# SHEIKllUPURA TRANSPORT CO. LID v. NORTHERN INDIA TRANSPORT INSURANCE CO

- **Citation:** [1971] Supp. 1 S.C.R. 20
- **Court:** Supreme Court of India
- **Decided:** 1971-03-16
- **Bench:** K. S. ffBG[)E, P. Jaganmohan Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sheikllupura-transport-co-lid-v-northern-india-transport-insurance-co-5515
- **Pages:** 7

## Headnote

Motor Vehicles Act, 1939 s. llOB and s. 95(2) (b)-Principles of compensation to be granted to legal representatives of person dyinK in accident U1'der s. 1108-Maximum amount of liability of insurer und.~r s. 95
(2)(b).
A passenger bus belonging to the appellant met with an accident, as
a result of which two persons B and N died on tho spot.
Tho legal
representativt:s of the deceased persons applied for compensation before
the tribunal appointed under the Motor Vehicles Act. Their claim was opposed by tho appellant as well as by the insurance company. The tribunal found
that the accident was due to the negligence of the driver and therefore
the claimants were entitled to compensation. The tribunal
compu~ed
the co?/.pens~tion due to the legal representatives of B at Rs. 18000. Out
of that sum jt determined the compensation due to the widow at Rs. 8000;
the compensation duo to one of his daughters was fixed at Rs. 4000 and
to the other at Rs. 6000. But as tho daughters had not made their claims
during the prescribed time, the Tribunal disallowed the compensation <lue
to them and 1tranted a decree in favour onlv of B's widow.. In the case
of N the tribunal computed the total compensation payable at Rs. 18000
and granted that sum to his legal representatives. It directed that the entire
sum payable by the appellant should be paid by the insurance company.
The insurance company as well as the legal representatives of the dl":ceased
persons appealed to the High Court. The High Court enhanced tho compensation payable to the legal representatives of both B and N frnm
Rs. 18000 to Rs. 36000. It. condoned the delay in making the claim by tho
da~hters of B and made the entire sum payable to his legal representa·
tives. It also allowed the appeal of the insurance company and limited the
amO\IDt payable by the insurance company to Rs. 2000 in the case of each
of the deceased persons in accordance with s. 95(2) of the Motor Vehicles
Act.
By special leave appeals were filed in this Court. The appellant
challenged (i) the amount of compensation as granted by tho High Court,
(ii) the condonation of delay in the case of B's daughters and (iii) the limiting of the amount payable by the insurance company to Rs. 2000.
HELD: (i) Under s. llOB of the Motor Vehicles Act, 1939 the tribunal is required to fix such compensation as appears to it to be just. The
power given to the tribunal is wide. The pecuniary loss to the aggrieved
party would depend on data which cannot be ascertained accurately but
must necessarily be an estimate or even partly a conjecture. The general
principle is that the pecuniary loss can be ascertained only by balanci11g
on the one hand the loss to the claimants of the future pecuniary benefit,
and on the other any pecuniary advantage which from whatever sources
comes to them by reasons of the death, that is, the balance of loss and
gain to a dependant by the death must be ascertained. (25B-DJ
Gobald Motor Service Ltd. v. R. M. K. Ve/uswami & Ors., [1962] I
S.C.R. 929, relied on.
The determination of the queirition of compensation depends on several
imponderables. In the assessment of those imponderables there is likely
to be a margin of error. If the assessment made by the High Court cannot
SHEIKHUPURA TRANSPORT •. NORTHERN INDIA TRANSPORT (Hegde,J.)
21
be considered to be unreasonable-and in the present case it could not be
A
said to be unreasonable-it will not be proper for this court to interfere
\\'ith the same. Taking an overall assessment of the facts and circumstances
of the present case it could not be held that the Compensation awarded
to the legal representatives of the deceased persons by the High Court was
excessive.
[24E]
(ii) By the time B's daughters were in1pleaded the time for filing applications for compensation by them had elapsed.
It was conceded that
B
Tribunal had jurisdiction to condone the delay in making the claim. The
Tribunal had not chosen to condone the delay.
But the High Court has
in its discretio

## Text

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SHEIKllUPURA TRANSPORT CO. LID.
v.
NORTHERN INDIA TRANSPORT INSURANCE CO.
