THE NEW INDIA ASSURANCE COMPANY LTDversusSEJALBEN RAJESHBHAI TIMBADIYA

    C/FA/2272/2022                                   JUDGMENT DATED: 06/03/2026




 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
                     R/FIRST APPEAL NO. 2272 of 2022
                                  With
                     R/FIRST APPEAL NO. 2449 of 2022


FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
==========================================================
        Approved for Reporting        Yes        No
                                       √
==========================================================
            THE NEW INDIA ASSURANCE COMPANY LTD
                              Versus
            SEJALBEN RAJESHBHAI TIMBADIYA & ORS.
==========================================================
Appearance in FA No.2272/2022:
MR KRUTIK A PARIKH(7268) for the Appellant(s) No. 1
MR ANAND R PATEL(7352) for the Defendant(s) No. 6
MR HEMAL SHAH(6960) for the Defendant(s) No. 1,2,3,4,5
Appearance in FA No.2449/2022
MR HEMAL SHAH(6960) for the Appellant(s) No. 1 -3, 4
MR KRUTIK A PARIKH(7268) for the Defendant(s) No. 2
MR ANAND R PATEL(7352) for the Defendant(s) No. 1
==========================================================
  CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR

                              Date : 06/03/2026
                       COMMON JUDGMENT

[1.0]    Since both these appeals are filed assailing the impugned
         judgment and award arising from a common accident, they are
         being heard, decided and disposed of by this common
         judgment and for the sake of convenience and brevity, facts
         from First Appeal No.2272 of 2022 are taken.

[2.0]    By way of First Appeal No.2272/2022 under Section 173 of the
         Motor Vehicles Act, 1988 (for short “MV Act”), the original
         opponent No.2 – insurance company and the original claimants
         by way of First Appeal No.2449/2022 have assailed the


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         impugned judgment and award dated 28.01.2022 passed by
         the learned Motor Accident Claims Tribunal (Auxi.), Rajkot (for
         short “learned Tribunal”) in Motor Accident Claim Petition
         No.644/2019, whereby the learned Tribunal held the driver of
         Truck to be negligent to the extent of 60% and deceased
         motorcyclist to the extent of 40% for the accident and
         directed the original opponent No.2 – insurance company to
         pay compensation of Rs.31,66,032/- to the original claimants
         after deducting 40% (Rs.21,10,688/-) from total compensation
         of Rs.52,76,720/- towards contributory negligence of the
         deceased motorcyclist with interest at the rate of 9% per
         annum from the date of claim petition.

[3.0]    The brief facts leading to filing of present appeals are as
         follows:

[3.1]    On 18.04.2019, deceased Rajeshbhai Hemrabhai Timbadiya
         (hereinafter referred to as “deceased motorcyclist”) was riding
         his Motorcycle with slow speed on the correct side of the road
         and when he reached at the place of accident, the driver of
         Truck No.GJ-10-TT-5084 came driving his Truck in rash and
         negligent manner with excessive speed and dashed his truck
         with motorcycle of the deceased as a result of which the
         accident occurred and deceased motorcyclist having sustained
         serious injuries died on the spot. Therefore, the original
         claimants – legal heirs and representatives of the deceased
         filed the claim petition seeking compensation of Rs.75 lakh.

[3.2]    After considering the evidence produced on record by the
         respective parties, learned Tribunal has been pleased to hold



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         the driver of Truck negligent to the extent of 60% and
         deceased motorcyclist 40% contributory negligent for the
         accident and awarded compensation of Rs.31,66,032/- to the
         original claimants after deducting 40% (Rs.21,10,688/-) from
         total compensation of Rs.52,76,720/- towards contributory
         negligence of the deceased motorcyclist with interest at the
         rate of 9% per annum from the date of claim petition. Hence,
         First Appeal No.2272/2022 is filed by the insurance company
         on the ground of negligence and liability and First Appeal
         No.2449/2022 is filed by the original claimants challenging
         40% negligence held on the part of the deceased motorcyclist
         as well as for enhancement of compensation.

