# New India Assurance Co. Ltd v. Shabbir Ahmed & Ors

- **Citation:** (2025) 11 ILRA 664
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-11-27
- **Case number:** First Appeal From Order No. 1999 of 2012
- **Bench:** Sandeep Jain
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/new-india-assurance-co-ltd-v-shabbir-ahmed-ors-52882
- **Pages:** 9

## Headnote

Lalit Kumar, Mohd. Asim Zulfiquar

Issue for Consideration
Matter pertains to whether the Employee's
Compensation
Commissioner
was
legally
justified in holding that the deceased was an
"employee" within the meaning of Employee's
Compensation Act, 1923, notwithstanding the
close familial relationship between the deceased
and owner of vehicle, and consequently whether
the insurer could be fastened with liability to
indemnify the compensation awarded, along
with the correct determination of the insurer's
obligation to pay statutory interest on the
compensation from the date it became due.

Headnotes
Penal Code, 1860 - 279, 304-A, 427 -
Employee's Compensation Act,1923 - s. 30
- The claim petition was filed by the
parents
of
the
deceased
under
the
Employee's
Compensation
Act,
1923,
asserting that their son was employed as
a conductor on vehicle No. UP-14-U-9433
owned by his elder brother and was
drawing a monthly salary of ₹4,500/-, and
that he died in a road accident on
16.05.2010 during the course of his
employment
-
The
Employee's
Compensation Commissioner, Moradabad,
upon
appreciation
of
oral
and
documentary
evidence,
including
the
admission of employment made by the
vehicle owner in his written statement
and testimony, held that an employer -
employee relationship stood established,
awarded compensation of ₹4,25,084/- to
the claimants, and directed the insurer to
indemnify the same with conditional
interest - Aggrieved thereby, the insurer
preferred an appeal u/s 30 of above Act
disputing
the
existence
of
the
employment relationship and its liability,
while the claimants filed a cross-objection
seeking interest from the date of the
accident, leading to adjudication by High
Court.

Held: The impugned judgment records that the
insurance company was again given opportunity
to cross-examine the owner, but the owner
failed to appear before the Commissioner - The
non appearance of owner cannot render his
testimony inadmissible, since the proceedings
under the Employee's Compensation Act,1923
are summary proceedings in which strict rules of
pleading and evidence are not applicable - In
view of evidence on record, it was proved that
the deceased was employed as conductor on
vehicle No.UP-14-U-9433 on the date of
accident, who was paid a monthly salary of
Rs.4,500/-, as such, the contention contrary to
it, of learned counsel for the appellant, is
rejected - The Commissioner has not erred in
concluding that there was relationship of
employer-employee between the owner of
vehicle and deceased - No substantial question
of law arises in appeal, thus accordingly, appeal
dismissed and also cross - objection of claimant
allowed. [Paras 15, 16, 17] (E-13)

Case Law Cited
Gottumukkala Appala Narasimha Raju & others
v. National Insurance Company Ltd. (2007) 13
SCC 446; United Insurance Company Ltd. v. Jai
11 All. New India Assurance Co. Ltd. Vs. Shabbir Ahmed & Ors.
665
Prakash Giri & others, Manu/UP/1379/2019;
Mamta Devi & Ors v. The Reliance General
Insurance Co. Ltd. & Another 2023 INSC 566;
T.S. Shylaja v. Oriental Insurance Company &
another (2014) 2 SCC 587; United India
Insurance Co. Ltd. v. Prakash Shankar Gurav &
another 2006 (2) TAC 575 (Kant); North East
Karnataka
Road
Transport
Corporation
v.
Sujatha (2019) 11 SCC 514; Rishi Raj v. Ram
Krishan & Ors. 2025 SCC OnLine HP 3172;
Pratap Narain Singh Deo v. Srinivas Sabat a and
Another (1976) 1 SCC 289 (By 4 Judges);
Kerala SEB & Another v. Valsala K. and Another
(1999) 8 SCC 254 (By 3 Judges); Oriental
Insurance Company Ltd. v. Siby George (2012)
12 SCC 540 - referred to

List of Acts
Employee's Compensation Act, 1923, Penal
Code, 1860

List of Keywords
Appeal u/s 30 of the Employee's Compensation
Act,
1923;
Employee's
Compensation
Commissioner; Claim petition; Employer
-
employee relationship; Course of employment;
Conductor; Monthly wages; Road accident; Oral
Testimony;
Documentary
evidence;
Written
statement;
Admission;
Examination-in-chief;
Cross-examina

## Text

664 INDIAN LAW REPORTS ALLAHABAD SERIES

8.Accordingly, the present criminal
revision is dismissed.

