UNITED INDIA INSURANCE CO. LTD.versusRAMBABU RAMPUJAN THAKUR

      C/FA/2057/2024                                JUDGMENT DATED: 20/01/2026




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                        R/FIRST APPEAL NO. 2057 of 2024

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
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             Approved for Reporting                 Yes          No

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                        UNITED INDIA INSURANCE CO. LTD.
                                      Versus
                       RAMBABU RAMPUJAN THAKUR & ORS.
==========================================================
Appearance:
MR PALAK H THAKKAR(3455) for the Appellant(s) No. 1
NISHIT A BHALODI(9597) for the Defendant(s) No. 1
NOTICE SERVED for the Defendant(s) No. 2
UNSERVED EXPIRED (N) for the Defendant(s) No. 3
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     CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR

                                Date : 20/01/2026

                               ORAL JUDGMENT


1.      Being aggrieved and dissatis ed with the judgment and award dated
22.11.2023 passed by the Motor Accident Claims Tribunal Bharuch, in Motor
Accident Claim Petition No. 349/2014, led under Section 166 of the Motor
Vehicles Act, 1988 (for short, “the MV Act”), the appellant – Insurance
Company 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.5,29,782/-.

2.      Heard Mr. Palak Thakkar, learned advocate for the appellant-
Insurance Company and Mr. Nishit Bhalodi, learned advocate appearing for
respondent Nos.1. Though served, none appears for respondent No.2.

3.      With consent of learned counsel for both the sides and considering
the issue involved in the appeal, the same is taken up for nal disposal.




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     C/FA/2057/2024                                 JUDGMENT DATED: 20/01/2026




4.     Learned counsel for the appellant has submitted that the Tribunal
has materially erred in law and on facts in holding the insurance company
jointly and severally liable to pay compensation. The Tribunal has further
committed a grave error in passing an order of “pay and recover” despite
there being a statutory breach of the conditions of the insurance policy. It is
evident from the record that the driver of the o;ending truck was not
holding any driving licence at the time of the accident. In such
circumstances, instead of exonerating the insurance company from liability,
the Tribunal erroneously directed the insurer to pay the compensation and
thereafter recover the same. An order of “pay and recover” can be passed
only in cases involving a defective or invalid licence or disquali cation of the
driver. In the present case, no licence whatsoever was held by the driver,
and therefore the Tribunal had no authority to pass an order of “pay and
recover”. Accordingly, it is prayed that the insurance company be
exonerated from liability to pay compensation.

5.     Learned counsel for the original claimant has opposed the present
appeal and submitted that the Tribunal has not committed any error in
passing the order of pay and recover. Therefore, the Tribunal has rightly
passed an order of pay and recover in favour of the insurance company.

6.     Upon perusal of the record, it appears that the Tribunal has properly
appreciated the evidence produced by the claimant at Exh. 27 and the
evidence of opponent No.1 produced below Exh. 49. The quantum of
compensation is not under challenge. Only the issue of liability has been
raised, and therefore the present appeal is required to be decided within a
narrow compass. The main contention of the learned counsel for the
appellant is that the Tribunal, having arrived at the conclusion that the
driving licence of the driver was not produced on record, erred in fastening
liability upon the insurance company. Reliance has been placed on the
evidence of opponent No.1, wherein it has been stated that opponent No.1
was not holding a driving licence at the time of the accident. It is not in



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     C/FA/2057/2024                                 JUDGMENT DATED: 20/01/2026




dispute that on the date of the accident, i.e. 30.06.2014, opponent No.1 did
not possess a driving licence. However, the Tribunal has relied upon the
decisions of the Hon’ble Supreme Court in Kempaiah v. S.S. Murthy,
reported in 2017 (0) AIJEL-SC 60167, and National Insurance Co. Ltd. v.
Swaran Singh and Others, reported in 2004 (2) GLR 989 (SC), wherein it
has been held that disquali cation of the driver or possession of an invalid
driving licence, as contemplated under Section 149(2)(a)(ii) of the Motor
Vehicles Act, must be proved to have been committed by the insured in
order to enable the insurer to avoid its liability. Mere absence, fake or
invalid driving licence, or disquali cation of the driver at the relevant time,
by itself, does not constitute a valid defence available to the insurer either
against the insured or the third party. Further, in view of the decision
rendered in Kusum Lata and Others v. Satbir and Others, reported in
2011 ACJ 926, the Tribunal has not committed any error in passing an order
of “pay and recover”.

7.     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 bene t 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 liberty to initiate
proceedings before the executing Court concerned, if the dispute is
between the insurer and the owner. In the present case, the claimants are



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      C/FA/2057/2024                                JUDGMENT DATED: 20/01/2026




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 awarding compensation.

8.      Further, this Court deems it     t 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 o;ending vehicle, who were held jointly
and severally liable, relying on the decision in Swaran Singh (supra). The
said view was aDrmed 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”.


9.      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      rst 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 satis ed to absolve the insurer from paying the
compensation, the doctrine of “pay and recover” continues to apply.

10.     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
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


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      C/FA/2057/2024                                   JUDGMENT DATED: 20/01/2026




warrant any interference.

11.     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 reaDrmed 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             nancial 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.

12.     As regards the authority relied upon by the learned advocate for the
appellant, in view of several judgments wherein the Hon’ble Apex Court has
passed order in the case of Shamanna (supra), Parminder Singh v. New
India Assurance Company Limited, (2019) 7 SCC 217, the learned Tribunal
has not committed any error. The authorities relied upon by the learned
advocate for the appellant nowhere refer to the case of Samanna (supra).

13.     In view of the above, the Hon’ble Apex Court has already decided the
issue     in     Swaran   Singh   (supra).       Considering    the     subsequent
pronouncements discussing the scope of the ‘pay and recover’ order and the
benevolent object of the legislation, as earlier explained in paragraph 14 of
this order, the principle of ‘pay and recover’ reFects judicial empathy
ensuring that victims are not left uncompensated due to disputes between
the owner and the insurer. Therefore, the argument canvassed by the
learned advocate for the appellant regarding contractual accountability is
not acceptable and Tribunal has not committed any error in passing the
order of “pay and recover”.

14.     The appellant–Insurance Company is directed to pay the amount of
compensation determined by the Tribunal, with liberty to recover the same
from the owner of the o;ending vehicle in accordance with law. In view of


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      C/FA/2057/2024                                                      JUDGMENT DATED: 20/01/2026




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 owner by initiating appropriate
proceedings before the Executing Court, without being required to                                         le 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.      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
Appeal stands dismissed.

16.      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.

17.      After deposit of the amount of compensation by the appellant –
insurance company, the same shall be disbursed in favour of the claimant
and/or through RTGS, after proper veri cation. 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 claimants on due veri cation.

18       Record and proceedings, if any, be sent back to the concerned
Tribunal forthwith.



                                                                        (HASMUKH D. SUTHAR,J)

SUCHIT

Original copy of this order has been signed by the Hon'ble Judge.
Digitally signed by: PATEL SUCHIT JAYESHBHAI(HC01083), Private Secretary, at High Court of Gujarat on 21/01/2026 17:22:41



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