Punjab-Haryana High Court
(O&M) Punjab Bus Service Mansa vs Kewal Singh And Ors on 7 November, 2025
FAO-3334-2002 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
FAO-3334-2002 (O&M)
Reserved on : 29.10.2025
Date of decision: 07.11 .2025
Punjab Bus Service Regd. Mansa through its Partner namely Amarjit
Singh
..Appellant
Versus
Kewal Singh and others
..Respondents
CORAM: HON'BLE MS. JUSTICE MANDEEP PANNU
Present: Mr.Kuldeep Singh,
Ms. Jaspreet Kaur,
Mr. Deepak Kumar and
Ms. Jasjot Kaur, Advocates for the appellants
Mr. Tarun Chawla, Advocate
for respondent No.1
None for respondent No.2
Mr. Lalit Garg, Advocate for
respondent No.3-Insurance Company
MANDEEP PANNU, J.
CM-20122-CII-2025
1. Allowed as prayed for. Amended memo of parties is
taken on record.
CM-20123-CII-2025
2. Allowed as prayed for. Sh. Amarjit Singh s/o Sh.Ved Raj
is taken on record as Appellant, being partner of the Firm namely
Punjab Bus Service in place of late Sh.Teja Singh s/o Sh.Chetain
Singh, through whom appeal was filed.
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CM-20124-CII-2025
3. Allowed as prayed for. Annexures A-1 and A-2 are taken
on record.
Main appeal
4. This appeal is filed by the owner of the offending Bus
against the award dated 06.05.2002 passed by the Motor Accident
Claims Tribunal, Mansa (hereinafter referred to as 'Tribunal')
whereby compensation of Rs.2,51,884/- has been awarded in favour
of claimant/respondent no.1, on account of injuries sustained by him
in the vehicular accident, which took place on 02.09.2000 and liability
to satisfy the same has been fastened upon both owner(appellant
herein) and driver of the offending vehicle. The claimant-injured has
filed cross objections by way of reply to the appeal praying for
enhancement of the awarded compensation.
Contentions on behalf of the Appellant (Punjab Bus Service)
5. In so far as appeal by Punjab Bus Service-appellant
(owner) is concerned, learned counsel for the appellant contended that
the learned Tribunal has gravely erred in exonerating the respondent-
Insurance Company from its liability to indemnify the insured. It was
submitted that the offending bus was duly insured and the driver was
holding a valid and effective driving licence at the time of the
accident. The only ground on which the Insurance Company was
absolved of liability was that the bus did not possess a route permit to
ply from Mansa to Pakho, where the accident occurred.
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6. Learned counsel argued that the evidence of RW-1
Jasdev Singh and RW-2 Jagjit Singh clearly established that the Head
Office of the Punjab Bus Service was situated at Mansa and that the
bus had been brought to Mansa for mechanical check-up and greasing
on the morning of 02.09.2000. It was further contended that while
proceeding for such repairs, a few passengers boarded the bus, but this
by itself could not be construed as a deliberate or material breach of
the route permit conditions. The deviation, if any, was purely technical
and without any mens rea or profit motive.
Contentions on behalf of the Respondent - Insurance Company
7. Per contra, learned counsel for the respondent-Insurance
Company supported the award of the learned Tribunal and submitted
that the vehicle was being plied on a route for which it had no valid
permit. It was urged that the evidence of the conductor and mechanic
shows that the bus was not on an empty run for mechanical repair but
was carrying about 25-30 passengers from Mansa towards Pakho.
Such carriage of passengers for hire and reward, on a route not
covered by the permit, constituted a clear violation of the permit
conditions and a breach of the terms of the insurance policy.
8. It was further argued that once the insured has used the
vehicle for a commercial purpose beyond the territorial and route
limits authorised under the permit, the insurer's contractual obligation
ceases. The Insurance Company, therefore, cannot be saddled with
liability to indemnify an illegal act, and the learned Tribunal rightly
fastened the liability exclusively upon the owner.
