Madhya Pradesh High Court
The New India Assurance Co.Ltd. vs Ashish And Anr. on 9 February, 2026
NEUTRAL CITATION NO. 2026:MPHC-IND:5313
1 MA-2555-2011
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PAVAN KUMAR DWIVEDI
MISC. APPEAL No. 2555 of 2011
THE NEW INDIA ASSURANCE CO.LTD.
Versus
ASHISH AND ANR. AND OTHERS
Appearance:
Shri Sudhir V. Dandwate, learned counsel for the appellant.
Shri Romil Malpani, learned counsel for the respondent No.1.
Heard on : 17.11.2025
Pronounced on : 09.02.2026.
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ORDER
The appellant/Insurance Company has filed this appeal under Section
173 of the Motor Vehicles Act being aggrieved by the award dated
08.08.2011 passed in Claim Case No.43/2009 challenging the liability
imposed upon it for payment of compensation.
2. Short facts of the case are that on 24.06.2009 deceased Mangalabai
was going on motorcycle No.MP-09-MR-1102 as a pillion rider, respondent
No.2 Prakash Rao was riding the same in rash and negligent manner as per
the contents of the claim petition. When they reached near Musakhedi Ring
Road, Pink City, accident occurred as another motorcycle dashed into the
motorcycle of Prakash Rao, respondent No.2. Deceased Mangalabai
sustained grievous injuries in the accident and died because of the same.
2.1 The respondent No.1 filed claim petition under Section 166 of
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Motor Vehicles Act claiming compensation for the death of Mangalabai. The
claims Tribunal after recording evidence awarded total compensation of
Rs.85,000/- to the respondent No.1.
3. The Insurance Company has come before this Court on two
grounds; (i) there was complete absence of any material to show rash and
negligent driving of the rider of motorcycle No.MP-09-MR-1102 (insured
vehicle); and (ii) the rider Prakash Rao was not having valid driving license
for riding the motorcycle. He, thus submits that on any count the Insurance
Company could not have been saddled with the liability to pay
compensation. In support of his submissions he referred to para Nos.13 and
14 and submits that the accident occurred due to rash and negligent driving
of the respondent No.2. He has placed reliance on Ex.P/2 the FIR and closure
report, which was registered in Police Station, Sanyogitaganj, Indore in
which statement of respondent No.2 and Ashish were recorded during Marg
investigation. He points out that para No.13 and 14 itself would show that it
was the unknown motorcycle, which was being driven in rash and negligent
manner and not the motorcycle driven by respondent No.2. In the statements
recorded in Marg intimation and in criminal case there is no whisper of rash
and negligent driving on the part of respondent No.2. He, thus submits that in
absence of rash and negligent driving on the part of respondent No.2 Prakash
Rao the Insurance Company could not have been held liable to pay
compensation in the case.
3.1 He points out that in para 21 of the impugned award the claims
Tribunal has considered the second plea raised by the appellant/Insurance
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Company in as much as on the date of accident the respondent No.2 was not
holding a valid driving license for riding the motorcycle. He submits that
Insurance Company called one Bhaiyalal Dwivedi, Assistant Grade II (AW-
1) from the R.T.O., Indore, who brought with himself license of Prakash
Rao, according to which license No.P-32454/97 was issued to him valid
from 8.1.1997 to 30.10.2005. It was issued for Light Motor Vehicle (LMV)
with an endorsement of professional. The witness admitted before the
Tribunal that there is no endorsement of motorcycle on the license of
respondent No.2. He brought with him the original record also i.e. license
card of the respondent No.2 Ex.D/1, its photocopy Ex.D/1C and original
record Ex.D/2 and its photocopy Ex.D/2C. The Tribunal recorded findings in
para 23 that the respondent No.2 has a valid driving license for driving the
Light Motor Vehicle. After recording this finding the claims Tribunal
discarded the contention of the Insurance Company that there was no
endorsement of motorcycle, thus he was not eligible to drive motorcycle by
placing reliance on the judgment of Karnataka High Court in the case of
Srinivasagowda and another Vs. Sannamma and others, reported 1 (2011)
ACC 416, wherein it was held that as the driver in that case having HMV
license, it was considered that he was having valid license for riding scooter
also. He submits that the claims Tribunal has completely ignored that the
facts of the said case were different and in fact prior to 1988 there was a
requirement that before holding the LMV driving license one should possess
for a period of one year a driving license for motorcycle. He submits that infact before grant of license of a vehicle the rider category is required to be
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mentioned, but after 1988 this situation has completely changed and that is
how the judgment of Srinivasagowda (supra) is not applicable in the present
case. In support of his submissions he placed reliance on the judgment
rendered by the Hon’ble Apex Court in the case of Oriental Insurance
Co.Ltd. Vs. Naharulnisha and others, reported in (2008) 12 SCC 385 .
