[Cites 24, Cited by 0]
Gujarat High Court
New India Asurance Co Ltd vs Bhavuben Mithabhai Makwana on 29 April, 2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1038 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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NEW INDIA ASURANCE CO LTD
Versus
BHAVUBEN MITHABHAI MAKWANA & ORS.
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Appearance:
MS DIMPLE A THAKER(6838) for the Appellant(s) No. 1
DS AFF.NOT FILED (R) for the Defendant(s) No. 5
MR HENIL M SHAH(10677) for the Defendant(s) No. 1,2,3,4
MR VISHAL C MEHTA(6152) for the Defendant(s) No. 7
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 29/04/2026
ORAL JUDGMENT
1. The present appeal is filed at the instance of the
Insurance Company under Section 173 of the Motor
Vehicles Act, 1988 (for short "the Act"), being aggrieved and
dissatisfied with the judgment and award dated 05.02.2015
passed by learned Motor Accident Claims Tribunal (Main),
Bhavnagar in MACP No. 210 of 2007.
2. By the said judgment and award the Tribunal has
allowed the claim petition preferred by the original
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claimants under Section 166 of the Act, 1988, holding them
entitled to recover amount of Rs. 9,54,000/- as
compensation, with interest at the rate of 9% per annum
from the date of claim petition till its actual realisation and
cost, from the original opponents jointly and severally.
3. Considering the grounds raised in the appeal and the
submissions made by learned advocate for the appellant-
Insurance Company, this Court vide order dated
10.06.2015, had admitted the appeal. In the interim
application for stay, appropriate directions were issued to
deposit the entire amount of compensation to the appellant-
Insurance Company. Subsequently vide order dated
28.07.2015, considering the fact that the entire awarded
amount has been deposited with the concerned Tribunal,
appropriate directions were issued to deposit the award
amount in the nationalised bank in a fixed deposit scheme.
The Nazir was directed to keep the custody of the
certificates with him and the fixed deposit was directed to be
renewed with cumulative interest in the disposal of the
appeal. Thus, the original-claimants have not been
permitted to withdraw the award amount which is lying in
the fixed deposit with the concerned bank.
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4. The record suggest that the notice of admission of appeal
has been duly served upon the respondents except
respondent No. 5. Respondents No. 1 to 4 and respondent
No. 7 are represented through their respective lawyers. With
the able assistance of learned advocate on record and
considering the fact that the contesting respondent have
been served the notice, the appeal was peremptorily heard
finally.
ARGUMENTS ON BEHALF OF APPELLANT :
5. Learned advocate Ms. Dimple Thaker appearing for the
appellant-Insurance Company has vehemently assailed the
impugned judgment and award passed by the Tribunal by
raising the issue of liability fastened on the appellant-
insurance company to pay the entire amount of
compensation.
5.1 It was submitted that the Tribunal committed error in
holding the appellant-Insurance Company liable despite the
undisputed facts; that the insured vehicle was a goods
carriage vehicle and considering the sitting capacity of the
insured vehicle as evident from the R.C book produced on
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record and the permit issued by the competent authority
about use of vehicle. It has been established by the
appellant-insurance company that the deceased was
traveling as an unauthorised passenger in a goods carriage
vehicle.
5.2 She has assailed the findings and reasons assigned by
the Tribunal, on the ground that the panchnama produced
on record is silent about the goods (sweet potatoes) being
found at the scene of accident. Despite aforesaid evidence
on record the Tribunal has given undue weightage to the
oral evidence of the claimant to arrive at the conclusion that
the deceased was traveling with the goods in the goods
vehicle. Learned advocate had placed heavy reliance upon
the panchnama produced on record at Exh. 44.
5.3 She has further relied upon the decision of the Hon'ble
Supreme Court in the case of National Insurance
Company Limited Vs. Bommithi Subhayamma reported
in 2005 (12) SCC 243. Inviting my attention to the facts of
the case, learned advocate has submitted that the deceased
was traveling in the lorry as a gratuitous passenger.
Considering the fact that the insured vehicle was a goods
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vehicle, the Hon'ble Supreme Court had held that the
Insurance company cannot be held liable for the payment of
any compensation to gratuitous passengers traveling in a
goods vehicle. Learned advocate has invited my attention to
the judgments referred to and relied upon more particularly
the case of New India Assurance Co. Ltd. Vs Asha Rani,
reported in 2003 ACJ 1 and the case of National
Insurance Co. Ltd. Vs. Baljit Kaur, reported in 2004 ACJ
428. Referring to the relevant observations, she submitted
that the Court having noted the effect of amendment in
Section 147 of the Motor Vehicle Act, 1988, pursuant to the
Motor Vehicle Amendment, 1994, had opined that the
provision of Section 147 ad existing prior to amendment in
respect to persons other than the owner of the goods or any
authorised representative continues. She has therefore,
submitted that it is settled that the insurance company in
respect of goods vehicle is not required to extend insurance
coverage in respect of the passengers like gratuitous
passengers who were neither contemplated at the time of
contract of insurance nor any premium was paid to the
extent of benefit of insurance to such category of people.
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5.4. At this stage, learned advocate had invited my attention
to the schedule of premium incorporated in the insurance
policy produced on record. Referring to the schedule of
premium she has submitted that indisputably except for the
premium amount realized towards a third party basic and
the employee under the Employees Compensation Act, no
other additional premium has been accepted by the
appellant Insurance Company. She has, therefore,
submitted that the Tribunal committed an error in holding
the appellant insurance liable to pay the amount of
compensation.
