Gujarat High Court
Reliance General Insurance Co. Ltd vs Vikramsinh Ranjeetsinh Zala on 18 July, 2025
NEUTRAL CITATION
C/FA/2586/2023 JUDGMENT DATED: 18/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2586 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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Approved for Reporting Yes No
No
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RELIANCE GENERAL INSURANCE CO. LTD.
Versus
VIKRAMSINH RANJEETSINH ZALA & ORS.
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Appearance:
MR RATHIN P RAVAL(5013) for the Appellant(s) No. 1
MR DK CHAUDHARI(5361) for the Defendant(s) No. 1,2
RULE SERVED for the Defendant(s) No. 3,4
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 18/07/2025
ORAL JUDGMENT
[1.] Heard Mr. Rathin Raval, learned advocate on record for
the appellant- Insurance Company. The notice of admission issued by
this Court upon the respondents, has been duly served; however, the
respondent nos. 3 and 4 have chosen not to appear and contest the
present proceedings. Learned advocate Mr. D.K. Chaudhari has
entered appearance on behalf of respondent nos.1 and 2.
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[2.] The present appeal is filed at the instance of the
Insurance Company under Section 173 of the Motor Vehicles Act,
1988, being aggrieved and dissatisfied with the impugned judgment
and award dated 17.09.2022 passed by the Motor Accident Claims
Tribunal (Auxi.), Mahesana in Motor Accident Claim Petition No. 336 of
2017.
[3.] This Court, noticing the grounds raised in the appeal and
the submissions made by the learned advocate for the appellant, vide
order dated 05.07.2023, has admitted the appeal, and in the
application seeking stay preferred at the instance of the original
appellant-Insurance Company, has stayed the impugned judgment and
award, pending the appeal, on condition of deposit of the entire
award amount with the concerned Tribunal. Thereafter, vide order
dated 18.08.2023, this Court had confirmed the aforesaid ad-interim
relief, and had permitted the original claimants to withdraw 30% of
the deposited award amount, and 70% of the amount was directed to
be invested in the fixed deposit with a Nationalized Bank, which was
subject to the outcome of the present appeal.
[4.] Learned advocate Mr. Rathin Raval appearing for the
appellant- Insurance Company has vehemently submitted that the
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Tribunal committed grave error in fixing the liability of the appellant-
Insurance Company to pay the amount of compensation. Learned
advocate has submitted that specific defence was raised before the
Tribunal that there was breach of terms and conditions of policy and
therefore the Insurance Company was required to be exonerated from
its liability to indemnify owner and to make payment of compensation
to the claimant.
[4.1] Learned advocate has invited my attention to the defence
raised by the appellant-Insurance Company before the Tribunal, and
has pointed out that despite the objection being raised with regard to
the seating capacity, which was confined to 5 persons including the
driver in the vehicle concerned; however, at the time of the accident,
admittedly 12 persons were travelling, which was beyond the
permissible seating capacity of the vehicle. He has, therefore,
submitted that considering the terms and conditions of the policy,
which was not beyond the seating capacity, the Insurance Company
ought not to have been saddled with the liability to pay compensation.
[4.2] He has further invited my attention to the findings and
reasons assigned by the Tribunal while considering the aspect of
liability and has submitted that, in fact, the Tribunal has completely
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ignored the specific defence of the appellant- Insurance Company
merely by noticing the fact that the insurance policy was in force at
the time of the occurrence of the accident, and the coverage being
offered by the Insurance Company, had held the Insurance Company
equally liable to pay the amount of compensation along with the rest
of the original opponents. He has, therefore, submitted that the
aforesaid order is a Non speaking order and has urged this Court to
quash and set or else to reside the remand the matter to examine the
aforesaid issue.
[4.3] At this stage, the reliance was placed on the decision of
the Hon'ble Supreme Court in the case of United India Insurance
Company Ltd. vs. K.M. Poonam reported in 2011(2) Scale 568. By
referring to the aforesaid decision, the learned advocate has urged
this Court to alternatively consider the issuance of appropriate
directions of pay and recovery.
