Holding

The High Court did not commit a grave error in its income assessment due to lack of reliable evidence, and the vehicle owner alone is an aggrieved person who may appeal, while the insurer's appeal is not maintainable.

Summary

A bus driver’s negligent driving caused the death of a man, whose legal heirs claimed compensation under the Motor Vehicles Act, 1988. The Claims Tribunal estimated the deceased’s monthly income at Rs 9,600 and awarded compensation accordingly, but the High Court reduced the income estimate to Rs 7,000 per month and consequently lowered the compensation. The vehicle owner and the insurer jointly appealed; the High Court entertained only the owner’s appeal and dismissed the insurer’s. The Supreme Court held that the High Court had considered all reliable evidence and could not be said to have committed a grave error in the income assessment, given the lack of proof for the higher claim. It also affirmed that the owner is an "aggrieved person" entitled to appeal under Section 173, whereas the insurer’s appeal was not maintainable under Section 149(2). Consequently, the Supreme Court dismissed the appeal, upholding the High Court’s award.

Issues considered

The correctness of the High Court's assessment of the deceased's income and the resulting quantum of compensation.
Whether the insurance company could maintain an appeal against the award under Sections 149(2), 170 and 173 of the Motor Vehicles Act.
Whether the owner of the vehicle qualifies as an "aggrieved person" entitled to appeal under Section 173.

Legislation cited

Motor Vehicles Act, 1988s. 149(2), s. 166, s. 170, s. 173

Subjects

Motor Vehicles ActCompensationIncome estimationAggrieved personAppeal maintainabilityInsurance companySection 149Section 173

Judgment

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I

[2008] 2 S.C.R. 387

V. SUBBULAKSHMI & ORS. A
II.
S.LAKSHMI & ANR.
(Civil Appeal No. 990 of 2008)
FEBRUARY 5, 2008
B
[S.B.SINHA AND HARJIT SINGH BEDI, JJ]
. ).
Motor Vehicles Act, 1988 -ss. 149(2), 166 and 173 Motor
accident -By driver of the vehicle - Causing death - Claim
for compensation -Income of deceased quantified by claimant c
-No reliable evidence in support thereof - Tribunal awarding
compensation after estimating the income less than that
quantified by the claimant -Joint Appeal by the owner of the
vehicle and insurance company - High Court dismissing the
appeal of insurance company and awarding compensation
D
estimating the income lesser than estimated by the Tribunal
. -4
- On appeal, held: Though estimation of income reached by
High Court is without any basis - However, in absence of
I
reliable evidence regarding the income, as claimed by the
claimant, High Court cannot be said to have committed grave
E
error - Question of maintainability of appeal by insurance
company questioning quantum of compensation, left open.
Driver of a bus owned by respondent No.1 caused
an accident owing to rash and negligent driving. This
resulted in death of the predecessor in interest of the F
t-
appellants. An application claiming compensation was
filed by the appellants. They produced certain documents
to show that the income of the deceased was about
12,500/- per month, from two source·s i.e. as an
~
agriculturist and also as a commission agent. Tribunal
G
... -t· estimated the income at Rs. 9,6001- per month and
accordingly awarded compensation. Owner of the vehicle
as well as the insurance company preferred appeal to
High Court. High Court entertained the appeal of the
387 H
388 SUPREME COURT REPORTS [2008] 2 S.C.R.

A owner and rejected that of the insurance company. High -t
Court e~timated the income at Rs. 7,000/- per month and
awarded compensation after deducting 113rd of the
amount and applying multiplier of 18. Hence the present
appeal.
B Dismissing the appeal, the Court
r
HELD: 1.1 Regarding the quantum of compensation, 1
the High Court has taken into consideration all the relevant .A.
evidences brought on record. Income tax returns having
c been'filed after death of the victim of the accident, have
rightly _not been relied upon. [Para 17] [397-E, F, G]
1.2 In t_he fact situation of the case High Court has
not relied upon all the documents filed by the appellant. It
may be true that there was no basis for the High Court to
D arrive at the conclusion that the income of the deceased
was Rs. 4,000/- from agricultural operation and Rs;3000/-
from his commission business, but no reliable document
· having been produced to show that the deceased was ).. '
.l
~

earning an income of Rs.12,500/- per month, as claimed.
E The High Court cannot be held to have thus committed
any grave error in this behalf. There being no material
available on record, this court is not in a position to
interfere with the impugned judgment of the High Court.
[Para 18] [398-B-E]
F 2. In the instant case, the owner ·of the bus was an ~-
aggrieved person. He could maintain an appeal of his own.
Section 173 of Motor Vehicles Act confers a right on any l.,
aggrieved person to prefer an appeal from an award. It is
not necessary to go into the larger question as to whether
G having regard to the bar contained in sub-Section (2) of
Section 149 of the Act, the second respondent could have )<