[4.0]    Learned advocate Mr. Krutik Parikh appearing for the
         insurance company has disputed the liability of insurance
         company on the ground that on date of accident there was no
         permit to ply the offending vehicle and there was statutory
         breach of the policy and hence, insurance company is not liable
         to pay the compensation. If in any event it is proved that there
         was a breach of policy even then the learned Tribunal ought to
         have passed an order of pay and recover. He has further
         submitted that there is clear breach of section 149(2)(a) & (c)
         of the MV Act. The permit was valid for the period from
         06.11.2013 to 05.11.2018 and then from 04.06.2019 to
         05.11.2018. Thus, as on the date of accident i.e. 18.04.2019,
         the insured vehicle was not having valid permit to drive the
         vehicle on road. Hence, the insurance company is required to
         be exonerated. Not only that, goods’ permit of the insured
         vehicle is produced at Exhs.26 and 27 and even it is admitted
         and undisputed fact that on 18.04.2019, insured vehicle was


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         not having valid permit however, on 04.06.2019, to avoid the
         liability the same is subsequently got renewed. Hence, there is
         clear cut violation and the breach of statutory conditions of
         the insurance policy. Hence, he has requested to exonerate
         the insurance company by relying on the decision of Hon’ble
         Supreme Court in the case of Amrit Paul Singh and Another
         vs. TATA AIG General Insurance Company Limited and
         Others reported in (2018)7 SCC 558.

[4.1]    Further, he has argued that though there was head on
         collision, learned Tribunal has committed an error in saddling
         the appellant with 60% negligence and deceased at 40% which
         ought to have been atleast 50% on the part of deceased
         motorcyclist considering the fact that there was head on
         collision based on panchnama and evidence produced on the
         record.

[5.0]    Learned advocate Mr. Anand Patel appearing for the opponent
         No.1 (original owner) of the vehicle has submitted that the
         vehicle was having valid permit and is subsequently got
         renewed as per sub-Section (5) of Section 81 of the MV Act to
         cover the period. After the accident, permit is renewed is not a
         ground to exonerate the insurance company from its liability.
         The coverage of policy is not in dispute. Hence, the decision in
         the case of Amrit Paul Singh (Supra) would not be applicable
         more particularly in light of sub-Section (5) of Section 81 of the
         MV Act and he has submitted that if permit is not renewed
         then the owner will have the risk of having to pay maximum
         tax and also the penalty and except this, it does not affect the
         coverage of third party risk and would not amount to


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         fundamental breach of policy as sub-Section (5) of Section 81
         of the MV Act permits subsequent renewal and during the
         pendency of renewal to ply the vehicle on route is permissible
         and in this regard, he has also relied on the decision of the
         Karnataka High Court in the case of United India Insurance
         Co. Ltd. vs. Smt. Yasmin Begum @ Yasmin W/o. Late
         Mohammed Jilan @ Mohammed Jilani. Hence, he has
         requested to dismiss the appeal.

[6.0]    Learned advocate Mr. H.M. Shah appearing for the original
         claimants adopting the arguments canvassed by learned
         advocate Mr. Anand Patel has further submitted that claimant
         is a third party who has nothing to do with any breach of policy
         and even as per section 81(5) of the MV Act renewal of such
         policy after the date of expiry of the permit is permissible.

[6.1]    Further, he has submitted that learned Tribunal has committed
         an error in considering 40% contributory negligence on the
         part of the deceased motorcyclist though charge-sheet is filed
         against the truck driver and accident took place on the middle
         of the road. He has further submitted that no any witness is
         examined to prove or rebut the presumption of negligence on
         the part of the truck driver and even otherwise the driver did
         not step into the witness box and requested to hold the truck
         driver solely negligent in causing the accident.

[6.2]    Further, he has submitted that the learned Tribunal has
         committed error in considering the average income of the
         deceased for three years and has not considered the latest
         income of the deceased. Hence, he has requested to dismiss



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         First       Appeal   No.2272/2022        and     allow     First     Appeal
         No.2449/2022 filed by the original claimants.

[7.0]    Having heard learned advocate for the appellant – insurance
         company, learned advocate appearing for the original owner
         of offending truck and learned advocate for the original
         claimants and perused the record.