March 16, 1971
(K. S. ffBG[)E AND P. JAGANMOHAN REDDY, JJ.J
Motor Vehicles Act, 1939 s. llOB and s. 95(2) (b)-Principles of compensation to be granted to legal representatives of person dyinK in accident U1'der s. 1108-Maximum amount of liability of insurer und.~r s. 95
(2)(b).
A passenger bus belonging to the appellant met with an accident, as
a result of which two persons B and N died on tho spot.
Tho legal
representativt:s of the deceased persons applied for compensation before
the tribunal appointed under the Motor Vehicles Act. Their claim was opposed by tho appellant as well as by the insurance company. The tribunal found
that the accident was due to the negligence of the driver and therefore
the claimants were entitled to compensation. The tribunal
compu~ed
the co?/.pens~tion due to the legal representatives of B at Rs. 18000. Out
of that sum jt determined the compensation due to the widow at Rs. 8000;
the compensation duo to one of his daughters was fixed at Rs. 4000 and
to the other at Rs. 6000. But as tho daughters had not made their claims
during the prescribed time, the Tribunal disallowed the compensation <lue
to them and 1tranted a decree in favour onlv of B's widow.. In the case
of N the tribunal computed the total compensation payable at Rs. 18000
and granted that sum to his legal representatives. It directed that the entire
sum payable by the appellant should be paid by the insurance company.
The insurance company as well as the legal representatives of the dl":ceased
persons appealed to the High Court. The High Court enhanced tho compensation payable to the legal representatives of both B and N frnm
Rs. 18000 to Rs. 36000. It. condoned the delay in making the claim by tho
da~hters of B and made the entire sum payable to his legal representa·
tives. It also allowed the appeal of the insurance company and limited the
amO\IDt payable by the insurance company to Rs. 2000 in the case of each
of the deceased persons in accordance with s. 95(2) of the Motor Vehicles
Act.
By special leave appeals were filed in this Court. The appellant
challenged (i) the amount of compensation as granted by tho High Court,
(ii) the condonation of delay in the case of B's daughters and (iii) the limiting of the amount payable by the insurance company to Rs. 2000.
HELD: (i) Under s. llOB of the Motor Vehicles Act, 1939 the tribunal is required to fix such compensation as appears to it to be just. The
power given to the tribunal is wide. The pecuniary loss to the aggrieved
party would depend on data which cannot be ascertained accurately but
must necessarily be an estimate or even partly a conjecture. The general
principle is that the pecuniary loss can be ascertained only by balanci11g
on the one hand the loss to the claimants of the future pecuniary benefit,
and on the other any pecuniary advantage which from whatever sources
comes to them by reasons of the death, that is, the balance of loss and
gain to a dependant by the death must be ascertained. (25B-DJ
Gobald Motor Service Ltd. v. R. M. K. Ve/uswami & Ors., [1962] I
S.C.R. 929, relied on.
The determination of the queirition of compensation depends on several
imponderables. In the assessment of those imponderables there is likely
to be a margin of error. If the assessment made by the High Court cannot
SHEIKHUPURA TRANSPORT •. NORTHERN INDIA TRANSPORT (Hegde,J.)
21
be considered to be unreasonable-and in the present case it could not be
A
said to be unreasonable-it will not be proper for this court to interfere
\\'ith the same. Taking an overall assessment of the facts and circumstances
of the present case it could not be held that the Compensation awarded
to the legal representatives of the deceased persons by the High Court was
excessive.
[24E]
(ii) By the time B's daughters were in1pleaded the time for filing applications for compensation by them had elapsed.
It was conceded that
B
Tribunal had jurisdiction to condone the delay in making the claim. The
Tribunal had not chosen to condone the delay.
But the High Court has
in its discretion condoned the delay. The wife of B was an illiterate lady ;
she was helpless and without assist:ince.
In the circumstances this Court
would not be justified in interfering with the discretion exercised by the
High Court in condoning the delay in question. [23C-D]
(iii) Reading together the provisions in ss. 95(1) (b), 95(2) and 96 of
C
the Motor Vehicles Act it is <;kar that the statutory liability of the insurer
to indemnify the insured is as prescribed in s. 95(2). Under that section
the maximum liability on an insurer in the case of a vehicle carrying more
than six passengers i~ Rs. 2000 per passenger and the maximum total liability is Rs. 20000.
