Gujarat High Court
Icici Lombard General Insurance … vs Legal Heirs Of Deceased Lakshmanbhai … on 7 May, 2026
NEUTRAL CITATION
C/FA/1762/2015 JUDGMENT DATED: 07/05/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1762 of 2015
With
R/CROSS OBJECTION NO. 11 of 2016
In
R/FIRST APPEAL NO. 1762 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
=============================================
Approved for Reporting Yes No
NO
=============================================
ICICI LOMBARD GENERAL INSURANCE COMPANY LTD
Versus
LEGAL HEIRS OF DECEASED LAKSHMANBHAI POPATBHAI
BADMALIYA & ORS.
=============================================
Appearance:
MR NIKUNT K RAVAL(5558) for the Appellant(s) No. 1
MR MEHUL S SHAH(772) for the Defendant(s) No. 1.1,1.2,1.3,1.4
MR VISHAL C MEHTA(6152) for the Defendant(s) No.
1.1,1.2,1.3,1.4
RULE SERVED for the Defendant(s) No. 2
UNSERVED EXPIRED (R) for the Defendant(s) No. 1.5
=============================================
CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 07/05/2026
ORAL JUDGMENT
1. The captioned appeal is filed at the instance of the
appellant -Insurance Company, being aggrieved and
dissatisfied with the judgment and award dated 25th June
2015 passed by the learned Motor Accident Claim Tribunal,
Bhavnagar in MACP No.835 of 2007.
2. By the said judgment and award, the Tribunal has partly
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allowed the claim petition preferred by the original claimants
under Section 166 of the Motor Vehicle Act, 1988, holding
them entitled to recover sum of Rs.8,34,000/- towards
compensation from the original opponents, jointly and
severally, together with running interest at the rate of 9% per
annum from the date of filing of claim petition till its actual
realization with proportionate cost. Hence, the captioned
appeal, at the instance of the original opponent no.2,
essentially disputing its liability to pay any amount of
compensation.
3. Considering the grounds raised in the appeal memo and the
submissions made by learned advocate for the appellant on
record, this Court vide order dated 28th January 2016, had
admitted the appeal and had issued notice for final disposal.
In the interim application for stay preferred by the -appellant –
Insurance Company, conditional order of stay was granted
against the execution and implementation of the impugned
judgment and award, on deposit of the entire award amount
at the concerned Tribunal. It was further directed to disburse
the award amount in favour of the original claimants in terms
of the directions issued by the Coordinate Bench in its
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judgment dated 8th May 2014 in First Appeal No.3289 of
2013. The record suggests that the notice of admission of
appeal was duly served upon respondent nos.1.1 to 1.4 who
are the original claimants and the notice of admission of
appeal is also reported to have been duly served upon
respondent no.2 who is the registered owner of the vehicle
involved in the accident. It was further reported that the
mother of the deceased who has been joined as respondent
no.1.5 has expired. The record and proceedings were called
for.
4. Mr. Ayush Bhandari learned advocate had appeared on
behalf of Mr. Nikunt K Raval learned advocate on record for
the appellant Insurance company. Learned advocate Mr.
Vishal C Mehta had appeared on behalf of the respondent
nos.1.1 to 1.4 – original claimants. It is required to be
mentioned that on admission of the captioned appeal, the
original claimants have preferred cross objections, essentially
praying for enhancement of the amount of compensation for
the grounds raised in the application. The cross objections
were directed to be heard along with the First Appeal.
Considering the appeal of 2015 pending consideration, the
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matter was peremptorily heard with the able assistance of
learned advocate, learned advocates on record for the
respective parties.
5. Learned advocate for the appellant- Insurance Company,
has vehemently assailed the impugned judgment and award
by submitting that the Tribunal committed grave error in
treating the deceased as passenger in the insured vehicle. It
was submitted that the Tribunal failed to appreciate the
evidence brought on record, more particularly the police case
papers produced vide list at Exhibit 20, which includes the
statement of the driver Pankajbhai Babariya has also been
produced on record at Mark 20/2. The bare appreciation of
the statement of the driver of the insured car clearly suggests
that the deceased along with three other persons were
permitted to board the insured vehicle as passengers. He had
further submitted that indisputably the insured vehicle is a
Tavera Car and as per the terms and conditions of the policy
issued by the appellant insurance company, which was
“private car package policy”, it prohibited the use of the car
for hire and reward purpose. Learned advocate has placed on
record the judgment of the Tribunal passed in Review
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Application No.1 of 2009 preferred in the original claim
petition at the instance of the Insurance Company seeking
review/recall of the order passed on application praying for
interim compensation under Section 140 of the Motor Vehicle
Act at Exhibit 5. He had submitted that initially, the Tribunal
had allowed the interim compensation application (Exhibit 5),
in favour of the original claimants. However, the Tribunal had
not considered the written arguments filed by the insurer at
Exhibit 18. The Insurance Company had therefore approached
in appeal before this Court, which was registered as First
Appeal No.5753 of 2008. The High Court upon appreciation of
the case of the Insurance Company, vide order dated 29 th
January 2009, had permitted the Insurance Company to prefer
a review application before the Tribunal, with further
direction to the Tribunal to take into consideration the written
arguments submitted by the insurer as well as other
arguments which may be advanced by the parties. Inviting my
attention to the various contentions raised by the Insurance
Company in the aforesaid review application, he had
submitted that the attention of the Tribunal was invited to the
material breach in the terms and conditions of the policy,
inasmuch as the private car was used for commercial purpose
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as a taxi and also was subjected to hire and reward. Apart
from the complaint lodged by the driver Pankajbhai Babariya,
his statement along with the statement of the four passengers,
including the subsequent purchaser Atulbhai, has also been
produced on record. Having appreciated the aforesaid
investigation case papers, the Tribunal had taken note of the
fact that though the name of the insured person appears as
Nileshbhai P. Adroja who is the registered owner of the
vehicle, the vehicle was in possession of the subsequent
purchaser- Atulbhai Balubhai as evident from his statement
recorded by the police. Learned advocate had further invited
my attention to the findings and reasons assigned by the
Tribunal while deciding the review application to point out
that if the driver had allowed the passengers to sit in the
offending vehicle, then it was well within the knowledge of the
owner of the vehicle. The Tribunal had therefore prima facie
believed the defence raised by the appellant Insurance
Company that the owner had given consent to ply the
passengers in the private vehicle, and therefore it amounts to
breach of vital terms and conditions of the policy. The
Tribunal has also believed the defence raised by the appellant
-Insurance Company that the FIR itself was lodged by the
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driver of the vehicle who had allowed four passengers to
board in the insured vehicle and that the said passengers have
paid the fare. The Tribunal had taken note of the pleadings in
this regard made by the original claimants of having
acquaintance with the driver of the vehicle as being related.
