Authority: High Court at Calcutta, Civil Appellate Jurisdiction

Order Date: 22.09.2026

Case Overview

  • Parties: National Insurance Company Limited (appellant) vs. Sarifan Khatun and others (claimants); cross‑objectors Sarifan Khatun and others vs. National Insurance Company Limited and another.
  • Appeals: FMA 1294 of 2025 (appellant) and COT 153 of 2025 (cross‑objector) arising from the same MAC Tribunal award dated 03.05.2024 in MAC Case No. 37 of 2021.
  • Original Tribunal Award: Directed the insurer to pay Rs 1,41,500 with simple interest at 6% per annum, payable by separate cheques within three months.
  • Claimants’ Argument: Accident on 01.09.2021 (post‑amendment of Motor Vehicles Act, 1988) entitled them to Rs 5,00,000 under amended Schedule II; sought enhanced interest of 10% on that amount.
  • Insurer’s Argument: Offending vehicle was driven without a valid licence, violating policy terms; insurer should not be liable and should recover from vehicle owner.
  • Tribunal Findings: Accident occurred as described; vehicle had valid insurance; driver’s rash negligence caused death; applied structured formula under Section 163A and awarded Rs 1,41,500.
  • Legislative Context: Ministry of Road Transport and Highways notification dated 22.05.2018 amended Schedule II of the Motor Vehicles Act, fixing death compensation at Rs 5,00,000 (with 5% annual increase from 01.01.2019).
  • Supreme Court Precedents Cited: K. Nagendra (pay‑and‑recover principle) and Akula Narayana (insurer pays award but may recover from owner).

Final Outcome

  • The High Court holds that claimants are entitled to the minimum compensation of Rs 5,00,000 as per the amended Schedule II of the Motor Vehicles Act, 1988.
  • Interest at 6% per annum is to accrue from the date of filing of the claim application until full realization.
  • The insurer, National Insurance Company Limited, must deposit Rs 5,00,000 in five equal cheques (each Rs 1,00,000) in the names of the five claimants within six weeks of the order.
  • The insurer is expressly permitted to recover the amount paid from the owner of the offending vehicle in accordance with the pay‑and‑recover principle.
  • No order as to costs was made; any connected applications stand disposed of.
  • An urgent certified copy of the judgment may be supplied upon request.

Topics: Motor Vehicles Act Compensation, Insurance Liability