Bombay High Court
Trilochansing S/O Milaramji Arora vs Premdas S/O Domaji Jivane And 3 Others on 7 November, 2025
2025:BHC-NAG:11611
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
FIRST APPEAL NO. 1220 OF 2013
Trilochansing s/o Milaramji Arora
Aged about : 50 Years; Occu - Business;
R/o C/o Milaramji Arora, Ward No.1, At
Post Bhiwapur, District Nagpur. ... APPELLANT
VERSUS
1. Premdas s/o Domaji Jivane
Aged : Major, Occu : Not known;
2. Smt. Sarubai w/o Premdas Jivane
Age : Major, Occu : Not known;
3. Master Aniket s/o Galfas Jivane
Aged : 15 Years; Occu : Not known;
Respondent No.3 being minor, through
Guardian Grandfather i.e. Respondent No.1.
Respondent Nos.1 to 3 R/o Kingaon, At Post
Bothoda, Tahsil Hinganghat, District
Wardha.
4. The United India Insurance Company Ltd.
Through its Divisional Manager, Divisional
Office, Mount Road, Sadar, Nagpur. ... RESPONDENTS
Mr. C. B. Dharmadhikari, Advocate for Appellant.
Mr. D. P. Bhongade, Advocate for Respondent Nos.1 to 3.
Mr. Pratik Jain, Advocate h/f Mr. M. R. Joharapurkar, Advocate for Respondent
No.4.
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CORAM : PRAVIN S. PATIL, J.
ARGUMENTS HEARD ON : OCTOBER 08, 2025.
PRONOUNCED ON : NOVEMBER 07, 2025.
JUDGMENT
. Heard Mr. C. B. Dharmadhikari, learned Counsel for the Appellant, Mr. D. P. Bhongade, learned Counsel for the Respondent Nos.1 to 3 and Mr. Pratik Jain, Advocate h/f Mr. M. R. Joharapurkar, learned Counsel for the Respondent No.4.
2. The present Appeal is filed by the owner of the vehicle challenging the Judgment and order dated 28/3/2013 passed by the Motor Accident Claims Tribunal, Nagpur in Claim Petition No. 533/2003.
3. The undisputed facts of the present matter are that, the Respondents are legal heirs of deceased Galfas Premdas Jivane, who died in motor vehicular accident on 6/3/2003. It is the case of the Claimants that deceased was working as a labour on truck No. MH-31/W-7464. On 6/3/2003 deceased was traveling in the offending vehicle i.e. truck which was going from Bhiwapur to Umrer road. During this traveling period, he fell down from the Truck on the road and died on the spot. As such, the Claimants have filed 3/17 Judg.fa.1220.2013.odt Claim Petition before the Motor Accident Claims Tribunal, Nagpur for just and reasonable compensation.
4. The present Appeal has been filed by the owner of the offending vehicle on the ground that the offending vehicle was duly insured with Respondent No.4. There was no rash or negligent driving of the driver of the truck. The deceased himself was responsible for the accident. According to him, the finding of learned Tribunal that driver of the offending vehicle was equally responsible for the accident is based upon the police case papers, which is not sustainable in the matter. He has specifically pointed out that in Criminal Case No. 749/2003 the truck driver was acquitted from the offence under Section 304-A of Indian Penal Code by the Judicial Magistrate First Class, Umred vide Judgment dated 26/9/2007. The learned Magistrate held that the Informant Mansaram has denied the contents of First Information Report. In short, it is the contention of the Appellant that conclusion of the learned Tribunal that the driver of the offending vehicle is responsible for the accident is erroneous in the matter. Therefore, the Appellant seeks indulgence of this Court in the matter.
5. Per contra, the learned Counsel appearing for Insurance Company vehemently opposed this Appeal. According to him, police case papers, 4/17 Judg.fa.1220.2013.odt particularly, First Information Report reveals the fact that the Informant, while lodging police complaint, specifically stated that on 5/3/2003 the truck was carrying marriage party (Barati) and accident occurred due to rash and negligent driving of the driver. Hence, according to him, this amounts to a breach of policy, and therefore, the conclusion drawn by the learned Tribunal cannot be followed in the matter.
6. The learned Counsel for Claimants i.e. Respondent Nos.1 and 2 stated that due to accident the bread earner of the family lost his life, and therefore, they are entitled for compensation amount, either from the Appellant or from the Respondent No.4/Insurance Company. Due to the dispute between them, Claimants are unnecessarily harassed in the matter and waiting for the fruits of the Judgment delivered by the Tribunal.
7. In the light of above factual position, I have perused the entire record and also the case laws, which both parties have relied upon in the matter and proceed to decide the present Appeal.
8. In the present Appeal, the only issue, which is to be considered and decided is, as to whether the exoneration of the Respondent 5/17 Judg.fa.1220.2013.odt No.4/Insurance Company from payment of compensation is justified in the facts and circumstances of the case or not.
