[Cites 10, Cited by 0]
Punjab-Haryana High Court
Rajeev Gupta vs Kuldeep And Ors on 20 January, 2026
FAO-3752-2018 Page 1 of 16
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
234
Date of decision: 20.01.2026
FAO-3752-2018(O&M)
Rajeev Gupta
...Appellant(s)
Vs.
Kuldeep & Others
...Respondent(s)
***
FAO-7200-2018(O&M)
Kuldeep
...Appellant(s)
Vs.
Anil Kumar & Others
...Respondent(s)
***
CORAM: HON'BLE MS. JUSTICE NIDHI GUPTA
Present:- Mr. Piyush Aggarwal, Advocate
for the appellant/owner (in FAO-3752-2018).
Mr. Manoj Kumar Taya, Advocate
for the appellant/claimant (in FAO-7200-2018).
Mr. Sandeep Suri, Advocate
for respondent No.2/Insurance Company.
***
NIDHI GUPTA, J.
FAO-3752-2018
Present appeal has been filed by the owner of the TATA-909
bearing registration No.HR-55-Q-5718 (hereinafter referred to as "the
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offending vehicle") against the Award dated 26.02.2018 passed by Motor
Accident Claims Tribunal, Karnal (hereinafter 'the learned Tribunal')
whereby Claim Petition No.178 dated 09.07.2014 filed under Sections 166
and 140 of the Motor Vehicles Act, by the claimant/respondent No.1 herein
has been allowed and the claimant has been awarded compensation of
Rs.19,82,602/- along with interest @ 6% per annum.
FAO-7200-2018
Present appeal has been filed by the injured-claimant seeking
enhancement of compensation of Rs.19,82,602/- awarded by the learned
Tribunal vide Award dated 26.02.2018 passed in Claim Petition No.178
dated 09.07.2014 filed under Sections 166 and 140 of the Act.
Both the present appeals are being disposed of by this
common order as both emanate from common Award dated 26.02.2018;
passed in same Claim Petition; and in respect of the accident dated
19.11.2013; between same parties; and facts and issues involved in both
the cases are identical. For the sake of brevity, facts are being drawn from,
and parties are being referred to as per their status in FAO-3752-2018.
2. Brief facts of the case are that the learned Tribunal on the basis
of pleadings and oral & documentary evidence adduced by the parties
concluded that the claimant had suffered injuries in a motor vehicular
accident that took place on 19.11.2013 due to the rash and negligent
driving of the offending vehicle being driven by respondent No.3, owned by
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the appellant, and insured by respondent No.2. Vide the impugned Award,
liability to pay the compensation amount has been fixed upon the appellant
and the respondent no.3 on the ground that the Driver of the offending
vehicle/respondent no.3 herein, did not possess a valid Driving Licence at
the time of accident. Accordingly, Recovery rights were granted to the
Insurance Company against the owner/appellant, and respondent no.3. The
said compensation has been awarded along with interest @ 6% per annum.
LIABILITY TO PAY COMPENSATION:
3. Learned counsel for the appellant/owner of the offending
vehicle submits that the learned Tribunal is in error in holding the appellant
liable to pay the compensation as, the appellant had clearly stated that at
the time of employing the driver, the owner-appellant had taken his Driving
Test. It is submitted that the owner had also checked the Driving Licence
held by the driver and it was found that he was holding a valid Driving
Licence. The owner had employed the driver in the year 2011. The Driving
Licence had been issued in the year 2010. The accident had taken place
three years thereafter on 19.11.2013. As such, there was nothing more that
the owner-appellant could have done to verify that the driver was
competent to drive the offending vehicle. It is submitted that as appellant
had taken all steps required as per law and by way of abundant caution,
liability to pay compensation could not have been affixed upon him.