5.5 Reliance was placed on the decision of this Court in the
case of Oriental Insurance Company Vs. Sarojben
Ghanshyambhai Siroya reported in 2023 AIJEL-HC-
247656. In the case of New India Assurance Company
Limited Vs. Heirs of Decd. Chandulal Lakmanbhai-
Lakmanbhai Nagjibhai reported in 2024 (2) GLR 1357
and in the case of United India Insurance Company
Limited Vs. Sureshbhai Raymalbhai Halvadiya reported in
2022 (o) AIJEL HC 245029, in support of her
submissions.
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ARGUMENTS ON BEHALF OF RESPONDENT NOS. 1 TO 4 :
6. On the other hand, learned advocate Mr. Henil M. Shah,
appearing for the respondent No.1 to 4-original claimants,
have forcefully submitted that the claimants have
successfully established before the Tribunal that the
deceased was carrying goods in the nature of sweet
potatoes.
6.1 In this regard, the attention of this Court was invited to
the case pleaded by the original claimants in the claim
petition, the written statement filed by the owner of the
insured vehicle at Exh. 28, wherein he has admitted the fact
that the vehicle was hired for the purpose of transferring
sweet potatoes to the market yard and the deceased was
traveling with the said goods.
6.2 The reliance was also placed on the evidence of the
father of the deceased whose examination in chief affidavit
has been brought on record at Exh. 41. Inviting my
attention to the cross-examination of the aforesaid witness,
learned advocate has submitted that in the cross-
examination at the instance of the owner of the insured
vehicle, the said witness has reasserted the fact that his son
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was traveling in the tempo with sweet potatoes and were on
their way to the market yard. He has also admitted that the
deceased was engaged to take care of the goods. The tempo
was hired. In the cross-examination at the instance of the
appellant Insurance company, learned advocate has
submitted that no contradictory facts have been brought on
record so as to dislodge the case of the claimant of the
deceased being traveling with the goods. The attention of the
Court was also invited to the FIR produced on record at
Exh. 43. It was submitted that the FIR was registered
immediately after the occurrence of the accident on the next
day, that is on 5th February 2007. In the said FIR lodged at
the instance of the owner of the insured vehicle, it has been
stated that the deceased was traveling with the goods and
they were on their way to the market yard.
6.3 The reliance was also placed on the evidence of the
witness Rameshbhai Jairam Baraiya, whose examination in
chief has been recorded at Exh. 53. Referring to his
deposition the learned advocate has submitted that the said
witness who has in partnership taken crop of the sweet
potatoes and was in a way owner of the said goods. He has
categorically deposed that the deceased was handed over
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the goods so as to deliver the same to Bhavnagar market
yard. As against his deposition , in his cross-examination at
the instance of the owner of the insured vehicle, he has re-
asserted the aforesaid facts. Despite the opportunity being
extended to the counsel for the appellant insurance
company, no contradictory facts have been brought on
record as against the aforesaid evidence of the said witness.
6.4 With such comprehensive material being brought on
record supporting the case of the claimants about deceased
traveling in the insured vehicle as the authorized
representative of the owner of the goods merely because the
panchnama is silent on the aspect of the goods being found
at the time of the accident, the Tribunal has rightly not
given any weightage so as to come to a conclusion that the
Insurance company had proved its defense to exonerate him
from its liability to pay any compensation.
6.5 In absence of any evidence or any independent witness
being examined by the appellant insurance company before
the Tribunal rebutting the evidence of the claimant, the
Tribunal has rightly arrived at a conclusion that the
appellant Insurance company has failed to prove its defense
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and has therefore not exonerated appellant insurance
company from its liability to pay the compensation. As
regards the breach of terms and conditions of the policy,
learned advocate has submitted that in absence of defence
of unauthorized/gratuitous passenger being established on
record, there is no question of considering the breach of
terms and conditions of the policy.
6.6. Learned advocate has also placed reliance upon the
judgment of the learned Single Judge of this Court in the
case of Oriental Insurance Company Vs. Shardaben Wd/o
Hasmukhbhai Vinubhai Parmar reported in 2024 (0)
AIJEL-HC-249438. The attention of this Court was invited
to the fact that the deceased was travelling as a fare paying
passenger in a tempo. The appellant insurance company
had filed the appeal on the ground that the premium for
third party risk was taken, however, they had disputed the
liability on the ground that the risk was confined to third
party and was not for the purpose of covering the risk of any
passenger traveling in the goods vehicle. The learned Single
Judge upon appreciation of the evidence on record, more
particularly the evidence of the widow of the deceased who
had asserted in cross examination that the deceased was
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sitting in the tempo along with a bunch of vegetables. The
aforesaid admission on the part of the witness was not
further challenged by the Insurance company in her cross-
examination. The learned Single Judge, upon evaluation of
the evidence of the claimant was satisfied that the deceased
was traveling along with the goods in a tempo, as against
that, the insurance company had failed to lead any further
evidence or to examine any independent witness to establish
their defence. The Court noted that the Insurance company
did not lead any evidence except the copy of the leaf of
policy. The Insurance Company neither did not examine the
driver of the tempo who could have disclosed the correct
facts. With such evidence on record, the Single judge had
drawn adverse inference and had upheld the order passed
by the Tribunal holding the appellant Insurance Company
liable to pay the amount of compensation.
