Sharad Jain vs Madanlal Yadav on 18 February, 2026

Author: Anuradha Shukla

Bench: Anuradha Shukla

          NEUTRAL CITATION NO. 2026:MPHC-JBP:14070




                                                                   1                                  MA-1444-2013
                                IN     THE       HIGH COURT OF MADHYA PRADESH
                                                       AT JABALPUR
                                                          BEFORE
                                          HON'BLE SMT. JUSTICE ANURADHA SHUKLA
                                                   ON THE 18th OF FEBRUARY, 2026
                                                     MISC. APPEAL No. 1444 of 2013
                                                         SHARAD JAIN
                                                            Versus
                                                  MADANLAL YADAV AND OTHERS
                           Appearance:
                                Shri Rohtash Babu Patel - Advocate for the appellant.

                                None for the respondent No.1, though duly served.

                                Shri Aditya Narayan Sharma - Advocate for the respondent No.2.

                           Heard on           : 09.02.2026
                           Pronounced on : 18.02.2026

                                                                       ORDER

Being aggrieved by the award passed on 08.01.2013 in MVC No.21/2009 by Additional Member, Motor Accident Claims Tribunal, Begumganj, District Raised, this appeal has been preferred by appellant/claimants. Under the impugned award, compensation amount of

Rs.94,000/- was awarded in favour of appellant and respondent No.2/insurance company was exonerated from payment of compensation amount.

2. Relevant facts that need to be summed up are that on 30.06.2008, appellant, along with his friend Sachin, was on a motorcycle, which was hit by another motorcycle being driven rashly and negligently by respondent No.1. In the accident, appellant/claimant sustained grievous injuries and

NEUTRAL CITATION NO. 2026:MPHC-JBP:14070

2 MA-1444-2013 permanent disability. A claim for Rs.7,63,648.95/- was therefore filed by the appellant, both against respondent No.1/owner cum driver and respondent No.2/insurance company. The Tribunal allowed the claim petition only partially in above discussed terms.

3. The present appeal has been preferred to question the quantum and also against finding of exoneration of respondent No.2/insurance company from the liability to pay compensation. The requested enhancement is detailed in a tabular form and on the basis of cited case laws, it is submitted that insurance company should be directed to pay original and enhanced sum to the appellant, as he was a third party whose risk was covered under the insurance policy.

4. Learned counsel for the appellant and respondent No.2 were heard and the record of the Tribunal was examined.

5. Appellant/claimant is disputing the exoneration of respondent No.2/insurance company from the liability to pay compensation. This finding of exoneration was on the ground that respondent No.1 was not holding a valid and effective licence as on the date of accident. For this, the learned Tribunal relied upon the facts that the charge-sheet was filed besides other Sections of criminal law also under Section 3/181 of Motor vehicles Act, which itself suggests that driver was not holding any valid and effective driving licence. The Tribunal had also emphasized on the fact that respondent No.1/driver did not appear to contest the claim petition, nor filed his driving licence for verification. A finding was therefore, given that he was driving the offending vehicle without having a valid and effective driving licence.

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3 MA-1444-2013

6. As discussed earlier, respondent No.1/owner-cum-driver, at no stage of trial, clarified the status of his driving license. Respondent No.2/insurance company had examined Shri Vishwas Shrivastava as its witness. He gave a testimony on the basis of filing of charge-sheet under Section 3/181 of Motor Vehicles Act to claim that there was no valid and effective driving licence to drive the offending vehicle.

7. Having considered the rival submissions and also the evidence available on record, it is observed that the Tribunal has rightly held that respondent No.1 was not having a valid and effective driving licence as on the date of accident, otherwise, he would have fairly come up before the Tribunal with his written statement and would also have placed the driving licence on record to enable the respondent No.2/insurance company to seek its verification from the concerned office. Thus, it is held that there was a clear breach of insurance policy Ex.D/4 which required that the vehicle shall be driven only by a person holding an effective licence at the time of accident. Here the driver was the insured/owner himself who had a very personal knowledge that he was not holding any valid driving licence still he drove the vehicle. Accordingly, violation of terms of insurance policy is manifest in the case.

