgment of the High Court is set aside. In
.J
the circumstances of the case, there shall be no order as to

costs.
.P
............................................. CJI [DIPAK MISRA]

............................................... J [A.M.KHANWILKAR]
:S
…............................................ J [Dr D Y CHANDRACHUD]

New Delhi;
February 06, 2018
BY
159
HEAD NOTES
The Insurance Companies can deposit the awarded
amount through digital modes. It is held that:
(viii) The Claims Tribunal shall direct the respondent to
deposit the award amount or transfer the same by
RTGS/NEFT/IMPS directly to the bank account of the Claims
Tribunal. The respondent held liable by the Claims Tribunal
shall give notice of deposit of the award amount to the
)
claimant(s) and shall file a compliance report with the Claims
V.
Tribunal with respect to the deposit of the award amount
within 15 days of the deposit. Form 5 of MCTAP is modified
D
and following new clause 27 is incorporated:
―27. Account number, MICR number, IFSC Code, name and
(A
branch of the bank of the Claims Tribunal in which the award
amount is to be deposited/transferred.‖
N
AI
IN THE HIGH COURT OF DELHI AT NEW DELHI
FAO 842/2003
.J
RAJESH TYAGI & ORS. ..... Appellants

.P
Through:
versus
:S
JAIBIR SINGH & ORS. ..... Respondents

Through: Mr. Kirtiman Singh, CGSC with Mr. Waize Ali Noor,
BY
Mr. Prateek Dhanda and Mr. Saeed Qadri, Advocate

Mr. Rahul Mehra, Sr. Standing Counsel (Crl.) for GNCTD with
Mr. Tushar Sannu, Mr. Prashant Singh and Mr. Chaitanya
Gosain, Advocates with ACP S.K. Gulia, AHTU/Crime Branch
and Insp. Amleshwar Rai, AHTU/Crime Branch
Mr. Santosh Kumar Tripathi, ASC for GNCTD
Mr. S.P. Jain and Mr. Himanshu Gambhir, Ms. Amandeep
Kaur and Mr. Abhijit Chakravarty, Advocate for OIC Ltd.
Mr. H.S. Parihar and Mr. Kuldeep S. Parihar, Advocates
Mr. Kamal Mehta, Advocate for LIC
160
Mr. Avinash Jha and Mr. Anshuman Nayak, Advocates

Mr. Ravi Sabharwal, Advocate for United Ins. Co. Ltd.
Mr. Pankaj Seth, Advocate for UIIC Ltd., NIC Ltd. and Mr.
NIAC Ltd.
Ms. Archana Pathak Dave, Advocate for Bajaj Allianz General
Insurance Co. Ltd.
Mr. Brijesh Bagga, Advocate, Mr. Priyadarshi Acharya,
Advocate for Shri Ram General Insurance Co. Ltd.
Mr. Kapil Singhal Advocate
)
Mr. Navneet Kumar, Advocate for Bharti Axa General
V.
Insurance Co. Ltd.
Mr. Pradeep Gaur and Mr. Amit Gaur, Advocates for National
D
Insurance Co. Ltd., United India Insurance Co. Ltd. and
Oriental Insurance Co. Ltd.
(A
Mr. A.K. Soni and Mr. Ankit Kalra, Advocate for ICICI
Lombard GIC Ltd. with Mr. Afag Sharwani, Legal Manager,
ICICI Lombard GIC Ltd.
N
Mr. Vijay Kumar Maurya, General Manager, RBI
Mr. Ram Kumar, Chief Manager, Mr. Nipun Kumar, Chief
AI
Manager, Mr. K.B. Bhushan, Chief Manager and Mr. N.K.

Garg, Dy. Manager for SBI
.J
Mr. Amit Bajaj, Advocate for NPS Trust with Mr. Sreejesh
Mathew, Dy. Manager PFRDA, NPS Trust
.P
Ms. Pooja Goel, Advocate

Mr. Satyam Thareja and Mr. Adivitiya Awasthi proxy for Mr.
Sidharth Luthra, Senior Advocate as amicus curiae
:S
Ms. Lakshita Sethi proxy for Mr. A.J. Bhambhani, Senior

Advocate as amicus curiae
BY
MAC.APP. 422/2009
SOBAT SINGH ..... Appellant
Through:
versus
RAMESH CHANDRA GUPTA & ANR. ..... Respondents
Through: Mr. Kirtiman Singh, CGSC with Mr. Waize Ali Noor,
Mr. Prateek Dhanda and Mr. Saeed Qadri, Advocate
161
Mr. Santosh Kumar Tripathi, ASC for GNCTD

Mr. H.S. Parihar and Mr. Kuldeep S. Parihar, Advocates
Mr. Vijay Kumar Maurya, General Manager, RBI
CORAM:
HON'BLE MR. JUSTICE J.R. MIDHA
ORDER
18.01.2018
)
V.
1. Mr. S.P. Jain, Mr. Ravi Sabhawal, Mr. Pankaj Seth, Ms.
Archana Pathak Dave, Mr. Priyadarshi Acharya, Mr. Navneet
D
Kumar, Mr. A.K. Soni and Mr. Pradeep Gaur, Advocates
submit that there are difficulties in the implementation of the
(A
Modified Claims Tribunal Agreed Procedure (‗MCTAP‘ in short)
in its true letters and spirit. The submissions of the learned
counsels, in this regard, are as under: -
N
(i) The investigating officers do not send the intimation of the
accident to the insurance companies within 48 hours in terms
AI
of Clause 2 of the MCTAP.

.J
(ii) In many cases, the charge sheet is not filed before filing of
the Detailed Accident Report (‗DAR‘ in short).
.P
(iii) There is no index to the DAR, DAR is not page numbered

and in many cases, incomplete DAR is furnished to the
insurance companies.
:S
(iv) The copy of the DAR is not furnished to the insurance

companies and the investigating officers serve the copy of the
BY
DAR to the panel Advocate of their own choice, without any

notice to the insurance companies as a result of which the
insurance companies get the intimation of the accident at a
later stage.
(v) In many cases, the DAR is not complete in all respects
whereupon the Claims Tribunal extend the time for making
good the deficiencies. In such cases, the appearance of the
claimants, before completion of the DAR, causes
inconvenience to them.
162
(vi) In many cases, the DAR is not accompanied with the

affidavit of the investigating officer.
(vii) The Claims Tribunals put very heavy reliance on the DAR
as a result of which many fake claims are cleared as genuine
cases without proper inquiry.
(viii) In many cases, the claims are exaggerated by the
Investigating Officers and even the disability certificates are
issued without following the guidelines. Motor accident claims
)
investigations are conducted by a special centralised cell of
V.
Delhi Police. It would be appropriate to de-centralise the
system and the investigating officers of the respective police
D
stations should investigate the motor accident claims.
2. This Court has considered the above submissions and the
(A
following directions are hereby issued for the implementation
of the MCTAP in its true letter and spirit:
N
(i) All the insurance companies shall appoint a Nodal Officer
within four weeks and intimate the name, address, phone
AI
numbers/mobile numbers and e-mail address of the Nodal

Officers to Mr. Rajan Bhagat, DCP/CRO, Police Headquarters,
.J
Delhi Police who shall instruct all the investigating officers of

Delhi Police dealing with the investigation of motor accident
claims to send the intimation of the road accident(s) in Form 1
.P
and DAR in Form 2 of MCTAP by e-mail to the Nodal Officer of

the concerned insurance company.
:S
(ii) The DAR shall be properly indexed and page numbered at

the time of filing with the Claims Tribunal. Copy of the DAR
BY
sent to the insurance company and others shall be paginated

and shall be accompanied by an index.
(iii) After the filing of the DAR, the Claims Tribunal shall
examine the same. If the DAR is complete in all respects, the
Claims Tribunal shall fix a date for appearance of the driver,
owner, claimant(s) and the eye witness(s) and the investigating
officer shall produce them on the date so fixed. The
investigating officer shall also intimate the date so fixed by the
Claims Tribunal to the Nodal Officer of the insurance
163
company and the insurance company shall enter appearance

on the date so fixed.
(iv) Clause 14 of the MCTAP is modified to the extent that the
investigating officer shall produce the driver, owner,
claimants(s) and the eye witness(s) before the Claims Tribunal,
after the order of the Claims Tribunal that the DAR is
complete in all respects meaning thereby that the
investigating officer is not required to produce the aforesaid
persons on the first date of listing of the DAR.
)
V.
(v) In cases where the charge sheet is not filed before the filing
of the DAR, the Claims Tribunal shall either await the filing of
D
the charge sheet or record the statement of the eye witness to
satisfy itself with respect to the negligence before passing the
(A
award.
(vi) This Court is of the view that it is a paramount duty of the
insurance companies to verify the correctness/genuineness of
N
every claim. The insurance company shall direct their own
AI
officers or appoint an investigator or surveyor to verify the
accident. For example, in cases where the insurance
companies receive the information of an accident relating to
.J
death, within 24 hours, the prompt visit by the