6.7 Learned advocate at this stage had invited my attention
to Section 147 of the Motor Vehicle Act, 1988. It was
submitted that in view of (i) (b) of sub-section (1) of Section
147 the Insurance company is statutorily liable to
compensate. It was submitted that the requirement of
policies as prescribed under the aforesaid provision,
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mandates the insurance policy to cover the liability of the
death or bodily injury of any person including owner of the
goods or his authorised representative carried in the vehicle.
Thus, according to the learned advocate, in view of the
statutory requirement once the insurance company has
accepted the premium and issued the policy, the insurance
company is bound to indemnify the owner of the insured
vehicle. With regard to the submissions made by learned
advocate for the appellant insurance company about the
schedule of premium indicated in the policy, he had
submitted that in view of the aforesaid statutory provisions,
once the premium amount is accepted towards third party
basis, it is to be inferred that it fulfills the statutory
requirement. He has therefore submitted that the Tribunal
has rightly held the appellant insurance company liable to
pay the amount of compensation.
6.8 The reliance was placed on the decision of a learned
Single judge of this Court in the case of Gaurishankar
Baldevbhai Shrimali Vs. Babubhai Madhavbhai Prajapati
reported in 2018 AIJEL HC 239939. The reliance was
placed on the relevant observations of the learned Single
Judge as recorded in paras 7, 8, 9, 10 and 64.
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6.9 As regards the submissions made about the breach
of permit, the learned advocate had invited my attention
to Rule 122 of the Gujarat Motor Vehicle Rules, 1989
which prohibits the carriage of persons other than the
driver in the goods carriage vehicle. While interpreting
the aforesaid rules, learned advocate has submitted
that the first proviso carves out the exceptional
categories of persons who can be permitted to travel in
a goods carriage vehicle. According to him the case of
the deceased would fall in the category of bonafide
employee of the hirer of the vehicle. Inviting my
attention to the second proviso to the aforesaid rules, he
had placed reliance upon the judgment of the learned
Single judge of this Court in the case of Reliance
General Insurance Company Ltd. Vs. Bhagvanbhai
Kamabhai Ulva reported in 2023 (2) GLR 1106. The
reliance was placed on the relevant observations of the
learned Single Judge recorded in paras 5.3 to 5.5.
According to learned advocate in view of the aforesaid
rule 122 of Rules 1989, there is no breach of the permit
and therefore, the prayer made by the appellant
Insurance company of exoneration is required to be
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rejected.
6.10. Alternatively, learned advocate had submitted that
even accepting the case of the appellant Insurance company
of breach of terms and conditions of the policy, considering
the entire evidence on record, it is certain that the
appellant-Insurance company has not established that such
fundamental breach had contributed to the occurrence
accident. Considering the judgment of the Hon'ble Supreme
Court in the case of National Insurance Company Ltd. Vs.
Swaran Singh reported in 2004(0) AIJEL SC 19396, the
Tribunal has arrived at a conclusion that the appellant-
Insurance company has failed to establish the fundamental
breach which has contributed to the occurrence of accident.
He has therefore urged this Court to dismiss the appeal and
to uphold the impugned judgment and award of the
Tribunal.
ARGUMENTS ON BEHALF OF RESPONDENT NO.7 :
7. Mr. Vishal Mehta learned advocate has appeared on
behalf of respondent No. 7-owner of the insured vehicle. He
has mainly relied upon the findings and reasons assigned
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by the Tribunal and has supported the case of the original
claimants. At the outset, he has invited my attention to the
written statement filed by the respondent No. 7 at Exh. 28.
He has fairly stated that the insured has not entered the
witness box, however, he has further clarified that the
appellant Insurance company for the reasons known to
them had chosen not to call him as witness. Learned
advocate had placed reliance upon Section 147 of the Act,
1988 and had pointed out that considering the second
proviso reflected after clause (b) of sub section (1) suggest
that the policy is not required in respect of the death arising
in the course of employment of the employee of a person
insured by the policy or in respect of the liability arising
under the Workman Compensation Act, 1923 who has been
engaged for the purpose of driving the vehicle or in case of
public service vehicle, being engaged as conductor of the
vehicle or for gratuitous passengers or unauthorized
passengers if it is a goods carriage. Referring to the
aforesaid second proviso, learned advocate had submitted
that the said proviso carves out an exception in cases where
the Insurance company is not statutorily required to extend
insurance coverage. Bearing in mind the aforesaid aspect, if
the policy produced on record is read, it can be inferred that
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the policy covers the risk of the person traveling in the
goods vehicle with the goods. In order to substantiate his
submissions, learned advocate has also placed reliance
upon Sub Section 1 of Section 147 of the Act, more
particularly (i) of clause (b) which mandates the Insurance
company to fulfill the requirement of policies, including
extending the risk coverage in case of any person, including
the owner of the goods or his authorised representative
carried in the vehicle. By placing reliance upon the
aforesaid provision, learned advocate had submitted that
considering the fact that the schedule indicates third party
basic risk being covered, this Court can certainly rule out
that the insurance company had undertaken to indemnify
the risk coverage of the authorised representative of the
goods carried in the vehicle. As regards the issue of seating
capacity, learned advocate has also placed reliance upon
Rule 122 of the Gujarat Motor Vehicles Rules, 1989 and has
supported the arguments advanced by learned advocate for
the original claimants. Learned advocate, has therefore,
submitted that in absence of any evidence or any
independent witness being examined by the appellant
Insurance company substantiating their defence raised by
them disputing their liability; both on the count of breach
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of the permit and the breach of the terms and conditions of
the policy, no error can be found with the conclusion drawn
by the Tribunal holding the appellant insurance company
liable to pay the entire amount of compensation. He has
therefore urged this Court to dismiss the appeal.
