[Cites 13, Cited by 0]
Gujarat High Court
Icici Lombard General Insurance Co Ltd vs Prafulbhai Ravjibjhai Patel on 30 April, 2026
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2208 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
==========================================================
Approved for Reporting Yes No
==========================================================
ICICI LOMBARD GENERAL INSURANCE CO LTD
Versus
PRAFULBHAI RAVJIBJHAI PATEL & ANR.
==========================================================
Appearance:
MR TANMAY B KARIA(6833) for the Appellant(s) No. 1
HCLS COMMITTEE(4998) for the Defendant(s) No. 1,2
MS CHETNABEN JOSHI(2313) for the Defendant(s) No. 1,2
==========================================================
CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 30/04/2026
ORAL JUDGMENT
[1.] The present appeal is filed at the instance of the
appellant- ICICI Lombard General Insurance Co. Ltd. (hereinafter to be
referred as "Insurance Company"), under Section 173 of the Motor
Vehicles Act, 1988 (hereinafter to be referred as "the Act of 1988"),
being aggrieved and dissatisfied with the judgment and award dated
30.06.2016 (hereinafter to be referred as "impugned judgment and
award) passed by the Motor Accident Claims Tribunal (Aux.) & 4 th
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
Additional District Judge, Kheda at Nadiad in M.A.C.P. No.1037 of
2012.
[1.1] By the said impugned judgment and award, the Tribunal
has partly allowed the claim petition preferred by the original claimant
under Section 166 of the Act of 1988, holding the claimant entitled to
recover sum of Rs.8,45,600/- with interest at the rate of 9% per
annum from the date of filing of claim petition, till its actual
realization with proportionate costs, from the original opponents
jointly and severally. Hence, the present appeal has been preferred by
the appellant-Insurance Company solely on the ground disputing its
liability to pay any amount of compensation.
[2.] Considering the grounds raised in the appeal memo and
the submissions made by learned advocate for the appellant, this
Court, vide order dated 18.10.2016, had admitted the appeal. In an
Interim Application for Stay preferred by the applicant/appellant-
Insurance Company, this Court, vide order dated 18.10.2016, had
stayed the impugned judgment and award, till final disposal of the
appeal, on condition of deposit of entire award amount with interest
and costs with the concerned Tribunal. This Court had also directed to
disburse 30% of the deposited award amount in favour of the claimant
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
and, had further directed to invest the remaining 70% of the amount
in the fixed deposit scheme with any nationalized bank. The fixed
deposit receipts were directed to be renewed from time to time and,
were not permitted to be encashed till the final hearing of the
captioned appeal. The interest accrued was permitted to be paid to
the claimant.
[3.] The record suggests that notice of admission of appeal is
reported to have been duly served upon the respondents herein.
Learned advocate Ms. Chetnaben Joshi has appeared on behalf of
respondent nos.1 and 2 through High Court Legal Services Committee.
Considering the fact that the appeal is of year-2016 and, pending
consideration, the appeal is peremptorily heard.
[4.] Mr. Tanmay B. Karia, learned advocate for the appellant-
Insurance Company, has assailed the impugned judgment and award
on the ground that the Tribunal failed to appreciate that indisputably
the offending vehicle involved in the accident was a goods carriage
vehicle and was therefore, meant for carrying goods only and not for
carrying passengers either for hire or for reward. It was further
submitted that seating capacity of the offending vehicle in the
accident as indicated in the R.C. Book produced on record at Exh.34,
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
was one, which is of the driver. He has further submitted that though
the claimant has pleaded that the injured was travelling in the
offending vehicle as owner of the goods, there is no iota of evidence
on record to demonstrate that the injured was travelling with goods.
Despite that, the Tribunal, merely on appreciation of the evidence of
the claimant, in light of the FIR produced on record, has believed the
case of the claimant that the injured was travelling with the goods.
Learned advocate has, therefore, submitted that in absence of any
evidence establishing the fact of the injured travelling with the goods,
the case of the claimant was required to be treated as an
unauthorized passenger travelling in the goods carriage vehicle. He
has, therefore, submitted that there was breach of terms and
conditions of the policy and, the Tribunal ought to have exonerated
the appellant-Insurance Company from its liability to pay any amount
of compensation.
