Branch Manager vs Smt. Melan Bai on 24 June, 2025

July 12, 2025

Chattisgarh High Court

Branch Manager vs Smt. Melan Bai on 24 June, 2025

1. Branch Manager New India Insurance Company Limited
(Correct Name As Assurance) Branch Office Rama Trade
Centre, Infront Of Rajeev Plaza, Bus Stand, Bilaspur, District
Bilaspur Chhattisgarh. (Insurer Of Vehicle Bus No. C.G. -10g-
0150), District : Bilaspur, Chhattisgarh
… Appellant
versus

1. Smt. Melan Bai W/o Late Ramkumar Netam Aged About 40
Years

2. Basant Netam S/o Late Ramkumar Netam Aged About 18
Years

3. Kumari Preeti Netam D/o Late Ramkumar Netam Aged About
8 Years

4. Ku. Priyanka Netam D/o Late Ramkumar Netam Aged About
6 Years

5. Dinesh Kumar Netam S/o Late Ramkumar Netam Aged About
4 Years
No.3 to 5 are minor represented through mother and natural
guardian Smt. Melan Bai.

6. Smt. Sukhvantin Bai W/o Late Chaituram Netam Aged About
61 Years
3

All are resident of Village Tonhichauan, Police Station-
Patharia, At Present R/o Village Bodri, Polilce Station-
Chakarbhatha, Tahsil Bilha, District- Bilaspur (CG)

7. Laxman Singh Thakur S/o Vishram Singh Thakur Aged About
52 Years R/o Near Old Thana, Takhatpur, Tahsil Takhatpur,
District- Bilaspur (CG) ………(Driver of Bus No.CG 10-G/0150)

8. Laxmichand Sachdev S/o Vishram Singh Thakur Aged About
52 Years R/o Sachdev Auto Parts, Sangam Nagar, Main
Road, Takhatpur, Tahsil-Takhatpur, District- Bilaspur,
Chhattisgarh…………..(Owner Of Bus No. C.G. 10-G/0150),
… Respondents
MAC NO.1248/2019
For Appellants : Ms. Deeksha Bharati Jaiswal, Advocate
on behalf of Mr. Gautam Khetrapal,
Advocate.

For Respondent No.1& 2 : None though served.

For Respondent No.3    : Ms.Swati Agrawal, Advocate on behalf of
                                Mr. Pankaj Agrawal, Advocate
                         MAC No.1318/2019
For Appellant           : Ms.Swati Agrawal, Advocate on behalf of
                          Mr. Pankaj Agrawal, Advocate
For Respondent No.1     : None.

For Respondent No.2 & 3 : Mr. Santosh Bharat, Advocate
Hon’ble Shri Justice Parth Prateem Sahu
Order on Board
24/06/2025

1. As above two appeals arise out of the common award dated

2.5.2019 passed by learned 9th Additional Motor Accident

Claims Tribunal, Bilaspur (for short ‘the Claims Tribunal’) in

Claim Case No.417/2018, these two appeals are heard

together and disposed of by this common order.

2. Appellants-claimants in MAC No.1248/2019 have filed this
4

appeal seeking enhancement of compensation, whereas

appellant Insurance Company in MAC No.1318/2019 has filed

this appeal challenging the liability fastened upon it to pay

amount of compensation to claimants.

3. Facts of the case, in brief, are that appellants filed an

application under Section 166 of the Motor Vehicles Act, 1988

(for short ‘the Act of 1988’) seeking compensation to the tune

of Rs.74,50,000/- under various heads, for death of

Ramkumar Netam in a motor vehicular accident. According to

claimants, who are widow, children and mother of deceased,

on 4.3.2018 when Ramkumar Netam was going to village

Polmi to attend 10th day ceremony in the bus bearing

registration number CG10-G-0150 (for short ‘offending

vehicle’), due to rash and negligent driving by non-applicant

No.1, the offending vehicle fell 20 feet downward from the

bridge in Maniyari River as a result Ramkumar Patel

sustained grievous injuries on various parts of body and died

on the spot.

4. Driver and owner of offending vehicle jointly filed reply

pleading that all of a sudden a cow came in front of vehicle

and in order to save the cow, driver turned the vehicle on the

side of road, it was the slope road, therefore, driver lost

control over the vehicle and it fell down. The driver of

offending vehicle had made best efforts to avoid accident.
5

Non-applicant No.1 was holding valid license and the

offending vehicle was insured with non-applicant No.3,

therefore, in case of award of any compensation, the liability

to satisfy the same would be of insurance company.