9.Let a copy of this order be circulated
to all the District Judges through the
Registrar
(Compliance)
and
to
all
Principal Judges, Family Courts, for
communication and necessary compliance.
----------
(2025) 11 ILRA 664
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 27.11.2025

BEFORE

THE HON'BLE SANDEEP JAIN, J.

First Appeal From Order No. 1999 of 2012

New India Assurance Co. Ltd. ...Appellant
Versus
Shabbir Ahmed & Ors. ...Respondents

Counsel for the Appellant:
Amaresh Sinha

Counsel for the Respondents:
Lalit Kumar, Mohd. Asim Zulfiquar

Issue for Consideration
Matter pertains to whether the Employee's
Compensation
Commissioner
was
legally
justified in holding that the deceased was an
"employee" within the meaning of Employee's
Compensation Act, 1923, notwithstanding the
close familial relationship between the deceased
and owner of vehicle, and consequently whether
the insurer could be fastened with liability to
indemnify the compensation awarded, along
with the correct determination of the insurer's
obligation to pay statutory interest on the
compensation from the date it became due.

Headnotes
Penal Code, 1860 - 279, 304-A, 427 -
Employee's Compensation Act,1923 - s. 30
- The claim petition was filed by the
parents
of
the
deceased
under
the
Employee's
Compensation
Act,
1923,
asserting that their son was employed as
a conductor on vehicle No. UP-14-U-9433
owned by his elder brother and was
drawing a monthly salary of ₹4,500/-, and
that he died in a road accident on
16.05.2010 during the course of his
employment
-
The
Employee's
Compensation Commissioner, Moradabad,
upon
appreciation
of
oral
and
documentary
evidence,
including
the
admission of employment made by the
vehicle owner in his written statement
and testimony, held that an employer -
employee relationship stood established,
awarded compensation of ₹4,25,084/- to
the claimants, and directed the insurer to
indemnify the same with conditional
interest - Aggrieved thereby, the insurer
preferred an appeal u/s 30 of above Act
disputing
the
existence
of
the
employment relationship and its liability,
while the claimants filed a cross-objection
seeking interest from the date of the
accident, leading to adjudication by High
Court.

Held: The impugned judgment records that the
insurance company was again given opportunity
to cross-examine the owner, but the owner
failed to appear before the Commissioner - The
non appearance of owner cannot render his
testimony inadmissible, since the proceedings
under the Employee's Compensation Act,1923
are summary proceedings in which strict rules of
pleading and evidence are not applicable - In
view of evidence on record, it was proved that
the deceased was employed as conductor on
vehicle No.UP-14-U-9433 on the date of
accident, who was paid a monthly salary of
Rs.4,500/-, as such, the contention contrary to
it, of learned counsel for the appellant, is
rejected - The Commissioner has not erred in
concluding that there was relationship of
employer-employee between the owner of
vehicle and deceased - No substantial question
of law arises in appeal, thus accordingly, appeal
dismissed and also cross - objection of claimant
allowed. [Paras 15, 16, 17] (E-13)

Case Law Cited
Gottumukkala Appala Narasimha Raju & others
v. National Insurance Company Ltd. (2007) 13
SCC 446; United Insurance Company Ltd. v. Jai
11 All. New India Assurance Co. Ltd. Vs. Shabbir Ahmed & Ors.
665
Prakash Giri & others, Manu/UP/1379/2019;
Mamta Devi & Ors v. The Reliance General
Insurance Co. Ltd. & Another 2023 INSC 566;
T.S. Shylaja v. Oriental Insurance Company &
another (2014) 2 SCC 587; United India
Insurance Co. Ltd. v. Prakash Shankar Gurav &
another 2006 (2) TAC 575 (Kant); North East
Karnataka
Road
Transport
Corporation
v.
Sujatha (2019) 11 SCC 514; Rishi Raj v. Ram
Krishan & Ors. 2025 SCC OnLine HP 3172;
Pratap Narain Singh Deo v. Srinivas Sabat a and
Another (1976) 1 SCC 289 (By 4 Judges);
Kerala SEB & Another v. Valsala K. and Another
(1999) 8 SCC 254 (By 3 Judges); Oriental
Insurance Company Ltd. v. Siby George (2012)
12 SCC 540 - referred to

