Gujarat High Court
Amiben Babubhai Matiya vs Basir Sajanbhai Malesh on 23 September, 2025
NEUTRAL CITATION
C/FA/4868/2018 JUDGMENT DATED: 23/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 4868 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J. L. ODEDRA
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Approved for Reporting Yes No
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AMIBEN BABUBHAI MATIYA & ORS.
Versus
BASIR SAJANBHAI MALESH & ANR.
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Appearance:
MR PREMAL S RACHH(3297) for the Appellant(s) No. 1,2,3,4
MR TANMAY B KARIA(6833) for the Defendant(s) No. 2
NOTICE SERVED for the Defendant(s) No. 1
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CORAM:HONOURABLE MR.JUSTICE J. L. ODEDRA
Date : 23/09/2025
ORAL JUDGMENT
1. The present appeal arises from judgment and award dated 13.08.2018 passed by the learned Motor Accident Claims Tribunal, Jamnagar.
2. It appears that on the fateful day i.e. on 25.12.2009, one Bhagvanji alias Babubai was going from Khijadia to Jamnagar at 7 p.m. for selling milk by driving his Chakda- Page 1 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025
NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined rickshaw (hereinafter being referred as "the rickshaw") and on the way, on a particular bridge, the axel of the rickshaw came to be broken and deceased lost control over the said rickshaw as a result of which the deceased suffered an accident and sustained fatal injuries.
3. In view of the said accident and the consequent fatality, the heirs of the said deceased filed a claim petition under section 163A of the Motor Vehicles Act 1988.
4. Vide the concerned judgment and award, the claim petition has been disposed of as rejected. It is against the said judgment and award that the present appeal has been filed.
5. Learned advocate Mr. Premal Rachh for the appellant has submitted that the Tribunal has been swayed by the fact that the deceased was not a paid driver and therefore on the said basis and the fact that the policy was accessed by the Tribunal to be an Act Only policy, it was held by the Tribunal that under the said policy, the risks are covered only of third party along with a paid driver or where the Page 2 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined owner himself is driving the vehicle. Thus, on the ground that the risk was not covered, the said MAC Petition came to be rejected. At this juncture, learned advocate for the appellant has drawn attention of this Court to the fact that the policy of the accident in question, the premium of paid driver to the extent of Rs. 25/- and that for cover for owner driver of Rs. 2,00,000/- has been included. It was also submitted that under the Limits of Liability clause on the said policy, under sub-clause (b), the following has been stated, which reads as follows:
"PA cover for owner driver under Section III CSI Rs.
2,00,000/-; voluntary deductible Rs. 0."
6. It was submitted that under the Driver's Clause, the following has been stated in the policy: "Any person including the insured: Provided that a person driving holds an effective Driving License at the time of the accident and is not disqualified from holding or obtaining such a license. Provided also that the person holding an effective Learner's License may also drive the vehicle and that such a person satisfies the requirements of Rule 3 for the Central Motor Vehicle Rules, 1989."
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7. The learned advocate has relied on judgment in the case of New India Insurance Company Limited and Manisha Ben Mahendra @ Shankar Joshi and others being a reported judgment at 2008 (2) GLH 12. Relying on the said judgment, it was emphasized before this Court that when the claim is under Section 163A, the defence of the Insurance Company that the victim of accident himself being a tortfeasor, pillion rider, employee of the insured or gratuitous passenger, are not tenable. It was submitted that the the Single Judge of this Hon'ble Court adjudicating the matter has considered the decision in the case of National Insurance Company Limited Vs. Swaran Singh and various other judgments and has held that the decision in the case of The Oriental Insurance Company Limited vs Meena Variyal & Ors reported at 2007 (5) SCC 428 and the other judgments referred not binding in as much as conjointly with the said judgment of Meena Variyal, were not decided in context of Section 163A of the Act. Relying on the said judgment, it was submitted that there was a statutory liability created against the insurer in terms of Section 163A and thus independent of the terms Page 4 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined of policy and other provisions of law, subject to Section 147(1), the plea and defenses of victim of the accident being tortfeasor, pillion rider, gratuitous passengers or employee of the insurer were not available to the insurer for avoiding or defeating its liability to pay compensation. The learned advocate Mr. Rachh has submitted that the concerned judgment i.e., Manishaben Mahendra Joshi (supra) has referred to judgment in the case of New India Insurance Company Limited Vs. P. Saguna, widow of P Bala Krishna and Ors. reported in 2008 (2) GLR 1357. In the said case, the Hon'ble High Court of Gujarat has laid down the very same ratio, which has been relied and reiterated in the case of Manishaben Mahendra Joshi (supra). On the other hand, he had thus submitted that therefore the finding of the Tribunal that under the relevant insurance policy, the insurance company is only liable to cover the risk of paid driver and owner only, is liable to be set aside.
