Gujarat High Court
New India Assurance Co Ltd vs Leelaben Maheshbhai Prajapati on 24 March, 2026
NEUTRAL CITATION
C/FA/1608/2015 JUDGMENT DATED: 24/03/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1608 of 2015
With
R/CROSS OBJECTION NO. 8 of 2016
In
R/FIRST APPEAL NO. 1608 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE --Sd/-
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Approved for Reporting Yes No
YES
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NEW INDIA ASSURANCE CO LTD
Versus
LEELABEN MAHESHBHAI PRAJAPATI & ORS.
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Appearance:
MR PALAK H THAKKAR(3455) for the Appellant(s) No. 1
MR MTM HAKIM(1190) for the Defendant(s) No. 1,2,3,4
RULE SERVED for the Defendant(s) No. 5,6
RULE UNSERVED for the Defendant(s) No. 7
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CORAM: HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 24/03/2026
COMMON ORAL JUDGMENT
1. The present appeal is filed at the instance of the
insurance company being aggrieved and dissatisfied with the
judgment and award dated 22nd December 2014 passed by the
Motor Accident Claims Tribunal (Aux.) in Motor Accident
Claim Petition no.1011 of 2010. By this said judgment and
award, the Tribunal has partly allowed the claim petition
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preferred by the original claimants under Section 166 of the
Motor Vehicles Act, 1988 holding them entitled to recover
sum of Rs.5,63,200/- from the original appellant nos.1, 2, 3,
jointly and separately together with proportionate cost and
interest at a rate of 9% per annum from the date of filing of
the claim petition till its realization.
2. Considering the grounds raised in the appeal and the
submissions made by learned advocate for the appellant at the
admission hearing of the appeal, this Court vide order dated
10th August, 2015 had admitted the appeal. In the application
for stay preferred by the insurance company the Court had
directed them to deposit entire award amount with the
concerned Tribunal with further directions to disburse 20% of
the aforesaid deposited amount in favour of the claimant and
80% was directed to be invested in long term fixed deposit
with any Nationalized bank, initially for a period of 3 years
which was directed to be renewed from time to time till the
final disposal of the present appeal. Considering the fact that
the amount as directed was deposited by the insurance
company, this Court vide order dated 5 th October, 2015 had
extended liberty to the claimants to withdraw periodical
interest on such FDRs. The record and proceedings were
called for.
3. The notice of admission of appeal was reported to have
been duly served upon the respondents except for respondent
no.7. The attempts were made to serve the respondent no.7
who is the owner of the offending vehicle. Despite service of
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the notice upon respondent no.7 in the original claim
proceedings, had choose not to appear and contest the claim
proceedings.
4. It is required to be noted that on admission of the appeal
the original claimants have entered their appearance and had
also preferred cross objections assailing the same self
impugned judgment and award, with a prayer for
enhancement of amount of compensation to the sum of
Rs.5,63,200/-. The cross objections are directed to be heard
along with the captioned appeal.
5. With the able assistance of learned advocate appearing
on record for the respective parties, the appeal as well as the
cross objections are heard and decided together by this
common judgment.
6. Mr.Palak Thakkar, learned advocate appearing for the
appellant has vehemently submitted that it has been
successfully established by the insurance company that the
driving license of the driver in respect of the offending truck
which falls in the category of ‘Heavy Goods Vehicle’, was not
renewed after 9th September, 2004 and therefore, the driver
was not holding any valid and effective driving license on the
date of the accident i.e. on 9 th June, 2010. In order to
substantiate his submission, learned advocate had drawn my
attention to the certificate of driving license issued by the
licensing authority of Godhara in reference to the driving
license of the driver of the offending truck. The copy of which
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has been produced on record at Exh.33 and the certified copy
being produced on record at Exh.39. Referring to the
contents of the aforesaid certificate, learned advocate had
submitted that as against item of “issuing authority”, the
validity period is referred as 10 th March, 1995 to 9th March,
1998, 9th September, 2001 to 9th September, 2004. Further,
the reference is made to “HGV, HPV – 10 th March, 1995 to 9th
September, 2004”. As against the aforesaid certificate
provided by the licensing authority with regard to the validity
period, the contents of the driving license of the driver of the
offending truck which is produced on record at Exh.51
suggest the renewal period from 9 th September, 1998 and
thereafter on 9th September, 2001. It was further submitted
that generally, the renewal of heavy goods vehicle would be
for period of 3 years and therefore considering the last
endorsement of 9th September 2001, it can safely be inferred
that the validity period was extended up to 9 th September,
2004. In absence of any further endorsement being
mentioned in the driving license, it clearly establishes the
defence raised by the appellant – insurance company that
there was no valid and effective driving license as on the date
of the accident that is 9th June, 2010.
6.1 The attention of this Court was also invited to the fact
that the vehicle in question falls in the category of ‘Heavy
Goods Vehicle’ (HGV). The evidence in the nature of the FIR,
the statement of the driver recorded before the investigating
officer, the consignment note, the invoices etc., establishes
the fact that the driver was carrying Hydrochloric Acid (HCL)
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which is considered as hazardous chemical. He had therefore
submitted that as on the date of the accident, the driver of the
offending truck was not holding valid and effective driving
license to drive heavy goods vehicle for carrying hazardous
chemical for which according to him separate endorsement
was required.
6.2 Referring to the aforesaid evidence on record, learned
advocate had further invited my attention to the record and
proceedings, more particularly, the applications submitted by
the insurance company before the Tribunal seeking presence
of the driver as well as owner of the offending vehicle as
produced on record at Exhs.28 and 29. The reliance was also
placed on the Bailiff report which is forming part of the
record, which suggest that the aforesaid summons have been
duly served upon the driver of the vehicle. However, as
regards the owner of the vehicle, the Bailiff though attempted
the service of summons on three occasions, the same could
not be served. Learned advocate had therefore submitted that
the defence as raised in the written statement about not
holding valid and effective driving license has been duly
proved and established before the Tribunal. Despite the
aforesaid evidence being brought on record, the Tribunal has
held the appellant – insurance company liable to pay the
amount of compensation. Hence, the present appeal
disputing their liability to pay the amount of compensation.
6.3 On the issue of quantum, learned advocate had mainly
disputed the amount of Rs.4,000/- being assessed as the
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income of the deceased. It was submitted that in absence of
any evidence on record, the Tribunal had committed serious
error in determining the income of the deceased as Rs.4,000/-.
The quantum of compensation was also assailed on the ground
of multiplier being wrongly applied in the facts of the case.
Learned advocate had therefore urged this Court to quash and
set aside the impugned judgment and award.
6.4 In support of the aforesaid submissions made, learned
advocate had placed reliance upon unreported decision of
Division Bench of this Court in case of Mahmad Rafik
Munnebhai Ansari Vs. Gujarat State Road Transport
Corporation & Ors. in First Appeal no.3173 of 2021 and allied
matters, oral order dated 24 th December, 2021. Also, reliance
was placed on the decision of Hon’ble Supreme Court in the
case of National Insurance Co. Ltd., Vs. Vidhyadhar
Mahariwala & Ors., reported in (2008) 12 SCC 701 and in the
case of Ram Babu Tiwari Vs. United India Insurance Co. Ltd.,
reported in (2008) 8 SCC 165.