ANALYSIS :
8. Heard learned advocates appearing for the respective
parties. I have carefully considered their arguments in light
of the findings and reasons assigned by the Tribunal. I
have carefully re-appreciated the entire evidence on record
in light of the various authorities relied upon by learned
advocates on record.
9. The short question which arises for consideration of this
Court in the present appeal is as to whether the Tribunal
committed any error in facts or in law in holding the
appellant Insurance company liable to pay amount of
compensation so determined while adjudicating the claim
petition preferred under Section 166 of the Act, 1988, in
light of the facts of the case and the evidence brought on
record?
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10. Before adverting to the merits of the appeal, it would be
appropriate to note that the foundational facts as regards
maintainability of the claim petition vis-a-vis the deceased
having succumbed to fatal injuries caused in the motor
vehicle accident, the issue of negligence as being answered
by the Tribunal holding the driver of both the vehicles
involved in the accident equally negligent towards the
occurrence of accident, in absence of any challenge being
made at the instance of either of the parties on record, the
same has attained finality.
11. Having noted so, if one looks at the findings and reasons
assigned by the Tribunal on the issue of liability is
concerned, the Tribunal has mainly taken into
consideration the driving license produced on record at
mark 7/17. It is required to be noted that the issue of not
holding a valid and effective driving license by the driver of
the offending tempo was one of the defence raised by the
present appellant insurance company before the Tribunal as
evident from their written statement. However, the Tribunal
having taken note of the R.C book produced on record at
mark 7/18 as well as the driving license produced on
record at mark 7/17, had arrived at a finding that the three
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wheeled tempo was belonging to the category of transport
vehicle, as against that the driver of the offending vehicle
was holding license to drive non-transport vehicle. The
Tribunal has therefore, in absence of any endorsement in
the license to drive transport vehicles, had accepted the
defense raised by the opponent No. 3-Insurance Company
about not holding a valid and effective driving license at the
time of accident. However, the Tribunal has followed the
principle laid down by the Hon'ble Supreme Court in the
case of Swaran Singh (supra) and has observed that the
opponent No. 3 Insurance Company has failed to establish
further that the fundamental breach had led to the
occurrence of accident. The opponent No.3-Insurance
Company has failed to establish that because of the non-
holding of the valid and effective driving license the same
had led to the occurrence of accident. The Tribunal also
took note of the fact that the driver was experienced about
driving for a long time.
12. Having answered the aforesaid issue of absence of
driving license, the Tribunal has further examined the issue
of unauthorised passenger. The Tribunal appreciating R.C
book produced on record has found the three wheeler tempo
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belongs to the category of the goods vehicle. The FIR and the
examination-in-chief affidavit of the father of the deceased
has also been closely evaluated by the Tribunal and has
arrived at a finding that the deceased was traveling with the
goods as owner of the goods. The Tribunal has further
sought corroboration of the aforesaid evidence from the
evidence of the independent witness namely Rajeshbhai
Baraiya, examined by the claimant and his evidence being
recorded at Exh. 53. Upon overall appreciation of the
evidence of the said witness, the Tribunal has believed the
said witness and has arrived at a finding that the deceased
was traveling in a three wheeled tempo along with the
goods. With such evidence on record, the Tribunal, has
taken note of the fact that the opponent No. 3 Insurance
Company has failed to plead any further evidence or
independent witness rebutting the aforesaid witness of the
claimant. The Tribunal has therefore, arrived at a
conclusion that the opponent No. 3 Insurance Company has
failed to prove their defense as regards unauthorised
passenger vis a vis their liability to pay the amount of
compensation.
13. On the issue of seating capacity, the Tribunal has
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perused the R.C.book of the insured vehicle produced on
record at Exh. 51. The Tribunal has thus observed that even
if it is to be believed that one or more persons were traveling
in the said vehicle then also the Insurance company has
failed to prove the fundamental breach. The Tribunal has,
therefore, not accepted the defense raised by the opponent
No. 3 Insurance Company and has thereby held it liable to
pay the entire amount of compensation.
14. Having appreciated the aforesaid findings and reasons
assigned by the Tribunal, the core contention which has
been raised in the present appeal at the instance of the
appellant Insurance assailing the said findings and reasons
is on the ground that the panchnama does not reveal the
presence. It has been vehemently submitted that the
Tribunal has committed serious error in giving due
weightage to the oral evidence led by the claimant for the
purpose of extending them the benefit of insurance
coverage, by treating case of deceased as being the owner of
goods.
