Gujarat High Court
State Of Gujarat vs Manharba Bheemsih Gohil on 19 June, 2026
NEUTRAL CITATION
C/FA/211/2015 JUDGMENT DATED: 19/06/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 211 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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Approved for Reporting Yes No
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STATE OF GUJARAT & ANR.
Versus
MANHARBA BHEEMSIH GOHIL & ORS.
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Appearance:
MS. SURBHI BHAT, AGP for the Appellant(s) No. 1,2
MR RITURAJ M MEENA(3224) for the Defendant(s) No. 4
MR.HIREN M MODI(3732) for the Defendant(s) No. 1
RULE SERVED for the Defendant(s) No. 2,3
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 19/06/2026
ORAL JUDGMENT
Heard Ms. Surbhi Bhati, learned AGP for the appellants-State
Authorities and Mr. Hiren M. Modi, learned advocate for the
respondent no.1-original claimant. Despite having entered the
appearance on behalf of the respondent no.4, learned advocate Mr.
Vasant S. Shah has chosen not to appear and assist the Court. The
record reveals that notice of admission of appeal is reported to have
been duly served upon the respondent nos.2 and 3; however, no
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appearance has been entered on their behalf.
[2.] With the able assistance of learned advocates on record
for appellants-State Authorities and respondent no.1, the appeal was
peremptorily heard finally.
[ 3.] The present appeal is filed at the instance of the original
opponent nos.1 and 2 under Section 173 of the Motor Vehicles Act,
1988 (hereinafter to be referred as “the Act of 1988”), being
aggrieved and dissatisfied with the judgment and award dated
29.06.2013 ( hereinafter to be referred as “the judgment and award”)
passed by learned 5th Additional District Judge & Motor Accident
Claims Tribunal, Ahmedabad (Rural) in M.A.C.P. No.1663 of 2008.
[3.1] By the said judgment and award, the Tribunal has partly
allowed the claim petition preferred by the original claimants under
Section 163A of the Act of 1988, holding them entitled to recover
compensation of Rs.4,50,000/- with interest thereon at the rate of
7.5% per annum from the date of claim petition till its actual
realization from the original opponent nos.1 and 2, jointly and
severally, with proportionate costs. The Tribunal has further
exonerated the opponent no.3- New India Assurance Company Ltd
(hereinafter to be referred as the “Insurance Company”) from its
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liability to pay any compensation to the original claimants. Hence, the
present appeal at the instance of the appellants-State Authorities,
essentially disputing their liability to pay compensation to the original
claimants.
[4.] Before considering the merits of the appeal, it would be
appropriate to briefly consider the manner in which the accident has
been reported. Before the Claim Tribunal, the heirs of the deceased
had pleaded that on the fateful day of the accident i.e. on 24.03.2007,
the deceased Naginbhai Dayabhai, who was working as Police
constable, while on his duty was on his way to Dhuvaran Khamabat
Road on the motorcycle bearing registration no.GJ-23-0073 owned by
the State Authorities. At around 10:00 to 10:30 hours in the night,
when he had reached near the bridge, one tempo had approached
from the opposite side and had dashed with the said motorcycle. The
driver of the tempo had fled away from the place of the accident. The
motorcycle went off the road, because of the impact caused by the
tempo, resulting in the fall of the deceased from the motorcycle.
Because of the aforesaid impact, the deceased had received fatal
injuries and when he was brought to Khambhat General Hospital, he
was declared dead.
[5] The heirs and legal representatives of the deceased,
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including the mother of the deceased, had preferred the claim
petition before the Motor Accident Claim Tribunal, Ahmedabad, which
was registered as M.A.C.P. No. 1663 of 2008, praying for
compensation of Rs. 4,50,000/- with interest at the rate of 12% and
proportionate costs from the original opponents, which includes the
D.G.P. Office, Gandhinagar, and the District Superintendent of Police,
Anand, as opponent nos. 1 and 2, and the Insurance Company of the
motorcycle involved in the accident as opponent no. 3. Along with the
claim petition, the claimants have produced on record various
documents, including the true copy of the FIR, the panchnama of the
place of accident, the inquest panchnama of the dead body, the copy
of the post-mortem report, the identity card of the deceased issued
by the D.S.P. Office, Anand, reflecting the date of birth as 03.02.1982,
the true copy of the driving licence of the deceased, the R.C. book of
the motorcycle involved in the accident, the copy of the insurance
policy, the pay slip of the deceased of the month of February-2007,
and the summary report submitted by the Investigating Officer under
Section 173 of the Code of Criminal Procedure, 1973, vide list at Exh.
6.
[6.] Before the Claim Tribunal, the summons issued upon the
original opponents were duly served.
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written statements at Exh.16 and had disputed the occurrence of the
accident, the involvement of the vehicle, the quantum of
compensation as well as their liability to pay any compensation.
[6.2] The original opponent no. 3- Insurance Company had also
submitted its written statement at Exh. 19, mainly raising the defense
by disputing their liability on the ground that the policy of the
motorcycle alleged to be involved in the accident was a “liability only,”
i.e an “Act Only” policy. It was also contended that the risk of a driver
of the insured vehicle is not covered and, since the deceased himself
was driving the insured vehicle at the time of the accident, the
applicant was not legally entitled to claim any compensation against
opponent no. 3- Insurance Company. The other facts pleaded in the
claim petition, were objected to by the Insurance Company. On the
issue of negligence, it was contended that the deceased had lost
control over the motorcycle, because of the impact caused as being hit
by the tempo, which was otherwise driven at an excessive speed and
had dashed with the front side of the motorcycle. Therefore, it was
submitted that the accident had taken place solely due to the
negligence of the driver of the tempo and the motorcyclist was not
liable for the accident.
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petition, the original claimant namely the mother of the deceased,
was reported to have expired, and therefore, the heirs and legal
representatives of the deceased claimant, have been brought on
record, pursuant to the order passed by the Tribunal below Exh.20.
