Summary and Analysis of Sunita & Ors. vs. United India Insurance Co. Ltd. & Ors. (Civil Appeal No. 9538 of 2025)
1. Heading of the Judgment
Sunita & Ors. vs. United India Insurance Co. Ltd. & Ors.
(Civil Appeal No. 9538 of 2025 | Decided on July 17, 2025)
Bench: Sanjay Karol and Joymalya Bagchi, JJ.
2. Relevant Laws and Legal Provisions
The judgment interprets and applies:
Motor Vehicles Act, 1988:
Section 166: Claim for compensation in accident cases.
Section 10(2)(d) & (e): Licensing requirements for driving Light Motor Vehicles (LMVs) and transport vehicles.
Section 2(21): Definition of "Light Motor Vehicle" (LMV).Insurance Policy Terms: "Liability Only Policy" (covers third-party liability only).
Key Precedents:
Mukund Dewangan v. Oriental Insurance Co. Ltd. (2017): LMV license covers transport vehicles under 7500 kg.
Bajaj Alliance v. Rambha Devi (2024): Constitutional Bench affirmed Mukund Dewangan.
National Insurance Co. Ltd. v. Baljit Kaur (2004): Introduced "pay and recover" principle.
Pranay Sethi (2017): Guidelines for calculating compensation (future prospects, conventional heads).
3. Basic Case Details
AspectDetailsAccident27 November 2013; Deceased (Gokul Prasad, 32) died in a rashly driven Tata 407 truck.Claim FiledBy legal heirs (Appellants) seeking ₹49.26 lakhs (deceased: cloth-seller, ₹12k/month income).Insurance DefensePolicy breach: Vehicle used commercially without valid permit/fitness; driver held LMV license (not commercial).Tribunal Award (2016)₹19.53 lakhs + 6% interest; liability on driver/owner (insurer exempted).High Court (2022)Upheld Tribunal’s order.Supreme CourtAllowed appeal: Directed insurer to pay ₹26.97 lakhs and recover from owner.
4. Explanation of the Judgment
I. Validity of Driver’s License
Issue: Driver held an LMV license; truck (Tata 407) weighed 4995 kg (<7500 kg). Insurer argued license invalid for commercial use.
Court’s Ruling:
LMV license (Section 10(2)(d), MV Act) covers transport vehicles under 7500 kg (Mukund Dewangan and Bajaj Alliance affirmed).
No separate endorsement needed for commercial vehicles in this weight category.
Driver held a valid license.
II. Liability of Insurance Company
Policy Type: "Liability Only Policy" (covered third parties only; no premium paid for driver/owner/passengers).
Insurer’s Argument: No liability since deceased was a "gratuitous passenger" (not covered under policy).
Court’s Ruling:
Insurer must pay compensation first ("pay and recover" principle: Baljit Kaur, Anu Bhanvara).
Reason: Insurer can recover the amount from the vehicle owner later to protect victims’ rights.
Tribunal & High Court erred in absolving insurer.
III. Compensation Recalculation
Tribunal’s Award: ₹19.53 lakhs (based on ₹12k/month income).
Supreme Court’s Enhancement:
Future Prospects: 40% added (deceased aged 32; Pranay Sethi).
Conventional Heads: 10% increase (revised every 3 years; Pranay Sethi):
Loss of Estate: ₹18,150 → ₹18,150
Funeral Expenses: ₹18,150 → ₹18,150
Loss of Consortium: ₹48,400 × 5 claimants = ₹2,42,000
Total Compensation: ₹26,97,500 (see table below).
Compensation HeadAmount (₹)BasisLoss of Income24,19,200Monthly: 12,000 → Yearly: 1,44,000 + 40% prospects = 2,01,600 → 1/4 deduction → ×16 multiplierLoss of Estate18,15010% increase since Pranay Sethi (2017)Funeral Expenses18,15010% increaseLoss of Consortium2,42,000₹48,400 × 5 claimants (10% increase)TOTAL26,97,500
IV. Final Directions
Insurer (United India) to deposit ₹26.97 lakhs + 6% interest in appellants’ bank account within 4 weeks.
Insurer may recover this amount from the vehicle owner (not the driver, as license was valid).
Appeal allowed; Tribunal & High Court orders modified.
Key Takeaways
License Validity: An LMV license suffices for commercial vehicles under 7500 kg.
Insurer’s Liability: "Pay and recover" applies even if the victim is an uncovered passenger, ensuring immediate relief.
Compensation: Must be revised periodically to account for inflation (Pranay Sethi).