14.1 In order to appreciate the aforesaid argument of the
learned advocate for the appellant insurance company, I
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have carefully appreciated the evidence of the father of the
deceased whose examination in chief affidavit has been
recorded at Exh. 41. The said witness has deposed on oath
that the deceased was traveling in the insured vehicle with
sweet potatoes which he intended to sell in the Bhavnagar
market yard. He has also deposed that his son was engaged
to take care of the said goods by the owner of the goods. In
his deposition he has also made reference to the fact that
the deceased had in partnership taken a crop of sweet
potatoes with one Raghuvanshi Ramubha Gohil and
Rameshbhai Jairambha Baraiya. As against the aforesaid
deposition, if one looks at his cross-examination , he has
reasserted the aforesaid facts when being cross-examined at
the instance of the owner of the vehicle (opponent No.3). In
the cross-examination at the instance of the appellant
Insurance company, the said witness had affirmed that he
is holding agricultural land admeasuring 10 bighas. He has
fairly accepted the fact that no documentary evidence in this
regard has been produced on record. He has categorically
denied the suggestion put forward by the counsel for the
appellant insurance company that the owner of the tempo is
related to him. He has reasserted the fact that he was aware
that the tempo was engaged for loading goods. He has also
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asserted that the tempo was engaged by his son, however,
he has said that he was not aware as to what amount the
tempo was engaged. As regards the recovery of the goods
(sweet potatoes), he has fairly submitted that the same has
not been recovered after the accident nor he has applied for
the same. He has also admitted the fact that he has not
produced any document to establish the ownership of the
said goods.
14.2 The claimant has also examined the witness who has
been mentioned by the father of the deceased in his
evidence namely Rameshbhai Jairambhai Baraiya. The
examination in chief affidavit of the said witness has been
produced on record at Exh. 53 who has reiterated the fact
that the sweet potatoes were loaded from the field, which
were intended to be sold in the Bhavnagar market yard. On
the fateful day of the accident the deceased had started his
journey with the goods to reach the Bhavnagar market yard.
As against the aforesaid evidence of the said witness, in
cross-examination at the instance of the owner of the goods
(opponent No.2), he has reaffirmed the aforesaid fact. In the
cross- examination at the instance of opponent No. 3
Insurance company, it has transpired that the said witness
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has agreed to the suggestion that no document with regard
to the details of the agricultural land has been produced on
record.
15. Having appreciated the evidence of the aforesaid two
witnesses, if one looks at the pleadings in the claim petition,
the claimants have at the inception stated that the deceased
was traveling with the sweet potatoes in the goods vehicle by
engaging said vehicle on rent. The FIR which is produced on
record was registered on 5.02.2007, which is immediately
after the date of the accident having taken place on
4.2.2007 in the late night. Having appreciated the evidence
on record, it is required to be noted that except for the
panchnama, which is silent on the presence of the goods at
the site of the accident, no other evidence has been led by
the appellant Insurance company nor any independent
witness has been examined by the appellant Insurance
company. If one looks at the provision more particularly
Section 147 of the Motor Vehicle Act, 1988, Chapter XI of
the Motor Vehicle Act, 1988, provides for compulsory
insurance of vehicles against 'any persons', including the
owner of the goods or his authorized representative ferried
in the vehicle. The core object for extending the risk
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coverage is part of social welfare legislation, to extend relief
by compensation to victims of accidents caused by use of
motor vehicles. On the other hand the insurer is entitled to
raise defence in a claim petition filed under Section 166 of
the Motor Vehicle Act, 1988, inter alia, in terms of Section
149(2)(a)(b) of the said Act. This mainly includes the breach
of policy conditions for example disqualification of the driver
or invalid driving license of the driver as contained in sub
section (2)(a) (b) of Section 149. The burden of which lies
upon the insurance company to prove beyond reasonable
doubt for avoiding his liability. The Hon'ble Supreme Court
in the case of Swaran Singh (supra), in para 102, while
recording the summary of findings on the various issues
has observed that mere absence of license, fake or invalid
driving license 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.
In order to avoid its liability towards the insured, the
insurer has to prove that insured was guilty of negligence
and had failed to exercise reasonable care in the matter of
fulfilling the conditions of policy regarding use of vehicle. It
is also held that the Insurance company is not only required
to plead the defences available but it is also required to
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establish 'breach' on the part of the owner of the vehicle, the
burden of proof would be on them. On the other hand, the
discretion is given to the Courts to appreciate the evidence
on record so as to find out as to how the said burden stands
discharged in the facts and circumstance of each case. The
Tribunals in interpreting the policy conditions are required
to consider and apply the rule of 'main purpose' and
'concept of fundamental breach' before allowing the
defences available to the insured under section 149(2) of the
Act.
16. Considering the aforesaid principles in the facts of the
case, having appreciated entire evidence on record, in my
view no error can be found with the findings of the Tribunal
that the insurance company has failed to discharge its
burden by establishing its defense by leading evidence or by
examining independent witness so as to exonerate from its
liability to pay any amount of compensation. Undoubtedly,
the insured vehicle is a goods carriage vehicle as evident
from the R.C book produced on record. The deceased was
traveling in the said vehicle with goods. Merely because the
panchnama is silent on the aforesaid aspect, that itself is
not sufficient to rebut the case put forward by the claimant
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which has been established by examining the witnesses as
recorded earlier. There is nothing on record to contradict the
case put forward by the claimant about the deceased
traveling in the said vehicle with goods. There is nothing in
record to establish that the deceased was a gratuitous
passenger in a goods vehicle. On close evaluation of the
evidence of the father of the deceased and the witness
examined by the claimant, the tribunal has rightly
evaluated their evidence in its true perspective. It is a
settled principle under Evidence law that if the credibility of
the witness is found without any blemish, the same can be
given due weightage in absence of any corroboration
through documentary evidence. In my view, the Tribunal
has rightly drawn the conclusion that the deceased was
traveling as an authorized representative of the goods.
