$~P-1 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Reserved on: 16.12.2025 Pronounced on: 19.02.2026 Uploaded on: 19.02.2026 + MAC.APP. 447/2017 & CM APPL. 2327/2019 RELIANCE GENERAL INSURANCE CO LTD. ..... Appellant Through: Ms. Prerna Mehta, Advocate. versus MOHD NAHID & ORS. ..... Respondents Through: Mr. S.N. Parashar & Mr. Ritik Singh, Advocates for R-1. CORAM: HON’BLE MR. JUSTICE PRATEEK JALAN JUDGMENT 1. By way of this appeal under Section 173 of the Motor Vehicle Act, 1988 [“MV Act”], the appellant-Reliance General Insurance Co. Ltd. [“the Insurance Company”] challenges an award dated 15.03.2017, passed by the Motor Accident Claims Tribunal [“the Tribunal”] in MAC No. 174/2014 [New No. 1399/2016], whereby the Tribunal awarded a sum of Rs.30,02,139/-, alongwith interest at the rate of 10% per annum, in favour of respondent No. 1, who was the claimant before the Tribunal. A. FACTS 2. The claim arose out of an accident which took place on 22.10.2013 at 11:30 AM, near Kasola Chowk on Delhi-Jaipur Road, National Highway-8. The claimant was travelling in a goods vehicle, i.e. a Canter [bearing registration No. HR-47B-2389] [“the offending vehicle”], which was being driven by Mr. Ramesh Kumar [respondent No. 2 herein]. The claimant’s allegation is that, due to the rash and negligent driving by respondent No. 2, the vehicle hit against a trolla from the back, resulting in the claimant sustaining severe injuries. 3. The claimant was treated at the General Hospital, Rewari, Haryana, and at the Jai Prakash Narayan Apex Trauma Centre, AIIMS, New Delhi. He was hospitalised from 22.10.2013 to 06.11.2013. The claimant’s injury included fracture of both bones in his left forearm, and extreme injuries in his left leg, resulting in above-knee amputation. Before the Tribunal, he placed on record a disability certificate dated 16.02.2015 [EX. PW 1/4], issued by the Guru Teg Bahadur Hospital, Delhi, which assessed his disability at 81% permanent locomotor disability in relation to his left upper limb and left lower limb. 4. The accident resulted in registration of an FIR bearing No. 245/13, dated 22.10.2013 at Police Station Kasola, District Rewari, Haryana. A chargesheet was also filed in the criminal proceedings against respondent No. 2. 5. The claimant filed a claim petition before the Tribunal, seeking compensation. The driver, owner and insurer of the offending vehicle, were arrayed as respondent Nos. 1 to 3 therein. The Tribunal found that the accident had occurred as a result of rash and negligent driving by respondent No. 2, and therefore awarded the sum of Rs.30,02,139/-, alongwith interest at the rate of 10% per annum, in favour of the claimant, under the following heads: Sr. No. Head Amount awarded by Tribunal 1. Compensation towards pain and suffering Rs.1,50,000/- 2. Compensation towards medical bills Rs. 15,989/- 3. Loss of earning capacity due to disability Rs.17,49,600/- 4. Loss of earning for a period of 6 months Rs. 72,000/- 5. Attendant charges for 5 months Rs. 17,500/- 6. Special diet and conveyance Rs. 35,000/- 7. Compensation towards loss of amenities and enjoyment of life Rs. 1,50,000/- 8. Compensation towards disfigurement Rs. 1,50,000/- 9. Compensation on account of artificial limb Rs. 6,12,050/- 10. Compensation on account of maintenance of artificial limb Rs. 50,000/- Total Rs. 30,02,139/- 6. Finding no material to show any violation of policy conditions, the Tribunal directed the Insurance Company to satisfy the claim. 7. The Insurance Company is in appeal. The claimant as well as the driver and owner of the offending vehicle have been impleaded as respondent Nos. 1, 2 and 3 respectively in this appeal. Although respondent Nos. 2 and 3 were served with notice of this appeal, as recorded in order dated 15.10.2018, and counsel filed vakalatnama on their behalf on 20.03.2018, the order sheets do not reveal any appearance on their behalf. B. SUBMISSIONS BY LEARNED COUNSEL FOR THE PARTIES 8. I have heard Ms. Prerna Mehta, learned counsel for the Insurance Company, and Mr. S.N. Parashar, learned counsel for the claimant. 9. Ms. Mehta’s principal contention was that the claimant was travelling in a goods vehicle as a gratuitous passenger, and was not covered by the terms of the insurance policy at all. She submitted that the Insurance Company should therefore have been absolved of any liability. According to Ms. Mehta, the evidence clearly revealed that the claimant was not travelling as a representative of the owner of the goods, so as to qualify for coverage under the insurance policy. 10. Without prejudice to her contention on liability, Ms. Mehta also submitted that the Tribunal had erroneously computed loss of income of the claimant by assessing his functional disability at 81%, the same figure at which his disability was assessed qua two limbs. In Ms. Mehta’s submission, such an assessment was contrary to the judgment of the Supreme Court in Raj Kumar v. Ajay Kumar & Anr.1. She also assailed the Tribunal’s computation on the basis of the claimant’s wages of Rs. 12,000/- per month, as it is entirely unsupported by evidence. She submitted that, at best the Tribunal could have assessed loss of income on the basis of minimum wages. 