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4. Per contra, learned counsel for the Insurance Company
vehemently opposes the submissions advanced on behalf of the owner and
submits that the owner in his written statement has nowhere pleaded that
he had taken the driving test of the driver. It is submitted that therefore,
learned counsel for the owner is arguing beyond the pleadings. Learned
counsel for the Insurance Company further draws the attention of this
Court to Para 39 of the impugned Award wherein the learned Tribunal has
recorded that the owner had failed to specify as to on which date, month
or year or at which place, he had taken the driving test of the driver before
employing him as a Driver upon his canter. It is submitted that therefore,
the learned Tribunal was not in error in affixing the liability to pay the
compensation amount upon the owner. Learned counsel for the Insurance
Company also draws the attention of this Court to the findings as recorded
in Para 37 of the impugned Award, wherein the Insurance Company had
duly taken the objection before the Tribunal that the driver was having a
fake Driving Licence (Ex.R7). It is contended that therefore, the liability has
been correctly fixed upon the owner-appellant and respondent no.3.
5. The aforesaid submissions of learned counsel for the Insurance
Company are vehemently opposed by learned counsel for the owner to
submit that the owner had done all within his ability and control under law
to ensure that the driver possessed a valid Driving Licence. Learned counsel
further relies upon judgment of the Hon'ble Supreme Court in "National
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Insurance Co. Ltd. Vs. Swaran Singh & Others" (2004) 3 SCC 297, Law
Finder Doc ID # 66307, to buttress his submission.
6. I have heard learned counsel for the owner of the offending
vehicle and the Insurance Company. As regards the question of liability, I
find merit in the submissions advanced on behalf of the owner-appellant.
7. The reasoning of the learned Tribunal in affixing liability upon
the owner/appellant, is as follows: -
"39. However, the said contention of Id. counsel for respondent
no.2 is unsustainable in view of the fact that no such facts had
been pleaded by respondent no.2 in his written statement. In
other words, the evidence led by respondent no.2 in the form
of his oral evidence by stepping into the witness-box as RW2 is
beyond pleadings. Besides, respondent no.2 has failed to
specify as to on which date, month or year or at which place he
had taken the driving test of respondent no.1 before employing
him as a driver upon his canter. In other words, the evidence of
respondent no.2 as RW2 is vague, indefinite and beyond
pleadings."
8. However, the above said view of the learned Tribunal does not
stand scrutiny, for the reasons given hereinbelow.
9. It has been contended on behalf of the Insurance Company
that liability has been correctly affixed upon the owner as he had not
pleaded in his written statement that he had taken driving test of the driver;
and there is no evidence on record to show that the owner had actually
taken driving test of the driver as date, month, year, time, place, etc. of
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driving test is not mentioned. However, the said arguments are liable to be
rejected because at time of employing respondent no.3 or even at the time
of filing of written statement, the owner could not have
guessed/anticipated/ known that the driving license would be found to be
fake, and that liability would be affixed upon him. Accordingly, the owner
had merely pleaded in his written statement that the driver "is having valid
and effective driving licence.". It is only when enquiry was conducted and
upon investigation by the Insurer, it was found that the driving license was
fake that the fact came to the knowledge of the appellant. Accordingly, in
his Affidavit of Evidence (Ex.RW2/A), the owner has categorically stated
that the appellant has taken driving test before employing Anil and had
clearly stated that he "has taken the driving test of Anil before employing
Anil i.e. respondent No.1 for driving Canter and he was found to have sound
knowledge of driving canter and he has shown his driving licence to the
deponent and has told that it was genuine and obtained after due
compliance of the requisite rules under the M.V. Act. There was no reason
to disbelieve him and in view of the test taken by the deponent. That Anil
respondent No.1 had told that he was driving the transport vehicle since
2010 regularly...". Clearly, at the time of employing the Driver, the appellant
could not have known any better. Thus, all that has to be shown is that the
owner had taken due care and caution before employing the Driver. From
the above facts, the same is proved. No evidence to the contrary has been
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led by the Insurer. A perusal of the record shows that during cross-
examination, even no suggestion was put by the Insurer to the Owner that
due care and caution was not taken.
10. In such circumstances, reference me be made to a three-Judge
Bench of the Hon'ble Supreme Court in Swaran Singh (supra); wherein it is
held as under: -
"110. The summary of our findings to the various issues as
raised in these petitions is as follows:
(i) Chapter XI of the Motor Vehicles Act, 1988 providing
compulsory insurance of vehicles against third-party risks is a
social welfare legislation to extend relief by compensation to
victims of accidents caused by use of motor vehicles. The
provisions of compulsory insurance coverage of all vehicles are
with this paramount object and the provisions of the Act have
to be so interpreted as to effectuate the said object.