List of Acts
Employee's Compensation Act, 1923, Penal
Code, 1860

List of Keywords
Appeal u/s 30 of the Employee's Compensation
Act,
1923;
Employee's
Compensation
Commissioner; Claim petition; Employer
-
employee relationship; Course of employment;
Conductor; Monthly wages; Road accident; Oral
Testimony;
Documentary
evidence;
Written
statement;
Admission;
Examination-in-chief;
Cross-examination; Burden of proof; Summary
proceedings; Strict rules of pleading and
evidence not applicable; Statutory liability;
Indemnify;
insurer;
Registered
owner;
Substantial question of law,; Dismissal of
appeal; Cross-objection; Interest u/s 4-A; Date
of accident; Modification of award; Deposit of
compensation; Release of amount to claimants.

Case Arising From
APPELLATE JURISDICTION: First Appeal From
Order No. - 1999 of 2012

From
the
Judgment
and
Award
dated
23.03.2012
passed
by
the
Employee's
Compensation Commissioner, Moradabad in W.C
Case No. 83 of 2010

Appearances for Parties
Adv. for the Appellant:
Amaresh Sinha

Advs. for the Respondents:
Lalit Kumar, Mohd. Asim Zulfiquar
(Delivered by Hon'ble Sandeep Jain, J.)

1. The instant appeal under Section 30
of the Employee?s Compensation Act,1923
has been preferred by the insurer of the
Vehicle No.UP-14-U-9433 against the
impugned judgment and award dated
23.03.2012 passed by the Employee?s
Compensation Commissioner, Moradabad
in W.C Case No.83 of 2010 (Shabbir
Ahmed & another vs. Shehnawaz and
others), whereby for the untimely death of
Jaane Alam in a road accident that occurred
on
16.05.2010,
a
compensation
of
Rs.4,25,084/- along with default interest @
12% per annum from the date of order has
been awarded to the claimants(father and
mother), which has been ordered to be
indemnified by the insurer of Vehicle
No.UP-14-U-9433.

2. Learned counsel for the appellant
insurance company submitted that the
deceased
Jaane
Alam
was
allegedly
employed as conductor on Vehicle No.UP14-U-9433 by his elder brother Shehnawaz
which
was
improbable
because
no
documentary proof of such employment
was produced before the tribunal. It was
further
submitted
that
the
owner
Shehnawaz of the above Vehicle No.UP14-U-9433 did not appear in the witness
box to face cross examination by the
insurance company, as such, merely on the
basis of his admission in the written
statement, it was not proved that the
deceased was employed as a conductor on
the above vehicle. It was further submitted
that the claimants have filed the claim
petition
on
false
grounds
to
claim
fraudulent
compensation
from
the
insurance company, which was not legally
maintainable but the Commissioner has
held otherwise. It was also submitted that
the claimants have rightly not been
666 INDIAN LAW REPORTS ALLAHABAD SERIES
awarded any interest on the compensation
by the Commissioner.

3. In support of his above submission
learned counsel for the appellant has placed
reliance on the case law of the Apex Court
in Gottumukkala Appala Narasimha Raju
&
others
Vs.
National
Insurance
Company Ltd. (2007) 13 SCC 446 and the
decision of this Court in United Insurance
Company Ltd. Vs. Jai Prakash Giri &
others,
Manu/UP/1379/2019.
For
the
award of interest on compensation he has
relied on Mamta Devi & Ors vs The
Reliance General Insurance Co. Ltd. &
Another 2023 INSC 566.

4. Per contra, learned counsel for the
claimant-respondents submitted that the
owner/employer Shehnawaz of Vehicle
No.UP-14-U-9433
filed
his
written
statement before the Commissioner in
which he admitted that the deceased was
employed as conductor on his above
vehicle, who was being paid monthly salary
of Rs.4,500/-. He further submitted that
there is no bar on the part of the employer
to employee his relative as a conductor on
his vehicle. It was further submitted that
the Commissioner has awarded conditional
interest on the compensation awarded to
the claimants, whereas the claimants were
entitled to get interest at the rate of 12% per
annum from the date of the accident.