9. Firstly, it is to be noted that the Respondent No.4/Insurance Company did not place on record the copy of Insurance policy to demonstrate that which condition was breached; and secondly, as to how the breach of the policy amounts to fundamental breach on the basis of evidence. According to me, to demonstrate this fact, it was necessary for the Insurance Company to enter into the witness-box and at least prove from the documentary evidence the breach of conditions of policy, but admittedly no such proof is available on record.
10. It will be relevant to refer the Judgment of the Hon'ble Supreme Court in the case of Suraj Mal Ram Niwas Oil Mills Private Limited V/s United India Insurance Company Limited and Another, (2010) 10 Supreme Court Cases 567, wherein in paragraph Nos. 23 and 26 the Hon'ble Supreme Court has observed as under:
"23. Before embarking on an examination of the correctness of the grounds of repudiation of the policy, it would be apposite to examine the nature of a contract of insurance. It is trite that in a contract of insurance, the rights and obligations are governed by the terms of the said contract. Therefore, the terms of a contract of insurance 6/17 Judg.fa.1220.2013.odt have to be strictly construed, and no exception can be made on the ground of equity.
26. Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties."
So also the Judgment in the case of B. V. Nagaraju V/s Oriental Insurance Company Ltd. Divisional Officer, Hassan, (1996) 4 Supreme Court Cases 647. The observation of the Supreme Court in paragraph No.7 is as under :
"7. It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If those 6 workmen when traveling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. Here, it is nobody's case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the oncoming vehicle had collided head-on against the insured vehicle, which resulted in the damage. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the 7/17 Judg.fa.1220.2013.odt owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident. In the instant case, however, we find no such contributory factor. In Skandia case¹ this Court paved the way towards reading down the contractual clause by observing as follows: (SCC pp. 665- 66, para 14) When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of 'reading down' the exclusion clause in the light of the 'main purpose' of the provision so that the 'exclusion clause' does not cross swords with the 'main purpose' highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose The theory which needs no support is supported by Carter's 'Breach of Contract' vide paragraph 251. To quote:
"Notwithstanding the general ability of contracting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the 'main purpose rule', which may limit the application of wide exclusion clauses defining a promisor's contractual obligations. For example, in Glynn v. Margetson & Co.2 (AC at p. 357), Lord Halsbury, L.C. stated:
'It seems to me that in construing this document, which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the 8/17 Judg.fa.1220.2013.odt whole instrument, and seeing what one must regard as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract.
Although this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in Suisse Atlantique Societe d' Armement Maritime SA V. NV Rotterdamsche Kolen Centrale³. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract."
So also in the case of Lakhmi Chand V/s Reliance General Insurance, (2016) 3 Supreme Court Cases 100, the Hon'ble Supreme Court, by considering its earlier Judgments, has observed in paragraph No.16 as under :
"16. It becomes very clear from a perusal of the above mentioned case law of this Court that the insurance company, in order to avoid liability must not only establish the defence claimed in the proceeding concerned, but also establish breach on the part of the owner/insured of the vehicle for which the burden of proof would rest with the insurance company. In the instant case, the respondent Company has not produced any evidence on record to prove that the accident occurred on account of the overloading of passengers in the goods-carrying vehicle. Further, as has been held in B. V. Nagaraju that for the insurer to avoid his liability, the breach of the policy must be so fundamental in nature that it brings the contract to an end. In the instant case, it is undisputed that the accident was in fact caused on account of the rash and negligent driving of the offending vehicle by its driver, against whom a criminal case vide FIR No. 66 of 2010 was registered for the offences referred to supra under the provisions of IPC. These facts have not been taken into consideration 9/17 Judg.fa.1220.2013.odt by either the State Commission or the National Commission while exercising their jurisdiction and setting aside the order of the District Forum. Therefore, the judgment and order of the National Commission dated 26-4-2013 passed in Lakhmi Chand v. Reliance General Insurance is liable to be set aside, as the said findings recorded in the judgment are erroneous in law."
In addition to abovesaid case laws, it will be relevant to refer the Judgment of Hon'ble Supreme Court, in the case of National Insurance Company Ltd. V/s Swaran Singh & Others, 2004(5) Bom.C.R. 467 , wherein the Hon'ble Supreme Court has laid down the certain principles in the form of summary of finding in paragraph No.110 of the Judgment, which is reproduced as under :
"110. The summary of our findings to the various issues as raised in these petitions is as follows :
(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third-party risks is a special 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, 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 10/17 Judg.fa.1220.2013.odt 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 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 a 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 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 insurer 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 11/17 Judg.fa.1220.2013.odt 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 decree.
(ix) The Claims Tribunal constituted under section 165 read with section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between 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 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 in- surer 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 12/17 Judg.fa.1220.2013.odt 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 there- under 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 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 circumstances adjudication of their claims inter se might delay the adjudication of claims of victims." From the abovesaid legal position, it is clear that if any one is coming with a case that there is a breach or infringement of insurance policy, it is for the Insurance Company to establish that the insured was guilty of an infringement/violation of the terms of policy. The insurer has also to satisfy the Tribunal or Court that such violation or infringement was on the part of insured and due to such incident, which is established on the basis of oral and documentary evidence on record that there is a fundamental breach of terms and conditions of the policy. In absence of same, Insurance Company could not be absolved from liability in the matter.