. preferred an appeal questioning the· quantum of '1-
compensati.on, as the High Court held that the appeal,
even after deletion of the second respondent from the
H array of the parties, the appeal preferred by the first
j
<(

V. SUBBULAKSHMI & ORS. v. S.LAKSHMI & ANR. 389 1

. [S.B. SINHA, J.]
....... respondent was maintainable. [Paras 13 and 14] A
[397-A, B, C]
National Insurance Co. Ltd., Chandigarh vs. Nicolletta
Rohtagi and Ors. (2002) 7 SCC 456; Narendra Kumar and
Anr. vs. Yarenissa and Ors. (1998) 9 SCC 202 and Chinnama
George and Ors. vs. N.K. Raju and Anr. (2000) 4 SCC 130- B
referred to.

' ,A, CIVILAPPELLATE JURISDICTION : Civil Appeal No. 990
of 2008.
From the final Judgment and Order dated 11.2.2006 of c
· the High Court of Madras, Bench at Madurai in C.M.A. No. 222/
2002.
V. Krishnamurthy, V. Ramas.ubramanian for the Appella.nts.
Ashok Kumar Sharma for the Respondents. D
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. Leave granted.
""
2. First respondent is the owner of a bus. Allegedly, owing
to .rash and negligent driving by the driver of the said vehicle, an E
accidenttook place wherein one Vadivelu, the predecessor in
interest of t_he appellants died.
3. An application under Section 166 of the Act claiming
compensation for a sum of Rs.25 lakhs was filed by the F
appellants in the Court of Motor Accidents Claims Tribunal
(Additional District Judge-cum-Chief Judicial Magistrate, Karur).
A written statement was filed by the Insurance Company in the.
said proceedings. The same was adopted by the owner of the
vehicle. Before the Tribunal, the appellants produced some

.. ... documents to show that the income of the deceased was about
12,500/- per month. He is said to have been deriving income
both as an agriculturist as also from his business as commission
(3

agent in the business of coconut.
4. The Tribunal, inter alia, keeping in view the fact that the H
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390 SUPREME COURT REPORTS · (2008] 2 S.C.R.

--<· -~

A Income Tax Returns were filed only after the death of the said ;,-
Vadivellu, estimated at Rs. 9,600/- per month.
The High Court, however, estimated the income of the
deceased to be around a sum of Rs. 4,000/- per month, from t
his agricultural operation and Rs. 3,000/- from his commission
B business, totalling a sum of Rs. 7,000/- per month and upon f
deducting 113rd thereof from the amount towards his personal I
I
expenses, the High Court held that his contribution to his family ).
would come to about of Rs. 4,667/- per month. Applying the
multiplier of 18, the loss of income was assessed at Rs. ·
c 10,08,072/-, instead and in place of Rs. 13,82,400/- as was
found by the Tribunal.

5. Appellant is, thus, before us.
Despite service of notice, the first respondent has not
~
D appeared. ;
f
6. Mr. V. Krishnamurthy, the learned senior counsel 1--
appearing on behalf of the appellant, inter alia, would submit )o
~
that a joint appeal by the owner of the vehicle and the Insurance
Company was not maintainable. It was furthermore urged that
E
the High Court without analysing the evidence on records has
arbitrarily reduced the amount of income of the deceased from
Rs. 9,600/- as was found by the learned Tribunal, to a sum of
Rs. 7,000/- per month.

