Gujarat High Court

Ravjibhai Galabhai Parmar vs Kiritbhai Jenabhai Zala on 11 August, 2025

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                            C/FA/569/2018                                      JUDGMENT DATED: 11/08/2025

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                                   IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                               R/FIRST APPEAL NO. 569 of 2018


                      FOR APPROVAL AND SIGNATURE:


                      HONOURABLE MR.JUSTICE J. L. ODEDRA
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                                  Approved for Reporting                       Yes            No
                                                                                               ✔
                      ==========================================================
                                            RAVJIBHAI GALABHAI PARMAR & ANR.
                                                           Versus
                                              KIRITBHAI JENABHAI ZALA & ORS.
                      ==========================================================
                      Appearance:
                      MR KRUNAL D PANDYA(3283) for the Appellant(s) No. 1,2
                      MR PALAK H THAKKAR(3455) for the Defendant(s) No. 3
                      RULE SERVED for the Defendant(s) No. 1
                      SERVED BY AFFIX. (R) for the Defendant(s) No. 2
                      ==========================================================

                        CORAM:HONOURABLE MR.JUSTICE J. L. ODEDRA

                                                          Date : 11/08/2025

                                                         ORAL JUDGMENT

1. Present appeal has been preferred by the appellants,

being the legal heirs of one Arvindbhai, who had

passed away on 04.03.2014 in an unfortunate road

accident. The appeal is against the judgment and

award dated 02.01.2018 passed in the concerned

MACP No.461 of 2014, by Motor Accident Claims

Tribunal (Auxiliary) District-Kheda. In the said

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judgment and award, the tribunal has partly allowed

the claim petition by allowing a recovery to the

claimants of the said petitions a sum of Rs.3,89,280/-

with interest at the rate of 9% from the date of claim

petition till its realization from the opponent no.1 and

2, exonerating the opponent No.3, the insurance

company of the unregistered Eicher 380 Tractor.

2. In so far as the fact pertaining to the accident are

concerned, it appears that on 04.03.2014 at about

8:30 p.m. when the deceased Arvindbhai was going

from village Nakhuti to Dhunadara on motorcycle

bearing registration No.GJ-7-BM-8323 (hereinafter,

"the motorcycle"), the opponent No.2, driving an

unregistered Eicher-380 Tractor (hereinafter,"the

tractor") with full speed and in negligent manner,

dashed the said tractor onto the motorcycle. Owing to

the said accident, the said Mr. Arvindbhai lost his life.

3. The only ground on which the present appeal has been

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preferred is the exoneration of the aforesaid insurance

company. It is the contention of the appellant (original

claimants) that the said exoneration is liable to be

interfered. In the alternative, it was submitted that

even if the Court considers that the Insurance

Company is not liable, more so in view of the fact that

the offending vehicle has not been registered with the

Regional Transport Office, then too, the Insurance

Company may please first be ordered to pay, and then,

to recover the said amount from the Owner/Driver of

the said unregistered Eicher 380 Tractor. Thus, it was

submitted that in view of the breach of policy

conditions, the judgment and award be modified to the

extent that the insurance company may be held liable

to first pay the claim amount to the appellants (original

claimants) with a liberty to the insurance company to

recover it from the opponents No.1 and 2 being the

owner and driver of the unregistered Eicher 380

Tractor involved in the accident.

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4. Heard learned advocate Mr. Palak Thakkar for the

appellant. He submitted that the reason why the

insurance company has been exonerated is that there

is a breach of policy condition, inasmuch as, the

tractor involved in the accident was not registered. It

was submitted that tribunal has observed in the

impugned judgment that the RTO Office has accepted

registration fees and tax, and yet, the registration

number of vehicle was not granted. It was, however,

the say of the learned advocate Mr. Palak Thakkar that

the concerned vehicle was not produced for inspection;

that the temporary registration number is only valid

for a month of the date of purchase of the vehicle. It

was further submitted that by that time, the vehicle

ought to be submitted for inspection. It was also

submitted that the fees and tax were paid only on

11.03.2014, which is after the date of accident. It

short, on date of the accident, the vehicle was not

having a valid registration number. It was submitted

that the witness, RTO Officer, Mr. Hemantbhai has

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recorded the fact that as the vehicle was not produced

for inspection before the relevant authority and that

therefore the said registration number was not allotted

and that only the temporary registration number, as

was available from the showroom, where from the

tractor was purchased, was there with the vehicle and

which was only valid from the earliest of the following

two dates, namely, (1) production of the said vehicle in

the RTO office for inspection, or (2) one month from

the date of purchase.

