[Cites 10, Cited by 0]
Gujarat High Court
Royal Sundaram Alliance Insurance Co. ... vs Arunbhai Sampatbhai Vasava on 20 April, 2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1130 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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Approved for Reporting Yes No
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ROYAL SUNDARAM ALLIANCE INSURANCE CO. LTD
Versus
ARUNBHAI SAMPATBHAI VASAVA & ORS.
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Appearance:
MR DAKSHESH MEHTA(2430) for the Appellant(s) No. 1
MR. RUSHANG D MEHTA(6989) for the Appellant(s) No. 1
MR JIGAR G GADHAVI(5613) for the Defendant(s) No. 2
MR MTM HAKIM(1190) for the Defendant(s) No. 1.1,1.2,1.3
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 20/04/2026
ORAL JUDGMENT
1. The present appeal is filed under section 173 of the
Motor Vehicle Act, 1988, at the instance of the insurance
company being aggrieved and dissatisfied with the judgment
and award dated 19th February 2015 passed by the learned
Motor Accident Claim Tribunal Main, Narmada at Rajpipla in
MACP number 197 of 2013. By the said judgment and award,
the Tribunal has partly allowed the claim petition preferred by
the original claimants under Section 166 of the Act, 1988
holding them entitled to seek recovery of a sum of
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Rs.8,23,000/- from the original opponents jointly and
severally with interest at the rate of 9% from the date of filing
of the claim petition till its actual realization, with
proportionate costs.
2. Considering the submissions made by the learned
advocate appearing for the appellant -Insurance Company and
the grounds raised in the appeal memo, this Court vide order
dated 6th July 2015 has admitted the appeal. In the interim
application for stay, this Court had directed the applicant
Insurance Company to deposit the entire award amount with
the concerned Tribunal and had issued further directions for
the release and disbursement of 20% of such deposited
amount in favour of the original claimants and the remaining
80% of the amount was directed to be invested in a long-term
fixed deposit with any nationalized bank in the name of
claimants initially for a period of 3 years, which was further
directed to be renewed from time to time till the final disposal
of the captioned appeal.
3. Learned advocate Mr. MTM Hakim has entered
appearance on behalf of the original claimants- respondent
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nos.1.1 to 1.3 and Mr. Jigar G Gadhvi, learned advocate, has
entered appearance on behalf of respondent no.2- owner of
the insured vehicle. With the able assistance of the learned
advocate on record, the appeal was finally heard.
4. Learned advocate Mr. Rushang Mehta appearing for the
appellant Insurance Company has vehemently assailed the
impugned judgment and award mainly disputing the liability
of the Insurance Company to pay any amount of compensation
to the claimants. The attention of this Court was invited to the
manner in which the accident was reported. Learned advocate
had submitted that in fact the deceased was an unauthorized
passenger on the insured vehicle. It was also contended that
the driver of the insured vehicle has also unfortunately
succumbed to the injuries sustained by him in the said
accident. He was not holding any valid and effective driving
license at the time of the accident. The attention of this Court
was invited to the written statement filed by the Insurance
Company at Exhibit.28. It was further submitted that
considering the nature of the vehicle involved which is a
tractor, even the RC book produced on record clearly
suggests that except for the driver no person was permitted to
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travel on the tractor. Despite aforesaid defence being raised,
the Tribunal has failed to frame a specific issue as regards the
liability of the Insurance Company. It was further submitted
that in the absence of any issue being framed, the Tribunal
has committed a grave error in dealing with the aforesaid
aspect. The attention of this Court was invited to the findings
and reasons assigned by the Tribunal in this regard. It was
submitted that the Tribunal has treated it as a case of a
gratuitous passenger and by following the principles laid
down by the Madhya Pradesh High Court in the case of New
India Assurance Company Limited versus Girvarnath
and others reported in 2007 ACJ 613, the Tribunal has
treated the deceased as a third party and has fixed the
liability of the Insurance Company to pay the amount of
compensation. In this regard, the learned advocate has placed
reliance upon the unreported judgment of the learned Single
Judge of this Court in the case of United India Insurance
Company Limited versus Vikramsinh Jadhav and others
rendered in First Appeal No.3622 of 2007 dated 7 th August
2023. Inviting my attention to the relevant observations, the
learned advocate has submitted that the Court after
considering the ratio laid down by the Hon'ble Supreme Court
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in the case of Oriental Insurance Company Limited versus
Brij Mohan reported in AIR 2007 SC 1971 has held that no
statutory liability is enjoined on the owner of the vehicle to
get the vehicle insured for any passenger traveling in a goods
vehicle and hence the Insurance Company would not be liable
thereof. Learned advocate has therefore urged this Court to
allow the appeal and to exonerate the Insurance Company
from its liability to pay compensation to the original
claimants.
