LEGAL HEIRS OF DECD. POPATBHAI TAPUBHAI VAGHELA vs PRAJAPATI KISHORBHAI PREMJIBHAI

C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2212 of 2013
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LEGAL HEIRS OF DECD. POPATBHAI TAPUBHAI VAGHELA & ORS.
Versus
PRAJAPATI KISHORBHAI PREMJIBHAI & ORS.
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Appearance:
MR HENIL SHAH for the Appellants
MS MASUMI NANAVATI for the Respondent No. 3
RULE SERVED for the Defendant(s) No. 1,2
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CORAM: HONOURABLE MR. JUSTICE J. C. DOSHI

Date : 02/09/2026

JUDGMENT
Heard learned advocates for the respective parties.
1. This appeal is filed under Section 173 of the Motor
Vehicles Act, 1988 (in short “the Act”) by the appellant/s
challenging the judgment and order dated 21.11.2012 passed
in MACP No. 818 of 2009, whereby the learned Tribunal
granted compensation of Rs. 1,83,800/- with interest at the
rate of 7.5% per annum from the date of the claim petition till
realisation.
2. The facts, as recorded, are that the deceased was
serving as a Cleaner-cum- Labour in the Tata-608 Tempo,
owned by the opponent No.2-owner. On 03-09-2009, in the
morning, with a view to perform his duty, the deceased
alongwith the opponent No.1-driver of the Tempo was
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
travelling in the said Tempo. The opponent No.1-driver was
driving the said vehicle rashly and negligently, in full speed,
endangering the human life. At about 9.00 to 9.30 in the
morning when they were nearby village Moti-Rajsthali, Meldi-
Maa Temple, the opponent No.1-driver of the said vehicle lost
control over the steering and so that, the said vehicle turned
turtle. As result thereof, the deceased sustained serious
injuries and died. A complaint was son a lodged on the same
day by the of the deceased against the opponent No.1-driver
in the Palitana Town Police Station vide Ist CR No.67/09
under sections-279, 304(a), 337, 338 of the IPC and sections-
177, 184, 134 of MV Act for causing this accident and thereby,
death of deceased.
2.1 The legal heirs – claimants of the deceased filed claim
petition before the learned Tribunal and the learned Tribunal
passed the judgment and award as stated herein above.
2.2 Being aggrieved by the said award, theappellant
preferred the present appeal.
3. Having considered the submissions of learned advocates
for both sides, two issues arose for consideration:
“3.1. Whether, in the facts of the present case, the
insurance company can be held directly liable, or
whether a direction of the nature of pay and recover
ought to be passed on account of a breach of the terms
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
and conditions of the policy?
3.2. Whether, in a case filed under Section 163A, the
amendment to the Motor Vehicles Act introducing
Section 164 would apply retrospectively?”
4. On the first issue being for the principle of pay and
recover, for the retrospective effect of amendment in section
163A, learned advocate for the claimant/s relied upon the
judgment of the Hon’ble Apex Court in case of New India
Assurance Co. Ltd. Vs. Urmila Halder, 2024 JX (SC) 1154
for the proposition that the amendment introduced by Section
164 to the Motor Vehicles Act, being a beneficial piece of
legislation, must be given retrospective effect.
5. It appears that the facts, supported by the evidence on
record, duly proved that the deceased, on unfortunate day,
was travelling in the tempo, and that, since the tempo was
being driven at excessive speed, it capsized, resulting in the
death of the deceased.
6. To be noted that the deceased was traveling in the tempo
as unauthorized passenger.