5. The Claims Tribunal upon analyzing the pleadings and

evidence brought on record by the parties, came to the

conclusion that accident occurred due to rash and negligent

driving of motorcycle by non-applicant No.1 which resulted in

death of deceased;. It was also held that there was no

element of contributory negligence and violation of any of the

conditions of insurance policy. Consequently, the Claims

Tribunal allowed application in part, awarded compensation of

Rs.9,06,750/- and fastened liability upon the non-applicants,

jointly and severally, to satisfy the award.

6. Learned counsel for claimants/appellants in MAC

No.1248/2019 submits that income of deceased assessed by

the Claims Tribunal is on lower side. She next contended that

learned Claims Tribunal erred in not awarding any amount

towards loss of consortium to appellants No.2 to 6, who are

children and mother of deceased. Therefore, she prays that

amount of compensation awarded by learned Claims Tribunal

be suitably enhanced.

7. Learned counsel appearing on behalf of Insurance Company

submits that on the date of accident though there was
6

coverage of Insurance Policy, the offending vehicle was not

having fitness certificate and unless there was fitness

certificate of the offending vehicle, it cannot be plied on public

road. Since there is no valid fitness certificate to the

offending vehicle, the same amounts to violation of condition

of insurance policy and therefore, finding of the Claims

Tribunal that the insurer is liable to pay compensation is

unsustainable and liable to be set aside.

8. I have heard learned counsel for the respective parties and

perused record of claim case including impugned award.

9. Let us first consider whether the Insurance Company has

been rightly fastened with liability to satisfy the award?

10. Claimant filed application seeking compensation for the

injuries sustained by her in the accident. The claim petition

filed by the claimants was resisted by the insurance company

inter alia contending that the offending vehicle did not

possess a valid and effective fitness certificate at the time of

accident and in support thereof produced documents as

Ex.D-1,Ex.D-2 and Ex.D-3 and also examined Shri Pitambar

Prasad Tripathi, Assistant Grade-III of the Regional Transport

Office Bilaspur as NAW3-1. Ex.D-1 is the registration

certificate of offending vehicle which mentions that the fitness

of offending vehicle was valid upto 21.7.2015. Ex.D-3 is the

application submitted by the counsel for insurance company
7

with the Regional Transport Officer, Bilaspur for supply of

certified copy of fitness certificate of offending vehicle. There

is an endorsement by the Registering Authority on this

application, mentioning that as per office records, fitness

certificate with the respect to offending vehicle was issued

lastly for the period from 22.7.2014 to 21.7.2015 and

thereafter the owner of offending vehicle has not applied for

fitness. Shri Pitambar Prasad Tripathi, Assistant Grade-III,

RTO, Bilaspur as NAW3-1 has proved the documents Ex.D-1

and Ex.D-2 and also deposed that on the date of accident i.e.

4.3.2018 there was no fitness certificate of the offending

vehicle.

11. Perusal of record would show that the accident has taken

place on 4.3.2018 in which claimant, who was traveling in the

offending bus, sustained grievous injuries including fracture

injuries. Based on the report lodged, a criminal case was

registered against non-applicant in Police Station Tarbahar,

Bilaspur for commission of offence under Section 279, 337,

338, 304A of IPC and after completion of investigation,

charge sheet was filed before the Court concerned against

non-applicant No.1-driver. In the course of investigation,

police seized documents relating to offending vehicle like

registration certificate, permit and insurance policy. However,

there is no seizure of fitness certificate valid on the date of
8

accident.

12. An application under Order 11 Rule 12 CPC has been filed on

behalf of the owner and driver of offending vehicle pleading

that they are in possession of fitness certificate for the period

from 2014 to 2015, the fitness certificate of the offending

vehicle for the period thereafter has lost, the same will be filed

as and when received. However, in support of this application,

the owner and driver of offending vehicle has not filed any

document like copy of FIR or application pending before the

concerned licensing authority for issuance of duplicate fitness

certificate, to substantiate their plea that fitness certificate

valid on the date of accident has been lost. Thus, it is clear

that an opportunity was available with owner and driver of

offending vehicle to establish that there was a valid fitness

certificate, but they failed to furnish any evidence in that

context.