F 7. Mr. Ashok Kumar Sharma, the learned counsel
appearing on .behalf of the second respondent, on the other
hand, submitted that the appeal before the High Court in terms
of Section 173 of the Act was maintainable. According to the
learned counsel keeping in view the phraseology used in
G
Section 173 of the Act, an appeal subject to the limitation
provided under sub-Section (2) thereof would be maintainable
against each and every award and, thus, if an appeal is
maintainable at the instance of the ·insurance Company, it
matters little as to whether it was filed with the owner of the
..,.
-
vehicle or not.
H
V. SUBBULAKSHMJ & ORS. v. S.LAKSHMI & ANR. 391
[S.B. SINHA, J.]
~
""t-
The learned counsel furthermore urged that the Tribunal A
has failed to take into consideration the fact that the documents
filed by the claimants/appellants purporting to establish the
quantum of income of the deceased being wholly unreliable,
the sam.e could not have been taken into consideration for the
purpose of computation of income. B
It 8. We may at the outset notice that the High Court was
• although of the opinion that no appeal would be maintainable at
the instance of an insurance company unless permission of the
court was obtained by it in terms of Section 170 Act, observed
that the owner of the vehicle being an appellant, the appeal would c
be maintainable at his instance.
9. The relevant statutory provisions, being Sections 149(2),
170 and 173 may be noticed by us, which are as under :
"149. (2) No sum shall be payable by an. insurer under D
sub-section (1) in respect of any judgment or award unless,
before the commencement of the proceedings in which
the judgment of award is given the insurer had notice
through the Court or, as the case may be, the Claims
Tribunal of the bringing of the proceedings, or in respect E
of such judgment or award so long as execution is stayed
thereon pending an appeal; and an insurer to whom notice
of the bringing of any such proceedings is so given shall
be entitled to be made a party thereto and to defend the
~ action on any of the following grounds, namely:- F
(a) that there has been a breach of a specified condition
of the policy, being one of the following conditions,

..
namely:-
(i) a condition excluding the use of the vehicle-
G
....- (a) for hire or reward, where the vehicle is on the
date of the contract of insurance a vehicle not
covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
H
~
392 SUPREME COURT REPORTS [2008] 2 S.C.R.

A (c) for a purpose not allowed by the permit under
-t -r
which the vehicle is used, where the vehicle is
a transport vehicle, or
(d) without side-car being attached where the l
\
vehicle is a motor cycle; or l
B
(ii) a condition excluding driving by a named
i
person or persons or by any person who is not A.
duly licensed, or by any person who has been
disqualified for holding or obtaining a driving
c licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused
or contributed to by conditions of war, civil war,
riot or civil commotion; or
(b) that the policy is void on the ground that it was
D
obtained by the nondisclosure of a material fact or
by a _representation of fact which was false in _some
material particular. ~

Section 170 - lmpleadlng insurer In certain cases-
E Where in the course of any inquiry, the. Claims Tribunal is
satisfied that-.
(a) there is collusion between the person making the claim
and the person against whom the claim is made, or
(b) the person against whom the claim is made has failed
F
to contest the claim,
-+ .
'

. it may, for reasons to be recorded in writing, direct that the ',

insurer who may be liable in respect of such claim, shall t~

-
be impleaded as a party to the proceeding and the insurer l

G so impleaded shall thereupon have, without prejudice to I·

the provisions contained in sub-section (2) of section 149, 't-
the right to contest the claim on all or any of the grounds ,.
that are available to the person against whom the claim '
has been made.
H
V. SUBBULAKSHMI & ORS. v. S.LAKSHMI & ANR. 393
[S.B. SINHA, J.]
~
Section 173-Appeals-(1) Subject to the provisions of A
sub-section (2) any person aggrieved by an award of a
Claims Tribunal may, within ninety days from the date of
the award, prefer an appeal to the High Court:
Provided that no appeal by the person who is required to
pay any amount in terms of such award shall be entertained B
by the High Court unless he has deposited with it twenty-
five thousand rupees or fifty per cent, of the amount so
-- >
awarded, whichever is less, in the manner directed by the
High Court:
c
Provided further that the High Court may entertain the
appeal after the expiry of the said period of ninety days,
if it is satisfied that the appellant was prevented by sufficient
cause from preferring the appeal in time.
(2) No appeal shall lie against any award of a Claims D
Tribunal if the amount in dispute in the appeal is less than
ten thousand rupees."
10. The maintainability of an appeal by the Insurance
Oompany together with the owner of the vehicle came up for
consideration before this Court in Narendra Kumar and Another E
Vs. Yarenissa and Others [(1998) 9 SCC 202], wherein it was
clearly held that an appeal by the owner of the vehicle is
maintainable despite the fact that in terms of an Award, he is to
be reimbursed by the insurance company, stating;
F
"6 ....... If the award has gone against the tortfeasors it is
difficult to accept the contention that the tortfeasor is not
"an aggrieved person" as has been held by some of the
High Courts vide Kantilal & Bros. v. Ramarani Debi, New
India Assurance Co. Ltd . v. Shakuntla Bai, Nahar Singh
G
v. Manohar Kumar, Radha Kishan Sachdeva v. Flt. Lt.
~ L.D. Sharma merely because under.the scheme of Section
96 if a decree or award has been made against the
tortfeasors the insurer is liable to answer judgment "as if
a judgment-debtor''. That does not snatch away the right
H
394 SUPREME COURT REPORTS [2008] 2 S.C.R