In the present case the vehicle was one in which
more than six passengers were allowed to be carried. The limit of liabi·
lity of the insurer prescribed under s. 95(2) (b) can be enhanced by a contract to the contrary. No clause of the policy issued to the appellant in
D
the present case provided for the payment of any amount higher than that
fixed by s. 95(2) (b). The High Court was therefore right in its conclusion that the li.!lbility of the insurer in the present case only extended up
to Rs. 2000. [24G, 250, 268, D]
CML APPELLATE JURISDICTION: Civil Appeals Nos. 501 to
504 of 1967.
Appeals from the judgments and orders dated December IS,
!96S of the Punjab High Court in First Appeals from Order Nos.
145 and 155 of 1960 and 6 and 7 of 1961.
S. K. Mehta, K. L. Mehta and K. R. Nagaraia for the appellant (in all the appealsT.
Hardev Singh a!ld H. L. Kapur, for respondent No. I (in
C. A. Nos. 501 )Uld S02 of !967) respondent No. 4 (in C. A. No.
503/67) and,respondent No. to (in C. A. No. 504 of 1967).
S. ,K. Bagga, B. K. Bagga and S. Bagga, for respondent Nos.
2 (in C. A. No. SOI of 1967) respondent Nos. 1 to 8 (in C. A. No.
504 of 1967) respondent No. 2 (in C. A. No. 502 of 1967 and
respond,nts Nos. I and 2 (in C. A. No. 503 of 1967).
The Judgment of the Court was delivered by
Hegde, 1. A passenger bus belonging to the appellant while
travelling from Ludhiana to Rajkot met with an accident at about
9 a.m. on February II, 19S9. As a result of this accident, two
persons name!y Bachan Singh and Narinder Nath died on the
spot and some others received minor injuries. The legal representatives of the deceased persons applied for compensation before
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the tribunal appointed under the Motor Vehicles Act. Their claim
was opposed by the appellant as well as by the insura.nce company.
Overruling the objections of the appellant as well as the insurance
company, the tribunal found that the accident WBB due to the
negligence of the driver and therefore the claimants were entitled to
compensation. The tribunal computed the compensation due to
the legal representatives of Bachan Singh at Rs. 18,000. Out of
that sum it determined the compensation due to the widow at
Rs. 8,000; Rs. 4,000 to his daughter Harbans Kaur and Rs. 6,000
to his another daughter Balbir Kaur. But as the daughters had
not made their cla.ims within the prescribed time, it disallowed
the compensation dne to them and only granted a decree in favour
of the widow of Bachan Singh. In the case of Narinder Nath,
it computed the total compensation payable at Rs. 18,000/- and
granted that sum to the legal representatives of Narinder Nath.
It directed that the entire sum payable by the appellant should be
pa.id by the insurance company. The insurance company as well
as the legal representatives of the deceased persons appealed to
the High Court. The High Court enhanced the compensation
payable to the legal representatives of both Bachan Singh a.nd
Narinder Nath from Rs. 18,000/- to Rs. 36,000/-. It condoned
the delay in making the claim by the daughters of Bachan Singh
and consequently mMle the entire sum payable to his legal represenmtives. It also allowed the appeal of the insurance company and
limited the amount payable by the insurance company to
Rs. 2,000 I - in the case of each one of the deceased persons.
Aggrieved by the decision of the High Court, these appeals have
been brought by special lelwe.
Now coming to the enhancement made by the High Court
both Bachan Singh and Narinder Nath were 42 to 43 years old
at the time of their death~ both the tribunal and the High Court
have come to th.e conclusion that .Bachan Singh had an annital
income of about Rs. 9,000/-. Out of Rs. 9,000/-, Rs. 2,000/- was
his income from immovable property: that income continued to
accrue to the benefit of his wife and children; therefore only the
income other than the income from immovable property which
Bachan Singh was earning from his contract Wlll!I taken into consideration. The Bish <:ourt has come to the conclusion that Bachan
Singh must have been spending at least Rs. 200/- on his family
every month. It must be remembered that Bachan Singh had to
marry two daughters. Therefore whatever he might have been
able to save after meeting the family expenses and his own, the
same would have been utilised for the marriage expenses of the
daughters. Both the tribunal and the High Court have computed
the Joss to the family of Bachan Singh by capitalising the benefit
that the family was getting from him durfag his life time. The
SllBICHUPURA TRANSPORT •• NORTHERN INDIA TRANSPORT (Hegde, J.)
