Authority: High Court of Jharkhand at Ranchi

Order Date: 08/09/2026

Case Overview

  • The appeal (M.A. No. 311 of 2015) was filed by ICICI Lombard General Insurance Company Limited (insurer) against the Judgment and Award dated 13.02.2015 passed by the Claims Tribunal, Palamau, in M.V. Claim Case No. 56 of 2009.
  • The Tribunal had directed the insurer to pay Rs. 7,10,000/- to the claimants (widow Gayatri Kuar and her four sons, all minors) together with interest at 6% per annum from the date of filing of the claim petition.
  • The insurer challenged the award on two grounds: (i) the offending vehicle allegedly did not possess a valid permit on the accident date, invoking Supreme Court precedents (National Insurance Co. Ltd. v. Swaran Singh, etc.) to claim a right to pay and recover; (ii) the Tribunal’s method of computing compensation was erroneous.
  • The claimants filed Cross Objection No. 01 of 2021, contending that the compensation was neither just nor adequate and that the Tribunal’s computation contradicted settled Supreme Court principles.
  • The insurer’s written statement relied on Sections 149(2) and 134(c) of the Motor Vehicles Act, demanding the owner/driver produce registration, road permit, and licence, and asserting a presumption of breach if such documents were not produced. However, the insurer did not specifically allege that the vehicle lacked a permit or that the driver was unlicensed, nor did it produce any oral or documentary evidence to prove such breach.
  • The insurer produced a temporary permit (Ext. 4) dated 09.12.2009, valid from 10.12.2009 to 05.04.2009, and argued that because the accident occurred on 07.09.2009 the vehicle was operating without a permit.
  • The Court held that the burden of proving a fundamental breach of policy conditions lies on the insurer (per Swaran Singh). The insurer’s pleadings were not categorical, and no evidence was adduced to demonstrate the absence of a permit. Consequently, the insurer could not escape liability.
  • Regarding the income of the deceased (Budhdeo Dubey), the Tribunal had fixed a monthly income of Rs. 6,000/‑ based on lack of documentary proof, while the claimants’ witnesses asserted Rs. 10,000/‑ per month. The Court, citing Supreme Court cases (Chameli Devi, Chandra @ Chanda, Sri Ramachandrappa, Oriental Insurance), accepted oral evidence and fixed the monthly income at Rs. 8,000/‑ as a reasonable middle ground.
  • Using the multiplier of 14 (uncontested), a deduction of one‑fourth for personal expenses, and an addition of 25% for future prospects, the loss of dependency was calculated as follows:
  • Monthly income = Rs. 8,000/‑
  • Annual income = Rs. 96,000/‑
  • Add 25% future prospects = Rs. 24,000/‑
  • Adjusted annual income = Rs. 1,20,000/‑
  • Less 1/4 for personal expenses = Rs. 30,000/‑
  • Annual contribution = Rs. 90,000/‑
  • Loss of dependency = Rs. 90,000/‑ × 14 = Rs. 12,60,000/‑
  • Consortium payable to each of the five claimants: Rs. 40,000/‑ each (total Rs. 2,00,000/‑). Funeral expenses: Rs. 15,000/‑; loss of estate: Rs. 15,000/‑. No loss of love and affection awarded.
  • Total compensation computed by the Tribunal: Rs. 14,90,000/‑.
  • Adjustments required: interim compensation already paid under Section 140 of the Act – Rs. 50,000/‑; payment by the vehicle owner – Rs. 2,50,000/‑ (Cheque No. 311832 dated 25.05.2009 and Cheque No. 311774 dated 19.06.2009). The owner’s payment is directly linked to the death and must be set off.
  • Net compensation payable after adjustments: Rs. 11,90,000/‑.
  • Interest at 6% per annum from the date of filing of the claim petition was upheld.
  • The Court ordered the insurer to deposit the net amount of Rs. 11,90,000/‑, together with accrued interest, within eight weeks of the order, after informing the claimants’ counsel.
  • The amount is to be apportioned equally among all claimants. For the minor children, the widow shall keep their shares in fixed deposits until they attain majority.
  • No costs were awarded. Any interim amounts already deposited shall be credited to avoid duplication. Payments must be made through regular banking channels after verification of identity and bank details.

Final Outcome

  • The insurer’s appeal (M.A. No. 311 of 2015) is dismissed; the Cross Objection filed by the claimants is allowed.
  • Compensation is enhanced to Rs. 11,90,000/‑ (net of prior payments) with interest at 6% per annum, to be paid within eight weeks.

Topics: Compensation, Motor Vehicle Insurance, Judicial Decision