6.5 Learned advocate for the appellant – insurance company
had therefore prayed for allowing the appeal by exonerating
the appellant – insurance company from its liability to pay any
amount of compensation to the claimant.
7. Mr. Hakim, learned advocate for the respondent –
claimant had vehemently objected to the aforesaid
submissions of the learned advocate for the appellant –
insurance company. Learned advocate had placed reliance
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upon the findings and reasons assigned by the Tribunal while
holding the appellant – insurance company jointly and
severally liable to pay the amount of compensation, more
particularly as recorded in para-13 of the impugned judgment.
It was submitted that the Tribunal has rightly followed the
principles laid down by the three Judges’ bench of the Hon’ble
Supreme Court in case of National Insurance Company
Limited Vs. Swaran Singh & ors., reported in 2004 (3) SCC
297. It was submitted that the burden lies upon the insurance
company to prove that the insured has committed a breach of
contract of insurance as envisaged under sub-clause-(ii) of
Clause-a of sub-section-2 of Section 149 of the M.V. Act. It is
in those circumstances, the insurance company shall be
entitled to realize the awarded amount from the owner or
driver of the vehicle, as the case may be, in the execution of
the same award considering the provisions of Section 165 and
168 of the Act.
7.1 As regards the submission made by the learned advocate
for the appellant insurance company praying for exoneration
from its liability to pay the amount of compensation, it was
submitted that the present case does not fall in that category
of exceptional cases as, considering the provisions of Section
149(2)(a), when a fraud or collusion is noticed between the
victim and the owner of the vehicle or such fact is
subsequently detected at a later stage, the Court may
consider exonerating the insurance company from its liability
to pay the amount of compensation.
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7.2 Learned advocate had placed reliance upon various
judgments of the Hon’ble Supreme Court, wherein despite the
breach of policy condition, i.e. invalid driving license of the
driver at the time of the accident, the Courts have time and
again issued appropriate directions of “pay and recover”. The
reliance was placed on the relevant observations made by the
three Judges’ Bench judgment, more particularly in paragraph
nos.41 to 44, 107 and 110 in the case of Swaran Singh
(supra), the reliance was also placed on the judgment of the
Hon’ble Supreme Court in the case of Jawahar Singh vs. Bala
Jain reported in (2011) 6 SCC 425 [equivalent citation AIR
2011 SC 2436]. Referring to the facts of the case, the learned
advocate had submitted that it was a case where the minor,
admittedly being an unlicensed driver, was held responsible
for the accident. The primary legal contention was raised by
the respondent – insurance company disputing their liability
on the ground of breach of policy conditions. The Hon’ble
Supreme Court upheld the decision of the Tribunal as well as
the High Court holding the owner of the vehicle responsible
for the accident. The Court, referred to the earlier decision in
the case of Ishwar Chandra Vs. Oriental Insurance Company
Ltd., (2007) SCC 650, holding that if a driver lacks a valid
license, the liability to pay compensation shifts to the owner of
the vehicle, emphasizing the owner’s duty to prevent
unauthorized usage. However, the Court held that the
insurance company can recover compensation from the owner
of the vehicle even in case if the driver is not holding any
license, thus reinforcing the owner’s ultimate responsibility.
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7.3 The reliance was also placed on the decision of the
Hon’ble Supreme Court in the case of Shamanna Vs. The
Divisional Manager, the Oriental Insurance Company Ltd.,
reported in AIR 2018 SC 3726. According to the learned
advocate, the Court had reaffirmed the principles laid down
by the three Judges’ Bench in the case of Swaran Singh
(supra). Inviting my attention to the facts of the case, it was
pointed-out that the driver of the offending vehicle Jeep had
no valid driving license at the time of the accident and since
there was a violation of the terms of the insurance policy, the
Tribunal had directed the insurance company to pay the
compensation to the claimants and had further granted liberty
to the insurance company to recover the same from the owner
of the offending vehicle. Being aggrieved by the aforesaid
directions, the insurance company had preferred an appeal
before the High Court. At the same time, the claimants had
also approached in appeal seeking enhancement of the
amount of compensation. The High Court had allowed the
appeal of the insurance company and had observed that such
directions of “pay and recover” can only be issued by the
Hon’ble Supreme Court considering the discretionary power
conferred under Article 142 of the Constitution of India. In
the absence of any such power being vested with the High
Court or the Tribunal, the directions issued by the Tribunal to
make payment of compensation at the first instance with
liberty to recover the same were held to be without
jurisdiction. The Hon’ble Supreme Court, considering the
case of third-party risk in view of the decision in the case of
Swaran Singh (supra), had held that the onus is always upon
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the insurance company to prove that the driver had no valid
driving license and there was a breach of policy conditions.
Even in cases where the driver did not possess a valid driving
license and there are breaches of policy conditions, “pay and
recover” can be ordered in case of third-party risk.
7.4 The reference was also made to the two Judges’ Bench
judgment of the Hon’ble Supreme Court in the case of
National Insurance Company Ltd., Vs. Parvathneni and
another reported in (2009) 8 SCC 785, wherein the reference
was made. The Court expressed reservations about directions
of “pay and recover” even where insurance company was held
not liable and doubted the correctness of such earlier
decisions by resorting to special power conferred under
Article 142 of the Constitution of India. The Court noted that
since the reference has been disposed of keeping the question
of law open, and since the principles laid down in the case of
Swaran Singh (supra) hold the field, the Court had upheld the
directions of the Tribunal with regard to pay and recover.
7.5 Learned advocate had therefore submitted that
considering the view expressed by the larger Bench headed by
three Judges in the case of Swaran Singh (supra), the
judgments relied upon by learned advocate for the appellant
insurance company in the cases of Mahmad Rafik Munnebhai
Ansari (supra), Vidhyadhar Mahariwala (supra), and Ram
Babu Tiwari (supra), which are the cases decided in peculiar
facts, does not lay down a binding precedent.
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7.6 Learned advocate had further relied upon the judgment
of the Division Bench of this High Court in the case of
Subhashrao Anandrao Pawar Vs. Ashokbhai Bhikhabhai
Makwana, 2021 (0) AIJEL-HC 243529, wherein this Court has
reaffirmed the legal principles that mere absence or invalidity
of a driving license does not absolve the insurance company
from compensating a third-party claim unless it is proved that
negligence was on the part of the insured to fulfill the policy
conditions. It was further submitted that in fact, on bare
appreciation of the provisions of the Motor Vehicles Act, 1988,
more particularly Section 149(2)(a)(ii), the Court has uphold
the arguments advanced by learned advocate as recorded in
para 10. The Court has reiterated the principles laid down by
the Hon’ble Supreme Court in the case of Swaran Singh
(supra) and thereby set aside the directions issued by the
Tribunal to recover the compensation from the owner of the
vehicle.
7.7 Learned advocate had also placed reliance upon a recent
decision of the Hon’ble Supreme Court in the case of Chatha
Service Station Vs. Lalmati Devi and others, AIR Online 2025
SC 303. The attention of this Court was invited to the facts of
the case wherein the accident had occurred due to the rash
and negligent driving of the offending vehicle which was an oil
tanker. It was submitted that the said vehicle was intended to
carry goods of dangerous and hazardous nature. Admittedly,
the driver of the offending vehicle did not have a license as
required under the Act and the Rules to drive a vehicle
carrying dangerous and hazardous goods. The Court upon
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appreciation of record had noted that the transport vehicle
driving license produced by the driver, did not have the
requisite endorsement. Despite the aforesaid evidence on
record, the Hon’ble Supreme Court had upheld the directions
of the High Court holding the insurance company liable to pay
compensation to the claimants with further liberty to recover
such amount from the owner of the oil tanker.