A of the tortfeasors who are jointly and severally liable to
answer judgment from preferring an appeal under Section
1~0-D of the Act. If for some reason or the other the
claimants desire to execute the award against the
tortfeasors because they are not in a position to recover
B the money from the in surer the law does not preclude
them from doing so and, therefore, so long as the award
or decree makes them liable to pay the amount of
compensation they are aggrieved persons within the
meaning of Section 110-D and would be entitled to prefer
c an appeal. But merely because a joint appeal is preferred
and it is found that one of the appellants, namely, the insurer
was not competent to prefer an appeal, we fail to see why
the appeal by the tortfeasor, the owner of the vehicle, cannot
be proceeded with after dismissing or rejecting the appeal
of the insurer. To take a view that the owner is not an
D
aggrieved party because the Insurance Company is liable
in law to answer judgment would lead to an anomalous
situation in that no appeal would lie by the tortfeasors ). '

against any award because the same logic applies in the
case of a driver of the vehicle. The question can be
E decided a little differently. Can a claim application be filed
against the Insurance Company alone if the tortfeasors
are not the aggrieved parties under Section 110-D of the
Act? The answer would obviously be in the negative. If that
is so, they are persons against whom the claim application
F must be preferred and an award sought for otherwise the
insurer would not be put to notice and would not be liable
to answer judgment as if a judgment-debtor. Therefore, on
first principle it would appear that the contention that the
owner of a vehicle is not an aggrieved party is
G unsustainable."
It was furthermore held;

"7. For the reasons stated above, we are of the opinion
that even in the case of a joint appeal by insurer and
H owner of offending vehicle if an award has been made
'i--
V. SUBBULAKSHMI & ORS. v. S.LAKSHMI & ANR. 395
[S.B. SINHA, J.]
-ii-- against the tortfeasors as well as the insurer even though A
an appeal filed by the insurer is not competent, it may not
be dismissed as such. The tortfeasor can proceed with
the appeal after the cause-title is suitably amended by
deleting the name of the insurer."
11. However, another Bench of this Court in Chinnama B
George and Others Vs. N.K. Raju and Another [(2.000) 4 SCC
~ 130] opined :
l
"6. Admittedly, none of the grounds as given in Sub-section
(2) of Section 149 exist for the insurer to defend the claims c
petition. That being so, no right existed in the insurer to file·
appeal against the award of the Claims Tribunal. However, ,
by adding N.K. Raju, the owner as co-appellant, an appeal
was filed in the High Court which led to the impugned
judgment. None of the grounds on which insurer could
D
defend the claims petition was the subject matter of the
appeal as far as the insurer is concerned. We have already
noticed above that we have not been able to figure out
from the impugned judgment as to how the owner felt
aggrieved by the award of the Claims Tribunal. The
impugned judgment does not reflect any grievance of the E
owner or even that of the driver of the offending bus against
the award of the Claims Tribunal. The insurer by associating
the owner or the driver in the appeal when the owner or the
driver is not an aggrieved person cannot be allowed to
mock at the law which prohibit the insurer from filing any F
appeal except on the limited grounds on which it could
defend the claims petition. We cannot put our stamp of
approval as to the validity of the appeal by the insurer
merely by associating the insured. Provision of law cannot
be undermined in this way. We have to give effect to the .G
...... real purpose to the provision of law relating to the award
..,- of compensation in respect of the accident arising out of
the use of the motor vehicles and cannot permit the insurer
to give him right to defend or appeal on grounds not
permitted by law by a backdoor method. Any other H
--t·
396 SUPREME COURT REPORTS [2008] 2 S.C.R.

