Bombay High Court

The Oriental Insurance ... vs Dr.Suresh Sadanand Borkar on 6 August, 2025

2025:BHC-AUG:20830
                                                 1                           SA.172-99.odt


                          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                     BENCH AT AURANGABAD

                                    SECOND APPEAL NO.172 OF 1999

                     The Oriental Insurance Co. Ltd.
                     Through Divisional Manager,
                     Divisional Office,
                     Adalat Road, Aurangabad.              ...     Appellant.
                                                                 (Ori. Defendant)
                           Versus

                     Dr. Suresh S/o Sadanand Borkar,
                     Age 44 years, Occu. Medical Practitioner,
                     R/o. Avanti, 74, Dashmeshnagar,
                     New Osmanpura, Aurangabad.           ...      Respondent.
                                                                 (Ori. Plaintiff)
                                                  ...
                                Advocate for Appellant : Mr. R. F. Totla.
                     Advocate for Respondent : Mr. Adwait M. Joshi h/f Mr. Milind
                                            Madhu Joshi.
                                                 ...

                                              CORAM :      SHAILESH P. BRAHME, J.

                                              RESERVED ON   : 31.07.2025
                                              PRONOUNCED ON : 06.08.2025.

                     JUDGMENT :

1. Heard both the sides finally.

2. Appellant/insurance company is aggrieved by judgment

and decree passed by Lower Appellate Court in Regular Civil

Appeal No.103 of 1998 confirming the judgment and decree

passed by Trial Court in Special Civil Suit No.679 of 1996

awarding damages of Rs.37,923/- to the respondent/original

plaintiff payable by the appellant/original defendant.

2 SA.172-99.odt

3. Respondent had filed suit for damages of Rs.37,923/-.

He is owner and driver of the four wheeler which was insured

with the appellant company. It met with an accident on

14.04.1996 and sustained damages. The respondent claimed

damages from the appellant company, but no heed was paid.

Therefore, suit was filed by the respondent contending that

there was a valid insurance and valid licence with the

respondent at the time of accident.

4. Appellant contested the suit on the ground that there

was no valid licence at the relevant time. The licence of the

respondent was expired. Under the contract, appellant was not

liable to pay anything to the respondent.

5. Respondent examined himself and produced his licence

at Exh.31 and insurance policy at Exh.32. Appellant examined

one witness. Trial Court decreed the suit and awarded damages

of Rs.37,923/- along with interest @ 18% p.a. vide judgment

dated 16.02.1998. Being aggrieved, Regular Civil Appeal

No.103 of 1998 was filed and it was dismissed on 09.11.1998.

6. While admitting Second Appeal, following substantial

question of law was framed :

3 SA.172-99.odt

"Whether on the date of the accident, the driver of the vehicle was having effective licence meaning thereby, whether he was holding a licence on the date of the accident ?"

7. At the time of final hearing with the consent of the

parties, additional substantial questions of law are framed.

Both the parties showed readiness to work out the matter on

the same date. They did not ask for time. Hence, with their

consent, the matter was heard by framing following additional

substantial questions of law :

"A) Whether the Hon'ble Civil Court has jurisdiction to decide the claim arising out of an accident in view of sections 166 and 175 of the Motor Vehicles Act ?

B) Whether the Hon'ble Lower Appellate Court is justified in deciding an appeal without passing any order on the production of additional evidence by way of document ?

C) Whether the Hon'ble Lower Court is justified in awarding an interest @ 18% p.a without framing any issue, as well without any discussion in the impugned judgment ?"

8. Learned counsel Mr. Totala appearing for the appellant

submits that suit filed by the respondent is barred under

Section 175 of Motor Vehicles Act (hereinafter referred to as 4 SA.172-99.odt

"Act" for sake of brevity and convenience). He would further

submit that application Exh.3 which was submitted before

Lower Appellate Court under Order 41 Rule 27 was not

decided by the Appellate Court causing great prejudice to the

appellant because vital documents were placed on record

towards additional evidence. He would further submit that no

reasons are assigned by both the Courts below for awarding

interest @ 18% nor any issue to that effect was framed in the

Trial Court. It is further submitted that it was mandatory for

the respondent to have valid and effective licence which is

under Section 3(1) as well as there is a term of the contract

between appellant and the respondent which is misinterpreted

by the Courts below.

9. Per contra, learned counsel Mr. Joshi would submit that

the Civil Court has jurisdiction because this type of plea was

not raised by the appellant in the Trial Court and conjoint

reading of Section 166 read with 165(1) of the Act invests

jurisdiction with the Civil Court. The additional evidence which

was sought to be produced before the Lower Appellate Court

could have been produced by the appellant in the Trial Court

itself. There was no pleading to that effect. The additional

evidence was not the fresh discovery. It is further submitted 5 SA.172-99.odt

that the respondent had applied for renewal of licence which

was renewed from 25.07.1996. A renewal is mere a regularity.

It is further contended that as per Section 15(1), the renewal

has to be treated with effect from date of its expiry.

10. Appellant did not raise defence of want of jurisdiction in

the written statement. Neither any issue was framed in the

Trial Court nor point of determination is framed in the Lower

Appellate Court. However, the objection is regarding the

jurisdiction of the Civil Court which goes to the root of the

matter, I permitted the appellant to address on the point. My

attention is adverted to Section 175 which bars the jurisdiction

of the Civil Court.