[4.1] The attention of this Court was invited to the policy
produced on record at Exh.45. Referring to the contents of the policy,
learned advocate has submitted that the policy was issued on
05.06.2012 for the period of insurance between 22.05.2012 to
21.05.2013. He has further pointed out that the policy was the goods
carrying package policy. The schedule of premium if taken into
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
consideration clearly suggests that the Insurance Company had
agreed to incur basic third party liability; towards paid driver, and
personal accident coverage for owner- driver for sum of Rs.2 Lakhs. He
has, therefore, submitted that the appellant-Insurance Company has
not incurred any liability to pay compensation in case of
illegal/unauthorized passenger.
[4.2] Inviting my attention to the limitation as to use of vehicle,
as indicated in the policy, learned advocate has submitted that it was
clearly mentioned that the vehicle shall not be used for carrying
passengers, except in case of employees (other than the driver) not
exceeding the number permitted in the registered document and one
falling under the purview of the Workmen's Compensation Act, 1923.
Having referred to the aforesaid terms and conditions of the policy,
learned advocate has, therefore, submitted that the owner of the
vehicle having committed fundamental breach of the terms and
conditions of the policy, the appellant-Insurance Company may be
exonerated from its liability to pay the compensation. He has,
therefore, prayed to allow the present appeal.
[4.3] Learned advocate for the appellant has also disputed its
liability on the ground that the driver of the insured vehicle was not
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
holding a valid and effective driving license at the time of the
accident. The attention of this Court was invited to the defence raised
in the written statement as well as the findings and reasons assigned
by the Tribunal. Inviting my attention to the driving license produced
on record, learned advocate has submitted that admittedly the driver
was holding driving license to drive a light motor vehicle, whereas the
insured vehicle is a transport vehicle.
[5.] In response to the query put by this Court with regard to
the recent development on the issue of absence of endorsement
transport vehicle in case of driving license of light motor vehicle is
concerned, learned advocate has fairly conceded to the legal position
in view of the recent judgment of the Hon'ble Supreme Court in the
case of Bajaj Alliance General Insurance Co. Ltd. vs. Rambha Devi
and Ors. reported in 2025 (3) SCC 95( Neutral Citation : 2024 INSC
840) .
[6.] Per contra, learned advocate Ms. Chetnaben Joshi
appearing for the respondent nos.1 and 2 has objected to the
aforesaid submissions made by the learned advocate for the
appellant-Insurance Company. She has mainly relied upon the findings
and reasons assigned by the Tribunal and, has submitted that having
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
appreciated the evidence of the claimant, the Tribunal has rightly
treated the case of the claimant as of owner of goods. She has,
therefore, submitted that the appeal may be dismissed and the
impugned judgment and award may be upheld.
[7.] I have heard the learned advocates appearing for the
respective parties and have considered their arguments in light of the
findings and reasons assigned by the Tribunal. I have also appreciated
the relevant evidence on record.
[8.] At the outset, it is required to be noted that the present
appeal is confined to the issue of liability in absence of any challenge
with regard to the issue of negligence and the quantum of
compensation at the instance of either of the parties, the same has
attained finality. Having noted so, the short question, which arises for
consideration of this Court in the present appeal is, as to whether the
Tribunal committed any error in holding the opponent no. 2- Insurance
Company liable to pay the amount of compensation to the claimant,
while adjudicating the claim petition under Section 166 of the Act of
1988, in the facts of the case and the evidence on record?
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
[9.] In order to appreciate the arguments of the learned
advocates, it would be appropriate to note that it is an undisputed
fact that the offending vehicle is a goods carriage vehicle. The R.C.
Book produced on record at Exh.34 describes the vehicle as of
"tractor". The class of vehicle is also stated to be a tractor. The
insurance policy produced on record at Exh.45 is indisputably a goods-
carrying package policy issued by the appellant-Insurance Company.
As rightly pointed out by the learned advocate for the appellant-
Insurance Company, in view of the aforesaid policy, the Company has
agreed to incur liability in case of third-party liability, paid driver, and
personal accident coverage for the owner-driver.
[10.] Considering the aforesaid evidence on record, the
question arises, as to whether the injured person travelling in the
goods carriage vehicle, was covered under the policy so as to hold the
appellant Insurance Company liable to pay compensation.
