Gujarat High Court
Oriental Insurance Co Ltd, Office At ... vs Heirs Of Deceased Roshanbanu Hanifbhai ... on 8 October, 2025
NEUTRAL CITATION
C/FA/1690/2011 JUDGMENT DATED: 08/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1690 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE MOOL CHAND TYAGI
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Approved for Reporting Yes No
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ORIENTAL INSURANCE CO LTD, OFFICE AT D.O.2, KALIDAS CHAMBERS
Versus
HEIRS OF DECEASED ROSHANBANU HANIFBHAI MEMON, HANIFBHAI
DAUD & ORS.
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Appearance:
MR VIBHUTI NANAVATI(513) for the Appellant(s) No. 1
DELETED for the Defendant(s) No. 8
MR.HIREN M MODI(3732) for the Defendant(s) No. 1,2,3,4,5,6
MR.KARNA H DHOMSE(6684) for the Defendant(s) No. 1,2,3,4,5,6
MS. VRUNDA C SHAH(6702) for the Defendant(s) No. 7
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CORAM:HONOURABLE MR.JUSTICE MOOL CHAND TYAGI
Date : 08/10/2025
ORAL JUDGMENT
1. The present appeal is filed against the impugned judgment and award dated 28.01.2011 passed by the learned Motor Accident Claims Tribunal (Auxiliary), Ahmedabad in MACP No.513/2005, whereby the claim petition was allowed partly and awarded a sum of Rs.9,16,000/- along with interest at the rate of 9% per annum from the date of filing of the claim petition till its realization with proportionate costs. The learned Tribunal has also directed the appellant-insurance company to first satisfy the award and thereafter, liberty was granted to the appellant-
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insurance company to recover the said awarded amount from the owner of the vehicle.
2. Heard learned counsels for the parties.
3. Learned counsel for the appellant submitted that the vehicle i.e. Tata Sumo bearing registration no.GJ-1-HH-1848, was insured with the appellant-insurance company at the relevant point of time. The said vehicle insured by the appellant was covered under a Private Car Liability Only Policy. The said policy contained the following clause:-
"The policy covers use of the vehicle for any purpose other than (a) Hire or Reward other than the purpose of driving tuition (b) Carriage of goods (other than samples or personal luggage, (c) Organized racing,
(d) Pace making, (e) Speed testing, (f) Reliability Trial, (g) any purpose in connection with Motor Trade." He further submitted that the claimant no.2-Irfanbhai Hanifbhai in his cross-examination at Exh.40, clearly admitted that the claimants and the deceased were traveling in the said Tata Sumo after hiring the same by fixing the rent from opponent no.1-
Vipulbhai, who is running a travelling business. He further submitted that it is the clear cut case of the breach of policy. Therefore, the learned Tribunal has committed an error in fastening the liability upon the appellant-insurance company to first satisfy the award and thereafter, entitle to recover the same from the owner of the vehicle in question. He further submitted that the insurance company ought to have been exonerated, as the conditions of the insurance policy were breached.
4. On the other hand, Mr. Hiren M. Modi, learned counsel, appearing on behalf of the original claimants/respondent nos.1 to 6, Page 2 of 5 Uploaded by MR.HARSHIT SANCHETI (HCD0070) on Fri Nov 07 2025 Downloaded on : Fri Nov 07 20:39:42 IST 2025 NEUTRAL CITATION C/FA/1690/2011 JUDGMENT DATED: 08/10/2025 undefined vehemently submitted that there is no infirmity in the impugned judgment. The learned Tribunal has rightly saddled the liability on the insurance company, as the claimants were third party. Therefore, insurance company was legally bound to satisfy the award, and thereafter, entitle to recover the same from the owner of the vehicle. In support of his contention, learned counsel for the respondents has relied upon the decision of Coordinate Bench of this Court in the case of Heirs and Legal Representative of deceased Bhalaji Hamirji & Ors. Vs. Driver of ST Bus No.GJ-18-V-7612 & Ors., passed in First Appeal No.842/2010 and allied appeal and submitted that in the said case, it was held in the similar facts and circumstances that the insurance company shall first satisfy the award, and thereafter, recover the same from the owner. He further submitted that the ratio of the aforementioned judgment is applicable in the facts and circumstances of the present case. Therefore, the present appeal is devoid of merits and liable to be dismissed.