officer/investigator/ surveyor of the insurance company at the
.P
place of occurrence, cremation and residence of the deceased

to verify of the relevant facts and examine the documents at
:S
that time, would leave no scope for manipulation of the

evidence at a later stage. Similarly, in the injury cases, the
insurance company‘s officer/surveyor/ investigator visit to the
BY
hospital at the initial stage would be helpful to verify the

relevant documents.
(vii) The Detailed Accident Report (DAR) is merely an opinion
of the investigating officer and is not to be treated as a legal
evidence. The DAR has to be considered like a charge sheet
under Section 173 Cr.P.C. and the Claims Tribunal is duty
bound to examine the DAR and satisfy itself with respect to
the genuineness of the claim as well as all the relevant facts.
For example, in death case(s), the Claims Tribunal shall direct
the claimant(s) to produce the original documents relating to
164
age, occupation and income from the legal representatives and

an appropriate award shall be passed after the satisfaction of
Claims Tribunal with respect to all the relevant facts.
Similarly, in an injury case(s), the Claims Tribunal shall
examine the injured and the relevant medical records to
satisfy itself with respect to the nature of the injuries and
percentage of the functional disability of the injured.
(viii) The Claims Tribunal shall direct the respondent to
deposit the award amount or transfer the same by
)
V.
RTGS/NEFT/IMPS directly to the bank account of the
Claims Tribunal. The respondent held liable by the Claims
Tribunal shall give notice of deposit of the award amount
D
to the claimant(s) and shall file a compliance report with
(A
the Claims Tribunal with respect to the deposit of the
award amount within 15 days of the deposit. Form 5 of
MCTAP is modified and following new clause 27 is
incorporated:
N
“27. Account number, MICR number, IFSC Code, name
AI
and branch of the bank of the Claims Tribunal in which

the award amount is to be deposited/transferred.”
.J
(ix) At the time of passing of the award, the Claims Tribunal

shall examine whether the claimants are entitled to exemption
.P
from deduction of TDS and if so, the claimant(s) shall submit

Form 15G or Form 15H (for senior citizen(s)) to the Insurance
:S
Company so that no TDS is deducted. The Claims Tribunal

shall record a finding in this respect at the time of passing of
the award.
BY
(x) This Court is of the view that taking of the photographs of

the vehicle(s), scene of accident, injured/deceased after the
accident, as soon as possible, is a very important factor.
Clause 3 of the MCTAP requires the investigating officer to
take the photographs of the scene of accident from all angles.
The photographs have to be attached to the DAR. The
investigating officers are again directed to take the
photographs of the scene of the accident and the vehicle(s)
involved in the accident at the time of their first visit to the
site of the accident and these photographs be uploaded on a
165
website of Delhi Police to avoid any scope of manipulation at a

later stage. The Delhi Police shall consider creating a website
at which the investigating officer would be required to upload
the photographs immediately after taking the same so that the
date and time of taking the photographs can be seen. Delhi
Police shall also consider issuing appropriate directions in this
regard.
(xi) The investigating officers shall also take the photographs
of the injured in the hospital. The photographs of the injured
)
V.
shall also be filed along with the DAR. The photographs of the
injured portion shall be annexed by the Claims Tribunal along
with the award.
D
3. In Cholamandalam MS General Insurance Company Ltd. v.
(A
The Inspector of Police, 2017 SCC On Line Mad 3860: (2017) 5
CTC 355, Justice P.N. Prakash of Madras High Court has
passed directions for implementation of the DAR procedure by
N
directing the registration of FIRs and uploading of DAR and
the relevant data on the website of Tamil Nadu Police for the
AI
immediate access of the same by the Claims Tribunals, Legal

Services Authority, Insurance Companies and the litigants/
.J
claimants. This Court is of the view that it would be

appropriate for the Delhi Police to implement the DAR
procedure on the same lines in which it is being implemented
.P
in Tamil Nadu. Delhi Police may seek necessary assistance, if

required, from the Tamil Nadu Police in this regard. Relevant
:S
portion of the judgment dated 12th September, 2017 is

reproduced hereunder: -
BY
―6. The Supreme Court has taken note of the DAR regime or
Agreed Procedure as it was christened, forming part of the
order dated 13/5/2016 as Ex.R5 in Jai Prakash vs. National
Insurance Co Ltd., and made it applicable Pan India by virtue
of its orders. This Court took note of the said development and
directed the Director General of Police to implement the DAR
regime within the State of Tamil Nadu also. It is in furtherance
to these developments that circular dated 2/1/2017 came to
be issued by the Office of the Director General of Police. The
DAR regime was conceived and tweaked and implemented
166
thanks to the proactive ways of the Delhi High Court and in

particular the passionate involvement from Justice J.R.
Midha, it became a practical reality within Delhi on and from
1/2/2015.
7. It is pertinent to note that Delhi High Court put together
the DAR regime and devised the Agreed Procedure for
implementation, not only for the purpose of expeditious
disposal of motor accident claims but also to ensure that false
and fabricated claims or manufacture of false records were
)
V.
avoided. While the Motor Vehicles Act, 1988, has provided the
basic framework for the filing of a motor accident claim in the
pursuit of just compensation, it is the Delhi Motor Accidents
D
Claims Tribunal Rules, 2008, which related to the actual
(A
procedure for conduct of the proceedings before the Claims
Tribunals at Delhi.
8. The Delhi High Court conceived and devised DAR regime
N
or Agreed Procedure, forming part of order dated 13/5/2016
in Jai Prakash vs. National Insurance Co. Ltd. of the Apex
AI
Court as Ex.R5, now forms part of the Delhi MACT Rules,

2008, as notified by Delhi administration. It is this Ex.R5
.J
which is now made applicable Pan India by the Supreme

Court by its orders.
.P
9. The DAR regime in Delhi is implemented physically. It is

a manually devised procedure/regime which is in vogue in
:S
Delhi. It is gathered that there are only 6 Motor Accidents

Claims Tribunals, in all, in Delhi and specific Police Stations
which capture the FIRs relating to the accidents arising
BY
thereto. So, manual implementation of DAR is plausible and

within a controllable geographical construct. But, in the
course of these proceedings, the Tamil Nadu Police
administration brought to the notice of this Court that already
the State Crime Records Bureau, under the aegis of the Office
of the Director General of Police, was already in the midst of
developing a software, since 2014, for the purpose of
registering FIRs and uploading data and controlling the
regime related to it, on online basis in Tamil Nadu (on Tamil
Nadu Police website www.eservices.tnpolice. gov.in). SCRB
167
was already in the course of fine-tuning this online regime,

which was deemed fit and proper to tap into for an online DAR
regime, for all practical purposes rather than a physical
regime. This Court chose to allow the embracing of technology
already in place, for implementing the DAR regime as the way
to go. Such online mechanism did not, in any way, detract
from the mandated implementation of the DAR regime and
instead, it enhanced the value and utility arising from its
operation. In the face of the fact that there are 1,827 Police
)
Stations, including 200 All Women Police Stations (AWPS),
V.
266 Traffic Police Stations and 27 Police Out Posts, as per
Government of Tamil Nadu Tamil Nadu Police Policy Note-
D
2016 and there are in all 1,014 courts in the State, of which,
around 289 are Claims Tribunals, and also more than 1/3 of
(A
them as Judicial Magistrates, as per Government of Tamil
Nadu Policy Note 2016-17, physical implementation of the
DAR regime would stretch the available manpower and
N
resources and make it difficult for sure and strict compliance.
Incidentally, on enquiry, this Court is proud to be informed
AI
that after Delhi, pursuant to the orders of the Apex Court,

only in Tamil Nadu, DAR regime has come to be implemented
.J
in the entire country and Tamil Nadu can pride itself of the
technology marvel. Access to hundreds of Police Stations,
.P
Claims Tribunals, Judicial Magistrate Courts, Legal Service

Authorities, a key to the efficacy of the implementation of DAR
regime, has become a realizable reality thanks in the main to
:S
the online platform. The SCRB initiative, plugged into, needs

commendation on every count.
BY
SOFT VERSION OF DAR REGIME

11. While so, as far as Tamil Nadu is concerned, SCRB was
already engaged in developing its online platform in relation to
criminal law jurisdiction, right from the registration of FIRs
and beyond. When the order of this court dated 17/8/2016
came, it was a timely one for the SCRB and the Office of the
Director General of Police to tweak the developing online
platform to cater to the implementation of the DAR regime.
This Court saw immense merit in the said practice and readily
168
allowed the dispensation to go online as a soft version of the