(ii) An insurer is entitled to raise a defence in a claim petition
filed under Section 163-A or Section 166 of the Motor Vehicles
Act, 1988, inter alia, in terms of Section 149(2)(a)(ii) of the said
Act.
(iii) The breach of policy condition e.g. disqualification of the
driver or invalid driving licence of the driver, as contained in
sub-section (2)(a) (il) of Section 149, has to be proved to have
been committed by the insured for avoiding liability by the
insurer. 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
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towards the insured, the insurer has to prove that the insured
was guilty of negligence and failed to exercise reasonable care
in the matter of fulfilling the condition of the policy regarding
use of vehicles by a duly licensed driver or one who was not
disqualified to drive at the relevant time.
(iv) Insurance companies, however, with a view to avoid their
liability must not only establish the available defences) raised
in the said proceedings but must also establish "breach" on the
part of the owner of the vehicle; the burden of proof wherefor
would be on them.
(v) The court cannot lay down any criteria as to how the said
burden would be discharged, inasmuch as the same would
depend upon the facts and circumstances of each case.
(vi) Even where the insurer is able to prove breach on the part
of the insured concerning the policy condition regarding
holding of a valid licence by the driver or his qualification to
drive during the relevant period, the insurer would not be
allowed to avoid its liability towards the insured unless the said
breach or breaches on the condition of driving licence is/are so
fundamental as are found to have contributed to the cause of
the accident. The Tribunals in interpreting the policy conditions
would apply "the rule of main purpose" and the concept of
"fundamental breach" to allow defences available to the
insurer under Section 149(2) of the Act.
(vii) The question, as to whether the owner has taken
reasonable care to find out as to whether the driving licence
produced by the driver (a fake one or otherwise), does not fulfil
the requirements of law or not will have to be determined in
each case.
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(viii) If a vehicle at the time of accident was driven by a person
having a learner's licence, the insurance companies would be
liable to satisfy the decree.
(ix) The Claims Tribunal constituted under Section 165 read
with Section 168 is empowered to adjudicate all claims in
respect of the accidents involving death or of bodily injury or
damage to property of third party arising in use of motor
vehicle. The said power of the Tribunal is not restricted to
decide the claims inter se between claimant or claimants on
one side and insured, insurer and driver on the other. In the
course of adjudicating the claim for compensation and to
decide the availability of defence or defences to the insurer, the
Tribunal has necessarily the power and jurisdiction to decide
disputes inter se between the insurer and the insured. The
decision rendered on the claims and disputes inter se between
the insurer and insured in the course of adjudication of claim
for compensation by the claimants and the award made
thereon is enforceable and executable in the same manner as
provided in Section 174 of the Act for enforcement and
execution of the award in favour of the claimants.
(x) Where on adjudication of the claim under the Act the
Tribunal arrives at a conclusion that the insurer has
satisfactorily proved its defence in accordance with the
provisions of Section 149(2) read with sub-section (7), as
interpreted by this Court above, the Tribunal can direct that the
insurer is liable to be reimbursed by the insured for the
compensation and other amounts which it has been compelled
to pay to the third party under the award of the Tribunal. Such
determination of claim by the Tribunal will be enforceable and
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the money found due to the insurer from the insured will be
recoverable on a certificate issued by the Tribunal to the
Collector in the same manner under Section 174 of the Act as
arrears of land revenue. The certificate will be issued for the
recovery as arrears of land revenue only if, as required by sub-
section (3) of Section 168 of the Act the insured fails to deposit
the amount awarded in favour of the insurer within thirty days
from the date of announcement of the award by the Tribunal.
(xi) The provisions contained in sub-section (4) with the proviso
thereunder and sub-section (5) which are intended to cover
specified contingencies mentioned therein to enable the
insurer to recover the amount paid under the contract of
insurance on behalf of the insured can be taken recourse to by
the Tribunal and be extended to claims and defences of the
insurer against the insured by relegating them to the remedy
before regular court in cases where on given facts and
circumstances adjudication of their claims inter se might delay
the adjudication of the claims of the victims."