17. In such circumstances, in view of the amendment
brought in the provision of Section 147 of the Act, the
insurance company was under obligation to extend the
coverage of risk. If one looks at the content of the policy
produced on record, it is stated to be goods carrying
commercial vehicle (open) policy liability only. The net
premium of amount of Rs. 925/- has been paid towards risk
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coverage of the insured vehicle. The schedule of premium
further suggests that the said gross premium of Rs. 925
includes the third party basic and workman compensation
to employees. If one looks at the limitation as to use of
insured vehicle is concerned, the said policy covers use in
context with the permit within the meaning of provisions of
the Act, 1988 or in case of carriage falling under Sub
Section 3 of Section 66 of the Act, 1988. The insurance
company has further clarified that the policy does not
cover : (a) use for organizing racing , (b) pace making, (c) the
reliability trails and clause (d) speed testing. Lastly, the
insured company has agreed and has certified that the
policy to which the certificate relates as well as the
certificate of insurance are issued is in accordance with the
provisions of Chapter X and XI of the Act, 1988. At this
stage, it would be appropriate to consider the ratio laid
down by this Court in the case of Guarishankar
Baldevbhai Shrimali (supra), wherein the Court observed :
"7. The next question is regarding the liability of the
Insurance Company with reference to the nature of policy
submitting that liability of the Insurance Company would
be different in case of different type of policy issued by
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them. Though it is certain that liability of the Insurance
Company is arising under the M.V. Act and, thereby, it is
statutory liability and though there is no separate identity
of distinguishable features of different type of policies, day
in and day out, the insurance companies are coming
forward with a different plea that either they are not liable
in view of a particular type of policy or that their liability is
limited in particular manner. One such instance is pleaded
and tried to be proved in this case also when one of the
Insurance Company has pleaded that their policy is `Act
Only Policy' and, therefore they are not liable to indemnify
the owner by payment of compensation to the occupant of
the vehicle in private car, the fact remains that practically
policy to be issued by the insurer shall be as provided
u/S.147 of the M.V. Act, 1988 wherein there is no definition
of different type of policies as pleaded by the insurer.
Section 147 is reproduced hereunder:-
"147. Requirements of policies and limits of liability: -
(1) In order to comply with the requirements of this
Chapter, a policy of insurance must be a policy which-
(a) is issued by a person who is an authorised insurer;
and
(b) insures the person or classes of persons specified in
the policy to the extent specified in sub-section (2)
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(i) against any liability which may be incurred by him in
respect of the death of or bodily a [injury to any person,
including owner of the goods or his authorised
representative carried in the vehicle] or damage to any
property of a third party caused by or arising out of the
use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger
of a public service vehicle caused by or arising out of the
use of the vehicle in a public place :
Provided that a policy shall not be required (1) to cover
liability in respect of the death, arising out of and in the
course of his employment, of the employee of a person
insured by the policy or in respect of bodily injury
sustained by such an employee arising out of and in the
course of his employment other than a liability arising
under the Workmen's Compensation Act, 1923
C/FA/521/2016 JUDGMENT in respect of the death of,
or bodily injury to, any such employee-
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle engaged as a conductor
of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability.
Explanation.-For the removal of doubts, it is hereby declared that
the death of or bodily injury to any person or damage to any
property of a third party shall be deemed to have been caused by
or to have arisen out of, the use of a vehicle in a public place
notwithstanding that the person who is dead or injured or the
property which is damaged was not in a public place at the time of
the accident, if the act or omission which led to the accident
occurred in a public place. (2) Subject to the proviso to sub-section
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(1), a policy of insurance referred to in sub-section (1) shall cover
any liability incurred in respect of any accident, up to the
following limits, namely :-
(a) save as provided in clause (b) the amount of liability
incurred;
(b) in respect of damage to any property of a third party,
a limit of rupees six thousand :
Provided that any policy of insurance issued with any
limited liability and in force, immediately before the
commencement of this Act, shall continue to be effective
for a period of four months after such commencement or
till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this
Chapter unless and until there is issued by the insurer in
favour of the person by whom the policy is effected a
C/FA/521/2016 JUDGMENT certificate of insurance in
the prescribed form and containing the prescribed
particulars of any condition subject to which the policy is
issued and of any other prescribed manner; and different
forms, particulars and matters may be prescribed in
different cases.
(4) Where a cover note issued by the insurer under the
provisions of this Chapter or the rules made thereunder
is not followed by a policy of insurance within the
prescribed time, the insurer shall, within seven days of
the expiry of the period of the validity of the cover note,
notify the fact to the registering authority in whose
records the vehicle to which the cover note relates has
been registered or to such other authority as the State
Government may prescribe.
(5) Notwithstanding anything contained in any law for
the time being in force, an insurer issuing a policy of
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insurance under this section shall be liable to indemnify
the person or classes of persons specified in the policy in
respect of any liability which the policy purports to cover
in the case of that person or those classes of persons.
[a] Substituted for the words "injury to any person" by Motor
Vehicles (Amendment) Act (54 of 1994), S. 46 (14-11-1994).