5. Per contra, learned advocate Mr. Kaival Patel appearing
for respondent No.2 -the owner of the insured vehicle, has
forcefully argued that the Tribunal has rightly held the
appellant- Insurance Company jointly and severally liable to
pay the amount of compensation in the facts of the case and
the evidence brought on record. Learned advocate had mainly
relied upon the findings and reasons assigned by the Tribunal
in this regard. Reliance was placed on the decision of the
learned Single Judge of this Court in the case of Kalavatiben
Motisingh Divera versus Kamalsingh Chandrasingh
Parmar reported in 2023 0 AIJEL HC 247510. The attention
of this Court was invited to the relevant observations. It was
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submitted that even in a case considering the deceased who
was in fact a laborer on the tractor, the Court has referred to
Rule 122 of the Gujarat Motor Vehicle Rules, 1989 and has
held that the said rule specifies that no person can be carried
in the goods carriage, provided the owner or the hirer or bona
fide employee of the owner or hirer of the vehicle, carried free
of charge. The Court has therefore held that the Rule permits
a bona fide employee of the owner to travel on the goods
carriage. The Court has further considered the second proviso
to Rule 122 to hold that the seating capacity would have no
bearing to the policy placed on record as the Rule permits the
person to travel in a goods vehicle. Applying the aforesaid
principles in the facts of the case, learned advocate has
submitted that admittedly the deceased was traveling as a
laborer on the tractor which was used for agriculture
purposes. Further reliance was placed on the decision of the
learned Single Judge of this Court in the case of United India
Insurance Company Limited versus Kalabhai Bachubhai
Parmar reported in 2014 (0) AIJEL HC 231812 to contend
that even in a case where the claimant was traveling on a
tractor as a laborer, considering the fact that the tractor had
turned turtle because of the rash and negligent driving of the
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driver of the tractor, the Court has treated the case of the
claimant in the position of a third party who has been injured
due to rash and negligent driving on the part of the driver of
the tractor. Considering the aforesaid principles in the facts of
the case which are almost similar, learned advocate has urged
this Court to treat the deceased as a third party. In view of the
undisputed fact that the policy was in force as on the date of
accident, no error can be found with the approach of the
Tribunal in holding the appellant- Insurance Company liable
towards payment of compensation to the claimants. He has
therefore, urged this Court to dismiss the present First
Appeal.
6. Mr. Hakim learned advocate appearing for the
respondent nos. 1.1 to 1.3 - original owners has vehemently
objected to the aforesaid submissions made by the learned
advocate for the appellant - Insurance Company. It was
submitted that on the aspect of holding of effective and valid
driving is concerned, learned advocate has submitted that
considering the evidence brought on record, the Tribunal has
rightly placed onus on the appellant- Insurance Company to
establish their defence beyond reasonable doubt. In absence
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of any RTO Officer being examined as witness or any
documentary evidence supporting their case of absence of
driving licence at the time accident, the Tribunal has rightly
not entertain their defence. It was further submitted that
deceased was engaged as labourer as can be gathered from
the evidence of the claimants. The nature of vehicle involved
is a tractor which was used for agricultural purpose. Keeping
in mind the aforesaid circumstances established on record,
the Tribunal has rightly treated the case of the deceased as
third party for the purpose of fixing the liability of Insurance
Company. Alternatively, learned advocate has submitted that
the claimant may not suffer because of the inter-se dispute
between the insurer and the Insurance Company as regards
the existence of a valid and effective driving license at the
time of the accident. He has therefore urged to pass
appropriate directions of pay and recovery in the facts of the
case.
7. I have heard learned advocates appearing for the
respective parties and I have also carefully considered their
arguments in light of the findings and reasons assigned by the
Tribunal. I have also perused the relevant evidence on record
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in light of the judgments relied upon by the learned advocate
appearing for respondent No.2 -owner of the insured vehicle.
The short question which arises for consideration of this Court
in the present appeal is as to whether the Tribunal committed
any error in the facts of the case and the evidence on record,
in holding the appellant- Insurance Company liable to pay the
amount of compensation, while adjudicating the claim petition
under section 166 of the Motor Vehicle Act, 1988?