[11.] In this regard, it would be appropriate to note that the
accident had taken place on 15.06.2012. The FIR, which is produced on
record at Exh. 31, was registered on 16.06.2012, whereas the
panchnama of the place of accident was carried out on 16.06.2012
between 08:30 to 09:00 hours. From the contents of the FIR and as
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
pleaded by the original claimant, the accident had taken place on
15.06.2012 in the afternoon at around 15:00 hours. The injured was
immediately shifted to the hospital and was operated upon late in the
evening for the head injuries sustained by him. The complaint was
lodged by the brother of the injured. Right from the registration of
the FIR and the claim petition filed before the Tribunal, it is the
specific case of the claimant that the injured was on his way to reach
the Piplag market and was travelling with goods i.e. bags carrying
Chilies, which were to be sold in the Piplag market. It is their specific
case that the vehicle was engaged for rent of Rs.300/-. On
appreciation of the contents of the panchnama, as rightly submitted
by the learned advocate for the appellant- Insurance Company, the
aforesaid goods have not been found at the place of offence;
however, it is required to be noted that even the vehicle involved in
the accident i.e. the offending vehicle, is also not found at the place of
accident. The wife of the injured claimant has been examined as a
witness. She has reasserted her case as pleaded in the original claim
petition. In her cross-examination at the instance of the Insurance
Company, she has denied the suggestion put forward by the counsel
for the Insurance Company that she is not aware about any goods in
the vehicle. She has reaffirmed that the chilies were carried in the
vehicle. She has denied the suggestion put forward by the counsel for
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
the Insurance Company that she has incorrectly stated that her
husband was the owner of the goods. She has further denied the
suggestion put forward by the counsel for the insurance that her
husband was a passenger in the vehicle.
[12.] Having noted the aforesaid evidence, it is apparent that
no contradictory facts have been emanated from her evidence by the
Insurance Company. As against the aforesaid case of the claimant, the
Insurance Company, in its written statement, has raised the defence
that the applicant was travelling in the said vehicle as a passenger and
was not covered by the policy, as the Insurance Company has not
charged any premium for passenger.
[13.] On careful consideration of the evidence on record, it
transpires that except for the RTO Officer being examined as a
witness, no independent witness has been examined by the Insurance
Company to prove such defence. In the cross-examination of the RTO
Officer (Exh.42), the said witness has admitted that the owner of the
goods can travel in such vehicle. With such evidence being produced
on record, in my view, the Insurance Company has failed to prove its
defence that the claimant was travelling as a passenger in the insured
vehicle.
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
[14.] Having held so, the next question, which arises for
consideration as regards the liability of the Insurance Company with
reference to the nature of the policy is concerned, it would be
appropriate to note that Section 147 of the Act of 1988, has been
amended vide Amendment Act 54 of 1994 with effect from
14.11.1994, whereby the words "including the owner of the goods or
his authorized representative carried in the vehicle" were inserted. In
view of the aforesaid amendment, as per the provisions of Section 147
of the Act of 1988, which pertains to the requirements of policies and
limits of liability, a policy of insurance must be a policy which insures
the person against any liability which may be incurred by it in respect
of the death of or bodily injury to, any person including the 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
use of the vehicle in a public place. Thus, statutory liability is imposed
upon the Insurance Company to fulfill the aforesaid requirement while
issuing the policy. Considering the fact that indisputably the policy had
been issued by the appellant Insurance Company in respect of the
insured vehicle, which was in force at the time of the accident, the
appellant- Insurance Company cannot be escape from its liability to
pay compensation.
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
[15.] As regards the contention raised about breach of terms
and conditions of the policy on the ground that the seating capacity of
the insured vehicle was one, which was of the driver, and therefore, no
other person could have travelled in the insured vehicle is concerned,
it would be appropriate to take note of Rule 122 of the Gujarat Motor
Vehicles Rules, 1989. Rule 122 of the Rules, 1989 reads as under:
"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 travelling 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;
Provided further that the provision of second proviso to this sub-rule
shall not apply in case where integral seating arrangements providing
a reasonably comfortable seating space for each person has been
made in the goods carriage for more than the number specified in the
second proviso
(2)......
(6) No person shall travel in a goods carriage in contravention of the
provisions of this rule."
