Iffco Tokio General Insurance Co. Ltd vs Vineet Sharma & Ors

$~53
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Date of decision: 20 April 2026

+ MAC.APP. 918/2013
IFFCO TOKIO GENERAL INSURANCE CO. LTD.....Appellant
Through: Mr. Pankaj Seth, Ms. Shruti Jain,
Advocates
versus

VINEET SHARMA & ORS .....Respondents
Through: Mr. Sunil Dahiya, Advocate for
Respondent nos. 2 & 3

CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT

ANISH DAYAL, J (ORAL)
1. This appeal has been filed by the Insurance Company challenging
the impugned award passed by Motor Accidents Claims Tribunal
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[‘ MACT ’], Saket Courts, New Delhi in Claim Petition No. 67/2011 on 12
September 2013, awarding compensation to the tune of Rs.3,55,200/- in
favour of respondent no.l/claimant, along with interest at the rate of 9% per
annum from the date of filing of petition till realization.
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2. The accident occurred on 23 June 2010 at about 5:45 pm at
Mehrauli Gurgaon Road Metro Station near Arjun Garh, New Delhi, when
respondent no.1/claimant was travelling to his office in Gurgaon from
Okhla Phase-II on his motorcycle was hit by a dumper (hereinafter,
‘ offending vehicle ’) from behind. FIR No. 123/10 was registered and claim
Signature Not Verified
MAC.APP. 918/2013 Page 1 of 7

Digitally Signed
By:MANISH KUMAR
Signing Date:23.04.2026
19:07:38

petition was filed by respondent no.1/claimant which resulted in the
passing of impugned award.
3. Appellant/Insurance Company raised a defence that the offending
vehicle had a permit for plying in the State of Haryana, while the accident
took place in Delhi, however, the MACT categorically held the
appellant/Insurance Company liable to satisfy the compensation amount
awarded.
4. Ms. Shruti Jain , counsel for Insurance Company, contends that even
though there was a valid permit, for which there was no dispute, conditions
of contract i.e. the insurance policy were violated, therefore, right to
recovery should have, at least, been granted.
5. In this regard, MACT relied the upon decision of Punjab & Haryana
High Court in National Insurance Company Ltd. v. Rajender Giri , 2011
SCC OnLine P&H 14036, which held that driving in another state without
a valid permit will not amount to violation of conditions of insurance
policy and would not give the insurer a defence under Section 149(2) of
Motor Vehicles Act, 1988. Therefore, no right to pay and recover have been
granted to appellant/Insurance Company.
6. It is noted that the decision in Rajender Giri (supra) was rendered on
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12 October 2011 and relevant paragraph is extracted hereunder:
“ 15. It would be said that the vehicle had a valid route
permit for being plied in the State of Rajasthan but not in
Haryana State. The Transport Authority of Rajasthan State
had found the vehicle fit for being plied as goods carriage.
Therefore, it cannot be said that the vehicle was being plied
without a route permit. The violation of bringing the vehicle
to the area of State of Haryana without a valid route permit
for plying the same in the said State would not amount to
violation of the conditions of the insurance policy and
would not give the insurer a defence under section 149(2) of
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MAC.APP. 918/2013 Page 2 of 7

Digitally Signed
By:MANISH KUMAR
Signing Date:23.04.2026
19:07:38

the Act. The case before me is not a case where there is no
route permit at all. Therefore, the ratio of the decision
in National Insurance Co. Ltd.'s case (supra) would not
stand attracted to the facts of this case.”
(emphasis added)

7. The issue, as per counsel for appellant/Insurance Company, now
stands resolved by decision of the Supreme Court in K. Nagendra v. The
New India Insurance Co. Ltd. & Ors. (2025) INSC 1270, where the
Supreme Court was dealing with a case where permit was issued for a
different State, while the accident took place in Channapatna City. The
Supreme Court in this context stated as under:
“8. Now, let us consider the instant case. The record reveals
that the offending vehicle did not have the permit to enter
Channapatna City, where the accident took place. This
position is not in dispute. Unquestionably, therefore, the
terms of the permit have been deviated.
9. 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.
10. At the same time though, when an Insurance Company
takes on a policy and accepts payments of premium in
pursuance thereto, it agrees to do so within certain bounds.
The contract lays down the four corners within which such
an insurance policy would operate. If that is the case, to
expect the insurer to pay compensation to a third party,
which is clearly outside the bounds of the said agreement
would be unfair. Balancing the need for payment of
compensation to the victim vis-à-vis the interests of the
insurer, the order of the High Court applying the pay and
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MAC.APP. 918/2013 Page 3 of 7

Digitally Signed
By:MANISH KUMAR
Signing Date:23.04.2026
19:07:38

recover principle, in our considered view, is entirely
justified and requires no interference.”
(emphasis added)