8. At the outset, it would be appropriate to take into
consideration the manner in which the accident had taken
place. Admittedly, the deceased was sitting on the mudguard
of the tractor. Because of the rash and negligent driving on
the part of the driver of the tractor, the tractor had turned
turtle; as a result, the deceased had sustained grievous
injuries and had succumbed to death. The original claimants
are the heirs and legal representatives of the deceased who
have preferred the claim petition under Section 166 of the
Motor Vehicle Act, 1988. Considering the overall evidence on
record, the Tribunal while examining the issue of negligence
has found the driver of the tractor solely negligent towards
the occurrence of the accident. There is no dispute to the fact
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that the appellant Insurance Company had issued a policy in
respect of the insured vehicle which was in force at the time
of the accident. However, the appellant- Insurance Company
has disputed their liability mainly on the ground of breach of
vital terms and conditions of the policy. As regards the issue
of non holding of valid and effective driving licence is
concerned, as rightly submitted by the learned advocate for
the original claimants, the Tribunal has rightly appreciated
the evidence on record. Considering the principle laid down
by the Hon'ble Supreme Court in the case of National
Insurance Company Limited versus Swaran Singh and
others reported in (2004) 3 SCC 297, it has been held that
the insurer is entitled to raise defence in a claim petition filed
under Section 163 A or 166 of the Act, inter alia in terms of
Section 149(2)(a)(ii) of the said Act. This includes the issue of
an invalid driving license of the driver. However, the same has
to be proved to have been committed by the insured for
avoiding liability by the insurer. Thus, the burden is placed
upon the insurer to prove that the insured was guilty of
negligence and had failed to exercise reasonable care in the
matter of fulfilling the condition of the policy regarding the
use of vehicles by a duly licensed driver. The Court has
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further observed that the Insurance Company is not only
required to establish the aforesaid defenses raised in the
proceeding but is also required to establish "breach" on the
part of the owner of the vehicle. The burden of proof
wherefore would be on them. Thus, in light of the aforesaid
principles, no error can be found with the approach of the
Tribunal in arriving at a conclusion that the Insurance
Company had failed to establish their defence as well as have
also failed to establish the breach on the part of the owner of
the vehicle which had contributed to the occurrence of the
accident.
9. This brings me to the second contention raised by the
learned advocate for the appellant-Insurance Company
disputing their liability on the ground that the deceased was
an unauthorized passenger on the insured vehicle. On careful
consideration of the RC book produced on record, it is evident
that the nature of the vehicle involved is a tractor. The seating
capacity indicated in the RC book is of one person. Thus, it
has been established on record that there was no permission
of any other person to be carried on the tractor. However, as
rightly pointed out by the learned advocate for respondent
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no.2- owner of the insured vehicle, in view of Rule 122 of the
Motor Vehicle Rules, the deceased being a labourer can be
treated as a bona-fide employee and therefore shall be
entitled to the benefit of the second proviso to Rule 122. The
second proviso as interpreted by the learned Single Judge of
this Court in the case of Kalavatiben Motisingh Divera
(supra) deals with the permissibility of the total number of
persons to be carried in the vehicle as noted. Further, the
proviso to the sub-rule shows that it would not be applicable
in cases where integral seating arrangements providing a
reasonable comfortable seating space for each person have
been made in the goods carriage for more than the number
specified in the second proviso. As can be gathered from the
evidence in the nature of FIR at Exh. 34 and the deposition of
the claimant at Exhibit 24, the deceased was sitting on the
mudguard of the tractor and was engaged as a labourer.
10. At this stage, it would be appropriate to note that the
learned advocate for the appellant Insurance Company has
objected to the findings of the Tribunal by treating it as case
of gratuitous passenger. It would be appropriate to consider
the judgment of the learned Single Judge of this Court in the
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case of Kalabhai Bachubhai Parmar(supra) where the
victim was occupant of tractor as a labourer who has
sustained injuries due to rash and negligent driving on the
part of the driver of the tractor. The Tribunal has partly
allowed the claim application holding that there was violation
of terms of the agreement by allowing gratuitous passengers
to travel however, had issue directions against the insurer to
pay the amount and then to recover the same from the owner
of the vehicle. The Insurance Company being aggrieved by the
aforesaid directions has approached in appeal before this
Court. The Court upon appreciation of evidence on record has
held that though entry of claimant on the vehicle was in
violation of terms of the policy, however the moment it has
transpired on record that due to negligent driving on the part
of the driver of the tractor, the claimants had fallen down on
the street resulting into injuries, he is position was to be
treated as "third party". Applying the aforesaid principles in
the facts of the case which are almost similar, no error can be
found with the approach of the Tribunal in holding the
appellant- Insurance Company liable to pay amount of
compensation.
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11. For the foregoing reasons, the appeal being without any
merits, is not entertained and is hereby dismissed. In view of
the dismissal of the appeal, the amount deposited by the
appellant Insurance Company with the concerned Tribunal is
hereby directed to be released and disbursed in favour of the
original claimants in terms of the impugned judgment and
award. Let the aforesaid exercise be undertaken by the
Tribunal within a period of six weeks from the date of receipt
of a certified copy of this order.
12. With these observations, the appeal stands dismissed of.
The record and proceedings are directed to be sent back
forthwith to the concerned Tribunal with the writ of this
judgment.
sd/-
(NISHA M. THAKORE,J)
RATHOD KAUSHIKSINH
