Case Note & Summary
The case arises from a motor accident claim petition filed by the parents of a minor deceased, Vijay, who died in a road accident on 17.12.2017 when a dumper driven rashly and negligently by opponent No.1 dashed against his bicycle. The Motor Accident Claims Tribunal (Aux.), Morbi, in MACP No.29 of 2018, awarded compensation of Rs. 8,00,000/- with interest at 7.5% per annum from the date of petition till realization, holding the Insurance Company liable. The Insurance Company appealed, contending that the driver did not hold a valid driving licence at the time of the accident, as per the charge-sheet at Exhibit 33, and therefore the insurer should not be liable. The High Court of Gujarat at Ahmedabad, in First Appeal No.4879 of 2022, heard the appeal. The court noted that the Tribunal had already considered the issue of licence and applied the 'pay and recover' principle. The court held that the Insurance Company is liable to pay compensation to third-party claimants even if the driver had no valid licence, as the breach of policy condition does not absolve liability towards third parties. The court directed the Insurance Company to pay the awarded amount to the claimants and then recover the same from the owner and driver of the offending vehicle in accordance with law. The appeal was dismissed with the above modification.
Headnote
A) Motor Accident Claims - Third-Party Liability - Pay and Recover - Section 149 Motor Vehicles Act, 1988 - Insurance Company is liable to pay compensation to third-party claimants even if the driver had no valid licence, but can recover the amount from the owner/driver - The court held that the insurer must pay and then recover from the insured, as the breach of policy condition does not absolve liability towards third parties (Paras 5-6).
Issue of Consideration
Whether the Insurance Company can be absolved from liability to pay compensation to third-party claimants when the driver of the offending vehicle did not possess a valid driving licence at the time of the accident.
Final Decision
The appeal is dismissed. The Insurance Company is directed to pay the awarded amount to the claimants and then recover the same from the owner and driver of the offending vehicle in accordance with law.
Law Points
- Pay and recover principle
- Breach of policy condition
- Third-party liability
- Driving without valid licence
- Section 149 Motor Vehicles Act
- 1988
Case Details
2026 LawText (GUJ) (01) 465
R/First Appeal No. 4879 of 2022
Mr. Rathin P. Raval for Appellant, Nishit A. Bhalodi for Respondents No.1,2
National Insurance Company Limited
Makanbhai Dahyabhai Nakum & Ors.
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Nature of Litigation
First Appeal against judgment and award of Motor Accident Claims Tribunal in a claim petition for compensation for death of minor in road accident.
Remedy Sought
Insurance Company sought to be absolved from liability to pay compensation on ground that driver had no valid driving licence.
Filing Reason
Insurance Company challenged the Tribunal's award saddling it with liability despite driver lacking valid licence.
Previous Decisions
Motor Accident Claims Tribunal (Aux.), Morbi, in MACP No.29 of 2018, awarded Rs. 8,00,000/- with 7.5% interest per annum, holding Insurance Company liable.
Issues
Whether the Insurance Company can be absolved from liability to pay compensation to third-party claimants when the driver of the offending vehicle did not possess a valid driving licence at the time of the accident.
Submissions/Arguments
Appellant (Insurance Company) argued that the driver was not holding a valid and effective driving licence at the time of accident, as per charge-sheet at Exhibit 33, violating Section 3 of Motor Vehicles Act, and thus the insurer should not be liable.
Respondents (claimants) argued that the Insurance Company is liable to pay compensation to third parties and can recover from the owner/driver.
Ratio Decidendi
The Insurance Company is liable to pay compensation to third-party claimants even if the driver had no valid licence, as the breach of policy condition does not absolve liability towards third parties; the insurer can recover the amount from the owner/driver under the 'pay and recover' principle.
Judgment Excerpts
The learned Tribunal has rightly considered the issue of driving licence and has rightly saddled the liability upon the appellant - Insurance Company with a direction to pay and recover the same from the owner and driver of the offending vehicle.
The Insurance Company is liable to pay compensation to third-party claimants even if the driver had no valid licence, as the breach of policy condition does not absolve liability towards third parties.
Procedural History
The Motor Accident Claims Tribunal (Aux.), Morbi, passed judgment and award dated 01.09.2022 in MACP No.29 of 2018 awarding compensation. The Insurance Company filed First Appeal No.4879 of 2022 before the High Court of Gujarat at Ahmedabad, which was heard and disposed of on 20.01.2026.
Acts & Sections
- Motor Vehicles Act, 1988: Section 3, Section 149