[6.4] Considering the overall pleadings on record, the Tribunal
has framed the issues at Exh.33 and, which are reproduced
hereunder:
“1. Whether the petitioner proves that deceased died
because of rash and negligent driving of the driver of
the vehicle involved in the accident?
2. Whether the applicant is/are entitled to
compensation ? If yes, what amount ?
3. In case, if the finding of issue No.2 in the affirmative,
who is liable to pay the compensation ?
4. What order ?”
[6.5] Before the Claim Tribunal, one of the claimants namely
Manharba Bheemsih Rathod, had submitted her examination-in-chief
affidavit at Exh. 21, who had mainly reiterated the case originally
pleaded in the claim petition. The examination-in-chief affidavit of
Manharba Bheemsih Gohil had been subsequently produced on record
at Exh 34. The respondents-original opponent nos. 1 and 2, had failed
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to cross-examine her. The respondent- Insurance Company had cross-
examined her; however, no challenge was made to the case of the
original claimants with regard to the deceased having succumbed to
the fatal injuries caused due to the use of the motor vehicle.
[6.6] Before conclusion of the proceedings, the opponent no. 3-
Insurance Company had preferred an application under Section 170 of
the Act of 1988 at Exh.35, which was allowed vide order dated
13.12.2011. Similarly, the examination-in-chief affidavit of the newly
added applicant No. 3- Chetnaben Kuwarba Chavda, was also brought
on record at Exh.37, who was cross-examined by the original opponent
no. 2-State Authorities, wherein she had reasserted the fact that the
deceased had succumbed to fatal injuries caused in the motor vehicle
accident. The opponent no. 3-Insurance Company has produced on
record the true copy of the insurance policy of the insured motorcycle
vide list at Exh.45. Apart from the aforesaid document and the
evidence produced on record, which has later been admitted as
Exh.47, the Insurance Company has examined one Mr. Chaitanyabhai
Somchand Bhavsar, the Assistant Manager of the Insurance Company,
as a witness. In his deposition before the Tribunal, the said witness has
categorically deposed that the risk of the motorcyclist is not covered
under the policy and, in such circumstances, the Insurance Company
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cannot be held liable. In the cross-examination, the said witness has
admitted the fact that the accident had taken place on 24.03.2007 and
the period of coverage as indicated in the policy is 01.01.2007 to
31.12.2007. In his cross-examination, he has admitted that, as per the
Schedule, the basic premium of Rs. 300/- has been realized towards
third-party risk and has denied that the minimum premium to be
realized was Rs. 100/-. In para-8, the said witness has categorically
denied the fact that the deceased can be treated as a third party. He
has admitted to the suggestion that the deceased cannot be treated
as the owner of the insured vehicle; however, he has reiterated that
the policy in question was confined to basic third-party risk and there
was no risk covered for the driver of the insured vehicle.
[6.7] The Tribunal, while examining a claim petition preferred
under Section 163A of the Act, 1988, has proceeded to decide the
issue of negligence on appreciation of documentary evidence such as
the complaint at Exh.56 and the panchnama at Exh.57, and held the
driver of the tempo solely negligent towards the occurrence of the
accident, in absence of the driver/owner of the unknown vehicle i.e.
tempo being joined as a party to the proceedings.Having held the
driver of the tempo negligent, the Tribunal has further decided the
issue of entitlement of compensation as well as the quantum of
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compensation. Having noted that the proceedings being preferred
under Section 163A of the Act, 1988, the Tribunal has arrived at a
finding that the deceased was working as a Constable in the Police
Department and was receiving a salary of Rs. 6,204/-, and therefore,
considering the income at Rs. 40,000/- per annum under Section 163A
of the Act of 1988, the Tribunal applied deduction of 1/3rd towards
the personal expenses of the deceased, and thereafter, applied
multiplier of 17, considering the age of the deceased to be 25 years,
thereby holding the claimants entitled to recover compensation of Rs.
4,50,000/-.
[6.8] As regards the issue of liability, the Tribunal has
considered the contents of the policy and has held that the policy was
an “Act Only” policy. While appreciating the evidence of the Assistant
Manager at Exh.46, the Tribunal, after considering the ratio laid down
by the Hon’ble Supreme Court in the case of United India Insurance
Co. Ltd. vs. M. Laxmi and others reported in 2009 ACJ 104, and in
the case of New India Assurance Co. Ltd. vs. Sadanand Mukhi and
others, reported in 2009 ACJ 998, as relied upon by the learned
advocate for the Insurance Company, has drawn the conclusion that
the risk of the driver was not covered under the policy in question and,
has thereby exonerated the Insurance Company from its liability to
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pay any compensation to the claimants. The Tribunal has considered
the provisions of Section 163A and has noted that the State
Authorities have failed to produce any evidence to show that the
Insurance Company is liable to pay compensation and has thereby held
the owners i.e. opponent nos. 1 and 2, liable to pay compensation
under Section 163A of the Act of 1988.
Hence, the present appeal is preferred by the State Authorities
disputing their liability to pay any compensation.
SUBMISSIONS ON BEHALF OF APPELLANT STATE :
[7.] Learned AGP Ms. Surbhi Bhaiti appearing for the
appellants- State Authorities has vehemently assailed the impugned
judgment and award, mainly disputing their liability.
[7.1] The attention of this Court was invited to the findings and
reasons assigned by the Tribunal, to contend that the Tribunal
committed serious error in entertaining the claim petition preferred
under Section 163A of the Act of 1988, in the facts of the case and the
evidence on record. Inviting my attention to the issue of negligence,
learned AGP has submitted that, in absence of the driver and owner of
the alleged tempo involved in the accident, the Tribunal had arrived at
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a conclusion holding the driver of the tempo solely negligent towards
the occurrence of the accident. On such an erroneous foundational
basis, the Tribunal has proceeded to examine the claim petition under
Section 163A of the Act of 1988.
