Himachal Pradesh High Court
Reserved On: 03.09.2025 vs Karam Chand & Others on 22 September, 2025
2025:HHC:32985 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO No.440 of 2019 Reserved on: 03.09.2025 .
Date of Decision:22.09.2025
New India Assurance Company Limited ...Appellant
Versus
Karam Chand & others ...Respondents
Coram
Hon'ble Mr. Justice Satyen Vaidya, Judge Whether approved for reporting?
For the appellant: Mr. Raman Sethi, Advocate. For the respondents: Mr. Pankaj Sawant, Advocate, for respondents No.1 to 3.
Mr. Abhay Chauhan, Advocate vice Mr. Sanjay Ranta, Advocate, for respondent No.4.
Satyen Vaidya, Judge By way of instant appeal under Section 173 of The Motor Vehicles Act. 1988 (for short, "the Act"), the appellant/insurer has assailed award dated 11.06.2019, passed by The Motor Accident Claims Tribunal, Shimla (for short, "the Tribunal").
2. The impugned award has been passed by learned Tribunal in the claim petition under Section 166 of the Act filed by respondents No.1 to 3 herein (for short, "the claimants"), who had claimed compensation on account of death of Shri Naveen (the son of claimants No.1 and 2 and brother of claimant No.3). The said Shri Naveen had died as a result of injuries suffered in a motor vehicle accident that had taken place on 06.02.2017 involving Maruti car having no registration.
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3. The offending vehicle had rolled into a deep gorge as a result whereof, the occupant i.e. Shri Naveen and the driver-cum-
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owner of the vehicle Shri Kapil had suffered fatal injuries.
4. The cause of accident was attributed to the rash and negligent driving of the owner and driver of the vehicle.
5. Respondent No.4 herein is the legal heir of deceased Shri Kapil (owner-cum-driver). The vehicle at the time of accident
6. to was insured with the appellant/insurer (for short, "the insurer") Respondent No.4 herein had contested the petition.
The allegation of rash and negligent driving against deceased Shri Kapil was specifically denied. It was submitted that the accident had taken place on account of mechanical failure i.e. locking of steering.
7. The insurer had also filed its separate reply. The averments made in the petition were denied in generality. The liability to indemnify the owner was sought to be avoided by the insurer by alleging that the vehicle, at the time of accident, had been driven in violation of the terms and conditions of the policy.
8. Learned Tribunal framed the following issues:
"(i) Whether Sh. Naveen died in a road side accident on 06.02.2017 involving vehicle bearing Chassis No. MA3EUA61500980956 in rash and negligent manner by the driver? OPP ::: Downloaded on - 23/09/2025 21:24:17 :::CIS 3 2025:HHC:32985
(ii) If Issue No.1 is proved in affirmative, for what amount of compensation, the petitioners are entitled and from whom? OPP .
(iii) Whether the claim petition is not maintainable? OPR-2
(iv) Whether the driver of the vehicle bearing Chassis No. MA3EUA61500980956 was not having a valid and effective licence? OPR-2
(v) Whether the vehicle in question is being permitted to ply in violation to the terms and conditions of the insurance policy as well as the r provisions of the M.V. Act, if so its effect?OPR-2
(vi) Whether the vehicle in question is being permitted to ply without valid registration certificate and fitness certificate? OPR-2.
(vii) Whether the claim petition is bad for mis-
joinder and non-joinder of necessary parties, if so, its effect? OPR-2.
(viii) Relief."
9. Issues No.1, 2, 5 & 6 were answered in affirmative. All other issues were answered in negative and accordingly, the claim petition was allowed by awarding compensation of Rs.10,07,560/-
along with 7.5% interest per annum on the award amount from the date of filing of claim petition till the realization. The liability to pay compensation, at the first instance, was fastened on the insurer with a right reserved in favour of insurer to recover the amount of compensation from the estate of deceased Shri Kapil inherited by ::: Downloaded on - 23/09/2025 21:24:17 :::CIS 4 2025:HHC:32985 respondent No.4 as per law. The cost of petition was also assessed at Rs.5,000/-.
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10. I have heard learned counsel for the parties and have also gone through the record carefully.
11. Indisputably, the vehicle in question was without registration at the time of accident. It has been found that the vehicle was purchased by deceased Kapil on 22.11.2006. Its temporary registration was valid till 22.12.2006. Thereafter, the deceased owner of the vehicle had not got the vehicle registered till the date of accident i.e. 06.02.2017.