5. It was thus submitted by learned advocate for the

appellant that this being only a breach of condition

therefore the insurance company may kindly be

ordered that it may first pay the amount adjudicated

by the Tribunal and, thereafter it may recover it from

the owner/driver of the vehicle, for the reason that the

it was only a case of breach of condition of the policy.

No other aspect of the judgment including the

negligence and the quantum of the compensation

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awarded under the present matter has been

challenged, nor were such grounds pressed before this

Court.

6. Heard learned advocate Mr. Vibhuti Nanavati for the

insurance company respondent No.3. Mr. Vibhuti

Nanavati submitted that under the applicable law,

once there is a breach of condition, insurance

company cannot be held liable in the matter. It was

thus submitted that it is not the case of the other side

that there is not breach of the condition. He submitted

that therefore, in the present circumstances, the

finding of the tribunal to the extent that the original

opponent No.3 i.e. present respondent No.3 having

been exonerated may kindly be confirmed and may not

be interfered.

7. Having heard the learned advocate for the parties, this

Court proceeds to decide the present matter in terms

of hereinafter.

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8. The following point of determination arises for the

consideration of this Court:

(a) Whether the exoneration of insurance

company on account of breach of policy

condition is liable to be sustained? Further,

would an order against the insurance company

to first pay the amount ordered under

impugned judgment and award, then recover

the said amount from the owner/driver of the

offending vehicle (unregistered Eicher 380

Tractor) been more appropriate in facts and

circumstances of the matter?

9. Indeed, it was a breach of condition of policy insuring

the vehicle in as much as the vehicles appears not to

have been produced before the RTO Office within the

statutory permissible limit for inspection.

Consequently, the formalities for providing a

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registration number of the vehicle could not be

completed. It is thus admitted fact that the concerned

vehicle did not have registration number and that the

earlier temporary registration number was only valid,

at the highest for a period of one month from the date

of purchase. It is not the case of the appellant that the

vehicle, involved in the accident, caused the accident

within one month of the purchase of the vehicle and

that therefore, there is reason to believe that there was

breach of condition pertaining to vehicle having

requisite requirement of valid registration number and

permit at the time of the concerned accident, i.e.

04.03.2014.

10. Naturally, therefore there was a clear breach of

condition of the policy as regards valid

registration/permit of the vehicle. The learned

advocate for the appellant, when confronted with the

factum of Exhibit-36, i.e. copy of receipt signed by the

Gujarat Motor Vehicle Department dated 11.03.2014,

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could not refute the fact that the accident was prior

(i.e. dated 04.03.2014) to the issuance of the said

receipt.

11. At this juncture, for the purpose of understanding the

broad principles of "Pay & Recover", the judgement of

the Hon'ble the Supreme Court in the case of Sunita

and others vs. United India Insurance Co.Ltd. and

others, reported in MANU/SC/0934/2025 decided on

17.07.2025, may be referred. The relevant paragraphs

thereof are quoted hereinbefore for the ease of

reference.

"12. The next question which arises for our consideration is whether the Insurance Company is liable to indemnify the compensation amount to the claimant-Appellant and, thereafter, recover the same from the driver and owner of the vehicle.

13. Adverting to the facts in hand, from a bare perusal of the record, it is borne that the vehicle in question was insured with "Liability Only Policy" and no premium was paid to cover the driver, owner, or a gratuitous passenger travelling therein. However, even then, in our view, the Courts below erred in holding that the

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Insurance Company is not liable to pay the compensation to the claimant-Appellants, for the principle of "Pay and Recover" ought to have been invoked. As such, we are inclined to interefere with the above findings of the Courts below.

14. We must advert to the exposition of this Court in National Insurance Co. Ltd. v. Baljit Kaur MANU/SC/0009/2004: 2004:INSC: 19:

(2004) 2 SCC 1. The deceased therein was travelling as a gratuitous passenger, and due to the rash and negligent driving of the offending vehicle, lost his life. The Insurance Company was directed to satisfy the amount awarded by the Courts below and recover the same from the owner of the vehicle, as the premium was not paid by the owner of the vehicle towards gratuitous passenger.