However, considering the first statement of the driver as
recorded by the police officers, in absence of such averments
being made by the driver, the Court had found such stand of
the claimants to be a camouflage and therefore was not
accepted. Learned advocate had therefore submitted that
having appreciated the police case papers, the Tribunal while
considering the interim compensation application has
categorically held that the deceased was traveling as a fare-
paying passenger and a private car was used in breach of
terms and conditions of the policy. As against the aforesaid
reasons assigned by the Tribunal while adjudicating the
interim compensation application, the Tribunal unfortunately
while deciding the main claim petition, on erroneous
considerations about absence any evidence with regard to
defence of the deceased driver plying insured vehicle by
carrying paying fare passengers, has refused such defense.
Inviting my attention to the aforesaid findings and reasons
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assigned by the Tribunal, learned advocate has submitted that
admittedly the claimant who has entered the witness box i.e.
wife of the deceased is not an eyewitness to the accident. A
bare appreciation of the evidence of the said witness in her
cross-examination, she has fairly conceded to the fact that the
insured vehicle was used as a taxi. On close appreciation of
her cross-examination, it transpires that the driver of the
insured vehicle was not known to the claimants. However, in
her later part of deposition, she has tried to project that the
driver -Pankajbhai Babariya was related to them. As against
the aforesaid evidence, the FIR produced on record at Exhibit
33, which is lodged by driver -Pankajbhai Babariya, nowhere
mentions that the deceased was known to him or related to
him or related to him. What is reported to the police is the
fact that the deceased had boarded the insured vehicle along
with three other persons as passengers while they were on
their way from Vallabhipur to Amreli. Inviting my attention to
the contents of FIR, learned advocate had submitted that in
fact it has transpired that the insured vehicle had traveled
from Amreli to Vallabhipur to drop the officers of Gujarat
Water Supply Sewerage Board. It has further transpired from
the statement of Atulbhai, who is the subsequent purchaser of
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the insured vehicle, and his statement being recorded before
the police during the course of investigation, that the insured
vehicle was hired by the Board on rental basis for an amount
of Rs.18,500/- per month. In this regard, having obtained the
police case papers, the Insurance Company has submitted an
amended written statement at Exhibit 17. It was submitted
that the first written statement was filed by the insurance
company which is produced on record at Exhibit 30. However,
on obtaining the investigation case papers, an application at
Exhibit 16 was preferred seeking permission of the Tribunal
to produce an amended written statement which was granted
by the Tribunal vide order dated 8 th August 2008. Inviting my
attention to the defence raised in the amended written
statement, learned advocate had submitted that specific
defence was raised with regard to breach of terms and
conditions of the policy mainly on the ground that the insured
car was used for hire and reward purpose and therefore was
subjected for taxi purpose as evident from the police
statement of Atulbhai Balubhai Patel and Pankajbhai Jinabhai
Babariya, the aforesaid defence has been established and
proved on record. It was also contended that the deceased
was traveling as an illegal passenger on the Tavera car which
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is otherwise a private vehicle, and traveling of such a person
was not permitted under the terms and conditions of the
policy as well as under the provisions of the Motor Vehicle Act
and rules framed thereunder. As regards the liability of the
Insurance Company is concerned, it was categorically stated
in the written statement that on the date of the contract of
insurance, the insured vehicle was not having any permit,
either expressly or implicitly, to carry any passenger for hire
or reward. On the contrary, there was a specific condition in
the policy which excluded the use of the insured vehicle for
the carriage of any passenger for hire or reward. Thus, it is
apparent that the vehicle was in fact used in breach of such
specified conditions. Learned advocate had placed heavy
reliance upon the statement of Pankajbhai Jinabhai Baraiya
recorded on 10th August 2007 in the form of FIR produced on
record at Exhibit 56 as well as the statement of Atulbhai
Balubhai recorded by the investigating officer on 11 th August
2007 at mark 20/4. Apart from the aforesaid defence raised,
learned advocate had further submitted that the driver was
not joined as a party in the original claim proceedings. Having
realized the above aspect, the objection was raised by the
Insurance Company in its written argument at Exhibit 94 in
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this regard. According to learned advocate, even on bare
appreciation of the manner in which the accident has taken
place, at the most it can be considered as an act of God. In
absence of the negligence of the driver being established, the
owner of the insured vehicle cannot be held vicariously liable
towards the occurrence of such accident, and consequently
the Insurance Company cannot be held liable to pay any
amount of compensation in absence of the driver being joined
as a party to the proceedings. Inviting my attention to the
terms and conditions of the policy which is produced on
record at Exhibit 51, learned advocate had submitted that
indisputably the policy is a private vehicle package policy and
therefore the insured vehicle could not have been used for
commercial purpose. In this regard, learned advocate had