7.8 The reliance was placed on the decision of the larger
Bench of this Court in the case of Shantaben wd/o. deceased
Kantibhai Punjabhai Vankar Vs. Yakubbhai Ibrahimbhai Patel
reported in 2012 (3) GLR 1985. It was submitted that the
matter was referred to the larger Bench in view of two
conflicting views taken by different division Benches of this
Court. The issue had arose for consideration in light of the
approach of the Tribunal as regards interpretation of Section-
95 of the Motor Vehicles Act, 1939, restricting the liability of
the insurance company limited to the statutory liability as
envisaged under the Act. The core contention which was
raised by the claimant was that insurance policies in all cases
contain an avoidance clause and provided that nothing in the
policy shall affect the right of any person indemnified by the
policy or any other person to recover an amount under or by
virtue of the provisions of the Motor Vehicles Act. In fact, the
aforesaid clause provided that the insured shall repay to the
company all sums paid by the company which otherwise the
company would not have been liable to pay, but in view of the
said provisions of the Act, the insurance company is
principally liable to satisfy the award irrespective of the
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statutory limit. As against the aforesaid contention raised by
the claimants, the learned counsel appearing for the
insurance company had opposed the appeals mainly on the
ground that the insurance policies in question were “Act
policies” and the liability of the insurance company was thus
restricted to Rs.50,000/-, the statutory limit prevailing at the
relevant time.
7.9 Learned advocate had further invited my attention to the
avoidance clause appearing in the policy as reproduced in
para 29 of the judgment. It was further submitted that a
similar avoidance clause is also reflected in the policy in the
present case. The larger bench upon appreciating the
contents of the avoidance clause questioned that whether the
insurance company could have avoid the indemnification of a
third party to the full extent and claim their restricted liability
in terms of the insurance policy under the statutory
provisions. While answering to the aforesaid issue, the Court
has taken into consideration the judgment of the Hon’ble
Supreme Court in the cases of Amrit Lal Sood Vs. Kaushalya
Devi Thapar, reported in (1998) 3 SCC 744, National
Insurance Co. Ltd., Vs. Jugal Kishore, reported in (1988) 1
SCC 626, and National India Assurance Co. Ltd., Vs. Shanti
Bai reported in (1995) 2 SCC 539. The Hon’ble Supreme
Court had in the case of Amrit Lal Sood (supra) taken a view
that considering the avoidance clause, the insurance company
was liable to meet the claim of the claimant and satisfy the
award passed by the Tribunal. The larger bench had noted
the relevant observations recorded in para-6 of the decision in
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the case of New India Assurance Co. Ltd., Vs. C. M. Jaya and
others, reported in (2002) 2 SCC 278, wherein the
Constitution Bench had held that in a policy for limited
liability, it was not open to the Court to direct the insurance
company to make any payment beyond the amount of limited
liability, but at the same time, it took note of the decision in
the case of Amrit Lal Sood (supra) with approval. More
particularly, noticing the avoidance clause in the policy which
according to Court makes all difference, the directions of the
High Court to the appellant insurance company to make
payment of the full amount of compensation was upheld. The
larger Bench therefore, after considering the issue in light of
the observations made by the Hon’ble supreme Court in the
case of New India Assurance Co. Ltd., Vs. Vimal Devi
reported in (2010) 12 SCC 492 answered the reference by
concluding that wherever the insurance policy contains an
avoidance clause providing that nothing in the policy shall
affect the right of any person indemnified by the policy or any
other person by recovering amount under or by virtue of
provisions of Motor Vehicles Act, the insurance company shall
be liable to pay compensation.
7.10 On the merits of the case, learned advocate had
therefore submitted that the burden was upon the insurance
company to prove that the driver of the offending vehicle was
not holding any valid and effective driving license, that the
insured was guilty or negligent and had failed to take due
care before handing over the offending vehicle to the driver.
Considering the evidence on record, according to learned
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advocate, merely producing the extract of driving license on
record is not sufficient to exonerate the appellant – insurance
company from its liability to pay the amount of compensation
in absence of the driver or the owner of the offending vehicle
being examined as witness. Learned advocate had therefore
prayed for dismissal of the appeal preferred by the appellant –
insurance company.
8. On the quantum of compensation, learned advocate had
assailed the findings and reasons assigned by the Tribunal by
contending that the Tribunal committed grave error in
assessing the income of the deceased as Rs.4,000/- per month.
It was submitted that considering the vocation of the
deceased who was earning his livelihood of Rs.10,000/- per
month by doing idol making work, the Tribunal ought to have
treated it as a case of skilled person. In order to substantiate
his claim, learned advocate had placed reliance upon the copy
of receipts of purchase of raw material being produced for the
purpose of making of the idol at Exh.37. The reliance was
also placed on the evidence of the witness examined by the
claimant in this regard. Learned advocate had prayed for the
income of the deceased to be assessed as Rs.10,000/- per
month. Alternatively, it was submitted that considering the
skills of the deceased, this Court may consider minimum
wages of a skilled labourer prevailing at the time of accident
for the determination of just and reasonable amount of
compensation. It was submitted that fair amount of Rs.4,210/-
may alternatively be considered as the income of the deceased
at the time of accident.
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8.1 It was further submitted that the deceased was aged 49
years and 8 months at the time of the accident. Considering
the landmark decision of the Hon’ble Supreme Court in the
case of National Insurance Company Ltd., Vs. Pranay Sethi
and others reported in (2017) 16 SCC 680, 25% future rise in
the income is required to be considered for the purpose of
determination of dependency loss suffered by the claimants.
According to him, the Tribunal has committed error in
deducting 1/4th of the amount of income towards personal and
living expenses of the deceased. Though the ground was
raised by contending that the Tribunal has committed error in
adopting multiplier of 13 in the facts of the case, however
considering the well settled principles laid down in the case of
Sarla Verma & Ors. Vs. Delhi Transportation & Anr., reported
in (2009) 6 Supreme Court Cases 121, he had fairly conceded
to apply multiplier of 13, in the facts of the case.
8.2 Learned advocate has lastly urged this Court to consider
enhancement of amount of compensation under the
conventional heads as well in view of the settled principles
and propositions of law in this regard. Learned advocate had
therefore urged this Court to allow the cross objections by
enhancing the amount of compensation which may be
awarded with 9% interest from the date of filing of claim
petition till its actual realization with proportionate cost.
9. Learned advocate for the insurance company has
objected to the aforesaid submissions made by learned
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advocate for the claimant praying for enhancement of amount
of compensation. According to learned advocate, considering
the findings and reasons assigned by the Tribunal in light of
the evidence on record, the Tribunal has rightly answered the
issue of quantum of compensation which calls for no
interference. Learned advocate had therefore prayed for
dismissal of the cross objections.