8. Learned advocate Mr. Tanmay Karia appearing for the insurance company has vehemently opposed the present Appeal. He has relied on the judgment of Ram Khiladi Vs. Page 5 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined United India Insurance Company Limited (2020) 2 SCC 550 and has submitted that in the said case, the Hon'ble Supreme Court has been pleased to consider various authorities and has held that the deceased cannot maintain a claim under Section 163A of the Act against the owner insurer of the vehicle which he himself has borrowed from the concerned owners as he steps into the shoes of the owner and therefore, he cannot maintain a claim against Section 163A of the Act. It was thus submitted that on the aforesaid count, there is no reason for interference in the impugned order.
9. Mr. Karia, in addition to the aforesaid judgment in the case of Ram Khiladi (supra), he had also relied on the judgment in the case of Vasuki and Ors. Vs. Shanti and Ors. reported in (2021) 16 SCC 730. He has submitted that the fact that the ratio in Ram Khiladi (supra) has also been reiterated in the latest judgment of the Hon'ble Supreme Court that being the judgment of Vasuki (supra). He has relied on the following paragraphs of Vasuki (supra):
".....
4. Mr. Abhishek Gola, learned counsel for the insurance Page 6 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined company pointed out that in terms of Indian Motor Tariff, the liability of the insurance company is limited in respect of personal accident coverage, therefore, the liability of the insurance company is limited. However, he could not point out any clause from the policy to show that the liability of the insurance company is limited. Mr. Gola, learned counsel also could not point out any clause from the policy that the Indian Motor Tariff would be applicable in respect of the liability of personal accident coverage for the owner and driver. Mr. Gola, learned counsel has referred to a judgment of this Court reported in (2020) 2 SCC 550, titled 'Ramkhiladi v. United India Insurance Company' to contend that the personal accident coverage is limited. It is argued that it was a case of motorcycle whereas the liability of the insurance company is limited to Rs. 1,00,000/- in respect of personal accident coverage but in respect of four-wheeler, the liability is limited to Rs. 2,00,000/-.
5. However, we are unable to agree with the arguments raised. The policy is categorical, indemnifying the personal accident claim of the owner and driver. There is no cap on the amount of compensation payable by the insurance company in the policy. There is no condition in the policy that tariff fixed by the Indian Motor Tariff would be applicable in respect of personal accident claim.
6. The judgment in Ramkhiladi (supra) was a case where there was an accident between two motorcycles. One motorcycle which was other than driven by the deceased, the owner, driver and the insurance company were not impleaded as respondent. Therefore, in terms of the policy, the personal accident benefit was limited to a sum of Rs. 1,00,000/- which was produced before the Court.
7. The arguments that the driver cannot be treated to be third party as against the owner is not disputed but the fact is that the insured having taken a personal accident policy in respect of the owner if she herself was driven or the driver who happens to be her husband, the liability of the insurance company is limited.