7. Nonetheless, having regard to the judgment in case of
Bharatbhai Shamjibhai Jambucha v. Mukeshbhai
Usmanbhai Desai, 2025 JX (Guj) 802, in which this Court
had, with reference to paragraphs 8, 9, and 10 thereof,
referred to the slew of pronouncements and held that order of
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
pay and recover deserves to be passed. Para 8 to 10 reads as
under:-
“ 8 . Evidence on record indicates that the claimants were
travelling as gratuitous passengers along with their goods. In
the fact situation, Co-ordinate Bench of this Court in the case
of United India Insurance Co. Ltd. v/s. Fatmaben Ismailbhai
and Ors. [First Appeal No.1915 of 2006], refereed judgment
of Shamanna v. Oriental Insurance Co. Ltd., (2018) 9
SCC 650, Manuara Khatun v. Rajesh Kr. Singh, (2017) 4
SCC 796 and Shivaraj V/s Rajendra and another
reported in 2018 ACJ 2755 to pass order of pay and
recover. The issue raised in this appeals are governed by said
judgments. Out of above judgments, let refer judgment in the
case of Shamanna v. Oriental Insurance Co. Ltd., (2018) 9
SCC 650, it is held in paragraphs 12 to 14 as under:
“12. The above reference in Parvathneni case [ National
Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 :
(2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943 ] has
been disposed of on 17-9-2013 [National Insurance Co. Ltd. v.
Parvathneni, (2018) 9 SCC 657] by the three- Judge Bench
keeping the questions of law open to be decided in an
appropriate case.
13. Since the reference to the larger Bench in
Parvathneni case [National Insurance Co. Ltd. v.
Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ)
568 : (2009) 3 SCC (Cri) 943] has been disposed of by
keeping the questions of law open to be decided in an
appropriate case, presently the decision in Swaran Singh
case [ National Insurance Co. Ltd. v. Swaran Singh,
(2004) 3 SCC 297 : 2004 SCC (Cri) 733 ] followed in
Laxmi Narain Dhut [ National Insurance Co. Ltd. v.
Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2
SCC (Cri) 142 ] and other cases hold the field. The
award passed by the Tribunal directing the insurance
company to pay the compensation amount awarded to
the claimants and thereafter, recover the same from the
owner of the vehicle in question, is in accordance with
the judgment passed by this Court in Swaran Singh
[National Insurance Co. Ltd. v. Swaran Singh, (2004) 3
SCC 297 : 2004 SCC (Cri) 733] and Laxmi Narain Dhut
[National Insurance Co. Ltd. v. Laxmi Narain Dhut,
(2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] cases. While
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
so, in our view, the High Court ought not to have
interfered with the award passed by the Tribunal
directing the first respondent to pay and recover from
the owner of the vehicle. The impugned judgment
[Shamanna v. Laxman, 2016 SCC OnLine Kar 6928] of
the High Court exonerating the insurance company from
its liability and directing the claimants to recover the
compensation from the owner of the vehicle is set aside
and the award passed by the Tribunal is restored.
14. So far as the recovery of the amount from the owner
of the vehicle, the insurance company shall recover as
held in the decision in Oriental Insurance Co. Ltd. v.
Nanjappan [ Oriental Insurance Co. Ltd. v.
Nanjappan, (2004) 13 SCC 224 : 2005 SCC (Cri)
148 ] wherein this Court held that : (SCC p. 226, para 8)
“8. … For the purpose of recovering the same from the
insured, 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 Tribunal and the issue is decided against the owner
and in favour of the insurer.”
9. With profit I may refer judgment in the case of
Manuara Khatun v. Rajesh Kr. Singh, (2017) 4 SCC
796 , it is held in paragraphs 15 to 16 as under:
"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 since the victim was
travelling in offending vehicle as “gratuitous passenger”
and hence, the insurance company cannot be held liable
to suffer the liability arising out of accident on the
strength of the insurance policy. However, this Court
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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 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
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
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] .”
10. However, noticeably, the claimants are third party
and were travelling as gratuitous passengers along with
their goods in the errant vehicle truck. Goods vehicle
was used for the purpose of carrying passengers which
would be antithetical to the terms of insurance policy,
since the claimants were third party, the claimants
cannot suffer on such technicalities to pay compensation
whether by owner or insurance company. The contract
of policy on record is comprehensive policy and insured
the vehicle, risk of the owner of vehicle is covered. Thus
it is case to follow law laid down in the case of
Shamanna (supra) and Manuara Khatun (supra) to pass
order pay and recover.”