[7.2] She has fairly conceded to the fact that the policy
produced on record at Exh.47 is an “Act Only” policy. Referring to the
policy produced on record, she has fairly pointed out that no
additional premium has been paid covering the risk of the driver of the
insured vehicle. The only premium, which was realized by the
respondent no. 3- Insurance Company, is towards the third-party risk.
However, she has objected to the liability of the State as, according to
her, the deceased being the driver of the insured vehicle-motorcycle,
in absence of his negligence, the State as owner of the vehicle could
not have been held liable to pay compensation.
[7.3] Learned AGP has invited my attention to the recent order
of the Hon’ble Supreme Court passed in the case of Wakia Afrin
Versus M/S National Insurance Company Limited, arising from
Special Leave Petition (Civil) Nos.15447-48 of 2024 (Neutral
Citation: 2025 INSC 919). The attention of this Court was invited to
the various earlier decisions on the issue reconsidered by the Hon’ble
Supreme Court, while referring the matter for reconsideration to a
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Larger Bench. She has, therefore, submitted that in the case of a
motor vehicle accident, if the tortfeasor is the driver, the owner has
the vicarious liability, which liability is indemnified by the insurer only
when there is a valid policy. She has further submitted that, in absence
of the second vehicle involved in the accident and in absence of the
driver and the owner of that vehicle being joined as parties to the
proceedings, a claim petition under Section 163A of the Act of 1988,
would not be maintainable.
[7.4] Reliance was also placed on the order dated 25.08.2022
passed by the Hon’ble Supreme Court in the case of Mohana Krishnan
S vs K. Balasubramaniyam, in Special Leave to Appeal (C) No(s).
3433/2020, wherein, after considering the earlier decisions, the issue
as to whether a pillion rider on a motorcycle is not a third party, and
therefore, the Insurance Company is not liable to indemnify the
insured on account of the injuries or death of such pillion rider, is
pending consideration before the Larger Bench. She has, therefore,
submitted that since the question, as to whether the “third party”
includes all other persons other than the insured, who is the first party
and the insurer, who is the second party, is pending consideration
before the Larger Bench. It was submitted that the hearing of the
present appeal may be deferred as the insurance policy admittedly
covers the risk of third party only being an “Act Policy” and in case the
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reference is answered in near future then the same will have bearing
on the issue of liability of Insurance Company.
[7.5] Similarly, reliance was placed on the order dated
06.02.2026 passed by the Hon’ble Supreme Court in the case of
Shyamkishor Choudhary vs. Branch Manager in Special Leave
Petition (Civil) Diary No. 2862 of 2026. While condoning the delay,
the Court had entertained an appeal to reconsider the issue, as to
whether a pillion rider can be treated as a third party. Noticing the
earlier order referring the matter to a Larger Bench in case of
Mohana Krishnan S (supra), the Hon’ble Supreme Court while issuing
notice in the main matter, has stayed the direction of the High Court
to refund the amount to the Insurance Company.
[7.6] Reliance was also placed on the order dated 11.08.2025
passed by the Hon’ble Supreme Court in the case of Sudha Hari @
Sudha vs. The United India Insurance Company Limited and others,
in Civil Appeal No.13426 of 2024, wherein the issue as to whether the
owner/driver/representative of the vehicle stands covered for the
purpose of the applicability of Section 163A of the Act of 1988,
considering the fact that issue has been referred to a Larger Bench in
the case of Wakia Afrin (supra), the Court has directed to tag the
matter along with the main matter. Reliance was also placed on the
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order dated 14.07.2025 passed by the Hon’ble Supreme Court in the
case of The Divisional Manager vs. Radha Santosh & Ors. In Special
Leave to Appeal (C) No.17630 of 2025.
SUBMISSIONS ON BEHALF OF RESPONDENT CLAIMANT :
[8.] Learned advocate Mr. Hiren Modi appearing for
respondent no. 1-the original claimant, has though objected to the
aforesaid submissions made by the learned AGP on the issue of
maintainability of claim petition under section 163A, however, has
made submissions on the aspect of liability.
[8.1] Learned advocate, at the outset, has invited my attention
to the findings and reasons assigned by the Tribunal in this regard. It
was submitted that, admittedly, the deceased was a Constable, and
therefore, he was an employee of the original opponent nos. 1 and 2.
It was submitted that, considering the provisions of Section 163A of
the Act of 1988, the Tribunal was not required to examine the issue of
negligence, though an issue was framed in this regard. It was
submitted that in order to consider the entitlement to the
compensation under Section 163A of the Act of 1988, the only
requirement was to establish the fact that the deceased had
succumbed to injuries caused in an accident arising out of the use of
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the motor vehicle.
[8.2] He has further submitted that, considering the arguments
advanced before this Court in the present appeal, there is no dispute
with regard to the manner in which the accident had taken place. The
requisite documents, in the nature of the R.C.book and the driving
licence of the deceased have been brought on record. The
involvement of the motorcycle in the accident has also been
established by the claimant. With such evidence on record, no error
can be found with the approach of the Tribunal in entertaining the
claim petition under Section 163A of the Act of 1988.
[8.3] On the issue of liability, learned advocate have mainly
relied upon Section 147 of the Act of 1988, which deals with the
requirements of policies and the limits of liability incurred. It is
submitted that, considering the proviso to Clauses (i) and (ii) of Clause
(b) of sub-section (1) of Section 147, it can be inferred that there is an
inbuilt risk covered to indemnify the employer towards the liability in
respect of the death of his employee during the course of his
employment. Referring to sub-clauses (a), (b), and (c) of Clause (i) of
the proviso to sub-section (1) of Section 147, learned advocate has
submitted that once a valid policy is issued then risk of an employee
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engaged in driving of the insured vehicle can always be inferred to be
covered.
[8.4] Referring to the aforesaid provision, learned advocate has
submitted that, irrespective of any additional amount of premium
being paid towards the Workmen’s Compensation Act, 1923
(hereinafter to be referred as “the Act of 1923”), considering the fact
that a valid policy was issued in respect of the vehicle used/involved in
the accident i.e. the motorcycle owned by the State Authorities, the
risk of the motorcyclist stood covered under the policy.