DAR regime, for all round benefit.
12. SCRB took the trouble of demonstrating its online
platform as captured in the circular dated 2/1/2017 of the
Office of the Director General of Police to this Court and this
Court was satisfied, as duly recorded, in its order dated
5/1/2017 that DAR regime was an online platform based
implementation in lieu of the physical or manual version of it,
as practised in Delhi. A run through of the DAR compilation,
)
V.
in its online avatar of SCRB, would reveal that every syllable
or information required to be compiled (as per Annexure
Ex.R5) identified in order dated 13/05/2016 of Supreme
D
Court in Jai Prakash vs. National Ins Co Ltd. is put together
(A
online itself. The DAR regime as implemented in Tamil Nadu is
nothing but a soft version of the hard version of it in Delhi.
13. Technology is the way to go. Digitisation is the key for
N
advancement in the lives of human beings too. E-Courts are
here to stay. Ordinary litigants are able to access the case
AI
details and status thereof and even tuck into the daily orders
or final orders, have easy access, from the confines of their
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homes. There is a certain element of open and transparent

regime infusing the needed dose of it in the administration of
justice. Motor accidents claims require a huge dose of it, no
.P
doubt about the same. Victims of motor accidents or

claimants, as the case may be, already traumatized would
:S
hugely benefit if the compilation of documents required to

pursue a claim for just compensation are readily accessible to
them. Equally, if the stakeholders thereto, be it
BY
owners/drivers of motor vehicles or insurance companies or

transport corporations, are provided ready access, the
documentation, investigated independently and verified for
veracity, it would go a long way in enabling early closure of
claims, even by way of compromise. That is actually the
purport and import of the order dated 13/5/2016 made in Jai
Prakash vs. National Insurance Co. Ltd. of the Apex Court.
That is more than adequately achieved by the DAR regime and
when it is an online platform and technology-driven, its
impact could be immediate and immense.
169
xxx xxx xxx

BENEFITS OF E-PLATFORM
15. We live in technological times. Law may be last and
lagging in embracing technology. But benefits of tapping into
technology would enhance the benefits flowing from judicial
administration. It may be trite to lay down the benefits as they
are too well known and obvious. This Court is aware of the
decision in United India Insurance Co. Ltd. v. Sagicor Capital
)
Life Insurance Co. Ltd. [2013 (2) CTC 408 (Mad.)] where a
V.
suggestion was made by this Court for payment of court fees
online. Taking cue, Notifications have been issued pursuant to
D
the amendments to the law for payment of court fees online.
Yet, it is reported that E-payment of court fee regime is not in
(A
yet, and it may be time for the powers that be to complete the
circle for ushering in the era of transparency in a key area. No
wonder, this Court, vide dated 20/7/2015 in Royal Sundaram
N
Alliance Ins Co. Ltd. vs E Priya (CMA No. 1298/2015) and in
Oriental Insurance Co. Ltd. vs. Rajesh (CMA No. 428/2016
AI
dated 11/3/2016), has mandated the use of Digital transfer or

NEFT/RTGS transfer of compensation payable by insurance
.J
companies and transportations to be deposited into the

accounts of the courts directly and also disbursement of
compensation to claimants/victims also by a similar transfer
.P
to their bank accounts. The claimants are required to furnish

as part of the claim documents, their bank account details
:S
and even PAN Card and (where they are possessed of it) and
this enables Direct Bank Transfer to the accounts of the
claimants/victims. The claimants/victims get to handle the
BY
compensation sums by themselves and exercise full control of

it, without fear of ‗leakage‘ which was rampant in this
jurisdiction. In fact, this Court feels that be it a motor
accident claim or a land acquisition claim or even a
matrimonial dispute or any litigation involving the need for
deposit and disbursement, time may have come to digitize the
operations for easy and smooth transfer and an open,
transparent regime. Sunlight, they say, is the sure and certain
disinfectant. It may be a fit and proper circumstance for the
Hon‘ble Chief Justice and Court administration to come up
170
with a comprehensive directive for implementing this Direct

Benefit or Bank transfer regime, across all jurisdictions
involving and requiring similar deposit of sums and
disbursement of it akin to motor accident claim jurisdiction
and also expedite the E-court Fee regime and possibly an E
filing of cases too. This suggestion is placed with utmost
respect before the Hon‘ble Chief Justice for appropriate
consideration.
16. In addition to the above, in the field of motor accidents
)
V.
claims, this Court has also introduced a regime of reference of
injured claimants to District Medical Boards for issuance of
certificate of disability for uniform, consistent assessment. By
D
order in CMA No.2380/2015 dated 12/4/2016 in Tata AIG
(A
General Ins Co. Ltd. vs. Prabhu, this new dispensation was
put in place as of 1/8/2016. While clarifying the purport and
import of the said order, by order dated 25.11.2016, this
Court, while reiterating and commending the regime, also
N
suggested use of digital way for transfer of medical records
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and receipt of certificates of disability. The utility of a techno-
savvy platform was highlighted.
.J
17. A combined reading/implementation of DAR regime –

which is a technology platform, allied with reference of the
victims to Medical Board, as a matter of rule for availing
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certificates of disability, and on grant of just compensation,

the transfer of the same as digital transfer to the bank
:S
accounts of the victims, would be a huge and transformational

change. Providing such avenues may not suffice. The
stakeholders need to be made aware of and be ready and
BY
willing to take full advantage of it. Once there is exposure and

experience of this well-oiled systemic change, the benefits that
flow to ease the lives of the traumatized victims would be
immense and deserving. In fact, this Court feels that the
courts below, which are the beneficiaries to this ready access,
need to be sensitized to its uses and benefits and SCRB even
took the initiative of a Lecture Demonstration to Judicial
Officers in Chennai and its suburbs at the Tamil Nadu State
Judicial Academy. May be, it would make sense to introduce
and familiarize the concerned Judicial Officers, elsewhere in
171
Tamil Nadu also, with this new technological regime, which if

accessed by them with intent and alacrity, would enable them
to advance in their careers too with a better performance.
Ultimately, Justice Hand could be falsified by Courts of Law
turning into ―Courts of Justice‖ after all.
INITIAL IMPLEMENTATION OF DAR REGIME
18. By order dated 13/4/2017, this Court while recording
the chronology of events, also adverted to the role that
)
technology played and could play in the administration of
V.
justice vis a vis a series of verdicts from the Supreme Court as
well. It therefore readily commended the SCRB on line
D
platform for implementing the DAR regime. The online
platform has gone live from 1/3/2017 and it has been opened
(A
up for insurance companies and transport corporations. Till
date, this Court is informed that 13 insurers have registered
themselves and are regularly making use of the uploaded
N
data. Transport Corporations, to whom also this service was
extended, have also sought registration for availing this
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facility. As far as Motor Accidents Claims Tribunals are

concerned, 289 of them have been given links, as well as 58
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Legal Service Authorities by SCRB till date, thanks to the IT

efforts of this Court and the service is available for them for
free. Equally, it is gathered that between 1/3/2017 and
.P
11/09/2017, around 18,000 claims related data, have been

uploaded and made accessible to the stakeholders, in
:S
question. DAR compilation as mandated by law, is an online

reality and instead of the physical version as in Delhi, now,
the version in Tamil Nadu is a soft one. Counsel for insurance
BY
companies have expressed satisfaction at the performance of

the platform thus far and readily admit that it has enabled the
insurers to handle claims better, with confidence, and made it
possible to seek closure also early.
19. The order dated 13/5/2016 of the Apex Court made in
Jai Prakash vs. National Insurance Co. Ltd. vide
implementation of the DAR regime, is now a reality in Tamil
Nadu, not in the physical or hard copy format but an online
version of it. This Court is immensely satisfied that the online
172
version is an improved version and not a belittled version and

DAR compilation is in accord with the legal mandate. Instead
of physically compiling the documents and capturing the
information, SCRB is uploading the data for ready access of
the stakeholders. Even assuming that the Claims Tribunals
were actually not registering claims upon such uploaded DAR
regime, they have no hurdle to download the compilation,
register the case, give it a number and issue notices to the
parties therein and process and dispose of the claim as if a
)
claim petition was filed, wherever claims have not already
V.
been filed. The physical filing of the DAR compilation is
replaced in Tamil Nadu by the online avatar, in precept, but,
D
in practice, it is but implementation of DAR regime as it is
perceived and mandated to be. SCRB deserves wholehearted
(A
appreciation for its readiness to comply with the legal
mandate and tweaking their online platform to put in place a
version to accommodate the DAR regime without any let or
N
hindrance. Hats off to all those who are involved and engaged
in this noble endeavour for the larger interest of the affected
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victims.
20. Motor accidents jurisdiction is quite peculiar from the
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point of view of specialised practitioners in Tamil Nadu. It has

been brought to the notice of this Court in course of
.P
demonstration of DAR compilation and settlement of 7 claims

on that basis and the Delhi regime where the DAR report
:S
when filed being registered as a claim petition, that in Tamil