15.The above position has been followed by this Court in Anu Bhanvara v. IFFCO Tokio General Insurance Co. Ltd., MANU/SC/1077/2019:

2019:INSC: 890: (2020) 20 SCO 632 wherein the injured person was travelling as a gratuitous passenger and was not covered under the Insurance Policy, the driver and owner of the vehicle was held liable for payment of compensation amount. This Court applied the principle of "Pay and Recover and directed the Insurance Company to pay the amount and, thereafter, recover the same from the owner of the vehicle.

16.The aforementioned principle was adopted by this Court, in various judgments of this Court in Amrit Lal Sood v. Kaushalya Devi Thapar MANU/SC/0209/1998: 1998:INSC:140 (1998) 3 SCC 744; New India Assurance Co. Ltd. v. C.M. Jaya MANU/SC/0031/2002: 2002:INSC:30:

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(2002) 2 SCC 278; National Insurance Co Ltd. v.

Challa Upendra Rao MANU/SC/0779/2004 2004:INSC:537: (2004) 8 SCC 517; New India Assurance Co. Ltd. v. Vimal Devi MANU/SC/1087/2010; National Insurance Co. Ltd. v. Saju P. Paul MANU/SC/0006/2013:

2013:INSC: 3: (2013) 2 SCC 41; Manuara Khatun v. Rajesh Kumar Singh MANU/SC/0194/2017: 2017:INSC:164: (2017) 4 SCC 796; and Puttappa v. Rama Naik MANU/SCOR/87148/2018.

17. Applying the above expositions of law, the Courts below ought to have directed the Insurance Company to indemnify the amount and thereafter recover the same.

18. Therefore, in light of the attending facts and circumstances of the case, we are of the view that the Insurance Company is liable to indemnify the compensation amount awarded by the Tribunal and recover the same only from the owner of the offending vehicle.

19. In view of the above discussion, the driver of the offending vehicle is not liable as he was holding a valid driving license to drive the offending vehicle i.e., TATA 407 Truck."

12. As noticed, herein-above, there is a clear mandate of

Hon'ble Supreme Court that in view of the aforesaid

expositions of law in case of breach of policy

conditions, the directions of "pay and recover" ought to

be issued against the owner.

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13. Question is, whether non-registration of a vehicle

constitutes breach of policy condition? The same has

been answered in affirmative by the Hon'ble Supreme

Court in the case of Narinder Singh vs. New India

Assurance Company Ltd. Reported in

MANU/SC/0762/2014:AIR 2014 SC 3761: 2014(a)

SCC 324. In the said case, the Hon'ble Supreme

Court, after referring to Section 39 and 43, read with

Section 192 f the Motor Vehicles Act concluded that

using a vehicle on the public road without registration,

is not only a punishable offence, but also a

fundamental breach of the terms of conditions of policy

contract.

14. To the aforesaid binding precedent, this Court most

respectfully abides. Thus, non-registration of vehicle,

constitutes to be a fundamental breach of policy

conditions, as laid down by the Hon'ble Supreme Court

in Narinder Singh vs. New India Assurance

Company Limited and others, (2014) 9 SCC 324.

The relevant portion of the said judgment is

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reproduced hereinafter, for the ease of reference:

"12. Indisputably, a temporary registration was granted in respect of the vehicle in question, which had expired on 11.1.2006 and the alleged accident took place on 2.2.2006 when the vehicle was without any registration. Nothing has been brought on record by the appellant to show that before or after 11.1.2006, when the period of temporary registration expired, the appellant, owner of the vehicle either applied for permanent registration as contemplated under Section 39 of the Act or made any application for extension of period as temporary registration on the ground of some special reasons. In our view, therefore, using a vehicle on the public road without any registration is not only an offence punishable under Section 192 of the Motor Vehicles Act but also a fundamental breach of the terms and conditions of policy contract."

15. Thus, it is the view of this Court that in the present

fact and circumstances, the Insurance Company ought

to be directed to first pay the claims amount to the

appellant (original claimants) and thereafter recover

the same from the owner (respondent No.1 herein).

16. Insofar as the quantum on compensation is concerned,

the Court begs to note that though the said aspect was

pleaded in this Appeal, the same was not pressed at

the time of hearing of this Appeal. No other aspects of

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