[8.5] To substantiate his submission, learned advocate has
placed reliance upon the judgment of the Hon’ble Supreme Court in
the case of National Insurance Company Ltd. vs Prembai Patel And
Others reported in 2005 (6) SCC 172. The attention of this Court was
invited to the facts. It was a case where the driver of the truck had
succumbed to injuries, as the truck had overturned. However,
considering the fact that the death of the driver had taken place out
of and in the course of the employment, the claimants had preferred a
claim petition under Section 166 of the Act of 1988. The insurance
company had objected to its liability to indemnify on the ground that,
though the vehicle was insured, it was an “Act Liability.” The High
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Court, upon appreciation of the aforesaid contention, had held that
the liability of the insurance company is not limited to the extent
provided under the Act of 1923 and had directed the insurance
company to pay the awarded amount granted by the Tribunal. The
insurance company once again approached in appeal before the
Hon’ble Supreme Court . The question arose, in the facts of the case,
as to whether the liability of the insurance company was limited to the
extent arising under the Act of 1923? The Hon’ble Supreme Court,
while accepting the aforesaid stand of the insurance company,
observed that the effect of the proviso was that if an insurance policy
covers the liability under the Act of 1923, in respect of the death of
any employee as described in sub-clauses (a), or (b), or (c) of proviso (i)
of Section 147(1)(b), it will be treated as a valid policy and the
insurance company would be required to comply with the
requirements of Chapter XI of the Act. The Court had further
considered Section 149 of the Act, which imposes a duty upon the
insurance company to satisfy the judgments and awards against the
person insured in respect of third-party risks. Considering the effect of
the said provision, the Court held that a policy which covers only the
liability arising under the Act of 1923, in respect of death or bodily
injury to any such employee, as described in sub-clauses (a), (b), or (c)
of proviso (i) to Section 147(1)(b) of the Act, is perfectly valid and is
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permissible under the Act. However, the Court further observed that,
considering the fact that the claim petition was preferred under
Section 166 of the Act, the High Court committed an error in holding
that the liability of the insurance company was not limited to the
extent provided under the Act of 1923, and therefore, the Hon’ble
Supreme Court restricted the liability of the insurance company to
satisfy the award to the extent arising under the Act of 1923 and
thereby issued further directions to the owner of the insured vehicle
to satisfy the remaining portion of the award.
[8.6] Learned advocate has also placed reliance upon the
unreported decision of the Co-ordinate Bench of this Court in the case
of Sashikant Manubhai Bhatti (Deceased) & Ors. Versus Minaben
Prakashbhai Bhatti & Anr. rendered in R/First Appeal No. 582 of
2013 on 12.01.2026, to contend that under Section 163A of the Act of
1988, negligence is not required to be examined. Inviting my attention
to the facts of the case, it was pointed out that the scooterist had got
hit by a donkey on the road and slipped. It was submitted that despite
no other vehicle being involved, the Court, by referring to the decision
of the Hon’ble Supreme Court in the case of United India Insurance
Co. Ltd. V. Sunil Kumar & Anr. reported in 2017 (0) AIJEL-SC 61480,
had quashed and set aside the order passed by the Tribunal, rejecting
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the claim petition preferred under Section 163A of the Act of 1988, by
holding that the issue of negligence was not required to be seen by
the Tribunal, while deciding a claim petition preferred under Section
163A of the Act of 1988.
[8.7] Lastly, learned advocate has placed reliance upon the
unreported judgment of the Co-ordinate Bench of this court in the
case of United India Insurance Company Limited Versus Bharatbhai
Manuprasad Upadhyay & Ors rendered in First Appeal No.3904 of
2025 on 06.01.2026. It is submitted that in the claim petition preferred
by the original claimants under Section 166 of the Act of 1988, the
Tribunal had partly allowed the claim petition. Disputing the liability,
the insurance company had approached in appeal on the ground that
the claim petition was preferred under Section 167 of the Act of 1988
and the deceased driver of the offending vehicle himself was the sole
tortfeasor in causing the accident. It was pointed out that the Tribunal
ought to have considered that the owner of the offending vehicle had
not paid any additional premium under the head of legal liability
towards the paid driver, and therefore, the insurance company was
wrongly held liable to pay compensation under Section 147 of the Act.
Alternatively, the argument was made by the insurance company that
the Tribunal ought to have taken into consideration the structured
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calculation provided under Section 4 of the Act of 1923, based on
prevailing minimum wages, while deciding the liability of the insurance
company in terms of the policy. The Co-ordinate Bench, after
appreciating the principles laid down by the Hon’ble Supreme Court in
the case of New India Assurance Co. Ltd vs C.M. Jaya & Ors reported
in 2002 (2) SCC 278 as well as in the case of Prembai Patel (supra),
held that the liability under Section 147(1)(b) of the Act, 1988, and
under Section 4 of the Act, 1923, are different. Considering the fact
that the claim petition was filed under Section 167 of the Act of 1988
and appreciating the policy produced on record, it was held that the
Tribunal ought to have awarded compensation in terms of the
provisions of the Act of 1923, by considering the minimum wages
prevailing at the time of the accident to award just compensation. This
Court, therefore, considering the minimum wages of Rs. 8,000/- per
month and applying 50% of the said wages by applying appropriate
factor, had held the insurance company liable to pay compensation in
terms of the provisions of Section 4 of the Act of 1923. However,
noticing the fact that the original claim petition was preferred under
the provisions of the Motor Vehicles Act, as against the total amount
of compensation adjudicated, after directing Insurance Company to
indemnify to the extent of liability under the Workmen’s
Compensation Act , the remaining amount was directed to be realized
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from the owner.