NEGLIGENCE:
[8.0]    It appears that the learned Tribunal has considered the
         evidence produced and adduced by both the parties including
         the affidavit of the claimant No.4 (Exh.21), complaint (Exh.28),
         panchnama of scene of accident (Exh.29), charge-sheet
         (Exh.34), which is filed against the driver of offending truck as
         well as the decisions of the Hon’ble Supreme Court in the case
         of Bimla Devi vs. H.R.S.T.C. reported in AIR 2009 SC 2819 and
         Parmeshwari Devi vs. Amir Chand reported in (2011) 11 SCC
         635, wherein it is held that it is settled law that negligence is
         required to be proved in claim petition under section 166 of
         the MV Act only on the touchstone of the preponderance of
         probability and not beyond doubt. Perusing the evidence of
         claimant No.4 (Exh.21), it appears that he was not the eye-
         witness of the accident however, as per his say, the driver of
         Truck No.GJ-10-TT-5084 came from opposite direction with
         excessive speed in rash and negligent manner.

[8.1]    Further, perusing the panchnama of place of accident (Exh.29),
         it appears that the motorcycle No.GJ-05-ER-5122 was lying in
         damaged condition on the left side of the road but the
         accident took place on the middle of the road as brake marks
         of the truck tyre of about 10 feet are found at the place of

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         accident and also the marks showing dragging of motorcycle
         were found on the middle of the road. Even, the charge-sheet
         (Exh.34) is filed against the driver of offending truck and he
         fled away leaving the truck on the place of accident. It seems
         that there was head on collision between the two vehicles
         however, at the same time, driver of offending truck is not
         examined and hence, no option left for the learned Tribunal
         but to draw adverse inference based on evidence produced on
         record i.e. panchnama and keeping in mind the principle of res
         ipsa loquitur.

[8.2]    Further, it appears that the truck was in excessive speed and
         alleged accident took place on the highway road and there was
         a 40 feet width of the road. On the highway road, high speed
         of vehicle is expected but at the same time, if the driver
         intended to stop his vehicle, he is responsible to take extra
         care of expected and unexpected events and he ought to have
         been in control of the vehicle. Herein, the accident took place
         on the middle of the road and there was sufficient chance to
         avoid the accident and motorcyclist could have otherwise
         taken his motorcycle from side to the middle of the road to
         avoid       the   accident.    Upto      that   extent,    the    deceased
         motorcyclist has contributed in the accident and contributory
         negligence reveals on the part of the deceased motorcyclist.
         At the same time, it is worth to mention that the truck driver
         applied brakes and tried to avoid the accident and therefore,
         the learned Tribunal has apportioned 40% contributory
         negligence on the part of deceased motorcyclist, which in the
         considered opinion of this Court, is somewhat on higher side
         and while driving heavy vehicle, degree and standard of care


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         and caution is required to be more and therefore, considering
         the size of the vehicle i.e. motorcycle, 20% contributory
         negligence on the part of deceased motorcyclist is required to
         be considered. Upto that extent, the learned Tribunal has
         committed an error. Hence, after re-appreciating the evidence,
         the driver of offending truck is held to be 80% negligent and
         deceased motorcyclist is held to be 20% contributory
         negligent for the accident.

QUANTUM:
[9.0]    In order to prove the income of the deceased, original claimant
         No.4 deposed at Exh.28 and even the original claimants had
         produced written arguments at Exh.32 wherein it has been
         claimed that the deceased was doing job work of diamond and
         used to earn Rs.30,000/- per month and to prove the said
         claim, the original claimants have produced income tax returns
         of the deceased at Exhs.35 to 37 for the assessment years
         2016-17,    2017-18   and     2018-19   respectively      alongwith
         computation of income statements, which show gross yearly
         income of the deceased for AY 2016-17 at Rs.2,81,039/-; for AY
         2017-18 at Rs.3,09,776/- and for AY 2018-19 at Rs.3,10,386/-.
         However, perusing the impugned judgment, it appears that
         though the learned Tribunal has observed that as per the
         judgment of the Hon'ble Supreme Court in the case of
         Malarvizhi and others vs. United India Insurance Co. Ltd.
         and Anr. reported in 2020 ACJ SC 526, the highest income
         declared in various income tax returns may be taken as annual
         income of deceased however, it is always apt, appropriate and
         safe to take average income and therefore, the learned
         Tribunal has taken the average income from the three income


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         tax returns produced on record at Exhs.35, 36 and 37 i.e.
         Rs.3,00,400/-.

