High Court of Gujarat
HDFC ERGO GENERAL INSURANCE COMPANY LIMITEDversusSARFARAJBHAI SULEMANBHAI KHOKHAR
- Disposal
- 39-RULE DISCHARGED/DISMISSED @ FH
- Bench
- HASMUKH D SUTHAR
Holding
The appeal is dismissed; the tribunal’s order holding the insurer liable is affirmed.
Summary
On 3 August 2018 a Maruti Eeco, being used for hire and reward, was involved in a collision caused by a heavy vehicle, resulting in the car crashing into a tree. The claimant, a fare‑paying passenger, sued HDFC ERGO General Insurance Company for indemnity, but the insurer contended that the vehicle’s use for hire and reward constituted a fundamental breach of the policy, absolving it of liability. The Motor Accident Claims Tribunal held the insurer liable, rejecting the breach defence. On appeal, the insurer argued that police statements and the FIR proved the vehicle was used for hire and reward and should have been considered. The High Court held that police statements are not substantive evidence under Section 25 of the Evidence Act and, following National Insurance Co. Ltd. v. Chamundeshwari Devi, the tribunal’s evidence‑based finding prevails. Consequently, the court found no error in the tribunal’s decision and dismissed the appeal.
Issues considered
- The insurer’s liability when the insured vehicle is used for hire and reward, constituting a fundamental breach of the policy.
- The admissibility and evidentiary value of police statements and FIR in determining the breach.
- Whether the tribunal erred in fastening liability on the insurer despite the alleged breach.
Legislation cited
Subjects
insurancefundamental breachhire and rewardmotor accident claimevidencepolice statementsIndian Evidence Act
Judgment
C/FA/4247/2023 JUDGMENT DATED: 08/01/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 4247 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR Sd/-
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Approved for Reporting Yes No
✔
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HDFC ERGO GENERAL INSURANCE COMPANY LIMITED
Versus
SARFARAJBHAI SULEMANBHAI KHOKHAR & ORS.
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Appearance:
MASUMI V NANAVATY(9321) for the Appellant(s) No. 1
MR VIBHUTI NANAVATI(513) for the Appellant(s) No. 1
MR. HEMAL SHAH(6960) for the Defendant(s) No. 3
RULE SERVED for the Defendant(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
Date : 08/01/2026
ORAL JUDGMENT
1. This appeal has been preferred by the appellant against the
judgment and award dated 02.03.2023 passed by the Motor
Accident Claims Tribunal (Auxi.) Savarkundla in Motor Accident
Claim Petition being MACP No.114 of 2020 (Old MACP No.162 of
2018).
2. Head learned advocates for the respective parties.
3. Brief facts of the case are that “On 03.08.2018 at about
4:30 a.m., when he was returning from Porbandar to
Savarkundla in Maruti Eeco Car No. GJ-14-AK-4164 and had
reached the Amreli–Kunkavav Road, a heavy vehicle coming from
the opposite direction with full lights on, in a manner
endangering human life, caused the driver of the said Maruti
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C/FA/4247/2023 JUDGMENT DATED: 08/01/2026
Eeco Car, i.e. opponent No. 1, to lose control of the vehicle, as a
result of which it dashed against a tree beside the road and
caused the accident.
4. Learned advocate for the appellant has submitted that the
learned Tribunal has not considered the fact that the original
claimant–respondent No. 3 was travelling in the Maruti Eeco Car
and that the said car was being used for hire and reward, which
fact is admitted and undisputed and clearly emerges from the
police papers. It was therefore submitted that the learned
Tribunal ought to have considered the defence of the Insurance
Company and ought to have passed an order exonerating the
Insurance Company on account of fundamental breach of the
insurance policy. From the oral evidence and documents on
record, it appears that the claimant was travelling as a fare-
paying passenger in the car. At the least, the Tribunal ought to
have passed an order of ‘pay and recover’ and fastened liability
upon the owner of the vehicle. Learned advocate has relied upon
the judgment of this Court in New India Assurance Co. Ltd. v.
Jaysukhlal Manganlal Doshi, 2013 (93) GLR 2283, and
submitted that the contents of the FIR, which was relied upon by
the claimant, are very clear and the circumstances reflected
therein cannot be doubted, and were required to be considered
by the Tribunal to decide the controversy as to whether the
claimant was travelling in the car by paying fare. Hence, the
appeal deserves to be allowed and at least an order of pay and
recover be passed.
5. Having heard the learned advocate for the appellant and
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C/FA/4247/2023 JUDGMENT DATED: 08/01/2026
upon perusal of the record, it is seen that the principal defence
of the Insurance Company is that on the date of the accident the
claimant was travelling in the Eeco Car as a fare-paying
passenger and that the vehicle was being used for hire and
reward, constituting a fundamental breach of the insurance
policy. It was therefore contended that the Insurance Company
was not liable to indemnify the owner.
6. On perusal of the record, it appears that opponent No. 3
examined witness-Pulkit Narendrakumar Singhvi at Exhibit-71
in order to establish breach of the policy conditions, relying upon
police statements produced at Exhibits 63 and 64 to contend
that the vehicle was being used for hire and reward. However,
except these police statements, no independent evidence was
produced before the Tribunal. On the other hand, the claimant
denied that he was travelling by paying fare or that the vehicle
was being used for hire and reward.
7. So far as the police statements of Imran Makwana at
Exhibit-65 and the statement produced at Exhibit-66 are
concerned, neither the authors of those statements were
examined before the Tribunal nor were the contents of those
statements proved in accordance with law. The Insurance
Company also failed to confront the claimant with those
statements.
8. It is well settled that statements made before the police are
not substantive evidence and, in view of Section 25 of the Indian
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C/FA/4247/2023 JUDGMENT DATED: 08/01/2026
Evidence Act, they are not admissible unless duly proved. Mere
production of such statements without examining the makers
thereof does not amount to proof of their contents.
9. Further, in view of the decision of the Hon’ble Supreme
Court in National Insurance Company Ltd. v. Chamundeshwari
Devi, (2021) 18 SCC 516, when the contents of the FIR run
contrary to the evidence adduced before the Tribunal, the
evidence led before the Tribunal must prevail. Therefore, the
reliance placed by the appellant on the FIR alone cannot be
accepted.
10. In the light of the above, the decision of this Court in
Jaysukhlal Manganlal Doshi (supra) would not come to the
assistance of the appellant in the facts of the present case.
11. In view of the above discussion, this Court is of the
considered opinion that the learned Tribunal has not committed
any error in fastening the liability upon the Insurance Company.
Hence, the appeal stands dismissed. Civil Application, if any,
stands disposed of as having become infructuous.
Sd/-
(HASMUKH D. SUTHAR,J)
ALI
Original copy of this order has been signed by the Hon'ble Judge.
Digitally signed by: ISTAYAK ALI(HC01093), PRIVATE SECRETARY, at High Court of Gujarat on 13/01/2026 16:38:28
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