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10. Thus, relying on the said judgment, it was submitted that where the policy has a clause for covering the personal accident claim of the owner and driver and that if there is no cap on the amount of compensation payable by the insurance company, then the liability of the insurance company would be unlimited. He however submitted that looking to the policy in the present case, there is specific cap stated in the insurance policy and therefore, the liability of the insurance company would be limited to such cap. It was thus submitted that in the facts of the present case, such liability cannot possibly be more than Rs. 2,00,000/-, that being the cap in the party cncerned.
11. Having heard the learned advocates for the parties, this Court proceeds to decide the present matter in terms appearing hereinafter.
12. The only point of determination which is arises for consideration by this Court in the present appeal is whether the findings of learned Tribunal to the effect that in Act Only policy, only of a paid driver and owner driver Page 8 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined only is liable to be set aside. Secondly, whether the Tribunal was right in avoiding calculation of compensation where it has come to on a finding that the insurance company is not liable.
13. It is the view of this Court that indeed when the Hon'ble Supreme Court has stated in the judgment in the case of Vasuki (Supra) that where the insurance policy covers the personal accident claim of the owner and driver and that there is no cap on the extent of liability in the Insurance Policy, then the liability of the insurance company is unlimited. In the present case, looking to the policy and the portions quoted herein above, it is apparent that the PA for owner-driver was to the extent of Rs. 2,00,000/-. Therefore, it cannot be stated that the insurance company is not liable when the policy is liability only/ act only policy. In the present case, the deceased was driving a concerned vehicle i.e. a Chakda-rickshaw. The facts of the Vasuki (Supra) indicate that there the challenge was to an order wherein the facts indicate that vehicles belong to the mother and were driven by father. Naturally, the father could not be a "paid driver". The Tribunal, in such Page 9 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined circumstances, held in that case that the personal accident coverage was not applicable, as the said Tribunal did not treat the driver to be a third party. The said argument was dealt by the Hon'ble Supreme Court, at Paragraph-7 of the said judgment, which reads as follows:
"The arguments (sic) that the driver cannot be treated to be third party as against the owner is not disputed, but the fact is that the insured having taken personal accident policy in respect of the owner if she herself was driver or the driver who happens to be her husband. The liability of the insurance company is limited."
14. The said observation of the Hon'ble Supreme Court paragraph has to be read in conjunction with paragraph 2.1 of the judgment in Ram Khiladi (Supra), which reads as follows;
"2.1 That in a vehicular accident which occurred on 02.10.2006, one Chotelal alias Shivram died. The deceased was travelling on motorcycle bearing registration No. RJ 02 SA 7811. At this stage, it is required to be noted that, even as per the claimants, the accident occurred on account of rash and negligent driving of the driver of another motorcycle bearing registration No. RJ 29 2M 9223. That the appellants herein filed a claim petition before the Motor Accident Claims Tribunal, Laxmangarh (Alwar), Rajasthan (hereinafter referred to as the learned Tribunal) under Section 163A of the Motor Vehicles Act (hereinafter referred to as the Act). At this stage, it is required to be noted that the claim petition was preferred only against the owner of the motorcycle bearing registration No. RJ 02 SA 7811 and its insurance Page 10 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined company. Neither the driver nor the owner or the insurance company of the vehicle bearing registration No. RJ 29 2M 9223 were joined as opponents in the claim petition........"
15. In Ram Khiladi (Supra), even when the vehicle was "borrowed" or "used under permission of the owner", [see Paragraph-9.3 of Ram Khiladi (supra)] by the concerned driver, the Hon'ble Supreme Court was pleased to hold that only where the insurance of personal accident cover has been taken, then such owner-driver would be entitled to a sum to the extent that has been covered in the insurance policy. The same implies that in such case, the bare Act Policy would not, by itself cover the paid driver and owner, but would be so covered only where the policy specifically covers them. In the present case, i.e., a case before this Court also, the case is that the vehicle had been borrowed by the applicant and therefore, in view of the ratio in Ram Khiladi (Supra) and subsequently, in the case of Vasuki (Supra), it appears that such driver who has borrowed the vehicle, the insurance company would be liable, at the highest, only to the extent to which the liability has been accepted under the contract of insurance, which in the present case is to the tune of Rs. 2,00,000/-. Page 11 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025
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16. Indeed, there is some observation of the Tribunal to the extent that the vehicle had been sold and the deceased- driver was the one who had purchased it. However, no consequential application under Section 157(2) of the Act appears to have been made and hence the said "purchaser" cannot be treated as the registered owner of the vehicle.