further invited my attention to the limitation clause
incorporated in the policy which specifically prohibits the use
of the vehicle for hire and reward purposes. As regards the
amount of premium realized towards different categories of
the risk covered, learned advocate had submitted that merely
because the additional premium is realized towards
passengers traveling in the insured vehicle and the seating
capacity of the Tavera Car being accepted as for 10 persons,
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does not permit the insurer to ply the vehicle for hire and
reward basis. According to learned advocate, the deceased
had boarded the Tavera Car by paying fare, and therefore
being an unauthorized passenger on the insured vehicle, the
insurance company is required to be exonerated from its
liability to pay any compensation. The attention of this Court
was also invited to the evidence of the RTO Officer who has
been examined as a witness at the instance of the appellant
Insurance Company and whose evidence has been recorded at
Exhibit 70. According to the learned advocate, the said
witness in his examination has fairly conceded to the fact that
the insured vehicle was used as a taxi. The examination-in-
chief before the Tribunal has categorically stated that the
insured vehicle was a private car and cannot be treated as a
transport vehicle. The reference in this regard was made to
the RC book. Inviting my attention to his cross-examination,
the learned advocate has submitted that the dispute with
regard to holding a valid and effective driving license was also
raised at the relevant stage by the appellant Insurance
Company before the Tribunal. In this regard, the RTO Officer
has admitted that the license was in force between the period
17th January 2005 to 16th January 2025. However, it is
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permitted to drive a Light Motor Vehicle (LMV). He has
further admitted that Travera Car would fall in the category of
Light Motor Vehicle. However, considering the issue of the
insured vehicle being used for commercial purposes, the issue
of non-holding of a license to ply a transport vehicle was
raised by the appellant Insurance Company. Lastly, the
learned advocate has referred to the evidence of one of the
passengers in the insured vehicle viz. Dileshbhai
Amarsinhbhai Chauhan, who has been examined as a witness
pursuant to the witness summons sought for by the appellant
Insurance Company at Exhibit 83. The evidence of the said
witness has been recorded at Exhibit 84. Inviting my attention
to the evidence of the said witness, the learned advocate has
once again emphasized on the fact that the deceased was
traveling as a passenger in a private car. By making the
aforesaid submissions, the learned advocate summarized his
position by stating that the appellant Insurance Company by
bringing on record the statements of witnesses recorded
during the course of investigation and appreciated in light of
the admission of the claimant who herself has in cross-
examination conceded to the fact that the insured vehicle was
used as a taxi and the evidence of witness Dineshbhai
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Amarsinhbhai Chauhan (Exhibit 84) of deceased along with
three persons having boarded the vehicle as passengers, it
can be concluded that the deceased was traveling as a
passenger by paying fare in a private car. The learned
advocate has, therefore, submitted that the impugned
judgment and award passed by the Tribunal, holding the
appellant Insurance Company liable to pay compensation, is
required to be quashed and set aside.
5.1. As regards legal stance, the learned advocate has placed
reliance upon the judgment of the Hon’ble Supreme Court in
the case Jagtar Singh vs. Sanjeev Kumar, reported in
(2018) 15 SCC 189, wherein the Court has held that the
liability of the Insurance Company in respect of the occupant /
gratuitous passengers in a private car would arise except
where occupants in the car are illegal passengers and the
private car is used in breach of the terms and conditions of
the policy. Learned advocate has also placed reliance upon
the judgment of the Division Bench of this Court in the case of
New India Assurance Company Limited vs. Jaysukh Lal
Magan Lal Joshi and Others reported in 2013, (3) GLR
2283. Reliance was placed on the observations made in Para
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7. Inviting my attention to the principal contention raised by
the Insurance Company disputing its liability on the ground
that the vehicle in the facts of the case was used as a taxi to
carry passengers for hire or reward. Considering the
aforesaid ground of the appellant- Insurance Company, the
Division Bench has closely appreciated the FIR produced at
Exh.32 wherein it was stated that the insurer vehicle was
hired. The Court upon appreciation of the aforesaid statement
made by the informant in light of the terms and conditions of
the policy arrived at the conclusion that policy does not cover
use for hired and reward purposes. As regards the stand of
the original claimants is concerned, the Court observed that
once the document is produced on record the claimant cannot
be permitted to choose part of the document in their favour
and to disown the part of the documents against them. The
Court has therefore, accepted the appeal of the appellant –
Insurance Company by exonerating them from liability to pay
any amount of compensation. Learned advocate has also
placed reliance upon the unreported judgment of the learned
Single Judge of this Court in case of National Insurance
Company Limited vs. Rekhaben Rajeshbhai Rathod and
Others rendered in First Appeal No.2446 of 2007 dated
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8th April 2014. The reliance was placed on observations in
Paras 9, 10, and 11. Learned advocate has therefore urged to
allow the appeal and exonerate them from their liability to pay
any amount of compensation.
