Allahabad High Court

THE ORIENTAL INSURANCE CO. LTD.versusSMT. AMNA @ MUNNI AND OTHERS

Decided: 11 May 2026
Bench: PANKAJ BHATIA

Holding

The tribunal’s award based on notional income is set aside, compensation is recomputed on actual income, and the insurer is liable to pay 50% of the total amount; both appeals are dismissed.

Summary

The husband of the first respondent died in a road accident on 04.02.2007 involving an Alto car he was driving and a truck insured by Oriental Insurance Co. Ltd. The Motor Accident Claims Tribunal held the truck driver 50% negligent and awarded compensation based on a notional monthly income of Rs.3,000 for the deceased, applying a multiplier of 13 and ordering the insurer to pay half the amount. The insurer appealed, arguing that a five‑day FIR delay, the driver’s LMV‑only licence, and the tribunal’s disregard of the deceased’s actual income tax return rendered the award unsustainable. The High Court held that the FIR delay was not inordinate, the licence issue did not affect liability, and the tribunal erred in treating the income as notional when a statutory income tax return was filed; consequently, it set aside the tribunal’s award, recomputed compensation using the actual income, and directed the insurer to pay 50% of Rs.13,70,125 with interest. Both the primary appeal (FAFO No.1888) and the connected appeal concerning a Rs.20,000 medical expense award (FAFO No.1887) were dismissed.

Issues considered

Whether a five‑day delay in lodging the FIR defeats the claim under the Motor Vehicle Act.
Whether the truck driver’s licence restriction to LMV vehicles constitutes a breach of policy conditions affecting insurer liability.
Whether the tribunal erred in treating the deceased’s income as notional despite the existence of an income‑tax return.
Determination of the correct quantum of compensation and the insurer’s share under contributory negligence.
Whether the award of Rs.20,000 for medical expenses in the connected appeal warrants interference.

Legislation cited

Motor Vehicle Act — s. 168

Subjects

motor accident
contributory negligence
insurance liability
compensation quantum
income tax return
FIR delay
policy violation
Motor Accident Claims Tribunal

Judgment

HIGH COURT OF JUDICATURE AT ALLAHABAD
FIRST APPEAL FROM ORDER No. - 1888 of 2010

The Oriental Insurance Co. Ltd.
.....Appellant(s)
Versus

Smt. Amna @ Munni And Others
.....Respondent(s)

Counsel for Appellant(s) : Siddarth Jaiswal
Counsel for Respondent(s) : Ajay Kumar Singh, Lal Chand Sahu

Along with :
1. First Appeal From Order No. 1887 of 2010:
The Oriental Insurance Co. Ltd.
Versus
Smt. Vilkesh @ Sania Begum and others

Court No. - 50
HON'BLE PANKAJ BHATIA, J.

1. Heard Sri Siddarth Jaiswal, learned Counsel for the appellant and Sri
Lal Chand Sahu, learned Counsel for the respondents-claimants.

2. The present appeal has been preferred by the appellant challenging an
award dated 09.03.2010 whereby, the appellant was directed to pay half
of the amount awarded to the claimants on account of the death of the
husband of the respondent no.1.

3. The facts in brief are that the husband of the respondent no.1 died in an
accident, which took place on 04.02.2007. As the accident involved an
Alto Car being driven by the deceased as well as the truck bearing
No.UP11B0507, which was insured by the present appellant.

4. A plea was taken that there was a contributory negligence, which was
upheld and the negligence of the truck was held to be 50%. Based upon
the said findings recorded by the Tribunal, the award was passed treating
the income of the deceased at Rs.3,000/- per month, which was a notional
income, on which, 1/3rd was deducted towards personal expenses and as
the age of the deceased was 48 years, multiplier of 13 was applied and
FAFO No. 1888 of 2010
2

compensation was awarded. It was further awarded that 50% of the total
compensation shall be paid by the appellant herein and rest of the amount
of 50% shall be paid by the Insurance Company of the Alto Car, which
was driven by the deceased at the time of accident.

5. Learned Counsel for the appellant argues that there was a delay of 5
days in lodging of the FIR and the final report had been filed, which was
not brought on record or challenge by the claimants, thus, the claim
petition deserves to be dismissed. It is also argued that the driving license
of the truck driver demonstrates that the driver was not authorized to drive
HGV vehicle. The driving license of the truck driver was for LMV
(private) vehicles, thus, there was a violation of the condition of the
policy.

6. The Counsel for the respondents-claimants on the other hand states that
although he has filed a cross appeal for enhancement of the compensation,
in case the grievance of the enhancement is considered in the present
appeal, he would not press the cross appeal.

