# National Insurance Co. Ltd., Ashok Nagar, Kanpur v. Smt. Archana Singh & Ors

- **Citation:** (2022) 4 ILRA 274
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-02-11
- **Case number:** First Appeal From Order No. 3192 of 2017
- **Bench:** Mrs. Sunita Agarwal, Krishan Pahal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/national-insurance-co-ltd-ashok-nagar-kanpur-v-smt-archana-singh-ors-48310
- **Pages:** 6

## Headnote

(A) Torts Law - Motor Vehicle Act,1988 -
Sections 163-A ,166 & 173 - quantum of
compensation - juxtaposition - U.P. Motor
Vehicles (Eleventh Amendment) Rules,
2011 - Rule 220-A(2)(ii)and(iii) , Rule
220-A 3(iii) , Rule 220-A (3) - for the
deduction towards personal and living
expenses of a married person (deceased),
a minor dependent will be counted as half
- Principle of standardisation - when a
person is in a permanent job, there should
be an addition of 15% if the deceased is
between the age of 50 to 60 years and
there should be no addition thereafter - in
case of self-employed or person on fixed
salary, the addition should be 10%
between the age of 50 to 60 years. (Para
- 3,4,12)

Deduction of 1/4th for personal expenses of
deceased - dependent family members of
deceased - claim petition and noted by the
Tribunal - are five (5); wife, two minor children,
mother and father of the deceased - deceased
was admittedly more than 31 years of age on
the date of the accident - multiplier of 17
applied by tribunal .

HELD:-Deduction of 1/4th towards personal
and living expenses of deceased cannot be said
to be unjust or in contravention of Rule 220A(2)(ii) and (iii) . Court cannot curtail the
benefits provided by the Statute to the
claimant/respondent
when
the
statutory
provision was very much available in the statute
book . Declined to interfere in the decision of
the Tribunal in applying multiplier of 17 as per
the Second Schedule while computing the
compensation payable to the dependent of
deceased/claimants herein.(Para - 4,15,16)

Appeal dismissed .(E-7)

List of Cases cited:-

## Text

274 INDIAN LAW REPORTS ALLAHABAD SERIES
(2022)04ILR A274
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.02.2022

BEFORE

THE HON'BLE MRS. SUNITA AGARWAL, J.
THE HON'BLE KRISHAN PAHAL, J.

First Appeal From Order No. 3192 of 2017

National Insurance Co. Ltd., Ashok Nagar,
Kanpur ...Appellant
Versus
Smt. Archana Singh & Ors. ...Respondents

Counsel for the Appellant:
Sri Radhey Shyam, Sri Sushil Kumar
Mehrotra

Counsel for the Respondents:
Sri Mohd. Naushad Siddiqui, Sri Shirish
Srivastava

(A) Torts Law - Motor Vehicle Act,1988 -
Sections 163-A ,166 & 173 - quantum of
compensation - juxtaposition - U.P. Motor
Vehicles (Eleventh Amendment) Rules,
2011 - Rule 220-A(2)(ii)and(iii) , Rule
220-A 3(iii) , Rule 220-A (3) - for the
deduction towards personal and living
expenses of a married person (deceased),
a minor dependent will be counted as half
- Principle of standardisation - when a
person is in a permanent job, there should
be an addition of 15% if the deceased is
between the age of 50 to 60 years and
there should be no addition thereafter - in
case of self-employed or person on fixed
salary, the addition should be 10%
between the age of 50 to 60 years. (Para
- 3,4,12)

Deduction of 1/4th for personal expenses of
deceased - dependent family members of
deceased - claim petition and noted by the
Tribunal - are five (5); wife, two minor children,
mother and father of the deceased - deceased
was admittedly more than 31 years of age on
the date of the accident - multiplier of 17
applied by tribunal .

