Gujarat High Court
New India Insurance Company Ltd vs Minor Shilpaben Rajubhai Parmar on 26 November, 2025
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C/FA/1604/2015 JUDGMENT DATED: 26/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1604 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J. L. ODEDRA
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Approved for Reporting Yes No
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NEW INDIA INSURANCE COMPANY LTD
Versus
MINOR SHILPABEN RAJUBHAI PARMAR & ANR.
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Appearance:
MR GC MAZMUDAR(1193) for the Appellant(s) No. 1
MR HG MAZMUDAR(1194) for the Appellant(s) No. 1
RULE SERVED for the Defendant(s) No. 2
TATVDEEP J JANI(7227) for the Defendant(s) No. 1
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CORAM:HONOURABLE MR.JUSTICE J. L. ODEDRA
Date : 26/11/2025
ORAL JUDGMENT
1. The present Appeal arises from the judgment and award
passed in MACP No.527 of 2005. The judgment and award
is dated 17.04.2005 and has been passed by the learned
Motor Accident Claims Tribunal (Main), Bhavnagar.
2. By way of the impugned judgment and award, the Tribunal
has been pleased to award a sum of Rs.5,55,000/- with 9%
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rate of interest from the date of filing of the claim petition
till realization,. from the opponents, jointly and severally.
3. At this juncture, the accident in question may be
examined. It appears that on 21.07.2005, at about 7:00
am, minor Shilpa, the victim herein, (hereinafter be
referred as "the deceased") was going to attend a call of
nature, when a truck belonging to opponent no.1, being
driven by one Hanifbhai alias Jokham alias Tako, came
from the opposite direction, driving it in wrong side and
dashed with the minor. As a result of the accident, the
minor deceased lost her life.
4. Whilst preferring the claim petition, it appears that the
father of the deceased did not deem it appropriate to
implead the driver. Apparently only the owner of the
vehicle and the Insurance Company were impleaded as
opponent nos.1 and 2, respectively.
5. In the present First Appeal, the appellant - Insurance
Company is aggrieved by the fact that it has not been
exonerated though the Tribunal concluded that the driver
did not possess requisite valid and effective driving license,
and therefore, the appellant has preferred the present First
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Appeal.
6. Heard learned advocates for the respective parties.
7. Learned advocate for the appellant Mr. H G Mazmudar has
submitted before this Court that on perusal of the
document at Exhibits-48,49 and 50, it is clear that the
driver was holding license in the following manner:
1. He had held Light Motor Vehicle (Non-Transport)
License from the period of 07.05.1982 till 05.04.2010.
2. Medium Goods Vehicle and Heavy Goods Vehicle
License from the period of 2001 to 11.10.2004.
8. Thereafter, as per the document Exhibit-49, the driver had
renewed the said license of Medium Goods Vehicle and
Heavy Goods Vehicle for the period of 25.07.2005 till
24.07.2008 and thereafter, again, from 25.07.2008 to
24.07.2011. It was thus submitted that as on the date of
the accident i.e., on 21.07.2005, the driver did not hold
any license in respect of the Medium Goods Vehicle or
Heavy Goods Vehicle. It was further submitted that yet, the
driver was driving the concerned vehicle on the fateful day
and had caused the accident, resulting in death of minor
Shilpa. It was thus urged that this is a case where the
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Insurance Company should have been exonerated for the
reason of breach of policy conditions. He has also
submitted that the Tribunal has relied on the judgment in
the case of National Insurance Company Limited Vs. Sajjan
Singh reported at 2004 ACJ 1 SC. It was submitted that
thereafter, the Tribunal has also noticed the judgment in
the case of Oriental Insurance Company Limited Vs.
Zaharulnisha and Ors. reported at AIR 2008 SC 2018,
wherein the Hon'ble Supreme Court held that holding the
valid and effective driving license is one of the conditions in
the contract of the Insurance Policy and that driving of the
vehicle without driving license is an offence.
9. It was submitted that the Tribunal has erred in holding the
Insurance Company liable to indemnify the insured. It was
thus submitted that looking to the peculiar facts and
circumstances of the case, the appellant - Insurance
Company may kindly be exonerated in the present First
Appeal.
10. Learned advocate appearing for the respondent No.1 has
submitted that in the present case, neither the owner nor
the driver have been examined by the Insurance Company.
It was submitted that, therefore, in terms of the judgment
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in the case of First Appeal No.2858 of 2014 dated
29.09.2014, it was not proved by Insurance Company that
the owner had taken proper care to verify the licence of the
driver and, therefore, the Insurance Company cannot be
absolved from the liability to pay the compensation as
contended by the appellant. It was also further submitted
that even if it was assumed that the Insurance Company
has succeeded in proving that the driver did not have
requisite licence, in terms of judgement in the case of
Pappu vs. Vinod Kumar Lamba, 2018(0) AIJEL-SC 61544,
the claimant cannot be prejudiced and in such
circumstances, this Court may order pay and recover
ordering the Insurance Company to first pay the claim
amount to the claimants and, thereafter, recover it from
the owner. It was, thus, submitted that in any case in
either of the eventualities, the claimants may not be
prejudiced, as they have not contributed to cause the
accident.
