Satyen Vaidya, Judge:

1. Both these appeals are being decided by a common judgment, as these arise from the same award.

2. A Maruti Car bearing Registration No. HP-12B- 0532, owned by Sh. Kamal Kishore (hereinafter referred to as the ‘owner’), met with an accident near Tribal Bhawan, Dhalli, District Shimla on 8.7.2012.The vehicle went off the road and rolled down into about 150 feet deep gorge.At the time of accident, the said vehicle was occupied by four occupants including the driver named Vijay Thakur. The said Vijay Thakur (driver) and Amarjeet Singh (occupant of front passenger seat) died as result of accident. The other occupants of the vehicle survived.

3. The deceased Amar Jeet Singh was survived by his wife, three children and mother as legal heirs and dependents (hereinafter referred to as the ‘claimants’). A claim petition under Section 166 of the Motor Vehicles Act, 1988 (for short, ‘the Act’) was filed on their behalf, which came to be registered as MAC Petition RBT No. 103-S/2 of 2014/12 on the files of learned Motor Accident Claims Tribunal-IV, Shimla (hereinafter referred to as the ‘Tribunal’). The claimants had alleged that the accident was result of rash and negligent driving of Vijay Thakur (driver).

4. It was claimed that deceased was working as a Motor Mechanic (Electrician) at Dhalli, Shimla and was earning Rs. 30,000/- per month from his business. The deceased was stated to be 51 years old at the time of death. It was also the case of the claimants that they were totally dependents upon the deceased and had no other independent source of income.

5. The owner filed reply and denied the rash and negligent driving of Vijay Thakur to be the cause of accident. It was claimed that the vehicle was insured with the insurer (appellant in FAO No. 57 of 2017).

6. The insurer also filed a separate reply and raised objections that it was not liable to indemnify the insured, as the insured had purchased an “Act Only Policy”, which did not cover the occupants of the vehicle. It was also contended that Vijay Thakur, driver of the vehicle was driving the vehicle in violation of Rule 3 of Central Motor Vehicles Rules (hereinafter referred to as the ‘Rules’). All other averments in the petition were also denied generally.

7. Learned Tribunal framed following issues:-

“i) Whether Amar Jeet had died in a road side accident on 8.7.2012 at about 12.40 PM at place near Tribal Bhawan and Post Office Dhalli, Shimla in a vehicle bearing No. HP-12B- 0532 involved in the accident on account of rash and negligent driving of the driver as alleged OPP

ii) If issue No.1 is proved in affirmative, whether the petitioners are entitled to and what should be the quantum of compensation and form whom OPP

iii) Whether the petition is not maintainable in the present form, as alleged OPR-2

iv) Whether the vehicle was being driven in breach of the terms and conditions of insurance policy, as alleged OPR-1

v) Whether the driver of the vehicle bearing HP- 12B-0532 was not possessing the valid and effective driving license as alleged OPR-2

vi) Whether the vehicle was being driven in contravention of Motor Vehicle Act as alleged OPR-1

vii) Whether the petition is bad for non-joinder and mis-joinder of the necessary parties as alleged OPR-4

viii) Relief.”

8. Issues No. 1 and 2 were answered in affirmative and all other issues were decided in negative.

9. Accordingly, the petition has been allowed and the claimants have been held entitled to compensation of Rs. 8,58,600/- along with interest at the rate of 9% per annum from the date of filing of petition till actual realization.

10. The liability to satisfy the award has been fastened upon the insurer.

11. The insurer has challenged the impugned award by way of FAO No. 57 of 2017. It is contended that the fastening of liability on the insurer in an ‘Act Only Policy’ is against the terms of the policy and the settled proposition of law. It is been submitted that the learned Tribunal has overlooked the violation of the Rules. Further, the award has also been challenged to be excessive in so far as the quantum of compensation is concerned.

12. The claimants have also assailed the award by way of FAO No. 91 of 2017 on the ground that the compensation has been assessed on lesser side.

13. I have heard learned counsel for the parties and have also gone through the record carefully.

14. Mr. Vivek Negi, learned counsel for the insurer has contended that the occupants of the vehicle which were insured under the ‘Act Only Policy’ are not the third parties and for such reasons are not entitled for coverage. In such policy, the insurer is not liable to indemnify the insured for death or bodily injury caused to the occupants of the vehicle. He has placed reliance upon on the judgment passed by the Hon’ble Supreme Court in the matter of National Insurance Co. Ltd. vs. Balakrishnan & another 2013 ACJ 199as also the judgments passed by a Coordinate Bench of this Court in FAO No. 237 of 2014, titled as, M/s Voluntary Health Association vs. The Oriental Insurance Company Limited & others, decided on 2.8.2024 and FAO No. 355 of 2016, titled as, United India Insurance Company Ltd. vs. Raksha Devi & others, decided on 19.7.2024. He has also placed reliance.

