Case Background
This case arises from a fatal road accident on 13.07.2011 in Assam. The deceased, Shaini Sah, was working as a handyman (khalasi) on a goods vehicle owned by Opposite Party No. 1.
The vehicle was transporting EFSW pipes from Shivsagar to Duliaganj (Assam) via National Highway No. 37. Near Tiloi, close to Kali Mandir in Assam, the loaded pipes allegedly became loose, hit the driver’s cabin with great force, and caused the instant death of both the driver, Raj Kishore Sah @ Kumar, and the khalasi, Shaini Sah.
The incident was reported on the same day as Moran P.S. Case No. 318 of 2011. Postmortem of the deceased was conducted at Assam Medical College, Dibrugarh, by an Assistant Professor in Forensic Medicine. The Motor Vehicle Inspector from Dibrugarh inspected the vehicle on 13.07.2011 and confirmed the accident in his report. An Accident Information Report was also prepared by the Officer-in-Charge of Moran Police Station.
The mother, wife, two minor daughters (through their mother), and father of the deceased filed M.V. Claim Case No. 35 of 2011 (CIS No. 532 of 2013) before the Motor Vehicle Accident Claim Tribunal, Madhepura. They claimed that the accident occurred due to rash and negligent driving and that the deceased, aged about 30 years, was working as a handyman earning Rs. 6,000/- per month, which he used to maintain his family.
The claimants sought Rs. 13,96,000/- on account of loss of dependency, loss of love and affection, loss of consortium and funeral expenses, with interest at 12% per annum.
Opposite Party No. 1 (vehicle owner) and Opposite Party No. 2 (Reliance General Insurance Company Limited) did not appear before the Tribunal and were proceeded ex parte. After evidence, the Tribunal allowed the claim, holding that the deceased died in an accident arising out of truck No. CG-04JA-0867 due to breaking of the chain by which pipes were tied on the truck.
By judgment dated 28.02.2017 and award dated 07.06.2017, the Tribunal granted total compensation of Rs. 18,83,000/- with 9% simple interest from 16.08.2011 (date of filing) until realization, to be paid by the Insurance Company, after adjusting any interim compensation paid under Section 140 of the Motor Vehicles Act, 1988.
The Insurance Company, aggrieved by the quantum, filed Miscellaneous Appeal No. 712 of 2018 under Section 173 of the Motor Vehicles Act before the Patna High Court.
What the Court Examined and Decided
The appeal came before Hon’ble Mr. Justice Ramesh Chand Malviya of the Patna High Court. The Court heard arguments from both sides on the maintainability of the appeal and on the correctness of the compensation calculations.
The Insurance Company did not dispute that the accident occurred or that it was liable to pay. Its dispute was only about how much compensation should be paid, not about avoiding liability altogether.
Arguments of the Insurance Company
Counsel for the appellant-Insurance Company argued that:
First, apart from oral evidence, there was no documentary proof of the deceased’s income. In such cases, courts normally take notional income or minimum wages. It was argued that notional income of Rs. 3,000/- per month should be applied, relying on the Supreme Court judgment in Laxmi Devi & Ors. v. Md. Tabbar and Anr., 2008 ACJ 1488, and that minimum wages at the time were less than Rs. 100/- per day for a handyman and less than Rs. 120/- per day for a driver.
The appellant cited several decisions to say that if there is no documentary proof of income, notional income or minimum wages must be adopted: Kirti and Anr. v. Oriental Insurance Company Ltd., 2021 ACJ 1; Sanichari Devi & Anr. v. Sanjay Kumar Yadav & Anr., 2012 (4) BBCJ 429; 2012 Supreme (Pat) 685; and Dukhni Devi v. Branch Manager, National Insurance Company Ltd., 2019 ACJ 2691.
Second, the appellant submitted that the Tribunal wrongly:
- assessed monthly income as Rs. 6,000/- instead of Rs. 3,000/-;
- applied a multiplier of 18, whereas for age 30, multiplier 17 should be used as per applicable law;
- allowed future prospects at 50%, instead of 40% as laid down in National Insurance Company Ltd. v. Pranay Sethi, (2017) 16 SCC 680;
- granted Rs. 1,00,000/- towards spousal consortium and additional amounts under loss of estate, loss of love and affection and guardianship, contrary to Pranay Sethi (Constitution Bench) and subsequent judgments;
- awarded funeral expenses on the higher side.