11. On the first point, Mr. Parashar submitted that the claimant was indeed the authorised representative of the owner of the goods, and would therefore fall within the terms of the insurance policy. In any event, he contended that, even assuming that the claimant was to be treated as a gratuitous passenger, the consequence would be that the Insurance Company would be entitled to recover the amount paid to the claimant, from the owner and driver of the offending vehicle. 12. Mr. Parashar also defended the Tribunal’s assessment of functional disability, referring to the claimant’s profession as a painter (whitewashing), which he can not perform anymore, as a result of the disabilities he has suffered. He, in fact, submitted that the Tribunal has under-estimated the compensation by omitting any enhancement of income on account of future prospects. 13. Learned counsel on both sides cited various judgments in support of their contentions, to which I shall refer at the appropriate juncture. C. QUESTIONS FOR DETERMINATION 14. The aforesaid arguments give rise to the following questions for determination. a. Was the claimant covered by the insurance policy in question? b. If not, what would be the consequence upon the liability of the Insurance Company towards the claimant? c. Does the quantum of compensation awarded by the Tribunal require interference in appeal? D. COVERAGE UNDER THE INSURANCE POLICY 15. The determination of this issue turns on an interpretation of the conditions of the insurance policy issued by the appellant in respect of the vehicle. A copy of the policy for the period 20.08.2013 to 19.08.2014 was available before the Tribunal as part of the proceedings in the criminal case, which were exhibited by the claimant as Ex.PW-1/6. 16. The following features of the policy are relevant for the present dispute. a) The policy specified “LCC including driver”2 as four. b) The limitations as to use of the vehicle included “use for carrying passengers in the vehicles; except employees (other than driver) not exceeding the number permitted in the registration document and coming under the purview of the Workmen’s Compensations Act, 1923”. c) The premium calculation included components of “LLP to Paid Driver/Cleaner/Conductor”, “LLP Paid Drivers”, and “Compulsory PA cover to Owner Driver”. 17. The registration certificate of the vehicle was also part of Ex.PW-1/6. It included the provision as follows: “13. Seating capacity + Driver 3” 18. Section 147 of the MV Act provides for the requirements of an insurance policy and limits of liability. It is reproduced hereinbelow: “147. Requirements of policies and limits of liability.—(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which— (a) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)— (i) against any liability which may be incurred by him in respect of the death of or bodily [injury to any person, including owner of the goods or his authorized representative carried in the vehicle] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place: xxxx xxxx xxxx xxxx (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:— (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand: Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. xxxx xxxx xxxx xxxx (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.”3 The said section was amended in 1994, to require a policy of insurance to cover liability towards the owner of goods carried in a vehicle, or his authorised representative. It has been thus interpreted in several decision of the Supreme Court, including inter alia in New India Assurance Co. Ltd. v. Asha Rani & Ors.4 and National Insurance Co. Ltd. v. Baljit Kaur & Ors.5. 19. In the present case, the claimant claimed coverage on the basis that he was the owner of the goods which were being carried in the vehicle, or the authorised representative of the owner. In the claim petition, the claimant asserted that he was going to HSIDC Balbal, Haryana, from Dharuhera in the offending vehicle, which “was loaded with goods which belong with the petitioner”. The claimant also filed an affidavit of evidence before the Tribunal, which included the statement that the offending vehicle was loaded with goods belonging to him. With regard to his vocation, he stated he was a painter [whitewasher] in the area of East Delhi. The claimant was cross-examined by learned counsel for the Insurance Company, in which he stated as follows: “…I am a Painter by profession. The alleged offending vehicle in which I was travelling was a Goods Carrying Canter. I along with two other passenger was sitting with driver in front seat. I do not know as to