Gujarat High Court
The New India Assurance Company Limited vs Gitaben Wd/O Prahaladbhai Dhulabhai ... on 15 January, 2026
NEUTRAL CITATION
C/FA/2015/2022 JUDGMENT DATED: 15/01/2026
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2015 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
==========================================================
Approved for Reporting Yes No
==========================================================
THE NEW INDIA ASSURANCE COMPANY LIMITED
Versus
GITABEN WD/O PRAHALADBHAI DHULABHAI PATEL & ORS.
==========================================================
Appearance:
MR RATHIN P RAVAL(5013) for the Appellant(s) No. 1
RULE SERVED for the Defendant(s) No. 1
RULE UNSERVED for the Defendant(s) No. 4
UNSERVED EXPIRED (R) for the Defendant(s) No. 2,3,5
==========================================================
CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
Date : 15/01/2026
ORAL JUDGMENT
1. Being aggrieved and dissatisfied with the judgment and award dated 08.02.2022 passed by the Motor Accident Claims Tribunal (Aux), Ahmedabad Rural at Mirzapur, in Motor Accident Claim Petition No. 62/2005, filed under Section 166 of the Motor Vehicles Act, 1988 (for short, "the MV Act"), the appellant prefers appeal under Section 173 of the Motor Vehicles Act, 1988, whereby, the Tribunal has been pleased to partly allow the claim petition and awarded compensation of Rs.4,17,500/-.
2. Heard Mr. Rathin Raval, learned advocate for the appellant- Insurance Company. Though served, none appears for the respondents.
Page 1 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined
3. Mr. Raval, learned counsel for the appellant, submitted that the Insurance Company is not liable to pay compensation as the deceased was travelling as an unauthorized passenger on the tractor and the risk of a passenger is not covered under the policy. Therefore, the Tribunal committed an error in saddling liability upon the Insurance Company and in directing it to pay and recover the amount. It was further submitted that the impugned order has been passed in violation of the Rules of the Road Regulations, 1989. As per Rule 28, the driver of a tractor, being a goods vehicle, is prohibited from carrying more passengers in the driver's cabin than the number prescribed in the certificate of registration, and such a vehicle is not permitted to carry passengers for hire or reward. Hence, the direction issued by the Tribunal to pay and recover is contrary to law. It was also contended that during the pendency of the proceedings, the owner of the vehicle expired and his legal heirs were not brought on record. Consequently, the order passed by the Tribunal is a nullity. On these grounds, learned counsel has requested that the appeal be allowed as prayed for.
4. Having heard the learned advocate for the appellant, it appears that the deceased was travelling in a goods vehicle as an authorized passenger, and this fact is not seriously disputed by the opponent. Therefore, the Tribunal on the ground that the Tribunal has the power to pass an order of "pay and recover", whereas the learned advocate for the appellant has disputed the Tribunal's authority to pass such an order. Therefore, this batch of appeals is required to be decided on a narrow compass.
5. The main contention raised by the learned advocate for the appellant pertains to the powers of the Tribunal, particularly when a statutory defence has been raised under Section 147 of the Motor Vehicles Act. Section 147 defines the minimum statutory coverage required in a motor insurance policy to safeguard third-party interests at the time of an accident by mandating compulsory insurance. The statutory liability created under Page 2 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined Section 147 extends only to the risks expressly enumerated therein, namely:
(i) death or bodily injury of a third party, and (ii) the owner's representative travelling in a goods vehicle. If the risk falls outside the scope of Section 147, the insurer has no statutory liability and cannot be compelled to pay. In contrast, Section 149(2) provides the insurer with specific statutory defences to avoid liability, commonly referred to as avoidance clauses. These defences permit the insurer to escape liability only in cases of proven fundamental breach. If the insurer successfully establishes a defence under Section 149(2), it may be exonerated from liability; however, if the insurer fails to prove such defence, it must indemnify the insured/owner in full.
Thus, Sections 147 and 149 form the basic statutory framework governing the insurer's liability. Section 149 specifically deals with the duty of insurers to satisfy judgments and awards passed against persons insured in respect of third-party risks. Section 149 reads as under:
(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (l) of section 147 (being a liability covered by the terms of the policy) or under the provisions of section 163A is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely--
a. that there has been a breach of a specified condition of the policy, being one of the following conditions, namely--
(i) a condition excluding the use of the vehicle--
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or Page 3 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving license during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non- disclosure of a material fact or by a representation of fact which was false in some material particular.
(3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India:
Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).
(4). Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect:
Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.
(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.
(6) In this section the expression "material fact" and "material particular"
means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the Page 4 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.