Third, it was argued that compensation must be “just” and not a “bonanza”, and that interest cannot be awarded on future prospects and conventional heads. The appellant relied on United India Insurance Company Ltd. v. Inderjeet & Ors., 2024 Supreme (J&K) 170, and Oriental Insurance Company Ltd. v. Smt. Rumi Barman & Ors., MAC App. 77 of 2017 (Gauhati High Court), to support the contention that interest should be only on the basic income-linked component, not on future prospects or conventional heads.
The appellant also gave its own calculation showing that the compensation should be Rs. 9,28,600/- based on Rs. 3,000/- monthly income, 1/4th personal deduction, multiplier 17, 40% future prospects, and standard amounts for consortium, funeral and loss of estate, with interest at 6% only on the basic loss of dependency.
On the question of whether the insurer could challenge quantum at all, the appellant relied on judgments such as United India Insurance Company Ltd. v. Shila Dutta & Ors., 2011 (7) Supreme 129, Bajaj Allianz General Insurance Company Ltd. v. Kamla Sen, 2014 ACJ 2369, National Insurance Company Ltd. v. Manju Majumder & Anr., Civil Appeal No. 7632 of 2012, and The New India Assurance Company Ltd. v. Krishna Sakharam Baing & Ors., Civil Appeal No. 252 of 2025, to contend that when the insurer is a party in the claim petition, it can contest even on quantum.
Arguments of the Claimants
Counsel for the respondents (claimants) raised a preliminary objection that the appeal was not maintainable because the insurer had not obtained permission under Section 170 of the Motor Vehicles Act from the Tribunal.
Reliance was placed on the three-judge bench judgment of the Supreme Court in National Insurance Company Limited v. Nicolletta Rohtagi and others, 2002 ACJ 1950, which held that an insurance company cannot challenge the quantum of compensation unless it has obtained permission under Section 170. It was argued that this view was approved in Shankarayya and another v. United India Insurance Company Limited and another, AIR 1998 SC 2968, where the Supreme Court held that mere impleading of the insurer does not entitle it to a wider defence without Section 170 permission.
The respondents also cited this Court’s judgment in Chairman I.C.I.C.I. Lombard General Insurance Company Ltd. v. Ranju Devi, 2023 ACJ 363, where an appeal by an insurer was held not maintainable without Section 170 permission.
On facts, the claimants maintained that:
- The deceased was paid Rs. 6,000/- per month as khalasi by Opposite Party No. 1, supported by oral evidence of CW-1, CW-2 and CW-3.
- The Insurance Company did not effectively rebut this evidence and only made a bare denial.
- In the unorganised sector, it is unrealistic to expect documentary proof of wages, and oral evidence should be accepted.
For this, they relied on Supreme Court decisions such as Sanjay Kumar v. Ashok Kumar, 2014 (1) BBCJ 273 (SC); Ramchandrappa v. Manager, Royal Sundaram Alliance Insurance Company Limited, (2011) 13 SCC 236; and Chameli Devi v. Jivrail Mian, 2019 ACJ 3011, where the Court accepted oral evidence of income of unskilled or informal workers, noting that such persons generally cannot produce wage slips or formal records.
They further argued that notices were duly sent to the insurer at the correct address by registered post, as reflected in the Tribunal orders dated 12.03.2013, 12.04.2013 and 13.05.2013 and the lower court record. Since the notices were not returned, service had to be deemed sufficient.
Court’s View on Maintainability
The Patna High Court first addressed whether the insurer’s appeal was maintainable without Section 170 permission. The Court observed that in this case, the Insurance Company was not trying to avoid or exclude its liability, but only sought determination of the extent of liability.
The Court held that the statutory restrictions on the insurer’s defences under Section 149(2) and the requirement of Section 170 mainly apply when the insurer wants to avoid liability altogether. Where the insurer admits its liability to pay and only disputes the quantum, the appeal is maintainable. On this basis, the Court held that the present appeal was maintainable.
Thus, the only issue left for decision was whether the quantum of compensation fixed by the Tribunal was correct or needed modification.
Re-assessment of Income and Compensation
The Court noted that the employer of the deceased had not been examined to prove employment and salary. The claim that the deceased earned Rs. 6,000/- per month was not supported by documentary evidence.