10. I have heard the learned advocates appearing for the
respective parties at length. I have also closely examined the
findings and reasons assigned by the Tribunal on the issue of
quantum of compensation and the liability of the insurance
company in light of the evidence brought on record. I have
carefully considered the various judgments relied upon by
learned advocates appearing for the respective parties.
11. Considering the arguments made by learned advocates
for the respective parties, the question which arises for
consideration of this Court is as to whether the Tribunal
committed any error in deciding the issue of quantum of
compensation and the liability of the insurance company to
pay the amount of compensation to the claimants in the facts
of the case and the evidence on record, while examining the
claim petition under Section 166 of the Act of 1988?
12. Before adverting to the merits of the case, it would be
appropriate to consider the manner in which the accident was
reported.
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13. From the record it transpires that on 9th June, 2010 the
deceased Maheshbhai Ramanbhai Prajapati was traveling in a
three-wheeler tempo along with his goods, mainly the
material required for making the idols of the God. While he
was traveling towards Miyagam and when he had reached
near the place at Miyagam, the driver of the offending vehicle,
i.e. tanker bearing registration no.GJ-6 TT 9717, had
approached in full speed in rash and negligent manner on the
wrong side of the road and had dashed with the tempo
resulting into the accident. Because of the aforesaid impact
between the two vehicles the deceased had succumbed to the
injuries on the spot. The aforesaid incident was reported to
the Vadodara Rural Police Station which was registered as I-
C.R. no.86 of 2010 against the driver of the offending vehicle
tanker. The claimants, viz. the wife of the deceased, his aged
parents as well as his major sons, have preferred claim
petition under section 166 of the Motor Vehicles Act, 1988
praying for compensation of Rs.12,00,000/- with interest and
proportionate cost. The said claim petition was registered as
MACP no.1011 of 2010 before the Motor Accident Claim
Tribunal (Aux.) at Vadodara.
13.1 Before the Tribunal, the summons were duly served
upon the driver and the owner of the offending vehicle tanker,
however they have chose not to appear and contest the claim
petition. The insurance company of the offending vehicle was
joined as opponent no.3 who have objected to the claim
petition by filing their written statement at Exh.11. In the
written statement the insurance company had not only
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disputed the negligence on part of the driver of the tanker but
have also disputed their liability to pay the amount of
compensation by contending that the driver of the offending
vehicle was not holding a valid and effective driving license at
the time of accident and further he was not qualified for
holding or obtaining driving license. It was further submitted
that the driver had contravened the statutory provisions of the
Motor Vehicle Act and the Rules framed thereunder and the
owner of the vehicle having committed the breach of the
terms and conditions of the policy, the insurance company
shall not be liable to pay any amount of compensation.
13.2 Considering the pleadings, the Tribunal had framed the
issues at Exh.17, which reads as under :
1. Whether the petitioners prove that deceased died
in a vehicular accident due to negligent driving by
the driver of vehicle involved in the accident?
2. Whether the petitioners are entitled to get any
compensation? If yes, what amount and from
whom?
3. What order and award.
13.3 Before the claim Tribunal the claimants have produced
oral as well as documentary evidence in support of their
claim, the details of which are reproduced hereunder in
tabular form.
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~:: Documentary Evidence ::~
Sr. Description Exh.
no.
1. Xerox copy of R.C. Book of vehicle 34
no.GJ.6.TT.9717
2. Xerox copy of chargesheet 35
3. True copy of insurance policy of vehicle 36
no.GJ.6.TT.9717
4. Bills of Venus Plaster Industries 37
5. Xerox copy of S.L.C. of deceased 38
6. Certificate pertaining to driving license 39
of opponent no.1 – Parmar Nansing
7. Certified of copy of complaint 46
8. Certified of copy of panchnama 47
9. Copy of P.M. Note 48
10. Xerox copy of R.C. book of Vehicle 50
no.GJ.6.TT.9717
11. Copy of driving license of Nansing 51
Parmar
12. Xerox copy of identity card of claimant 52
no.1
13. Xerox copy of identity card of claimant 53
no.2
14. Xerox copy of identity card of claimant 54
no.3
15. Xerox copy of identity card of claimant 55
no.4
16. Xerox copy of identity card of claimant 56
no.5
17. True copies of police papers relating to 57
chargesheet
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13.4 As against the aforesaid evidence led by the claimants,
the insurance company had preferred applications at Exh.27
and Exh.28 seeking permission of the Tribunal to examine the
driver and the owner of the tanker as witnesses. The prayer
was also made with regard to production of relevant
documents, more particularly the set of entire record of
charge-sheet papers, the extract of the driving license.
Considering the aforesaid prayer, the Tribunal had issued
summons upon the said witnesses. The record reveals that
the summons issued upon the driver of the tanker has been
duly served as per Bailiff’s report, however the attempts made
to serve the owner of the vehicle had failed as reported by the
Bailiff.
13.5 The insurance company had also led documentary
evidence along with the list produced on record at Exh.26,
which mainly include the certificate issued by the RTO office
as regards the driving license in the name of the opponent
no.1 (Exh.39), the statement of the driver of the tanker
recorded by the investigating officer (Exh.40), the extract of
the consignment note acknowledging the fact that the tanker
was carrying hazardous goods in the nature of hydrochloric
acid (Exh.41) and the invoice copy of the tanker reflecting the
hazardous good carried by the vehicle at the time of accident
(Exh.42).
13.6 The Tribunal upon appreciation of the entire evidence on
record in light of the arguments made by learned advocates
for the respective parties had held the driver of the tanker
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negligent towards the occurrence of accident.
13.7 On the issue of quantum of compensation, the Tribunal
had determined the monthly income of the deceased as
Rs.4,000/- in absence of any direct proof of income being
produced on record thereby discarding the bills of purchase of
raw material produced on record at Exh.37. Further, the
Tribunal has considered the school leaving certificate
produced on record at Exh.38 indicating the date of birth of
the deceased as 7th October, 1960 and has accordingly
determined the age of the deceased as 50 years at the time of
accident. Having noted the aforesaid facts, Tribunal has
further followed the principle laid down by the Hon’ble
Supreme Court in the case of Rajesh and others Vs.
Rajbirsingh and others reported in 2013 ACJ 1403 as well as
in the case of Sarla Verma (supra) and has extended 15%
future rise of the income and by applying multiplier of 13 and
deduction of 1/4th of the income, determined the dependency
loss as Rs.5,38,200/-. Under the conventional heads, the
Tribunal has awarded Rs.10,000/- towards loss of consortium
and towards loss of estate each whereas Rs.5,000/- has been
awarded towards funeral expenses. The Tribunal has thus by
impugned judgment and award determined total amount of
compensation as Rs.5,63,200/-.
13.8 On the issue of liability, the Tribunal has considered the
defense raised by the insurance company disputing their
liability to pay any amount of compensation on the ground of
absence of valid driving license by following the judgments of
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the Hon’ble Supreme Court, has held that since the driver of
the tanker was solely negligent towards the occurrence of
accident and the policy being in force, the tanker was insured
with the opponent insurance company at the time of accident
and has thereby directed the opponent insurance company to
indemnify the insured i.e. opponent no.2. Thus, the Tribunal
by impugned judgment and award has held the original
opponent nos.1, 2, 3 jointly and severally liable to pay the
aforesaid amount of compensation with proportionate cost
and interest at the rate of 9% per annum from the date of
filing of claim petition till its realization.