HELD:-Deduction of 1/4th towards personal
and living expenses of deceased cannot be said
to be unjust or in contravention of Rule 220A(2)(ii) and (iii) . Court cannot curtail the
benefits provided by the Statute to the
claimant/respondent
when
the
statutory
provision was very much available in the statute
book . Declined to interfere in the decision of
the Tribunal in applying multiplier of 17 as per
the Second Schedule while computing the
compensation payable to the dependent of
deceased/claimants herein.(Para - 4,15,16)

Appeal dismissed .(E-7)

List of Cases cited:-

1. Sarla Verma & ors. Vs Delhi Transport Corp.
& anr.,2009 (6) SCC 121

2. New India Assurance Co. Ltd. Vs Urmila
Shukla & ors., Civil Appeal no. 4634 of 2021

3. National Insurance Co. Ltd. Vs Pranay Sethi,
2017 (16) SCC 680

4. Kerala SRTC Vs Susamma Thomas, 1994 (2)
SCC 176

5. U.P. SRTC Vs Trilok Chandra, (1996) 4 SCC
362

6. New India Assurance Co. Ltd. Vs Charlie,
(2005) 10 SCC 720

(Delivered by Hon'ble Mrs. Sunita
Agarwal, J.
&
Hon'ble Krishan Pahal, J.)

1. Heard Sri Sushil Kumar Mehrotra
learned counsel for the appellant and Sri
Shirish
Srivastava,
leaned
Advocate
holding brief of Mohd. Naushad Siddiqui
learned
counsel
for
the
claimantsrespondents.
4 All. National Insurance Co. Ltd., Ashok Nagar, Kanpur Vs. Smt. Archana Singh & Ors.
275

2. The challenge to the award passed
by
the
Motor
Accident
Claims
Tribunal/Additional District Judge, Court
No. 7, Kanpur Nagar is confined to the
issue of quantum of compensation, i.e. the
alleged illegality in the computation made
by the Tribunal. The issue no. 5 in the
decision of the Tribunal under challenge is
on the quantum of compensation.

3. The arguments of the learned
counsel
for
the
appellant-Insurance
Company are two folds: the first is that the
Tribunal had wrongly made deduction to
the extent of 1/4th for personal expenses of
deceased in ignorance of U.P. Motor
Vehicles (Eleventh Amendment) Rules,
2011 (In short as "the Rules, 2011) which
provides in Rule 220-A (3) that for the
purposes of calculation of number of
family members as per Clauses (ii) and (iii)
of the said sub-rule (2), i.e. for the
deduction towards personal and living
expenses of a married person (deceased), a
minor dependent will be counted as half.

The contention is that as the
deceased was survived by two minor
children apart from his wife, total number
of dependent family members would be
two (2). The Tribunal, therefore, ought to
have made deduction of 1/3rd in the said
category.

4. To deal with this submission,
suffice it to note that the dependent family
members of deceased as narrated in the
claim petition and noted by the Tribunal are
five (5); wife, two minor children, mother
and father of the deceased. A categorical
statement has been made in the claim
petition that the claimant wife, her children
and parents of deceased were wholly
dependent upon him. Nothing contrary
could be brought before us. Considering the
number of dependent family members
being five, we find that the Tribunal had
correctly applied the ratio given in Rule
220-A(2)(ii) of the Rules, 2011.

Even if the arguments of the
learned counsel for the appellant-Insurance
Company regarding application of sub rule
(2)(iii) are accepted in this regard, counting
minor dependents as half, the total number
of dependent family members would be
four (4). In both the eventuality, the
dependent family members being between
four(4) to six(6) in number, the deduction
of 1/4th towards personal and living
expenses of deceased cannot be said to be
unjust or in contravention of Rule 220A(2)(ii) and (iii).

The first ground of challenge is,
therefore, turned down.

5. The second limb of argument of the
learned counsel for the appellant is on the
multiplier chosen by the Tribunal.

The contention is that the deceased
was admittedly more than 31 years of age on
the date of the accident. As per the principle
laid down by the Apex Court in Sarla Verma
and others vs. Delhi Transport Corporation
and another1, the multiplier in the table in
paragraph '40' was to be applied as against the
multiplier mentioned in the Second Schedule
for claims under Section 163-A of the Motor
Vehicles Act. As per Column (4) of the table
given in Sarla Verma (supra), multiplier of
16 had to be applied for the deceased his age
being in the bracket of 31 to 35 years. The
Tribunal has erred in choosing the multiplier
of 17 from the table in the Second Schedule to
the Motor Vehicles Act, 1988 (In short as "the
Motor Vehicles Act").