[8.8] Reliance was also placed on the decision of the Hon’ble
Supreme Court in the case of Ramachandra vs. Regional Manager,
United India Insurance Company Limited reported in (2013) 12 SCC
84. Referring to the relevant observations made by the Hon’ble
Supreme Court in paras 22 and 23, learned advocate has submitted
that, in absence of any expressive clause being included in the
insurance policy, this Court can always infer about risk covered, in view
of the statutory liability imposed on the employer by the provisions of
the Act of 1923, the insurance company cannot escape its liability to
pay the compensation, in the facts of the case, where the insured
vehicle was driven by the employee under the instructions of the
employer. He has therefore submitted that suitable directions can be
issued holding the respondent- Insurance Company liable to pay the
amount of compensation to the extent of their liability in terms of the
provisions of the Act of 1923 and, the remaining amount of
compensation may be directed to be realized from the owner of the
insured vehicle i.e. the appellant herein, in view of Section 163A of the
Act of 1988. Learned advocate has, therefore, urged this Court to
suitably modify the order to the aforesaid extent, more particularly,
when there is no challenge to the amount of compensation as
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quantified by the Tribunal while entertaining the claim petition under
Section 163A of the Act of 1988.
REJOINDER OF STATE :
[9.] In rejoinder, learned AGP has objected to the aforesaid
submissions made by the learned advocate for respondent no. 1-
Insurance Company. Reliance was placed on the recent decision of the
Hon’ble Supreme Court in the case of Mohammed Masood vs The
New India Assurance Co. Ltd & Anr. (Neutral Citation: 2025 INSC
1179 ). She has submitted that the claimants have the option to seek
compensation either to prefer a claim petition under Sections 166 or
163 of the Act of 1988, or to apply under the Act of 1923. She has
therefore, submitted that both the aforesaid remedy provided to the
claimants, are distinct and, in view of Section 167 of the Act of 1988,
once the remedy under the Act of 1988, is elected and the Tribunal
has adjudicated the claim, this Court may not import the provisions of
the Act of 1923, while considering the issue of liability. She has,
therefore, submitted that the State cannot be held liable to pay
compensation and the impugned judgment and award passed by the
Tribunal, may be quashed and set aside.
[9.1] Disputing the findings and reasons assigned by the
Tribunal exonerating the Insurance Company from its liability to pay
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the amount of compensation, learned AGP has submitted that, in a
similar set of facts, the deceased who was driving the tractor and
holding a valid driving licence, succumbed to injuries. The tractor was
turtled and the deceased had died on the spot. An appeal was
preferred by the original claimants, being the heirs and legal
representatives of the deceased, being aggrieved by the directions of
the Tribunal exonerating the insurance company. She has fairly
pointed out that the policy produced on record indicated the payment
of an extra premium for legal liability to the driver in terms of IMT-28.
In the written statement, as well as before the Appellate Court, the
respondent-insurance company had specifically contended that the
deceased was not a third party, and therefore, can not claim
compensation against his own insurance company. It was also
contended that the claim petition is not maintainable because the
deceased himself was driving the tractor involved in the accident.
Inviting my attention to the findings and reasons assigned by this
Court, learned AGP has submitted that, while entertaining the appeal
of the original claimants, the Court appreciated the insurance policy
and the fact of the additional premium being paid under Clause IMT-
28 towards the legal liability of the driver. Considering the judgment
of the Larger Bench of this Court in the case of Valiben Laxmanbhai
Thakore (KOLI) Wd/O Late Laxmanbhai Ramsingbhai Thakore
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(KOLI) & Ors. vs. Kandla Dock Labour Board & Ors. reported in 2021
(4) GLH 77, as well as the judgments of the Hon’ble Supreme Court in
the case of Chandrakanta Tiwari vs. New India Insurance Company
Limited, reported in (2020) 7 SCC 386, and Ramkhiladi vs. United
India Insurance Company Limited, reported in (2020) 2 SCC 550, the
Court has held the insurance company liable to pay compensation to
the claimants under Section 163A of the Act of 1988, by considering
Section 147 of the Act of 1988. Learned AGP has, therefore, prayed
that, alternatively, the Court may allow the appeal, by holding the
Insurance Company, jointly and severally, liable to pay the amount of
compensation to the claimants.
SUBMISSIONS ON BEHALF OF RESPONDENT INSURANCE
COMPANY :
[10.] Notably, learned advocate for the respondent Insurance
company on record had chosen not to appear and conduct the matter
and while the matter was at verge of dictation of order, the request
was made on behalf of Insurance company to grant adjournment to
engage a different lawyer. Learned advocate Mr. Meena was
permitted to enter the appearance on behalf of respondent Insurance
Company. It was argued that the Tribunal has rightly exonerated the
respondent insurance company from liability to pay compensation.
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Learned advocate had relied upon findings and reasons assigned by
the tribunal in this regard.
[10.1] The reliance was placed on a decision of the Hon’ble
Supreme Court in the case of Oriental Insurance Co. Ltd vs. Meena
Variyal and others, reported in (2007) 5 SCC 428 and has submitted
that the liability of insurance companies in view of section 147 of the
Motor Vehicles Act is not intended to cover risk of persons other than
third parties. It was submitted that the liability of the insurance
company covered under statutory insurance does not cover risk of
every employee except in cases where the liability arises under the
Workmen’s Compensation Act, 1923. The attention of his Court was
invited to Section 147 1)(b). It was submitted that the Court held that
section 149(1) of the Act cannot be used to enlarge the liability of the
Insurance Company if it does not exist.
[10.2] The reliance was placed on a decision of Hon’ble Supreme
Court in the case of Ramkhiladi (supra), to contend that the claim
petition itself was tenable in eyes of law in absence of the alleged tort
feasor viz. The tempo driver and the owner being joined in the claim
petition. The question which arose for consideration as recorded in
para 5 was read over and further referring to observations recorded n
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para 5.5, it was submitted that the deceased having entered into the
shoes of the owner of the insured vehicle and in absence of any
contract to indemnify the owner of the insured vehicle, the insurance
company can n ot be held liable to pay compensation.