[9.1]    This Court is of considered view that there is no thumb rule
         that Tribunal ought to have considered the average income. In
         this regard, reference is required to be made to the decision of
         the Hon’ble Supreme Court in the case of Nidhi Bhargava v.
         National Insurance Co. Ltd. reported in 2025 SCC OnLine
         872, wherein the Hon’ble Supreme Court in paragraph 12 has
         observed and held as under:

               “12. Just because on the date of the accident i.e.,
               12.08.2008, the Return for the Assessment Year 2008-2009
               had not been filed, cannot disadvantage the appellants, for
               the reason that the period for which the Return is to be
               submitted covers the period starting 1 st of April, 2007 and
               ending 31st March, 2008. Thus, for obvious reasons, the
               Return would be only for the period 01.04.2007 to
               31.03.2008, and date of submission would be post-
               31.03.2008. No income earned beyond 31.03.2008 would
               reflect in the Income Tax Return for the Assessment Year
               2008-2009. To reject the Return on the sole ground of its
               submission after the date of accident alone, in our
               considered view, cannot be legally sustained.

               13. ... In K Ramya v. National Insurance Co. Ltd., 2022 SCC
               OnLine SC 1338, after taking note of, inter alia, Ningamma
               v. United India Insurance Co. Ltd., (2009) 13 SCC 710, the
               Court held that the ‘…Motor Vehicles Act of 1988 is a
               beneficial and welfare legislation that seeks to provide
               compensation as per the contemporaneous position of an
               individual which is essentially forward-looking. Unlike
               tortious liability, which is chiefly concerned with making up
               for the past and reinstating a claimant to his original
               position, the compensation under the Act is concerned with
               providing stability and continuity in peoples’ lives in the
               future. …’


               Relying on the said decision, in the case of Sayar Ram vs.
         Ram Kara rendered in SLP (Civil) No. 24501/2025, the


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         Hon’ble Supreme Court in paragraph 12 has observed and held
         as under:

               “12. What flows from Nidhi Bhargava (supra) is that the
               Income Tax Returns filed after the accident/death can also
               be taken into consideration for calculation of income to
               award compensation. However, having due regard for the
               Tribunal's well-placed doubts, in so far as returns filed for
               the relevant year, we take a different approach. In the
               instant case, it cannot be simply assumed that there is no
               profit accruing from the business of the deceased at the
               time of the accident. To adopt such a presumption would be
               contrary to the settled principles guiding the assessment of
               compensation. Rather, the returns for the preceding year
               or years must be taken as a foundational benchmark,
               subject to careful judicial examination, recognizing that
               business profits are seldom static and often exhibit a
               progressive growth trajectory. The exercise thus calls
               for a fair and reasonable assessment, grounded in
               available evidence, of the financial benefits that the
               deceased would have justifiably earned but for the
               untimely accident. In our considered view, in order to
               award just and fair compensation, the annual income of the
               deceased is re-assessed at Rs.3,50,000/- per annum.”


               Hence, in considered view of this Court and in view of the
         decision of the Hon’ble Supreme Court in the case of
         Malarvizhi & Ors (Supra), as income tax return is a statutory
         document, considering Exh.37 i.e. Income Tax Return for the
         AY 2018-19, annual income of the deceased is required to be
         assessed at Rs.3,10,000/- to award just and fair compensation.

[9.2]    Herein, the original claimants have produced driving license of
         the deceased at Exh.38 which shows birth date of deceased as
         24.04.1984 and accident took place on 18.04.2019 and
         therefore, at the time of accident, the deceased was aged 35
         years and considering the age group of 31 to 35 years,
         multiplier of 16 is rightly applied by the learned Tribunal in