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
[16.] On bare appreciation of the first proviso of the aforesaid
rule, it clearly permits the owner or the hirer or a bona fide employee
of the owner or the hirer of the vehicle carried free of charge, or a
police officer in uniform travelling on duty, to be carried in a goods
carriage.
[17.] The learned Single Judge of this Court, in the case of
Reliance General Insurance Company Ltd Vs. Bhagvanbhai
Kamabhai Ulva & 6 others reported in 2023 (2) GLR 1106, while
interpreting the aforesaid rule, has held that the provision when read
as it is, it talks about exempted persons like the owner or the hirer or a
bona fide person etc., to be carried in the goods carriage vehicle. The
Court has, therefore, held that any person travelling in a three-
wheeler goods vehicle where its seating capacity may be one,
including the driver, it includes persons, who are carried along with
the goods. Therefore, Rule 122 of the Rules, 1989 does not prohibit to
carry a person with goods in a goods vehicle, where the seating
capacity is only one.
[18.] It is also required to be noted that the policy produced on
record at Exh.45, under the terms and conditions of "limitations as to
use," though prohibits carrying of passengers in the vehicle; however,
carves out an exception in the case of employees "other than the
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
driver" not exceeding the number permitted in the registration
document and falling within the purview of the Workmen's
Compensation Act, 1923. The policy does make reference to the
carrying capacity of the insured vehicle as one, as indicated in the R.C.
Book. In light of the aforesaid terms and conditions of the policy, it
can be inferred that despite being conscious of the fact that the
insured vehicle permits seating capacity of only one; however, the
person other than driver of the insured vehicle, was permitted to
travel as passenger, who was employee other than the driver and,
would come under the purview of the Workmen's Compensation Act,
1923.
[19.] Considering the Rule 122 of the Rules, 1989, and in
absence of any independent witness or any other evidence produced
on record to demonstrate that the breach of the aforesaid condition,
in any manner, had attributed to the root cause of the accident, in my
view, the Tribunal has rightly not taken into consideration the
aforesaid aspect for the purpose of determination of liability of the
appellant Insurance Company.
[20.] At this stage, it would be appropriate to revisit the
summary of findings of the Hon'be Supreme Court in the case of
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
National Insurance Co. Ltd vs Swaran Singh & Ors reported in 2004
(3) SCC 297. The Hon'be Supreme Court has observed as under:
110. The summary of our findings to the various issues as raised in
these petitions are as follows:
(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory
insurance of vehicles against third party risks is a social welfare legislation
to extend relief by compensation to victims of accidents caused by use of
motor vehicles. The provisions of compulsory insurance coverage of all
vehicles are with this paramount object and the provisions of the Act have
to be so interpreted as to effectuate the said object.
(ii) Insurer is entitled to raise a defence in a claim petition filed under
Section 163 A or Section 166 of the Motor Vehicles Act, 1988 inter alia in
terms of Section 149(2)(a)(ii) of the said Act.
(iii) The breach of policy condition e.g., disqualification of driver or invalid
driving licence of the driver, as contained in sub-section (2)(a)(ii) of section
149, have to be proved to have been committed by the insured for
avoiding liability by the insurer. 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. To avoid its liability towards insured, the
insurer has to prove that the insured was guilty of negligence and failed to
exercise reasonable care in the matter of fulfilling the condition of the
policy regarding use of vehicles by duly licensed driver or one who was not
disqualified to drive at the relevant time.
(iv) The insurance companies are, however, with a view to avoid their
liability must not only establish the available defence(s) raised in the said
proceedings but must also establish 'breach' on the part of the owner of
the vehicle; the burden of proof wherefor would be on them.
(v) The court cannot lay down any criteria as to how said burden would be
discharged, inasmuch as the same would depend upon the facts and
circumstance of each case.
(vi) Even where the insurer is able to prove breach on the part of the
insured concerning the policy condition regarding holding of a valid licence
by the driver or his qualification to drive during the relevant period, the
insurer would not be allowed to avoid its liability towards insured unless
the said breach or breaches on the condition of driving licence is/ are so
fundamental as are found to have contributed to the cause of the
accident. The Tribunals in interpreting the policy conditions would apply
"the rule of main purpose" and the concept of "fundamental breach" to
allow defences available to the insured under section 149(2) of the Act.