6. To contradict this submission,
learned counsel for the respondent has
276 INDIAN LAW REPORTS ALLAHABAD SERIES
placed reliance on a decision of the Apex
Court in New India Assurance Co. Ltd.
vs. Urmila Shukla and others2, wherein
the decision of this Court in a First Appeal
against the order passed by the Motor
Accident Claims Tribunal was challenged
on the ground that Rule 3(iii) of U.P. Motor
Vehicles Rules, 1998 is contrary to the
conclusions drawn by the Constitution
Bench of the Apex Court in National
Insurance Company Ltd. vs. Pranay
Sethi3

The challenge in the said appeal
was to the quantum of compensation on the
premise that addition of 20% of the salary
in the future prospects of deceased, more
than 50 years of age was illegal.

It was contended therein that by
application of sub-rule 3(iii) of Rule 220-A
of the Rules 1998, the Tribunal has
committed an error in taking decision in
contravention of the conclusions arrived by
the Constitution Bench of the Apex Court
wherein it was held that there should be an
addition of 15% in case of the deceased
between the age of 50 to 60 years and there
should be no addition thereafter.

The Apex Court, however, had
turned down the objection of the appellantInsurance Company noticing that the
validity of the Rules was not in question in
the said matter and the Court cannot restrict
the scope of the Rules which afford a
favourable treatment to the claimant.

7. Based on this decision, it is
vehemently argued by the learned counsel
for the respondent claimants that on the
date of the decision given by the Tribunal,
the Second Schedule was very much in
existence on the statute book. The Tribunal,
therefore, cannot be said to have erred in
giving benefit of the multiplier provided in
the Second Schedule.

8. In rejoinder, learned counsel for the
appellant, however, asserted that the table
given in paragraph '40' of the decision of
the Apex Court in Sarla Verma (supra) is
final and binding on the High Court and
submits that in any case, the Tribunal or
this Court cannot deviate from the said
decision.

9. To deal with the above contentions,
we would be required to go through the
decision of the Apex Court in Sarla Verma
(supra), specifically paragraphs '13' to '42'
which contain the discussion on the
question of selection of multiplier. The
Apex Court had noticed therein various
discrepancies/errors in the multiplier scale
given in the Second Schedule table and
found
that
it
prescribes
a
lesser
compensation for cases where a higher
multiplier of 18 is applicable and a larger
compensation with reference to cases
where a lesser multiplier of '15', '16' or '17'
is applicable. It was, therefore, inferred that
a clerical error has crept in the Schedule
and the multiplier figure got wrongly typed
therein.

Another incongruity which was
noticed therein is that the table prescribed
the compensation payable even in cases
where the annual income ranges between
Rs. 3000/- to Rs.12000/- whereas the
notional minimum income of non-earning
persons is prescribed therein as Rs.
15,000/- per annum. This has led to a
situation where the compensation will be
higher in cases where the deceased was idle
and not having any income than in cases
where the deceased was already earning an
income ranging between Rs. 3000/- and
Rs.12,000/- per annum.

10. The Apex Court, thereafter,
considered its earlier decisions in Kerala
4 All. National Insurance Co. Ltd., Ashok Nagar, Kanpur Vs. Smt. Archana Singh & Ors.
277
SRTC vs. Susamma Thomas4, U.P.
SRTC vs. Trilok Chandra5 and New
India Assurance Co. Ltd. vs. Charlie6 to
consider the multiplier indicated therein for
claims under Section 166 of the Motor
Vehicles Act, in juxtaposition with the
multiplier
mentioned
in
the
Second
Schedule for claims under Section 163-A of
the Motor Vehicles Act for carving out the
table in paragraph '40' of the decision in
Sarla Verma (supra). It was, thereafter,
stated
that
in
order
to
avoid
any
inconsistency in the cases falling under
Section 166 of the Motor Vehicles Act, the
multiplier to be used should be as
mentioned in Column (4) of the table given
in paragraph '40', which was prepared by
applying Kerala SRTC vs. Susamma
Thomas (supra), U.P. SRTC vs. Trilok
Chandra
(supra)
and
New
India
Assurance Co. Ltd. vs. Charlie (supra).

It is evident from Column (4) of
the table in Sarla Verma (supra) that
multiplier of 16 for age bracket 31 to 35
years has to be applied whereas Second
Schedule to Motor Vehicles Act provides
multiplier of 17 for this age bracket. There
is no dispute about the age of deceased and
that he was above 31 years on the date of
accident.