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         view of decision in the case of Sarla Verma (Smt) & Ors. Vs.
         Delhi Transport Corporation & Anr. reported in (2009)6 SCC
         121 and as per the decision of the Hon’ble Supreme Court in
         the case of National Insurance Company Limited vs. Pranay
         Sethi and Ors. reported in 2017 ACJ 2700, addition of 40% i.e.
         Rs.1,24,000/- (40% of Rs.3,10,000/-) towards future prospects
         is required to be taken into consideration and therefore, yearly
         income of deceased would come to Rs.4,34,000/- (Rs.3,10,000
         + Rs.1,24,000).    Further, the learned Tribunal has rightly
         deducted 1/4 towards dependency and personal expenses of
         the deceased and therefore, deducting Rs.1,08,500/- (1/4 of
         Rs.4,34,000/-) towards personal expenses of the deceased, the
         learned Tribunal ought to have considered Rs.3,25,500/-
         [Rs.4,34,000   –   Rs.1,08,500]        towards   annual       loss     of
         dependency. Further, applying multiplier of 16, compensation
         under the head of future loss of dependency ought to have
         been awarded at Rs.52,08,000/- (Rs.3,25,500 x 16). To that
         extent the impugned judgment and award is required to be
         modified.

[9.3]    So far as compensation under the conventional heads of loss
         of consortium, loss of estate and funeral expenses is
         concerned, under the head of loss of estate and funeral
         expenses, the original claimants are entitled to Rs.18,150/-
         each and in view of the decision of the Hon’ble Supreme Court
         in the case of Magma General Insurance Co. Ltd. vs. Nanu
         Ram reported in (2018) 18 SCC 130 and Janabai Wd/o
         Dinkarrao Ghorpade & Ors. vs. M/s ICICI Lambord Insurance
         Company Ltd. reported in 2022 LiveLaw (SC) 666, the original
         claimant No.1 is entitled to Rs.48,400 towards spousal


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         consortium, original claimant Nos.2 and 3 are entitled to
         Rs.48,400/- each towards filial consortium and original
         claimant Nos.4 and 5 are entitled to Rs.48,400/- each towards
         parental consortium.

[9.4]    Hence, the original claimants are now entitled to get the
         reassessed compensation as under:
                     Heads           Awarded by         Reassessed by this Court
                                      Tribunal
             Future loss of          Rs.50,46,720/-           Rs.52,08,000/-
              dependency                              including additional amount of
                                                               Rs.1,61,280/-
             Loss of Estate           Rs.15,000/-               Rs.18,150/-
           Funeral Expenses           Rs.15,000/-               Rs.18,150/-
          Spousal Consortium          Rs.40,000/-               Rs.48,400/-
            (Rs.40,000 x 1)
            Filial Consortium         Rs.80,000/-              Rs.96,800/-
             (Rs.40,000 x 2)                                 (Rs.48,400 x 2)
         Parental Consortium          Rs.80,000/-              Rs.96,800/-
            (Rs.40,000 x 2)                                  (Rs.48,400 x 2)
         Total Compensation      Rs.52,76,720/-               Rs.54,86,300/-
                                                      including additional amount of
                                                               Rs.2,09,580/-



               Hence, the original claimants are entitled to get
         Rs.54,86,300/- but as discussed hereinabove, as the deceased
         motorcyclist is held contributory negligent to the extent of
         20% for the occurrence of accident, 20% i.e. Rs.10,97,260/- is
         required to be deducted and therefore, the original claimants
         are entitled to get of Rs.43,89,040/- [(Rs.54,86,300 –
         Rs.10,97,260         (20%      of     Rs.54,86,300)]      towards           just
         compensation with interest at the rate of 9% per annum and
         therefore, the impugned judgment and award passed by the




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         learned Tribunal is required to be modified to the aforesaid
         extent.

LIABILITY:

[10.0] So far as liability to pay compensation is concerned, appellant
         – insurance company has disputed the liability by filing written
         statement at Exh.15 wherein defence is raised qua existence
         of route permit on the date of accident but said issue is not
         addressed or answered by the learned Tribunal. The issue
         raised before the learned Tribunal to avoid liability was only
         qua license and learned Tribunal has appreciated the evidence
         produced on record at Exh.25 i.e. insurance policy of offending
         truck which shows that as on the date of accident i.e.
         18.04.2019, the insurance policy was in force as period of
         policy was from 12.10.2018 to 11.10.2019 and hence, coverage
         of risk is not in dispute. The driving license of opponent No.1 –
         driver of offending truck is also produced at Exh.33 and in
         evidence also, claimant No.4 has stated that deceased was
         having driving license to drive the motorcycle and same is also
         produced at Exh.38.

