Gujarat High Court
The New India Assurance Company Ltd vs Kalubha Alias Pratapsinh Balvantsinh ... on 26 November, 2025
NEUTRAL CITATION
C/FA/995/2022 JUDGMENT DATED: 26/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 995 of 2022
With
R/FIRST APPEAL NO. 998 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR Sd/-
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Approved for Reporting Yes No
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THE NEW INDIA ASSURANCE COMPANY LTD
Versus
KALUBHA ALIAS PRATAPSINH BALVANTSINH SARVAIYA & ORS.
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Appearance:
MR.KRUTIK A PARIKH(7268) for the Appellant(s) No. 1
RULE SERVED for the Defendant(s) No. 1,3,4,5,6
UNSERVED EXPIRED (R) for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
Date : 26/11/2025
ORAL JUDGMENT
1. Both the captioned appeals under Section 173 of the Motor Vehicles Act, 1988 arise out of the common judgment and award dated 05.08.2021 passed by the Motor Accident Claims Tribunal (Main), Morbi, in Motor Accident Claim Petition Nos. 96 of 2015 and 97 of 2015, whereby the learned Tribunal has partly allowed the claim petitions.
2. Heard learned advocate for the appellant. Though served, none appears for the respondent.
3. The brief facts of the present claim petitions are that on 16.02.2015 at about 2:30 a.m., the deceased persons--Geetaba Kalubhai @ Pratapsinh Sarvaiya, Alkaba @ Umaba Sanjaysinh Page 1 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Nov 28 2025 Downloaded on : Fri Nov 28 23:55:57 IST 2025 NEUTRAL CITATION C/FA/995/2022 JUDGMENT DATED: 26/11/2025 undefined Zala, Minor Kripalsinh Sanjaysinh Zala, Minor Sonalba Sanjaysinh Zala, and Minor Jagrutiba Raghuvirsinh Zala--were returning from Dumana village near Dhrangdhra to Pipli village in Maruti Car No. GJ-3-CA-7371. They were travelling as relatives of the owner and driver of the vehicle. The said car, owned by opponent No.2 and driven by opponent No.1, was being driven in a rash and negligent manner at excessive speed. When the vehicle reached near Morbi village, Nichi Mandal, the driver lost control over the steering, causing the car to veer off the road and fall into a deep water-filled well. As a result, the accident occurred, and all the occupants sustained fatal injuries and died on the spot due to drowning.
4. Learned advocate for the appellant-insurance company, original opponent No.3, has preferred these appeals on the ground that the learned Tribunal has committed an error in passing the impugned judgment and fastening the liability upon the insurance company. It is submitted that the Maruti Car bearing Registration No. GJ-03-CA-7317 was insured under an "Act Only" policy and no additional premium had been paid to cover the risk of passengers travelling in the said vehicle. Therefore, the occupants cannot be considered "third parties"
and the insurance company is not liable to pay any compensation. It is further submitted that the seating capacity of the vehicle was five, whereas six persons were travelling at the time of the accident, and the risk of excess passengers is not covered under the "Act Only" policy. Thus, in absence of any contractual liability, the insurance company cannot be saddled with any responsibility to satisfy the award. Hence, it is prayed Page 2 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Nov 28 2025 Downloaded on : Fri Nov 28 23:55:57 IST 2025 NEUTRAL CITATION C/FA/995/2022 JUDGMENT DATED: 26/11/2025 undefined that the present appeals be allowed.
5. Perusing the record, it appears that in MACP No. 96 of 2015, the deceased Geetaba Kalubhai was 45 years old at the time of the incident. The learned Tribunal considered her income to be Rs.5,000/- per month and awarded compensation of Rs.8,01,200/-. In MACP No. 97 of 2015, the learned Tribunal assessed the income of the deceased at Rs.5,000/- per month, added future prospects by considering the income at Rs.7,000/- per month, and awarded total compensation of Rs.8,40,060/- under all heads. Therefore, the quantum of compensation is not seriously disputed in these appeals; only the aspect of liability is under challenge. Accordingly, the Court has considered the submissions and these appeals are decided within a narrow compass confined to the issue of liability.
