Chhattisgarh High Court Dismisses Insurance Appeals, Enhances Accident Compensation to ₹9.91 Lakh

News Citation : 2026 LN (HC) 275 | 2026:CGHC:17769

April 20, 2026 : The High Court of Chhattisgarh has dismissed two appeals filed by The New India Assurance Company Limited in connection with a motor accident compensation dispute, while at the same time allowing a cross-objection by the claimants and enhancing the compensation awarded.

In a common judgment delivered on April 20, 2026, Justice Sanjay K. Agrawal dealt with MAC No. 928 of 2020 and MAC No. 978 of 2020, both arising out of the same accident but involving separate claim cases. The insurance company had challenged the awards passed by the Motor Accident Claims Tribunal, Ambikapur, which had granted compensation to the victims’ families.

The insurer argued that although the offending vehicle held a valid national permit, it lacked the required authorization under Rule 87(3) of the Central Motor Vehicles Rules, 1989, and therefore the company should not be held liable to pay compensation.

The Court rejected this argument, relying on the Supreme Court’s ruling in Shri Binod Kumar Singh v. National Insurance Company Ltd., which clarified that such authorization is only necessary when a vehicle operates outside the state in which it is registered. Since the vehicle in question was operating within Chhattisgarh and the accident also occurred within the state, the Court held that no such authorization was required. As a result, the insurance company’s appeals were dismissed.

On the issue of compensation, the Court considered the cross-objection filed by the claimants in MAC No. 928 of 2020. It found that the Claims Tribunal had underestimated the deceased’s monthly income at ₹4,500. Referring to the applicable minimum wages notification issued by the Labour Commissioner, Chhattisgarh, the Court revised the income to ₹6,000 per month.

The Court also held that the amounts awarded under conventional heads such as consortium, funeral expenses, and loss of estate were inadequate and required enhancement. Applying principles laid down in leading Supreme Court judgments including National Insurance Co. Ltd. v. Pranay Sethi, Sarla Verma v. Delhi Transport Corporation, and Magma General Insurance Co. Ltd. v. Nanu Ram, the Court recalculated the compensation.

The total compensation was increased from ₹7,50,400 to ₹9,91,200, resulting in an additional entitlement of ₹2,40,800 for the claimant. The Court directed the concerned respondent to deposit the enhanced amount within three months, along with interest at 8% per annum from the date of filing of the claim petition until realization.

With this, the Court dismissed the insurer’s appeals and allowed the claimants’ cross-objection, modifying the earlier award to the extent of enhancement.

Case Reference : MAC No. 928 of 2020 (The New India Assurance Company Limited vs. Sudhari Bai & Others), Counsel for Appellant: Mr. Dashrath Gupta, Advocate; Counsel for Respondent No.1: Mr. C. Jayant K. Rao, Advocate; and MAC No. 978 of 2020 (The New India Assurance Company Limited vs. Bhagmaniya & Others), Counsel for Appellant: Mr. Dashrath Gupta, Advocate; Counsel for Respondent: None.