Legal Updates

Case Note

Kamli & Others v. Boby Chauhan & Others

FAO (MVA) Nos. 50 & 51 of 2024
Decided on: 7 October 2025
Coram: Hon’ble Mr. Justice Vivek Singh Thakur
Court: High Court of Himachal Pradesh, Shimla
Citation: 2025:HHC:33881

Headnote

Motor Vehicles Act, 1988 — Sections 166 & 168 — Rash and negligent driving — Liability of registered owner and insurer — Compensation—Evidence—FIR and witness statements indicating rash and negligent driving sufficient to prove negligence when undisputed — Registered owner remains liable until transfer is completed under Section 50 — Insurance company bound to indemnify owner — Compensation assessed on basis of minimum wages with standard additions for future prospects and consortium — Motor Accident Claims Tribunal’s dismissal of claim petitions set aside.

Facts

On 28 August 2016, a Ford Figo car (HP-06A-2153) travelling from Village Darkali to Kotlu fell into a deep gorge at Shalini Mod, resulting in the deaths of Ghanshyam, his wife Neetu Devi, and another passenger Usha. The driver Gian Chand also died later in hospital.

The claimants—Kamli Devi (mother of Ghanshyam), and his children Manish Khanna and Poonam Kumari—filed two claim petitions before the MACT, Karsog, seeking compensation for the deaths of Ghanshyam and Neetu Devi. They alleged that the accident occurred due to rash and negligent driving by Gian Chand.

The MACT dismissed both petitions on 8 December 2023, holding that negligence was not proved. Aggrieved, the claimants filed FAO (MVA) Nos. 50 & 51 of 2024 before the High Court.

Issues

1. Whether the accident occurred due to rash and negligent driving of the vehicle by the deceased driver Gian Chand?

2. Whether the Motor Accident Claims Tribunal erred in dismissing the petitions for lack of proof of negligence?

3. Whether the registered owner (Boby Chauhan) or the alleged transferee (Gian Chand) was liable to pay compensation?

4. Whether the insurance company was liable to indemnify the owner under the Private Car Package Policy?

Held

1. Negligence Established:
   The Court found that the accident occurred due to rash and negligent driving by Gian Chand. The FIR and the police investigation report, which recorded offences under Sections 279, 337, and 304-A IPC, clearly attributed the cause of the accident to high speed and negligent driving. None of the parties disputed the FIR’s contents.

2. Tribunal’s Findings Perverse:
   Justice Thakur held that the MACT misread the evidence and erroneously concluded that negligence was not proved. The Tribunal’s observation that Gian Chand was not examined as a witness ignored the fact that he had died in the same accident.

3. Ownership and Liability:
   Although Boby Chauhan had executed an agreement to sell the car and obtained an NOC prior to the accident, the statutory transfer process under Section 50 of the Motor Vehicles Act was incomplete. Therefore, Chauhan remained the registered owner at the time of the accident and was liable to third parties.

4. Insurer’s Liability:
   The vehicle was insured under a valid Private Car Package Policy, and the driver held a valid driving licence. The insurance company failed to prove any breach of policy conditions. Hence, it was bound to indemnify the owner.

5. Assessment of Compensation:
   Since there was no documentary proof of income, the Court assessed the deceased persons’ income at ₹6,000 per month (minimum wages) and applied a multiplier of 16 for their age (33 years). Following the principles laid down in Pranay Sethi and Kirti, the Court added future prospects, consortium, and funeral expenses.

   • For Neetu Devi: ₹14,94,000 + interest @6% p.a.

   • For Ghanshyam: ₹12,25,200 + interest @6% p.a.

6. Directions:
   The insurance company was directed to indemnify the owner and deposit the awarded compensation by 31 October 2025, payable in equal shares to the claimants.

Ratio Decidendi

• FIR and investigation reports, if undisputed and corroborated by evidence, can be relied upon to establish rash and negligent driving.

• Under Section 50 of the Motor Vehicles Act, 1988, until the transfer of ownership is recorded by the registering authority, the registered owner remains liable for accidents.

• The insurance company is bound to indemnify the insured unless there is clear proof of policy breach.

• The Tribunal must decide all issues on merits; failure to do so constitutes a material irregularity.

• Compensation should be computed using minimum wages and standard multipliers when actual income is unproved.

Disposition

Appeals allowed.
Impugned awards of MACT set aside.
Claimants entitled to ₹14,94,000 and ₹12,25,200 respectively, with 6% annual interest.
Insurance company directed to pay and indemnify the owner.

Endnotes / Case Law References

1. National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 – Standard principles for computation of compensation and future prospects.

2. Magma General Insurance Co. Ltd. v. Nanu Ram alias Chuhru Ram, (2018) 18 SCC 130 – Consortium and loss of love and affection recognized as compensable heads.

3. Kirti v. Oriental Insurance Co. Ltd., 2021 (1) ACJ 1 – Income enhancement and recognition of homemaker’s contribution.

4. Naveen Kumar v. Vijay Kumar & Ors., (2018) 3 SCC 1 – Registered owner remains liable to third parties until formal transfer of ownership.

5. Surendra Kumar Bhilawe v. New India Assurance Co. Ltd., (2020) 18 SCC 224 – Liability of insurer to indemnify registered owner despite vehicle transfer.

6. Prakash Chand Daga v. Saveta Sharma, (2019) 2 SCC 747 – Responsibility of registered owner for accident even after sale.

7. Bajaj Allianz Insurance Co. Ltd. v. Rambha Devi & Ors., (2025) 3 SCC 95 – Driver licensed for LMV entitled to drive LMV transport vehicle.

8. Prithvi Raj Jhingta v. Gopal Singh, AIR 2007 HP 11 (FB) – All issues framed by tribunal must be decided on merits.

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