6. Per contra, the learned advocate Mr. Vishal C Mehta,
appearing for respondents 1.1 to 1.4 -original Claimants, has
forcefully objected to the aforementioned submissions.
Learned advocate once again invited my attention to the
manner in which the accident was reported, more
particularly, referring to the FIR produced on record at
Exhibit 33. He pointed out from the contents of the FIR that
on the fateful day, the informant who is the driver of the
insured vehicle, namely Pankajbhai Jinabhai Babariya had
reported that they were returning from Vallabhipur to Amreli
and while they have reached near Lathi bus stand, four
persons who were standing nearby had boarded the vehicle
and had started their journey to reach Amreli. Learned
advocate had therefore, submitted that on bare appreciation
of the complaint, nowhere in the complaint it has been stated
that the deceased or the other three persons were charged
with any fare. He has further submitted that as regards the
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contention raised by the appellant Insurance Company of the
vehicle being subjected to use for hire and reward purpose, no
evidence worth has been brought on record in this regard. He
has further submitted that the appellant – Insurance Company
attempted to relate an earlier part of the journey whereby the
witnesses examined by the police during the course of
investigation, more particularly, the subsequent purchaser of
the insured vehicle viz. Atulbhai Patel, who has mentioned
before the investigating officer that the vehicle was given on
rent to the Gujarat Water Supply and Sewerage Board for a
rent of Rs. 18,500/- and on the fateful day, they had started
their journey from Amreli to reach Vallabhipur to drop the
officers of the said board. The learned advocate submitted
that the aforesaid breach of condition would have no bearing
as regards accident. It was submitted that in order to
ascertain the liability of the Insurance Company what is
required to be taken into consideration is the factors existing
at the time of the accident. He has further invited my
attention to the evidence of the widow of the deceased who
has been examined as witness, recorded at Exhibit 31. From
her examination-in-chief, it was pointed out that she has
categorically stated that the deceased was knowing the driver
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of the insured vehicle and being friends, he had accompanied
the driver in the insured vehicle without any fare. In her
cross-examination, at the instance of learned counsel for the
appellant- Insurance Company, she has fairly conceded to the
fact that the vehicle was used as a taxi. However, it is also
required to be noted that it was merely a suggestion put by
the learned counsel for the Insurance Company, which as a
prudent person, she has immediately conceded to such
suggestion. According to the learned advocate, for a witness
the description of the vehicle as a car or taxi would not be of
such difference. The attention of this Court was invited to her
evidence wherein she has stated in her cross examination that
the name of the driver was Pankajbhai Babariya. She has also
admitted that Pankajbhai Babariya is still alive. With such
evidence on record, it can be inferred that the deceased was
knowing the driver. Learned advocate has further pointed out
that though a question was put to the witness about the
deceased being serving in Gujarat Water Supply Board, she
has denied the aforesaid fact. She has further stated that her
husband was traveling in the insured vehicle without paying
any fare. Learned advocate has therefore, submitted that the
Insurance Company having cross examined said witness, no
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contradictory evidence has been brought on record as regards
the case put forward by the claimant that the deceased was
on board as he was known to driver of the insured vehicle. On
the contrary, it has elicited from her cross that her husband
had not paid any amount of fare towards such journey.
Learned advocate has also invited my attention to the
evidence of witness Dineshbhai Chauhan at Exh.84. He had
submitted that said witness had accompanied the deceased
along with other persons who were traveling in the insured
vehicle at the time of accident. On close appreciation of the
evidence of the said witness, it gives an impression that the
person seating behind them was known to the driver. He had
further pointed out that a specific question was put to the said
witness as to whether the four persons who were permitted to
travel as passengers have paid any fare, to which, said
witness has denied having paid any amount of fare. On the
contrary, while he was examined at the instance of the
counsel for the claimant, he has admitted that since the
deceased was known to the driver, he had accompanied in the
Tavera car. He has also admitted that no amount of rent was
realized. Considering the aforesaid evidence on record,
learned advocate has submitted that no error can be found
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with the finding of the Tribunal that the Insurance Company
failed to establish its defense by leading any evidence. It was
submitted that the first version of the accident in the FIR does
not reveal the fact about acceptance of fare. In absence of any
evidence acknowledging the fact of the amount of fare being
paid by the deceased while boarding the insured vehicle, the
Insurance Company has failed to prove its defence. The
attention of this Court was invited to the terms and conditions
of the policy produced on record at Exh.51. It was pointed out
that the policy was a private car package policy which is
treated as comprehensive policy. According to the learned
advocate, the issue of liability of the Insurance Company to
indemnify the occupant in the private care having private car
package policy which / comprehensive policy is no mo res-
integra. In this regard, the learned advocate has drawn my
attention to the judgment of the Hon’ble Supreme Court in the
case of Insurance Company Limited versus Balakrishnan
reported in (2013) 1 SCC 731. Referring to the relevant
observations, learned advocate had pointed out that the
Hon’ble Court had taken note of the role of Tariff Advisory
Committee and had referred to its earlier decisions in case of
Amrit Lal Sood and another versus Kaushalya Devi
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Thapar and others reported in (1998) 3 SCC 744, as well
as other related judgments, whereby, the Tariff Advisory
Committee was requested to enforce its decision in regard to
coverage of third-party risk which would include an occupant
in a vehicle. The Hon’ble Supreme Court had taken note of the
decision of Delhi High Court in the case of Yashpal Luthra
and another versus United India Insurance Company
Limited and another reported in 2011 ACJ 1415. In the
aforesaid decision, the evidence of the competent authority,
namely the Tariff Advisory Committee (TAC) and Insurance
Regulatory and Development Authority (IRDA) had placed on
record circular dated 16th November 2009 issued by IRDA to
the CEOs of all the Insurance Companies, restating the factual
position relating to the liability of Insurance Companies in
respect of pillion rider on a two-wheeler as well as occupants
in a private car under the comprehensive/package policy.