5. Learned counsel has submitted that
the Employee's Compensation Act, 1923 is
a beneficial Act, in which, strict rules of
evidence and pleading are not applicable,
as such, even if the owner/employer of the
offending vehicle has not appeared in the
witness box to face cross examination of
the insurance company even then, it is not
fatal to the claimants case and the claimants
can rely on his admission made in the
written statement submitted before the
Commissioner.

6. In support of his contention, he
placed reliance on the case law T.S.
Shylaja Vs. Oriental Insurance Company
& another (2014) 2 SCC 587, United India
Insurance Co. Ltd. Vs. Prakash Shankar
Gurav & another 2006 (2) TAC 575
(Kant) and North East Karnataka Road
Transport Corporation Vs. Sujatha (2019)
11 SCC 514.

7. I have heard the learned counsel for
both the sides, perused the impugned
judgment and documents submitted with
the appeal.

8. The Apex Court in the case of T.S.
Shylaja(supra), where the owner of the
offending vehicle happened to be brother of
the deceased, who was employed as a
driver on a monthly salary of Rs.6,000/-
has upheld the finding of the Commissioner
that the deceased was indeed employed to
drive the vehicle of his brother. In this case,
the vehicle owner appeared as a witness
and clearly stated that the deceased was his
younger brother, but was working as a paid
driver under him and has admitted that he
was paying salary to him. The Apex Court
has upheld the finding of the Commissioner
and held that there is no law that relatives
cannot be in an employer- employee
relationship.

9. Similarly, the Karnataka High
Court, in Prakash Shankar Gurav (supra),
a father who was the owner of the vehicle,
had employed his son as a cleaner on the
vehicle, on the date of the accident. This
employee-employer
relationship
was
upheld by the High Court of Karnataka and
the contention of the insurance company,
that it was a sham relationship which was
11 All. New India Assurance Co. Ltd. Vs. Shabbir Ahmed & Ors.
667
not proved and it was improbable, was
repelled . It was held by the High Court
that a father engaging his son as an
employee in a vehicle owned by the father
is not prohibited in law nor it can be said
that such a situation is not normally
possible. Just as in any other avocation, it is
possible for a father to engage his son as
employee.

10. This Court in the case of Jai
Prakash Giri (supra) where the injured
claimant claimed that he was employed as
Khalasi/cleaner on the truck of his father,
has repelled the contention of the claimant
on the ground that the owner of truck, who
was the father of the claimant, did not
appear before the Commissioner despite the
service of notice and the Commissioner
proceeded exparte against him. This Court
held that there was no evidence regarding
employment
of
the
claimant
as
an
employee on his father's truck.

11. In the case of Gottumukkala
Appala Narasimha Raju (supra), the
owner of the offending tractor was the wife
of the deceased and the claimants raised a
plea that the wife had employed her
husband to drive the tractor, which on the
facts of the case was disbelieved by the
Apex Court because it was disputed, but in
this decision also, the Apex Court has held
that technically, it may be possible that the
husband is employed under the wife. In this
case, the Apex Court has not held that it is
impossible that the husband can never be
employed as an employee under his wife. It
was also held by the Apex Court that in the
absence of any specific contract, it was
wholly absurd to suggest that the husband
would be a workman of his wife, who were
living
separately
because
of
certain
disputes. Since the husband and wife was
living separately in view of certain dispute,
the question of husband being a workman
under his wife was disbelieved.

12. Similarly, The Himachal Pradesh
High Court in the case of Rishi Raj vs Ram
Krishan & Ors. 2025 SCC OnLine HP
3172, held as under:-

23. In Gottumukkala's case also,
it has been categorically observed by the
Supreme Court that technically there is
possibility that husband and wife can have
relation of employer and employee. It is apt
to notice that relation of husband and wife
is more closer than the relation of brother,
as both of them being partners of life, in
normal circumstances, cannot be expected
to work as employee and employer,
however, despite that it has been observed
by
the
Supreme
Court
that
such
relationship is possible.

24. In present case, relationship
between respondent No. 1 and deceased
Amar Singh was that they were brothers.
Employment of a brother as an employee
under another brother is not an abnormal,
unnatural or unexpected situation. As
observed
by
the Supreme
Court
in
Gottumukkala's case that claim of such
relationship amongst the close family
members is required to be established on
record and the Court has to assess the
veracity of such claim by taking into
consideration overall situation.

