Shimla, October 7, 2025:
In a significant ruling, the Himachal Pradesh High Court has set aside the orders of the Motor Accident Claims Tribunal (MACT) that had earlier dismissed two compensation petitions arising from a fatal road accident in Mandi district. Justice Vivek Singh Thakur allowed the appeals filed by Kamli Devi and her children, directing the insurance company to pay compensation of ₹14.94 lakh and ₹12.25 lakh respectively for the deaths of Neetu Devi and Ghanshyam, who died in a tragic car accident in 2016.
Background of the Case
The case originated from a road accident that occurred on August 28, 2016, when a Ford Figo car (HP-06A-2153) carrying Ghanshyam, his wife Neetu Devi, Usha, and the driver Gian Chand rolled down a 150-metre-deep gorge at Shalini Mod, near Karsog. All three passengers died on the spot, while the driver succumbed to his injuries later at CHC Karsog.
The claimants—Kamli Devi (mother of Ghanshyam) and his children Manish Khanna and Poonam Kumari—filed two separate petitions before the MACT seeking compensation for the deaths of Ghanshyam and Neetu Devi, alleging rash and negligent driving by the driver Gian Chand.
However, the MACT dismissed both petitions in December 2023, holding that the claimants had failed to prove negligence on the driver’s part.
Findings of the High Court
Justice Vivek Singh Thakur observed that the tribunal had misread the evidence and ignored the material on record, including the FIR and witness statements which clearly indicated that the accident occurred due to rash and negligent driving. The Court held that the Tribunal’s conclusion that the driver was not proved negligent was perverse and contrary to record.
The Court also criticized the MACT for noting that the driver was not examined as a witness, pointing out that Gian Chand had died in the same accident and therefore could not have been produced.
Quoting from the FIR and the investigation report, the Court found that the case had been registered under Sections 279, 337, and 304-A of the IPC, all of which relate to rash and negligent driving causing injury or death. Since none of the parties disputed the FIR’s contents, the Court accepted the finding that the accident was caused by negligent driving.
Ownership and Insurance Liability
The registered owner of the car, Boby Chauhan, argued that he had sold the vehicle to the driver Gian Chand before the accident. The Court examined the transfer documents and held that although an agreement to sell had been executed and an NOC issued, the transfer process was incomplete under Section 50 of the Motor Vehicles Act at the time of the accident. Thus, Boby Chauhan remained the registered owner.
Relying on Supreme Court precedents such as Naveen Kumar v. Vijay Kumar (2018) and Surendra Kumar Bhilawe v. New India Assurance Co. (2020), the Court ruled that the registered owner remains liable to third parties until the ownership transfer is formally completed.
The car was insured with respondent No. 3 – the Insurance Company, which was therefore held liable to indemnify the owner and pay the compensation.
Assessment of Compensation
The Court applied the principles laid down by the Supreme Court in National Insurance Co. Ltd. v. Pranay Sethi (2017) and Kirti v. Oriental Insurance Co. (2021) to compute compensation.
Since the deceased’s income could not be proven, the Court adopted minimum wages of ₹6,000 per month, applying a multiplier of 16 for their age (33 years), and granted standard benefits for future prospects, consortium, loss of estate, and funeral expenses.
| Deceased | Compensation Awarded | Interest |
|---|---|---|
| Neetu Devi | ₹14,94,000 | 6% p.a. from 9 June 2017 |
| Ghanshyam | ₹12,25,200 | 6% p.a. from 9 June 2017 |
The insurance company was directed to deposit the entire amount by October 31, 2025, payable in equal shares to the claimants.
Significance of the Judgment
This judgment reinforces the principle that technicalities cannot defeat substantive justice in motor accident claims. The High Court’s detailed reasoning emphasizes that when the facts clearly show rash and negligent driving, compensation cannot be denied merely because the deceased driver cannot testify.
The ruling also clarifies the liability of registered owners and insurers, reaffirming that until ownership transfer is fully recorded with the registering authority, the original registered owner—and consequently, their insurer—remains responsible for compensation.
Citation:
Kamli & Others v. Boby Chauhan & Others, FAO (MVA) Nos. 50 & 51 of 2024, decided on 7 October 2025, by Hon’ble Mr. Justice Vivek Singh Thakur, High Court of Himachal Pradesh, Shimla.