NEW INDIA INSURANCE COMPANY LTD v. MINOR SHILPABEN RAJUBHAI PARMAR

C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/FIRST APPEAL NO. 1604 of 2015

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE J. L. ODEDRA

========================================================== Approved for Reporting Yes No ========================================================== NEW INDIA INSURANCE COMPANY LTD Versus MINOR SHILPABEN RAJUBHAI PARMAR & ANR.

========================================================== Appearance:

MR GC MAZMUDAR(1193) for the Appellant(s) No. 1 MR HG MAZMUDAR(1194) for the Appellant(s) No. 1 RULE SERVED for the Defendant(s) No. 2 TATVDEEP J JANI(7227) for the Defendant(s) No. 1 ========================================================== CORAM:HONOURABLE MR.JUSTICE J. L. ODEDRA

Date : 26/11/2025

ORAL JUDGMENT

1. The present Appeal arises from the judgment and award passed in MACP No.527 of 2005. The judgment and awa rd is dated 17.04.2005 and has been passed by the lear ned Motor Accident Claims Tribunal (Main), Bhavnagar.

2. By way of the impugned judgment and award, the T ribunal has been pleased to award a sum of Rs.5,55,000/- with 9% Page 1 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 rate of interest from the date of filing of the cla im petition till realization,. from the opponents, jointly and severally.

3. At this juncture, the accident in question may b e examined. It appears that on 21.07.2005, at about 7 :00 am, minor Shilpa, the victim herein, (hereinafter be referred as “ the deceased”) was going to attend a call of nature, when a truck belonging to opponent no.1, be ing driven by one Hanifbhai alias Jokham alias Tako, ca me from the opposite direction, driving it in wrong si de and dashed with the minor. As a result of the accident, the minor deceased lost her life.

4. Whilst preferring the claim petition, it appears that the father of the deceased did not deem it appropriate to implead the driver. Apparently only the owner of the vehicle and the Insurance Company were impleaded as opponent nos.1 and 2, respectively.

5. In the present First Appeal, the appellant – Insurance Company is aggrieved by the fact that it has not be en exonerated though the Tribunal concluded that the d river did not possess requisite valid and effective drivi ng license, and therefore, the appellant has preferred the pres ent First Page 2 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 Appeal.

6. Heard learned advocates for the respective parties.

7. Learned advocate for the appellant Mr. H G Mazmu dar has submitted before this Court that on perusal of the document at Exhibits-48,49 and 50, it is clear that the driver was holding license in the following manner:

1. He had held Light Motor Vehicle (Non-Transport)

License from the period of 07.05.1982 till 05.04.2010.

2. Medium Goods Vehicle and Heavy Goods Vehicle License from the period of 2001 to 11.10.2004.

8. Thereafter, as per the document Exhibit-49, the driver had renewed the said license of Medium Goods Vehicle an d Heavy Goods Vehicle for the period of 25.07.2005 till 24.07.2008 and thereafter, again, from 25.07.2008 to 24.07.2011. It was thus submitted that as on the da te of the accident i.e., on 21.07.2005, the driver did no t hold any license in respect of the Medium Goods Vehicle or Heavy Goods Vehicle. It was further submitted that yet, the driver was driving the concerned vehicle on the fat eful day and had caused the accident, resulting in death of minor Shilpa. It was thus urged that this is a case where the Page 3 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 Insurance Company should have been exonerated for t he reason of breach of policy conditions. He has also submitted that the Tribunal has relied on the judgm ent in the case of National Insurance Company Limited Vs. Sajjan Singh reported at 2004 ACJ 1 SC. It was submitted that thereafter, the Tribunal has also noticed the judgm ent in the case of Oriental Insurance Company Limited Vs.

Zaharulnisha and Ors. reported at AIR 2008 SC 2018, wherein the Hon’ble Supreme Court held that holding the valid and effective driving license is one of the conditions in the contract of the Insurance Policy and that drivi ng of the vehicle without driving license is an offence.

9. It was submitted that the Tribunal has erred in holding the Insurance Company liable to indemnify the insured. It was thus submitted that looking to the peculiar facts and circumstances of the case, the appellant – Insurance Company may kindly be exonerated in the present Fir st Appeal.

10. Learned advocate appearing for the respondent N o.1 has submitted that in the present case, neither the own er nor the driver have been examined by the Insurance Comp any.

It was submitted that, therefore, in terms of the j udgment Page 4 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 in the case of First Appeal No.2858 of 2014 dated 29.09.2014, it was not proved by Insurance Company that the owner had taken proper care to verify the licen ce of the driver and, therefore, the Insurance Company cannot be absolved from the liability to pay the compensation as contended by the appellant. It was also further sub mitted that even if it was assumed that the Insurance Comp any has succeeded in proving that the driver did not have requisite licence, in terms of judgement in the case of Pappu vs. Vinod Kumar Lamba, 2018(0) AIJEL-SC 61544, the claimant cannot be prejudiced and in such circumstances, this Court may order pay and recover ordering the Insurance Company to first pay the claim amount to the claimants and, thereafter, recover it from the owner. It was, thus, submitted that in any cas e in either of the eventualities, the claimants may not be prejudiced, as they have not contributed to cause the accident.