The Court reaffirmed the settled principle that where the income of the deceased is not established, loss of dependency is to be calculated on the basis of minimum wages for unskilled labour. The Court found that the minimum wages figure at the relevant time appeared to be approximately Rs. 3,000/- per month.
The Court distinguished the judgment in Chameli Devi v. Jivrail Mian because that case involved a skilled person (carpenter), whereas here the deceased was an unskilled khalasi and his employment and salary were not sufficiently proved.
Accordingly, the Court fixed the monthly income at Rs. 3,000/-. The steps adopted by the Court were:
- Monthly income: Rs. 3,000/-
- Annual income: Rs. 36,000/- (Rs. 3,000 x 12)
- Future prospects: 40% addition, as per para 59.4 of Pranay Sethi, because the deceased was 30 years old and not shown to be in permanent employment, resulting in enhanced annual income of Rs. 50,400/- (Rs. 36,000 + Rs. 14,400).
- Personal and living expenses: 1/4th deduction, as there were five dependents (wife, two minor children, mother and father), deducting Rs. 12,600/- and leaving Rs. 37,800/- as annual contribution to family.
- Multiplier: 17, applicable for age group 26–30, as per Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, read with Pranay Sethi.
On this basis, the Court computed loss of dependency as Rs. 37,800 x 17 = Rs. 6,42,600/-.
Conventional Heads and Consortium
The Court further applied the law laid down in Pranay Sethi, Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130, United India Insurance Company Ltd. v. Satindar Kaur @ Satwinder Kaur, (2021) 11 SCC 780, and Rojline Nayak & Ors. v. Ajit Sahoo & Ors., 2024 SCC OnLine SC 1901 to reassess amounts under conventional heads.
It held that:
- Loss of estate: Rs. 15,000/- with 10% enhancement twice (as per indexation pattern applied by the Supreme Court) = Rs. 18,150/-.
- Funeral expenses: Rs. 15,000/- with 10% enhancement twice = Rs. 18,150/-.
- Loss of consortium: Rs. 40,000/- per dependent, with 10% enhancement twice, giving Rs. 48,400/- per dependent. Since there were five dependents, total consortium = Rs. 48,400 x 5 = Rs. 2,42,800/-.
Finally, the Court summed up:
- Loss of dependency: Rs. 6,42,600/-
- Loss of estate: Rs. 18,150/-
- Loss of consortium: Rs. 2,42,800/-
- Funeral expenses: Rs. 18,150/-
- Total compensation: Rs. 9,21,700/-
Modification of Interest and Final Order
The Court modified the Tribunal’s judgment and award to the above total of Rs. 9,21,700/-. It further ordered that 9% annual interest would be payable only on the “income” portion (i.e., loss of dependency) from the date of filing of the claim petition, and not on the future prospects or conventional heads, in line with the insurer’s contention and higher court guidance.
With this modification, the appeal was disposed of. The Court directed the office to send back the trial court records and a copy of the judgment to the Tribunal for necessary compliance.
Why This Judgment Matters
This judgment is important for accident claimants and insurance companies alike, especially in Bihar, for several reasons.
First, the Patna High Court has reaffirmed that where income is not clearly proved, courts will fall back on minimum wages for unskilled labour. Families of workers in the unorganised sector should understand that mere oral assertion of a higher income may not always be accepted without some supporting evidence.
Second, the Court strictly applied the Supreme Court’s framework in Pranay Sethi and Sarla Verma on:
- choosing the correct multiplier based on age;
- fixing future prospects (40% here) for non-permanent employees;
- standardising amounts for loss of estate, funeral expenses and consortium, with modest periodic enhancements.
This brings clarity and consistency in how compensation is calculated, reducing wide variations between Tribunals.
Third, the Court clarified that an insurer can maintain an appeal to correct the quantum of compensation when it accepts liability but disputes only the extent. This is significant for future motor accident appeals where insurance companies challenge excessive awards.
For victims’ families, the decision shows that while courts are sympathetic and recognise the social purpose of the Motor Vehicles Act, they will still test income claims and follow the structured formula of the Supreme Court to ensure that compensation is “just” rather than a windfall.
Legal Issues and Answers
- Issue: Can the Insurance Company file an appeal challenging the quantum of compensation without permission under Section 170 of the Motor Vehicles Act?