Inviting my attention to the aforesaid circular dated 16th
November 2009 as reproduced in the said judgment as well as
the relevant observations of the Delhi High Court in the
judgment referred to the Court held that there was no scintilla
of doubt that a “comprehensive/package policy” would cover
the liability of the insurer for payment of compensation for the
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occupant in a car. Learned advocate had therefore submitted
that considering the fact that the policy in question in the
present case is a private car package policy which is treated
as comprehensive policy, the deceased being occupant in a
private car, Insurance Company is bound to indemnify the
owner of the insured vehicle to pay the compensation to the
original claimants.
7. On the quantum of compensation, learned advocate had
invited my attention to the grounds raised in the cross-
objection. Assailing the impugned judgment and award,
learned advocate had submitted that the Tribunal has rightly
determined the age of the deceased as 49 years considering
the date of birth of the deceased as 16 th June 1958 and the
date of accident being reported on 10 th August 2007.
However, the income of the deceased has been determined on
lower side as according to him, despite cogent material being
produced on record in the nature of pay slip, salary certificate
and muster roll, the witness being examined, the Tribunal has
fixed the income of the deceased at Rs.6,000/- as against
Rs.7,500/- earned by attending job. It was further pointed out
that the additional income of Rs.1,700/- has also been
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erroneously not considered despite evidence of the Secretary-
Mansukhbhai Patel, being recorded at Exhibit 58 and the
vouchers of payment right from October 2005 to July 2007
being produced on record. The Tribunal has refused to take
into consideration aforesaid evidence merely on the ground
that no muster roll, no pay register has been brought on
record. Merely because the said witness has conceded to the
fact that the vouchers are not signed by the payee was not a
valid reason to ignore the aforesaid documents on record. The
attention of this Court was invited to the findings and reasons
assigned by the Tribunal. It was submitted that the Tribunal
has taken note of the fact that the deceased used to work on
the job between 10:00 to 5:00 PM and therefore it was not
possible for him to attend the work of caretaker. It was
further submitted that at least the pay slip produced on
record indicating the salary of the deceased at Rs.7,500/-, in
light of the evidence of the widow of the deceased being
examined as witness, deserves consideration. He has
therefore urged this Court to fix the income of the deceased at
Rs.7,500/. As regards prospective income, learned advocate
has fairly submitted that the Tribunal has rightly taken into
consideration addition of 30% of the established income.
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Learned advocate had further disputed the deduction made
towards personal and living expenses of the deceased which
according to him considering the fact that there were five
dependents in the family, it was appropriate to apply 1/4th
deduction instead of 1/3rd as applied by the Tribunal. Learned
advocate had fairly submitted that the Tribunal has rightly
considered a multiplier of 13 in the facts of the case. Learned
advocate had therefore urged this Court to enhance the
amount of compensation under the head of loss of dependency
appropriately. Learned advocate had further prayed for
enhancement towards the conventional heads. It was
submitted that in view of the settled principles laid down by
the Hon’ble Supreme Court in the case of National
Insurance Company Limited versus Pranay Sethi
reported in (2017) 16 SCC 680 as well as in the case of
Magma General Insurance Co. Ltd vs. Nanu Ram Alias
Chuhur Ram & Ors reported in (2018)18 SCC 130, each of
the claimants shall be entitled to loss of consortium which has
been fixed as Rs.48,400/-. As against the aforesaid amount the
Tribunal has awarded meager amount of Rs.5,000/- under the
aforesaid head. Learned advocate had further submitted that
the amount under the head of loss of estate and funeral
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expenses is also required to be revisited in view of the
aforesaid principles. Learned advocate had therefore urged
this Court to dismiss the First Appeal and to allow the Cross-
Objections by modifying the impugned judgment and award
by appropriately enhancing the amount of compensation
which may be awarded with interest and cost.
