Patna High Court
National Insurance Company Through Its ... vs Chandramani Devi And Ors on 7 November, 2025
Author: Jitendra Kumar
Bench: Jitendra Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
Miscellaneous Appeal No.56 of 2017
======================================================
National Insurance Company Through Its The Divisional Manager, Shanti
Market, Rai Kashi Nath More, P.S.:- Civil lines, District : Gaya represented
through National Insurance Company Ltd. Having its Regional Office at 4th
Floor, Sone Bhawan, P.S.:- Sachiwalaya, District:- Patna (Opposite Party No.
1 in the Court below)
... ... Appellant/s
Versus
1. Chandramani Devi W/o Ramjee Yadav aged about 30 years,
2. Ramjee Yadav, S/o Faguni Yadav (aged about 35 years),
Applicant no.1 and 2 are mother and father the deceased, Both are resident
of Village- Meghua, PO- Simla, P.S.- Kasma, District- Aurangabad Bihar,
permanent resident of Village- Barorah, PO- Tineri, P.S.- Guraru, District-
Gaya.
3. Md. Mattulah, Son of Late Rayasat Hussain, resident at Shimla, P.O.-
Shimla, P.S.- Kasma, District- Aurangabad Bihar Owner of the Vehicle Tata
Magic bearing registration no. BR-02M-5290 and opposite party no.2 in the
court below
... ... Respondent/s
======================================================
Appearance :
For the Appellant/s : Mr. Sanjay Kumar Sharan, Advocate
For the Resp. No. 1 & 2 : Mr. Rajen Sahay, Advocate
For the Resp. No. 3 : None
======================================================
CORAM: HONOURABLE MR. JUSTICE JITENDRA KUMAR
CAV JUDGMENT
Date : 07-11-2025
The present Miscellaneous Appeal has been preferred
against the impugned judgment/award dated 12.08.2016, passed
by learned Additional District Judge-Ist-cum-Chairman, Motor
Accident Claim Tribunal, Gaya in MAC Case No. 115 of 2011
(D.J.)/ 21 of 2012, whereby learned Tribunal has directed the
appellant/Insurance Company herein to pay compensation of Rs.
3,75,000/-, excluding Rs. 50,000/-, which was already paid to
the claimants towards interim compensation, with interest @ 9%
per annum from the date of institution of the claim petition till
Patna High Court MA No.56 of 2017 dt.07-11-2025
2/15
the payment.
2. The factual background of the case is that one Sujit
Kumar, aged about 12 years, died in a road accident on G.T.
Road, N.H.-2, near Kusha More at about 6:00 AM on
09.04.2011
under Madanpur Police Station, Aurangabad
District, involving the motor vehicle (Tata Magic) bearing
Registration No. BR-02M-5290.
3. Subsequent to the accident, Madanpur P.S. Case
No. 57 of 2011 was registered against the driver of the offending
vehicle for offence punishable under Sections 279, 337, 338 and
304A of the Indian Penal Code. After investigation, charge-sheet
was submitted against the FIR named accused viz., Matin
Miyan @ Matiullah, son of late Riyatan @ Riyasat Hussain.
4. On the basis of the death of the deceased/Sujit
Kumar on account of motor accident, claim case No. 115 of
2011 was filed by the parents of the deceased against the
Insurance Company, who is the appellant herein, and one Matin
Miyan @ Matiullah, son of late Riyatan @ Riyasat Hussain
stating that the deceased was 12 years of age at the time of
accident. It was also stated that the accident took place on
account of rash and negligent driving of the driver of the
offending vehicle, leading to the injury to the deceased, who
Patna High Court MA No.56 of 2017 dt.07-11-2025
died in course of treatment at N.M.C.H, Gaya. Md. Matiullah is
claimed to be owner of the vehicle. It was also stated that the
vehicle was registered by the insurance company vide policy
bearing No. 170907/31/10/6300004899 being valid from
26.11.2010 to 25.11.2011. It is also claimed by the claimant that
the deceased was a student and earning Rs. 100 per day and
total compensation amount of Rs. 4,36,500/- was claimed by the
claimants.
5. On notice, the Insurance Company as well as the
owner of the vehicle appeared and filed their written statements,
contesting the claim petition of the claimants for compensation.