...(r
A interpretation will produce unjust results and open gates
for the insurer to challenge any award. We have to adopt r
purposive approach which would not defeat the broad
purpose of the Act. Court has to give effect to true object
of the Act by adopting purposive approach.
B 7. Sections 146, 147, 149 and 173 are in the scheme of
the Act and when read together mean : (1) it is legally
~
obligatory to insure the motor vehicle against third party
,.A.
.risk. Driving an uninsured vehicle is an offence punishable
with an imprisonment extending up to three months or the
c fine which may extend to Rs. 1,000/-or both; (2) Policy of
insurance must comply with the requirements as contained
in Section 147 of the Act; (3) It is obligatory for the insurer
to satisfy the judgments and awards against the person
insured in respect of third party risks. These are Sub-
D sections (1) and (7) of Section 149. Grounds on which
insurer can avoid his liability are given in Sub-section (2)
of Section 149.
)a
8. If none of the conditions as contained in Sub-section (2)
of Section 149 exist for the insurer to avoid the policy of
E insurance he is legally bound to satisfy the award, he
cannot be a person aggrieved by the award. In that case
insurer will be barred from filing any appeal against the
award of the Claims Tribunal."

F 12. In ·Chinnamma George, the owner did not challenge
the findings of the Tribunal that the bus was being driven by the -+
driver in a rash and negligent manner. It was therefore, held that
the owner was not an aggrieved person to maintain an appeal.
It was in the aforementioned context this Court observed that
none of the grounds as laid down under sub-Section (2) of
G
Section 149 of the Act having been satisfied, an appeal by the
Insurance Company was not maintainable, observing that an ...,. ...
insurer having a limited area to defend the'claim petition, it
cannot circumvent the same by associating itself with the owner/
driver in an appeal when the owner/driver is not an aggrieved
H
i---
V. SUBBULAKSHMI & ORS. v. S.LAKSHMI & ANR. 397
[S.8. SINHA, J.]

. person and, thus, cannot be allowed to mock at the law. A
13. In the instant case, the owner of the bus was an
aggrieved person. He could maintain an appeal of his own.
Section 173 of the Act confers a right on any aggrieved person
to prefer an appeal from an award.
B
14. In the present case, it is not necessary for us to go into
the larger question as to whether having regard to the bar
}
._ contained in sub-Section ·(2) of Section 149 of the Act, the
second respondent could have preferred an appeal questioning
the quantum of compensation, as the High Court held that the c
appeal, even after deletion of the second respondent from the
array of the parties, the appeal preferred by the first respondent
was maintainable.
15. We may only notice that the aforementioned two
decisions although have been referred to by a three Judge Bench D
of this Court in National Insurance Co. Ltd., Chandigarh Vs.
Nicolletta Rohtagi and Others [(2002) 7 sec 456], it was not
specifically held even therein that a joint appeal by the owner
and the insurer would not be maintainable.
16. However, in this case, the appeal preferred by the E
Insurance Company has been dismissed. The High Court has
only entertained the appeal of the owner.
17. So far as the question in regard to the quantum of
compensation awarded in 'favour of the appellants is concerned, F
.,, we are of the opinion that the High Court has taken into
consideration all the relevant evidences brought on record.
The accident took place on 7.5.1997. Income tax returns
were filed on 23.6.1997.
The Income Tax Returns (Exp. P-14), therefore, have rightly G

- .....
not been relied upon.
Ex.P-8 is a deed of lease. It was an unregistered document.
Although the document was purported to have been executed
on 10.4.1993, the genuineness thereof was open to question. H
398 SUPREME COURT REPORTS [2008] 2 S.C.R.

A The stamp paper was purchased in the year 1983 but an .....
interpolation was made therein to show that it was purchased
in 1993. The purported receipts granted by the tenant were also
unstamped.
18. In the aforementioned fact situation, the High Court
B has not relied upon all the aforementioned documents, filed by
the appellant. It may be true that there was no basis for the High
Court to arrive at the conclusion that the income of the deceased -i
was Rs.4,000/- from agricultural operation and Rs. 3,000/- from
....
his commission business, but no reliable document having bee,n
c produced to show that the deceased was earning an income of
Rs.12,500/- per month, as claimed. The High Court, in our
opinion, cannot be held to have, thus, committed any grave error
in this behalf. There is no dispute as regards application of the
multiplier.
D
In a case of this nature, some guess work is inevitable.
This Court could have gone into the question prov,ided there
was some material brought on record by the appellants upon
~
which reliance could be placed. There being no such material
available on record, we are not in a position to interfere with the
E impugned judgment of the High Court.

19. We, therefore, are of the opinion that it is not a fit case
where this Court should interfere with the judgment of the High
Court. Appeal is dismissed. No costs.
F K.K.T. Appeal dismissed. ...,.

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