3.2 Learned counsel further points out that even the claimant
respondent No.1 had earlier filed M.A.No.2793/2011 before this Court for
enhancement of compensation. The said appeal was allowed vide order dated
13.12.2011, whereby the amount of compensation was enhanced from
Rs.85,000/- to Rs.2,49,000/-. However, the Insurance Company
subsequently filed Review Petition No.14/2012, thereby it was held that this
enhancement shall be subject to the order, which would be passed in the
present appeal. He, thus prays for reversal of the findings recorded by the
claims Tribunal and setting aside the impugned award.
4. Per contra, learned counsel for the claimant-respondent No.2 refers
to para 9 and 10 of the impugned award and submits that he admitted in para
3 of his cross-examination that he was riding the motor cycle in high speed,
which caused the accident. He places reliance on the judgment of this Court
rendered in the case of Smt. Sushila Bhadoriya and others Vs. M.P.State
Road Transport Corpn.and another , reported in 2005 (1) MPLJ 372 and
submits that compensation can be claimed from the owner of the vehicle on
which the deceased was sitting.
4.1 As regards question of license he places reliance on two orders of
the Karnataka High Court rendered in the cases of United India Insurance
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Co.Ltd. Vs. Bharamappa Doddabirappa Pujari and another, reported in 1
(2004) ACC 568 and Srinivasagowda and another Vs. Sannamma and others,
reported 1 (2011) ACC 416 . He further places reliance on the insurance
policy Ex.D/3 and submits that no such condition was there.
5. In rejoinder submissions learned counsel for the appellant/Insurance
Company submits that criminal case would show that Prakash Rao was not
negligent.
6. Heard learned counsel for the parties; perused the record.
7. Learned counsel for the appellant has mainly stressed upon two facts; (i)
there is complete absence of any material to show rash and negligent driving
of the rider of motorcycle No.MP-09-MR-1102 i.e. the insured vehicle and
(ii) rider Vikas Rao was not having valid driving license for riding the
motorcycle. With respect to first contention that there was complete absence
of material to show that ash and negligent driving of the driver reference to
para 3 of the cross-examination of Prakash Rao himself would show that he
explicitly admitted that he was riding his motorcycle in high speed and that
accident occurred due to his fault. This statement of the owner of the vehicle
has been referred to by the Tribunal in para 9 and 10 of the impugned award.
In view of the same, the first contention regarding absence of any material to
show rash and negligent driving of the insured vehicle is discarded. As
regards contention of learned counsel regarding absence of a valid driving
license it is seen from the record that AW-1 Bhaiyalal Dwivedi, Assistant
Grade II came from RTO, Indore, who brought with himself license of
Prakash Rao according to which license No.P-32454/97 was issued to him
valid from 08.01.1997 to 20.10.2005 for operating Light Motor Vehicle.