Nadu, scope or need for such filing/registration of MCOPs
based on DAR compilation, seems otiose or meaningless. Even
BY
well before the DAR compilation is made and uploaded,

however fast, within even 30 days and 60 days in many a
case, already claim petitions get filed before Claims Tribunals
and advocates are already on record. It is as if along with first-
aid to the traumatized victims, vakalats are obtained and
claims filed in Tamil Nadu, as a matter of rule and the Police
administration is even put on notice of the advocates-on-
record even while they upload the data in this DAR regime.
So, this Court is satisfied that online implementation of DAR
does not, in any way, detract from the merits of the DAR
173
regime from its physical filing format. Hence, the online

version of DAR regime, as implemented in Tamil Nadu, passes
the crucible of being an online version of DAR regime (in line
with Ex.R5 as in order dated 13/05/2016 of the order of the
Supreme Court in Jaiprakash v National Ins. Co. Ltd.) In fact,
as times move, this Court is inclined to believe that this online
version may be the way to go for implementation of DAR
regime and SCRB may have a ‗saleable product‘ on their
hands to offer to other States across India, who also may
)
come within the binding mandate for implementation of the
V.
DAR regime. Possibly, if the Apex Court was put on notice of
this online version of DAR regime implementation, they may
D
well commend its replication for rest of India, considering the
keenness of the Apex Court in embracing technology.
(A
FULL FLEDGED IMPLEMENTATION OF DAR REGIME:
21. While the Motor Accidents Claims Tribunals were
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afforded access first, and then Legal Services Authorities, and
then insurance companies and transport corporations, SCRB
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took time to provide access to the victims/claimants and

owners/drivers (who could be christened as accused at one
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level). SCRB has now completed the circle by providing access

to the last segment also at a low price on and from
31/8/2017, within the promised dateline or mandated
.P
timeline of this Court. It adds a feather to the cap of SCRB for

not only conceiving this facility but ensuring its
:S
implementation without any time overruns as well. Tamil

Nadu Police can take pride that they have met the mandate of
law and leading the way as the first and only State as on date
BY
in implementation of DAR regime.

22. The claimants/victims and owners/drivers, when they
are registered and their details captured with mobile numbers,
are given an One Time Password (OTP) with which they can
have access to the uploaded DAR compilation for a small fee of
Rs.10/- per document. In fact, if there is proper marketing of
this dispensation and the ordinary citizen becomes aware,
possibly, just possibly, the sale and purchase of victims as
commodities may cease and the claimants/victims may get
174
full control over their lives and claims to seek their own
counsel and file claims of their choice, rather than being
peddled as commodities for a price, immediately upon an
accident, and being more often than not compelled, to file
claims through a select community of practitioners who
dominate the jurisdiction. So, the benefits flowing from this
DAR regime are limitless except that it is for the stakeholders
to appreciate, assimilate, understand and utilize it to their
benefit. SCRB may be doing their job by uploading the data
)
and offering it on a platter to the stakeholders, all of them, in
V.
particular, the claimants/victims, at their door step. If the
claimants/victims become aware of this facility and wait a wee
D
bit, they can avoid themselves being sold as ―commodities‖,
since access to documentation under the DAR regime is
(A
within their grasp to take full control of their claims. But, if
the claimants/victims fail or refuse to take advantage of this
wonderful dispensation, we would still not be failing in our
N
duty, for claimants/victims may be failing themselves. We can
take the horse to the water but it is for the horse to drink for
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we cannot coerce it into doing so.

EXTENSION OF DAR REGIME TO VICTIM COMPENSATION
.J
SCHEME:
23. Thus, SCRB seems to have complied with the mandate
.P
of law in the implementation of the DAR regime. This Court

sought to tweak the DAR regime for the benefit of the victims
:S
in relation to Sec.357-A of Cr.P.C. vis-a-vis Tamil Nadu Victim

Compensation Scheme, 2013 as well. SCRB has merely to
provide access to the Judicial Magistrates handling the crimes
BY
relating to motor accidents for them to make use of the same

in assessment and award of compensation. In effect, any
which way the DAR regime could be implemented effectively
and put in place, in its online avatar, as distinguished from
the physical form as enacted in Delhi, has been accomplished
thanks to the innovative and endeavouring ways of SCRB.
SUMMATION:
24. The journey this Court set off on 17/8/2016 has now
culminated with a Status Report from SCRB dated
175
08/09/2017. In paragraph no.10 of the status report, it is

indicated that, as directed by this Court, extension of services
is being made to State Transport Corporations also. While so,
letter dated 08/09/2017 in Rc. No. DX/2386/SCRB/2016,
has been brought to the notice of this Court that such services
have now been extended to State Transport Corporations also.
This letter shall form part and parcel of the status report.
Hence, the circle is now complete. It is now a recorded and
realistic fact that DAR regime is in vogue, up and running as
)
mandated by the order of the Supreme Court dated
V.
13/5/2016 and as triggered within this State by orders of this
Court. The DAR regime, as practiced and implemented with
D
SCRB at the apex, is a vastly improved and improvised version
of the DAR regime as on online platform. It is no different from
(A
the DAR regime in its physical format, in content. The online
platform vis-a-vis DAR regime went live from 1/3/2017. It has
granted access to Claims Tribunals, Legal Services Authority
N
and insurance companies and transport corporations on and
from 1/3/2017 itself. Thereafter, now, SCRB has completed
AI
the compliance with their obligation by providing access to the

claimants/victims and owner/drivers as well on and from
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31/8/2017. It is good that the implementation of the DAR

Regime and allied facility, have been publicized on 31/8/2017
.P
in all districts of Tamil Nadu and in Chennai on 1/9/2017,

under the leadership of the respective Commissioners of
Police. Good causes should never shun publicity and instead,
:S
ought to embrace it for widening the base and its sphere of

influence, in public interest. The online platform, SCRB
suggests is running well and the stakeholders are by and large
BY
satisfied. Insurance companies appear to be the largest

beneficiaries in having DAR regime documentation on their
tables at the click of a key and it is only but fair that they use
it not to their advantage exclusively but be forthcoming to try
and compromise as many accident claims as possible to ease
the pressure on the existing pendency. Hope the insurers
would reciprocate the benefits that have come their way since
the litigation they mounted has culminated in these
developments. In any new concept and compliance, with a
176
high end technological tweak, there is bound to be technical

glitches which SCRB promises will be attended to all the time.
They have as a permanent fixture provided the name, address
and identity of the entity who would be available on line to
attend to grievances and redressal thereof.
25. In fine, this Court is more than satisfied that SCRB has,
in fact and reality, implemented the DAR regime as they were
obliged to, but as an online platform. The form is different
from Delhi, which is physical. In all other respects, the
)
V.
content being one and the same, the SCRB effort is a sure
shot improved one and possibly worth replicating Pan India.
In fact, if the Apex Court becomes aware of this online venture
D
of the implementation of DAR regime, it may even consider
(A
recommending its implementation across India, as being
paperless is the way to go, as the Apex Court has itself
demonstrably noted on 3rd July, 2017, going paperless itself
on a trial run basis. SCRB has done a commendable job of
N
what it was directed to do and one fervently hopes that all the
AI
stakeholders would take full advantage of what is on offer for
the lasting benefit of the community of motor accidents
victims, to seek early closure of their claims for just
.J
compensation and to come out of a traumatized event and

circumstances, as early as possible and possibly rid the
.P
jurisdiction of the pernicious practice of false and fabricated

motor accidents claims and falsification of records. A
:S
successful uploading and implementation of DAR regime

would be testimony to the orders of the Apex Court in
commending its application throughout India.
BY
26. With these words, this Court commends the application

of DAR regime as proposed for the entire State in its online
version as constituting full compliance with the mandate of
the decision of the Supreme Court dated 13/5/2016 in Jai
Prakash vs National Insurance Co. Ltd. and as per the
directions of this Court commencing from 16/8/2016 and
culminating in this order. This Court commends the efforts of
all those involved in implementation of the DAR regime and
taking strenuous efforts to make a success of the regime for
the lasting benefit of the innocent motor accidents victims to
177
deliver on the promise of social justice as a Constitutional

principle.‖
(Emphasis supplied)
4. Mr. A.K. Soni, learned counsel for ICICI Lombard GIC Ltd.
submits that all the insurance companies have not yet
submitted their suggestions. The insurance companies shall
submit their suggestions to the Committee appointed by this
Court vide order dated 15th December, 2017. The suggestions
)
be submitted to Mr. Rahul Mehra, Convenor of the Committee,
V.
who shall convene the next meeting in the third week of
February, 2018 to consider the same and submit its report
D
before this Court.
5. The Committee shall also consider the implementation of
(A
the procedure/mechanism developed by the Madras High
Court in its aforesaid judgment.
N
6. Learned counsels further submit that the Claims Tribunal
are attaching the bank account of the Insurance Companies
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before expiry of 90 days available to file the appeal against the

award before this Court. There is merit in this contention. No
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coercive action should be taken within 90 days of the award.

