Allahabad High Court

THE ORIENTAL INSURANCE CO. LTD.versusARYA PRASAD PANDEY AND OTHERS

Decided: 6 May 2026
Bench: PANKAJ BHATIA

Holding

The court held that despite the dishonoured cheque, the insurer was liable under a valid insurance policy and the compensation award as calculated was proper.

Summary

A fourteen‑year‑old boy died in a road accident involving a truck, leading the claimants (the deceased’s family) to file a claim against The Oriental Insurance Co. Ltd. The insurer argued that the vehicle was not insured at the time of the accident and that a cheque issued by the owner was dishonoured, contending it was not liable for payment. The claimants, relying on a recent Supreme Court decision (Devendra Kumar Tripathi v. Oriental Insurance), argued that the compensation awarded was inadequate. The owner, in a cross‑appeal, contended that the dishonoured cheque did not extinguish his liability, citing National Insurance Co. Ltd. v. Balkar Ram. The court rejected the insurer’s claim of non‑liability, held that a valid policy existed, and affirmed the award of compensation calculated on the basis of Rs.5,400 per month with a 40 % increase for future prospects, plus heads for loss of estate, funeral expenses and loss of consortium, totaling Rs.8,14,400 with interest. The cross‑objection of the owner was dismissed, and all appeals and the cross‑objection were disposed of.

Issues considered

The insurer’s liability when the vehicle was allegedly uninsured at the time of the accident
Whether a dishonoured cheque by the owner bars the insurer’s obligation to pay the claim
The adequacy and quantum of compensation for the death of a minor

Subjects

insurance liability
death of minor
compensation quantum
dishonoured cheque
policy validity
court award

Judgment

HIGH COURT OF JUDICATURE AT ALLAHABAD
FIRST APPEAL FROM ORDER No. - 3030 of 2012

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

Arya Prasad Pandey And Others
.....Respondent(s)

Counsel for Appellant(s) : Satish Kishore Kakkar, Sumit Kakkar,
S.K. Kakkar
Counsel for Respondent(s) : Amit Kumar Singh, Amit Kumar Sinha,
Ram Singh

Along with :
1. First Appeal From Order No. 3105 of 2012:
Arya Prasad Pandey and another
Versus
The Oriental Insurance Co. Ltd. and another

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

1. As both the appeals challenges the same judgment and award dated
07.04.2012, hence are being decided by this common judgment.

2. Heard Sri Sumit Kakkar, the counsel for the appellant Insurance
Company, Sri Amit Kumar Sinha who appears for the claimants and has
also filed the cross appeal for enhancement of the compensation as well as
Sri Ram Singh, who appears for the owner and challenges the award
insofar as it grants the liberty to pay and recover the amounts. Sri
Abhinav Shukla appears for the respondent no.1 in appeal no.3105 of
2012.

3. The facts, in brief, are that a fourteen years old boy died on account of
an accident with a Truck, which led to filing of a Claim Petition. The
submission of the counsel for the appellant Insurance Company is that the
vehicle was not insured on the date of the incident and the cheque given
by the owner stood dishonored on the said date. Thus, the insurance
company is not liable for payment of said amount. It is further argued that
FAFO No. 3030 of 2012
2

the quantum is on the higher side.

4. The counsel for the respondents claimants argues that the amount
awarded is wholly inadequate and places reliance on the judgment of the
Supreme Court in the case of Devendra Kumar Tripathi and others vs.
The Oriental Insurance Company Limited and another; Special
Leave Petition (C) No.2195 of 2024 decided on 15.12.2025.

5. The counsel for the owner, while arguing his cross appeal argues that
although the cheque was dishonored, the same itself would not passion
the liability on the owner. Reliance is placed upon the judgement of the
Supreme Court in the case of National Insurance Company Limited vs.
Balkar Ram and others; 2013 (5) AWC 5046 (SC).

6. Considering the submissions made at the Bar, admittedly, the Policy
was issued by the Insurance Company. As only because of cheque given
by the owner got dishonored, the Insurance Company is denying its right
to pay the amount. On perusal of the award impugned, it is clear that the
said contention is accepted and the Insurance Company has been granted
the right to pay and recover from the owner. Thus, the first submission
merits rejection and is accordingly rejected.

7. As regards the compensation, as admittedly the deceased child was
aged about 15 years, taking a cue from the judgment of the Supreme
Court in the case of Devendra Kumar Tripathi (supra), the amount
payable is assessed at Rs.5400/- per moth with a 40% increase for future
prospects. The amount awarded shall work as under:

Sl. Compensation
Head
No. awarded
Rs.5400/- per
1. Monthly income of the deceased
month
Rs.7560/- per
2. Adding 40% towards future prospects
month
3. Net yearly income Rs.90,720/-
Rs.90720/2 =
4. Deducting 1/2 towards personal expenses Rs.45,360/-
FAFO No. 3030 of 2012
3

Rs.45360 x 15 =
5. Applying multiplier of '15'
Rs.6,80,400/-

Amount under conventional heads:

(i) loss of estate Rs.18,500/- Rs.18,500 +
Rs.18,500 +
(ii) funeral expenses Rs.18,500/- as per Pranay
6. Rs.97000/- =
Sethi's case (supra)
(iii) loss of consortium Rs.48,500/- per person Rs.1,34,000/-
(Rs.48,500 x 2) as per Magma General Insurance
Company Limited (supra)
Total amount of compensation
7. (Sr.No.5 + Sr.No.6) Rs. 8,14,400/-

8. The amount as recorded above shall be paid alongwith interest @ 7% per
annum from the date of filing the claim petition till actual
payment/realisation. The said amount shall be paid within a period of three
months from today and the amount already paid as compensation shall be
deducted from the aforesaid amount to be paid to the claimant.

9. The cross objection of the owner is dismissed as no material has been
placed to suggest that the dishonoured cheque was subsequently paid by
the owner.

10. In view thereof, it is clear that there was no valid insurance policy.
Thus, the tribunal has rightly directed the the Insurance Company to pay
the amount and to recover the same from the owner.

11. The appeal preferred by the appellant Insurance Company, the appeal
of the claimants and the cross objection filed by the owner are disposed
off.

12. As the claimants are now major, the entire amount deposited as FD
shall also be released in favour of the claimant on their moving proper
application.

(Pankaj Bhatia,J.)
May 7, 2026/VNP/-

Digitally signed by :-
VISHVANATH PRASAD SHUKLA
High Court of Judicature at Allahabad

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