Madhya Pradesh High Court
The Nationa Insurance Com Ltd vs Smt Indu Bai on 18 February, 2026
Author: Anuradha Shukla
Bench: Anuradha Shukla
NEUTRAL CITATION NO. 2026:MPHC-JBP:13999
1 MA-2388-2014
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SMT. JUSTICE ANURADHA SHUKLA
ON THE 18 th OF FEBRUARY, 2026
MISC. APPEAL No. 2388 of 2014
THE NATIONA INSURANCE COM LTD
Versus
SMT INDU BAI AND OTHERS
Appearance:
Shri Diwakar Nath Shukla - Advocate for the appellant.
Shri Yogesh Kumar Chourasia - Advocate on behalf of Shri K. K. Singh -
Advocate for respondent no.8.
None for rest of the respondents - though served.
WITH
MISC. APPEAL No. 2384 of 2014
THE NATIONAL INSURANCE COM LTD PANKAJ PLAZA
Versus
ROSHAN AND OTHERS
Appearance:
Shri Diwakar Nath Shukla - Advocate for the appellant.
None for respondents no.1 to 5 - though served.
Shri Ashish Kumar Vaidya - Advocate for respondent no.6.
Reserved on : 29.01.2026
Pronounced on: 18.02.2026
ORDER
Both these appeals have arisen out of a common award passed on 30.08.2014 by First Additional Member to the First Additional Motor Accident Claims Tribunal, Chhindwara (for short, "Tribunal"), deciding two Claim Cases No.68/2013 and 74/2013. Appellant-insurance company is challenging the finding Signature Not Verified Signed by: PRASHANT SHRIVASTAVA Signing time: 19-02-2026 10:24:05 NEUTRAL CITATION NO. 2026:MPHC-JBP:13999 2 MA-2388-2014 of Tribunal whereby it was held jointly and severally liable to pay the compensation amount.
2. Facts in brief are that Hariram, whose dependents had filed Claim Case No.68/2013, was travelling in an auto-rickshaw which met with an accident when the offending bus, being driven by its driver-respondent Mansingh Chouhan, dashed against the auto-rickshaw and Hariram sustained fatal injuries. The other Claim Case No.74/2013 was filed by Roshan who, according to claim petition, was standing on the road and sustained injuries when the offending bus hit the auto-rickshaw. These claims were respectively for the amounts of Rs.76,20,000/- and Rs.13,39,000/- and they were allowed to a sum of Rs.7,10,000/- and Rs.1,51,000/- respectively by the Tribunal holding owner, driver and the insurance company of offending vehicle jointly and severally liable to pay the compensation.
3. M.A. No.2388/2014 arising out of Claim Case No.68/2013 and M.A. No.2384/2014 arising out of Claim Case No.74/2013 have been preferred by the appellant-insurance company of the offending bus disputing its liability to pay the compensation amount.
4. The grounds of the appeals are that respondent Mansingh Chouhan, driver of the bus, was not having a valid and effective driving licence as his original licence was fake and a new licence issued on the basis of a fake licence cannot be considered to be compliant to the terms of insurance policy. Even the auto- rickshaw, besides carrying the passengers, was transporting some goods and hence it too was being driven in violation of terms of insurance policy. The next submission was that there was contributory negligence on the part of driver of auto-rickshaw. Thus, a prayer was made in both the appeals to exonerate appellant-insurance company of the bus from the liability to pay Signature Not Verified Signed by: PRASHANT SHRIVASTAVA Signing time: 19-02-2026 10:24:05 NEUTRAL CITATION NO. 2026:MPHC-JBP:13999 3 MA-2388-2014 compensation. Respondents-claimants, driver and the owner of the offending vehicle did not appear to contest the appeals and argue the matter finally.
5. Counsel for appellant-National Insurance Company and also for New India Insurance Company were heard and records of the Tribunal were examined.
6. Both the claim petitions were filed against the driver, owner and insurance company of both the vehicles involved in the accidents i.e. offending bus and auto-rickshaw. Claimants were representing a third party in reference to both the vehicles and even if it was a case of contributory negligence on the part of drivers of both the vehicles, claimants were entitled to seek compensation against owner, driver and the insurance company of any of these two vehicles or jointly against both of them. For claimants it was a case of composite negligence. The Tribunal considered who among the two drivers was responsible for the accident and it arrived at the conclusion that accident occurred on account of rash and negligent driving on the part of driver of the offending bus alone.
7. Appellant-insurance company, which had issued the insurance policy in regard to the offending bus, has questioned this finding by claiming that driver of auto-rickshaw was equally negligent. From the evidence available on record of the Tribunal, it can be gathered that auto-rickshaw involved in the accident was standing motionless while offending bus was in high speed and its driver could not control the bus on a narrow road and consequently it dashed against the motionless auto-rickshaw parked there. No witness was examined by appellant- insurance company of offending bus to assert that there was any contributory negligence on the part of driver of auto-rickshaw. Thus, the finding given by the Tribunal against the driver of offending bus, that he alone was responsible for the accident to happen on account of his rash and negligent driving, needs no interference.