13. As per Section 56 of the Act of 1988, any Transport Vehicle

shall not be deemed to be validly registered for the purpose of

Section 39 of the Act of 1988, unless, it carries a certificate of

Fitness in the prescribed form issued by the prescribed

authority. Section 56 (1) of the Act of 1988 reads thus:-

“56.Certificate of fitness of transport vehicles.- (1)
Subject to the provisions of Section 59 and 60, a
transport vehicle shall not be deemed to be validly
registered for the purposes of Section 39, unless it
9

carries a certificate of fitness in such form containing
such particulars and information as may be
prescribed by the Central Government, issued by the
prescribed authority, or by an authorised testing
station mentioned in sub-section (2), to the effect that
the vehicle complies for the time being with all the
requirements of this Act and the rules made
thereunder:

14. As per Section 2 (47) of the Act of 1988, “Transport vehicle”

means a public service vehicle, a goods carriage, an

educational institution bus or a private service vehicle”. In the

instant case, the offending vehicle is the bus as per certificate

of registration seized by police vide Seizure Memo Ex.P-9.

15. In the matter of Pareed Pillai vs Oriental Insurance Co. Ltd.

reported in 2019 ACJ 16, the Kerala High Court has

observed that it is a mandatory requirement of every permit

that the vehicle to which the permit relates shall carry valid

certificate of fitness issued under Section 56 at all times,

absence of which will automatically lead to a situation that the

vehicle shall not be deemed having a valid permit and thus,

there is violation of insurance policy.

16. Thus, keeping in mind the provisions of Section 56 of the Act

of 1988, the evidence of Umesh Tripathi (NAW3-1) that after

21.7.2015, fitness certificate of the offending vehicle has not

been issued by the RTO, Bilaspur coupled with admission of

owner and driver of offending vehicle that on the date of

accident, they were not in possession of valid fitness
10

certificate, this Court is of the considered view that defence

raised by appellant Insurance Company that there was

violation of insurance policy as the offending vehicle was

plied on road without fitness certificate is correctly recorded.

This being the position, the finding recorded by the Claims

Tribunal on the issue relating to violation of conditions of

insurance policy is not sustainable and it is hereby set aside.

It is held that on the date of accident the offending vehicle

was plied on road without valid fitness certificate, the terms

and condition of insurance was violated and thus the

insurance company is not jointly and severally liable to make

payment of compensation.

17. Now the question arises for consideration is whether the

insurance company is entitled to complete exoneration from

its liability to indemnify the insured or not?

18. In case of Pareed Pillai (supra), the five Judges Bench of

Kerala High Court while dealing with breach relating to non-

availability of fitness certificate has observed thus:-

“17. The stipulations under the above provisions clearly
substantiate the importance and necessity to have a
valid Fitness Certificate to the transport vehicle at all
times. The above prescription converges on the point
that Certificate of Registration, existence of valid Permit
and availability of Fitness Certificate, all throughout, are
closely interlinked in the case of a transport vehicle and
one requirement cannot be segregated from the other.

The transport vehicle should be completely fit and road
worthy, to be plied on the road, which otherwise may
cause threat to the lives and limbs of passengers and
the general public, apart from damage to property. Only
if the transport vehicle is having valid Fitness
Certificate, would the necessary Permit be issued in
terms of Section 66 of the Act and by virtue of the
mandate under Section 56 of the Act, no transport
vehicle without Fitness Certificate will be deemed as a
validly registered vehicle for the purpose of Section 39
of the Act, which stipulates that nobody shall drive or
cause the motor vehicle to be driven without valid
registration in public place or such other place, as the
case may be. These requirements are quite
‘fundamental’ in nature; unlike a case where a transport
vehicle carrying more passengers than the permitted
capacity or a goods carriage carrying excess quantity of
goods than the permitted extent or a case where a
transport vehicle was plying through a deviated route
than the one shown in the route permit which instances
could rather be branded as ‘technical violations’. In
other words, when a transport vehicle is not having a
Fitness Certificate, it will be deemed as having no
Certificate of Registration and when2020:CGHC:18660-
DB such vehicle is not having Permit or Fitness
Certificate, nobody can drive such vehicle and no owner
can permit the use of any such vehicle compromising
with the lives, limbs, properties of the
passengers/general public. Obviously, since the safety
of passengers and general public was of serious
concern and consideration for the law makers,
appropriate and adequate measures were taken by
12

incorporating relevant provisions in the Statute, also
pointing out the circumstances which would constitute
offence; providing adequate penalty. This being the
position, such lapse, if any, can only be regarded as a
fundamental breach and not a technical breach and any
interpretation to the contrary, will only negate the
intention of the law makers.”