(7) No insurer to whom the notice referred to in sub-section (2) or sub-
section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub- section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.
6. As per Section 150, which pertains to the duty of insurers to satisfy judgments and awards against persons insured in respect of third-party risks, and keeping in mind the aforesaid facts, the Hon'ble Supreme Court, in National Insurance Co. Ltd. vs. Swaran Singh, reported in (2004) 3 SCC 297, has in paragraphs 83 and 102 observed as under:
"83. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. The right to avoid liability in terms of sub- section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading."
102 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.Page 5 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026
NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined 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.
(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 Page 6 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined 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.
7. Keeping in mind the aforesaid provision, more particularly paragraph 102(x), the Hon'ble Supreme Court has held that where, upon execution of the claim, the Tribunal concludes that the insurer has satisfactorily proved its defence, the Tribunal may direct that the insurer is entitled to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party. Paragraph 102(xi) further provides that the provisions contained in sub-section (4) with the proviso thereunder, and sub-section (5), are intended to cover the specified contingencies mentioned therein so as to enable the insurer to recover the amount.
8. In the present case, the Insurance Company has submitted that on the ground of violation of the terms and conditions of the insurance policy, it is required to be exonerated from its liability. However, an insurance policy is a statutory contract entered into between the insurer and the insured for the benefit of third parties. The aforesaid ratio has also been followed by the Hon'ble Apex Court in Shamanna vs. Oriental Insurance Co. Ltd., (2018) 9 SCC 650, wherein, while considering Sections 147 and 149 of the Motor Vehicles Act, it has been held that the victim of a motor vehicle accident is a third party, and it is the statutory duty of the insurer to satisfy the award. The principle of "pay and recover" has been reiterated, holding that if the driver had no valid driving licence and there was a breach of policy conditions, the High Court ought not to interfere with the order of "pay and recover" passed by the Tribunal. If the Insurance Company has paid any amount, the mode of recovery is also provided, and the insurer has the Page 7 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined liberty to initiate proceedings before the executing Court concerned, if the dispute is between the insurer and the owner. In the present case, the claimant is a third party and has no concern with the inter se terms and conditions of the insurance policy. Hence, in view of the decisions of the Hon'ble Supreme Court in Anu Bhanvara & Ors. vs. IFFCO Tokio General Insurance Co. Ltd. & Ors., (2020) 20 SCC 632; Sunita & Ors. vs. United India Insurance Co. Ltd. & Ors.; and Rama Bai vs. M/s. Amit Minerals, 2025 INSC 1162, the learned Tribunal has not committed any error in directing "pay and recover".
9. Further, this Court deems it fit to refer to the judgment of the Hon'ble Apex Court in Sadhna Tomar v. Ashok Kushwaha, 2025 SCJ 414, wherein the Tribunal was pleased to pass an award of compensation in favour of the claimant, holding that the Insurance Company shall pay the amount of compensation to the claimant and thereafter recover the same from the driver and owner of the offending vehicle, who were held jointly and severally liable, relying on the decision in Swaran Singh (supra). The said view was affirmed by the High Court, and the order of "pay and recover" was also upheld by the Hon'ble Apex Court. In view of the above, the learned Tribunal has not committed any error in passing the order of "pay and recover".
10. The Hon'ble Supreme Court in the cases of Shamanna (supra), Rama Bai (supra), and Swaran Singh (supra) has consistently held that the insurer must first pay the compensation amount to the third party and may thereafter recover the same from the insured. Even though the insurer is entitled to raise a valid defence regarding the driver not possessing a valid driving licence under Section 149(2)(a)(ii) to avoid liability, and even if the conditions of law are satisfied to absolve the insurer from paying the compensation, the doctrine of "pay and recover" continues to apply.
11. In view of the judgment of the Hon'ble Supreme Court in Rambabu Tiwari vs. United India Insurance Co., (2008) 8 SCC 165, wherein the Court Page 8 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined exonerated the Insurance Company from liability for breach of policy conditions but refused to interfere with the order of "pay and recover", the direction issued by the learned Tribunal in the present case also does not warrant any interference.
12. In view of the decision of the Hon'ble Supreme Court in K. Nagendra vs. New India Insurance Co. Ltd., 2025 SCC OnLine SC 2297, the authority relied upon by the learned advocate for the appellant is not helpful. In all the authorities referred to by the appellant, there is no reference to the case of Shamanna (supra), wherein the powers of the Tribunal to pass an order of "pay and recover" were upheld. In Shamanna (supra), the Hon'ble Supreme Court has specifically observed in paragraphs 6, 7, 11, 12, and 13 as under:
"6. As per the decision in Swaran Singh case, onus is always upon the insurance company to prove that the driver had no valid driving licence and that there was breach of policy conditions. Where the driver did not possess the valid driving licence and there are breach of policy conditions, "pay and recover" can be ordered in case of third-party risks. The Tribunal is required to consider " as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver... does not fulfil the requirement of law or not will have to be determined in each case"."