25. Engaging an unemployed
brother with Truck as a Attendant,
Conductor,
Manager,
Caretaker
or
Cleaner, by his real brother, is not
unnatural phenomena, rather it is natural
for a brother to provide employment to his
another
brother
in
this
Era
of
unemployment and every person is fighting
with crises of getting employment. A stray
668 INDIAN LAW REPORTS ALLAHABAD SERIES
suggestion of the Insurance Company that
claimant was travelling in the Truck for
excursion tour for Delhi, which has been
denied, cannot be considered sufficient
material to rebut the claim of the claimant
that he was engaged by owner, i.e. his
brother for facilitating/supervising/helping
plying of Truck. In the given facts and
circumstances, there is nothing on record
to discard plea of the claimant that he was
employed with Truck by owner of the Truck
(his brother).

13. In the instant case, the owner of
vehicle Shehnawaz who was opposite party
No.1 before the Commissioner has filed his
written statement, in which he has
unequivocally admitted that on his vehicle
No.UP-14-U-9433, he had employed Jaane
Alam(deceased) as conductor and was
paying salary of Rs.4,500/- per month. It is
also evident that the owner Shehnawaz in
his
examination-in-chief
before
the
Commissioner has admitted that he is the
registered owner of Vehicle No.UP-14-U9433, on which driver Dildar and conductor
Jaane Alam were employed on 16.05.2010,
which met with an accident in which
conductor Jaane Alam died and regarding
the accident his driver has lodged FIR at
police station Gajraula. He also deposed
that Jaane Alam was paid salary of
Rs.4,500/- per month. The owner has also
appeared in cross-examination but despite
opportunity being provided to the insurance
company he was not cross examined by the
insurance company as such, on this basis,
his oral testimony cannot be discarded.

14. The claimants also filed FIR in
documentary
evidence
before
the
Commissioner
regarding
the
accident
registered on 18.05.2010 at 16:45 hours
being Case Crime No. 1313 of 2010 under
Section
279,304-A,427
IPC
at
P.S.
Gajraula, District JP Nagar which discloses
that the first informant?s(Dildar?s), who
was the driver on vehicle UP-14U-9433,
brother Jaane Alam who was a conductor
on the vehicle, died in a road accident on
16.05.2010, which was caused by truck
No.MP-17C-0537.

15. The impugned judgment records
that the insurance company was again
given opportunity to cross-examine the
owner, but the owner failed to appear
before
the
Commissioner.
The
non
appearance of the owner cannot render his
testimony
inadmissible,
since
the
proceedings
under
the
Employee?s
Compensation
Act,1923
are
summary
proceedings in which strict rules of
pleading and evidence are not applicable.

16. In view of the above evidence on
record, it was proved that the deceased
Jaane Alam was employed as conductor on
vehicle No.UP-14-U-9433 on the date of
the accident, who was paid a monthly
salary of Rs.4,500/-, as such, the contention
contrary to it, of the learned counsel for the
appellant, is rejected. The Commissioner
has not erred in concluding that there was
relationship
of
employer-employee
between the owner of the vehicle and the
deceased.

17. In view of the above analysis, no
substantial question of law arises in this
appeal.
This
appeal
is,
accordingly,
dismissed.

Order on Cross-Objection 21 of
2022 in FAFO No.1999 of 2012

1.
Learned
counsel
for
the
claimant/cross-objector submitted that the
Commissioner awarded the interest to the
claimants @12% per annum on the
11 All. New India Assurance Co. Ltd. Vs. Shabbir Ahmed & Ors.
669
awarded sum but it was awarded from the
expiry of 30 days from the date of order
and that too, if the appellant failed to
deposit the awarded sum within 30 days,
which is erroneous. Learned counsel
submitted that as per the decision of the
Apex Court in the case of North East
Karnataka Road Transport Corporation
(supra) the claimants are entitled to interest
on the compensation awarded, @12% per
annum from the date of accident, till its
actual payment.

2. Learned counsel for the appellant
insurance company submitted that the
interest on the compensation is to be paid
as per the law laid down by the Apex Court
in the case of Mamta Devi (supra).

3. I have heard the learned counsel of
both the sides and perused the case laws
referred by them.

4. The Apex Court in the case of
North East Karnataka Road Transport
Corporation (supra) while analysing from
which date interest is to be granted on the
compensation awarded under Employee?s
Compensation Act,1923 held as under:-

19. The question relates to grant
of interest on the awarded amount and
further, from which date, it is to be
awarded to the respondent claimant.

