RELIANCE GENERAL INSURANCE COMPANY LIMITED vs RASIKBHAI KARAMSIBHAI KOLI

C/FA/529/2019 JUDGMENT DATED: 15/10/2026
(GJHC240792312018)
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 529 of 2019
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RELIANCE GENERAL INSURANCE COMPANY LIMITED
Versus
RASIKBHAI KARAMSIBHAI KOLI & ORS.
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Appearance:
MR VIBHUTI NANAVATI(513) for the Appellant(s) No. 1
ANAND R PATEL(7352) for the Defendant(s) No. 4
RULE SERVED for the Defendant(s) No. 1,2
UNSERVED EXPIRED (N) for the Defendant(s) No. 3
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CORAM: HONOURABLE MR. JUSTICE J. C. DOSHI

Date : 15/10/2026

JUDGMENT
1. By way of the present appeal under Section 173 of
the Motor Vehicles Act, 1988, the appellant, Reliance General
Insurance Company Limited, has challenged the judgment and
award dated 29.08.2018 passed by the Motor Accident Claims
Tribunal (Auxiliary), Limbdi, District Surendranagar, in MACP
No. 1262 of 2012 (formerly MACP No. 172 of 2008).
1.1 By the impugned judgment and award, the learned
Tribunal has awarded compensation of Rs. 8,36,554/- with
interest at the rate of 9% per annum from the date of filing of
the claim petition until realization and has held opponent Nos.
1 to 3 jointly and severally liable to pay the compensation.
1.2 The principal contention raised by the Insurance
Company in the present appeal is that the deceased was
travelling in a goods carriage vehicle as a gratuitous
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passenger, in breach of the terms and conditions of the
insurance policy, as the vehicle was not authorized to carry
passengers. However, the learned Tribunal failed to properly
appreciate this aspect and fastened liability upon the
Insurance Company to satisfy the award.
2. The brief facts of the case are that, according to
the claimants, on 25.02.2008, at about 7:30 a.m., the
deceased, Pravinbhai, was travelling in Jeep No. GJ-13-V-5475,
which was carrying goods, along the Vejalaka–Ranpur Road.
While the jeep was in motion, its door suddenly opened,
causing the deceased to fall from the vehicle. As a result, he
sustained serious injuries to his head and other parts of his
body, which ultimately resulted in his death.
2.1 FIR was lodged against the driver of the jeep at
Limbdi Police Station.
2.2 In the aforesaid factual background, the claimants,
being the parents of the deceased, Pravinbhai, filed a claim
petition under Section 166 of the Motor Vehicles Act, 1988.
They contended that the deceased was an unmarried young
man aged 20 years, was not suffering from any ailment, and
was earning Rs. 3,000/- to Rs. 4,000/- per month. He was also
contributing to the maintenance of the family. Accordingly, the
claimants sought compensation of Rs. 5,00,000/- with interest
and proportionate costs.
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2.3 Before the learned Tribunal, the Insurance
Company raised two principal contentions: first, that the
driver of the jeep did not hold a valid driving licence to drive a
light motor vehicle (LMV); and secondly, that the deceased
was travelling in a goods carriage vehicle as a passenger and
had not been travelling in connection with any goods.
2.4 Upon appreciating the evidence on record and
considering the aforesaid contentions, the learned Tribunal
passed the impugned judgment and award to the aforesaid
terms.
2.5 Being aggrieved, the appellant, Reliance General
Insurance Company Limited, has preferred the present
appeal.
3. Heard learned advocate Mr. Vibhuti Nanavati for
the appellant, Reliance General Insurance Company Limited,
and learned advocate Mr. A. R. Patel for respondent No. 4.
Though served, none appeared for respondent Nos. 1 and 2.
4. Learned advocate Mr. Nanavati, appearing for the
Insurance Company, fairly submitted that the issue concerning
the validity of the driving licence, specifically whether the
driver of the jeep held a valid licence to drive a light motor
vehicle (LMV), has been settled by the Hon’ble Supreme
Court in M/s. Bajaj Allianz General Insurance Co. Ltd. v.
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Rambha Devi & Ors. , (2025) 3 SCC 95. He, therefore,
submitted that the Insurance Company does not press this
ground in the present appeal.
4.1 Secondly, he submitted that although the claimants
had pleaded that the deceased was travelling along with
goods in the goods carriage vehicle, no evidence, apart from a
general and bald assertion, had been produced on record to
establish that the deceased was travelling in connection with
any goods. He, therefore, submitted that the Insurance
Company ought to be exonerated from its liability to pay the
compensation on the ground that the terms and conditions of
the insurance policy had been breached.
5. Per contra , learned advocate Mr. Patel, appearing
for respondent No. 4, referred to the findings recorded by the
learned Tribunal and submitted that the burden was upon the
Insurance Company to establish that the deceased was not