(emphasis supplied)
11. The above view has been reiterated in case of "Pepsu Road
Transport Corporation Vs. National Insurance Company" (2013) 10 SCC
217, where in it is held that:-
"10. In a claim for compensation, it is certainly open to the
insurer under Section 149(2) (a)(il) to take a defence that the
driver of the vehicle involved in the accident was not duly
proved that the licence possessed by the driver was a fake one,
whether there is liability licensed. Once such a defence is taken,
the onus is on the insurer. But even after it is on the insurer is
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the moot question. As far as the owner of the vehicle is
concerned, when he hires a driver, he has to check whether the
driver has a valid driving licence. Thereafter he has to satisfy
himself as to the competence of the driver. If satisfied in that
regard also, it can be said that the owner had taken reasonable
care in employing a person who is qualified and competent to
drive the vehicle. The owner cannot be expected to go beyond
that, to the extent of verifying the genuineness of the driving
licence with the licensing authority before hiring the services of
the driver. However, the situation would be different if at the
time of insurance of the vehicle or thereafter the insurance
company requires the owner of the vehicle to have the licence
duly verified from the licensing authority or if the attention of
the owner of the vehicle is otherwise invited to the allegation
that the licence issued to the driver employed by him is a fake
one and yet the owner does not take appropriate action for
verification of the matter regarding the genuineness of the
licence from the licensing authority. That is what is explained
in Swaran Singh case". If despite such information with the
owner that the licence possessed by his driver is fake, no action
is taken by the insured for appropriate verification, then the
insured will be at fault and, in such circumstances, the
Insurance Company is not liable for the compensation.
11. On facts, in the instant case, the appellant employer had
employed the third respondent Nirmal Singh as driver in 1994.
In the process of employment, he had been put to a driving test
and he had been imparted training also. The accident took
place only after six years of his service in PRTC as driver. In such
circumstances, it cannot be said that the insured is at fault in
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having employed a person whose licence has been proved to
be fake by the Insurance Company before the Tribunal. As we
have already noted above, on scanning the evidence of the
licensing authority before the Tribunal, it cannot also be
absolutely held that the licence to the driver had not been
issued by the said authority and that the licence was fake.
Though the appellant had also taken a contention that the
compensation is on the higher side, no serious attempt has
been made and according to us justifiably, to canvas that
position". (Emphasis added)
12. Reliance may be placed upon most recent judgment of Hon'ble
Supreme Court in Hind Samachar Ltd. (Delhi Unit) v. National Insurance
Company Ltd., (SC) : Law Finder Doc ID # 2790918, wherein it is held that:-
"A. Motor Vehicles Act, 1988 Sections 149, 166 Fake driving
licence - Liability of insurer - Held, insurance company must
prove absence of due diligence by owner while employing
driver or entrusting vehicle - No obligation on vehicle owner to
verify authenticity of driving licence with licensing authority -
High Court erred in inferring collusion between owner and
driver in absence of evidence - "Pay and recover" directions
issued by High Court set aside.
B. Motor Vehicles Act, 1988 - Vicarious liability of vehicle owner
- Held, owner is vicariously liable for negligence of driver -
Submission of driving licence by owner does not indicate
collusion - Driver's absence in proceedings may be due to fear
of prosecution and does not impute wrongdoing to owner -
Insurance company failed to prove breach of policy conditions
by owner."
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13. The record reveals that in the present case also, the driver of
the offending vehicle did not put in appearance and was proceeded against
ex parte. However, in terms of the above judgment, liability could not have
been fixed upon the appellant/owner; and recovery rights could not have
been granted against him.
14. Thus, from the above noted factual and legal position it is clear
that the learned Tribunal was in error in affixing liability to pay
compensation upon the appellant. Therefore, the said finding of the
Tribunal is set aside and it is held that it is the Insurance Company who is
liable to pay the impugned compensation amount. Accordingly, FAO-3752-
2018 filed by the owner of the offending vehicle stands allowed as above.
QUANTUM:
15. As regards, quantum of compensation, the FAO-7200-2018,
has been filed by the injured-claimant seeking enhancement of
compensation.