11. It may be noted that, though the Rule has been served
upon respondent no.2, who is the owner of the vehicle, he
has not caused any appearance in the present First
Appeal.
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12. In the rejoinder arguments of the learned advocate for the
appellant has reiterated that the Insurance Company has
conclusively proved that at the time of accident, the driver
did not have requisite licence, therefore, in view of the
complete breach by the Insurance Company, the Insurance
Company may kindly be exonerated. He, therefore, urged
that the Court may please interfere with the judgement of
the Tribunal to the aforesaid extent and in the present
case, only the owner may be held liable.
13. Having heard learned advocates for the parties, the Court
proceedings to decide the present appeal in terms of
hearing hereinafter.
14. The point of determination that arises for determination
by this Court in the present case is as to whether the
Insurance Company could be held liable in the present
case, if the driver is proved to not have valid and effective
license? If so, to what extent?
15. At the outset, it may be noted that undisputedly the
original claimants have not preferred any appeal against
the impugned judgement and award. It may also be noted
that during the course of arguments, learned advocate for
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the claimant has not disputed the contents of Paragraph
No.17 of the impugned judgement, which reads as follows:
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"17. From the oral as well as documentary evidence
produced by the Opponents at Exh.48, 49 &50, it
appears that the driver of Opponent No.1 i.e.
Hanifbhai U. Mira was holding a driving license for
LMV NT from 07.05.82 to 24.7.2011, which was also
subsequently renewed even for Transport Vehicle but
on the date of accident i.e. on 27.7.2005, he was not
holding driving license to drive Transport Vehicle.
Therefore, it is established from the above facts and
documents that driver of opponent No.1. was not
holding a valid driving licence to drive transport
vehicle and accordingly, the breach is established."
16. Furthermore, the respondent no.2 has not caused any
appearance and hence, the question of him disputing the
aforesaid finding does not arise.
17. There is slight discrepancy wherein Paragraph No.10 of
the Claim Petition wherein, the claimants have pleaded
that it was the opponent, who was driving the concerned
vehicle. However, from the perusal of the Paragraph No.
(10-A) and (10-B) of the claim petition, it is clear that the
driver of the concerned vehicle was one Hanif alias Jokham
alias Tako and as per Paragraph no.(10-B) of the said claim
petition, the owner was Yasinbhai Musabhai Radhanpara,
who was original Opponent No.1 in the said claim petition.
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18. Indeed, the Insurance Company, by application Exhibit 44
had prayed before the Tribunal that as they need to
establish if the concerned driver - Hanifbhai the original
opponent No.1 had valid licence or not needs to be proved
and, that therefore, the RTO Officer, Bhavnagar may kindly
be permitted to be summoned as a witness. The witness
was subsequently examined by the Tribunal at deposition
Exhibit 47. On perusal of the said deposition along with
record of the Tribunal, it is clear that the vehicle involved
in the present case was a Heavy Goods Vehicle (HGV),
whereas the driver had the following licences since 1982.
(A) Licence to drive Light Motor Vehicle (LMV) from
07.05.1982 till April, 2010.
(B) Licence to drive HGV from 12.10.2001 till
11.10.2004.
(C) Licence to driver HGV from 25.07.2005 till
24.07.2008.
19. Naturally, the date of accident was 21.07.2005 and it is
clear that on the said date of accident, the driver did not
possess requisite licence to driver HGV. This is not a case
where the owner has been misled to believe that the driver,
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who is having a requisite licence and for the lack of further
verification of the owner, he could not realize that the
driver was committing a breach of the policy condition of
the Insurance Company.
20. Furthermore, the Hon'ble Supreme Court in Zaharulnisha
and Ors. (supra) has held that where a third party, injured,
in an accident, is entitled to amount of compensation
granted by the MACT, although the driver of the vehicle, at
the relevant point in time, might not have the valid and
effective driving license, but the claimant would be entitled
to the compensation from the owner and the driver. The
Hon'ble Supreme Court observed that where the insurers,
relying upon the provisions of violation of law by the
assured, take an exception to pay the assured or a third
party, they must prove a willful violation of the law by the
assured. In some cases, violation of criminal law,
particularly violation of the provisions of the MV Act, may
result in absolving the insurers but, the same may not
necessarily hold good in the case of a third party. In any
event, the exception applies only to acts done intentionally
or "so recklessly as to denote that the assured did not care
what the consequences of his act might be".