However, significantly there is no endorsement of motorcycle on the said
license of respondent No.2. It is, thus clear that rider was having a driving
license for operating Light Motor Vehicle, which is a totally different class
from the vehicle, which was being ridden by Prakash Rao at the time of
accident. However, the claims Tribunal by placing reliance on a judgment of
the Division Bench of Karnataka High Court discarded this defence of the
Insurance Company and held it liable to pay compensation. The Division
Bench of Karnataka High Court in the case of Srinivasagowda (supra)
considered this aspect in para 16 in following words:-
“16. A question that occurs to our mind is that a person,
who is licensed to drive motor cycle with gear, can he
not drive motor cycle without gear? Prudent answer
would be in the affirmative. If that is the case, our
answer and finding is that the driver of the scooter who
was authorized to drive HMV is deemed to had valid
driving licence to drive scooter. Merely because anSignature Not Verified
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endorsement has not been made in the driving licence
as per Section 11 of the Act, it cannot be said that the
driver has violated Section 3 of the Act. Section 3 of the
Act says that no person shall drive motor vehicle in any
public place unless he holds an effective driving licence
to drive the vehicle. In the decision reported in 2008
ACJ 1928 (Oriental Insurance Company Ltd. V/S.
Jaharulnisha And Others) supra, the driver, who had
licence to drive heavy motor vehicle, was driving two
wheeler-scooter held violated Section 10(2) of M V
Act. But no reference was made as to whether a person
authorized to drive higher capacity vehicle (HMV) was
deemed to possess valid licence to drive lower capacity
vehicle namely motor cycle or not. But we are of the
view that the driver, who has valid licence to driver
heavy motor vehicle is deemed to possess valid licence
to drive scooter. In our view, none of the decisions cited
by the learned Counsel for the insurer can be applied to
the case on hand and they are of no avail. Accordingly,
we answer Point No.3 in the affirmative.”
8. Apart from this, learned counsel for the respondent has also referred
to a Single Bench order of Karnataka High Court in the case of Bharamappa
(supra). However, a close scrutiny of the Division Bench judgment of the
Karnataka High Court would show that though it referred to Zaharulnisha
(supra), however, the reasoning appears to be faulty. This issue in fact was
considered by the Hon’ble Apex Court in the case of Zaharulnisha (supra) in
explicit words. The Hon’ble Apex Court in para 5 recorded the contention of
the Insurance Company in following words:-
5. The appellant Insurance Company filed an appeal
before the High Court. Before the High Court it was
contended that as the driver Ram Surat was holding
licence for driving heavy motor vehicle (HMV) only,
therefore, he had no valid licence to drive a two-
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wheeler scooter which is totally a different class of
vehicle in terms of Section 10 of the Motor Vehicles
Act, 1988 (hereinafter referred to as “the MV Act“). It
was contended that in view of the breach of the
provisions of the MV Act, the appellant Insurance
Company cannot be held liable to satisfy the award in
terms of Section 149(2) of the MV Act.
and after referring provisions of Section 2, 3, 5, 10 and 149 of the
Motor Vehicles Act and after referring to case of Swarn Singh concluded in
para 20, 21 and 22 as under :-
20. The learned Judges having considered the entire
material and relevant provisions of the MV Act and
conflict of decisions of various High Courts and this
Court on the question of defences available to the
insurance companies in defending the claims of the
victims of the accident arising due to the harsh and
negligent driving of the vehicle which is insured with
the insurance companies, proceeded to record the
following summary of findings: (Swaran Singh case
[(2004) 3 SCC 297 : 2004 SCC (Cri) 733] , SCC pp.
341-42, para 110)
“110. (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) An 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
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inter alia in terms of Section 149(2)(a)(ii) of
the said Act.
(iii) The breach of policy condition e.g.
disqualification of the driver or invalid
driving licence of the driver, as contained in
sub-section (2)(a)(ii) of Section 149, has 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 the 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) Insurance companies, 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 the said burden would be discharged,
inasmuch as the same would depend upon the
facts and circumstances 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
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liability towards the 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
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 the
claimant or claimants on one side and the
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 the 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
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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.