15. On the other hand, learned counsel for the claimants has opposed the contention raised by insurer by making reference to the terms and conditions of the policy Ext. RW3/B and also the judgment passed by another Coordinate Bench of this Court on 7.5.2024 in FAO No. 104 of 2019, titled as, Nand Lal & another vs. Manohar Lal & another, Latest HLJ 2024 (HP) (1) 596. He would contend that the aforesaid judgment in Nand Lal has also been upheld by the Hon’ble Supreme Court by dismissing the insurer’s SLP (C) No. 49609 of 2024vide order dated 22.11.2024.

16. In order to appreciate the rival contentions of the parties, it will be relevant to notice that the insurer has placed reliance on the policy of insurance Ext. RW1/B. This document was placed and proved on record by RW-3 Smt. Shashi Saini, Assistant Manager of the insurer. A perusal of insurance policy Ext. RW3/B reveals that the insured had paid premium of Rs. 740/- towards Basic-TP (third party) and Rs. 100/- towards Compulsory PA (personal accident) owner-driver. At page-4 of the policy document, a noticeable terms can be read as under:-

“LIABILITY TO THIRD PARTIES

1. Subject to the limits of liability as laid down in the Schedule hereto the Company will indemnify the insured in the event of an accident caused by or arising out of the use of the insured vehicle against all sums which the insured shall become legally liable to pay in respect of:-

(i) Death of or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of Motor Vehicles Act, the company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured,

(ii) Damage to property other than property belonging to the insured for held in trust or in the custody or control of the insured.”

(emphasis added)

17. A plain reading of the aforesaid term reveals that the insurer had undertaken to indemnify the insured, in case of accident caused by or arisen out of use of insured vehicle, against all sums which the insured would become liable to pay in respect of death or bodily injury to any person including occupants carried in the vehicle (provided such occupants were not carried for hire or reward). When such an explicit clause is available in the policy of insurance, it is not understandable as to how the insurer can seek to absolve itself from indemnifying the insured in a case like the one at hand.

18. In the case of Nand Lal (supra) also the facts were identical. The policy of insurance in said case also contained pari-materia the same clause. On the basis of such clause in the policy of insurance, the Coordinate Bench of this Court held the insurer liable to indemnify the insured for payment of compensation on account of death or bodily injury to the occupants of the vehicle. As noticed above, the view taken by the Coordinate Bench in the case of Nand Lal has been affirmed by Hon’ble Supreme Court. That being so, the contention of insurer is liable to be rejected.

19. As regards the reliance placed by the insurer on the judgment passed by Hon’ble Supreme Court in Balakrishnan as also the judgments passed by a Coordinate Bench of this Court in FAO No. 237 of 2014, and FAO No. 355 of 2016, though in said judgments it has been followed that in the ‘Act Only Policy’, the occupant is not third party, but it cannot be made out as to whether in all such cases a similar clause, as is contained in RW3/B, was available or not. Thus, in my considered view the precedent in Nand Lal (supra) has to be followed being on identical facts.

20. It has next been contended on behalf of the insurer that the learned Tribunal has erred in not appreciating a clear violation of Rule 3 of the Rules. Learned counsel for the insurer would contend that the driver Vijay Thakur was having a learner license only and as per the conditions laid in Rule 3 (supra), he could drive the vehicle only when he was accompanied by another person, holding a valid driving license to instruct him and such person should also be seating in such a position so as to control or stop the vehicle.

21. Noticeably, the learned Tribunal has found as fact that the deceased Amar Jeet Singh was the occupant of front passenger seat. The driving license of deceased Amar Jeet Singh has been placed on record as Ext. PW1/D. The insurer has not been able to prove that Ext. PW1/D was not a valid and genuine license.

22. Rule 3 of the Rules reads as under:-

“3. General.—The provisions of sub-section (1) of section 3 shall not apply to a person while receiving instructions or gaining experience in driving with the object of presenting himself for a test of competence to drive, so long as—

(a) such person is the holder of an effective learner's licence issued to him in Form 3 to drive the vehicle;

(b) such person is accompanied by an instructor holding an effective driving License to drive the vehicle and such instructor is sitting in such a position to control or stop the vehicle; and

(c) there is painted, in the front and the rear or the vehicle or on a plate or card affixed to the front and the rear, the letter "L" in red on a white background as under:—

Note.—The painting on the vehicle or on the plate or card shall not be less than 18 centimeters square and the letter "L" shall not be less than 10 centimeters high, 2 centimeters thick and 9 centimeters wide at the bottom: Provided that a person, while receiving instructions or gaining experience in driving a motor cycle (with or without a side-car attached), shall not carry any other person on the motor cycle except for the purpose and in the manner referred to in clause (b).”

23. Once the deceased Amar Jeet Singh was found to be seated on the front passenger seat of a Maruti Car with a valid driving license, it cannot be said that there was violation of the aforesaid Rules. He was in the best position to control and stop the vehicle. Therefore, the second contention of insurer also deserves to be rejected for the reasons discussed above more particularly when it was not disputed that the driver possessed a learner’s license at the time of accident.