11. It may be noted that, though the Rule has been served upon respondent no.2, who is the owner of the vehic le, he has not caused any appearance in the present First Appeal.

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C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 12. In the rejoinder arguments of the learned advoc ate for the appellant has reiterated that the Insurance Company has conclusively proved that at the time of accident, t he driver did not have requisite licence, therefore, in view of the complete breach by the Insurance Company, the Insurance Company may kindly be exonerated. He, therefore, ur ged that the Court may please interfere with the judgem ent of the Tribunal to the aforesaid extent and in the pre sent case, only the owner may be held liable.

13. Having heard learned advocates for the parties, the Court proceedings to decide the present appeal in terms of hearing hereinafter.

14. The point of determination that arises for dete rmination by this Court in the present case is as to whether the Insurance Company could be held liable in the prese nt case, if the driver is proved to not have valid and effective license? If so, to what extent?

15. At the outset, it may be noted that undisputedly the original claimants have not preferred any appeal ag ainst the impugned judgement and award. It may also be no ted that during the course of arguments, learned advoca te for Page 6 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 the claimant has not disputed the contents of Parag raph No.17 of the impugned judgement, which reads as fol lows:

-

“17. From the oral as well as documentary evidence produced by the Opponents at Exh.48, 49 &50, it appears that the driver of Opponent No.1 i.e.

Hanifbhai U. Mira was holding a driving license for LMV NT from 07.05.82 to 24.7.2011, which was also subsequently renewed even for Transport Vehicle but on the date of accident i.e. on 27.7.2005, he was n ot holding driving license to drive Transport Vehicle.

Therefore, it is established from the above facts a nd documents that driver of opponent No.1. was not holding a valid driving licence to drive transport vehicle and accordingly, the breach is established.”

16. Furthermore, the respondent no.2 has not caused any appearance and hence, the question of him disputing the aforesaid finding does not arise.

17. There is slight discrepancy wherein Paragraph N o.10 of the Claim Petition wherein, the claimants have pleaded that it was the opponent, who was driving the conce rned vehicle. However, from the perusal of the Paragraph No.

(10-A) and (10-B) of the claim petition, it is clea r that the driver of the concerned vehicle was one Hanif alias Jokham alias Tako and as per Paragraph no.(10-B) of the said claim petition, the owner was Yasinbhai Musabhai Radhanpa ra, who was original Opponent No.1 in the said claim petition.

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C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 18. Indeed, the Insurance Company, by application Exhibit 44 had prayed before the Tribunal that as they need to establish if the concerned driver – Hanifbhai the o riginal opponent No.1 had valid licence or not needs to be proved and, that therefore, the RTO Officer, Bhavnagar may kindly be permitted to be summoned as a witness. The witne ss was subsequently examined by the Tribunal at deposi tion Exhibit 47. On perusal of the said deposition along with record of the Tribunal, it is clear that the vehicl e involved in the present case was a Heavy Goods Vehicle (HGV), whereas the driver had the following licences since 1982.

(A) Licence to drive Light Motor Vehicle (LMV) from 07.05.1982 till April, 2010.

(B) Licence to drive HGV from 12.10.2001 till 11.10.2004.

(C) Licence to driver HGV from 25.07.2005 till 24.07.2008.

19. Naturally, the date of accident was 21.07.2005 and it is clear that on the said date of accident, the driver did not possess requisite licence to driver HGV. This is not a case where the owner has been misled to believe that the driver, Page 8 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 who is having a requisite licence and for the lack of further verification of the owner, he could not realize that the driver was committing a breach of the policy condit ion of the Insurance Company.

20. Furthermore, the Hon’ble Supreme Court in Zaharulnisha and Ors. (supra) has held that where a third party, injured, in an accident, is entitled to amount of compensation granted by the MACT, although the driver of the veh icle, at the relevant point in time, might not have the vali d and effective driving license, but the claimant would b e entitled to the compensation from the owner and the driver. The Hon’ble Supreme Court observed that where the insur ers, relying upon the provisions of violation of law by the assured, take an exception to pay the assured or a third party, they must prove a willful violation of the l aw by the assured. In some cases, violation of criminal law, particularly violation of the provisions of the MV Act, may result in absolving the insurers but, the same may not necessarily hold good in the case of a third party. In any event, the exception applies only to acts done inte ntionally or "so recklessly as to denote that the assured did not care what the consequences of his act might be”.