Answer: Yes. The Court held that where the insurer is not seeking to avoid liability but only to determine the extent of liability (quantum), the appeal is maintainable even without Section 170 permission. - Issue: Was the Tribunal’s assessment of income, multiplier, future prospects and conventional heads legally correct?
Answer: No. The Court held that in absence of proof of Rs. 6,000/- monthly income, minimum wages of Rs. 3,000/- per month should be taken; multiplier 17 and 40% future prospects should apply for a 30-year-old, and conventional heads must follow the limits set in Pranay Sethi and subsequent Supreme Court decisions. - Issue: What is the just compensation payable to the dependents of the deceased?
Answer: The High Court held that the just compensation is Rs. 9,21,700/- in total, with 9% interest only on the loss of dependency portion from the date of filing.
Cases Cited by the Court
- National Insurance Company Limited v. Pranay Sethi and others, (2017) 16 SCC 680
- Sarla Verma and Ors. v. Delhi Transport Corporation and Anr., (2009) 6 SCC 121
- Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130
- United India Insurance Company Ltd. v. Satindar Kaur @ Satwinder Kaur and Ors., (2021) 11 SCC 780
- Rojline Nayak and Ors. v. Ajit Sahoo and Ors., 2024 SCC OnLine SC 1901
- Laxmi Devi & Ors. v. Md. Tabbar and Anr., 2008 ACJ 1488
- Kirti and Anr. v. Oriental Insurance Company Ltd., 2021 ACJ 1
- Sanichari Devi & Anr. v. Sanjay Kumar Yadav & Anr., 2012 (4) BBCJ 429; 2012 Supreme (Pat) 685
- Dukhni Devi v. Branch Manager, National Insurance Company Ltd., 2019 ACJ 2691
- United India Insurance Company Ltd. v. Inderjeet & Ors., 2024 Supreme (J&K) 170
- Oriental Insurance Company Ltd. v. Smt. Rumi Barman & Ors., MAC App. 77 of 2017 (Gauhati High Court)
- United India Insurance Company Ltd. v. Shila Dutta & Ors., 2011 (7) Supreme 129
- Bajaj Allianz General Insurance Company Ltd. v. Kamla Sen, 2014 ACJ 2369
- National Insurance Company Ltd. v. Manju Majumder & Anr., Civil Appeal No. 7632 of 2012
- The New India Assurance Company Ltd. v. Krishna Sakharam Baing & Ors., Civil Appeal No. 252 of 2025
- National Insurance Company Limited v. Nicolletta Rohtagi and others, 2002 ACJ 1950
- Shankarayya and another v. United India Insurance Company Limited and another, AIR 1998 SC 2968
- Chairman I.C.I.C.I. Lombard General Insurance Company Ltd v. Ranju Devi, 2023 ACJ 363
- State of Bihar v. Kalika Kuer, (2003) 5 SCC 448
- Sanjay Kumar v. Ashok Kumar, 2014 (1) BBCJ 273 (SC)
- Ramchandrappa v. Manager, Royal Sundaram Alliance Insurance Company Limited, (2011) 13 SCC 236
- Chameli Devi v. Jivrail Mian, 2019 ACJ 3011
Case Details
Case Number: Miscellaneous Appeal No. 712 of 2018
Case Title: Chairman, Reliance General Insurance Company Limited v. Kaushalya Devi & Ors.
Citation: 2025 (3) PLJR 290
Coram: Hon’ble Mr. Justice Ramesh Chand Malviya
Advocates:
- For the Appellant (Insurance Company): Mr. Durgesh Kumar Singh, Advocate; Mr. Abhijeet Kumar Singh, Advocate
- For the Respondents (Claimants): Mr. Surya Narayan Yadav, Advocate
Nature of the Case: Miscellaneous Appeal under Section 173 of the Motor Vehicles Act, 1988, against award of Motor Vehicle Accident Claim Tribunal (fatal accident claim).
Impugned Tribunal Case: M.V. Claim Case No. 35 of 2011 (CIS No. 532 of 2013), District Judge-cum-Motor Vehicle Accident Claim Tribunal, Madhepura
Accident Date: 13.07.2011
High Court Judgment Date: 24.06.2025
Link to Judgment: https://patnahighcourt.gov.in/viewjudgment/MiM3MTIjMjAxOCMxI04=-Blct31Vqe–am1–8=
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