11. We may further note the decision
of Apex Court in New India Assurance
Co. Ltd. (supra) dated 6th August, 2021,
wherein categorical challenge was to the
percentage of salary applied for the future
prospects of deceased more than 50 years
of the age. The percentage of 15% of salary
towards future prospects has been carved
out by the Apex Court in National
Insurance Company Ltd. vs. Pranay
Sethi (supra). Some of the observations of
the Apex Court in National Insurance
Company Ltd. vs. Pranay Sethi (supra),
specifically paragraphs '31' and '55' to '58'
were noted by the Apex Court in New
India Assurance Co. Ltd. (supra).

12. From the careful reading of the
extracted
paragraphs
of
National
Insurance Company Ltd. vs. Pranay
Sethi (supra), it is evident that while
applying the principle of standardisation,
the Apex Court while dealing with the issue
of fixation of future prospects in cases of
deceased who are self-employed or on a
fixed salary has held that though the
decision in Sarla Verma (supra) says that
where the age of deceased is more than 50
years, there should be no addition on future
prospects, however, taking judicial notice
of the fact that the salary does not remain
the same, to lay down as a thumb rule that
no addition be made after 50 years will be
an unacceptable concept. It was, therefore,
held that the Court found it appropriate that
when a person is in a permanent job, there
should be an addition of 15% if the
deceased is between the age of 50 to 60
years and there should be no addition
thereafter. Similarly, in case of selfemployed or person on fixed salary, the
addition should be 10% between the age of
50 to 60 years. It was then stated that the
aforesaid yardstick has been fixed so that
there can be consistency in the approach by
the Tribunals and the Courts.

13. It is this observations in the
Constitution Bench judgment of the Apex
Court in National Insurance Company
Ltd. vs. Pranay Sethi (supra) which was
the bone of contention of the appellants in
Civil Appeal No. 4634 of 2021 decided on
6th August, 2021. As against the direction
of the Apex Court, the Tribunal had relied
on sub-rule 3(iii) of Rule 220-A which
provides addition of 20% of the salary for
the future prospects of deceased more than
278 INDIAN LAW REPORTS ALLAHABAD SERIES
50 years of age. It is in this context the
Apex Court in New India Assurance Co.
Ltd. (supra) has observed in paragraphs
'10' and '11' as under:-

"10. The discussion on the point
in Pranay Sethi was from the standpoint of
arriving at "just compensation" in terms of
Section 168 of the Motor Vehicles Act,
1988.

11. If an indicia is made available
in the form of a statutory instrument which
affords a favourable treatment, the decision
in Pranay Sethi cannot be taken to have
limited the operation of such statutory
provision specially when the validity of the
Rules was not put under any challenge. The
prescription of 15% in cases where the
deceased was in the age bracket of 50-60
years as stated in Pranay Sethi cannot be
taken as maxima. In the absence of any
governing principle
available
in
the
statutory regime, it was only in the form of
an indication. If a statutory instrument has
devised a formula which affords better or
greater benefit, such statutory instrument
must be allowed to operate unless the
statutory instrument is otherwise found to
be invalid."

The crux of the decision of the
Apex Court in New India Assurance Co.
Ltd. (supra) to our understanding is that if
the
statutory
instrument
affords
a
favourable treatment, the decision of the
Court cannot limit the operation of such
statutory provision specially when the
validity of the Rules was not put under
challenge. In other words, if the formula
devised by the statutory instrument affords
better or greater benefits, such statutory
instrument must be allowed to operate
unless it is otherwise found to be invalid.

14. Applying the same principle, we
may note that the table carved out in Sarla
Verma
(supra)
was
to
remove
the
discrepancies in the multiplier scale with
reference to the quantum of compensation
given in the Second Schedule table where
lesser compensation for higher multiplier and
larger compensation with reference to lesser
multiplier has been applied. The clerical
mistake in the Second Schedule as per the
observation made by the Apex Court in Sarla
Verma
(supra),
has
been
corrected.
However, it may be noted that the Second
Schedule in Motor Vehicles Act, 1988 was
very much on the statute book when the
Motor Accident Claims Tribunal gave the
decision under challenge. The multiplier of
17 applied by the Tribunal is in conformity
with the Second schedule. As per Sarla
Verma (supra), the multiplier of 16 should
have been applied in the age bracket of 31 to
35 years. The formula as provided in the
Second Schedule is found to be beneficial to
the claimant/respondent herein.