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C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 21. However, on perusal of the judgment in Pappu (supra), it appears that in that case, the owner had filed a wr itten statement stating that the vehicle at material time was driven by an authorized person having valid driving licence. However, in the said written statement, th e owner did not name that person. Thus, the Hon’ble Apex Co urt was pleased to hold that without disclosing the name of the driver in written statement or producing any eviden ce to substantiate the fact that copy of driving licence produced in support of the person who in fact was authorised to driver the offending vehicle at that relevant time, the owner of the vehicle cannot be said to have extricated hi mself from his liability. However, to subserve the ends o f justice, the Apex Court was pleased to order pay and recover order, i.e. the Insurance Company to first pay the claiman ts and thereafter to recover the said amount from the owner of the vehicle to meet the ends of justice. On the basis o f the said judgement, subsequently, this Court in the case of United India Insurance Company Limited vs. Vijay Narayan Apsbaran Ray, 2019(0) AIJEL-HC 241719, was pleased to conclude that the driver of the vehicle involved in the accident was not having a valid licence to drive th e Heavy Page 10 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 Goods Vehicle. Rather, he was only holding a licence to drive a Light Motor Vehicle or Medium Motor Vehicle as per the driving licence produced at Exh.51 to 53 on rec ord. In the said circumstances, the Court held that in view of the decision of the Apex Court in the case of Pappu (supra) the Insurance Company was directed to first pay the amount of the compensation to the claimants and, thereafter, recover the same from the driver and owner of the offending vehicle by filing mere execution proceedings of the award w ithout filing any other suit against the driver or owner o f the offending vehicle.

22. The Tribunal, it may be noted, has stated the f ollowing paragraph No.21 to hold the appellant Insurance Com pany liable. The said Paragraph No.21 of the impugned judgement is quoted hereinbelow for the ease of reference:- “21.From the above ratios, it becomes clear that the liability of the insurer to satisfy the decree passed in favour of a third party is statutory and mere absence, fake or invalid driving licence or disqualification of t he driver for driving at the relevant time, are not in themse lves defences available to the insurer against either the insured or the third parties. As discussed above dr iver Hanifbhai was holding driving license to drive LMV N T from 7.5.1982 to 5.4.2010 and to drive MGV & HGV Transport license from 12.10.2001 to 11.10.2004.

Therefore, this is not a case of no driving license at all.”

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C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 Indeed, the Tribunal is right when it states that mere absence, vague or invalid driving licence or disqua lification of a driver for driving at the relevant point in ti me are not in themselves defence available to the insurer against either the insured or the third parties. The said q uote is borrowed verbatim from the judgement in the case of National Insurance Company Ltd. vs. Swaran Singh, 2004 ACJ 1. However, in Swaran Singh (supra) the very paragraph further states that to avoid its liabilit y towards the insured, the insurer has to prove that the insu red was guilty of negligence and had failed to exercise rea sonable care in the matter of fulfilling the condition of policy regarding use of vehicle by duly licenced driver fo r one, who was not disqualified to drive at the relevant time.

It is clear that the driver did not have licence at the relevant period, as discussed in foregoing portion of this judgement. However, it appears that the owner did n ot take sufficient care to examine the licence that th e driver was holding at the relevant point in time. Moreover, it appears from the perusal of the R & P that the owner of the vehicle original opponent No.1 had not even filed the written statement, though he was served. This has b een Page 12 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 noted categorically under the impugned judgement at Paragraph No.3 of the impugned judgment, wherein it is stated that Opponent No.1 had appeared through his advocate, but had not filed a written statement. Th us, the basic assertion of fact that the owner had not comm itted any breach of the policy condition and had examined the licence of the driver at the relevant point in time before handing over the vehicle to such driver was not mad e. This makes the facts such that ratio of Pappu (supra) can be applied. In absence of the concerned Opponent No.1 filing a written statement, the appellant Insurance Company had examined RTO officer who had enlightened the Tribun al about the nature of licences that the driver of the vehicle involved was holding which is also apparent from Paragraph no.17 of the impugned judgement. In the circumstances, it cannot be stated that at the relevant point of time, the driver had valid and effective licence.

23. In view of the foregoing, this Court in complia nce of the aforesaid decisions of the Hon’ble Apex Court, more particulary, Pappu (supra), holds that the Insurance Company shall first pay to the claimants and therea fter be at liberty to recover the amount of compensation fr om the Page 13 of 14 C/FA/1604/2015 JUDGMENT DATED: 26/11/2025 owner, who has been impleaded in the original proce edings at Opponent No.1 and in the present appeal at Respo ndent No.2. Insofar as, the driver is concerned, the Insu rance Company may take steps for recovery against him, however, after filing and succeeding in appropriate proceedings before the competent forum.

24. The impugned judgement and award stands modifie d to the aforesaid extent. Rest of the judgement shall r emain unaltered.

25. Moreover, in view of the orders dated 10.08.2015 and 05.10.2015, indicating that the entire award amount has been deposited before the Tribunal by the appellant , it is ordered that the amount to the extent that has not been disbursed to the original claimants be forthwith di sbursed in accordance with law.

26. The appeal stands disposed of in aforesaid terms.

27. The record and proceedings be sent back forthwi th to the Tribunal.

(J. L. ODEDRA, J)

SUDHIR

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Original copy of this order has been signed by the Hon'ble Judge.

Digitally signed by: SUDHIR ACHUTHAN EZHUTHASSAN(HC00192), GOV, at High Court of Gujarat on 26/11/2025 17:59:00