19. Thus, it is clear that absence of fitness certificate of the

offending vehicle is a fundamental breach of the terms and

conditions of the insurance policy and it would not help the

Insurance Company to secure complete exoneration. Even,

once, the Insurance Company had agreed to indemnify the

insured than it would be a dispute between the insured and

the insurer as to whether the vehicle was being used contrary

to the conditions of Insurance Policy or not? On account of

such inter se dispute between the insured and the insurer, the

claimants, who are completely stranger to the contract

between them, cannot be made to suffer. In case at hand, it is

not in dispute that on the date of accident, the insurance

policy was effective and the accident occurred during validity

of the policy. Hence, the insurer/Insurance Company cannot

get away from its liability of indemnifying the insured by

proving that the vehicle was being used contrary to the

Insurance Policy.

20. In the matter of Amrit Paul Singh and another v. Tata AIG

General Insurance Company Limited and others reported
13

in (2018) 7 SCC 558 Hon’ble Supreme Court has held thus:-

“We are disposed to think so in view of the series of
exceptions carved out in Section 66. The said
situations cannot be equated with absence of
licence or a fake licence or a licence for different
kind of vehicle, or, for that matter, violation of a
condition of carrying more number of passengers.
Therefore, the principles laid down in Swaran Singh
(supra) and Lakhmi Chand (supra) in that regard
would not be applicable to the case at hand. That
apart, the insurer had taken the plea that the
vehicle in question had no permit. It does not
require the wisdom of the “Tripitaka”, that the
existence of a permit of any nature is a matter of
documentary evidence. Nothing has been brought
on record by the insured to prove that he had a
permit of the vehicle. In such a situation, the onus
cannot be cast on the insurer. Therefore, the
tribunal as well as the High Court had directed the
insurer was required to pay the compensation
amount to the claimants with interest with the
stipulation that the insurer shall be entitled to
recover the same from the owner and the driver.

The said directions are in consonance with the
principles stated in Swaran Singh (supra) and other
cases pertaining to pay and recover principle.”

21. In cases of Shivaraj vs. Rajendra, reportedin (2018) 10

SCC 432 and Shamanna and another Vs. Divisional

Manager Vs. the Oriental Insurance Co. Ltd. and others,

[(2018) 9 SCC 650, the Hon’ble Supreme Court has observed
14

that in the case of breach of policy, directions against the

Insurance Company to pay the awarded sum to the claimants

and then to recover the said sum from the insured be given

by applying the principle of “pay and recover”.

22. Therefore, in the light of above decisions of Hon’ble Supreme

Court and considering the beneficial object of the Act of 1988,

it would be just and appropriate to apply the principle of ‘pay

and recover’ in the given facts and circumstances of the case.

23. Consequently, appellant Insurance Company is exonerated

from its liability to indemnify insured under the policy.

Respondents No.2 & 3, driver & owner of offending vehicle,

are held liable to satisfy the compensation awarded by the

Claims Tribunal, jointly and severally. Appellant Insurance

Company is directed to first deposit the entire amount of

compensation together with interest, as awarded by Claims

Tribunal, and then to recover the same from respondent

Nos.2 & 3- driver & owner of offending vehicle, jointly and

severally, in accordance with law.

24. Now let us see whether claimants/appellants in MAC

No.1248/2019 are entitled for enhancement of compensation

or not.

25. So far as income of the deceased is concerned, the Claims

Tribunal disbelieved version of claimants that deceased was

earning Rs.10,000/- per month by working as Mason by
15

recording that claimant failed to prove the occupation and

income of deceased by placing any documentary evidence in

that regard. Consequently, the Claims Tribunal has assessed

income of deceased at Rs.6,206/- per month on notional

basis treating the deceased to be an unskilled labour and

taking resort to the minimum wage fixed by the Competent

Authority for the period from 1.10.2016 to 31.3.2017. In case

at hand, date of accident is 4.3.2018 and at the time of

accident, deceased was resident of District Bilaspur, which

comes within the category of ‘B’ Zone. Hence, the Claims

Tribunal ought to have taken the minimum wage rate

applicable and prescribed by the Competent Authority under

the Minimum Wages Act, 1948 for an unskilled worker of

Grade ‘B’ city for the period from 1.10.2017 to 31.3.2018,

which was Rs.7930/-. The Claims Tribunal erred in fixing

income of deceased at the minimum wage rate which was

applicable for an unskilled worker the period from 1.10.2016

to 31.3.2017. Accordingly, the notional income of deceased

assessed by the Claims Tribunal at Rs.6206/- is hereby

enhanced to Rs.7930/- per month. It is ordered accordingly.