14. Having noted the aforesaid findings and reasons
assigned by the Tribunal and having reappreciated the
evidence on record in light of the arguments advanced by
learned advocate for the respective parties, it would be
appropriate at the outset to look into the core contention
raised by the appellant insurance company in its appeal on the
issue of liability. The main ground which is raised by the
appellant insurance company disputing their liability is on the
premises that the driver of the tanker was not holding valid
effective driving license to drive the vehicle, more particularly
carrying the goods which was a hazardous chemical. I have
carefully considered the aforesaid arguments advanced by
learned advocate for the appellant insurance company in light
of the evidence on record, more particularly the certificate
issued by the RTO office Godhra as produced on record at
Exh.36 and Exh.39 as well as the extract of the driving license
produced on record at Exh.51. On close perusal of the
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aforesaid documentary evidence, as rightly pointed-out by
learned advocate for the appellant – insurance company, the
driver of the tanker was authorized to drive the tanker during
period 10th March, 1995 to 9th March, 1998 which was
thereafter renewed from 9th September, 2001 to 9th
September, 2004. Despite service of summons to the driver
and the owner of the vehicle before the Tribunal, they have
choose not to appear and led any evidence. In view of the
settled principles laid down by the Hon’ble Supreme Court in
the case of Swaran Singh (supra), undoubtedly the defense is
available to the insurance company under section 149(2)(a)(ii)
of the Motor Vehicle Act, 1988, to take a plea that the
offending vehicle was driven by an unauthorized person and
the driver did not hold a valid driving license. Considering the
summary findings as recorded in para-110 of the aforesaid
decision, the onus would shift on the insurance company only
after the owner of the offending vehicle pleads and proves the
basic facts within his knowledge that the driver of the
offending vehicle was authorized by him to drive the vehicle
and was having a valid driving license at the relevant time. As
recorded earlier, and as evident from the record, the
appellant insurance company in absence of the driver and the
owner of the vehicle having appeared before the Tribunal, has
placed on record along with the list at Exh.26, the documents
in the nature of the certificate issued by the RTO office which
clearly suggest that the driver of the tanker was holding the
driving license to drive the tanker and such driving license
had remained in force till 9 th September, 2004. In absence of
any further document reflecting the renewal of the aforesaid
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driving license, the defense raised by the insurance company
that the driver of the tanker was not holding driving license at
the relevant time stands established.
15. As regards the contention raised by learned advocate for
the appellant insurance company of absence of the requisite
permit with regard to driving the tanker carrying hazardous
goods is concerned, the extract of the driving license does
reflect the necessary endorsement in this regard. Having held
so, the next issue which arises for consideration of this Court
is as to whether in the fact situation of this case, the
insurance company can be exonerated from its liability to pay
the compensation or whether the insurance company can be
directed to pay the amount of compensation at first instance
with liberty to recover the same from the owner of the
vehicle?
16. Considering the various authorities relied upon by
learned advocates for the respective parties, in my view, the
legal issue involved is no more res integra in view of the
landmark decision of three Judges Bench of the Hon’ble
Supreme Court in the case of Swaran Singh (supra). It would
be appropriate to revisit the relevant observations of the
Hon’ble Supreme Court in this regard.
“107. We may, however, hasten to add that the
Tribunal and the court must, however, exercise their
jurisdiction to issue such a direction upon
consideration of the facts and circumstances of each
case and in the event such a direction has been issued
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the insurer has been able to establish that the insured
has committed a breach of contract of insurance as
envisaged under sub-clause (ii) of clause (a) of sub-
section (2) of Section 149 of the Act, the insurance
company shall be entitled to realise the awarded
amount from the owner or driver of the vehicle, as the
case may be, in execution of the same award having
regard to the provisions of Section 165 and 168 of the
Act . However, in the event, having regard to the
limited scope of inquiry in the proceedings before the
Tribunal it had not been able to do so, the insurance
company may initiate a separate action therefor
against the owner or the driver of the vehicle or both,
as the case may be. Those exceptional cases may arise
when the evidence becomes available to or comes to
the notice of the insurer at a subsequent stage or for
one reason or the other, the insurer was not given
opportunity to defend at all. Such a course of action
may also be resorted when a fraud or collusion
between the victim and the owner of the vehicle is
detected or comes to the knowledge of the insurer at
a later stage.
110. The summary of our findings to the various
issues as raised in these petitions are as follows:
(i) Chapter XI of the Motor Vehicles Act,
1988 providing compulsory insurance of
vehicles against third party risks is a social
welfare legislation to extend relief by
compensation to victims of accidents caused
by use of motor vehicles. The provisions of
compulsory insurance coverage of all
vehicles are with this paramount object and
the provisions of the Act have to be so
interpreted as to effectuate the said object.
(ii) Insurer is entitled to raise a defence in
a claim petition filed under Section 163 A or
Section 166 of the Motor Vehicles Act, 1988
inter alia in terms of Section 149(2)(a)(ii) of
the said Act.
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(iii) The breach of policy condition e.g.,
disqualification of driver or invalid driving
licence of the driver, as contained in sub-
section (2)(a)(ii) of section 149, have to be
proved to have been committed by the
insured for avoiding liability by the insurer.
Mere absence, fake or invalid driving licence
or disqualification of the driver for driving at
the relevant time, are not in themselves
defences available to the insurer against
either the insured or the third parties. To
avoid its liability towards insured, the insurer
has to prove that the insured was guilty of
negligence and failed to exercise reasonable
care in the matter of fulfilling the condition
of the policy regarding use of vehicles by
duly licensed driver or one who was not
disqualified to drive at the relevant time.
(iv) The insurance companies are, however,
with a view to avoid their liability must not
only establish the available defence(s) raised
in the said proceedings but must also
establish ‘breach’ on the part of the owner of
the vehicle; the burden of proof wherefor
would be on them.
(v) The court cannot lay down any criteria
as to how said burden would be discharged,
inasmuch as the same would depend upon
the facts and circumstance of each case.
(vi) Even where the insurer is able to prove
breach on the part of the insured concerning
the policy condition regarding holding of a
valid licence by the driver or his qualification
to drive during the relevant period, the
insurer would not be allowed to avoid its
liability towards insured unless the said
breach or breaches on the condition of
driving licence is/ are so fundamental as are
found to have contributed to the cause of the
accident. The Tribunals in interpreting the
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policy conditions would apply “the rule of
main purpose” and the concept of
“fundamental breach” to allow defences
available to the insured under section 149(2)
of the Act.
(vii) The question as to whether the owner
has taken reasonable care to find out as to
whether the driving licence produced by the
driver, (a fake one or otherwise), does not
fulfil the requirements of law or not will have
to be determined in each case.
(viii) If a vehicle at the time of accident was
driven by a person having a learner’s licence,
the insurance companies would be liable to
satisfy the decree.
(ix) The claims tribunal constituted under
Section 165 read with Section 168 is
empowered to adjudicate all claims in
respect of the accidents involving death or of
bodily injury or damage to property of third
party arising in use of motor vehicle. The
said power of the tribunal is not restricted to
decide the claims inter se between claimant
or claimants on one side and insured, insurer
and driver on the other. In the course of
adjudicating the claim for compensation and
to decide the availability of defence or
defences to the insurer, the Tribunal has
necessarily the power and jurisdiction to
decide disputes inter se between insurer and
the insured. The decision rendered on the
claims and disputes inter se between the
insurer and insured in the course of
adjudication of claim for compensation by the
claimants and the award made thereon is
enforceable and executable in the same
manner as provided in Section 174 of the Act
for enforcement and execution of the award
in favour of the claimants.