[5.] Considering the aforesaid submissions of the learned
advocate appearing for the appellant- Insurance Company and having
perused the findings and reasons assigned by the Tribunal, in light of
the judgment of the Hon'ble Supreme Court in the case of K.M.
Poonam (supra), the only issue which is raised for consideration of this
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Court is, as to whether the Tribunal committed any error in imposing
the liability of the Insurance Company along with the driver and owner
of the vehicle in making the payment of compensation in a case where
admittedly there was breach of the provisions by carrying passengers
beyond the permissible limit. The Tribunal, upon appreciation of the
evidence produced on record, has arrived at the conclusion that there
were 12 passengers inside the vehicle at the time of the occurrence of
the accident. As against that, upon appreciation of the R.C. book
produced on record at Exh.69, the sanctioned seating capacity was
confined to 5 persons only.
[6.] In light of the aforesaid document produced on record,
after considering the terms and conditions of the policy, wherein it
has transpired that the policy does not cover the risk of 12 passengers
as they were travelling beyond the capacity, in the opinion of this
Court, the Tribunal has miserably failed to consider the aforesaid
defence raised by the appellant- Insurance Company. Upon perusal of
the evidence brought on record, more particularly, the R.C. Book
which is produced on record for consideration at Exh. 69, it is evident
that the seating capacity of the vehicle was confined to 5 persons
only, whereas upon appreciation of the evidence in the nature of the
FIR placed on record at Exh. 63, it is evident that more number of
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passengers were travelling beyond the permissible limit.
[7.] Having noted the aforesaid evidence on record, as regards
the liability of the insurer is concerned, in view of the settled legal
position as laid down by the Hon'ble Supreme Court in the case of
K.M. Poonam (supra), would be confined to the number of persons
covered by the insurance policy, and not beyond the same. In absence
of any challenge being made by the original claimants as against the
aforesaid foundational findings assigned by the Tribunal, this Court
has reason to believe that the insurance policy was confined to the
seating capacity of the vehicle. Thus, the Insurance Company can be
held liable, at the most, to pay the amount of compensation to the
five passengers occupied in the vehicle at the time of the accident.
However, considering the ratio laid down by the Hon'ble Supreme
Court in the aforesaid decision, and considering the facts of the case
where this Court would have no occasion to pick and choose and to
identify the five persons, excluding the driver, in order to issue
directions to the Insurance Company to make the payment, this Court
is inclined to issue directions to meet the ends of justice by adopting
the procedure adopted by the Hon'ble Supreme Court in the aforesaid
decision.
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[8.] Thus, the Insurance Company is directed to deposit the
total amount of compensation awarded to all the claimants, and the
amount so deposited is further directed to be disbursed in favour of
the claimants in respect of their claims, with further liberty to the
Insurance Company to recover the amounts paid by it, over and above
the compensation amount payable in respect of the persons covered
by the insurance policy from the owner of the vehicle.
[9.] For the foregoing reasons, the appeal is partly allowed.
The impugned judgment and award dated 17.09.2022 passed by the
Motor Accident Claims Tribunal (Auxi.), Mahesana in Motor Accident
Claim Petition No. 336 of 2017, is hereby modified in the aforesaid
terms.
[10.] Since the appeal is partly allowed, in view of the order
passed by this Court, while considering the interim relief of stay, and
in view of the disposal of the First Appeal by this order, the Tribunal is
directed to release the entire award amount in favour of the original
claimants, preferably within a period of two weeks from the date of
receipt of this order.
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[11.] Needless to clarify that the aforesaid exercise shall be
undertaken by the Tribunal strictly in accordance with law and the
guidelines issued by the Hon'ble Supreme Court in this regard.
[12.] With these observations, present First Appeal stands
disposed of.
(NISHA M. THAKORE,J)
SUYASH SRIVASTAVA