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
(vii) The question as to whether the owner has taken reasonable care to
find out as to whether the driving licence produced by the driver, (a fake
one or otherwise), does not fulfil the requirements of law or not will have
to be determined in each case.
(viii) If a vehicle at the time of accident was driven by a person having a
learner's licence, the insurance companies would be liable to satisfy the
decree.
(ix) The claims tribunal constituted under Section 165 read with Section
168 is empowered to adjudicate all claims in respect of the accidents
involving death or of bodily injury or damage to property of third party
arising in use of motor vehicle. The said power of the tribunal is not
restricted to decide the claims inter se between claimant or claimants on
one side and insured, insurer and driver on the other. In the course of
adjudicating the claim for compensation and to decide the availability of
defence or defences to the insurer, the Tribunal has necessarily the power
and jurisdiction to decide disputes inter se between insurer and the
insured. The decision rendered on the claims and disputes inter se between
the insurer and insured in the course of adjudication of claim for
compensation by the claimants and the award made thereon is
enforceable and executable in the same manner as provided in Section
174 of the Act for enforcement and execution of the award in favour of
the claimants.
(x) Where on adjudication of the claim under the Act the tribunal arrives at
a conclusion that the insurer has satisfactorily proved its defence in
accordance with the provisions of section 149(2) read with sub-section (7),
as interpreted by this Court above, the Tribunal can direct that the insurer
is liable to be reimbursed by the insured for the compensation and other
amounts which it has been compelled to pay to the third party under the
award of the tribunal. Such determination of claim by the Tribunal will be
enforceable and the money found due to the insurer from the insured will
be recoverable on a certificate issued by the tribunal to the Collector in
the same manner under Section 174 of the Act as arrears of land revenue.
The certificate will be issued for the recovery as arrears of land revenue
only if, as required by sub-section (3) of Section 168 of the Act the insured
fails to deposit the amount awarded in favour of the insurer within thirty
days from the date of announcement of the award by the tribunal.
(xi) The provisions contained in sub-section (4) with proviso thereunder
and sub-section (5) which are intended to cover specified contingencies
mentioned therein to enable the insurer to recover amount paid under the
contract of insurance on behalf of the insured can be taken recourse of by
the Tribunal and be extended to claims and defences of insurer against
insured by relegating them to the remedy before regular court in cases
where on given facts and circumstances adjudication of their claims inter
se might delay the adjudication of the claims of the victims.
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
[21.] Considering the aforesaid principles, the burden lies upon
the Insurance Company to establish " breach" on the part of the owner
of the vehicle. The insurer is not only required to prove breach on part
of the insured concerning the policy condition, but is also required to
demonstrate as to in what manner, the breach of such terms and
conditions of the policy contributed to the cause of the accident. Thus,
it has been held that Tribunals, in interpreting the policy conditions,
are required to apply "the rule of main purpose" and the concept of
"fundamental breach" to allow defences available to the insurer under
Section 149(2) of the Act. In absence of any evidence being laid by the
appellant- Insurance Company to establish their defence, no error can
be found with the approach of the Tribunal holding the appellant-
Insurance Company liable to pay the amount of compensation to the
claimant.
[22.] For the foregoing reasons, the appeal, being devoid of
any merit, is hereby dismissed. The impugned judgment and award
dated 30.06.2016 passed by the Motor Accident Claims Tribunal (Aux.)
& 4th Additional District Judge, Kheda at Nadiad in M.A.C.P. No.1037 of
2012, is hereby confirmed.
NEUTRAL CITATION
C/FA/2208/2016 JUDGMENT DATED: 30/04/2026
undefined
[23.] In view of the dismissal of the appeal, the interim stay
granted by this Court vide order dated 18.10.2016 is hereby vacated.
The Tribunal shall proceed with the release and disbursement of the
award amount in favor of the original claimant as lying in the fixed
deposit. The Tribunal is expected to undertake such exercise within a
period of four weeks from the date of receipt of the certified copy of
this judgment.
[24.] With these observations, the First Appeal stands disposed
of. The record and proceedings are directed to be sent back to the
concerned Tribunal along with the Writ of this judgment.
(NISHA M. THAKORE,J)
SUYASH SRIVASTAVA