20. The grant of interest on the
awarded sum is governed by Section 4-A of
the Act. The question as to when does the
payment of compensation under the Act
?becomes due? and consequently what is
the point of time from which interest on
such amount is payable as provided under
Section 4-A(3) of the Act remains no more
res integra and is settled by the two
decisions of this Court.

21. As early as in 1975, a fourJudge Bench of this Court in Pratap Narain
Singh Deo v. Srinivas Sabata [Pratap
Narain Singh Deo v. Srinivas Sabata,
(1976) 1 SCC 289 : 1976 SCC (L&S) 52 :
AIR 1976 SC 222] speaking through
Singhal, J. has held that an employer
becomes liable to pay compensation as
soon as the personal injury is caused to the
workman in the accident which arose out of
and in the course of employment. It was
accordingly held that it is the date of the
accident and not the date of adjudication of
the claim, which is material.

22. Another question analogous
to the main question arose before the threeJudge Bench of this Court in Kerala SEB v.
Valsala K. [Kerala SEB v. Valsala K.,
(1999) 8 SCC 254 : 2000 SCC (L&S) 50 :
AIR 1999 SC 3502] as to whether
increased amount of compensation and
enhanced rate of interest brought on statute
by amending Act 30 of 1995 with effect
from 15-9-1995 would also apply to cases
in which the accident took place before 159-1995. Their Lordships, placing reliance
on the law laid down in Pratap Narain case
[Pratap Narain Singh Deo v. Srinivas
Sabata, (1976) 1 SCC 289 : 1976 SCC
(L&S) 52 : AIR 1976 SC 222] held that
since the relevant date for determination of
the rate of compensation is the date of
accident and not the date of adjudication of
the claim by the Commissioner and hence if
the accident has taken place prior to 15-91995, the rate applicable on the date of
accident would govern the subject.

23. After these two decisions, this
Court in two cases (both by the two-Judge
Bench) viz. National Insurance Co. Ltd. v.
Mubasir Ahmed [National Insurance Co.
Ltd. v. Mubasir Ahmed, (2007) 2 SCC 349 :
(2007) 1 SCC (L&S) 643] and Oriental
670 INDIAN LAW REPORTS ALLAHABAD SERIES
Insurance Co. Ltd. v. Mohd. Nasir
[Oriental Insurance Co. Ltd. v. Mohd.
Nasir, (2009) 6 SCC 280 : (2009) 2 SCC
(Civ) 877 : (2009) 2 SCC (Cri) 987]
without noticing the law laid down in
Pratap Narain [Pratap Narain Singh Deo
v. Srinivas Sabata, (1976) 1 SCC 289 :
1976 SCC (L&S) 52 : AIR 1976 SC 222]
and Valsala [Kerala SEB v. Valsala K.,
(1999) 8 SCC 254 : 2000 SCC (L&S) 50 :
AIR 1999 SC 3502] cases took a contrary
view
and
held
that
payment
of
compensation would fall due only after the
Commissioner's order or with reference to
the date on which the claim application is
made.

24. This conflict of view in the
decisions on the question was noticed by
this Court (two-Judge Bench) in Oriental
Insurance Co. Ltd. v. Siby George
[Oriental Insurance Co. Ltd. v. Siby
George, (2012) 12 SCC 540 : (2013) 2 SCC
(Civ) 392 : (2012) 4 SCC (Cri) 136 :
(2013) 3 SCC (L&S) 478] . Aftab Alam, J.
speaking for the Bench referred to the
aforementioned decisions and explaining
the ratio of each decision held that since
the two later decisions rendered in Mubasir
[National Insurance Co. Ltd. v. Mubasir
Ahmed, (2007) 2 SCC 349 : (2007) 1 SCC
(L&S) 643] and Mohd. Nasir [Oriental
Insurance Co. Ltd. v. Mohd. Nasir, (2009)
6 SCC 280 : (2009) 2 SCC (Civ) 877 :
(2009) 2 SCC (Cri) 987] which took
contrary view without noticing the earlier
two decisions of this Court rendered in
Pratap Narain [Pratap Narain Singh Deo
v. Srinivas Sabata, (1976) 1 SCC 289 :
1976 SCC (L&S) 52 : AIR 1976 SC 222]
and Valsala [Kerala SEB v. Valsala K.,
(1999) 8 SCC 254 : 2000 SCC (L&S) 50 :
AIR 1999 SC 3502] cases by the larger
Benches (combination of four and three
Judges respectively) and hence later
decisions rendered in Mubasir [National
Insurance Co. Ltd. v. Mubasir Ahmed,
(2007) 2 SCC 349 : (2007) 1 SCC (L&S)
643] and Mohd. Nasir [Oriental Insurance
Co. Ltd. v. Mohd. Nasir, (2009) 6 SCC 280
: (2009) 2 SCC (Civ) 877 : (2009) 2 SCC
(Cri) 987] cases cannot be held to have
laid down the correct principles of law on
the question and nor can, therefore, be
treated as binding precedent on the
question.