OBJECTS AND REASONS:
Clause 147 lays down the requirements of the Policies
and the limit of liability in respect of passengers and
persons other than passengers in relation to passenger
vehicles and goods carriages.-S.O.R."
8. The bare reading of the Section makes it clear that a
policy of insurance must insured the person Le owner(s)
of the vehicle against (1) any liability which may be
incurred by him in respect of the death of of bodily injury
to any person, including owner of the goods or his
authorized representative carried in the vehicle or
damage to any property of a third party caused by or
arising out of the use of the vehicle in a public place and
against (ii) the death of or bodily injury to any passenger
of a public service vehicle caused by or arising out of the
use of the vehicle in a public place.
9. While considering such provision, it is to be recollected
that by the amendment of such provision vide the
Amendment Act 54 of 1994 (w.e.f. 14.11.1994), the
words "including the owner of the goods or his
authorized representative carried in the vehicle were
inserted. Such situation arise because till such
amendment, in absence of such clarity, the insurance
companies were taking a stand that their policies do not
cover the liability to pay compensation to the owner of
the goods or his representative carried in the goods
vehicle. So far as limits of liability is concerned sub
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section (2) makes it clear that subject to the provisions of
sub section (1), a policy of insurance shall cover any
liability incurred in respect of any accident for the
amount of liability incurred except a limit of Rs.6,000/- in
respect of damage to any property of a 3rd party,
whereas, the proviso of sub section (1) confirms that the
policy shall not be required to cover liability in respect of
the death, arising out of and in the course of
employment, of the employee of a person insured i e.
owner of the policy or in respect of bodily injuries
sustained by such an employee arising out of and in the
course of his employment other than a liability arising
under the W.C. Act, 1923 or to cover any contractual
liability.
10. Therefore, when there is specific exclusion clause in
proviso to sub section (1) as referred in sub section (2),
the insurance policy must be a policy which covers the
risk in respect of the death or or bodily injuries to any
person, including owner of the goods or his authorized
representative carried in the vehicle. Thereby, when there
is no restriction or exclusion of covering the occupant of
the vehicle except the driver or may be conductor for
whom as per the proviso of policy may not cover the risk,
for rest of the persons excluding the owner being party to
the contract of insurance practically Insurance Company
is liable to pay compensation. to.indemnify the owner.
Such interpretation is quite clear and obvious when
phrase "Injury to any person is used in the section
without making any differentiation between the occupant
or nonoccupant of the vehicle, on the contrary clarifying
that even in goods vehicle if a person is travelling with
the goods, the insurance company is liable to indemnify
the insured/owner,
64.Therefore, considering the above discussion, I hold
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that the Insurance Company is certainly liable
compensate the occupant of the private vehicle
irrespective of nature of policy because there is nothing
like different type of policy in the Statute and the liability
of the Insurance Company is certainly statutory and,
therefore, they cannot escape from such liability."
18. Thus, having appreciated the aforesaid policy produced
on record, it can be inferred that once policy was issued, the
Insurance company has agreed to extend the statutory
liability incurred in view of Section 147 of the Act, 1988
which mandates the risk coverage of the owner of the goods
or his authorized representative carrying the goods in the
insured vehicle. In light of the aforesaid provision and the
evidence on record, no error can be found with the
conclusion drawn by the Tribunal holding the appellant
Insurance company liable to pay the entire amount of
compensation.
19. On the aspect of the breach of the terms and conditions
of the policy on the ground that the owner of the insured
vehicle had permitted the person other than the driver to
accompany on the goods vehicle despite one sitting capacity
permitted, as evident from the R.C book is concerned, in
view of Rule 122 of Motor Vehicle Rules 1989, the case of
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the deceased would fall in the category of the hirer of the
vehicle as well as representative of goods. Considering the
second proviso which permits the total number of persons
so carried not to be more than one in case of light motor
vehicle having less than 900kg, having appreciated the
contents of R.C book on record, in absence of any further
evidence being made by the appellant insurance company
demonstrating the aforesaid breach having attributed to the
occurrence of accident, the opponent No. 3 Insurance
company had miserably failed to prove its defense before the
Tribunal. At this stage, appropriate would be to consider the
ratio laid down by the learned Single Judge of this Court in
the case of Bhagvanbhai Kamabhai Ulva (supra), wherein
the Court has interpreted Rule 122 of Rule of 1989 as under
:
"5.3 Taking first the legal point raised by Mr. Nanavati,
learned advocate for the appellant that in view of Rule
122 of The Gujarat Motor Vehicles Rules 1989
(hereinafter referred to as 'the Rules) when a vehicle is
not having seating capacity of more than one being goods
vehicle, even passenger travelling in the said Company is
not liable to indemnify the insured needs to be examined
and for that Rule 122 of the Rules' is goods vehicle with
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goods would be in breach of conditions of the policy, and
therefore, the Insurance required to be quoted thus"
122. Carriage of persons in goods carriages
"(1) Subject to the provisions of this rule, no person shall
be carried in a goods carriage. Provided that the owner or
the hirer or a bonafide employee of the owner or the hirer
of the vehicle carried free of charge, or
a police officer in uniform traveling on duty, may be
carried in a goods carriage Provided further that the total
number of persons so carried shall not be more than-
(i) one, in case of a light motor vehicle having gross
vehicle weight less than 900 kilograms;
(ii) three, in case of any other light motor vehicle.