[10.3] The attention of this Court was invited to the recent
judgment of the Hon’ble Supreme Court in the case of Daivshala &
ORS. vs. Oriental Insurance Company Ltd. and ors., Neutral Citation :
225 INSC 904, to contend that the claimant has to establish that the
accident had occurred during the course of employment.
[10.4] Lastly, the judgment of the Hon ‘ble Supreme Court in the
case of Mohamed Masood vs. The New India Assurance Co. Ltd :
Neutral Citation : 2025 INSC 1179, has been relied upon. It was
submitted that this Court cannot apply parameters of Workmen ‘s
Compensation Act, 1923 regarding fixing of income when the
compensation was assessed under Motor Vehicles Act.
[10.5] Learned advocate, referring to aforesaid principles has
further submitted that admittedly, the policy produced on record at
EXH. 478 is an ‘Act Policy’ and therefore in absence of any additional
premium being paid covering risk of the owner of the insured vehicle
or its driver, no liability can be imposed on respondent insurance
company to pay compensation. The said Policy is confined to only third
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party risk. According to him, the judgment of Prembai (supra) shall not
be applicable in the facts of the case. He has therefore urged this
Court to dismiss the present appeal.
ANALYSIS :
[11.] I have heard the learned AGP for the appellants-State
Authorities and learned advocate for the respondent no.1-original
claimant and insurance company. Considering the submissions made
and the grounds raised in the appeal, the question which arises for
consideration in the present appeal is, as to whether the Tribunal
committed any error in entertaining the claim petition under section
163A of the Motor Vehicles Act, 1988, against the owner and
insurance company of the insured vehicle, when the accident has
taken place while the insured vehicle was driven by the deceased.?
[11.1] I have carefully considered the arguments submitted by
the learned advocates appearing in light of the findings and reasons
assigned by the Tribunal. I have also carefully re-appreciated the
evidence on record, in light of the provisions of Sections 147 and 163A
of the Act of 1988. At the outset, it would be appropriate to note the
undisputed facts, which can be gathered from the record. Considering
the arguments made by the appellants-State Authorities and in
absence of any challenge being made with regard to the manner in
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which the accident has occurred and the involvement of use of
motorcycle owned by the State Authority, there is no challenge to the
fact that the deceased has succumbed to the injuries caused in the
motor vehicle accident, during the course of his employment. It is an
admitted fact that the deceased was a Constable working under the
appellants-State Authorities i.e. at the D.S.P. Office, Sanand. Thus,
considering the deposition of the claimants and the documentary
evidence, more particularly, the salary slip produced on record, the
relationship of the employee/employer, has been established on
record.
[11.2] As rightly submitted by learned advocates appearing for
the respective parties, while deciding the claim petition under Section
163A of the Act of 1988, the issue of the negligence of the driver of
the vehicle involved in the accident, is not required to be looked into.
Despite the aforesaid settled legal position, in my view, the Tribunal
committed grave error in examining the issue of negligence. The
Tribunal, in absence of the necessary party namely the driver/owner of
the alleged tempo involved in the accident, has proceeded to hold the
driver of the tempo negligent towards the occurrence of accident. Be
that as it may, the fact remains that it is not the case of either of the
opponents that it was the deceased who had negligently contributed
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to the accident. Considering the scheme of “no fault liability”, in view
of Section 163A of the Act of 1988, the sole requirement which is
required to be established is that the deceased had succumbed to the
injuries caused in the accident by use of a motor vehicle. Bearing in
mind, the aforesaid provision of the Act, the Tribunal has rightly
entertained the claim petition preferred by the heirs and legal
representatives of the deceased under Section 163A of the Act of
1988.
[11.3] As regards, reliance placed by learned advocates for the
Appellant State and for Insurance Company on the decision of
Ramkhiladi (supra) is concerned, it is required to be noted that the
Supreme Court has in para 5.3 has noted the facts that there is no
evidence on record to suggest that the deceased was in employment
as driver of the owner of the insured vehicle and has found him a
permissible user. It is in this background of facts, the Court has
applied the principle laid down in the case of Ninagamma (supra) to
conclude that the deceased had entered into the shoes of the owner
and therefore section 163A would not apply where the owner himself
is involved in an accident. While considering the ratio laid down in the
case of Dhanraj (supra), the Court was guided by the provisions of
section 147 of the ACt which clearly suggest that there is no statutory
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obligation to get risk cover of the owner of the vehicle.
[11.4] The submission made by learned AGP, as regards the
reference in the case Wakia Afrin (supra), pending consideration, it
would be appropriate to note that in the aforesaid case, the facts of
the case suggest that the parents of the claimant had expired in an
unfortunate accident when their vehicle had dashed against a road
side building, as the tyre had burst. The claim petition was preferred
under Section 163A of the Act of 1988. The owner of the vehicle was
father of the claimant, who was shown as the deceased respondent in
the array of the parties and the Insurance Company of the vehicle, was
joined as second respondent. Noticing the aforesaid facts, the High
Court was of the view that a dead person cannot be made the
respondent, and therefore, held the claim petition not maintainable.
In the appeal before the Supreme Court, the Court noted that the
validity of the insurance policy was not in question and the fact that
the vehicle was driven by a person, who had a valid licence. The
question arose before the Supreme Court that, whether the liability of
the insurer can be confined to that provided in the policy or it can be
determined under Section 163A of the Act of 1988. In the process, the
Court has considered the provisions itself. The attention of the Court
was invited to the various earlier decisions including the judgment of
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the Supreme Court in the case of The Oriental Insurance Company
Limited vs Meena Variyal & Ors, reported in 2007 (5) SCC 428,
arising out of the proceedings filed under Section 166 of the Act of
1988. Thus, considering the orders as relied upon by learned Assistant
Government Pleader referring matter to larger bench, in my the said
orders does not touch issue of liability with facts like in present case
about deceased driver of the insured vehicle being employed by the
owner of the vehicle vis-a-vis liability of insurance company being
examined.