However, it is clarified that the Claims Tribunal shall keep the
case for compliance after 30 days of the award so that the
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award amount is deposited within 30 days in cases in which

no appeal is filed.
:S
7. Mr. Vijay Kumar Maurya, General Manager, RBI; Mr.

Sreejesh Mathew, Dy. Manager PFRDA, NPS Trust; and Mr.
BY
Ram Kumar, Chief Manager, State Bank of India; Mr. Nipun

Kumar, Chief Manager, State Bank of India; Mr. K.B.
Bhushan, Chief Manager, State Bank of India; and Mr. N.K.
Garg, Dy. Manager, State Bank of India are present in Court.
There is no appearance on behalf of Indian Bank Association
and Institution of Actuaries of India. Issue fresh notice to
Indian Bank Association and Institution of Actuaries of India,
returnable on 9th March, 2018.
8. This Court is concerned with the formation of a special
scheme for victims of the road accidents in which the award
178
amount is kept in monthly FDRs and the maturity amounts

are transferred by RTGS/NEFT/IMPS to the savings bank
accounts of the victims near their place of their residence. The
disbursement scheme formulated by this court is as under: -
a) The award amount is to be released to the claimants in a
phased manner by initially releasing some amount and
keeping the balance in monthly FDR‘s with cumulative
interest. For example, in a case where award amount is of
Rs.5,50,000/- and the monthly expenditure of the claimant is
)
V.
Rs.5,000/- per month, Rs.50,000/- may be released initially
and the balance Rs.5,00,000/- be kept in 100 FDR for
Rs.5,000/- each for the period 1 to 100 months respectively,
D
along with cumulative interest.
(A
b) Original fixed deposit receipt(s) be retained by the bank in
its safe custody. However, a statement containing FDR
number, FDR amount, date of maturity of FDR and maturity
N
amount of the FDR(s) be given to the claimant(s).
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c) The maturity amount(s) of the FDR(s) shall be credited to
the savings bank account of the claimant(s) in a nationalized
bank near the place of his residence.
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d) No cheque book or debit card shall be issued to the

claimant(s) in respect of the savings bank account in which
.P
the award amount is to be sent/credited, without permission

of the Court. However, in case the debit card and/or cheque
:S
book have already been issued, the court shall direct the bank
to cancel the same before the disbursement of the award
amount. The bank shall make an endorsement on the
BY
passbook(s) of the claimant(s) to the effect that no cheque

book and/or debit card have been issued and shall not be
issued without the permission of the Court. The claimant(s)
shall produce the passbook with the necessary endorsement
before the Court on the next date fixed for compliance.
e) No loan, advance or pre-mature discharge shall be allowed
of the fixed deposit(s) without permission of the Court.
f) No joint name(s) is added in the savings bank account or
fixed deposit account of the claimant(s).
179
9. State Bank of India and UCO Bank are directed to consider

formulating a special scheme for disbursement of the
compensation to the victims of the road accidents under the
order of this Court. This Court is of the view that the banks
can prepare/create a software for introducing such scheme.
LIC and NPS Trust already have such schemes but the return
of their schemes is not beneficial to the victims. LIC and NPS
Trust shall extend the necessary cooperation to State Bank of
India and UCO Bank for this purpose. The officers from State
)
Bank of India present in Court shall take up this matter with
V.
their concerned department and submit the response on the
next date of hearing.
D
10. List for further hearing on 09th March, 2018 at 02:30
(A
p.m.
11. Copy of this order be given dasti to counsels for the
parties as well as to the counsels of the Insurance Companies,
N
RBI and Banks as well as to Mr. Sidharth Luthra, Senior
Advocate appointed as amicus curiae, Mr. A.J. Bhambhani,
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Senior Advocate appointed as amicus curiae, Mr. Rahul

Mehra, Sr. Standing Counsel (Crl.) for GNCTD under
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signatures of the Court Master.

12. Copy of this order be sent to Delhi State Legal Services
.P
Authority and to National Legal Services Authority.

:S
J.R. MIDHA, J.
JANUARY 18, 2018
BY
180
HEAD NOTES
-Calling of Higher Officials by the Courts are deprecated.
(Para No. 10, and 13)
CIVIL APPEAL NO. 5600 OF 2006
R.S. Singh Appellant
versus
)
V.
U.P. Malaria Nirikshak Sangh & Others ..Respondents
ORDER
D
Heard learned counsel for the parties.
(A
This appeal has been filed against the impugned interim
orders dated 13th November, 2003 and 18th December, 2003
passed by the High Court of Judicature at Allahabad, Bench
N
at Lucknow.
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We have perused the said orders. A direction has been given
in the said orders that the Principal Secretary, Finance along
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with the Principal Secretary, Medical & Health, U.P.

Government shall appear personally before the High Court on
the next date for non-compliance of the judgment of the High
.P
Court dated 5.11.1989/ 13.12.1989.

This Court has been repeatedly observing that the High
:S
Courts ordinarily should not summon the senior officials of

the government and that should only be done in very rare and
exceptional cases when there are compelling circumstances to
BY
do so.
In State of Gujarat vs. Turabali Gulamhussain Hirani, AIR
2008 SC 86, this Court observed:
"6. A large number of cases have come up before this
Court here we find that learned Judges of various High Courts
have been summoning the Chief Secretary, Secretaries to the
government (Central and State), Director Generals of Police,
181
Director, CBI or BSF or other senior officials of the

government.
7. There is no doubt that the High Court has power to
summon these officials, but in our opinion that should be
done in very rare and exceptional cases when there are
compelling circumstances to do so. Such summoning
orders should not be passed lightly or as a routine or at the
drop of a hat.
)
8. Judges should have modesty and humility. They
V.
should realize that summoning a senior official, except in
some very rare and exceptional situation, and that too for
D
compelling reasons, is counterproductive and may also
involve heavy expenses and valuable time of the official
(A
concerned.
9. The judiciary must have respect for the executive and
the legislature. Judges should realize that officials like the
N
Chief Secretary, Secretary to the government, Commissioners,
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District Magistrates, senior police officials etc. are extremely
busy persons who are often working from morning till night.
No doubt, the ministers lay down the policy, but the actual
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implementation of the policy and day to day running of the

government has to be done by the bureaucrats, and hence the
.P
bureaucrats are often working round the clock. If they are

summoned by the Court they will, of course, appear before the
:S
Court, but then a lot of public money and time may be

unnecessarily wasted. Sometimes High Court Judges summon
high officials in far off places like Director, CBI or Home
BY
Secretary to the Government of India not realizing that it

entails heavy expenditure like arranging of a BSF aircraft,
coupled with public money and valuable time which would
have been otherwise spent on public welfare.
10. Hence, frequent, casual and lackadaisical summoning of
high officials by the Court cannot be appreciated. We are
constrained to make these observations because we are
coming across a large number of cases where such orders
summoning of high officials are being passed by the High
182
Courts and often it is nothing but for the ego satisfaction of

the learned Judge.
11. We do not mean to say that in no circumstances and
on no occasion should an official be summoned by the
Court. In some extreme and compelling situation that
may be done, but on such occasions also the senior
official must be given proper respect by the Court and he
should not be humiliated. Such senior officials need not
be made to stand all the time when the hearing is going
)
V.
on, and they can be offered a chair by the Court to sit.
They need to stand only when answering or making a
statement in the Court. The senior officials too have their
D
self-respect, and if the Court gives them respect they in
(A
turn will respect the Court. Respect begets respect.
12. It sometimes happens that a senior official may not even
know about the order of the High Court. For example, if the
N
High Court stays the order of the Collector of suspension of a
class- III or class IV employee in a government department,
AI
and certified copy of that order is left with the Clerk in the
office of the Collector, it often happens that the Collector is
.J
not even aware of the order as he has gone on tour and he

may come to know about it only after a few days. In the
meantime a contempt of court notice is issued against him by
.P
the Court summoning him to be personally present in Court.