25. In other words, the law laid
down in Pratap Narain [Pratap Narain
Singh Deo v. Srinivas Sabata, (1976) 1
SCC 289 : 1976 SCC (L&S) 52 : AIR 1976
SC 222] and Valsala [Kerala SEB v.
Valsala K., (1999) 8 SCC 254 : 2000 SCC
(L&S) 50 : AIR 1999 SC 3502] cases was
held to hold the field throughout as laying
down the correct principle of law on the
subject. The two-Judge Bench in Oriental
Insurance Co. Ltd. v. Siby George
[Oriental Insurance Co. Ltd. v. Siby
George, (2012) 12 SCC 540 : (2013) 2 SCC
(Civ) 392 : (2012) 4 SCC (Cri) 136 :
(2013) 3 SCC (L&S) 478] accordingly
followed the principle of law laid down in
Pratap Narain [Pratap Narain Singh Deo
v. Srinivas Sabata, (1976) 1 SCC 289 :
1976 SCC (L&S) 52 : AIR 1976 SC 222]
and Valsala [Kerala SEB v. Valsala K.,
(1999) 8 SCC 254 : 2000 SCC (L&S) 50 :
AIR 1999 SC 3502] cases and decided the
case instead of following the law laid down
in Mubasir [National Insurance Co. Ltd. v.
Mubasir Ahmed, (2007) 2 SCC 349 :
(2007) 1 SCC (L&S) 643] and Mohd. Nasir
[Oriental Insurance Co. Ltd. v. Mohd.
Nasir, (2009) 6 SCC 280 : (2009) 2 SCC
(Civ) 877 : (2009) 2 SCC (Cri) 987] cases
which was held per incuriam.

26. Now coming to the facts of
this case, we find that the Commissioner
11 All. New India Assurance Co. Ltd. Vs. Shabbir Ahmed & Ors.
671
awarded the interest to the respondents @
12% p.a. on the awarded sum but it was
awarded from the expiry of 45 days from
the date of order and that too, if the
appellant failed to deposit the awarded sum
within 45 days.

27. In other words, if the
appellant had deposited the awarded sum
within 45 days from the date of the order
then the respondent was not entitled to
claim any interest on the awarded sum, but
if the appellant had failed to deposit the
awarded amount within 45 days, then the
respondent was entitled to claim interest @
12% p.a. from the date of the order.

28.
In
our
opinion,
the
aforementioned
direction
of
the
Commissioner in awarding the interest on
the awarded sum is contrary to law laid
down by this Court in Pratap Narain case
[Pratap Narain Singh Deo v. Srinivas
Sabata, (1976) 1 SCC 289 : 1976 SCC
(L&S) 52 : AIR 1976 SC 222] and hence
not legally sustainable.

29. In the light of the foregoing
discussion, even though the respondent did
not challenge this direction by filing any
appeal in the High Court nor challenged it
by filing any appeal in this Court too, yet
the question being a pure question of law,
this Court with a view to do substantial
justice to the respondent considers it just
and proper to modify the order of the
Commissioner in the respondent's favour so
as to make the same in conformity with the
law laid down by this Court in the
abovereferred two decisions (supra).

30. Accordingly and in view of the
foregoing discussion, the order of the
Commissioner dated 23-4-2002 is modified in
favour of the respondent to the extent that the
awarded sum of Rs 3,79,120 shall carry
interest @ 12% p.a. from the date of accident
i.e. 6-4-1999.