who are the other two persons who were also sitting with driver. The Canter was carrying my painting goods in it. I was going from Daruhera to Gharhi Bolani Chowk. I engaged the Canter to carry my goods. I have not placed on record any document pertaining to hiring of the said Canter. The other two persons travelling in the Canter boarded the Canter later on and the driver allowed them to travel after taking fare from them. The driver of the Canter ran away from the accident site after causing the accident. The driver did not sustain any injuries in the accident. I was taking the goods to a place called Hans Resort for white wash work. I had to white wash and paint the 20-25 rooms of the said Resort. I had engaged two Labours with me for doing the said white wash work. I do not have any document to show that I was assigned this work from Hans Resort. I used to earn Rs. 20-25000/per month. I have not placed on record any proof to this effect. I have still not placed on record my complete medical bills. It is wrong to suggest that I was travelling as a gratuitous passenger in the offending vehicle after paying the fare along with two other persons or that the goods in the Canter did not belong to me. It is wrong to suggest that I am deposing falsely.” 6 20. In the written statement filed by the Insurance Company, the Insurance Company disputed this position, and contended that the claimant was, in fact, travelling as a gratuitous passenger. Ms. Mehta submitted that the aforesaid evidence of the claimant was inconsistent with his statement, recorded under Section 161 of the Code of the Criminal Procedure, 1973 [“CrPC”], in which he stated he was working as a supervisor in New Paradise Company. Ms. Mehta submitted that this evidence was contrary to the claim before the Tribunal, to the extent that the claimant did not mention carrying any goods in the statement under Section 161 of the CrPC, and did not mention his employment with any other entity before the Tribunal. 21. While there is some dissimilarity in the two statements of the claimant – one under Section 161, and the second before the Tribunal - I do not find it sufficient to discredit the claimant’s testimony altogether. Even in his statement under Section 161 of the CrPC, he mentioned that he was engaged in carrying out painting and repair work at Hans Resort, although this was in the capacity of a supervisor employed by New Paradise Company. Most significantly, the claimant was not confronted with the alleged inconsistency in the course of cross-examination at all. Although general cross-examination was carried out as to the purpose of his travel, there was no cross-examination whatsoever, as to the alleged discrepancy between the Section 161 of the CrPC statement and the claim petition, or evidence before the Tribunal. The claimant maintained that he was carrying his goods in the vehicle, and denied that he was travelling as a gratuitous passenger. Without his testimony having been challenged in cross-examination at all, the Tribunal committed no error in proceeding on the basis of the evidence given by the claimant. Although the Tribunal has not elaborately discussed this aspect, its conclusion is recorded in paragraph 28 of the impugned award, to the effect that there was nothing on the record to show any violation of policy conditions. 22. In the course of her arguments, Ms. Mehta also submitted that two of the other victims of the same accident [the legal representatives of one passenger who died in the accident and another injured victim] had filed claim proceedings before the Tribunal in Rewari, in which only the driver and owner of the offending vehicle were held liable, and the Insurance Company was exonerated from liability. A copy of the award of the Tribunal in Rewari, dated 07.10.2016, has also been placed on record. It is clear therefrom that, as far as the other two victims are concerned, there was no suggestion that they were travelling as owners of the goods being carried in the vehicle or authorised representatives of the owner. This is a question of fact, which would differ from case to case, and I do not, therefore, find any reason to interfere with the award in the present case, simply because a different conclusion has been recorded with regard to other passengers. 23. In view of the Section 147 of the MV Act, as interpretated in Baljit Kaur, I am of the view that the present claimant was covered by the insurance policy in question. 