Bombay High Court
THE MANAGER, H.D.F.C. ERGO GENERAL INSURANCE CO.LTD.versusSHRI. GANESH ARJUN LADKAT AND ANR.
- Decided
- Disposal
- Disposed Off
Holding
The insurer cannot deny compensation to the third‑party claimant on the ground of the driver’s licence breach, and the interest rate is reduced to 7% per annum.
Summary
The HDFC Ergo General Insurance Company appealed a Motor Accident Claims Tribunal order that awarded Rs.5,06,763 plus 9% interest to the claimant, Ganesh Arjun Ladkat, for injuries sustained in a road accident. The insurer argued that the vehicle driver lacked a valid licence, constituting a breach of the insurance policy, and that the interest rate was excessive. The court held that any breach of policy terms is a dispute between the insurer and the driver and cannot be used to deny compensation to the injured third‑party claimant. It also found no evidence supporting a 9% interest rate and, noting the downward trend in rates, reduced the interest to 7% per annum. The appeal was dismissed, the statutory deposit of Rs.25,000 was ordered to be transferred to the Tribunal, and any excess amount was to be refunded to the insurer.
Issues considered
- Whether a breach of the insurance policy by the driver (lack of a valid licence) can be invoked to deny compensation to a third‑party claimant.
- Whether the interest rate of 9% per annum awarded by the Tribunal is appropriate.
Subjects
- insurance
- motor accident claims
- third‑party compensation
- policy breach
- interest rate
- statutory deposit
- appeal
Judgment
2026:BHC-AS:24514
Sayyed 18-FA(ST).29262.2019.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL (ST) NO.29262 OF 2019
WITH
INTERIM APPLICATION NO.2776 OF 2019
WITH
INTERIM APPLICATION NO.2775 OF 2019
The Manager, H.D.F.C. Ergo
General Insurance Co. Ltd. ...Appellant/Applicant
Versus
Ganesh Arjun Ladkat & Anr. ...Respondents
_____________________________________________________
Ms. Sweta Shah i/by Mr. Abhijit P. Kulkarni for the Appellant/Applicant.
Mr. Anuj Tiwari i/by Mr. Vivek V. Salunke for Respondent No.1.
_____________________________________________________
CORAM : JITENDRA JAIN, J.
DATE : 17 JUNE 2026
P.C.:
INTERIM APPLICATION NO.2775 OF 2019
1. Delay of 25 days in filing the appeal, for the reason stated in
the application, is condoned.
2. Interim application is disposed of.
INTERIM APPLICATION NO.2776 OF 2019
3. Ms. Shah, learned counsel for the applicant states that the
insurance company has deposited the decretal amount with the Tribunal.
Accepting the said statement, the operation of the impugned order dated
27 June 2019 is stayed till the disposal of the appeal.
4. Interim application is disposed of.
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Sayyed 18-FA(ST).29262.2019.doc
FIRST APPEAL (ST) NO.29262 OF 2019
5. By consent, heard finally at the admission stage.
6. This appeal is filed by the insurance company challenging the
order of the Motor Accident Claims Tribunal, Baramati, District Pune
(Tribunal) dated 27 June 2019, whereby the Tribunal awarded
Rs.5,06,763/- alongwith interest @9% per annum on account of injury
sustained by the claimant because of the accident.
7. Ms. Shah, learned counsel for the appellant-insurance
company, submits that the driver of the vehicle was not having a valid
licence and, therefore, there was breach of terms and conditions of the
policy. In my view, this issue is now no more res-integra insofar as, the
third party is concerned. If there is any breach of terms and conditions of
the policy then the remedy of the insurance company lies against the
person who has breached and not the third party. Therefore, this
contention cannot be accepted to deny the compensation to the injured
person. However, the insurance company will be at liberty to take
appropriate action in accordance with law against the person who has
breached the terms and conditions of the policy.
8. The second contention raised by the learned counsel is that the
interest awarded is on the higher side. The Tribunal has awarded 9% per
annum. The original claimant has not led any evidence with respect to
the rate of interest. It is also a fact that the rate of interest has moved
southwards over a period of time. Therefore, in the interest of justice, the
rate of interest awarded by the Tribunal is modified from 9% to 7% per
annum. The claimants are entitled to the original awarded amount
alongwith interest @7% per annum from the date of filing the petition
till realisation. Refund, if any, to be given to the insurance company.
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Sayyed 18-FA(ST).29262.2019.doc
9. Statutory deposit of Rs.25,000/- to be transferred to the
concerned Tribunal and parties are at liberty to make an application for
refund.
10. Appeal is disposed of in above terms.
[ JITENDRA JAIN, J. ]
Signed by: Sayyed Saeed Ali
Designation: PA To Honourable Judge
Date: 18/06/2026 11:59:06 3 of 3
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