15. Applying the principle laid down by
the Apex Court in New India Assurance Co.
Ltd. (supra), we are of the considered view
that the Court cannot curtail the benefits
provided
by
the
Statute
to
the
claimant/respondent
herein
when
the
statutory provision was very much available
in the statute book.

16. Applying the above principle, we
are not inclined to interfere in the decision of
the Tribunal in applying multiplier of 17 as
per the Second Schedule while computing the
compensation payable to the dependent of
deceased/claimants herein.

17. In view of the above discussion, on
both the above counts, we do not find merit
in the appeal.

No
other
ground
has
been
pressed.
4 All. National Insurance Co. Ltd., Navyug Market, Ghaziabad Vs. Kewal Krishna Arora & Ors. 279

The appeal is dismissed being
devoid of merits.
----------
(2022)04ILR A279
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.02.2022

BEFORE

THE HON'BLE SUBHASH CHANDRA
SHARMA, J.

First Appeal From Order No. 3492 of 2009

National
Insurance
Co.
Ltd.,
Navyug
Market, Ghaziabad ...Appellant
Versus
Kewal Krishna Arora & Ors. ...Respondents

Counsel for the Appellant:
Sri Anand Kumar Sinha

Counsel for the Respondents:
Sri Anurag Sharma, Sri Anurag Singh, Sri
Anurag Sinha, Km. Pratima Srivastava, Sri
S. Shekhar, Sri Sharve Singh, Ms. Nirja
Singh, Sri Chandra Shekhar Singh

(A) Torts Law - Motor Vehicle Act,1988 -
Section
166
-
Application
for
compensation , Section 173 - Appeals -
extent of care/diligence expected of the
employer/insured
while
employing
a
driver - Mere absence, fake or invalid
driving licence or disqualification of the
driver for driving at the relevant time are
not in themselves defences available to
the insurer against either the insured or
the third parties - To avoid its liability
towards the insured the insurer has to
prove that the insured was guilty of
negligence
and
failed
to
exercise
reasonable care.(Para - 19,22)

(B) Torts Law - Motor Vehicle Act,1988 -
Section
140
-
Liability
to
pay
compensation in certain case on the
principle of no fault , Section 149(2)(a) -
breach
of
conditions
,
Section
149(2)(a)(ii)
-
conditions
regarding
driving liscence - claim for compensation -
open
to
the
insurer
under
Section
149(2)(a)(ii) to take a defence - driver of
the vehicle involved in the accident was
not duly licensed - onus is on the insurer -
if the owner was aware of the fact that
the licence was fake and still permitted
the driver to drive the vehicle, then the
insurer would stand absolved - mere fact
that the driving licence is fake, per se,
would not absolve the insurer. (Para -
20,21)

Deceased S/o claimant - returning home from
his office by motorcycle - truck driven by its
driver rashly and negligently dashed - causing
injuries - died same day - sum of Rs.12,70,406/-
alongwith
6
%
interest
awarded
as
compensation - driver of offending vehicle had
no valid license at the time of accident - liability
for payment of compensation cannot be
fastened
with

insurance
company
-
compensation payable by owner of the
offending vehicle - M.A.C.T. held - insurer was
liable even though the driver had a fake
license.(Para -2 to 11 )

HELD:-Not
proved
by

appellant
that
owner/respondent no.3 had not taken adequate
care and caution to verify the genuineness of
the driving licence of the driver at the time of
his employment and that the owner was aware
or had notice that the licence was fake or invalid
and still permitted him to drive the offending
vehicle.Cannot be said that the insured/owner is
at fault in having employed a person whose
licence has been found to be fake by the
insurance
company.
Appellant/Insurance
Company liable to indemnify respondents.(Para
- 24,25)

Appeal dismissed. (E-7)

List of Cases cited:-

1. United India Insurance Co. Ltd. Vs Lehru &
ors., (2003) 3 SCC 338

2. National Insurance Co. Ltd. Vs Swaran Singh
& ors., (2004) 3 SCC 297

3. National Insurance Co. Ltd. Vs Laxmi Narain
Dhut, 2007 (3) SCC 700