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21. However, on perusal of the judgment in Pappu (supra), it
appears that in that case, the owner had filed a written
statement stating that the vehicle at material time was
driven by an authorized person having valid driving
licence. However, in the said written statement, the owner
did not name that person. Thus, the Hon'ble Apex Court
was pleased to hold that without disclosing the name of the
driver in written statement or producing any evidence to
substantiate the fact that copy of driving licence produced
in support of the person who in fact was authorised to
driver the offending vehicle at that relevant time, the owner
of the vehicle cannot be said to have extricated himself
from his liability. However, to subserve the ends of justice,
the Apex Court was pleased to order pay and recover order,
i.e. the Insurance Company to first pay the claimants and
thereafter to recover the said amount from the owner of the
vehicle to meet the ends of justice. On the basis of the said
judgement, subsequently, this Court in the case of United
India Insurance Company Limited vs. Vijay Narayan
Apsbaran Ray, 2019(0) AIJEL-HC 241719, was pleased to
conclude that the driver of the vehicle involved in the
accident was not having a valid licence to drive the Heavy
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Goods Vehicle. Rather, he was only holding a licence to
drive a Light Motor Vehicle or Medium Motor Vehicle as per
the driving licence produced at Exh.51 to 53 on record. In
the said circumstances, the Court held that in view of the
decision of the Apex Court in the case of Pappu (supra) the
Insurance Company was directed to first pay the amount of
the compensation to the claimants and, thereafter, recover
the same from the driver and owner of the offending vehicle
by filing mere execution proceedings of the award without
filing any other suit against the driver or owner of the
offending vehicle.
22. The Tribunal, it may be noted, has stated the following
paragraph No.21 to hold the appellant Insurance Company
liable. The said Paragraph No.21 of the impugned
judgement is quoted hereinbelow for the ease of reference:-
"21.From the above ratios, it becomes clear that the
liability of the insurer to satisfy the decree passed in
favour of a third party is statutory and 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. As discussed above driver
Hanifbhai was holding driving license to drive LMV NT
from 7.5.1982 to 5.4.2010 and to drive MGV & HGV
Transport license from 12.10.2001 to 11.10.2004.
Therefore, this is not a case of no driving license at all."
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Indeed, the Tribunal is right when it states that mere
absence, vague or invalid driving licence or disqualification
of a driver for driving at the relevant point in time are not
in themselves defence available to the insurer against
either the insured or the third parties. The said quote is
borrowed verbatim from the judgement in the case of
National Insurance Company Ltd. vs. Swaran Singh , 2004
ACJ 1. However, in Swaran Singh (supra) the very
paragraph further states that to avoid its liability towards
the insured, the insurer has to prove that the insured was
guilty of negligence and had failed to exercise reasonable
care in the matter of fulfilling the condition of policy
regarding use of vehicle by duly licenced driver for one,
who was not disqualified to drive at the relevant time.
It is clear that the driver did not have licence at the
relevant period, as discussed in foregoing portion of this
judgement. However, it appears that the owner did not
take sufficient care to examine the licence that the driver
was holding at the relevant point in time. Moreover, it
appears from the perusal of the R & P that the owner of the
vehicle original opponent No.1 had not even filed the
written statement, though he was served. This has been
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noted categorically under the impugned judgement at
Paragraph No.3 of the impugned judgment, wherein it is
stated that Opponent No.1 had appeared through his
advocate, but had not filed a written statement. Thus, the
basic assertion of fact that the owner had not committed
any breach of the policy condition and had examined the
licence of the driver at the relevant point in time before
handing over the vehicle to such driver was not made. This
makes the facts such that ratio of Pappu (supra) can be
applied. In absence of the concerned Opponent No.1 filing
a written statement, the appellant Insurance Company had
examined RTO officer who had enlightened the Tribunal
about the nature of licences that the driver of the vehicle
involved was holding which is also apparent from
Paragraph no.17 of the impugned judgement. In the
circumstances, it cannot be stated that at the relevant
point of time, the driver had valid and effective licence.
23. In view of the foregoing, this Court in compliance of the
aforesaid decisions of the Hon'ble Apex Court, more
particulary, Pappu (supra), holds that the Insurance
Company shall first pay to the claimants and thereafter be
at liberty to recover the amount of compensation from the
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owner, who has been impleaded in the original proceedings
at Opponent No.1 and in the present appeal at Respondent
No.2. Insofar as, the driver is concerned, the Insurance
Company may take steps for recovery against him,
however, after filing and succeeding in appropriate
proceedings before the competent forum.
24. The impugned judgement and award stands modified to
the aforesaid extent. Rest of the judgement shall remain
unaltered.
25. Moreover, in view of the orders dated 10.08.2015 and
05.10.2015, indicating that the entire award amount has
been deposited before the Tribunal by the appellant, it is
ordered that the amount to the extent that has not been
disbursed to the original claimants be forthwith disbursed
in accordance with law.
26. The appeal stands disposed of in aforesaid terms.
27. The record and proceedings be sent back forthwith to the
Tribunal.
(J. L. ODEDRA, J)
SUDHIR
