CHOLAMANDALAM MS GENERAL INSURANCE CO LTD MEHSANA vs PRAVINSINH DANSINH CHAUHAN
- Court
- Gujarat High Court
C/FA/3317/2025 (GJHC240284372025) JUDGMENT DATED: 01/09/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3317 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J. C. DOSHI
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Approved for Reporting Yes No
No
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CHOLAMANDALAM MS GENERAL INSURANCE CO LTD MEHSANA
Versus
PRAVINSINH DANSINH CHAUHAN & 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 JM BAROT(143) for the Defendant(s) No. 2,3,4,5,6
NOTICE SERVED for the Defendant(s) No. 1
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CORAM: HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 01/09/2026
JUDGMENT
1. The solitary issue raised by the appellant - insurance
company in this appeal pertains to order passed by learned
Tribunal for ‘pay and recover’.
2. Heard learned advocate Ms. Masumi Nanavati appearing
for the appellant and learned advocate Mr. Barot appearing for
the respondent.
3. This Appeal under section 173 of the Motor Vehicle Act.
1988, arises from the judgment and award dated 29.11.2024
passed by the learned MACT (Auxi.), Mahesana at Visnagar in
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MACP No.17 of 2017, by which the learned Tribunal assessed
the compensation of Rs.8,84,877/- with the interest at the rate
of 9% p.a. from the date of petition till realization. The insurance
company has been held liable to pay the amount of
compensation and further permitted the insurance company to
recover the same from the owner of the vehicle on the ground of
breach of terms and conditions of the policy.
3. The factual aspects are as under :-
3.1. On 30.12.2016, deceased Mulsinh Dhulsinh Chauhan was
traveling in a tractor bearing No.GJ-2-AG-8250. The trolley was
attached with the tractor. The tractor was driven at full speed.
The tractor along with the trolley turned turtle due to rash and
negligent driving. The deceased who was sitting on the
mudguard of the tractor received fatal injuries and succumbed
during treatment. The deceased was 50 year old and according
to claimants, he was earning Rs.8,000/- per month by doing
agriculture work. The dependents were solely relying upon the
income of the deceased. The claimants have pleaded complete
negligence of driver of the tractor and the compensation has
been sought jointly and severally from the opponents on the
ground that Insurance company owe contractual liability to pay
the compensation. In defense, the insurance company filed
written statement contending that driver was not holding valid
and effective driving license. Further it is contended the sitting
capacity of the tractor was only one and therefore the person
who was sitting on the mudguard does not fall within the
definition sitting capacity and therefore a person sitting on the
mudguard constitute unauthorized passenger and it is breach of
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policy conditions, therefore, Insurance company is not liable to
pay the compensation.
4. The learned Tribunal permitted both the parties to lead the
evidence and after appreciating the evidence, awarded the
compensation of Rs.8,84,877/- with 9% interest.
5. The claimant is satisfied with the said compensation and
has not filed any appeal.
6. The insurance company being aggrieved by the order of
passing of pay and recover has preferred this appeal.
7. At the outset, I may refer to finding of the learned Tribunal
in Para 16 of the impugned judgment, which reads as under :-
“16. LIABILITY TO PAY THE COMPENSATION:-
So far as question of payment of liability is concerned, as
discussed in Issue No.1 that, the impugned accident was
occurred upon sole negligence in driving on the part of the
driver of the offending vehicle Tractor– opponent No.1 and
applicants have produced copy of Insurance Policy of Tractor
at Exh.24, which was in force for the period from
17/07/2016 to 16/07/2017 and the accident was occurred
on 30/12/2016, which shows that insurance policy of
Tractor was in force at the relevant time of accident. Learned
Advocate for the opponent No.2 has vehemently argued that
deceased was travelling in the Tractor and sat on the
mudguard of the Tractor though only one person i.e. driver
alone is allowed to drive the vehicle Tractor. However,
looking to the documentary evidence produced on record, the
deceased and applicant No.2 were sat on the mudguard of
Tractor at the relevant time of accident and fell therefrom.
Therefore, insurance company is not liable to pay
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compensation to the applicants as there is breach of terms
and conditions of the insurance Policy. In view of the
reported judgment of the Hon’ble Supreme Court of India in
the case of V. Renganathan & Anr. Versus Branch
Manager, United India Insurance Co. Ltd. & Anr.,
reported in 2022 (0) AIJEL-SC-71043 , wherein it has
been held that…..
1. Leave granted.
2. The appellants are the son and daughter of the deceased
who was traveling in the Tractor by sitting on the Mudguard
which met with an accident. The claimants therefore, filed
claim petition and claimed a compensation of Rs.7,00,000/-
before the Motor Accidents Claims Tribunal ('the Tribunal').