17. Thus, clearly, the deceased can only be treated as "borrower" of the vehicle for the purpose of present proceedings. In the circumstances, this Court is of the opinion that the exoneration of insurance company as aforesaid is not sustainable inasmuch as the liability of the insurance, at the highest, could only be to the tune of Rs. 2,00,000/-.
18. The accident in question is of 25.12.2009. If, at this stage, i.e., in the Year 2025, the matter is remanded back to the Tribunal for the purpose of assessing the compensation, it would be travesty of justice as the fruits of the present claim petition would be denied to the claimants for such further period, as would be taken by the Tribunal to assess Page 12 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined the compensation afresh. In the circumstances, this Court is inclined to consider the evidence on record. It appears that in the affidavit of examination in chief (Exhibit 14) being that of the son of the deceased, the income of the deceased was claimed, as Rs. 40,000/- per annum. In the cross examination, qua the said income, the deponent asserts that his father, the deceased, was earning Rs. 40,000/- per year by engaging in the business of selling milk including transportation there of. But then the suggestion of the insurance company is that that the deceased was earning about Rs. 1,500/- to Rs. 2,000/- per month. In view of the aforesaid, as there is no clear demarcation of income, nor the proof thereof, this Court is of the view that it would be appropriate if the minimum wages, as applicable at that point in time, were to be considered. So considering, the minimum wages for the concerned year for an unskilled labor, the income for a month would be to the tune of Rs. 3,700/- which would be more than Rs. 40,000/- for yearly income. Hence for the purpose of a person earning Rs.40,000/-, the highest income provided under the schedule 2 of the Motor Vehicles Act and for the purpose of Section 163A of the Page 13 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined Motor Vehicles Act, the total compensation payable would be to the tune of Rs. 6,00,000/-. Of Rs. 6,00,000/-, ⅓ would have to be deducted towards personal expenses of the deceased as the multiplier of dependents are four in number. Thus, the amount would stand to be reduced to Rs.4,20,000/-. In terms of the provisions of the 2nd schedule, additional compensation would be to the tune of Rs. 2,000, Rs. 5,000, Rs. 2,500, and Rs. 15,000 being respectively the expenses of funeral, loss of consortium, loss of estate and medical expenses, the cumulatively coming to the Rs. 24,500/- . However that because as the maximum compensation payable to the applicant under the policy would be to the tune of Rs. 2,00,000/-, therefore the claim to the extent of Rs. 2,00,000/- alone is liable to be awarded. The same shall be awarded with interest at the rate of 9% from the date of filing of the claim petition till actual deposit of the said amount by the insurance company. Therefore, this claim petition is liable to be allowed to the aforesaid extent.
19. The claimant company shall deposit the said amount within a period of 8 weeks from the date of obtaining a Page 14 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025 NEUTRAL CITATION C/FA/4868/2018 JUDGMENT DATED: 23/09/2025 undefined copy of the present judgment.
20. Looking to the fact that the accident is of 2009, it would not be beneficial if the said amount is again invested in FDRs. Hence, it is ordered that the entire amount shall forthwith be disbursed upon it being paid by the insurance company to the claimants upon due verification. The shares to which the claimant shall be entitled, shall be adjudged by the Tribunal.
21. The appeal having been allowed to the aforesaid extent and stands disposed of accordingly.
22. The Records and Proceedings be sent back to the concerned Tribunal, forthwith.
(J. L. ODEDRA, J) JIGAR J RABARI Page 15 of 15 Uploaded by MR.JIGAR JIVANBHAI RABARI(HCD0067) on Tue Sep 23 2025 Downloaded on : Wed Sep 24 00:59:57 IST 2025