High Court did not accept the computation of the tribunal that
Bachan Singh would have spent only Rs. 100 /- on his family during
his life time. We think the High Court was right in its conclusion.
Taking into consideration the total income of Bachan Singh as
well as the requirements of the family, it is reasonable to hold
that he would have spent a.I least Rs. 200 I- per month on his
family. We cannot also overlook the fact that Bachan Singh in
all reasonable possibility would have been able to earn more in
the years to come, if he had not died.
It is true that Bachan Singh's daughters were not made parties
to the petition filed by the widow of Bachan Singh, when she field
that petition, but later on they were impleaded. By the time they
were impleaded, the time for filing application for compensation
by the da.ughters had elapsed. It is conceded that under Jaw, the
tribunal had jurisdiction to condone the delay in making the claim.
The tribunal had not chosen to condone the delay. But the High
Court bas in its discretion condoned the delay. It is seen that the
wife of Bachan Singh was an illiteraite lady. She appears to have
been quite helpless. In fact in her petition she specifically stated
that she had no assistance and therefore she requested the court to
give her the assistance of some lawyer. We do not think tha.t we
will be justified in interfering with the discretion exercised by the
High Court in condoning the delay in question.
In the case of Narinder Nath, the evidence adduced on behalf
of the claimants clearly establishes that he was earning about
Rs. 6,000 /- per year as Commission Agent and that his income
was going up from year to year. But yet the tribunal thought that
his income could be computed at Rs. 5,000/- per year. There wa.s
no basis for such a conclusion. Further the tribunal held that
Narinder Nath must have been spending aboU! Rs. 100/- per
month on his family.' This conclusion is a wholly fallacious one.
The evidence disclosed that he was spending on his family abou~
two to. three hundred rupees a month. The High Court has arrived at the conclusion that he must have been spending Rs. 200 / ·
per month on his family. Herc again it may be noted-that he had
the prospect of earning more in the years to come a.nd consequently he would have spent more on his family if he had lived longer.
On the basis that he was spendit1g about Rs. 200/- per month on his
family, the High Court has computed the total Compensation at
Rs. 36,000/-. It has computed the compensation on the basis of
15 ~ears' purchase of the benefits that were accruing to the family
as in t·be case of Bachan Singh.
It was contended on behalf of the appellants' that the computation of compensation was excessive a.nd the High Court erred in
not giving due deductions for circumstances like the widow remarrying, the possibility of the deceased persons dying before they
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reached the age of 58 years and the children of the deceased per·
sons getting other source of income after they completed their
education.
Under s. llOB of the Motor Vehicles Act, 1939 the tribunal
is required to fix such compensation which appe11rs to it to be
just. The power given to the tribunal in the matter of fixing com·
pensation under that provision is wide. Even if we assume (we
do not propose to decide that question in this ca6e) that compen·
sation under that provision has to be fixed on the same basis as
is required to be done under Fatal Accidents Act, 1855 (Act 13 of
1855), the pecuniary loss to tlie aggrieved party would depend
upon data which cannot be ascertained accurately but must necessarily be an estimate or even partly a conjecture. The general prin·
ciple is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecu·
niary benefit a.nd on the other any pecuniary advantage which from
whatever sources come to them by reason of the death, that is,
the balance of loss and gain to a dependant by the death must be
ascertained-see Goba/d Motor Service Ltd. and anr. v. R.N.K.
Veluswami and ors.(')
The determination of the question ot compensation depends
on several imponderables. In the assessment of those imponderables, there is likely to be a margin of error. If the assessment
made by the High Court cannot be considered to be unreasonable
-and we do not think it to be unreasonable-it will not be proper
for this Court to interfere with the same. Ta.king an overall as·
sessment of the facts and circumstances oI this case, we are unable
to agree with the contention of the appellant's Counsel that the
compensation awarded to the legal representatives of the deceased
persons is excessive. Nor a.re we able to accept the contention
that the High Court erred in condoning the delay in the matter of
the claim made by the daughters of Bachan Singh.