8. In rejoinder, learned advocate for the appellant Insurance
Company, has objected to the aforesaid submissions made by
learned advocate on record for the claimants on the ground of
quantum of compensation. Learned advocate has mainly
relied upon the findings and reasons assigned by the Tribunal
on the issue of quantum of compensation. As regards the
submissions made by learned advocate for the original
claimants on the issue of liability, learned advocate had
pointed out that the Tribunal had no occasion to deal with the
aspect of private car package policy / comprehensive policy.
He has re-emphasized on the fact of breach of terms and
conditions of the policy on the ground of insured vehicle being
subjected to hire, use of hire and reward purpose and the
deceased having travelled as unauthorized passenger.
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9. Disputing the aforesaid submissions, learned advocate Mr.
Vishal C Mehta appearing for the original claimants has
submitted that in fact at page 18 of the impugned judgment
and award, the Tribunal has recorded finding that the policy
in question is a private car package policy. As regards the
aforesaid submission made by learned advocate for the
appellant Insurance Company, he had submitted that at no
stage, either before the Tribunal when the written statements
were tendered or before this Court when the appeal memo
was submitted or even during the course of argument, the
aforesaid aspect disputing the policy to be Act Policy or
comprehensive policy has not been raised. He has therefore
urged this Court not to entertain the aforesaid plea. Learned
advocate had further clarified that as regards the reliance
placed on the review order passed by the Tribunal is
concerned, it was a prima facie expression of the findings and
reasons assigned by the Tribunal on an interim application at
an interim stage, which may not have bearing on the final
judgment. As against the reliance placed on the police case
papers, more particularly, the statements of the witnesses
recorded during the course of investigation, the appellant
Insurance Company has miserably failed to examine the driver
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of the insured car or the subsequent purchaser Atulbhai Patel
as witnesses in support of their defense. On the contrary, the
witness Dineshbhai Chauhan whose evidence has been
recorded at Exhibit 84 categorically disowns the statement
produced on record at mark 20/4. As regards the amount of
consortium qua deceased mother is concerned, learned
advocate has placed reliance upon the recent judgment of this
Court in the case of National Insurance Company Limited
vs. Ranchodbhai Savjibhai Baraiya and other in First
Appeal No.1235 of 2015 dated 29.4.2026 wherein the Court
has considered the loss of consortium even in case of
deceased claimant. Learned advocate has therefore prayed for
dismissal of the appeal.
10. I have given thoughtful consideration to the arguments
advanced by the learned advocates for respective parties. I
have appreciated their arguments in light of the findings and
reason assigned by the Tribunal as well as I have also perused
the relevant evidence on record. The short question which
arises for consideration in the present appeal is as to whether
the Tribunal Committed any error in facts or in law, to hold
the origins claimants entitled to compensation of
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Rs.8,34,000/- towards compensation from the original
opponents, jointly and severally, together with running
interest at the rate of 9% per annum from the date of filing of
claim petition till its actual realization with proportionate cost,
in light of the facts of the case and the evidence on record?.
11. Before adverting to the aforesaid point for determination,
it would require to be noted that the foundational facts as
regards involvement of the offending vehicle, the deceased
having succumbed to the fatal injuries caused due use of the
motor vehicle , the negligence attributed to the driver of the
offending vehicle, the vehicle involved being duly insured with
the appellant insurance company, in absence of any challenge
to these facts, the same has remained uncontroverted.
12. As regards merits of the present appeal, the core
contention which has been raised by the appellant insurance
company is it’s liability to pay any compensation to the
claimants. The challenge is mainly on the ground that the
deceased was a fare paying passenger travelling in the private
car, which is otherwise not permissible. Indisputably, the
vehicle involved in the accident; the tavera car, is a private
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car which could not be used for any commercial purpose for
hire or reward purpose. I have carefully considered the
evidence of the witnesses namely Premjibhai Ramabhai
Makwana ( Exh. 70), who is an RTO officer and who has stated
in his deposition that a private vehicle cannot be treated as a
Transport vehicle. However, in his cross examination he has
fairly conceded that from policy he cannot confirm that the
vehicle involved was a non transport/ private car or a
transport vehicle. The Insurance company has submitted
witness summons application at Exh. 83 seeking attendance of
witnesses namely Atulbhai Babubhai Agaja and Dineshbhai
Amarshibhai Chauhan. The Tribunal has passed an order
below such application issuing warrant of arrest upon said
witnesses. The insurance company has examined Dineshbhai
Amarsinh Chauhan as a witness whose evidence has been
recorded at Exh. 84. The said witness in his deposition has
stated that he had accompanied driver Pankajbhai who was
driving the Tavera car and on their back side, other two to
four persons were travelling who were related to driver
Pankajbhai. The learned counsel for the insurance company
has questioned said witness about any fare being charged to
which he has denied. As against aforesaid facts elicit from his
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deposition, in cross examination at instance of claimants, said
witness has Nileshbhai was using said car for his private use
and had never rented. He has also admitted the fact that the
deceased was travelling in the car as being related to driver
Pankajbhai. He has denied any statement given before the
Police as shown to him and produced on record at Mark 20/4.
The application for reissuance of summons has been filed by
the insurance company against witness Atulbhai, however,
despite such application being allowed, at later stage, the
insurance company has submitted application at Exh. 90,
declaring their closure of right to lead further evidence.