Signature Not Verified Signed by: PRASHANT SHRIVASTAVA Signing time: 19-02-2026 10:24:05NEUTRAL CITATION NO. 2026:MPHC-JBP:13999 4 MA-2388-2014
8. Next comes up the defence of appellant-insurance company that the driver of offending bus, namely Mansingh Chouhan, was not holding a valid and effective driving licence as on the date of accident and, thus, it was claimed that there was a breach of terms of insurance policy. This contention rested on the fact that respondent-driver was though holding a driving licence on the date of accident, but it was a renewed licence and in terms of the testimony of witness Deepak Singh Chouhan (N.A.W.1) the original licence allegedly issued by Bombay RTO was a fake one. The submission of learned counsel for appellant was that a driving licence renewed on the basis of a fake one cannot be considered as a valid and effective licence.
9. During oral submissions, reliance was placed on the judgment of Apex Court in Oriental Insurance Co. Limited. v. Prithvi Raj, AIR 2008 SC 1408 , wherein the decision of New India Assurance Co., Shimla v. Kamla and others, (2001) 4 SCC 342, was considered and it was held that once the licence is a fake one, its renewal cannot take away the effect of forgery. It was added that "a fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged". The Apex Court, thus, observed that no licensing authority has the power to renew a fake licence and a counterfeit document, showing that it contains a purported order of a statutory authority, would ever remain counterfeit, albeit the fact that other persons, including some statutory authorities, would have acted on the document unwittingly on the assumption that it is genuine.
10. In the above factual and legal matrices of the case, it is observed that witness Deepak Singh Chouhan (N.A.W.1) was able to prove that a fake licence allegedly issued by Bombay RTO was renewed as Ex.D-5 by RTO Bhopal and this renewal, Signature Not Verified Signed by: PRASHANT SHRIVASTAVA Signing time: 19-02-2026 10:24:05 NEUTRAL CITATION NO. 2026:MPHC-JBP:13999 5 MA-2388-2014 even by a competent authority, did not vest the required validity in the driving licence of Ex.D-5. Further, in view of complicated legal intricacies about renewal of a fake license, Sheikh Ismail (respondent-owner of vehicle) cannot be held willfully negligent for not having taken required precautions before handing over the vehicle to the driver. The breach on the part of insured must be a willful one and the burden of proof to establish this breach is upon the insurer.
11. Learned counsel for the appellant has relied upon the decision of Pappu and others v. Vinod Kumar Lamba and another (Civil Appeal No.20962/2017, decided on 19.01.2018) wherein the Hon'ble Apex Court, discussing the principle laid down in the case of National Insurance Co. Ltd. v. Swaran Singh and others, (2004) 3 SCC 297, has held that for the ends of justice the insurer shall pay the claim amount awarded by the Tribunal to the appellants in the first instance with a liberty to recover the same from the owner of the vehicle in accordance with law. This shows that appellant, too, is pressing upon the application of principle of "pay and recover" while the Tribunal under the impugned judgment has saddled it with a co-extensive liability along with owner and driver.
12. The facts established here are that the offending bus was being driven at the time of accident by its driver Mansingh Chouhan, who was though holding a licence issued by RTO, Bhopal, as on the date of accident, but it was a licence renewed on the basis of a fake licence, hence, the driving licence was not a valid licence and, consequently, there was a breach of insurance policy issued by the appellant. However, it is not proved that owner-Sheikh Ismail willfully committed breach of terms of insurance policy.
13. Consequent to the fact that breach was not willful, appellant is liable to pay the compensation to the third party/claimants under the principle of "pay and recover". Accordingly, both these appeals are allowed and by quashing the finding Signature Not Verified Signed by: PRASHANT SHRIVASTAVA Signing time: 19-02-2026 10:24:05 NEUTRAL CITATION NO. 2026:MPHC-JBP:13999 6 MA-2388-2014 of "joint and several" liability fastened by the Tribunal on appellant, it is directed that appellant shall pay the compensation amount to the claimants of both the claim cases under the principle of "pay and recover" and, thereafter shall be entitled to recover the same from the owner of the offending vehicle, namely Sheikh Ismail.
14. Accordingly, the appeals are partly allowed and disposed of .
15. Let a copy of this order along with the records of Claims Tribunal be send back for information and necessary compliance.
(ANURADHA SHUKLA) JUDGE ps Signature Not Verified Signed by: PRASHANT SHRIVASTAVA Signing time: 19-02-2026 10:24:05