The claim petition was allowed. The learned Tribunal held
that the owner of the tractor as well as the insurer are
jointly and severally liable to pay compensation of
Rs.6,62,000.- with interest @ 7.5% per annum from the date
of ling of the claim petition as against the claim of
Rs.7,00,000/-.
3. Being aggrieved thereby, the United India Insurance
Company Limited ('the Insurance Company') led an appeal
before the High Court. The learned single Judge of the High
Court allowed the appeal and held that the Insurance
Company was not liable to pay the compensation, it was
only the owner of the vehicle who was liable to pay the
compensation.
4. Being aggrieved thereby, the present appeal. We have
heard Mr. T.R.B. Sivakumar, learned counsel appearing for
the appellants and Mr. Rajesh Kumar Gupta, learned
counsel appearing for the United India Insurance Company
Limited.
5. We find no fault with the finding of the High Court that
the Insurance Company could not be held liable for the
payment of compensation in view of the judgment of 3-
Judges' Bench of this Court in the case of New India
Assurance Co. Ltd. vs. Asha Rani & Ors. reported in 2003
(2) SCC 223. However, at the same time, we find that in
view of the settled position, the High Court ought to have
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partly allowed the appeal. We may gainfully refer to the
observations of this Court in similar facts at paragraph
Nos.10 and 11 of the Judgment of this Court in Shivaraj vs.
Rajendra and Anr. reported in 2018(10) SCC 432. As
already observed, the facts in the present case are similar to
the facts in the case of Shivaraj vs. Rajendra and Anr.
(supra).
6. In the present case also, the High Court ought to have
partly allowed the appeal preferred by the Insurance
Company and ought to have directed it to pay the amount of
compensation to the appellants and granted liberty to
recover the same from the tractor owner.
7. We are, therefore, inclined to allow the appeal. We uphold
the finding of the High Court that the Respondent No.1-
Insurance Company cannot be held liable for payment of
compensation. At the same time, we direct the Respondent
No.1-Insurance Company to pay the compensation to the
appellants- claimants as determined by the learned Tribunal
with interest as specified in the order within three months
from today with liberty to recover the said amount from the
owner of the vehicle.
Thus, in view of the above judgment of the Hon’ble Supreme
Court of India, the Insurance Company i.e. opponent No.2 is
held liable to pay the amount of compensation to the
applicants at the first instance with a liberty to recover the
said amount from the owner of the Tractor involved in the
accident. Thus, the opponent No.1 as being owner and driver
and opponent No.2 as being an insurer of Tractor No.GJ-2-
AG-8250, both are held liable to pay compensation to the
applicants jointly and severally.”
8. While determining the liability, the learned Tribunal placed
reliance upon the judgment of the Supreme Court in the case of
Ranganathan (supra) and passed order of "pay and recover".
The Tribunal held that the sitting of the deceased on the
mudguard of the tractor would constitute breach of the
insurance policy conditions and that would not disentitle the
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claimants from recovering compensation, more particularly when
there is existence of a valid and effective insurance policy.
Furthermore, it was observed that a breach of the terms and
conditions of the policy merely permits the insurer the right to
recover the paid compensation amount from the insured.
9. Even recently the Hon’ble Supreme Court in the case of
Kaminiben v/s. Oriental Insurance Company Limited [2026
live law (SC) 174] , the Hon’ble Supreme Court reiterated the
principle of pay and recover. Hon’ble Supreme Court in para 10
to 12 held as under :-
“10. In the present case, the deceased was travelling in the
subject tempo along with Ganesh Idol, which was taken for
immersion in Narmada River. Thus, the dominant purpose
for hiring the vehicle was not for travelling but for carrying
the Ganesh idol for immersion. Travelling in the vehicle was
only incidental, therefore, at best, the deceased can be
treated as gratuitous passenger travelling with his goods
(Ganesh idol). This being the circumstance, we rely on the
judgment in the matter of Manuara Khatun & Ors. (supra),
wherein this Court has held thus in paragraph Nos. 15 and
16:-
“15. This question also fell for consideration recently in
National Insurance Co. Ltd. v. Saju P. Paul [National
Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41 :
(2013) 1 SCC (Civ) 968 : (2013) 1 SCC (Cri) 812 :
(2013) 1 SCC (L&S) 399] wherein this Court took note
of entire previous case law on the subject mentioned
above and examined the question in the context of
Section 147 of the Act. While allowing the appeal filed
by the insurance company by reversing the judgment
[ Saju P. Paul v. National Insurance Co. , 2011 SCC
OnLine Ker 3791:2012 ACJ 1852] of the High Court, it
was held on facts that 3 .2025 INSC 1219 since the
victim was travelling in offending vehicle as
“gratuitous passenger” and hence, the insurance
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company cannot be held liable to suffer the liability
arising out of accident on the strength of the insurance
policy. However, this Court keeping in view the
benevolent object of the Act and other relevant factors
arising in the case, issued the directions against the
insurance company to pay the awarded sum to the
claimants and then to recover the said sum from the
insured in the same proceedings by applying the
principle of “pay and recover”.