In our opinion, this should not be readily done, because there
:S
is no reason why the Collector would not obey the order of the
High Court. In such circumstances, the Court should only
request the government counsel to inform the concerned
BY
Collector about the earlier order of the Court which may not
have been brought to the notice of the Collector concerned,
and the High Court can again list the case after a week or two.
Almost invariably it will be found that as soon as the collector
comes to know about the stay order of the High Court, he
orders compliance of it.
13. In the present case, we find no occasion or reason for
the learned Judge to summon the Chief Secretary or the
Law Secretary by the impugned order. If the learned Judge
183
was concerned about the lack of enough Stenographers in

the office of the Public Prosecutor he could have called
the Advocate General or Govt. Advocate to his chamber
and have asked him to convey the Court's displeasure to
the government, but where was the need to summon the
Chief Secretary or Law Secretary? Hence, we set aside the
impugned interim order dated 11.4.2007 and condone the
delay of 25 days in filing the appeal before the High Court.
The High Court may now proceed to hear the Criminal
)
Appeal in accordance with law. The appeal is allowed."
V.
Following the above decision, this Court in State of U.P. &
Ors. vs. Jasvir Singh & Ors, JT 2011(1) SC 446, observed:
D
"7. It is a matter of concern that there is a growing
(A
trend among a few Judges of the High Court to routinely
and frequently require the presence, in court, of senior
officers of the government and local and other authorities,
N
including officers of the level of Secretaries, for perceived
non-compliance with its suggestions or to seek
AI
insignificant clarifications. The power of the High Court

under Article 226 is no doubt very wide. It can issue to
.J
any person or authority or government, directions, orders,

writs for enforcement of fundamental rights or for any
other purpose. The High Court has the power to summon
.P
or require the personal presence of any officer, to assist

the court to render justice or arrive at a proper decision.
:S
But there are well settled norms and procedures for

exercise of such power.
BY
8. This court has repeatedly noticed that the real

power of courts is not in passing decrees and orders, nor
in punishing offenders and contemnors, nor in
summoning the presence of senior officers, but in the
trust, faith and confidence of the common man in the
judiciary.
Such trust and confidence should not be frittered away by
unnecessary and unwarranted show or exercise of power.
Greater the power, greater should be the responsibility in
exercising such power. The normal procedure in writ
184
petitions is to hear the parties through their counsel who

are instructed in the matter, and decide them by
examining the
pleadings/affidavit/evidence/documents/material. Where
the court seeks any information about the compliance
with any of its directions, it is furnished by affidavits or
reports supported by relevant documents. Requiring the
presence of the senior officers of the government in court
should be as a last resort, in rare and exceptional cases,
)
where such presence is absolutely necessary, as for
V.
example, where it is necessary to seek assistance in
explaining complex policy or technical issues, which the
D
counsel is not able to explain properly. The court may also
require personal attendance of the officers, where it finds
(A
that any officer is deliberately or with ulterior motives
withholding any specific information required by the
court which he is legally bound to provide or has
N
misrepresented or suppressed the correct position.
AI
9. Where the State has a definite policy or taken a specific
stand and that has been clearly explained by way of
affidavit, the court should not attempt to impose a
.J
contrary view by way of suggestions or proposals for

settlement. A court can of course express its views and
.P
issue directions through its reasoned orders, subject to

limitations in regard to interference in matters of policy.
:S
But it should not, and in fact, it cannot attempt to impose

its views by asking an unwilling party to settle on the
terms suggested by it. At all events the courts should
BY
avoid directing the senior officers to be present in court

to settle the grievances of individual litigants for whom
the court may have sympathy. The court should realize
that the state has its own priorities, policies and
compulsions which may result in a particular stand.
Merely because the court does not like such a stand, it
cannot summon or call the senior officers time and again
to court or issue threatening show cause notices. The
senior officers of the government are in-charge of the
administration of the State, have their own busy
185
schedules. The court should desist from calling them for

all and sundry matters, as that would amount to abuse of
judicial power. Courts should guard against such
transgressions in the exercise of power."(emphasis
supplied)
We are pained to observe that despite our decision in
State of Gujarat vs. Turabali Gulamhussain Hirani (supra)
many High Courts are persisting in summoning executive
officials where it was not absolutely necessary to summon
)
V.
them. It is possible that our judgment in the aforesaid
decision has not been brought to the notice of the Hon'ble
Judges in many of the High Courts and it may also be that
D
the subsequent decision of this Court in State of U.P. vs.
(A
Jasvir Singh (supra) has not been brought to their notice.
Consequently we are coming across many orders where
High Court Judges are summoning executive officials
routinely, casually, and sometimes even at the drop of a
N
hat. This is most improper.
AI
We are constrained to make these observations because

we are repeatedly coming across a large number of cases
.J
where such orders summoning high officials are being

passed by the High Courts and often it is only for the ego
satisfaction of the learned Judge. Judges should not have
.P
any ego problems. In particular, members of the higher

judiciary (High Court and Supreme Court) should have
:S
great modesty and humility. This is because the higher

one moves in the hierarchy the greater become his
powers. Hence, unless one has modesty and humility, he
BY
may play havoc.

High Court Judges have tremendous powers, but the
beauty lies in not exercising those powers except where
absolutely necessary. Flaunting these powers
unnecessarily only brings the judiciary into disrepute.
Some of the greatest Judges have been the most modest,
e.g., Justice Holmes, Judge Learned Hand, Justice
Brandeis, Justice Cardozo, Lord Atkins, Lord Denning,
Justice Venkatachaliah, etc. At the same time, we make it
186
clear that we have also come across cases where orders of

the Courts are deliberately ignored by government
officials which is not proper. Democracy and the rule of
law requires that the orders of the Courts should be
complied with by the executive authorities promptly and
with due diligence. If the executive authorities are
dissatisfied with a High Court order, they may appeal
against that order to the Supreme Court but it is not
proper to ignore such orders.
)
V.
In our opinion, if the High Court finds that its order has
not been complied with, it shall first see whether the
order can be complied with without summoning any
D
official and for that purpose it can ask the Advocate
(A
General, Additional Advocate General or Chief Standing
Counsel or some other counsel of the State to
communicate to the concerned official that there is some
order of the Court which has not been complied with.
N
Ordinarily, this will suffice because we see no reason as to
AI
why the executive authorities will not comply with the
orders of the court. It is only in some extreme case where
the High Court is convinced that deliberately the order of
.J
the court has been ignored in a spirit of defiance that it

may summon the official to explain why the order of the
.P
court has not been complied with.

The system functions on mutual respect between the
:S
judiciary and the executive. While the judiciary must

respect the executive, at the same time, the executive
must also respect the judiciary. If we do not respect each
BY
other, the system will collapse. In the present case, we are

of the opinion that the High Court was not justified in
summoning the aforementioned officials.
Following the decision in Turabali's case (supra) and Jasvir
Singh's case (supra), this appeal is allowed and consequently
the direction of the High Court summoning Principal
Secretary, Finance along with Principal Secretary, Medical &
health is set aside. The Contempt Petition shall be decided on
its own merits, in accordance with law, expeditiously.
187
A copy of this order will be sent to the Registrar

Generals/Registrars of all the High Courts, who shall circulate
copies to the learned Judges of the High Courts. The Chief
Justices of the High Courts, in particular, shall bring this
judgment to the notice of all Hon'ble Judges of the Court, with
the request that they follow this decision, in letter and spirit.
A copy of this order will also be sent to the Cabinet Secretary,
Union of India, New Delhi as well as to all the Chief
Secretaries of all States/Union Territories.
)
V.
..........................J. [MARKANDEY KATJU]
..........................J. [GYAN SUDHA MISRA]
NEW DELHI/MARCH 09, 2011
D
(A
N
AI
.J
.P
:S
BY
188
HEAD NOTES
Courts are not expected to play to the gallery or for any
applause from anyone or even need to take up cudgels as
well against anyone, either to please their own or anyone's
fantasies. Uncalled-for observations on the professional
competence or conduct of a counsel, or any person or
authority or harsh or disparaging remarks are not to be
made, unless absolutely required or warranted for deciding
the case.”
)
V.
IN THE HIGH COURT OF DELHI AT NEW DELHI
D
CRL.M.C. 1944/2017
(A
Judgment Reserved on: 27.07.2017
Judgment Pronounced on: 23.08.2017
N
Ms INDIRA VATI ..... Petitioner
versus
AI
STATE OF DELHI ..... Respondent

.J
CORAM:
HON'BLE MR. JUSTICE VINOD GOEL
.P
1. Both these petitions i.e. Criminal Miscellaneous Case

1944/2017 and Criminal Miscellaneous Case 1949/2017 have
:S
been filed under Section 482 of the Code of Criminal