11. The learned Counsel for Respondent No.4 has relied upon some 13/17 Judg.fa.1220.2013.odt Judgments of the Hon'ble Supreme Court, particularly, National Insurance Company Ltd. V/s Cholleti Bharatamma and Others, (2008) 1 Supreme Court Cases 423; National Insurance Company Ltd. V/s Kaushalaya Devi and Others, (2008) 8 Supreme Court Cases 246; Oriental Insurance Company Ltd. V/s Brij Mohan and Others, (2007) 7 Supreme Court Cases 56; Narayanan and another V/s Mathan Mathai, 1981 SCC OnLine Ker 155; and National Insurance Company Ltd. V/s Rattani and Ors. AIR 2009 SUPREME COURT 1499 . From these Judgments attempt was made to draw conclusion that vehicle which was insured as goods vehicle cannot carry labourer or other gratuitous passengers in the vehicle, same amounts to violation of the terms of the policy. The proposition of law laid down in above cases is not disputed. However, after perusal of these Judgments, one factor which needs consideration is that Insurance Company in all theses cases entered into the witness-box and established before the Competent Court that how there was a breach of the terms and conditions of the policy and same amount to fundamental breach of the policy. Therefore, on the basis of evidence made available before the Tribunal, the conclusion was drawn that there was a breach of policy. Therefore, I am of the opinion that unless such evidence is brought on record, the Judgment relied upon by the Respondent No.4 are not helpful to him in the matter.
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12. The Respondent No.4 has strongly relied upon the police papers. Per contra, the Appellant has also placed on record the copy of final Judgment in the criminal case registered against the driver of the offending vehicle. The Complainant, in the said proceeding, specifically stated that he is not aware about the incident and denied the fact of lodging FIR by him, and on that basis driver of the offending vehicle was acquitted from the criminal proceeding. Therefore, prima facie, the documents relied upon by the Tribunal seems to be not trustworthy. So also instead of relying upon the police case papers it is always expected that some efforts should be taken by the Insurance Company to bring on record the evidence and prove its case, but no such efforts are seen to be taken on the part of Respondent No.4/Insurance Company.
13. As states above, in the case of Swaran Singh (supra), the Hon'ble Supreme Curt of India has categorically held that if according to the Insurance Company, there is a specific submission that there was a breach of policy, it is the responsibility of the Insurance Company to prove the same by cogent evidence on record. It is also required to be established that breach of the policy on the part of owner of the vehicle is a fundamental breach, and therefore, the Insurance Company should be exonerated and owner of the vehicle should be burdened the entire compensation amount.
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14. In the same manner as in the case of Lakhmi Chand (supra), the Hon'ble Supreme Court has held that if the Insurance Company failed to produce any evidence on record to prove that accident had occurred on account of overloading of passengers in the goods carriage vehicle, it is the responsibility of the Insurance Company to establish that the breach of policy is so fundamental in nature that it brings the contract to an end. Thus, both these case laws are squarely applicable in the present matter.
15. Coming to the facts of the present Appeal, it is not established on record by cogent evidence that where was the deceased sitting in the truck at the time of accident and if the truck was carrying marriage party, why any person from that marriage party or atleast the Informant was not examined before the Tribunal. The Insurance Company, which was expected to conduct the preliminary enquiry in the matter, failed to take any efforts to reach to the conclusion that the accident occurred because the marriage party was traveling in the vehicle. Hence, in absence of any such evidence available on record, holding responsible the owner on the basis of presumption, is not expected from the Tribunal.
16. Therefore, I am of the opinion that the learned Tribunal failed to consider the legal position in the right perspective and exonerated the 16/17 Judg.fa.1220.2013.odt Insurance Company from the payment of compensation. Impugned order needs modification to the extent that owner of the offending vehicle and the Insurance Company are jointly and severally liable to pay the compensation. Hence, I proceed to pass following order.
ORDER
1. The First Appeal is allowed.
2. The Judgment and order dated 28/3/2013 passed by the Motor Accident Claims Tribunal, Nagpur in Claim Petition No. 533/2003 is modified to the extent that the Appellant as well as the Respondent No.4/Insurance Company are jointly and severally liable to pay compensation amount awarded by Motor Accident Claims Tribunal to the Respondent Nos.1 to 3/Claimants.
3. The Respondent No.4/Insurance Company is directed to deposit the compensation amount as per the Judgment of the Tribunal within a period of three months, either with the Registry of this Court or with the Motor Accident Claims Tribunal, Nagpur with due intimation to the Claimants.
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4. The Claimants are entitled to withdraw the amount after depositing same by the Respondent No.4/Insurance Company.
5. No order as to costs.
[PRAVIN S. PATIL, J.] vijaya Signed by: Mrs. V.G. Yadav Designation: PS To Honourable Judge Date: 07/11/2025 18:52:28