Appreciating the overall evidence on record, merely because
the widow in her cross examination has admitted that the car
was plied as taxi, cannot be given due weightage to draw
conclusion that the insured vehicle was driven in breach of
terms and conditions of policy. In my view, the burden was to
establish the fact that the deceased was travelling as a fare
paying passenger. Having appreciated the aforesaid evidence
on record, in my view, the tribunal has rightly arrived at
finding that the insurance company has failed to establish
their case that the deceased was travelling as a fare paying
passenger.
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13. The next contention which has been raised by the
appellant insurance company is about breach of terms and
conditions of the policy mainly on two grounds; that the
private car was plied for hire and reward purpose and
secondly, on the ground that the driver of the insured vehicle
had plied a non transport vehicle in absence of valid and
effective driving license authorising to drive a transport
vehicle. For the reasons recorded in preceding paras, in my
view, in absence of any foundational facts of deceased being
traveling as fare paying passenger being proved, the
consideration of breach and terms of the policy does not arise.
So far as, objection being raised by emphasising on the fact
that the car was actually rented to the semi government
agency and the officers of the said agency being dropped, has
rightly been ignored by the Tribunal as the said facts would
have no bearing as regards liability of insurance company vis-
a-vis status of deceased being travelling as occupant is
concerned. As regards, issue of transport vehicle and holding
of license of light motor vehicle is concerned, it has been
elicited from the evidence of the RTO officer that the insured
vehicle belongs to category of ‘Light Motor Vehicle’ and
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therefore considering the fact that the driver Babriya
Pankajbhai Jinabhai was holding LMV license ( Exh. 48) at the
time of accident, the Tribunal has rightly decided the issue of
liability against the appellant insurance company.
14. Further, on careful consideration of the insurance policy
produced on record at Exh.51, it is apparent that the policy
was in force on the date of accident. The policy issued by the
appellant insurance company is a ‘Private Car Package
Policy’. The schedule of premium suggests that additional
premium has been realised towards unnamed PA cover for 10
persons of Rs.1,00,000 each apart from insurance coverage of
paid driver as well as PA cover of owner of the vehicle
insured. Thus, considering the aforesaid schedule, it is evident
that the insurance company has agreed to incur contractual
liability apart from statutory liability. The policy in question is
not restricted to third party risk but is a comprehensive
policy.
15. Having noted aforesaid features of the policy, as regards
status of the deceased being accepted as occupant in car and
not as unauthorized passenger or a fare paying passenger, in
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my view the insurance company cannot escape from its
liability to pay compensation to the claimants. As regards
legal position of the liability of Insurance Companies in case
of occupants travelling in private car under ‘Private Car
Package Policy’, as elucidated by the Hon’ble Supreme Court
in the case of Balkrishnan (supra), the Court has ruled that a
“comprehensive /package policy” covers the liability of the
insurer for injuries to passengers/occupants in a private car,
extending beyond the mandatory third-party risk. The court
has emphasized that such policies offer broader coverage,
allowing occupants to claim compensation. In the subsequent
decision in the case of Jagtar Singh (supra), the Hon’ble
Supreme Court has reiterated the instructions issued by the
Tariff Advisory Committee and IRDA directing all insurance
companies across the country as regards factual position
about liability of the insurance companies in respect of an
occupant in a private car under the comprehensive / package
policy. In view of the aforesaid precedents and the circulars
dated 18.03.1978, 02.06.1986, 16.11.2009 and 03.12.2009,
the appellant insurance company cannot shy away from it’s
liability to compensate the claimants.
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16. For the foregoing reasons, the appeal of the appellant
insurance company is without any merits and is hereby
dismissed.
17. As regards the cross objections filed by the original
claimants is concerned, essentially it raises the issue of
quantum of compensation. I have carefully considered the
findings and reasons assigned by the Tribunal in this regard.
The Tribunal has though taken note of the salary slip of the
month of July, 2007 of the deceased produced on record at
Exh.62 reflecting a basic salary of Rs.7,500/- per month,
however, for no valid reasons has confined the income to Rs.
6,000/- only, however, after considering the evidence of
witness The additional income of Rs. 1700 claimed by the
claimants, the evidence of the witness namely one
Manshukhbhai Vaghjibhai Patel, secretary at R.N. Gajera
Leuva Patel Wadi Trust (Exh. 58) has been rightly appreciated
by the Tribunal. It has not been accepted by the Tribunal
mainly on the ground that the appointment letter of the
deceased, the muster roll and pay register prior to 2007 has
not been produced by the claimants. The Tribunal has taken
note of the fact that if the deceased was working as store
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keeper in the Gujarat Krishi Machinery Ltd., between 10 a.m.
to 5 p.m., it was not possible for the deceased to attend work
of watchman with said Trust. Considering the aforesaid
findings and reasons assigned, in my view the Tribunal has
rightly appreciated the case of the claimants with regard to
additional income. I am in complete agreement with regards
to the reason assigned in this regard. However, as regards
income of the deceased earned from the work of store keeper
is required to be reconsidered. In my view, the Tribunal
committed grave error in ignoring the evidence on record
whereby the claimants have established their case of the
deceased earning Rs. 7,500 per month by leading cogent
evidence on record. In absence of any contradictions being
brought on record, there were no reasons for the Tribunal to
confine the income of the deceased to Rs. 6000 instead of Rs.