[12.] Having held so, the second question which arises for
consideration is as to whether the Tribunal committed any error in
exonerating respondent Insurance Company from making any
payment of compensation by relying upon the Judgment of the
Hon’ble Supreme Court in the case of M. Laxmi (supra) and Sadanand
Mukhi (supra), in the facts of the case.? Whether the heirs and legal
representatives of deceased driver are entitled to any compensation
from the owner and the insurance company of the insured vehicle in a
claim petition filed under Section 163A of the Act of 1988? The
subliminal question, which arises for consideration of this Court is, as
to whether the appellant State as owner of the insured vehicle can be
held liable to pay compensation to the heirs and legal representatives
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of deceased driver of the insured vehicle in claim petition filed under
Section 163A of the Act of 1988. ?
[13.] It is required to be noted that the view expressed in M.
Laxmi ( supra) deals with a case of pillion rider and ‘Act only Policy’. It
is this background of facts of the case, the Hon’ble Supreme Court
ruled that the meaning of the words “any person” must also be
attributed having regard to the context in which they have been used
i.e. “a third party”. Keeping in view the provi- sions of the 1988 Act, it
was held that as the provisions thereof do not enjoin any statutory
liability on the owner of a vehicle to get his vehicle insured for any
passenger travelling in a goods vehicle, the insurers would not be
liable therefor. Thus, the said principle would not be applicable to
exonerate insurance company from its liability merely because it is an
‘Act only Policy’ as it does not touch to proviso to clause (b) of
subsection (1) of section 147 of the Act which deals with liability of
the owner of insured vehicle cum employer to secure the risk of
employee.
[13.1] In the case of Sadanand Mukhi (supra), the Hon’ble
Supreme Court was called upon to examine the issue of liability in the
facts of the case where the deceased was father and the owner of the
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insured vehicle was a son, and thus the deceased was not a third party.
Considering the provisions of section 165 of the MV. The Court held
that in cases involving the owner of the vehicle or others, the risk of
whom, if proposed to be covered, an additional premium was required
to be paid for covering their life and property. Thus, as noted earlier in
the said case, the Court has ruled so in light of the facts of the case
and had no occasion to deal with circumstances involving employees.
[13.2] The judgments relied upon by learned advocate for the
respondent insurance company shall also be not applicable in the facts
of the case for the reasons recorded in the preceding paras.
In view thereof, the Tribunal committed grave error in applying
the aforesaid precedents in the facts of the case while deciding the
issue of liability of the insurance company.
[14.] This brings me back to the subliminal questions which
arise for consideration. In order to examine the aforesaid issue, it
would be appropriate to find out as to whether the deceased, who
was indubitably a Police Constable, can be treated as an employee of
the State in terms of the provisions of the Employees’ Compensation
Act, 1923. It would be appropriate to consider the definition of the
term ’employee’ as provided under Section 2(1)(n)(dd) of the
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Employees’ Compensation Act, 1923. Thus, the term ’employee’ as
defined under the aforesaid provision reads as under:
“(c) a person recruited as driver, helper, mechanic,
cleaner or in any other capacity in connection with a
motor vehicle.”
[15.] Normally the regular police service would be governed by
the special service Rules, however, considering the peculiar facts of
the case, as a part of his duty, when the State has entrusted the motor
vehicle, the question arises as to whether the Police Constable can be
said to be an employee within the meaning of Section 2(1)(dd) of the
State under the Employees’ Compensation Act, 1923? It would be
appropriate to look into the definition of the term ’employer’ as
defined under Section 2(e) of the Employees’ Compensation Act,
1923. The term ’employer’ as defined under the aforesaid provision
includes any body of persons, whether incorporated or not, and any
managing agent of an employer and the legal representatives of the
deceased employee, and, when the services of an employee are
temporarily lent or let out on hire to another person by the person
with whom the employee has entered into a contract of service or
apprenticeship, means such other person while the employee is
working for him.
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employees as provided under Schedule II also needs to be looked into.
Considering the definition of the term ’employee’, as noted earlier and
the scope of Section 12 of the Employees’ Compensation Act, 1923, it
is evident that the core intention of the legislation to incorporate
the aforesaid provision in the statute was to give protection to the
employee. It would be appropriate to consider the judgment of the
Division Bench of this Court in the case of Bhutabhai Angadbhai And
Anr. vs Gujarat Electricity Board And Ors. reported in (1987)1 GLR
617. The Court has observed as under:
“9. The object of enacting Section 12 of the Act is to give
protection to the workmen and secure compensation from the
persons who can pay and in case of an accident such workmen
will not be dependent, sometime upon a petty contractor who
will not be able to pay compensation on account of his
financial inability. In our opinion, the main object of enacting
Section 12 of the Act is to secure compensation to the
employees who have been engaged through the Contractor by
the principal employer for its ordinary part of the business,
which, in the ordinary course, the principal employer is
supposed to carry out by its own servants.
10. While imposing this liability on the principal employer, sub-
Section (2) of Section 12 of the Act has provided that the
principal employer will be entitled to be indemnified by the
contractor in case the principal employer is required to pay
compensation to the employees of the contractor.”
The Employees’ Compensation Act,1923, thus covers full-time,
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temporary or even cases of casual workers. Keeping in mind the
aforesaid provisions, in my view, the Police Constable was casually
engaged by the Employer who was also owner of the insured vehicle
to drive the motorcycle while he was on his special duty as officer.
[17.] Considering the aforesaid provision and the fact that the
deceased had met with the accident and had succumbed to the same
while he was on his duty, and considering the scheme of benevolent
legislation which intends to provide immediate relief to the victims
under the Employees’ Compensation Act, 1923, the Police Constable
can be treated as an employee for the purpose of enforcement of
provisions of the Act of 1988. If one looks at section 147 of the Motor
Vehicles Act, 1988, the said section deals with the liability of insurance
companies regarding accidents involving motor vehicles. It specifies
the conditions under which an insurance policy must compensate for
death or bodily injury sustained by an employee during the course of
their employment. The First Proviso to Section 147(1)(b), outlines the
exceptions where the insurance policy does not cover certain
liabilities, such as when an employee is not performing his designated
role ie. driving at the time of the accident but is engaged in other
tasks. However, once he is engaged by the employer to drive the
vehicle, the crucial question which is required to examine is whether
the employee was acting within the duties and responsibilities
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assigned by the employer at the time of the incident. What is required
to be established for liability purposes is a direct link between the
employment and the incident.