24. Lastly, there has been dispute between the insurer and claimants as to assessment of compensation. As per insurer, the compensation assessed by the learned Tribunal is on a higher side and on the other hand, the claimants alleged the same to be on a lesser side.

25. According to claimants, the deceased was earning Rs. 30,000/- approximately per month. The income of the deceased was sought to be proved by the claimants by way of statements of PW1 Param Jeet Kaur and PW2 Karam Singh wife and brother of deceased respectively. Both these witnesses stated that the deceased was earning about Rs. 30,000/- per month. PW1 has tried to justify her versions by deposing that one of her daughters was doing B. Pharmacy Course and the son was undergoing course in Hotel Management from a Government institution at Kufri. She deposed that the fee of the daughter was about Rs. 25,000/- per semester and the fee of the son was Rs. 40,000/- per semester. The third daughter was stated to have passed her matric during the relevant period. Such version of PW-1 was neither challenged in cross examination nor refuted otherwise.

26. The income of the deceased has been taken at Rs. 6000/- per month by the learned Tribunal. The learned Tribunal has applied guesswork for such purpose, which in the circumstances where the income is not documented, is permissible. However, the guesswork cannot be on unrealistic parameters.

27. On facts it was established that the deceased was working as Motor Mechanic (Electrician) at Dhalli Shimla. The accident had taken place in the year 2012.

There is no evidence on record to suggest that the deceased had some other source of income. It has also not been established that the wife or any other member of the family of deceased was earning independently from any other source. That being so, it is difficult to comprehend that with a meager income of Rs. 6000/- per month, the deceased would have been able to manage his entire household which included six other members in addition to himself more particularly when two of his children were undergoing professional courses and their fee was ranging from Rs. 50,000 to 80,000/- each per annum. It can be inferred from circumstances available on record that the deceased had been spending about Rs. 10,000/- per month on the education of his two children only. Thus, in my considered view, the assessment made by learned Tribunal in assessing the monthly income of the deceased at Rs. 6000/- is not justified.

28. Another reason for taking such a view is that during the arguments a document i.e. notification with respect to minimum wages governing Minimum Wages in the year 2012 has been placed on record. Item-97 of such notification relates to ‘electrician-auto’ and his monthly wages has been shown as Rs. 192/-. It cannot be ignored that the monthly wages under the Minimum Wages Act are for specified hours of working. It is common knowledge that self-employed businessman works for much more hours than the working hours prescribed under the Minimum Wages Act. In this view of the matter, there cannot be any equivalence between two. It is also settled that where the income of victim of motor vehicle accident is not documented, the wage fixed under the Minimum Wages Act can be taken to be a guiding factor only.

29. Thus even by conservation approximation the income of the deceased could not be assessed less than Rs. 10,000/- per month.

30. Noticeably, the learned Tribunal has not awarded anything to the claimants on account of loss of future prospects. In National Insurance Company vs. Pranay Sethi 2017 (16) SCC 680 in case like one at hand, the loss of future prospects has been directed to be assessed at 10%. By such addition, the monthly income of the deceased would be Rs. 11,000/-.

31. The learned Tribunal has deducted 1/5thof deceased towards his personal expenses, whereas it has to be 1/4th as per Pranay Sethi. After such deduction, the monthly dependency would be Rs. 8250/-. The multiplier of 11 has rightly been applied and thus, the total dependency will be Rs. 8250 x 12 x 11 = Rs. 10,89,000/-.

32. Further, the compensation awarded under the heads of loss of consortium, funeral expenses and loss of love and affection is also required to be modified to bring it in tune with Pranay Sethi (supra) and the subsequent judgment passed by the Hon’ble Supreme Court in Magma General Insurance Co. Ltd. vs. Nanu Ram, 2018 (18) SCC 130. Since the total number of dependents are 5, each of them will be entitled to Rs. 40,000/- under the head of loss of consortium and the total amount under this head will be Rs. 2,00,000/-. In addition, the claimants will be entitled to enhancement at the rate of 10% after every three years w.e.f. 2017 i.e. the year of passing of judgment in Pranay Sethi. The amount of such enhancement will be Rs. 40,000/-. The claimants will also be entitled to amount of Rs. 15000/- each under the heads of loss of estate and funeral expenses, which in total will be Rs. 30,000/-. Again, the amount of Rs. 30,000/- will be increased by 10% by every three years and such enhancement will be calculated at Rs. 6000/-. The claimants will not be entitled for any compensation under the head of loss of love and affection separately.

33. Thus, the total compensation payable to the claimants is as under:-

34. In addition, the claimants shall be entitled to interest at the rate of 9% per annum from the date of filing of petition till actual realization as already held by the learned Tribunal.

35. The compensation shall be apportioned amongst the claimants as under: -

36. In light of above analysis, FAO 57 of 2017 is dismissed and FAO 91 of 2017 is partly allowed. Impugned award passed by the learned Motor Accident Claims Tribunal-IV, Shimla in MAC Petition RBT No. 103- S/2 of 2014/12 shall stand modified in above terms.

37. The appeals are disposed of. Pending application(s), if any, also stand disposed of. Record be sent back.