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(x) Where on adjudication of the claim
under the Act the tribunal arrives at a
conclusion that the insurer has satisfactorily
proved its defence in accordance with the
provisions of section 149(2) read with sub-
section (7), as interpreted by this Court
above, the Tribunal can direct that the
insurer is liable to be reimbursed by the
insured for the compensation and other
amounts which it has been compelled to pay
to the third party under the award of the
tribunal. Such determination of claim by the
Tribunal will be enforceable and the money
found due to the insurer from the insured
will be recoverable on a certificate issued by
the tribunal to the Collector in the same
manner under Section 174 of the Act as
arrears of land revenue. The certificate will
be issued for the recovery as arrears of land
revenue only if, as required by sub-section
(3) of Section 168 of the Act the insured fails
to deposit the amount awarded in favour of
the insurer within thirty days from the date
of announcement of the award by the
tribunal.
(xi) The provisions contained in sub-section
(4) with proviso thereunder and sub-section
(5) which are intended to cover specified
contingencies mentioned therein to enable
the insurer to recover amount paid under the
contract of insurance on behalf of the insured
can be taken recourse of by the Tribunal and
be extended to claims and defences of
insurer against insured by relegating them to
the remedy before regular court in cases
where on given facts and circumstances
adjudication of their claims inter se might
delay the adjudication of the claims of the
victims.”
17. Having noted the aforesaid principles laid down by the
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Hon’ble Supreme Court, the aforesaid principles has been
followed later on in the subsequent decision, more
particularly the three Judges Bench in the case of Pappu and
others Vs. Vinod Kumar Lamba and another reported in
(2018) 3 SCC 208. The Court has reiterated the principles
laid down in the case of Swaran Singh (supra) holding thereby
that though the insurance company is entitled to take a
defense that offending vehicle was driven by unauthorized
person or that the person driving the vehicle did not have a
valid driving license, however, as regards third party
insurance vis-a-vis liability of insurance company is
concerned, the insurance company cannot escape its liability.
The Court has considered sub Section-2 of Section 149 of the
Act, 1988. On facts of the case, the Court observed that the
insurance company had succeeded in establishing its defense
of unauthorized driver with invalid license. However,
applying the principles laid down in the case of Swaran Singh
(supra) in order to subserve the ends of justice, directed the
insurance company to pay the amount of compensation to the
claimants at first instance with liberty to recover the same
from the owner of the vehicle in accordance with law.
18. Having noted the aforesaid decisions even in case of
breach of policy conditions, more particularly the
disqualification of driver or invalid driving licence of the
driver as contained in sub Section-2(a)(ii) of Section 149, such
defence is though available to the insurer against the insured,
may not be a ground to avoid liability towards third parties.
At this stage, it would be appropriate to note that the
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insurance policy produced on record at Exh.49 indicates that
insurance company has agreed for the avoidance clause being
incorporated in the policy. It is mentioned that the “insured
is not indemnified, if the vehicle is used or driven otherwise
than in accordance with the schedule. Any payment made by
the company by reason of wider terms appearing in the
certificate in order to comply with the Motor Vehicle Act,
1988 is recoverable from the insured”. See clause added
“avoidance of certain terms and right of recovery.”
19. The similar avoidance clause fell for consideration
before the larger Bench of this Court in the case of Shantaben
(supra). The Court was considering the issue of liability of
insurance company in light of the provisions of Section 95 of
the old Motor Vehicle Act, 1939. More particularly, the extent
of liability in third party policy whether in case where in the
insurance policy avoidance clause has been incorporated to
the effect that nothing in policy should affect the right of any
person indemnified by policy or any other person to recover
amount under or by virtue of provisions of the act. In such
circumstances, whether insurance company could have
pressed in service the limit of statutory liability under the act
and could have avoid satisfying the award insofar as claimants
were concerned? The larger Bench having appreciated the
terms and conditions of the policy as well as the provisions of
law, has noted that though the Court is not required to go into
the question with regard to the principle of “pay and recover”
in the set of appeals, the Court was of the view that in view of
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Kishore (supra), holding that liability of insurance company
would be limited as well as in the case of New Asiatic
Insurance Company Ltd., Vs. Pessumal Dhanamal Aswani
reported in AIR 1964 SC 1736, holding that even in case of
avoidance clause the liability of insurance company which was
otherwise limited would not become unlimited, the Court
noted that there was a similar avoidance clause appearing in
the policy and therefore considering the judgment of Hon’ble
Supreme Court in the case of Amrit Lal Sood (supra), such
avoidance clause does not enable the insurance company to
resist or avoid claim made by the claimant. Such clause was
to be considered only in a dispute between the insurer and
insured. Thus, considering the decisions in the cases of Amrit
Lal Sood (supra), Jugal Kishore (supra) and Shanti Bai (supra),
which has been considered later on in the case of C.M. Jaya
(supra). The Court further took into consideration the relevant
observations made in C.M. Jaya (supra), and concluded as
under :
“(33) The decisions in the cases of Amrit Lal Sood
(supra), Jugal Kishore (supra) and Shanti Bai (supra) all
came up for consideration before the Apex Court in the
case of C.M.Jaya (supra). The appeals were placed
before the Larger Bench of five Judges referring
following questions :
“1. The question involved in these appeals is
whether in a case of insurance policy not taking
any higher liability by accepting a higher
premium, in case of payment of compensation to
a third party, the insurer would be liable to the
extent limited under Section 95 (2) or the insurer
would be liable to pay the entire amount and hePage 32 of 43
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may ultimately recover from the insured. On this
question, there appears to be some apparent
conflict in the two three Judge Bench decisions of
this Court (1) New India Assurance Co. Ltd. v.
Shanti Bai, ((1995) 2 SCC 539) and (2) Amrit Lal
Sood v. Kaushalya Devi Thapar ((1998) 3 SCC
744).
2. In the latter decision, unfortunately the
decision in New India Assurance case (supra) has
not been noticed though reference has been made
to the decision of this Court in National Insurance
Co. Ltd. v. Jugal Kishore, ((1988) 1 SCC 626),
which was relied upon in the earlier threeJudge
Bench judgment. In view of the apparent conflict
in these two three Judge Bench decisions, we
think it appropriate that the records of this case
may be placed before my Lord, the Chief Justice
of India to constitute a larger Bench for resolving
the conflict. We accordingly so direct. The record
may now be placed before the Hon’ble the Chief
Justice of India.”
(34) The Apex Court drew a distinction between two
sets of cases, one represented by Jugal Kishore and
Shanti Bai and another by Amrit Lal Sood. The Apex
Court observed as under:
“9. In Shanti Bai‘s case (supra), a Bench of
three learned Judges of this Court, following the
case of Jugal Kishore, has held that (i) a
comprehensive policy which has been issued on
the basis of the estimated value of the vehicle
does not automatically result in covering the
liability with regard to third party risk for an
amount higher than the statutory limit,(ii) that
even though it is not permissible to use a vehicle
unless it is covered at least under an “Act only”
policy, it is not obligatory for the owner of a
vehicle to get it comprehensively insured, and
(iii) that the limit of liability with regard to third
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party risk does not become unlimited or higher
than the statutory liability in the absence of
specific agreement to make the insurer’s liability
unlimited or higher than the statutory liability.