26. Addition of future prospects to the assessed income of

deceased; deduction towards personal expenses of deceased

and multiplier applied by the Claims Tribunal to compute the

loss of dependency appears to be in consonance with the law
16

settled in this regard and the same need no interference.

27. Perusal of impugned award would show that the Claims

Tribunal has awarded a sum of Rs.40,000/- for loss of

consortium to the widow of deceased only and nothing has

been awarded for loss of consortium to other claimants/

dependents who are children and mother of deceased. As

per decision of Hon’ble Supreme Court in case of Magma

General Insurance Company Ltd. vs. Nanu Ram alias

Chuhru Ram & others, (2018) 18 SCC 130, the children and

parents of victim died in a road accident are also entitled for

consortium at the rate of Rs.40,000/- each under the head

‘parental consortium’ and filial consortium. Thus, appellants

No.2 to 5 being children and appellant No.6 being mother of

the deceased would also be entitled to parental consortium

and filial consortium in the sum of Rs.40,000/- each. It is

ordered accordingly.

28.For the foregoing, this Court proposes to recalculate amount

of compensation payable to the claimants/appellants.

29.Accordingly, income of deceased is taken as Rs.7,930/- per

month and after adding 25% towards future prospects, as

done by the Claims Tribunal looking to the fact that deceased

was in between the age group of 46 to 50 years, monthly

income of deceased would come to Rs.9,912/- and annual

income would be Rs.1,18,944/-. Out of this amount, one-
17

fourth is to be deducted towards personal and living expenses

of deceased, as deducted by the Claims Tribunal, and after

deducting one-fourth, loss of dependency would come to

Rs.89,208/-. Applying multiplier of 13, as applied by Claims

Tribunal, the loss of dependency would be Rs.11,59,704/-

(89208 x13). Besides this, appellant No.1 is entitled for a sum

of Rs.40,000/- towards spousal consortium; appellant No.2 to

5 are entitled for a sum of Rs.40,000/- each towards parental

consortium and appellant No.6, mother of deceased, is

entitled for Rs.40,000/- for loss of filial consortium. In addition

to aforesaid amount, appellants are also entitled to get a sum

of Rs.15,000/- for funeral expenses and Rs.15,000/- for loss

of estate. Thus, total amount of compensation for which now

appellants-claimants are entitled, comes to Rs.14,29,704/-

This amount of compensation shall carry interest @ 8% p.a.

from the date of application till actual payment is made. Rest

of the conditions mentioned in the impugned award shall

remain intact. Any amount disbursed to appellants pursuant

to impugned award will be adjusted from the amount of

compensation as awarded above.

30.In the result;

• MAC No.1248/2019 is allowed in part and now the

claimants / appellants are entitled are entitled for

compensation of Rs.14,29,704/- with interest @ 8% p.a.
18

• MAC No.1318/2019 is allowed. Appellant Insurance

Company is exonerated from its liability to indemnify

insured under the policy. Respondents No.2 & 3, driver &

owner of offending vehicle, are held liable to satisfy the

compensation awarded by the Claims Tribunal, jointly and

severally. Appellant Insurance Company is directed to first

deposit the entire amount of compensation together with

interest, as awarded by Claims Tribunal, and then to

recover the same from respondent Nos.7 & 8- driver &

owner of offending vehicle, jointly and severally. Appellant

Insurance Company shall recover the amount of

compensation in same execution proceeding as per

direction of Hon’ble Supreme Court in case of n case of

Oriental Insurance Company Limited v. Nanjappan

reported in AIR 2004 SC 1631.

       Digitally
SYED   signed
ROSHAN by SYED
ZAMIR  ROSHAN
ALI    ZAMIR
       ALI                                                              Sd/-
                                                               (Parth Prateem Sahu)
                                                                       Judge
                   roshan/

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Chattisgarh High Court

Branch Manager vs Smt. Melan Bai on 24 June, 2025

Author: Parth Prateem Sahu

Bench: Parth Prateem Sahu

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