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Findings and Decision of this Court
9. I have considered the rival submissions and perused the
evidence.
10. It is an admitted position that on the date of accident, the
offending bus did not possess a valid route permit for Mansa-Pakho.
The evidence of AW-2 Kewal Singh indicates that the bus was
carrying about 25-30 passengers at the time of the accident. The case
of the appellants, however, is that the bus had been brought to Mansa
for mechanical check-up and greasing, and it was while proceeding
towards Pakho for such purpose that the accident took place.
11. The plea that the bus was proceeding for minor repairs,
though supported to some extent by RW-2 Jagjit Singh, loses force
when viewed in light of the undisputed fact that the bus was carrying
a large number of passengers on a route for which there was no valid
permit. The carriage of passengers for hire and reward cannot be
treated as a mere technical or inadvertent deviation. The same
amounts to using the vehicle for a purpose, not authorised by the
permit and hence, constitutes a breach of the permit condition.
12. Recent judgment of the Hon'ble Supreme Court in K.
Nagendra v. The New India Insurance Co. Ltd. & Ors. 2025 INSC
1270 decided on 29.10.2025, governs the present controversy. The
Apex Court, while dealing with a similar situation where the bus had
entered a route beyond its permit limits, held that though such use
may technically amount to a breach of the permit condition, the
insurer cannot be completely exonerated. The Court reiterated that the
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purpose of third-party insurance is to ensure compensation to victims
of motor accidents, and therefore, the insurer must satisfy the award in
the first instance. The insurer's remedy lies in recovering the paid
amount from the owner, if a breach is proved. Hence, even if there
was a deviation from the permitted route, the principle of "pay and
recover" should be applied, directing the Insurance Company to first
satisfy the award and then recover the amount from the owner, if so
advised.
13. The Supreme Court has lucidly observed that "to deny
the victim compensation merely because the accident took place
outside the bounds of the permit, would be offensive to the sense of
justice, for the accident itself is for no fault of the victim." At the same
time, it balanced the contractual rights of the insurer by upholding the
pay and recover mechanism.
14. Applying the above dictum, this Court holds that while
the carriage of passengers on an un-permitted route by the offending
bus constitutes a breach of the route permit and consequently, a
violation of the policy condition, however, the Insurance Company
cannot be wholly exonerated. The appropriate course is to direct the
insurer to pay the awarded amount to the claimant and thereafter,
recover the same from the owner of the bus, in accordance with law.
Conclusion
15. In view of the foregoing discussion and in the light of the
ratio laid down by the Hon'ble Supreme Court in K. Nagendra's case
(supra), the finding of the learned Tribunal absolving the Insurance
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Company of its liability cannot be sustained. The award of the
Tribunal is, accordingly, modified to the limited extent that the
Insurance Company shall satisfy the awarded amount in the first
instance and shall be entitled to recover the same from the owner of
the vehicle. Accordingly, appeal stands disposed of.
16. Now coming to the cross objections filed by the
claimant/respondent no.1, learned counsel for claimant/respondent
no.1 submits that Tribunal has awarded a meagre amount of
Rs.2,51,884/- on account of grievous injuries sustained by the
claimant in the accident.
17. The Tribunal, after going through the entire evidence
produced by the claimant, awarded the following compensation to
him:-
Sr. Heads Compensation
No. awarded
1. Compensation on account of 75,000/-
permanent disability to the extent of
50%
2. Medical bills 1,63,994/-
3. Pain & sufferings 5,000/-
4. Monthly income @ 2000/- thereby 3000/-
loss of income for one and half
months
5. Attendant charges 2000/-
6. Special diet 3000/-
Total Rs. 2,51,884/-
18. Learned counsel for the claimant-appellant submits the
claimant was 25 years old at the time of accident and has suffered
disability to the extent of 50% (Ex.A1) as per certificate issued by
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Civil Surgeon, Mansa. He had to be operated 3-4 times and even his
leg was grafted and steel rod was inserted in his leg. He used to
agricultural work before the accident, however, now, he is unable to
do such work and needs assistance of other person for his day to day
activities. Even at the time of recording his evidence before the
Tribunal, the claimant has submitted that that he still has to undergo
one more operation. He had already remained hospitalized for a
period of 1-½ months and availed services of two attendants during
period of treatment. He produced medical bills amounting to Rs.