[18.] If one looks at the categories/class of persons, the risk of
whom is mandatorily covered as provided under Section 147, which
deals with “Requirements of policies and limits of liability,” sub-clause
(b) of Section 147(1) read with the proviso lays down a statutory
scheme of compulsory coverage of liability incurred by the employer
vis-a-vis his employees when they meet with the accident or sustain
injuries by the use of motor vehicles during their employment, and on
account of motor accidents arising out of, and in the course of their
employment. As laid down by the Hon’ble Supreme Court in the case
of Prembai Patel (supra), the aforesaid statutory coverage for such
liability is limited to the extent of liability of the insured employer
arising under the Workmen’s Compensation Act in respect of death or
bodily injury to such employees. Thus, in motor accidents resulting in
fatal injuries to the employees, whatever liability is incurred by the
insured in connection with proceedings arising out of the Workmen’s
Compensation Act shall be governed by the statutory liability of the
respondent- Insurance Company. It is required to be noted that sub-
section (2) of Section 147 of the Motor Vehicles Act, 1988, lays down
the limits of liability. Sub-section (5) of Section 147 of the Act of 1988
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is a non-obstante clause, which makes the insurers liable to indemnify
the person or class of persons specified in the policy in respect of the
liability covered by the policy. Thus, even in case it was an ‘Act Liability
Policy’, the insurance company shall be liable to pay compensation to
the heirs of the deceased employee to the extent as limited under the
Workmen’s Act.
[19.] In view thereof, considering the judgment of the Hon’ble
Supreme Court in the case of Prembai Patel (supra), the Tribunal
committed grave error in exonerating the Insurance Company from
its liability to pay compensation to the original claimants, ignoring the
status of the deceased as an employee of the respondent State-
employer.
[20.] In view of the aforesaid legal position, if the facts of the
case are appreciated, it is true that the deceased was engaged for a
momentous work in connection with the use of a motor vehicle and
such engagement to perform the task was under the instruction of the
employer–the State; the deceased having succumbed to fatal injuries
during the course of the aforesaid employment, the requisite criteria
so as to attract the provisions of the Workmen’s Compensation Act
stands fulfilled. On careful consideration of the principles laid down
by the Hon’ble Supreme Court in the case of Prembai Patel (supra), it
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is evident from the facts of the case that the claim petition was filed
under Section 167 of the Act, 1988; and while appreciating the terms
and conditions of the policy produced on record, the Hon’ble Supreme
Court was of the view that the Tribunal ought to have awarded
compensation in terms of the provisions of the Act of 1923 by
considering the minimum wages prevailing at the time of the accident
to award just compensation. Thus, applying the provisions of Section 4
of the Act of 1923, an appropriate amount of compensation was
determined. Considering the fact that the original claim petition was
filed under the provisions of the Motor Vehicles Act, after
determining the total amount of compensation, the Hon’ble Supreme
Court directed the Insurance Company to indemnify the claimants to
the extent of their statutory liability in terms of the provisions of the
Employees’ Compensation Act, 1923, whereas the remaining amount
was directed to be realized from the employer i.e. the owner of the
insured vehicle/insurer.
[21.] Considering the aforesaid principles in the facts of the
case, in absence of any challenge being made to the quantum of
compensation determined as Rs. 4,50,000/- with interest at the rate of
7.5% per annum from the date of filing of the claim petition, till its
actual realization, the respondent no.3- Insurance Company shall be
liable to pay the compensation determined in terms of the provisions
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of the Employees’ Compensation Act, 1923.
CONCLUSION :
[22.] In view of the above discussions, the First Appeal is partly
allowed. The impugned judgment and award dated 29.06.2013 passed
by learned 5th Additional District Judge & Motor Accident Claims
Tribunal, Ahmedabad (Rural) in M.A.C.P. No.1663 of 2008, is hereby
modified by holding the original claimant entitled to recover
compensation of Rs. 4,50,000/- with interest at the rate of 7.5% per
annum from the date of filing of the claim petition till its actual
realization.
[23.] As regards the liability to pay such compensation is
concerned, opponent no.3- Insurance Company is liable to pay
compensation of Rs. 3,57,901/- ( Rs 3,300 x 50% = Rs. 1650 x 216.91 ) ,
with proportionate costs and interest as directed by this Court.
Whereas, the original opponent nos.1 and 2 are held jointly and
severally liable to pay remaining amount of compensation to the
extent of Rs. 92,099/- ( Rs. 4,50,000 – Rs. 3,57,901).
[24.] As the entire award amount has been deposited by the
appellant-State Authorities pending the appeal, the Tribunal is
directed to release and disburse the entire award amount in favour of
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NEUTRAL CITATIONC/FA/211/2015 JUDGMENT DATED: 19/06/2026
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the original claimants, subject to verification and strictly adhering to
the guidelines of the Hon’ble Supreme Court in this regard. At the
same time, the appellant-State Authorities shall be at liberty to realize
the amount to the extent of the liability of the Insurance Company,
which otherwise the Insurance Company was liable to satisfy in terms
of the policy. Thus, the appellant-State shall be at liberty to realize the
amount towards the liability of the Insurance Company being paid on
their behalf to the original claimant, by seeking appropriate legal
remedy available in law.
[25.] With these observations, the First Appeal stands disposed
of, in the aforesaid terms. Record and proceedings, if any, are
directed to be sent back to the concerned Tribunal forthwith along
with the Writ of this judgment.
(NISHA M. THAKORE,J)
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