Gujarat High Court
Bharatbhai Parsotambhai Bhanushali vs Dineshbhai Khodabhai Raval on 5 March, 2026
NEUTRAL CITATION
C/FA/4857/2022 JUDGMENT DATED: 05/03/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 4857 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
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Approved for Reporting Yes No
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BHARATBHAI PARSOTAMBHAI BHANUSHALI
Versus
DINESHBHAI KHODABHAI RAVAL & ANR.
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Appearance:
NISHIT A BHALODI(9597) for the Appellant(s) No. 1
KRUPALI N BHATT(9455) for the Defendant(s) No. 2
RULE SERVED for the Defendant(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
Date : 05/03/2026
ORAL JUDGMENT
1. This appeal has been preferred by the appellant-claimant against the judgment and award dated 03.01.2022 passed by the Motor Accident Claims Tribunal, Nadiad, in MACP No.578 of 2019.
2. Heard learned advocates for the respective parties. Though served, none appears for respondent No.1.
3. The brief facts of the case are that on on 11.12.2018, the applicant had left Kheda on his own motorcycle to go to Nadiad Page 1 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Mar 06 2026 Downloaded on : Mon Mar 09 21:34:40 IST 2026 NEUTRAL CITATION C/FA/4857/2022 JUDGMENT DATED: 05/03/2026 undefined for work. At about 6:30 p.m. in the evening, while he was passing in front of Kheda Camp Patiya, opponent No.1 came from behind riding his motorcycle bearing registration No. GJ-7- CN-5544, which was owned by him, and drove it at a high speed and in a rash and negligent manner, without caring for the life and property of people on the road, and dashed into the rear side of the applicant's motorcycle. As a result of the said collision, a serious accident occurred and the applicant fell on the road. Due to the accident, he sustained a fracture in the wrist of his right hand and also suffered serious injuries on other parts of his body. He initially took treatment at Civil Hospital, Kheda, and thereafter remained admitted as an indoor patient at Ved Hospital, Kheda, where he received further treatment. Therefore, the applicant has claimed compensation of Rs.3,00,000/- under the head of pain, shock and suffering for the injuries and hardship suffered by him.
4. Learned advocate for the appellant submitted that the present appellant, who is the original claimant, has preferred the appeal on the ground that respondent No.2 - the insurance company - has been exonerated on the premise that the driver of the offending motorcycle was not holding a valid driving licence at the time of the accident. It is submitted that, in light of the decision of the Hon'ble Supreme Court in National Insurance Co. Ltd. vs. Swaran Singh, reported in (2004) 3 SCC 297, even in case of breach of any policy condition, the claimant being a third party has nothing to do with such breach. Therefore, the learned Tribunal ought to have passed an order of "pay and Page 2 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Mar 06 2026 Downloaded on : Mon Mar 09 21:34:40 IST 2026 NEUTRAL CITATION C/FA/4857/2022 JUDGMENT DATED: 05/03/2026 undefined recover." It is further submitted that, in absence of any cogent material, merely relying upon the unsigned statement of respondent No.1, it cannot be said that respondent No.2 has discharged its burden of proving that respondent No.1 was not holding a valid driving licence at the time of the accident or that there was any breach of the policy condition. The learned Tribunal ought to have considered that the insurance company may take the defence of the avoidance clause; however, it is still duty-bound to first satisfy the award in favour of the victim and thereafter recover the same from the insured in case of breach of policy conditions. Hence, it is requested that the present appeal be allowed and at least an order of "pay and recover" be passed.
5. On the contrary, the learned advocate appearing for the respondent has opposed the appeal on the ground that the learned Tribunal has not committed any error in passing the impugned judgment and award. It is submitted that two witnesses were examined to prove that, on the date of the accident, the driver was not holding a valid and effective driving licence. Therefore, it is requested that the present appeal be dismissed.
6. Upon perusal of the record, it appears that the present appeal is filed only with regard to the liability of the insurance company, and the quantum of compensation is not disputed. Therefore, the appeal is required to be decided within a narrow compass.
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7. It appears from the record that the insurance company examined the Investigating Officer (IO). The IO has stated that he had recorded the statement of the driver of the offending vehicle i.e. opponent No.1, wherein the driver allegedly admitted that he did not possess a driving licence at the time of the accident. However, in the charge-sheet, no offence under the provisions of the Motor Vehicles Act relating to driving without licence has been mentioned.
8. The IO has also admitted in his deposition that he had not made any inquiry with the RTO office to verify whether the driver was holding a valid driving licence or not.
9. Further, the insurance company examined a witness at Exhibit-37, who is the Divisional Manager of the Insurance Company, and he has stated that during the period from 20.06.2018 to 19.06.2019, opponent No.1 was not holding a valid and effective driving licence and therefore the insurance company is not liable to pay compensation.
10. On the basis of the aforesaid evidence, the learned Tribunal came to the conclusion that there was a statutory breach of the policy condition, and accordingly exonerated the insurance company from liability. However, it is required to be noted that opponent No.1 did not appear before the Tribunal and no independent or reliable evidence, such as the examination of the RTO officer or production of authentic records from the RTO authority, was produced to establish that the driver was not Page 4 of 6 Uploaded by ALI ISTAYAK(HC01093) on Fri Mar 06 2026 Downloaded on : Mon Mar 09 21:34:40 IST 2026 NEUTRAL CITATION C/FA/4857/2022 JUDGMENT DATED: 05/03/2026 undefined holding a valid driving licence. Moreover, merely relying upon the statement recorded by the Investigating Officer cannot be treated as substantive evidence. Even otherwise, the charge-sheet does not indicate any violation of Sections 3 and 181 of the Motor Vehicles Act.
11. Even assuming for the sake of argument that there was a breach of the policy condition, the claimant in the present case is a third-party victim, and under the scheme of the Motor Vehicles Act, the paramount consideration is to protect the interest of innocent third-party victims. The dispute relating to breach of policy conditions is essentially a dispute between the insurer and the insured, and the third party has nothing to do with such inter se disputes.
12. Considering the provisions of Section 149 of the Motor Vehicles Act, the insurance company has a statutory obligation to satisfy the award in favour of the third-party claimant. In cases where there is a breach of policy conditions between the insurer and the insured, the proper course is to direct the insurance company to pay the compensation to the claimant first and thereafter recover the same from the owner of the vehicle. This view is also supported by the principles laid down in United Insurance Co. Ltd. v. Minor Sobhnaben Madhobhai Patadiya, reported in 2026 (1) GLR 148, wherein it has been held that in such circumstances the Tribunal ought to pass an order of pay and recover.
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13. Considering the object of the Motor Vehicles Act, which is a social welfare and benevolent legislation, and balancing the rights of the insurer with the protection of innocent third-party victims, the learned Tribunal ought to have directed the insurance company to pay the compensation and thereafter recover the same from the owner of the offending vehicle.
14. In view of the above, the appeal deserves to be allowed. The opponent - Insurance Company is directed to pay the compensation amount as determined by the learned Tribunal to the claimant, with liberty to recover the same from the owner of the offending vehicle, i.e., opponent No.1, in accordance with law, in view of the principles laid down by the Hon'ble Supreme Court in Oriental Insurance Co. Ltd. vs. Nanjappan, reported in (2004) 13 SCC 224.
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