7. The Supreme Court considered the decision of Swaran Singh case in subsequent decision in National Insurance Co. Ltd. v. Laxmi Narain Dhut. wherein this Court held that (SCC p. 705, para 5) "5. The decision in Swaran Singh case) has no application to cases to indemnify the amount and if so advised, to recover the same from the other than third-party risks and in case of third-party risks the insurer has insured."
8. The same principle was reiterated in Premkumari v. Prahlad Dev.
9. For the sake of completion, we may refer to few judgments where the breach of policy conditions was fundamental and the Supreme Court taking contrary view that the insurance companies were not liable to pay the compensation. In National Insurance Co. Ltd. v. Bommithi Subbhayamma making the insurance company liable for payment of compensation in respect the Supreme Court reversed the judgment of Andhra Pradesh High Court in of gratuitous passengers carried in the goods vehicle.
10. In Oriental Insurance Co. Lid. v. Brij Mohon?, the claimant was travelling in the trolley attached to tractor carrying earth to brick kiln. It was d found that the tractor and the trolley were not used for "agricultural works", the only purpose for which the tractor was insured, when the claimant sustained the injuries. The Supreme Court though held that the insurance company is not liable to pay compensation, however, invoked the power vested in the Supreme Court under Article 142 of the Constitution of India in directing the insurance company to satisfy the award by paying compensation to the insured/claimant e and realise the same from the owner of the tractor.
Page 9 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined
11. In the present case, to deny the benefit of "pay and recover", what seems to have substantially weighed with the High Court is the reference to larger Bench made by the two-Judge Bench in National Insurance Co. Ltd. v. Parvathnenis which doubted the correctness of the decisions which in exercise of jurisdiction under Article 142 of the Constitution of India directing insurance company to pay the compensation amount even though insurance company has no liability to pay. In Parvathneni cases, the Supreme Court pointed out that Article 142 of the Constitution of India does not cover such type of cases and that: (SCC p. 786, para 5):
"5. If the insurance company has no liability to pay at all, then, it cannot be compelled by order of the court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle."
12. The above reference in Parvathneni cases has been disposed of on 17-9- 2013 by the three-Judge Bench keeping the questions of law open to be decided in an appropriate case.
13. Since the reference to the larger Bench in Parvathneni cases has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case followed in cases hold the field. The award Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the b vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh and Laxmi Narain Dhur cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored."
13. In view of the reliance placed by the learned advocate for the appellant, no assistance can be derived by the appellant-Insurance Company, as the Hon'ble Supreme Court has reaffirmed the social welfare intent underlying the Motor Vehicles Act. The principle or order of "pay and recover" embodies judicial empathy, ensuring that victims are not left uncompensated due to disputes between the owner and the insurer. At the same time, considering contractual accountability, an owner who breaches the conditions of the policy cannot escape financial responsibility, as insurers retain the right to recover the amount paid to the claimant. This dual balance justice to the victim and fairness to the insurer strengthens the integrity of the Motor Vehicles accident compensation system.
14. In view of the above, the appellant-Insurance Company is directed to pay the amount of compensation determined by the Tribunal, with liberty to Page 10 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined recover the same from the owner of the offending vehicle in accordance with law. In view of the law laid down by the Hon'ble Apex Court in Oriental Insurance Co. Ltd. v. Nanjappan, (2004) 13 SCC 224, it is always open for the Insurance Company to recover the amount from opponent No.5 by initiating appropriate proceedings before the Executing Court, without being required to file a separate suit. While passing the order of "pay and recover", the Tribunal shall issue appropriate directions to protect the interest of the Insurance Company, as directed by the Hon'ble Apex Court in Nanjappan (supra), subject to suitable conditions and safeguards..
15. Herein it is needless to say that as the Insurance Company, having the right to recover the amount from opponent No.5 -owner and insurance company has to make appropriate request or to file proceedings before the Tribunal to recover the amount and to take appropriate steps against the owner of the vehicle, i.e., opponent No.5 for furnishing security of amount that the insurer is required to pay or paid to the claimants, and the offending vehicle shall be attached as part of such security. If necessity arises, the appellant-Insurance Company may take assistance from the concerned Regional Transport Authority also, and make request to the Executing Court to pass appropriate orders in accordance with law.