5. Having considered the submissions of the learned counsel for the parties and having perused the record, it is not in dispute that the offending vehicle was not insured by the appellant. The insurance policy of the vehicle was proved before the learned Tribunal at Exh.46. Having considered the facts and circumstances of the case, the learned Tribunal in para 21, has observed as under:-
"In this case, so far the liability to pay the compensation is concerned, the LA appearing on behalf of the opponent- insurance company has vehemently argued that the vehicle involved in this case was hired by the appellants from one Vipul Shah by fixing the rent, and therefore, there being breach of policy, the insurance company is not liable. He has relied upon the judgment in the case of New India Assurance Page 3 of 5 Uploaded by MR.HARSHIT SANCHETI (HCD0070) on Fri Nov 07 2025 Downloaded on : Fri Nov 07 20:39:42 IST 2025 NEUTRAL CITATION C/FA/1690/2011 JUDGMENT DATED: 08/10/2025 undefined Company Limited Vs. Naba Kumar Mondal and another, 2006 ACJ 238, wherein the insurance company was not held liable in case of vehicle hired by the victim. In the case on hand, the applicant no.2 has also admitted in the cross-examination that they have hired the vehicle by fixing the rent. And therefore, of course, I do agree with the principle laid down in the cited authority, but, considering the facts of the case, it would be just and proper to held liable both the opponent nos.1 and 2 at this stage, and the insurance company is at liberty to recover the same from the owner of the vehicle."
6. Thus, it is evident that the learned Tribunal has saddled the liability on the insurance company to first satisfy the award, and thereafter, recover the same from the owner of the offending vehicle. It is not in dispute that the claimants are the third party and the Motor Vehicles Act is the beneficial piece of legislation, therefore, the terms and conditions agreed between the owner and the insurance company cannot defeat the right of the claimants to get the compensation on account of the loss or injuries sustained by the claimants in the vehicular accident. The similar issue came for consideration before the Coordinate Bench of this Court in the case of Heirs and Legal Representative of deceased Bhalaji Hamirji & Ors.(supra) wherein, the Coordinate Bench in para 9, has observed as under:-
"What further could be deduced that on the ground that deceased were fare paying passenger, insurance company of jeep has been exonerated on the ground that jeep has been used for hire and reward and there is breach of terms and conditions of the policy. The Coordinate Bench in the case of Dhirali (Minor) Vinodbhai v/s. Dhanabhai Raisbhai Bhardiya Ahir (First Appeal No.1652 of 2019 with allied matters), held that in case when the private car is being used as hire for reward and carrying the passengers, against the Page 4 of 5 Uploaded by MR.HARSHIT SANCHETI (HCD0070) on Fri Nov 07 2025 Downloaded on : Fri Nov 07 20:39:42 IST 2025 NEUTRAL CITATION C/FA/1690/2011 JUDGMENT DATED: 08/10/2025 undefined insurance policy, as is in the case on hand, the claimants being third party cannot suffer for the technicalities, whether the owner/insurance company should pay the amount and it is further directed the insurance company shall first satisfy the award and shall recover the same from owner. Same principle applies in the present case."
7. Having regard to the facts of the present case, the claimants being a third party could not be permitted to suffer on account of the technicalities, whether the owner or the insurance company should pay the amount. It is not in dispute that the vehicle was duly insured at the relevant point of time. Therefore, the learned Tribunal has committed no error in holding that the insurance company shall first satisfy the award, and thereafter, recover the same from the owner of the offending vehicle.
8. In view of the above discussion, the appeal is devoid of merits and liable to be dismissed and accordingly, the appeal stands dismissed. The amount if any, lying deposited with the Registry of this Court, the same shall be remitted to the learned Tribunal concerned. The claimants shall be at liberty to withdraw the amount lying deposited with the learned Tribunal concerned. Record & Proceedings, if any, be sent back to the learned Tribunal concerned. No order as to costs.
(MOOL CHAND TYAGI, J) HARSHIT Page 5 of 5 Uploaded by MR.HARSHIT SANCHETI (HCD0070) on Fri Nov 07 2025 Downloaded on : Fri Nov 07 20:39:42 IST 2025