1,63,994/- incurred on his treatment. Learned counsel further
submitted that Tribunal has awarded a sum of Rs.75,000/- on account
of disability, without assessing income of the claimant, granting future
prospects thereupon and also applying proper multiplier.
Furthermore, he submits that amounts awarded under Heads 'Pain &
sufferings', 'Special Diet' and 'Attendant charges' are inadequate.
19. Per contra, learned counsel for appellant(owner) and
Insurance Company have vehemently argued that sufficient amount
towards compensation has already been awarded by the Tribunal and
there is no scope for enhancement.
20. Now, let us examine the extent of disability suffered by
the claimant/injured. He has been issued disability certificate (Ex.A1)
by Civil Surgeon, Mansa indicating disability to the extent of 50%.
He used to do agricultural work before the accident. Therefore, there
is no doubt that after suffering grievous injuries in the accident,
resulting in insertion of steel rod in his leg, undergoing 2-3 operations
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and hospitalization for a period of 1-½ months, the claimant would
not be having similar physical strength and ability to do agricultural
work, which he was having earlier to earn his livelihood. Therefore,
in view of Ex.A1 issued by Civil Surgeon, Mansa, his functional
disability is assessed as 50%.
21. Furthermore, in view of law laid down by the Hon'ble
Supreme Court in National Insurance Company Ltd. vs. Pranay
Sethi & Ors. [(2017) 16 SCC 680] , the claimant/injured will also be
entitled to future prospects. The claimant's monthly income at the
rate of Rs.2000/- as assessed by the Tribunal is maintained. He was
25 years old at the time of accident. Therefore, he is held entitled to
future prospects at rate of 40% (40% of 2000 = 800/-, monthly income
= 2000+800 = 2800/-) and in view of Sarla Verma vs. Delhi
Transport Corporation and Another (2009) 6 SCC 121, multiplier
of 18 will be applied. The claimant/injured remained under treatment
for a period of 1-½ months . Therefore, he is held entitled to
Rs.2800/- (2800+1400 = 4200/-) towards loss of income for this
period. Amount of Rs. 5,000/- awarded under Head 'Pain &
Suffering' is highly inadequate and the same is enhanced to
Rs.50,000/-. An amount of Rs.5,000/- each is awarded under Head
'Special Diet' and 'attendant charges'.
22. Accordingly, the compensation is re-assessed as under :
Sr.No. Heads Compensation
awarded
1. Monthly Income 2000/-
2. Future prospects @ 40% 2800
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2000x40% = 800 [2000+800=2800]
3. Annual income 33,600/-
2800x12=33,600
4. Multiplier 18 6,04,800/-
18x33600=6,04,800/-
5. Functional disability @ 50% 3,02,400/-
604800x50% =3,02,400/-
6. Loss of income during period 4200/-
of treatment i.e 1 and half
months 2800+1400=4200
7. Medical bills 1,63,994/-
8. Special diet 5,000/-
9. Attendant charges 5,000/-
10. Pain & suffering 50,000/-
Total Compensation Rs.5,30,594/-
23. The claimant-appellant shall be entitled to difference in
amount of compensation alongwith interest at the rate of 7.5% per
annum from the date of filing of the claim petition till its realization.
Rest of the award needs no modification. Accordingly, the cross
objections stand partly allowed.
24. Consequently, FAO-3334-2002 stands disposed of
whereas cross objections filed by claimant/respondent no.1 stands
partly allowed.
25. All the pending miscellaneous applications, if any, are
also disposed of.
(MANDEEP PANNU)
07.11.2025 JUDGE
rekha
Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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