10. On a careful reading and analysis of the
decision in Amrit Lal Sood (supra), it is clear that
the view taken by the Court is no different. In
this decision also, the case of Jugal Kishore is
referred to. It is held (i) that the liability of the
insurer epends on the terms of the contract
between the insured and the insurer contained in
the policy; (ii) there is no prohibition for an
insured from entering into a contract of
insurance covering a risk wider than the
minimum requirement of the statute whereby
risk to the gratuitous passenger could also be
covered; and (iii) in such cases where the policy
is not merely statutory policy, the terms of the
policy have to be considered to determine the
liability of the insurer. Hence the Court aftrer
noticing the relevant clauses in the policy, on
facts found that under Section II1(a) of the
policy, the insurer has agreed to indemnify the
insured against all sums which the insured shall
become legally liable to pay in respect of death
of or bodily injury to “any person”. The
expression “any person” would undoubtedly
include an occupant of the car who is
gratuitously travelling in it. Further, referring to
the case of Pushpabai Purshottam Udeshi
(supra), it was observed that the said decision
was based upon the relevant clause in the
insurance policy in that case which restricted the
legal liability of the insurer to the statutory
requirement under Section 95 of the Act. As
such, that decision had no bearing on Amrit Lal
Sood‘s case as the terms of the policy were wide
enough to cover a gratuitous occupant of the
vehicle. Thus, it is clear that the specific clause
in the policy being wider, covering higher risk,
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made all the difference in Amrit Lal Sood‘s case
as to unlimited or higher liability. The Court
decided that case in the light of the specific
clause contained in the policy. The said decision
cannot be read as laying down that even though
the liability of the insurance company is limited
to the statutory requirement, an unlimited or
higher liability can be imposed on it. The liability
could be statutory or contractual. A statutory
liability cannot be more than what is required
under the statute itself. However, there is
nothing in Section 95 of the Act prohibiting the
parties from contracting to create unlimited or
higher liability to cover wider risk. In such an
event, the insurer is bound by the terms of the
contract as specified in the policy in regard to
unlimited or higher liability as the case may be.
In the absence of such a term or clause in the
policy, pursuant to the contract of insurance, a
limited statutory liability cannot be expanded to
make it unlimited or higher. If it is so done, it
amounts to rewriting the statute or the contract
of insurance which is not permissible.
11. In the light of what is stated above, we
do not find any conflict on the question raised in
the order of reference between the decisions of
two Benches of three learned Judges in Shanti
Bai and Amrit Lal Sood aforementioned and, on
the other hand, there is consistency on the point
that in case of an insurance policy not taking any
higher liability by accepting a higher premium,
the liability of the insurance company is neither
unlimited nor higher than the statutory liability
fixed under Section 95(2) of the Act. In Amrit Lal
Sood‘s case, the decision in Shanti Bai is not
noticed. However, both these decisions refer to
the case of Jugal Kishore and no contrary view is
expressed.”
(35) From the above noted portion of the decision in
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the case of C.M.Jaya (supra), it can be seen that the
Apex Court did not find that in the decisions in the
cases of Shanti Bai and Amrit Lal Sood any contrary
views are expressed. It was observed that the case of
Amrit Lal Sood was decided in light of the specific
clause contained in the policy.
(36) These decisions in the case of Amrit Lal Sood,
C.M.Jaya were considered by a Division Bench of this
Court in the case of Firdoz Pervez Mysorewala (supra)
in light of the avoidance clause contained in the
insurance policy. The plea of the Insurance Company
that the decision in the case of Amrit Lal Sood has been
overruled by five Judges Constitution Bench of the
Supreme Court in the case of C.M.Jaya (supra) was
negatived. It was observed as under :
“The above paragraphs quoted from the decision
of the Constitution Bench would indicate that the
judgment in Amrit Lal Sood (supra) is not
overruled at all. Further, five Judge Constitution
Bench had no occasion to consider the avoidance
clause in the insurance policy which is considered
in Amrit Lal Sood (supra) and Oriental Insurance
Co.Ltd. (supra). Applying the principles laid down
in the above referred to two decisions of the
Supreme Court to the facts of the present case
and more particularly to the terms and conditions
stipulated in the insurance policy Exh.51, this
Court is of the opinion that though the liability of
the Insurance Company is limited to the extent of
Rs.50,000/ (Rupees Fifty Thousand) only, the
Insurance Company is liable to pay the entire
award amount to the claimant and upon making
such payment, the Insurance Company can
recover the excess amount from the insured by
executing the award against the insured to the
extent of such excess amount as per Section 96(4)
of the Motor Vehicles Act, 1939.”
(37) Our task of culling the ratio in the case of Amrit
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Lal Sood (supra) and the effect of the subsequent
decisions in the case of C.M.Jaya (supra) however, has
been considerably simplified by a later decision in the
case of New India Assurance Co. Ltd. v. Vimal Devi,
2010 ACJ 2878. It was a case wherein the Insurance
Company had appealed to the Supreme Court. The
High Court had accepted the limited liability of the
Insurance Company to the extent of Rs.50,000/, but still
directed it to pay the entire amount along with interest
to claimants and then to recover the amount beyond the
liability of Rs.50,000/ from the owner of the vehicle
involved in the accident. The policy under consideration
in the said case also contained an avoidance clause
which read as under:
“Avoidance of certain terms and right of
recovery. Nothing in this policy or any
endorsement hereon shall affect the right of any
person indemnified by this Policy or any other
erson to recover an amount under or by virtue of
the provisions of the Motor Vehicles Act, 1939,
Section 96. But the insured shall repay to the
Company all sums paid by the Company which
the Company would not have been liable to pay
but for the said provisions.”
(38) The Apex Court relying on the decision in the
case of Amrit Lal Sood (supra) held that in view of
avoidance clause, the Insurance Company would be
liable to meet the claim of the claimant and satisfy the
award passed by the Tribunal. The decision in the case
of C.M.Jaya (supra) was noticed by the Apex Court in
the said decision and it was observed as under:
“6.Mr.Calla further submitted that in C.M.Jaya,
2002 ACJ 271 (SC), a Constitution Bench of this
court indeed held that in a policy for limited
liability it was not open to the court to direct the
insurance company to make any payment beyond
the amount of the limited liability but it took note
of the decision in Amrit Lal Sood, 1998 ACJ 531Page 37 of 43
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(SC) with approval. He referred to paras 8 and
12 of the judgment in C.M.Jaya (supra) where
the decision in Amrit Lal Sood (supra) is noticed
with approval.
7. The avoidance clause in the policy in this case
makes all the difference and the direction of the
High Court to the appellant insurance company
to make payment of the full amount of
compensation to the claimants and to recover its
due from the owner of the vehicle is directly in
accordance with that clause. In our view, the
submission of Mr.Calla is well founded. The
appellant in this case can derive no benefit from
the decision in C.M.Jaya, 2002 ACJ 271 (SC).”