24. It is therefore not necessary to enter into adjudication of question (b) formulated above, and I proceed to examine the contentions with regard to quantum of compensation E. QUANTUM OF COMPENSATION 25. The arguments of learned counsel on both sides centred around compensation awarded under the head of loss of income – for the period of treatment, as well as for loss of earning capacity in the future. i) Quantum of Income 26. The first element which requires determination is the quantum of the claimant’s income at the time of the accident. In the claim petition, he claimed an income of Rs. 20,000-22,000/- per month. The Tribunal assessed his income at Rs.12,000/- per month, observing as follows: “19. The testimony of PW-1 shows that he is doing work of white wash and earning Rs. 20-25,000/- per month. There is no income proof on record. The petitioner is self employed. It is a matter of common experience that a person engaged in a white wash work can easily earn a sum of Rs. 12,000/- per month. This income is taken by virtue of some guess work…..” 27. I am unable to uphold this assessment of income in the absence of any proof of income in the claimant’s case, or even any evidence with regard to the income of a person engaged in whitewashing work. The Tribunal ought to have based the assessment on the level of minimum wages, rather than “common experience” or “guess work”. In the course of hearing, learned counsel for the parties accepted that minimum wages for an unskilled worker in Delhi at the relevant time was Rs. 8,086/- per month. It is therefore not necessary to remand the matter to the Tribunal for re-assessment, particularly having regard to the fact that the accident occurred in the year 2013. I, therefore, hold that the loss of income payable to the claimant for the period of treatment and thereafter, ought to have been assessed on the basis that his income at the time of the accident was Rs.8,086/- per month. ii) Loss of Income during treatment 28. As far as loss of income during the period of treatment is concerned, the Tribunal awarded loss of income for the period of six months on the basis of its assessment of income at Rs. 12,000/- per month. 29. In view of the aforesaid discussion, the award under this head stands reduced from Rs. 72,000/- to Rs. 48,516/- [Rs. 8,086/- x 6]. iii) Assessment of functional disability 30. For computation of loss of earning capacity, two other contested factors must first be determined – level of functional disability and future prospects. 31. The assessment of functional disability requires a three-step process, as laid down by the Supreme Court in Raj Kumar: “13. Ascertainment of the effect of the permanent disability on the actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant could carry on in spite of the permanent disability and what he could not do as a result of the permanent disability (this is also relevant for awarding compensation under the head of loss of amenities of life). The second step is to ascertain his avocation, profession and nature of work before the accident, as also his age. The third step is to find out whether (i) the claimant is totally disabled from earning any kind of livelihood, or (ii) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, or (iii) whether he was prevented or restricted from discharging his previous activities and functions, but could carry on some other or lesser scale of activities and functions so that he continues to earn or can continue to earn his livelihood..” 32. In the present case, the claimant’s disability was assessed at 81% permanent disability in both his left limbs. His vocation as a painter/whitewasher was not disputed before the Tribunal. The Tribunal has computed loss of income at 81%, i.e. the same level as his physical disability in two limbs. 33. Although Ms. Mehta submitted that the loss of earning capacity has been over-estimated by the Tribunal, I find, to the contrary, that it has, in fact, been under-estimated. One of the examples discussed by the Supreme Court in Raj Kumar, was of amputation of the left hand. The Court observed as follows: “14. For example, if the left hand of a claimant is amputated, the permanent physical or functional disablement may be assessed around 60%. If the claimant was a driver or a carpenter, the actual loss of earning capacity may virtually be hundred percent, if he is neither able to drive or do carpentry. On the other hand, if the claimant was a clerk in government service, the loss of his left hand may not result in loss of employment and he may still be continued as a clerk as he could perform his clerical functions; and in that event the loss of earning capacity will not be 100% as in the case of a driver or carpenter, nor 60% which is the actual physical disability, but far less. In fact, there may not be any need to award any compensation under the head of "loss of future earnings", if the claimant continues in government service, though he may be awarded compensation under the head of loss of amenities as a consequence of losing his hand. Sometimes the injured claimant may be continued in service, but may not be found suitable for discharging the duties attached to the post or job which he was earlier holding, on account of his disability, and may therefore be shifted to some other suitable but lesser post with lesser emoluments, in which case there