6. The application of the Insurance Company under
Section 170 of the Motor Vehicles Act for permission to contest
the claim petition was allowed by the Tribunal vide order dated
12.09.2014.
7. On the basis of the pleadings of the parties, the
following issues were framed:-
"i. Whether the claim application is
maintainable?
ii. Whether the Claimants have any cause of
action for the case?
iii. Whether the deceased Sujit Kumar died in a
motor accident occurrence on 09.04.2011 at
about 6:00 AM on G.T. Road, Kusha More
due to rash and negligence driving of the
driver of the Tata Magic bearing
Registration No. BR-02M-5290?
iv. Whether the driver of the aforesaid Tata
Patna High Court MA No.56 of 2017 dt.07-11-2025
Magic has/had valid driving licence at the
time of the accident?
v. Whether the aforesaid vehicle was insured
with O.P. No. 1, National Insurance
Company and is liable to pay the
compensation amount, if yes, whether
owner of the vehicle violated any terms
and conditions of policy or not?
vi. Whether the applicants are entitled to
compensation?
vii. Whether the age and occupation, income of
the deceased are correct as claimed?
viii. Whether the applicant is entitled to any
other relief or reliefs?"
8. During the trial, altogether three claimant witnesses
were examined viz., A.W.1- Ramjee Yadav (one of the
claimants), A.W.2- Chandramani Devi (also one of the
claimants) and A.W.3- Naresh Yadav.
9. During the trial, five documents have been
exhibited viz., Ext.1- Certified Copy of the FIR, Ext.2- Charge-
sheet, Ext.3- Policy Bond of alleged vehicle, Ext.4- Photocopy
of the owner book smart card and Ext. 5- Postmortem report of
the deceased.
10. Neither any witness has been examined, nor any
document has been brought on record by the Insurance
Company or the owner of the vehicle.
11. After hearing the parties and perusal of the
materials on record, learned Tribunal found that the accident had
taken place on account of rash and negligent driving of the
offending vehicle bearing Registration No. BR-02M-5290 and
Patna High Court MA No.56 of 2017 dt.07-11-2025
on account of the injury suffered by the victim/Sujit Kumar, the
victim died.
12. Learned Tribunal also found that it could not be
proved by the Claimants or the owner/driver of the vehicle that
the offending vehicle was being driven by duly licensed driver
at the time of the accident, because no driving license was filed
by any of the parties, though the owner of the vehicle had
appeared before the Tribunal on notice. It was also found by
learned Tribunal that at the time of the accident, the number of
the passengers in the vehicle was more than the seating capacity
in the vehicle at the time of the accident. As per the evidence of
the Claimants, 15-16 persons were travelling in the vehicle,
including 8-10 persons sitting on its roof and the accident took
place not only on account of rash and negligent driving of the
vehicle, but also on account of the number of the passengers
being more than the seating capacity in the vehicle. The
witnesses examined on behalf of the Claimants have clearly
deposed in their cross-examination that on account of excessive
number of passengers in the vehicle, the driver lost the control
over the vehicle. Hence, learned Tribunal found that the
insured /owner of the vehicle violated terms and conditions of
the insurance policy. However, the Insurance Company, who is
Patna High Court MA No.56 of 2017 dt.07-11-2025
the Appellant herein, was not given any right to recover the
compensation amount after paying the same to the legal
representative of the deceased/third party.
13. It was also found that the age of the deceased was
12 years. The monthly income of the deceased was found to be
Rs. 3000/-. Multiplier of twenty was applied while calculating
the loss of dependency. Since the deceased was found to be
unmarried, 50% of his income was deducted towards personal
expenses. Hence, total compensation amount of Rs. 3,60,000/-
was granted towards loss of earning and Rs. 50,000/- was
granted towards future prospect, whereas Rs. 5,000/- was
granted towards the funeral expense and Rs. 10,000/- was
allowed towards cost of litigation and loss of love and affection.
As such, total compensation was calculated to be Rs. 4,25,000/-.
However, Rs. 50,000/- was already paid to the claimants as
interim compensation. Hence, the remaining amount of
Rs.3,75,000/- was found to be payable to the Claimants towards
their compensation and the Insurance Company/Appellant was
directed to pay the same to the Claimant/Respondent No.1 & 2
herein along with the interest @ 9% per annum from the date of
filing the claim petition by way of account payee cheque in the
names of the claimants/respondent Nos. 1 and 2 herein.