This takes us to the question as to the extent of the liability
of the insurance company. The measure of liability of the insurer
has to be ascerta.ined with reference to s. 95(2) of the Motor Vehicles Act. Section 94 of that Act requires that every passenger bus
should be insured against third party risk. Section 95(1) prescribes
the requirements of policies. The provision relevant for our pre·
sent purpose is s. 95(2). That provision as it stood at the relevant
time read thus :
"Subject to the proviso to sub-section (!), a policy of in·
surance shall cover a•ny liability incurred in respect of any
one accident up to the following limits namefy :-
(a) where the vehicle is a goods vehicle, a limit of twenty
tho)lSand rupees in all including the liabilities, if any,
(I) [1~62] IS. C.R. 529.
SHEKHUPURA TRANSPORT v. NORTHERN INDIA TRANSPORT (Jfegde, J.)
arising under the Workmen's Compensation Act, 1923, in
respect of the death of, or bodily injury to, employees
(other than the driver), not exceeding six in number, being
carried in the vehicle.
ibl where the vehicle is a vehicle in which pai;sengers are
carried for hire or reward or by reason of or in pursuance
of a contract of employment, in respect of persons other
than passengers carried for hire or reward, a limit of
twenty thousand rupees; and in respect of passengers a
limit of twenty thousand rupees in a.II, and four thousand
rupees in respect of an individual passenger, if the vehicle
is registered to carry not more than six passengers excluding the driver or two thousand rupees in respect of an
individual passenger. if the vehicle is registered to carry
more than six passengers excluding the driver;
(c) where the vehicle is a vehicle of any other class, the
amount of. the liability incurred."
In the present case we are dealing with a vehicle in which niore
than six passengers were allowed to be carried. Hence the maximum liability imposed under s. 95(2) on the insurer is Rs. 2,000 /-
per passenger though the totaA liability may go upto Rs. 20,000 /-..
This is also the view taken by the High Court. The limit of insurer
prescribed under s. 95(2)(b) of the Motor Vehicles Act can be
enhanced by any contract to the contrary. Therefore we have to
see whether the contract of insurance entered into between the appellant and the insurance company provided for the pa.yment of
enhanced amount in case the owner of the bus involved in an
accident is required by the decree of a court to pay any higher amount as compensation. The insurance policy issued by the insurer is
muked as Exh. R. W. 3 I B. aause (I) of that policy says :
"Subject to the limit of liability the Company will
indeminfy the insured in the event of accident caused by
or arising out of the use of the Motor Vehicle in a public
place against all sums including claimants costs and expenses which the insured shall become legally liable to pay
in respect of death of or bodily injury to any person."
The opening words of the clause "subject to the limit of liability the Company" evidently refer to the limit precribed under
s. 95(2)(b) of the Motor Vehicles Act. No clause in the insurance
policy specifically providing for the payment of any amount higher
than that fixed under s. 95(2)(b) was brought to our notice. The
cla.u~e dealing with avoidance of certain terms and the right of recovery reads :
"Nothing in this policy or any endorsement thereon
shall affect the right of any person indemnified by this
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policy or any other person to recover an amount under or
by virtue of the provisions of the Motor Vehicles Act
1939 Section 96".
This clause makes it abundantly clear th.at the extent of the
right of the person indemnified is as prescribed in s. 96 of the
Motor Vehicles Act.
Under that provision the amount to b1t
recovered is that covered by cl. (b) of sub-i:. (1) of s. 95. Clause
(b) of s. 95(1) says:
"In order to comply with the requirements of this
Chapter, a policy of insurance must be a policy which-
(b) insures the person or classes of person specified
in the policy to the extent specified in sub-section (2)
against any liability which may be incurred by him or
them in respect of the death of or bodily injury to any
person caused by or arising out of the use of the vehicle
Ill a public place ............ "
Reading all these provisions together, it is clear that the
statutory liability of the insurer to indemnify the insured is as
prescribed in s. 95(2).
Hence the High Court was right in its
conclusion that the liability of the insurer in the present case
only extends up to Rs. 2,000 /- each, in the case of Bachan Singh
and Narinder Nath.
For the reasons mentioned above these appeats fail and they
are dismissed with costs.
G.C.