(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 the proviso thereunder and sub-
section (5) which are intended to cover
specified contingencies mentioned therein to
enable the insurer to recover the amount paid
under the contract of insurance on behalf of
the insured can be taken recourse to by the
Tribunal and be extended to the claims and
defences of the insurer against the insured by
relegating them to the remedy before regular
court in cases where on given facts and
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circumstances adjudication of their claims
inter se might delay the adjudication of the
claims of the victims.”
21. In the light of the above settled
proposition of law, the appellant Insurance
Company cannot be held liable to pay the
amount of compensation to the claimants for
the cause of death of Shukurullah in road
accident which had occurred due to rash and
negligent driving of scooter by Ram Surat
who admittedly had no valid and effective
licence to drive the vehicle on the day of
accident. The scooterist was possessing a
driving licence of driving HMV and he was
driving a totally different class of vehicle,
which act of his is in violation of Section
10(2) of the MV Act.
22. In the result, the appeal is allowed to the
limited extent and it is directed that the
appellant Insurance Company though not
liable to pay the amount of compensation, but
in the nature of this case it shall satisfy the
award and shall have the right to recover the
amount deposited by it along with interest
from the owner of the vehicle viz.
Respondent 8, particularly in view of the fact
that no appeal was preferred by him nor has
he chosen to appear before this Court to
contest this appeal. This direction is given in
the light of the judgments of this Court in
National Insurance Co. Ltd. v. Baljit Kaur
[(2004) 2 SCC 1 : 2004 SCC (Cri) 370] and
Deddappa v. National Insurance Co. Ltd.
[(2008) 2 SCC 595 : (2008) 1 SCC (Cri) 517]
9. The Division Bench of Karnataka High Court while distinguishing
the judgment in the case of Zaharulnisha (supra) in para 16 observed that
there was no reference as to whether a person authorized to drive higher
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capacity vehicle was deemed to possess valid license to drive lower capacity
vehicle namely; motorcycle or not and thus it concluded that the driver, who
has valid license to drive heavy motor vehicle is deemed to possess valid
license to drive motorcycle. This observation of the Division Bench in most
respectful opinion of this Court is in contrast to what was held by the
Hon’ble Apex Court in the case of Zaharulnisha (supra). The clear context
comes to fore from perusal of above para 5 and 21 that if a person holds
license for a higher vehicle in a class of vehicles, then he can operate the
lighter vehicles in that class, but same is not true for a completely different
class of vehicles. In the present case the driver of the insured vehicle was
holding LMV license, which is a license for four wheeler, but at the time of
accident he was riding a two wheeler. Thus, the insured vehicle was a
completely different class of vehicle (class of two wheeler) than the class of
vehicle for which the rider held driving license (LMV, in the class of four
wheeler). As such, the dispute in the present case is squarely covered by the
judgment of Hon’ble Apex Court in the case of Zaharulnisha (supra). In view
of the same the appeal of the Insurance Company on this point stands
allowed.
10. This Court is mindful of the fact that the claimants have also filed
M.A.No.2793/2011, which was allowed by coordinate Bench of this Court
vide order dated 13.12.2011. However, on a review by the present
appellant/Insurance Company this court vide order dated 19.4.2012 made the
order dated 13.12.2011 subject to order of this appeal. This Court has
already held that appellant/Insurance Company is not liable to pay
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compensation in view of the breach of insurance policy in as much as the
driver of the insured vehicle was not having valid driving license for riding a
two wheeler at the time of accident. However, in para 22 of Zaharulnisha
(supra) in similar circumstances the Hon’ble Apex Court directed the
Insurance Company to first pay the amount to the claimants and then it can
recover the same from owner of the vehicle.
11. Accordingly, this Court directs the appellant/Insurance company to
first pay the amount of compensation to the claimants and then it can recover
the same from the owner of the vehicle.
12. With the aforesaid, the present appeal stands allowed in part .
(PAVAN KUMAR DWIVEDI)
JUDGE
patil
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