(39) In view of the above pronouncement of the Apex
Court, we have no hesitation in holding that in face of
avoidance clause contained in the insurance policy, the
Insurance Company despite its limited liability must in
so far as third party is concerned, satisfy the entire
award of the Claims Tribunal. The Insurance Company,
of course, would be entitled to recover the amount in
excess of Rs.50,000/ which is the statutory limit of
liability, from the owner of the vehicle insured which
was involved in the accident.”
20. Considering the aforesaid principles in the facts of the
case on hand, and having appreciated the similar avoidance
clause appearing in the policy produced on record at Exh.36
(Exh.49), I have no hesitation in holding that despite there
being breach of the vital term and condition of the policy as
proved by the insurance company in absence of any ground of
fraud being involved, the insurance company is liable to
satisfy the amount of compensation at first instance insofar as
third party like claimants are concerned. In view of the
avoidance clause read with the third party risk covered as
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contained in the insurance policy, which is ‘standard
commercial vehicle package policy’ the insurance company is
bound to satisfy the entire award amount to the claimants at
first instance with liberty to recover such amount of
compensation from the owner of the vehicle insured, which
was involved in the accident.
21. Having held so, as regards the quantum of compensation
is concerned, the core contention of the claimant which is
required to be dealt with at the outset is the income of the
deceased being determined on lower side. On appreciation of
the evidence of the claimant no.1 whose deposition has been
recorded at Exh.20 and having appreciated the bills of Venus
Plaster Industries produced on record at Exh.38, undoubtedly
the claimant have established the case that the deceased was
earning his livelihood by doing making of idols. However,
there is no direct proof of any income of Rs.10,000/- being
produced on record to accept the case of the claimant for
determining the income as Rs.10,000/-. In absence of any
proof of income being produced on record, this Court is
inclined to consider the case of the claimant based on the
minimum wages prevailing at the time of accident.
Indisputably, the accident has taken place on 9 th June, 2010
considering the rates of minimum wages notified in the State
of Gujarat during the aforesaid period, it would be
appropriate to fix the income of the deceased as Rs.4,210/-
per month considering the nature of the work of the deceased
as that of skilled labourer.
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22. The age of the deceased has been proved by the
claimant as 50 years at the time of accident which is fixed by
the Tribunal based on the documentary evidence in the nature
of school leaving certificate produced on record at Exh.38,
wherein the date of birth of the deceased is reflected as 7 th
October, 1960. Admittedly, the claimants includes the widow
of the deceased, both aged parents and two major sons of the
deceased. Thus, the deceased being survived by 5 dependents
in the family, the Tribunal has rightly considered 1/4 th
deduction towards the personal and living expenses of the
deceased bearing in mind the well settled principles laid down
in this regard in the case of Sarla Verma (supra).
23. This brings me to the future rise of income to be
considered for the purpose of determination of dependency
loss in light of well settled principles laid down in the
landmark decision of Hon’ble Supreme Court in the case of
Pranay Sethi (supra). Considering the fact that the deceased
was self employed, as rightly submitted by learned advocate
for the claimant, it would be appropriate to consider 25%
towards future rise of the established income.
24. So far as the multiplier of 13 being applied by the
Tribunal considering the fact that the age of the deceased will
fall in the age group of 46 to 50 years, in view of the
guidelines issued by the Hon’ble Supreme Court in the case of
Sarla Verma (supra), the Tribunal has rightly applied the
multiplier of 13. Considering the aforesaid components, the
dependency benefit is thus redetermined as Rs.4,210 x 25% =
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Rs.1,053 + Rs.4,210 – 1/4th deduction = Rs.3,947/- x 12 x 13 =
Rs.6,15,732/-.
25. This brings me to the amount of compensation to be
reconsidered under conventional heads. Considering the well
settled principles laid down by the Hon’ble Supreme Court in
the landmark judgment of Pranay Sethi (supra), giving them
benefit of 10% rise on the ground that the claimants have
pursued the proceedings all throughout praying for
enhancement under the conventional heads as well, it would
be appropriate to fix amount of Rs.18,150/- each towards the
funeral expenses as well as loss of estate.
26. As regards the amount of compensation under the head
of loss of consortium is concerned, considering the fact that
the widow of the deceased has suffered loss of love, affection
and companionship of her husband, is hereby held entitled to
an amount of Rs.48,400/- towards spousal consortium.
Similarly, both the aged parents of the deceased are held
entitled to amount of Rs.96,800/- towards filial consortium.
The two major sons having lost love and affection of their
father at early age, are hereby held entitled to amount of
Rs.96,800/- towards loss of parental consortium. The total
amount of loss of consortium comes to Rs.2,41,800/-, which is
rounded upto Rs.2,42,000/-.
27. Thus in light of the aforesaid reasoning, the total amount
of compensation is reconsidered as under :-
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Sr. Particular Amount Enhanced
no. awarded by amount
the Tribunal
1. Loss of dependency benefit Rs.5,38,200/- Rs.6,15,732/-
2. Loss to estate Rs.5,000/- Rs.18,150/-
3. Loss of consortium Rs.10,000/- Rs.2,42,000/-
4. Funeral expenses Rs.10,000/- Rs.18,150/-
======== =========
Total :- Rs.5,63,200/- Rs.8,94,032/-
28. For the foregoing reasons the appeal preferred by the
appellant – insurance company is partly allowed and the
cross objections preferred by the original claimants are
hereby allowed. Consequently, the impugned judgment and
award dated 22nd December, 2014 passed by the Motor
Accident Claims Tribunal (Aux.) and 7 th Addl. District Judge,
Vadodara in MACP no.1011 of 2010 is hereby modified by
holding the original claimant entitled to seek recovery of sum
of Rs.8,94,032/- with interest at the rate of 9% per annum
from the date of filing of claim petition till its actual
realization together with proportionate costs from the original
opponent nos.1 and 2 jointly and severally.
29. For the reasons recorded earlier, to subserve the ends of
justice, the respondent no.3 insurance company is hereby
directed to satisfy the aforesaid amount of compensation with
proportionate costs and interest as awarded, at first instance
to be paid to the claimants with further liberty to recover the
aforesaid amount of compensation with proportionate costs
and interest from the owner of the vehicle (original opponent
no.2) by way of execution in accordance with law.
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30. The appellant – insurance company is therefore directed
to deposit the enhanced amount of compensation to the tune
of Rs.3,30,832/- (Rs.8,94,032 – Rs.5,63,200) with 9% interest
and proportionate costs as awarded, with the concerned
Tribunal within period of six weeks from the date of receipt of
certified copy of this order. On deposit of the aforesaid
amount of compensation, the Tribunal shall be at liberty to
proceed with the release and disbursement of the entire
award amount in favour of the claimants as per the
apportionment as directed in the impugned judgment and
award. Let the aforesaid exercise be undertaken by the
Tribunal within period of two weeks on deposit of the entire
award amount. The Tribunal shall also look into the Court
fees, if any to be realized before proceeding with the
disbursement of the award amount.
31. With these observations the first appeal stands partly
allowed whereas the cross objection stands allowed. The R.
& P. are directed to be remitted back to the concerned
Tribunal with the writ of this judgment.
Sd/-
(NISHA M. THAKORE, J.)
AMAR RATHOD…/sfs/24.03
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