8. Learned counsel for the respondent No.2 has relied upon the decisions of United India Insurance Company Limited Vs. Mostt. Kalli Devi & Ors., (2019) PLJR 522, M. Ananthi Vs. V. Venkatesan & Anr., 2022 (1) TN MAC 135 , Oriental Insurance Company Limited Vs. Savita Kumari, 2015 SCC

Online Patna 2505 and three decisions of M.P. High Court delivered in the

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4 MA-1444-2013 cases of Smt. Beena Bai & Ors. Mangilal Lodhi & Ors., M.A. No. 345/2016 , ICICI Lombard General Insurance Company Limited Vs. Nanki & Ors., M.A. No. 125/2015 and Dhirendra Singh Sengar Vs. Gopi Singh Kalicharan & Anr., 2008 ACJ 2277 . All these judgments have been relied upon to emphasis the fact that if owner himself was driving the vehicle without holding a valid and effective driving license on the date of accident, mischief becomes magnified and Insurance Company cannot be saddled with any liability to take the onus of such a mischief monger/ tort. Significantly, in the case of M. Ananthi (supra) , the Madras High Court was of the view that such a breach of policy by owner-cum-driver amounts to fundamental breach. In contrast, counsel for the appellant representing claimants has relied upon the decision of Hon'ble Apex Court given in the case of Pappu & Ors. Vs. Vinod Kumar Lamba & Anr. in Civil Appeal No. 20962/2017, requesting that application of principle of "pay and recover"

was the justified remedy.

9. The rival submissions have been given a considerable thought by this Court in the light of judgments relied upon. In the case of Pappu (supra) curious fact was that the owner could not disclose the name of the driver and the basic essence of the judgment, advocating the same line of thought, as was laid down in the case of National Insurance Company Limited Vs. Swarn Singh & Ors, (2004) 3 SCC 297, is that despite this kind of breach on the part of the insured, the Insurance Company should first discharge its liability towards third party and then may recover the amount from the insured.

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5 MA-1444-2013

10. It would again be appropriate to refer to the judgment of National Insurance Company Limited Vs. Swarn Singh (supra), wherein discussing the application of "The Third Parties (Rights against Insurer) Act, 1930", which was an English statute, it was held that its provisions were incorporated by the Parliament of India while enacting the Motor Vehicles Act 1939 and also of 1988. The Hon'ble Apex Court also observed that in number of cases it was mainly concerned with the third party right under the policy and any condition in the policy taking away this right was struck down as void. It discussed several earlier findings given in different cases and held that a beneficent statue must receive a liberal interpretation and since the liability of Insurer is a statutory one, its liability to satisfy the decree passed in favour of third party should also be statutory.

11. Furthermore, the Apex Court in the judgment of Swarn Singh observed that the social need of victim being compensated, as enacted by Parliament, was the subject matter of consideration even before the earlier three Judges Bench of Apex Court in the case of British India General Insurance Company Limited Vs. Captain Itbar Singh and Others, AIR 1959 SC 1331, and held that "insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition, but the insurer, who is statutorily liable to pay compensation to third parties on account of certificate of insurance, shall first pay to that third party, even in case of breach of policy condition and shall be entitled to recover it from the insured".

12. In the light of these findings of Hon'ble Apex Court in the acclaimed

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6 MA-1444-2013 judgment of Swarn Singh (supra) , other judgments relied upon by learned counsel for the respondent No.2 of various High Courts cannot be given any precedence. The view of Hon'ble Apex Court in Swarn Singh's case has again ben affirmed in the case of Pappu (supra) relied upon by counsel for the appellant and also in the case of Shamanna and Ors. Vs. Divisional Manager, Oriental Insurance Company in Civil Appeal No. 8144/2018.

13. Accordingly, it is held that the Tribunal was not justified in completely exonerating respondent-insurance company of its liability. Consequently, despite the breach of terms of insurance policy by the insured, respondent no.2-insurance company is directed to honour its statutory liability towards the third party, the appellant/claimant, to pay the compensation amount, in first instance, and later recover it from the owner-cum-driver/respondent No.1.

14. Appeal is accordingly allowed, however, partially .

15. Let the copy of this order along with the record of Tribunal be sent back to the concerned Tribunal for necessary compliance.

(ANURADHA SHUKLA) JUDGE

DevS