12. Learned Tribunal has found the violations of Sections 39 and 43 of the Act proved in the facts of case at hand. Though, learned Tribunal has held the non-registration of vehicle at the time accident as fundamental breach of insurance policy, yet the insurer has been held liable to pay the compensation to claimants at the first instance and then to recover the same from the estate of deceased Kapil as inherited by respondent No.4 herein.
13. Mr. Raman Sethi, learned counsel for the insurer, has taken exception to the fastening of liability on the insurer to pay the compensation in the first instance. He has also challenged the impugned award insofar as the right of insurer has been restricted to recover the compensation amount from the estate of deceased Kapil inherited by respondent No.4.
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14. Mr. Raman Sehti, learned counsel for the insurer, has submitted that in light of the law laid down by Hon'ble Supreme .
Court in Narinder Singh vs. New India Assurance Company Limited and others (2014) 9 SCC 324, the plying of vehicle without its registration was a fundamental breach of policy terms and its proof was sufficient to absolve the insurer from indemnifying the insured. He would further contend that in the case of fundamental breach of policy of insurance, even fastening of liability to pay compensation at the first instance was not permissible.
15. Learned counsel for the insurer has placed reliance on a judgment passed by this Court on 25.11.2022 in FAO No.211 of 2015, titled Reliance General Insurance Co. Ltd. vs. Reeta Devi & others to assert that in view of the fundamental breach of policy of insurance, the very existence of policy becomes questionable and for such reason, the insurer cannot be fastened with liability to pay compensation even in the first instance.
16. No doubt in Narinder Singh (supra) non-registration of vehicle has been held as fundamental breach of policy of insurance, however, it cannot be said as a matter of rule that in such case the principle of pay and recover cannot be applied.
17. In Reeta Devi (supra), this Court was dealing with a fact situation, where the proved breach of terms of insurance policy was on account of compensation being claimed for death of a ::: Downloaded on - 23/09/2025 21:24:17 :::CIS 6 2025:HHC:32985 gratuitous passenger. Thus, the aforesaid judgment is distinguishable on facts.
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18. A Coordinate Bench of this Court vide judgment dated 05.07.2019 in FAO(MVA) No.564 of 2018, titled National Insurance Company Limited vs. Kamal Kishore & others, in the identical fact situation has applied the principle of pay and recover against the insurer. In the said case also, the vehicle was held to be not registered at the time of accident. Learned Coordinate Bench held the ratio in Narinder Singh (supra) inapplicable to the facts on the ground that in Narinder Singh (supra) the claim was by the owner of the vehicle for own damage claim, whereas in the case of Kamal Kishore (supra), the claim was by a third party.
19. In the instant case also, the learned Tribunal has held that the insured had purchased a comprehensive policy of insurance from the insurer, which was in force at the time of accident. Thus, the occupant of the vehicle i.e. deceased Naveen was entitled for compensation and the insurer was liable to indemnify to that extent.
20. Another Coordinate Bench of this Court in FAO No.124 of 2018 and FAO No.504 of 2018 vide judgment dated 29.03.2022 has applied the principle of pay and recover against the insurer and in that case also the breach was in the form of non-registration of the vehicle at the time of accident.
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21. The applicability of principle of pay and recover has been kept open even by the larger Bench of Hon'ble Supreme .
Court in National Insurance Company Ltd. vs. Parvathneni, (2018) 9 SCC 657.
22. Recently, in Balu Krishna Chavan vs. The Reliance General Insurance Company Ltd. & others, Civil Appeal arising out of SLP(C) No.33638 of 2017, Hon'ble Supreme Court has held that though, in all cases of breach of policy, order of pay and recover would not arise when the insurance company is not liable, but in the given facts and circumstances, it can be considered by the Hon'ble Supreme Court to meet the ends of justice.
23. As regards, the submission of learned counsel for the insurer that the Tribunal should not have restricted the right of insurer to the recovery from the estate of deceased as inherited by respondent No.4, it is clarified that the recovery from the estate of deceased owner can only be made in accordance with law and the conclusion drawn by learned Tribunal will be read in that context only.
24. In result, there is no merit in the appeal and the same is dismissed along with pending application(s), if any.
(Satyen Vaidya) Judge September 22, 2025 ::: Downloaded on - 23/09/2025 21:24:17 :::CIS 8 2025:HHC:32985 (vt) .
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