Patna High Court MA No.56 of 2017 dt.07-11-2025
14. I heard learned counsel for the Appellant as well
as learned Counsel for the Respondent Nos.1 and 2. However,
the Respondent No.3 (owner of the vehicle), has not appeared
despite valid service of notice.
15. Learned counsel for the Appellant submits that the
grievance is confined to the right of the Insurance Company
/Appellant to recover the compensation amount if paid to the
Claimants by it.
16. He submits that learned Tribunal has found that
the terms and conditions of the insurance policy have been
violated by the owner of the vehicle. One of the terms and
conditions was that the vehicle must be driven by a duly
licensed driver, but during the trial, no driving license was
produced by the owner or any party. As per the finding of the
Tribunal, the owner/driver of the vehicle has also violated the
terms and conditions by taking passengers in the vehicle beyond
the seating capacity in the vehicle. As per evidence, 15-16
passengers were traveling, including 8-10 passengers sitting on
the roof of the vehicle, whereas, as per the description of the
vehicle in the insurance policy, the seating capacity in the
vehicle was seven. In such facts and circumstances, the
minimum relief which should have been granted to the
Patna High Court MA No.56 of 2017 dt.07-11-2025
appellant/the Insurance Company is the right to recover the
compensation amount payable to the claimants. But learned
Tribunal has not given such right to the Insurance
Company/Appellant herein, nor any reason has been assigned
by the tribunal for its failure to give such right to the insurance
company.
17. However, learned counsel for the respondent Nos.
1 and 2 submits that there is no illegality or infirmity in the
impugned judgment/award and hence, the present appeal is
liable to be dismissed.
18. In view of the rival submission of the parties, it
transpires that the Insurance Company/ Appellant is aggrieved
by the impugned judgment/award on account of the fact that
despite the finding of learned Tribunal that the insured/owner of
the vehicle has violated the terms and conditions of the
insurance policy, learned Tribunal has not granted right to the
Insurance Company to recover the compensation amount after
paying the same to the legal representatives of the victim.
19. It also transpires that the Claimants, have not filed
any Appeal or cross-appeal against the impugned
judgment/award. Hence, there is no dispute in regard to any
finding or the quantum of the compensation awarded to the
Patna High Court MA No.56 of 2017 dt.07-11-2025
Claimants, who are the Respondent Nos.1 & 2 herein.
20. In view of the aforesaid facts and circumstances
and rival submissions of the parties, the only point for
determination by this Court is as follows:
(i) Whether the Appellant should be given right to
recover the compensation amount payable by it to the
Respondent Nos. 1 & 2 after payment of the same to them.
21. Before I proceed to consider the point for
determination, it would be imperative to discuss the law on the
subject.
Law relating to Doctrine of "Pay and Recover"
22. It is settled position of law if there is valid
contract of insurance and there is no violation of terms and
conditions on the part of the Insured, the insurer is legally bound
to indemnify the insured, i.e owner of the vehicle. The insurer,
by virtue of Section 149(1) of the Motor Vehicles Act steps into
the shoes of the judgment debtor/the insured and gets bound to
pay the amount awarded to the third party.
23. However, the problem arises in cases where there
is no valid contract of insurance or where there is valid contract
of insurance, but there is violation of terms and conditions on
the part of the insured i.e owner of the offending vehicle.
Patna High Court MA No.56 of 2017 dt.07-11-2025
24. The insurer is entitled to raise defence in a claim
petition in terms of Section 149(2) of the Motor Vehicles Act
and the issue of defence as provided to the Insurance Company
under Section 149(2) of the Motor Vehicles Act, has been
authoritatively decided by Hon'ble three Judge Bench of Apex
Court in National Insurance Company Limited Vs. Swaran
Singh and Ors. as reported in 2004 3 SCC 297 and this
landmark judgment is still holding the field on the subject. As
per the judgment, claimant should not be allowed to suffer and
run about for release of the compensation awarded to them and
it is in the fitness of things that the Insurance Company, in such
cases, should first pay and then recover the amount from the
owner/driver, if there is breach of terms and conditions of the
Insurance policy and if such breach is fundamental or
contributory to the cause of the accident. In this case, Hon'ble
Supreme Court issued a detailed guideline as to how and in
what circumstances "pay and recover" can be ordered. It has
been also held in Swaran Singh case (supra) that the onus to
prove the breach of any terms and condition on the part of the
insured is on the insurer. The relevant para of the judgment
reads as follows, by way of summary of the conclusions:
"Summary of findings
110. The summary of our findings to the various issues as
Patna High Court MA No.56 of 2017 dt.07-11-2025
raised in these petitions is 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) An 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
the driver or invalid driving licence of the driver, as
contained in sub-section (2)(a)(ii) of Section 149, has 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 the 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 a duly licensed driver or one who was
not disqualified to drive at the relevant time.