11. Learned counsel for the respondent has adverted my

attention to Sections 165 and 166 of the Act. According to him,

as per Section 165(1), the Claim Tribunal is established to

decide claims of damages to any property of the third person

arising out of the accident. In the present case, owner is the

insured person who was driving the car and in accident the

same was damaged. Therefore, it is not a case of damage to

any property of a third person. I am unable to accept the

submission of the respondent. The following provision is

relevant :

6 SA.172-99.odt

"166. Application for compensation - (1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made

--

(a) by the person who has sustained the injury; or

(b) by the owner of the property; or

(c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or

(d) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be ?"

12. A specific provision is made in the Act referred above for

filing application for compensation by the owner of the

property. Section 166(1)(b) covers the present case and the

claim could have been filed before the Tribunal instead of

approaching the Civil Court. As the claim was entertainable,

bar under Section 175 is attracted. I am of the considered view

that Civil Court had no jurisdiction.

13. Learned counsel for the appellant had rightly referred to

the judgment of Harshad Chiman Lal Modi Vs. DLF Universal

Ltd. and another ; (2005) 7 Supreme Court Cases 791 .

Following is the relevant paragraph :

"We are unable to uphold the contention. The jurisdiction of a court may be classified into several categories. The important categories are (i) Territorial or local 7 SA.172-99.odt

jurisdiction; (ii) Pecuniary jurisdiction; and (iii) Jurisdiction over the subject matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is a nullity."

For want of jurisdiction appellant is bound to succeed in

the present second appeal.

14. It has come on record by the oral evidence of both the

witnesses that the licence of the respondent had expired on

11.11.1995. The accident occurred on 14.04.1996. Within one

month, no steps were taken by the respondent to renew the

licence. He resorted to renewal after the accident which is

candidly admitted by him in his cross-examination. The

renewal was sought for on 25.07.1996 and it was renewed

from 25.07.1996 upto 28.02.2000. When the accident took

place, respondent was not holding valid licence. In this regard,

it is relevant to notice following provision :

8 SA.172-99.odt

"15. Renewal of driving licences - (1) Any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this Act with effect from the date of its expiry."

15. The respondent did not apply for the renewal within 30

days from the date of expiry of the licence i.e. 11.11.1995. The

first proviso comes into effect which renders the renewal of the

licence from the date of renewal, not from the date of its

expiry. The wordings of Section 15(1) are very specific. Both

the Courts below failed to comprehend the literal meaning of

the provision and arrived at patent illegality. Both the Courts

below have given undue weightage to the fact that he was not

disqualified from holding or obtaining the licence. This

interpretation is erroneous one. Both the Courts below have

not taken into account Section 15(1) of the Act.

16. The contract between the parties i.e. insurance policy is

placed on record which is at Exh.32. It provides for effective

driving licence at the time of accident. The word "and" is used

in between two sentences. First part is about the obligation for

a person driving vehicle to hold an effective licence at the time

of accident and the next sentence is he should not be

disqualified from holding or obtaining such licence. Both the

Courts below interpreted "and" as "or" which is not the purport 9 SA.172-99.odt

of the term. The interpretation of the clause of the policy is

patently illegal and perverse.

17. Learned counsel for the respondent has placed reliance

on the judgment of Pernod Ricard India (P) Ltd. Vs. The State

of Madhya Pradesh and others. The facts and circumstances of

that judgment are distinguishable. It was a case of penalty

under Foreign Liquor Rules. The Rule 19 of 1996 Rules

provided rigorous penalty of four times for the deficiencies in

excess of the limit prescribed under the rules. On 29.03.2011,

Rule 19 was substituted and comparatively venial penalty was

brought into force. The question before the Court was that the

demand notice was given to a person after the amendment was

brought into force. The rule is held to be retroactive. This

judgment will not help the respondent.

18. Appellant filed application Exh.3 under Order 41 Rule 27

seeking to produce additional evidence. The application was

not considered either way by the Lower Appellate Court. The

Lower Appellate Court should have dealt with the application

at the time of final hearing, but I hold it to be irregularity. I

have considered the contents of the application and the

documents which were sought to be produced. There is no

valid explanation with the appellant as to why those were not 10 SA.172-99.odt

produced before the Trial Court. Those are not the new

discovery of the evidence. Therefore, even if the application

Exh.3 has not been dealt with, I do not think that any prejudice

can be said to have been caused to the appellant.

19. Both the Courts below did not assign any reason for

awarding 18% interest. They should have assigned some

reasons for imposing the extreme interest on the appellant.

However, payment of interest is consequential one. Unless the

respondent proves his entitlement to receive the amount, the

payment of interest would not come into picture.

20. For the reasons stated above, we find force in the

submissions of learned counsel for the appellant. The

substantial question of law in respect of the licence and bar of

jurisdiction of the Civil Court will have to be answered in

favour of the appellant and the question in respect of

additional evidence will have to be answered against the

appellant. As I have concluded that respondent is not entitled

to compensation, the last substantial question becomes

redundant.