16. Learned counsel for the claimant seeks enhancement of
compensation by submitting that in the accident in question, the claimant
has suffered 100% permanent disability. It is submitted that at the time of
accident, the claimant was only 26 years of age. Disability of the claimant
was duly proved from the comprehensive evidence on record. It had been
pleaded by the claimant that he was working as a Contractor of Electricity
Fittings, yet the learned Tribunal has taken income of the claimant on the
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lower side. Even though the claimant is 100% disabled, nothing has been
awarded towards Physiotherapy. The attendant, transportation charges and
special diet etc. have been given on the lower side. Income of the claimant
has been wrongly assessed on the lower side as only Rs.6,025/- per month,
which is for an unskilled worker. As claimant is 100% disabled, at least Rs.5
lakh ought to have been awarded towards pain and suffering. It is
accordingly prayed that the claimant appeal be allowed and the
compensation be enhanced.
17. Per contra, learned counsel for the Insurance Company
opposes submissions of the claimant and submits that the learned Tribunal
has already taken more than the Minimum Wages payable to an unskilled
worker; and therefore, no enhancement in income is liable to be made.
Learned counsel submits that the impugned Award suffers from no error;
and the present appeal deserves to be dismissed.
18. I have heard learned counsel for the parties. I find merit in the
submissions advanced on behalf of the injured-claimant.
19. It is undisputed fact on record that the claimant is 100%
disabled as is established from the Disability Certificate dated 15.07.2015
(Ex.P1) and Disability Certificate dated 06.09.2017 (Ex.P118). The Disability
Certificates were duly proven from the evidence of PW6 Dr. Ashwani Kumar.
Learned Tribunal has categorically noted in Para 25 of the Award that even
after two years "the claimant is unable to stand or sit independently and he
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needs physiotherapy.....the claimant Kuldeep is lying on bed in a vegetative
condition and he cannot perform his day-to-day routine work and requires
a permanent attendant to look after him.". As such, the Tribunal had
correctly calculated functional disability of the claimant as 100%.
20. It was the pleaded case of the claimant before the learned
Tribunal that prior to the accident, he was working as a Contractor of
Electricity Fittings and was earning Rs.15,000/- per month. However, the
claimant had failed to lead any evidence in this regard. As such, the Tribunal
had assessed notional income of the deceased as that of an unskilled
labourer as Rs.6,025/- per month on the basis of DC rates. No Income Tax
Returns or Bank Statements or no other documentary evidence was proved
by the claimant to prove his alleged income. I find no error in the same.
21. Age of the claimant was determined to be 26 years at the time
of accident, on the basis of his Aadhaar Card (Ex.P121), as per which his
year of the birth of the claimant was 1987. Accordingly, the learned Tribunal
had correctly applied multiplier of 17. The claimant had produced Medical
Bills for an amount of Rs.6,03,502/- (Ex.PW11/1 to Ex.PW11/13 and Ex.P9
to Ex.P109). which were duly reimbursed by the learned Tribunal.
Impugned Award shows that nothing has been given to the claimant by way
of Physiotherapy. Attendant charges have been given on the lower side.
Even special diet and transportation charges are on the lower side and are
liable to be enhanced.
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22. In view of the facts noted above, compensation payable to the
claimant is re-assessed in the following manner:-
Sr. Head of Amount as Amount ought to be
No. Compensation awarded by Ld. enhanced by High Court
Tribunal
1. Medical Rs.6,03,502/- Rs.6,03,502/-
Treatment
2. Loss of Income Rs.12,29,100/- Rs.12,29,100/-
(100% disability)
3. Attendant Rs.50,000/- Attendant charges @ Rs.
Charges 10,000/- per month;
+ multiplier of 17 =
(Rs.10,000/- x 12 x 17)
Rs.20,40,000/-
4. Pain and Rs.1,00,000/- Rs.3,00,000/-
Suffering
5. Physiotherapy Nil Rs4,500/- per month +
charges multiplier of 17 = (Rs.4,500/-
x 12 x 17) Rs.9,18,000/-
6. Transportation Nil ₹70,000/-
and special diet
Total Rs.19,82,602/- Rs.51,60,602
23. In view of the above discussion, both the appeals FAO-3752-
2018 and FAO-7200-2018 stand allowed; and respondent No.2/Insurance
Company is directed to make payment of asbove enhanced compensation
of Rs.51,60,602/- to claimant within the period of 8 weeks from the date of
order.
24. Pending application(s) if any also stand(s) disposed of.
20.01.2026 (Nidhi Gupta)
Sunena Judge
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
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