(iii) five, in case of any medium goods vehicle;
(iv) seven, in case of any heavy goods vehicle.
second proviso to this seating arrangements providing a
reasonably comfortable seating space for each person
has been in the goods carriage for more than the
number specified in the second proviso
(2)....
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(6) No person shall travel in a goods carriage in
contravention of the provisions of this rule."
[5.4] To substantiate his submission, he has drawn
attention of the Court to the certificate of registration Exh.
44 contending that when the seating capacity of a vehicle
registered is only one including the and gross vehicle
weight 900 kg, no other person can be carried, may be
as owner or representative owner with goods, in a goods
vehicle having capacity not more than one, and therefore,
the Company is not liable to indemnify the insured. He
laid much stress on the second proviso to s of Rule 122
and Clause (i) to contend that Rule 122 opens up with
restriction. Subject to the provisions of 'the Rules', no
person shall be carried in a goods carriage with certain
exceptions and second proviso that total number of
persons so carried shall not be more than one in case of
a vehicle having gross vehicle weight less than 900 kg,
and therefore, according to his submission, when the
seating capacity of the goods carriage involved in the
accident is only one, no person over ar driver could be
carried in it, it may be a goods vehicle, and therefore, the
Insurance Company to indemnify the insured.
[5.5] Though the said argument appears to be very
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attractive, once it is closely examined, Rule 122 of the
Rules' has nothing to do with any seating capacity of any
goods vehicle, may be three wheeler Tempo, four wheeler
or light motor vehicle. While it exempts the owner or the
hirer or a bonafide employee of the owner or the hirer of
the vehicle carried free of charge, or a police officer in
uniform traveling on duty, may be carried in a goods
carnage with a further restriction that total number of
persons so carried shall not be more than one in case of
light motor vehicle having gross vehicle weight less than
900 kg. If the provision is read as it is, it talks about
excepted, persona like owner or the hirer or a bonafide
person etc to be carried in the said vehicle, and therefore,
any passenger travelling in a three wheeler goods vehicle
where its seating capacity may be one, including driver,
it includes person so carried alongwith the goods, and
therefore, Rule 122 of the Rules does not prohibit, as
argued by the learned advocate for the appellant, to
carry a person with goods in a goods vehicle where the
seating capacity is only one."
20. As regards the issue raised about sitting capacity and
breach of terms of policy, it is required to be noted that the
Hon'ble Supreme Court in the case of B.V. Nagaraju Vs.
Oriental Insurance Company Ltd., reported in (1996) 4
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SCC 648, while deciding the issue, whether the alleged
breach of carrying passenger in goods vehicle more the
number permitted in terms of the insurance policy , is so
fundamental breach, so as to exonerate the insurance
company from liability altogether?. The Court held that the
exclusion clause of the insurance policy must be read down
so as to serve the main purpose of the policy on the ground
that carrying of extra passengers could not contribute to the
accident. The Hon'ble Supreme Court also held that the
exclusion terms of the insurance policy must be read down
so as to serve the main purpose of the policy that is to
indemnify the insurer.
CONCLUSION :
21. For the foregoing reasons, this Court finds no reason to
interfere with the findings and reasons assigned by the
Tribunal holding the appellant Insurance company liable to
pay the amount of compensation.
22. Resultantly, the appeal being without merits fails. The
impugned judgment and award dated 5.2.2015, passed by
the Motor Accident Claims Tribunal, Bhavnagar in MACP
No. 210 of 2007 is hereby confirmed.
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23. In view of the dismissal of the appeal the award amount
lying in the fixed deposit with the nationalized bank is
hereby directed to be released and disbursed in favour of
the claimants. The Tribunal shall undertake such exercise
of release and disbursement of the entire awarded amount
in favour of the claimants subject to due verification and
strictly in accordance with the guidelines of the Hon'ble
Supreme Court in this regard preferably within a period of
two weeks from the date of receipt of the certified copy of
this order. The Registry is directed to send back the record
and proceedings forthwith to the concerned Tribunal with
the writ of this judgment.
24. After the pronouncement of the judgment, the learned
advocate for the appellant Insurance company has prayed
for stay of this judgment so as to enable the appellant
Insurance company to approach in appeal before the
Hon'ble Supreme Court. The aforesaid prayer of learned
advocate for the appellant Insurance company has been
objected by learned advocate for the respondent No.1 to 4-
original claimants on the ground that the accident had
taken place in the year 2007 and in view of the stay of the
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impugned judgment and award pending the appeal and the
appeal being finally heard and decided in the year 2026, the
claimants may not be deprived of the fruits of
compensation. Having noted the aforesaid submissions
made by learned advocates for the respective parties,
considering the fact that the impugned judgment and award
has been stayed pending the appeal and all throughout the
amount being lying in the fixed deposit in the nationalized
bank, this judgment is stayed for a period of 6 weeks from
today. On expiry of the aforesaid period and in absence of
any stay, the Tribunal shall be at liberty to proceed with
release and disbursement of the award amount as directed
earlier.
25. With these observations the First Appeal stands
disposed of in the aforesaid terms. The record and
proceedings are directed to be sent back to the concerned
Tribunal forthwith, with the writ of this order. No order as to
costs.
(NISHA M. THAKORE,J)
MARY VADAKKAN
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