5. It is apparent that the Apex Court in
the case of Mamta Devi(supra) without
noticing the previous binding precedents of
the larger Benches of the Apex Court in the
case of Pratap Narain Singh Deo vs Srinivas
Sabat a and Another (1976) 1 SCC 289 (By
4 Judges) , Kerala SEB & Another vs
Valsala K. and Another (1999) 8 SCC 254
(By 3 Judges) and Coordinate Bench
Decisions in Oriental Insurance Company
Ltd. Vs Siby George (2012) 12 SCC 540 and
North East Karnataka Road Transport
Corporation (supra) has held that the
claimants would be entitled to interest @12%
per annum from one month after the date of
accident, till date of payment, which cannot
be treated as a binding precedent, rather it is a
judgment rendered per incuriam.

6. It is apparent that in view of the above
binding precedents of the Apex Court, in the
instant case the claimants are entitled to
interest @12% per annum from the date
of the accident i.e. 16.05.2010, on the
awarded compensation of Rs.4,25,084/-
till the date of its actual payment. It is
also apparent from the certificate of
deposit issued by the Commissioner,
which was filed by the appellant at the
time of filing of the instant appeal, that
the
appellant
has
deposited
the
compensation of Rs,4,25,084/- through
cheque on 31.03.2012, which has been
ordered to be invested in a fixed deposit
by this Court on 17.05.2012.

7. It is held that the claimants are also
entitled to interest @12% per annum on the
awarded compensation from the date of
accident i.e 16.05.2010 till its actual
payment.
672 INDIAN LAW REPORTS ALLAHABAD SERIES

8. Accordingly, the cross-objection
of the claimant is allowed.

9. The judgment and award of the
Commissioner
dated
23.03.2012,
is
modified to the above extent.

10. Interim order, if any, stands
vacated.

11. If any amount has been deposited
in pursuance of the order of this Court, in a
fixed deposit, then it shall be released in
favour of the claimants, alongwith accrued
interest, forthwith.

12.
The
appellant
insurance
company is directed to deposit the
interest, as awarded to the claimants by
this
Court,
before
the
concerned
Commissioner within a period of one
month, which shall be paid to the
claimants, without any delay.
----------
(2025) 11 ILRA 672
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 15.11.2025

BEFORE

THE HON'BLE SANDEEP JAIN, J.

First Appeal From Order No. 2680 of 2025

The New India Assurance Comp. Ltd.
 ...Appellant
Versus
Mukesh Agrawal & Ors. ...Respondents

Counsel for the Appellant:
Akhilesh Sharan Srivastava

Counsel for the Respondents:
Ashish Gupta

Issue for Consideration
Matter pertains to whether whether the Motor
Accident Claims Tribunal was justified in holding
that the accident in question was caused by the
rash and negligent driving of the offending bus
and in fastening statutory liability upon the
insurer to indemnify the awarded compensation,
despite
the
insurer's
plea
disputing
the
involvement of the vehicle, the timing of the
accident, and the alleged breach of permit and
policy conditions.

Headnotes
Motor Vehicles Act, 1988 - ss. 149(2), 177,
180, 181, 190(2), 213(5)(e) - Penal Code,
1860 - ss. 279, 337, 338, 304-A - Central
Motor Vehicle Rule, 1989 - r. 138(3), 104 -
The appeal was instituted by the insurer
of offending bus u/s 173 of Motor Vehicles
Act, 1988, assailing the judgment and
award passed by Motor Accident Claims
Tribunal, Meerut, whereby compensation
was awarded to the parents of the
deceased, who succumbed to injuries
sustained in a motor accident on 12
January 2018 while performing duty at a
toll plaza on NH-24 - The claimants
asserted that the accident occurred due to
the
rash
and
negligent
driving
of
offending bus, which struck the deceased
and fled from the spot, and relied upon
eyewitness
testimony
and
police
investigation culminating in a chargesheet against the driver - The insurer
disputed the very factum of the accident,
contended that the FIR initially referred to
an
unknown
vehicle,
questioned
the
timing and place of occurrence, and
further alleged breach of permit and
policy conditions on the ground that the
bus was being plied as a stage carriage
instead of a contract carriage - Upon
appreciation of oral and documentary
evidence, Tribunal held the accident to be
duly proved, attributed negligence to the
bus driver, and fastened liability upon the
insurer, leading to the instant appeal
challenging those findings.

Held: It is apparent that the offending bus has
been challaned for five offences, but only on
this ground it is not proved that the bus was
being driven in violation of the terms and
conditions of the insurance policy because the