6. Hence, this Court deems it fit to refer to the law laid down by the Hon'ble Supreme Court in Shamanna vs. Oriental Insurance Co. Ltd., (2018) 9 SCC 650, wherein, considering Sections 147 and 149 of the MV Act, it has been held that in the case of a third-party victim of a motor accident, it is the duty of the insurer to satisfy the award, and the principle of "pay and recover" has been summarized. It is held that even if the driver had no valid driving licence and there was a breach of policy condition, the High Court ought not to interfere with the Tribunal's order of "pay and recover". If the insurance company pays any amount, the mode of recovery is also provided, giving the insurer liberty to initiate proceedings before the executing Page 3 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Nov 28 2025 Downloaded on : Fri Nov 28 23:55:57 IST 2025 NEUTRAL CITATION C/FA/995/2022 JUDGMENT DATED: 26/11/2025 undefined Court concerned for recovery from the owner. The claimant being a third party has nothing to do with the terms and conditions of the policy. Hence, in view of the decisions of the Hon'ble Supreme Court in K. Nagendra vs. New India Insurance Co. Ltd., 2025 SCC OnLine SC 2297, and Rama Bai vs. Amit Minerals, 2025 INSC 1162, the learned Tribunal has not committed any error in applying the principle of "pay and recover". This principle ensures that the victim is not deprived of compensation due to disputes between the owner and insurer, and at the same time, preserves the right of the insurer to recover the excess amount from the owner, thereby maintaining fairness and accountability in the Motor Accident Compensation system.
7. In view of the above, the Tribunal has not committed any error. So far as the argument canvassed by the learned advocate for the appellant that the policy covered the risk of only four passengers and that six persons were travelling in the vehicle is concerned, the liability of the insurance company may stand avoided on that ground. However, in view of the law laid down by the Hon'ble Apex Court in United India Insurance Company Ltd. vs. K.M. Poonam, (2015) 15 SCC 297, there cannot be any "pick and choose" method to identify passengers for whom compensation would be payable. To meet the ends of justice, the insurance company is required to deposit the entire amount of compensation awarded to all the claimants, and the amount so deposited shall be disbursed to the respective claimants, with liberty to the insurance company to recover the amount paid in Page 4 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Nov 28 2025 Downloaded on : Fri Nov 28 23:55:57 IST 2025 NEUTRAL CITATION C/FA/995/2022 JUDGMENT DATED: 26/11/2025 undefined excess of its statutory liability from the owner of the vehicle by executing the decree.
8. It is needless to state that if the insurance company satisfies the award, it will not be required to file a separate suit or independent proceedings for recovery, as it may recover the excess amount from the owner of the vehicle in the same execution proceedings. In this regard, reference may be made to Oriental Insurance Co. Ltd. vs. Nanjappan, (2004) 13 SCC 224.
9. In view of the above, the submissions advanced by the learned advocate for the appellant are not sustainable, and the learned Tribunal has not committed any error. Therefore, no interference is called for by this Court and hence, the present First Appeals stand dismissed.
10. As the entire awarded amount of compensation has already been deposited, the same shall be disbursed in favour of the claimants and/or their guardians through RTGS, after proper verification. The bank account details shall be furnished by the learned advocate for the claimants to the Nazir Department of the concerned Tribunal. The court fees, if any, payable by the claimants shall be deducted from the said amount, and the remaining compensation shall be disbursed in favour of the claimants on due verification within a period of two weeks thereafter.
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11. Record and proceedings, if any, be sent back to the concerned Tribunal forthwith. Pending civil applications, if any, shall stand disposed of accordingly.
Sd/-
(HASMUKH D. SUTHAR,J) ALI Page 6 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Nov 28 2025 Downloaded on : Fri Nov 28 23:55:57 IST 2025