Chhattisgarh HC Hikes Compensation For Unskilled Labour, Directs Insurance Pay-And-Recover

The Chhattisgarh High Court has significantly enhanced the compensation for the family of a deceased unskilled labourer, ruling that minimum wage notifications must dictate income assessments in the absence of documentary proof. In a vital relief for claimants, the Bench invoked the 'pay and recover' principle, compelling the insurance company to settle the award despite a breach of policy conditions regarding the driver's license.

A Single Judge bench of Hon'ble Shri Justice Sanjay Kumar Jaiswal adjudicated the appeal filed by the legal heirs of Late Sampat Lal. The appellants challenged an award of the Motor Accident Claims Tribunal, seeking a revision of the deceased's assessed income and a direction to hold the insurance company liable for payment.

Key Takeaways

Wage Notification Supremacy

In the absence of specific evidence regarding a deceased's profession, courts must rely on the Minimum Wages Notification for income assessment rather than conservative estimates.

Mandatory Pay and Recover

Insurance companies cannot evade initial payment to victims' families solely due to a driver's licensing breach; they must pay the claimants first and seek recovery from the owner later.

Inflation-Adjusted Conventional Heads

Compensation for loss of estate, funeral expenses, and consortium must be periodically updated in line with judicial precedents to reflect contemporary economic realities.

Court Observations and Directions

The Chhattisgarh High Court observed that while the claimants failed to produce "cogent and reliable evidence" to prove the deceased was a mason, it was improper to assess his income at a meager rate. The Bench noted that "Considering that the accident took place on 19.10.2023, it would be proper to take his monthly income of Rs.10,100/- as per the Chhattisgarh Minimum Wages Notification issued by the office of Labour Commissioner, Chhattisgarh for unskilled labour."

Regarding the liability, the Bench addressed the Tribunal's exoneration of the insurer due to a license breach. Relying on established principles, the Court modified this to ensure the claimants receive their dues immediately.

Ratio

Where the income of a deceased in a motor accident claim is not proved through documentary evidence, the Tribunal/Court must adopt the prevailing Minimum Wages Notification for that category of labour. Furthermore, in cases of policy condition breaches like lack of a valid driving license, the 'Pay and Recover' doctrine remains the standard to protect the interests of third-party claimants.

Background

The dispute originated from a road accident on October 19, 2023, when Sampat Lal, while riding a bicycle, was struck by a motorcycle driven rashly by the first respondent. A claim was filed under Section 173 of the Motor Vehicles Act, 1988. The Claims Tribunal originally awarded Rs.13,94,880/-, assessing the income at Rs.7,410/- per month and exonerating the Sarla Verma & Ors. Vs. Delhi Transport Corporation & Ors ( "(2009) 6 SCC 121": 2009 CaseBase(SC) 380) based on a license breach.

The appellants argued that the deceased earned up to Rs. 20,000/- as a mason. The Chhattisgarh High Court, while evaluating the precedents in National Insurance Company Ltd. V. Pranay Sethi ( "(2017) 16 SCC 680": 2017 CaseBase(SC) 551) and Sarla Verma & Ors. Vs. Delhi Transport Corporation & Ors ( "(2009) 6 SCC 121": 2009 CaseBase(SC) 380) for future prospects and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors for consortium, found the original award insufficient. Applying the principles from Rama Bai Vs. Amit Minerals through Incharge Officer/Competent Officer and Another regarding the 'pay and recover' mechanism, the Chhattisgarh High Court enhanced the total compensation to Rs.18,76,800/-.

Case Details:
Case No.: MAC No. 650 of 2025
Neutral Citation: 2026:CGHC:46229
Case Title: Janki Bai & Others vs. Sewakram & Another
Appearances:
For the Petitioner(s): Mr. Shobhit Koshta, Advocate.
For the Respondent(s): Mr. S.K. Kushwaha, Advocate for Respondent No. 2.

Source: 2026 CaseBase(CTH) 21284