7. Considering the submissions made at the Bar, the first submission with
regard to the delay in lodging the FIR, cannot be held to be fatal for the
claim, as the delay of five days cannot be said to be 'inordinate' in the
facts of the case. Non challenge of final report also has no consequences
of the claim, which is to be decided in terms of the mandate of Section
168 of the Motor Vehicle Act. The third submission with regard to the
driver being authorized only to drive LMV (Private) vehicles and not
HGV vehicles. The tribunal has recorded a finding based upon a license,
which was filed. Prima facie, there is no material to suggest that filing on
that count is bad in law. However, in any case, violation of the terms and
conditions of the policy only authorizes the Insurance Company to pay
and recovery.

8. As regards the quantum of compensation, an income tax return was
filed in the year 2006-2007 showing his income at Rs.105150/-, however,
the same was disbelieved by the Tribunal only on the ground that the tax
paid on the said income was not depicted and the returns of earlier years
have not been filed, thus, the income was treated as notional income of
FAFO No. 1888 of 2010
3

Rs.3,000/- per month.

9. The Counsel for the respondent-claimants argues that once the income
return was filed, which is a statutory documents, irrespective of the
payment of income tax, the factum of the income stood established and
merely because, the returns of the earlier years have not been filed, the
same could have no consequence.

10. Before the Tribunal, the documentary evidence in the form of ITR had
been presented and the reasons for ignoring the same are wholly
irrelevant. Thus, there was no basis for the Tribunal to form a view that
the income of the deceased would be a notional income of Rs.3,000/-.
Thus to that extent, the award of the tribunal deserves to be set aside and
the compensation, to which the claimants are entitled, is worked out as
under:

Sl. Compensation
Head
No. awarded
Income of the deceased as per the ITR 2006-
1. Rs.1,05,150/- per year
07
Adding 25% in the light of the judgement in
2. Rs.1,31,437.5
Pranay Sethi's case (supra)
3. Net yearly income Rs.1,31,437.5/-
Rs.1,31,437.5 x 1/3rd =
Rs.43,812.50
After deduction :
4. Deducting 1/3rd towards personal expenses
Rs.1,31,437.50 - Rs.
43,812.50 =Rs.87,625/-

Rs.87,625 x 13 =
5. Applying multiplier of '13'
Rs.11,39,125/-

Amount under conventional heads:
Rs.18,500 +
Rs.18,500 +
(i) loss of estate Rs.18,500/-
6. Rs.1,94,000 =
(ii) funeral expenses Rs.18,500/- as per
Pranay Sethi's case (supra) Rs.2,31,000/-
(iii) loss of consortium Rs.48,500/- per
FAFO No. 1888 of 2010
4

person (Rs.48,500 x 4) as per Magma
General Insurance Company Limited (supra)
Total amount of compensation Rs.11,39,125
7. + Rs.2,31,000/-
Rs.13,70,125/-

11. Being the contributory negligence, the appellant-Insurance Company
is directed to pay 50% of the total compensation to the claimants within a
period of three months along with interest @ 7% from the date of claim
till actual payment/ realisation.

12. Any amount already paid as compensation by the appellant-Insurance
Company shall be deducted from the aforesaid amount to be paid to the
claimants.

13. The amount, if any, deposited herein shall be transmitted to the
tribunal concerned for being paid to the respondents-claimants in
accordance with law.

14. The amount shall be paid through RTGS by the Tribunal directly in
the account of the claimants. In case, the bank account contains the details
of anybody other than the family members of the claimants, the amount
shall not be deposited in that account and the claimants would be required
to open a bank account either singly or jointly with family members only
in view of the law as laid down by the Hon'ble Supreme Court in para
17.1 of Parminder Singh vs Honey Goyal and others: 2025 LiveLaw (SC)
318 and in para 9 of Suo Motu Writ Petition (C) No.7 of 2024 In
Re:Compensation Amounts Deposited with Motor Accident Claims
Tribunals and Labour Courts.

15. The appeal being FAFO No.1888 of 2010 filed by the Insurance
Company is dismissed.

16. In case, the appellant-Insurance Company establishes the violation of
condition, it will be open to the appellant to recover the said amount by
initiating appropriate proceedings.

17. The connect appeal being FAFO No.1887 of 2010 has been filed by
the appellant-Insurance Company challenging the award of Rs.20,000/-,
FAFO No. 1888 of 2010
5

out of which, 50% is to be paid by the appellant to the claimants towards
the medical expenses to the injured.

18. Considering the nature of the award of Rs.10,000/- directed to be paid
to the injured and the amount being meager, no interference is called for.

19. The FAFO No.1887 of 2010 is also dismissed.

(Pankaj Bhatia,J.)
May 12, 2026
akverma

Digitally signed by :-
ASHOK KUMAR VERMA
High Court of Judicature at Allahabad

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