[10.1] Now, coming back to the issue raised by the insurance
         company as regards permit, it is the case of the insurance
         company that the permit of offending truck (Exh.26) was
         issued for all Districts of Gujarat State and goods permit for
         offending truck is produced at Exh.27 which shows validity
         period from 06.11.2013 to 05.11.2018 while document
         (Exh.26) shows validity period of permit from 04.06.2019 to
         03.06.2024 and accident took place on 18.04.2019 and thus,
         obviously, the said permit was renewed after seven months of


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        the accident. Hence, there was no any permit to ply the vehicle
        and hence, insurance company is not liable to pay the
        compensation and in this regard, the appellant – insurance
        company has relied on the decision of Hon’ble Supreme Court
        in the case of Amrit Paul Singh (Supra).

[10.2] It is undisputed and admitted fact that aforesaid both the
        documentary evidences at Exhs.26 and 27 are produced by the
        insurance company which shows that permit is renewed for
        the period from 04.06.2019 to 03.06.2024. If we peruse the
        provision of sections 2(28), 2(31), 2(47) and 81 of the MV Act,
        same read as under:
              “2(28) “motor vehicle” or “vehicle” means any mechanically
              propelled vehicle adapted for use upon roads whether the power
              of propulsion is transmitted thereto from an external or internal
              source and includes a chassis to which a body has not been
              attached and a trailer; but does not include a vehicle running
              upon fixed rails or a vehicle of a special type adapted for use only
              in a factory or in any other enclosed premises or a vehicle having
              less than four wheels fitted with engine capacity of not
              exceeding twenty-five cubic centimetres;

              2(31) “permit” means a permit issued by a State or Regional
              Transport Authority or an authority prescribed in this behalf
              under this Act authorising the use of a motor vehicle as a
              transport vehicle;

              2(47) “transport vehicle” means a public service vehicle, a goods
              carriage, an educational institution bus or a private service
              vehicle;

              81. Duration and renewal of permits.—

              (1) A permit other than a temporary permit issued under section
              87 or a special permit issued under sub-section (8) of section 88
              shall be effective 2[from the date of issuance or renewal thereof]
              for a period of five years:
                     Provided that where the permit is countersigned under
              sub-section (1) of section 88, such counter signature shall remain
              effective without renewal for such period so as to synchronise
              with the validity of the primary permit.


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           (2) A permit may be renewed on an application made not less
           than fifteen days before the date of its expiry.

           (3) Notwithstanding anything contained in sub-section (2), the
           Regional Transport Authority or the State Transport Authority, as
           the case may be, may entertain an application for the renewal of
           a permit after the last date specified in that sub-section if it is
           satisfied that the applicant was prevented by good and sufficient
           cause from making an application within the time specified.

           (4) The Regional Transport Authority or the State Transport
           Authority, as the case may be, may reject an application for the
           renewal of a permit on one or more of the following grounds,
           namely:—
                  (a) the financial condition of the applicant as evidenced by
           insolvency, or decrees for payment of debts remaining unsatisfied
           for a period of thirty days, prior to the date of consideration of
           the application;
                  (b) the applicant had been punished twice or more for any
           of the following offences within twelve months reckoned from
           fifteen days prior to the date of consideration of the application
           committed as a result of the operation of a stage carriage service
           by the applicant, namely:—

                  (i) plying any vehicle—

                  (1) without payment of tax due on such vehicle;
                  (2) without payment of tax during the grace period
           allowed for payment of such tax and then stop the plying of such
           vehicle;

                  (3) on any unauthorised route;

                  (ii) making unauthorised trips:

                  Provided that in computing the number of punishments
           for the purpose of clause (b), any punishment stayed by the order
           of an appellate authority shall not be taken into account:

                  Provided further that no application under this sub-section
           shall be rejected unless an opportunity of being heard is given to
           the applicant.

           (5) Where a permit has been renewed under this section after
           the expiry of the period thereof, such renewal shall have
           effect from the date of such expiry irrespective of whether or
           not a temporary permit has been granted under clause (d) of



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              section 87, and where a temporary permit has been granted,
              the fee paid in respect of such temporary permit shall be
              refunded.”


              Herein, in the case on hand, no evidence is available qua
        temporary permit was issued during interregnum period or
        date of permit renewal application. The Regional Transport
        Authority has also not rejected the application for renewal of
        permit. Once permit is renewed then as per sub-section (5) of
        Section 81 of the MV Act, after expiry of the period of permit,
        the renewal of such permit having effect from the date of such
        expiry irrespective of whether or not a temporary permit has
        been granted.