should be a limited award under the head of loss of future earning capacity, taking note of the reduced earning capacity.”7 34. The case of a painter like the claimant is, in my view, akin to the Supreme Court’s example of a driver or a carpenter. In the present case, although the amputation was of the claimant’s leg, his disability was also in his left arm. To carry on the work of paintings/whitewashing of walls, the use of both hands and both legs is imperative. I am therefore of the view that an assessment of 100% functional disability/loss of earning capacity would be appropriate in the present case. iv) Future Prospects 35. On the question of future prospects also, the claimant deserves some further relief. The Constitution Bench of Supreme Court in National Insurance Company Ltd. v. Pranay Sethi & Ors.8, clearly held that loss of income must be enhanced for future prospects, at a level depending upon the age and nature of the victim’s work. The same principle has also been applied in personal injury cases9. 36. In the present case, the victim had admittedly crossed the age of 40 years as on the date of the accident. He would therefore be entitled to 25% enhancement of future income10. v) Assessment of loss of future income 37. As a result of the above discussion, the compensation for loss of future income is recomputed as follows: Heads Amount Monthly Income [A] Rs. 8,086/- Annual income [A x 12 = B] Rs. 97,032 Addition of future prospects [25% of B = C] Rs. 24,258/- Annual income (including future prospects) [B + C = D] Rs. 1,21,290/- Loss of future earnings after accounting for functional disability (per annum) [100% of D = E] Rs. 1,21,290/- Loss of future income (after applying the applicable multiplier) [D x 15] Rs. 18,19,350/- 38. Loss of future income is therefore enhanced from Rs.17,49,600/- to Rs. 18,19,350/-. F. CONCLUSION 39. As the result of the above discussion, the impugned award is modified to the following extent: S. No. Heads Amount awarded by the Tribunal Amount awarded by the Court Difference (+/-) 1. Loss of earning capacity due to disability Rs.17,49,600/- Rs.18,19,350/- (+) Rs. 69,750/- 2. Loss of earning for a period of 6 months Rs. 72,000/- Rs. 48,516/- (-) Rs. 23,484/- TOTAL Rs. 18,21,600/- Rs.18,67,866/- (+) Rs.46,266/- 40. The impugned award, in the present case, thus stands enhanced by Rs. 46,266/- from Rs. 30,02,139/- to Rs. 30,48,405/-. 41. It may be noted that this judgment results in an enhancement of the awarded amount, even in the absence of a cross-objection or cross-appeal by the claimant. Such a course, is in my view, permitted, particularly having regard to the judgment of the Supreme Court in Surekha & Ors. v. Santosh & Ors.11. I have had occasion to consider this issue in detail in Oriental Insurance Co. Ltd. v. Shanti & Ors.12. 42. By order dated 12.05.2017, the Insurance Company was granted stay of execution of the impugned award, subject to deposit of the awarded amount in this Court. The interest on the deposit was released to the claimant, pursuant to order dated 20.03.2018. The Tribunal’s order directed disbursement of the awarded amount over a period of 11 years, which have not yet lapsed. 43. As the proceedings have resulted in enhancement of the award, the following directions are passed: a) The amount of the award be deposited by the Insurance Company with the Tribunal, within a period of 8 weeks, alongwith interest at the rate of 9% per annum from the date of filing of the petition until deposit. b) The deposited amount lying in this Court, alongwith accrued interest therein, be transferred to the Tribunal forthwith. c) The amounts which would already have been released to the claimants, under the impugned award of the Tribunal, be released to him forthwith. d) The amount which is to be deposited pursuant to paragraph 43(a) above, may also be released to the claimant forthwith. e) The amount which was to be kept in further fixed deposits under the impugned award shall be disbursed in terms of the directions contained therein. 44. The appeal, alongwith the pending application, stands disposed of with the aforesaid directions. 45. Statutory deposit be refunded to the Insurance Company. PRATEEK JALAN, J FEBRUARY 19, 2026 ‘PV/Ainesh’/ 1 (2011) 1 SCC 343 [hereinafter, “Raj Kumar”]. 2 Licensed carrying capacity, including driver. 3 Emphasis supplied. 4 (2003) 2 SCC 223 [hereinafter, “Asha Rani”]. 5 (2004) 2 SCC 1 [hereinafter, “Baljit Kaur”]. 6 Emphasis supplied. 7 Emphasis supplied. 8 (2017) 16 SCC 680 [hereinafter, “Pranay Sethi”]. 9 Sidram v. United India Insurance Co. Ltd., [(2023) 3 SCC 439], paragraph 31. 10 Pranay Sethi, paragraph 59.4. 11 (2021) 16 SCC 467. 12 MAC.APP. 891/2013, decided on 11.12.2025 [hereinafter, “Shanti”]. --------------- ------------------------------------------------------------ --------------- ------------------------------------------------------------ MAC.APP. 447/2017 Page 16 of 16