Crl.M.C.1944/2017 & Crl. M.C. 1949/2017 Procedure, 1973
(in short „the code‟) read with Article 227 of the Constitution
BY
of India to quash the impugned order dated 20.04.2017

passed by Sh. Ramesh Kumar-II, Additional Sessions
Judge/SFTC-2 (Central), Tis Hazari Courts (in short „ASJ‟) in
case No.309619/16 vide FIR no. 236/2016 P.S Timarpur
under sections 376/420/506/34 IPC. Since both the
petitioners have sought quashing of the same impugned order,
I find it expedient to dispose of both these petitions by this
common judgment.
189
2. After filing of the charge sheet, case was committed to the

court of the Sessions Judge. The case was assigned to the
ASJ/SFTC- 2 Central, Delhi.
3. On 28/02/2017 the ASJ ordered to summon the
Investigating Officer (in short „IO‟) for the next date of hearing
i.e. 08.03.2017 and fixed the matter for arguments on charge.
On 08.03.2017 it was observed by the ASJ that process in
respect of the IO was not received back and therefore he
issued fresh summon to the concerned IO and also
)
V.
summoned the In-charge of the V-B for 22.03.2017.
4. IO Harender Kumar and ASI Om Prakash, who was In-
D
charge of the V-B of Police Station Timarpur, appeared before
the ASJ on 22.03.2017. ASI Om Prakash informed the Court
(A
that he had not received any summons. Similarly Naib Court
informed the court that he had also not received the
summons. The ASJ observed that as per the record, summons
N
had been issued to the Crl.M.C.1944/2017 & Crl. M.C.
1949/2017 IO and felt that an enquiry was required regarding
AI
the loss of summons and directed the DCP concerned to

conduct an inquiry regarding loss of summons.
.J
5. It is submitted by the learned Counsel for the petitioner

that the DCP/North got an inquiry conducted through ACP,
.P
Civil Lines and a detailed report was filed in the court of the
ASJ which was taken on record on 03.04.2017. It was
:S
reported to the ASJ that the summons regarding the presence

of SI Harender Kumar were neither received in the Police
Station nor by the Naib Court.
BY
6. It is further submitted by the learned counsel for the

appellant that the ASJ did not find this enquiry conducted by
the DCP to be satisfactory. The ASJ again observed that the
summons were issued by his office and fixed the case for
arguments on the point of charge on 20.04.2017.
7. The orders dated 22.03.2017 passed by the ASJ is
reproduced below:-
―22.03.2017
190
Present: Sh. A.T. Ansari, Ld. Addl. PP for the State.

All accused persons are on bail.
Sh. Fakhruddin, Ld. Counsel for Azad Ahmad.
Sh. Yunush Qureshi, Ld. Counsel for accused Naeem.
Sh. Aftab Ahmad, Learned counsel for accused
Tasleem.
Ms. Geeta Verma, Ld. Counsel for DCW.
I.O. S.I. Harender Kumar in person.
Since matter was fixed for arguments on charge.
)
At this stage, accused Ayub states that he belongs to a poor
V.
family and he is not in position to engage Counsel Crl.
M.C.1944/2017 & Crl. M.C. 1949/2017 and he is willing to
D
get assistance of counsel on government expenses.
(A
Heard.
Ms. Dolly Nair, advocate is hereby appointed as Amicus
Curiae for assistance of accused.
N
Ms. Dolly Nair, Ld. Amicus Curiae be informed accordingly.
AI
ASI Om Prakash, In-charge V-B is present. He states that he

has not received the summons and concerned Naib Court also
.J
states that he had not received the summons but as per

record, summons have been issued to the IO. Therefore
.P
enquiry is required. DCP concerned is directed to conduct

enquiry regarding loss of summons.
:S
Copy of this order be sent to DCP concerned for necessary

action and compliance.
IO SI Harender Kumar is discharged for today. Issue fresh
BY
summons.
Matter adjourned.
Matter be listed for arguments on charge on 03.04.2017.‖
8. The orders dated 03.04.2017 passed by the ASJ reads as
under:-
―03.04.2017
191
Sh. A.A. Ansari, Ld. Counsel for complainant with Sh. A.T.
Ansari, Ld. Addl. PP for the State.
Sh. Fakhruddin, Ld. Counsel for accused Azad Ahmad.
Sh. Aftab Ahmad, Learned counsel for accused
Tasleem.
Ms. Dolly Nair, Ld. Amicus Curiae for accused Ayub.
)
I.O. S.I. Harender in person.
V.
Ms. Neha Jain, Ld. Counsel for DCW.
DCP has filed enquiry report in compliance of order dated
D
22.03.2017 of this court. It be taken on record.
(A
Report perused. This court is not satisfied with the enquiry of
DCP. Record of this court shows that Crl.M.C.1944/2017 &
Crl. M.C. 1949/2017 summons were issued by this office.
N
Therefore, DCP is required to be appear in person on next date
of hearing.
AI
DCP be summoned to appear in person on next date of

.J
hearing.
Since matter was fixed for arguments on charge.
.P
Ld. Counsel for accused persons seeks some time to advance

their arguments on charge.
:S
Heard.
At the request of ld. counsel for accused persons, matter
BY
adjourned.
IO SI Harender is discharged for today.
Matter be listed for arguments on charge on 20.04.2017.‖
9. It is submitted by the learned counsel for the appellant that
on 20.04.2017, the DCP could not appear in person as he was
busy because of the upcoming Municipal Elections in Delhi on
23.04.2017 but he directed the ACP, Civil Lines and SHO
Timarpur to remain present in the court to answer all the
192
queries of the Court and to apprise the Court of all the facts of
the case.
10. It is submitted that on 20.04.2017, the ASJ observed that
the enquiry was not conducted properly by DCP and he just
enquired from Ct. Khem Chand and ASI Om Prakash. He
observed that DCP did nothing. The ASJ observed that the
DCP had not taken pain to go through record of the Court to
find out as to whether summons were issued or not. The ASJ
observed that DCP did not make enquiry from the Naib Court.
)
V.
The ASJ further observed that the DCP does not know how to
conduct an enquiry. The ASJ further observed that due to
such negligence, matters are delayed and prosecution cases
D
are demolished. The ASJ further observed that his order had
(A
nothing to do with the role of the Naib Court in getting the
summons served. The ASJ then directed the Commissioner of
Police, New Delhi to take appropriate action against the DCP
and ACP, Civil Lines vide order dated 20.04.2017. This order
N
is reproduced below: -
AI
―20.04.2017
Present: Sh. A.T. Ansari, Ld. Addl. PP for the State.
.J

.P
Sh. Fakhruddin, Ld. Counsel for accused Azad Ahmad.

:S
Sh. Aftab Ahmad, Ld. Counsel for accused Tasleem.

Ms. Dolly Nair, Ld. Amicus Curiae for accused Ayub.
Ms. Neha Jain, Ld. Counsel for DCW.
BY
ACP Indravati V. Rathore in person with enquiry report. It be

taken on record.
ASI Ranvir Singh from Legal Cell, North District has also filed
enquiry report. It be also taken on record.
Report perused. It reflects that enquiry has not been
conducted by concerned DCP in proper manner and according
to law. He has just enquiry from Ct. Khem Chand and ASI Om
Prakash and done nothing else.
193
Further, concerned DCP has not taken pain to go through the

record of this court whether summons have been issued or
not. Nor he had made any enquiry from the Naib Courts of
this court regarding the summons. It shows that DCP has not
followed the proper proceedings of the enquiry and does not
know how the enquiry should be conducted. Due to such
negligence, matters are being delayed and causes demolition
to the prosecution cases. It is highly objectionable that officer
of higher level also does not know how to conduct the enquiry.
)
V.
ACP also could not reply to the question of the court.
Despite opportunity given by this court, DCP has been failed
D
to take due course of enquiry. Hence, I am not satisfied with
the report of concerned DCP.
(A
This order has nothing to do with the role of Naib Courts in
getting the summons served as this order pertains to enquiry
conducted in very perfunctory manner by DCP.
N
The Commissioner of Police, New Delhi, is directed to take
AI
action against the concerned DCP and ACP.

Copy of this order be sent to the Commissioner of Police, New
.J
Delhi, for necessary action and compliance.

Ld. Counsel for accused persons seek some time to advance
.P
their arguments on charge.

Heard.
:S
At the request of Counsel for accused persons, matter

adjourned. Matter be listed for arguments on charge on
BY
09.05.2017.‖
11. In the present case, the controversy started when the
process with respect to summons issued to ensure the
presence of IO Harender Kumar on 08.03.2017 was not
received back and fresh summons were issued to IO Harender
Kumar and also to the In-charge of V-B of Police Station
Timarpur for 22.03.2017.
Pursuance to these summons, IO Harender Kumar and ASI
Om Prakash, who is the In-charge of V-B Police Station
194
Timarpur, appeared before the ASJ and informed the Court

that summons were not received in the Police Station.
12. The purpose of issuing summons was to ensure the
presence of the concerned person i.e. IO Harender Kumar in
the Court which was achieved when on the issuance of fresh
summons, IO Harender Kumar appeared before the ASJ on
22.03.2017.
Further, IO Harender Kumar had also appeared on
)
03.04.2017.
V.
13. The controversy should have been put to rest on
22.03.2017 itself by the ASJ but he chose to step over the
D
boundaries of judicial propriety and unnecessarily directed to
conduct an enquiry by the DCP about the loss of the
(A
summons allegedly issued to IO Harender Kumar.
14. It is important to mention here that the usual practice
N
followed by the courts of Additional Sessions Judges to serve
summons is that the summons are issued by the Ahalmad of
AI
the concerned Court. These summons are handed over to the

Naib Court posted in the court. The Naib Court sends the
.J
summons to the In-charge of the V-B of the concerned Police