[10.3] Perusing the provision of sub-section (5) of Section 81 of the
        MV Act, it clearly reveals that sub-section (5) of Section 81 of
        the MV Act having a deeming proviso to effect renewal of
        permit retrospectively and which is governed by the doctrine
        of “Relation Back”. The doctrine of “Relation Back” is the
        principle that an act done at a later time is deemed by law to
        have occurred at a prior time. In practice, in certain scenarios
        the present act of the party will relate back to the earlier time
        for the purpose of determining the cause of action. The Black’s
        law dictionary defines the term “Relation Back” to mean that
        an act done at a later time is, under certain circumstances,
        treated as though it occurred at an earlier time. According to
        the Law Lexicon the term “Relation Back” is where a thing or
        act constructively relates back to an antecedent thing or act.
        The doctrine of “Relation Back” is a legal fiction where a later
        act such as renewal of permit deemed to have taken effect
        from an earlier date, which prevents break and such renewal

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        having retrospective effect which is bridging the gap and such
        subsequent permit renewal in light of sub-Section (5) of
        Section 81 of the MV Act having effect of continuity.

[10.4] In view of above, since there is no any evidence brought on
        record except production of documents at Exhs.26 and 27 by
        the insurance company, no oral or other evidence is tendered
        or no any dispute raised before the Tribunal qua permit hence,
        there is nothing on record which suggests as to whether
        during interregnum period, temporary or otherwise permit
        does exist. However, even relying on the documents produced
        at Exhs.26 and 27 produced by the appellant – insurance
        company, even if for the sake of argument it is accepted that
        as on date of accident the offending vehicle was not having
        permit then also, subsequent renewal of permit under sub-
        Section (5) of Section 81 of the MV Act having retrospective
        effect of renewal and such act is also recognized under the
        doctrine of “Relation Back”. Hence, the argument canvassed by
        learned advocate Mr. Parikh qua fundamental breach of terms
        and conditions of insurance policy is not acceptable.

[10.5] Learned advocate Mr. Parikh has also relied on the decision of
        the Hon’ble Supreme Court in the case of Amrit Paul Singh
        (Supra). Going through the record, it becomes clear that in
        the case on hand, the permit was already issued at the first
        instance and it was effective for the period initially from
        06.11.2013 to 05.11.2018 and subsequently, from 04.06.2019
        to 03.06.2024. Hence, merely delay in making application for
        renewal of permit does not make any difference in light of
        sub-Section (5) of Section 81 of the MV Act as discussed in


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        earlier part and hence, argument qua renewal application was
        made after the expiry of such period only with a view to cover
        the accident period to avoid the liability is not acceptable in
        light of sub-Section (5) of Section 81 of the MV Act, which is a
        deeming proviso and which takes care of situation where
        pending application for renewal of permit, if transport vehicle
        is plying on the road and subsequently permit is renewed then
        it covers the aforesaid period considering the doctrine of
        “Relation Back” as well as deeming provision of sub-section (5)
        of Section 81 of the MV Act. This is not a case wherein the
        vehicle was plying without permit. Initially, the permit was
        issued and during the interregnum period it was not in
        existence and under sub-section (4) of section 81 of the MV
        Act, application for renewal of permit is not rejected by the
        authority. Considering the aforesaid fact, the decision in the
        case of Amrit Paul Singh (Supra) is distinguishable on the
        facts of the present case. In the case of Amrit Paul Singh
        (Supra), there was no permit at all and herein, permit was
        issued but it was renewed subsequently and during the
        interregnum period accident took place.