8. On the second issue, it is found that the same was fully
covered by the judgment of the Hon’ble Apex Court in case of
Urmila Halder (supra) , which holds that the amendment to
a beneficial piece of legislation must be given retrospective
effect.
9. Section 163A of the Motor Vehicles Act has been
replaced by Section 164, introducing a fixed compensation of
Rs. 5,00,000/- in death cases, and that the Hon’ble Apex Court
had held that this amendment would apply even where the
accident occurred before the amendment came into force.
Relevant para of the judgment is 6 to 10, which read as
under:-
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
“6. Reliance was placed on the last line of the
notification, which indicates that the said amendment
would come into force from the date of publication in
the official Gazette, which is 22nd May, 2018. It was
submitted that as the accident had occurred on 11th
December, 2004, the benefit of such amendment
could not be granted to the respondent. In support of
this contention, learned counsel referred to and relied
upon various decisions of this Court in Padma
Srinivasan Vs. Premier Insurance Company
Limited, [(1982) 1 SCC 613]; Shyam Sunder and
Others vs. Ram Kumar and Another, [(2001) 8
SCC 24]; Nasiruddin and Others Vs. Sita Ram
Agarwal, [(2003) 2 SCC 577] and Panchi Devi Vs.
State of Rajasthan and Others, [(2009) 2 SCC
589] .
7. It was further contended that the present case is
covered by the policy under which the payment is
made and the same crystallized on the date the same
was entered into and subsequent developments would
not alter the rights and liabilities of the parties. Thus,
the contention was that the appellant would not be
liable to pay any further than what it was obliged to
pay under the Act prior to coming of the amendment
on 22nd May, 2018.
8. Learned counsel for the respondent submitted that
the High Court has rightly taken a view that it is
merely a procedural amendment which has to be
given retrospective effect and it is nothing substantive
so as to affect the merits of the issue.
9. Having considered the matter, we do not find any
reason to interfere with the judgment impugned. With
regard to the judgments of this Court relied upon by
learned counsel for the appellant, having gone
through the same we find that they are
distinguishable from the facts of the present case and
thus, the ratio of those cases would not apply in the
present case.
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
10. The order of the High Court is well discussed and
we agree with the view taken. We may, however, add
that a beneficial legislation would necessarily entail
the benefit to be passed on to the claimant in the
absence of any specific bar to the same. In the
present case, the liability of the appellant-Insurance
Company has not been interfered with. Only the
computational mode and the modality have been
further clarified, which rightly has been noted by the
High Court and accordingly, the claim has been
enhanced to Rs. 5,00,000/- (Rupees Five Lakhs). As
50% of the compensation amount was stayed by this
Court, the same be paid to the respondent in terms of
the impugned judgment within eight weeks.”
10. Applying the aforesaid dictum, the following order is
passed:
10.1 The appeal filed by the insurance company is partly
allowed.
10.2 The judgment of the learned Tribunal is modified to
the extent that the claimant/s shall be entitled to the fixed
compensation of Rs. 5,00,000/-, together with interest at 7.5%
per annum from the date of the claim petition till realization.
10.3 Opponent Nos. 1 and 2 shall be liable to pay the
compensation.
10.4 In the first instance, Opponent No. 3, the insurance
company shall satisfy the award, and shall be entitled to
recover the said amount of compensation from Opponent Nos.
1 and 2 by executing this order.
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C/FA/2212/2013 (GJHC240396572013) JUDGMENT DATED: 02/09/2026
11. Registry is directed to return back the R & P, if any, to
the concerned Court forthwith.
(J. C. DOSHI,J)
SHEKHAR P. BARVE
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