Station for execution.
.P
15. Instead of calling the Ahlmad and perusing the record

himself as to whether the summons were issued by
:S
Ahlmad/court officials and to whom the summons were

handed over, the ASJ without applying his mind
unnecessarily chose to direct the DCP concerned to conduct
BY
an enquiry regarding the loss of summons. This particularly

when the Naib Court informed the ASJ on 22.03.2017 itself
that he had not received the summons.
The ASJ should have confronted his Ahalmad with the Naib
Court and the matter would have ended then and there.
16. Even if the ASJ in his wisdom found it appropriate to
conduct an enquiry into loss of the summons by the DCP, the
report of the DCP clearly stated that the Naib Court posted in
the Court informed that he had not received the summons
195
from the Court and therefore the controversy could have been
put to rest at this stage also.
17. The ASJ should have heard the arguments on the point of
charge on 22.03.2017 instead of becoming egoistic in directing
the DCP to conduct an inquiry. This was not done and instead
of making short enquiries from his own staff/Ahalmad, the
ASJ whimsically directed an enquiry by the DCP who is
completely alien to the records of the court and is already
burdened with many other important responsibilities. The ASJ
)
V.
made disparaging remarks against the DCP in his order dated
20.04.2017 which were not at all warranted. I find it hard to
comprehend why the ASJ did not conduct the enquiry himself.
D
ASJ himself faulted in not conducting an enquiry by perusing
(A
the record kept by the Ahalmad to find out whether the
Ahalmad had issued the summons to the IO and if so to whom
summons were handed over.
N
18. The ASJ did not hear arguments on point of charge on
AI
22.03.2017, 03.04.2017 and 20.04.2017 and himself faulted
in delaying the matter and casted aspersion on DCP/ACP by
observing that cases are being delayed due the negligence of
.J
such officers. Had the ASJ put to rest the controversy and
proceeded with the case, precious time of the Court as well as
.P
the litigants would have been saved and it was due to the
serious lapse on the part of the ASJ himself that the matter
:S
was delayed and arguments on charge could not be advanced.

19. The DCP had clearly stated that he could not be present in
Court on 20.04.2017 as he was busy in preparations of the
BY
upcoming Municipal Elections in Delhi. The ASJ before

making scathing remarks on the conduct of the DCP and
ordering an enquiry against him and the ACP, Civil Lines, did
not even bother to seek an explanation or give them an
opportunity to represent themselves which is clearly against
the principles of natural justice.
20. The DCP being not available for justifiable reason,
before the ASJ on 20.04.2017 seems to have hurt the
ASJ‟s ego who was under the belief that high ranking
196
executive officials are somehow inferior to members of

the Judiciary and bound by all their directions. The ASJ
to satisfy his own sadistic pleasures seems to have
forgotten that Judges are to remain humble and not be
guided by their ego or prejudices.
21. Time and again the Apex Court has deprecated the
practice of Courts summoning senior Police and
Government officials by observing that Judges should
have modesty and humility. They should realise that
)
V.
summoning a senior official, except in some very rare and
exceptional situation, and that too for compelling reasons,
is counter-productive and may also involve heavy
D
expenses and valuable time of the official concerned.
(A
22. The Hon‘ble Supreme Court in Testa Setalvad v. State of
Gujarat, (2004) 10 SCC 88 had deprecated the practice of
Courts in making remarks about the incompetence or
N
character of either the parties, their counsels or other
Government officials. The Hon‘ble Supreme Court held as
AI
under: -
―9. Observations should not be made by courts against
.J
persons and authorities, unless they are essential or

necessary for decision of the case. Rare should be the
.P
occasion and necessities alone should call for its resort.

Courts are temples of justice and such respect they also
:S
deserve because they do not identify themselves with the

causes before them or those litigating for such causes. The
parties before them and the counsel are considered to be
BY
devotees and pandits who perform the rituals respectively

seeking protection of justice; parties directly and counsel on
their behalf. There is no need or justification for any
unwarranted besmirching of either the parties or their causes,
as a matter of routine.
10. Courts are not expected to play to the gallery or for
any applause from anyone or even need to take up cudgels
as well against anyone, either to please their own or
anyone's fantasies. Uncalled-for observations on the
197
professional competence or conduct of a counsel, or any

person or authority or harsh or disparaging remarks are
not to be made, unless absolutely required or warranted
for deciding the case.”
23. Therefore, I find that the order of the ASJ in ordering an
enquiry against the ACP, Civil Lines and DCP to be highly
arbitrary and unbecoming of a Judge who is supposed to
maintain judicial propriety at all times and is not to be guided
by his ego or personal prejudices against someone or a
)
V.
particular group or class of people/officers.
24. In the facts and circumstances of the case and the law laid
D
down by the Hon‘ble Supreme Court, the impugned order of
the ASJ dated 20.04.2017 passed in case no.173/2017 is set
(A
aside.
25. Copy of this judgment be circulated to all Judicial
Officers for their guidance. The Ld. District & Sessions
N
Judges are requested to sensitise the Judicial Officers
AI
under their jurisdiction.
.J
VINOD GOEL, J.
AUGUST 23, 2017
.P
:S
...................................xxxxxxxx.........................................
BY
198
S.P. JAIN (ADV.)
B.A. (Voc.), M.A. (Pol. Scie.), M.A. (Eco.), M.A. (Socio.), LL.M.,
CC: CYBER LAW
HIMANSHU GAMBHIR (ADV.)

(B.Com., LL.B., CC: CYBER LAW, IPR)
ABHISHEK JAIN
(B.Sc. CS, CC: CYBER LAW, IPR)
39, WESTERN WING,

TIS HAZARI COURTS, DELHI

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S.P. JAIN (ADV.

HIMANSHU GAMBHIR (ADV.)

39, WESTERN WING,

S.NO. PARTICULARS PAGE NO.

2. Notification u./s 163-A of the Motor Vehicles Act 3

3. Analysis of the notification issued by the Central 4-7

Govt. in respect of section 163-A of the Motor

(Constitution Bench Judgment)

Hon’ble Supreme Court in respect of the case titled

Court of India in the case titled as Mukund Vs

by the Hon’ble Supreme Court of India

Ltd. Vs Laxmamma on dishonour of cheque of

Kumar by the Hon’ble Supreme Court of India, on

defences of Insurance Company

Khatoonbee by the Hon’ble Supreme Court of India

Kumar by the Hon’ble Supreme Court of India on the

that the amount of compensation can be deposited by

Malaria Niritshak Sangh by the Hon’ble Supreme

of Delhi by the Hon’ble High Court of Delhi wherein

TABLE OF MINIMUM WAGES (DELHI)

01.05.1987 489.00 552.00 651.00 563.00 661.00 781.00

16.03.1988 562.00 635.00 749.00 647.00 760.00 898.00

1382.00 1548.00 1806.00 1575.00 1830.00 2142.00

1495.00 1661.00 1919.00 1688.00 1943.00 2255.00

6084.00 6734.00 7410.00 6734.00 7410.00 8060.00

THE GAZETTE OF INDIA: EXTRAORDINARY

S.O. 2022(E).—In exercise of the powers conferred by sub-

FATAL ACCIDENTS/INJURY CASES CLAIMS

Compensation payable in case of Death shall be five lakh

(b) Accidents resulting in permanent disability:

Compensation payable shall be = [Rs. 5,00,000/- × percentage

Provided that the minimum compensation in case of permanent

2. On and from the date of 1st day of January, 2019 the

ANALYSIS OF THE NOTIFICATION ISSUED BY THE

Since the insertion of Section 163-A in the Motor Vehicles Act,

section (3) of 163-A of the Motor Vehicles Act. The Hon‘ble

Govt. about the said provision in the statute, however no

has now issued notification on 22nd May, 2018, which is

5,00,000/ which can‘t be reduced or enhanced in any

claimants u/s 166 of the Motor Vehicles Act on the basis of

the claimant was bound to prove negligence of the offending

(8) Similarly the death cases relating to the death of child

after the proof of negligence would now be filed by the

victims of accidents who have received minor injuries in the

163A. Special provisions as to payment of compensation

Explanation.—For the purposes of this sub-section,

extent as in the Workmen‘s Compensation Act, 1923 (8 of

(2) It is not made clear in the notification whether it will be

cases will be covered wherein the accident in question had

applicable retrospectively then it will be applicable to all the

words, or necessary implication. The second rule is that the

(5) In case of death or injury the claimants will not be entitled

(6) The notification now remove the Table altogether which

MAIN FEATURES OF PRANAYA SETHI JUDGMENT

S.NO. AGE OF THE VICTIM MULTIPLIER

DEDUCTIONS FOR SELF EXPENSES OF THE DECEASED

S.NO. STATUS DEPENDANTS DEDUCTIONS

1. MARRIED 2-3 1/3RD

2. MARRIED 4-6 1/4TH

S.NO. AGE ADDITION

1. UPTO 40 YEARS 50%

FUTURE PROSPECTS WHEN THE DECEASED IS SELF

S.NO. AGE ADDITION