[10.6] Further, to substantiate the aforesaid view, it would be in
        profit to refer and rely upon the decisions of the Andhra
        Pradesh High Court and Karnataka High Court in the case of C.
        Lakshman Reddi vs. The State Transport Authority reported
        in AIR 1977 AP 299 wherein, the Andhra Pradesh High Court
        was considering section 58(4) of the Motor Vehicles Act, 1939,
        which is a provision similar to section 81 of the MV Act and
        wherein it was observed that once the renewal of permit is
        granted, it has retrospective effect and if the vehicle is run on


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        temporary permit, the fee paid in respect of such temporary
        permit is liable to be refunded. So once renewal has been
        granted, it has retrospective effect from the date of expiry of
        the permit and the vehicle must be deemed to be having a
        valid permit from the date of expiry of the permit. Even, in a
        case where the permit has not been renewed, the operator
        will take the risk of having to pay the maximum tax and also
        penalty. But, in the case of third party, if vehicle runs without
        permit, it does not make any difference and policy does not
        make any difference.
                Further, relying on the aforesaid pronouncement, the
        Karnataka High Court in the case of Smt. Yasmin Begum @
        Yasmin W/o. Late Mohammed Jilan @ Mohammed Jilani
        (Supra), has held that under sub-section (5) of Section 81 of
        the MV Act, there is no fundamental breach of terms and
        conditions of policy in case the permit is subsequently
        renewed and owner and insurance company of the offending
        vehicle are jointly and severally liable to satisfy the award in
        favor of third party. Subsequently, said decision of Karnataka
        High Court came to be challenged before the Hon’ble Supreme
        Court (3 Judges’ Bench) by way of Special Leave to Appeal (C)
        D. No.14303/2020, which came to be dismissed vide order
        dated 14.10.2020.

[10.7] In view of aforesaid discussion and distinguishable facts, the
        case of Amrit Paul Singh (Supra) relied on by the learned
        advocate for the insurance company would not avail any
        assistance to the learned advocate appearing for the insurance
        company. Even, in the case of K. Nagendra vs. New India
        Insurance Co. Ltd. reported in AIR 2025 SC 5281, the Hon’ble


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        Supreme Court has held that the purpose of an insurance
        policy in the present context is to shield the owner/operator
        from direct liability when such an unforeseen/unfortunate
        incident takes place. To deny the victim/dependents of the
        victim compensation simply because the accident took place
        outside the bounds of the permit and, therefore, is outside the
        purview of the insurance policy, would be offensive to the
        sense of justice, for the accident itself is for no fault of his.
        Then, the Insurance Company most certainly ought to pay.
        Thus, for the reasons recorded hereinabove, the insurance
        company is liable to pay the compensation to the original
        claimants.

[11.0] In     wake    of     aforesaid        conspectus,     (i)   First    Appeal
        No.2272/2022 filed by the insurance company is dismissed
        and (ii) First Appeal No.2449/2022 filed by the original
        claimants is partly allowed and impugned judgment and
        award dated 28.01.2022 passed by the learned Motor Accident
        Claims Tribunal (Auxi.), Rajkot in Motor Accident Claim Petition
        No.644/2019 is modified and it is held that original claimants
        are     entitled    to   get         Rs.43,89,040/-    after     deducting
        Rs.10,97,260 towards contributory negligence of the
        deceased from total entitlement of Rs.54,86,300/- from the
        respondents jointly and severally. As the insurance company
        has already deposited Rs.31,66,032/- with the learned
        Tribunal, the insurance company is directed to deposit the
        remaining     amount          i.e.   Rs.12,23,008/-     [(Rs.43,89,040        –
        Rs.31,66,032       (earlier     deposited)]    alongwith       interest      as
        awarded by the learned Tribunal, with the learned Tribunal




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            within a period of four weeks from the date of receipt of this
            judgment.

[11.1] After deposit of the aforesaid amount of Rs.12,23,008/-, the
            Tribunal shall disburse the entire amount of compensation
            with accrued interest thereon, if any, to the original claimants,
            by account payee cheque / NEFT / RTGS, after proper
            verification and after following due procedure and strictly in
            accordance with the apportionment made by the learned
            Tribunal.

[11.2] While making the payment, the Tribunal shall deduct the
            courts fees, if not paid.

[12.0] Record and proceedings, if any, be sent back to the concerned
            Tribunal, forthwith.

                   Pending civil application, if any, stands disposed of.


                                                                                          Sd/-
                                                                        (HASMUKH D. SUTHAR, J.)


Ajay
 Original copy of this order has been signed by the Hon'ble Judge.
 Digitally signed by: AJAY CHANDRAN MENON(HC00939), PRINCIPAL PRIVATE SECRETARY, at High Court of Gujarat on 06/03/2026 15:36:47




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