8. Supreme Court while upholding decision of the High Court, relied
upon another judgment of Supreme Court in Amrit Paul v. TATA AIG
General Insurance Company (2018) 7 SCC 558 where no documentary
evidence to support a valid permit had been brought on record. Therefore,
the right to pay and recover was granted to the Insurance Company.
9. Yet another reference can be made to a decision of the Supreme
Court in National Insurance Co. Ltd. Vs. Challa Upendra Rao 2004 (8)
SCC 517 where the insurer was granted recovery rights after satisfying the
award in first instance. Relevant finding of the Supreme Court is as under:
“ 12. The High Court was of the view that since there was no
permit, the question of violation of any condition thereof
does not arise. The view is clearly fallacious. A person
without permit to ply a vehicle cannot be placed on a better
pedestal vis-à-vis one who has a permit, but has violated
any condition thereof. Plying of a vehicle without a permit is
an infraction. Therefore, in terms of Section 149(2) defence
is available to the insurer on that aspect. The acceptability
of the stand is a matter of adjudication. The question of
policy being operative had no relevance for the issue
regarding liability of the insurer. The High Court was,
therefore, not justified in holding the insurer liable.
13. The residual question is what would be the appropriate
direction. Considering the beneficial object of the Act, it
would be proper for the insurer to satisfy the award, though
in law it has no liability. In some cases the insurer has been
given the option and liberty to recover the amount from the
insured. For the purpose of recovering the amount paid
from the owner, the insurer shall not be required to file a
suit. It may initiate a proceeding before the executing court
concerned as if the dispute between the insurer and the
owner was the subject-matter of determination before the
Signature Not Verified
MAC.APP. 918/2013 Page 4 of 7

Digitally Signed
By:MANISH KUMAR
Signing Date:23.04.2026
19:07:38

Tribunal and the issue is decided against the owner and in
favour of the insurer. Before release of the amount to the
claimants, owner of the offending vehicle shall furnish
security for the entire amount which the insurer will pay to
the claimants. The offending vehicle shall be attached, as a
part of the security. If necessity arises the executing court
shall take assistance of the Regional Transport Authority
concerned. The executing court shall pass appropriate
orders in accordance with law as to the manner in which the
owner of the vehicle shall make payment to the insurer. In
case there is any default it shall be open to the executing
court to direct realisation by disposal of the securities to be
furnished or from any other property or properties of the
owner of the vehicle i.e. the insured. In the instant case,
considering the quantum involved, we leave it to the
discretion of the insurer to decide whether it would take
steps for recovery of the amount from the insured.”
(emphasis added)

10. Accordingly, in view of clear enunciation by the Supreme Court, the
impugned award is modified to the extent that pay and recovery rights are
granted to appellant/Insurance Company against respondent no.3/owner of
the offending vehicle.
11. Mr. Sunil Dahiya , counsel for respondent no 2/driver and respondent
no.3/owner, states that loss of income awarded by the MACT was without
proof. However, the Court is not inclined to agree with his contention,
considering the reasons provided by MACT in paragraph 20 of the
impugned award, where the MACT relied upon certificate issued by Resil
Chemicals Pvt. Ltd ., where respondent no.1/claimant was employed in a
Sales and Marketing role, which showed that respondent no.1/claimant was
on leave for 3 months. Further reliance was also placed on salary slips,
exhibited as PW-1/2-A filed by respondent no.1/claimant (‘ PW-1 ’).
Signature Not Verified
MAC.APP. 918/2013 Page 5 of 7

Digitally Signed
By:MANISH KUMAR
Signing Date:23.04.2026
19:07:38

12. Mr. Sunil Dahiya , counsel for respondent no. 2/driver and respondent
no. 3/owner, has also raised a challenge to the compensation awarded
towards medical expenses, as the same were not supported by proof. In
respect of this, testimony of PW-1 was taken into account wherein he stated
that he had sustained head injuries and his left shoulder was broken. He
remained in ICU for 10 days in Artemis hospital and further, six days in the
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hospital from 24 June 2010 to 09 July 2010. Medical bill of
Rs.3,00,000/- was raised by the hospital, out of which Rs.1,00,000/- was
paid by Mediclaim, while the balance amount was paid by him. After 8
months, he had a follow up for his treatment, but continued to face hearing
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problems from his right ear. On 24 April, 2012 he got the rod removed
from his shoulder and another surgery of his ear was performed. It is
alleged that Rs.71,000/- were paid, out of which Rs. 45,000/- was paid by
Mediclaim.
13. In the cross examination conducted on behalf of respondent no.
2/driver and respondent no.3/owner and appellant/Insurance Company, he
stated that he had filed duplicate receipts of the medical bills, since original
bills had been submitted for the purpose of Mediclaim. He admitted that no
prescriptions in support of the bills had been filed. It is noted that the
documents relating to medical receipts given by the hospital have been
placed on record as Ex. PW-1/4 to Ex. PW-1/34 .
14. In light of the detailed testimony given by respondent no.1/claimant
himself, this Court does not find any reason to displace the conclusion
arrived at by the MACT in this regard.
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15. By order dated, 11 October 2013, this Court had directed a stay on
the execution of impugned award, subject to deposit of entire compensation
amount by appellant/Insurance Company with the Registrar General of this
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MAC.APP. 918/2013 Page 6 of 7

Digitally Signed
By:MANISH KUMAR
Signing Date:23.04.2026
19:07:38

Court. On deposit, 80% amount was directed to be released as per the terms
and conditions fixed by the MACT and the balance amount was kept in
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FDRs. Thereafter, vide order dated 29 August 2016, this Court had
directed the release of entire awarded amount in favour of respondent
no.1/claimant.
16. Therefore, in view of the above observations, appeal is allowed in
favour of appellant/Insurance Company and recovery rights are granted
against respondent no.2/driver and respondent no.3/owner.
17. Appeal is accordingly disposed of in above terms.
18. Pending applications, if any, are rendered infructuous.
19. Statutory deposit, if any, be refunded to appellant/Insurance
Company, only if the order of deposit has been complied with.
20. Judgment be uploaded on the website of this Court.

(ANISH DAYAL)
JUDGE
APRIL 20, 2026/sm/ sp
Signature Not Verified
MAC.APP. 918/2013 Page 7 of 7

Digitally Signed
By:MANISH KUMAR
Signing Date:23.04.2026
19:07:38