16. R.M. Lodha, J. (as his Lordship then was and later
became CJI) speaking for the Bench held in paras 20
and 26 as under : ( Saju P. Paul case [ National
Insurance Co. Ltd. v. Saju P. Paul , (2013) 2 SCC 41 :
(2013) 1 SCC (Civ) 968 : (2013) 1 SCC (Cri) 812 :
(2013) 1 SCC (L&S) 399] , SCC pp. 52 & 55)
“20. The next question that arises for consideration is
whether in the peculiar facts of this case a direction
could be issued to the Insurance Company to first
satisfy the awarded amount in favour of the claimant
and recover the same from the owner of the vehicle
(Respondent 2 herein).
26. The pendency of consideration of the above
questions by a larger Bench does not mean that the
course that was followed in Baljit Kaur [National
Insurance Co. Ltd. v. Baljit Kaur , (2004) 2 SCC 1 :
2004 SCC (Cri) 370] and Challa Upendra Rao [National
Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8
SCC 517 : 2005 SCC (Cri) 357] should not be followed,
more so in a peculiar fact situation of this case. In the
present case, the accident occurred in 1993. At that
time, the claimant was 28 years old. He is now about
48 years. The claimant was a driver on heavy vehicle
and due to the accident he has been rendered
permanently disabled. He has not been able to get
compensation so far due to the stay order passed by
this Court. He cannot be compelled to struggle further
for recovery of the amount. The Insurance Company
has already deposited the entire awarded amount
pursuant to the order of this Court passed on 1-8-2011
[ National Insurance Co. Ltd. v. Saju P. Paul [National
Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41, 55
(footnote 14)]] and the said amount has been invested
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in a fixed deposit account. Having regard to these
peculiar facts of the case in hand, we are satisfied
that the claimant (Respondent 1) may be allowed to
withdraw the amount deposited by the Insurance
Company before this Court along with accrued
interest. The Insurance Company (the appellant)
thereafter may recover the amount so paid from the
owner (Respondent 2 herein). The recovery of the
amount by the Insurance Company from the owner
shall be made by following the procedure as laid down
by this Court in Challa Upendra Rao [National
Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8
SCC 517 : 2005 SCC (Cri) 357].”
11. Thus, in Manuara Khatun & Ors. (supra), this Court has
referred and approved Saju P. Paul (supra) case to hold that
when the victim was a gratuitous passenger, this Court
issued directions against the insurer of the offending vehicle
to first satisfy the awarded sum, and then to recover the
same from the insured in the same proceedings.
12. In the case of Amudhavalli & Ors. (supra), referred by
learned counsel for the respondent Insurance Company, the
deceased hired a goods vehicle for travelling and thus, it
was not a case where the goods vehicle was taken on rent
for carrying the goods, and travelling was incidental as
gratuitous passenger. Thus, the said case of Amudhavalli &
Ors. (supra), is distinguishable on facts; and the facts of the
present case is similar and closer to the one in the case of
Saju P. Paul (supra) and Manuara Khatun & Ors. (supra).”
10. In view of above and applying aforesaid dictum to the facts
of the present case, I find that appeal is devoid of merit and
requires to be dismissed, and accordingly, it is dismissed. The
impugned judgement and award is confirmed.
11. The learned Tribunal concerned shall disburse the entire
awarded amount lying in the FDR and/or with the Tribunal, with
accrued interest thereon, if any, to the claimant/s, by account
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payee cheque / NEFT / RTGS, after proper verification and if
required by passing necessary order for disbursement.
12. While making the payment, the Tribunal shall deduct the
courts fees, if not paid, in accordance with rules/law.
13. Record and proceedings be sent back to the concerned
Tribunal, forthwith.
14. Needless to state that when learned Tribunal has passed
the order for ‘pay and recover’, which is confirmed by this Court,
the insurance company would be at liberty to execute this order
to recover the amount of compensation from the owner of
vehicle.
(J. C. DOSHI,J)
SATISH
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