7,500 as evident from the deposition of the widow of the
deceased (Exh.31), affidavit of witness Harishbhai Trivedi
(Exh. 59), Pay slip of month of July, 2007 (Exh.62). For the
above reasons, the income of the deceased is fixed as
Rs.7,500/- per month.
18. As evident from the school leaving certificate ( Mark 6/6)
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of the deceased produced on record, his date of birth was
16.06.1968. Accordingly, the age of the deceased at the time
of accident date 11.08.2007, can be ascertained as 48 years
two months. The Tribunal has treated the age of the deceased
as 49 years and has followed the principles laid down in the
case of Rajesh and ors. Vs. Rajbir Singh and ors., reported
in 2013 ACJ SC 1403, and has applied 30% addition towards
future prospective income of the deceased. The Tribunal has
further considered the number of dependents as five however
has applied 1/3rd deduction towards personal and living
expenses of the deceased. The Tribunal has applied a
multiplier of 13 by treating the age of the deceased as 49
years. Having considered the aforesaid findings and reason
assigned by the Tribunal, the age of the deceased can be
considered between 48 to 49 years at the time of accident and
considering the fact that the deceased was employed on fixed
salary at the time of accident, the prospective income of the
deceased is required to be reconsidered in light of the ratio
laid down by the Hon’ble Supreme Court in the case of
Pranay Sethi (supra). Considering aforesaid age, the case of
the claimants will fall in the category of age group of 40 to 50
years and fixed salaried person and therefore, there shall be
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addition of 25% towards prospective income of the deceased.
Thus, the prospective income of the deceased would be Rs.
7500/- + 25% of Rs.7500/- = Rs.9,375/- per month. The
deceased was survived by five members in the family and
therefore considering the ratio laid down in the case of Sarla
Verma (supra), there shall be deduction of 1/4th instead
1/3rd as determined by the Tribunal, towards personal and
living expenses of the deceased. The deceased, if had
survived, could have contributed to the income of the family
Rs.7031 (Rs.9375/- – Rs.2344/-). Considering the age of the
deceased as 49 years, the Tribunal has rightly applied a
multiplier of 13. Thus, loss of dependency is determined as Rs.
7031/- x 12 x13 = Rs.10,96,836/-.
19. As regards compensation under conventional heads are
concerned, in view of the judgment of the Hon’ble Supreme
Court in the case of Pranay Sethi (supra), each of the
claimants viz. the widow, their three children and the mother
shall be entitled to loss of consortium. Considering the fact
that the claimants have persuaded their remedy essentially
seeking enhancement of compensation, they shall be entitled
to 10% rise as held by the Hon’ble Supreme Court in the
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aforesaid ruling. Thus, the widow shall be entitled to loss of
spousal consortium of Rs.48,400/-. Each child shall be entitled
to loss of parental consortium of Rs.48,400/-. The mother of
the deceased having suffered loss of love, care and affection of
his deceased son shall be entitled to filial consortium as Rs.
48,400/-. Similarly, the claimants shall be entitled to an
amount of Rs.18,150/- each towards funeral expenses and loss
of Estate.
20. In view of above discussions, the total amount of
compensation is reconsidered and redetermined as under:
Particulars/ Head Awarded by the Awarded by
Tribunal this Court
Loss of Dependency 8,11,200/- 10,96,836/-
Loss of consortium 5,000/- 2,42,500/-
Loss of Estate 15,000/- 18,150/-
Funeral expenses 2,500/- 18,150/-
Total compensation 8,34,000/- 13,75,636/-
Enhanced Compensation 5,41,636/-
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Hence, the original claimants are entitled to a total
amount of compensation of Rs.13,75,636/-, with interest at
the rate of 9% p.a. from the date of filing of claim petition till
its actual realisation, from the original opponents, jointly and
severely, with proportionate cost.
21. For the foregoing reasons, the captioned appeal stands
dismissed whereas the cross objection is allowed. The
impugned judgment and award dated 25 th June 2015 passed
by the learned Motor Accident Claim Tribunal, Bhavnagar, in
MACP No.835 of 2007, stands modified by holding the original
claimants entitled to a total amount of compensation of
Rs.13,75,636/-, with interest at the rate of 9% p.a. from the
date of filing of claim petition till its actual realisation, from
the original opponents, jointly and severely, with
proportionate cost. In view of thereof, the appellant insurance
company is directed to deposit an enhanced amount of
compensation of Rs.5,41,636/- with interest and cost as
awarded by this judgment, with the concerned Tribunal within
a period of six weeks from the date of certified copy of this
order. On deposit of the aforesaid amount, the Tribunal shall
be at liberty to proceed with release and disbursement of the
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entire award amount in favour of the original claimants, in
terms of the apportionment as may be directed by the
Tribunal. The Tribunal may verify the identity of the claimants
and may strictly adhere to the guidelines of Hon’ble Supreme
Court at the time of payment of compensation. Let aforesaid
exercise be undertaken by the Tribunal within a period of two
weeks thereafter. It shall be open for the tribunal to look into
the aspect of court fees, if any to be realised, before payment
of compensation.
22. With these observations, the appeal and the cross
objections stand disposed of in aforesaid terms. The Registry
is directed to send back the record and proceedings to the
concerned Tribunal forthwith along with the writ of this
judgment.
sd/-
(NISHA M. THAKORE,J)
RATHOD KAUSHIKSINH
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