(iv) Insurance companies, 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 the
said burden would be discharged, inasmuch as the same
would depend upon the facts and circumstances 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
the 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
Patna High Court MA No.56 of 2017 dt.07-11-2025
insurer under Section 149(2) of the Act.
(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
the 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 the
proviso thereunder and sub-section (5) which are intended
Patna High Court MA No.56 of 2017 dt.07-11-2025
to cover specified contingencies mentioned therein to
enable the insurer to recover the amount paid under the
contract of insurance on behalf of the insured can be taken
recourse to by the Tribunal and be extended to claims and
defences of the insurer against the 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."
(Emphasis supplied)
25. The Swaran Singh case (supra) was considered
by Hon'ble Supreme Court subsequently in National Insurance
Company Limited Vs. Laxmi Narayan Dhut as reported in
2007 3 SCC 700 and it was held that decision in Swaran Singh
case (supra) has no application to cases other than the third
party risks and in case of third party risks, the insurer has to
indemnify the amount and if so advised, to recover the same
from the insured. The same principle was reiterated by Hon'ble
Supreme Court in Premkumari Vs. Prahlad Dev, 2008 3 SCC
193.
26. In Oriental Insurance Company Limited Vs.
Nanjappan, (2004) 13 SCC 224, Hon'ble Supreme Court has
held that for the purpose of recovering the same from the
insured, the insurer shall not be required to file a suit. It may
initiate a proceeding before the executing court concerned as if
the dispute between the insurer and the owner was the subject
matter of determination before the Tribunal and the issue is
Patna High Court MA No.56 of 2017 dt.07-11-2025
decided against the owner and in favour of the insurer.
Present Case
27. Coming to the case on hand, I find that learned
Tribunal has clearly found that it could not be proved during the
Trial that the offending vehicle was being driven by duly
licensed driver holding valid and effective license at the time of
accident. It has been also found that the accident had taken place
on account of rash and negligent driving by the driver who was
driving the offending vehicle at the time of the accident. The
accident also took place on account of the number of passengers
sitting in the vehicle beyond the seating capacity in the vehicle.
As per the evidence on record, the seating capacity of the
vehicle was only seven, whereas total number of passengers
travelling in the vehicle were 15 to 16, and out of them, 8 to 10
passengers were sitting on the roof of the vehicle, on account of
which, the driver lost the control of the vehicle leading to the
accident. As such, there is clear finding by learned Tribunal that
the insured had violated the terms and conditions of the
insurance policy and such breach of terms and conditions was
fundamental and contributory to the cause of the accident.
28. Hence, learned Tribunal had committed error by
not giving "pay and recover" right to the Insurance Company,
Patna High Court MA No.56 of 2017 dt.07-11-2025
who is the Appellant herein.
29. Hence, the impugned judgment/award is modified
to the extent that after paying the awarded compensation of
Rs.3,75,000/- with interest @ 9 % per annum to the
Claimants/Respondent Nos.1 & 2, the Insurance Company is
given right to recover the same from the owner of the vehicle,
who is Respondent No.3 herein, after paying the same to the
claimants/Respondent Nos. 1 and 2 herein.
30. The present Appeal is allowed, in part,
accordingly.
31. The statutory amount of Rs.25,000/-, if deposited
by the Insurance Company/Appellant herein, be paid to the
Respondent Nos. 1 and 2. This amount would be adjusted
against the total compensation amount payable by the Insurance
Company/Appellant herein to the Respondent Nos. 1 and 2.
32. LCR be sent back to the concerned Court
forthwith.
(Jitendra Kumar, J.)
shoaib/ravishankar
AFR/NAFR AFR
CAV DATE 16.09.2025.
Uploading Date 07.11.2025.
Transmission Date 07.11.2025.