16. So far as death of owner is concerned, owner is expired on 14.06.2015 during pendency of the claim petition and decree is passed on 04.03.2022. But perusing the record, it appears that during the aforesaid period, coverage of policy was available and policy was in force. Hence, right of third party is already crystallized on the ground that merely order is nullity, said argument is not acceptable, more particularly in light of Section 155 of the Act and decision delivered in case of Shriram General Insurance Company Vs. Takhuben Mafabhai Mundhava, reported in 2024 (1) GLR 805. Paragraphs 7 and 9 read as under:-
"7. The Insurance company at the stage of appeal has disputed undefined its liability by raising the issue of non-joinder of heirs and legal representatives as party respondents. This leads to the core issue as to whether claim petition was maintainable, in absence of heirs and legal representatives of the deceased owner being brought on record, against the Insurance Co. At this stage, it would be apt to Page 11 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined look into section 155 of the Act which provides that the death of an insured does not bring about abatement of the proceeding. Section 155 of the Act deals with the situation where even in the case of the dead person in whose favour the certificate of insurance has been issued, the cause of action to claim still survives against the insurer. Section 155 of the Act reads as under:
"155. Effect of death on certain causes of action.-- Notwithstanding anything contained in section 306 of the Indian Succession Act, 1925 (39 of 1925), the death of a person in whose favour a certificate of insurance had been issued, if it occurs after the happening of an event which has given rise to a claim under the provisions of this Chapter, shall not be a bar to the survival of any cause of action arising out of the said event against his estate or against the insurer."
8. Thus, the said provision clearly suggests that even in the case of death of a person in whose favour certificate of insurance undefined is issued, if such death occurred after happening of the accident, which give rise to the claim under the provisions of the Act, shall not be bar to the survival of the said cause against his estate or his insurer. In light of the aforesaid provision, even upon death of the owner, who is husband of the claimant, she being legal heir of the deceased definitely steps in the shoes of the insured. However, the same would not rebut her claim against the Insurance Co. In view of the aforesaid provision in my opinion, even in absence of an heir and legal representative being brought on record of the deceased owner pending the claim petition, the claim against the insurer shall survive and the proceedings shall not be abated. It is pertinent to note that the accident took place on 17.02.2013, the claim petition was preferred before the Tribunal on 27.06.2013 and the owner of the offending vehicle, who has been arraigned as opponent No.1 in the said claim petition is reported to have expired on 17.12.2018. Thus on the date of accident, the certificate of Insurance issued by the appellant - Insurance Co. was in force and the subsequent demise of the owner of the vehicle pending claim petition would not absolve the Insurance Co. from its contractual liability. In view of Section 155 of the Act, the claim put forward by the original claimant shall not be barred upon the death of the owner of the offending vehicle in whose favor undefined certificate of insurance had been issued. Hence, there is no merits in the aforesaid submission of the appellant insurance company and is hereby rejected."
In view of the above, arguments canvassed by learned counsel for the appellant is not acceptable.
17. In view of the above conspectus, no interference is called for in order passed by the learned Tribunal of "pay and recover". The present First Appeals stand dismissed. However, it is needless to say that so far order of pay and recover is concerned, it is always open for the Insurance Company to initiate recovery proceedings in light of Sections 51, 52 and 53 of the Code of Civil Procedure against the legal representatives of insured person. Even on count of smallness of amount, no further discussion is required.
Page 12 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026 NEUTRAL CITATION C/FA/2015/2022 JUDGMENT DATED: 15/01/2026 undefined
18. The appellant - insurance company is directed to deposit the entire amount of compensation as awarded by the learned Tribunal in the impugned judgment and award alongwith accrued interest on the said amount within a period of four weeks from the date of receipt of this order with the learned Tribunal.
19. After deposit of the amount of compensation by the appellant - insurance company, the same shall be disbursed in favour of the claimant and/or her guardian and father through RTGS, after proper verification. The bank account details shall be furnished by the learned advocate for the claimant to the Nazir Department of the learned Tribunal concerned. The Court fees, if any, payable by the claimant on compensation be deducted from the said amount and the remaining amount of compensation be disbursed in favour of the claimant on due verification.
20. Record and proceedings, if any, be sent back to the concerned Tribunal forthwith. Pending civil applications, if any, also shall stand disposed of accordingly.
21. Since the First Appeal is dismissed, Civil Application if any does not survive and are accordingly disposed of.
(HASMUKH D. SUTHAR,J) SUCHIT Page 13 of 13 Uploaded by SUCHITKUMAR PATEL(HC01083) on Fri Jan 16 2026 Downloaded on : Tue Jan 20 21:07:01 IST 2026