travelling with goods. He further submitted that the claimants
had specifically pleaded that the deceased was travelling with
goods and the police statement placed on record before the
learned Tribunal also indicates that the deceased was
travelling with goods. Therefore, according to him, the
learned Tribunal had rightly appreciated the evidence and
fastened liability upon the Insurance Company to pay the
compensation.
5.1 On the basis of the aforesaid submissions, learned
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advocate Mr. Patel prayed that the appeal be dismissed.
6. Having heard the learned advocates for the
respective parties and upon examining the evidence adduced
before the learned Tribunal, as well as the impugned
judgment and award, it would be appropriate, at the outset, to
refer to the findings recorded by the learned Tribunal
concerning the contention that the deceased was travelling as
an unauthorized passenger in a goods carriage vehicle. The
relevant observations of the learned Tribunal are reproduced
hereinbelow:
The Ld. Advocate for the claimant has relied upon the
judgment in case of National Insurance Co.Ltd v/s Lakhuben
Punabhai Vaghri and Ors wherein Hon'ble Division bench of
Gujarat High Court has held that when specific statement in
the claim petition that they were traveling with their goods
and in face of this specific averment the onus to disprove this
averment rests upon the Insurance Co.Had the Insurance Co
discharged the onus,it would have gone a long way in proving
whether or not, the deceased was gratuitous passenger but
unfortunately it has failed to do so and has not even brought
the driver into the witness box. The burden to prove the
breach of a term of contract rests squarely on the party
which complain of such breach. The test which can be applied
in such a situation would be that which party would fail if no
evidence is led or onus is not discharged. In the case on hand
also the insurance company has raised the defence of illegal
passenger and resultant breach of contract but has not
examined the driver or the owner of the utility vehicle in
which the deceased was traveling on the fateful day so it has
failed to discharge the burden to prove it's defence. The Ld.
Advocate for the claimant has also relied upon judgment in
case of National Insurance Co v/sM.A.Rudani reported in
2008(3) G.L.H 34 and Oriental Insurance Co v/sMunnabhai
Jerambhai Koli reported in 2016(3) G.L.R wherein a similar
view as taken by the devision bench is taken. The Judgment
relied upon by the Ld.Advocate for the insurance does not
apply to the case on hand as it has failed to prove that
deceased was traveling as illegal passenger on the fateful day
by examining the driver.
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7. Upon considering the rival submissions advanced
by the learned advocates for the respective parties, it is noted
that the FIR at Exhibit 37, lodged by the father of the
deceased on the very day of the accident, does not contain any
statement to the effect that the deceased was travelling with
any goods. The FIR merely records that his son, Pravinbhai,
was travelling in the utility jeep. Certain police statements
were also placed on record, particularly the statement of
Champaben, the mother of the deceased. She entered into the
witness box at Ex.35 and, in her examination-in-chief, stated
that the deceased was travelling with certain goods, including
clothes and wheat. However, in her cross-examination, she
admitted that she had not stated in the FIR what goods the
deceased was carrying. She further admitted that she did not
know what had happened to the goods allegedly being carried
by the deceased at the time of the accident. She also admitted
that she had not made any application before the competent
police station for the return of the said household goods.
Furthermore, she admitted that her son was travelling in the
utility vehicle after paying a fare of Rs. 20/-.
7.1 In the aforesaid factual background, upon
examining the spot panchnama at Ex.38, it is evident that no
goods of any kind were found at the scene of the accident.
Upon overall appreciation of the evidence on record, there is
considerable force in the submission advanced by learned
advocate Mr. Nanavati that the deceased was travelling in the
utility jeep without any goods.
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8. Learned advocate Mr. Patel, appearing for the
original claimants, relied upon the judgment of the Division
Bench of this Court in National Insurance Company
Limited v. Savitaben Motibhai & Ors. , (2006) 2 GLH 468.
In the said judgment, the Division Bench observed the
principle of pay and recover. As regards the aforesaid
judgment of the Division Bench, it is required to be observed
that the Insurance Company may establish its defence even by
relying upon the evidence adduced by the claimants. It is not
necessary for the Insurance Company to lead independent
evidence in support of its defence in every case. If the oral or
documentary evidence produced by the claimants is sufficient
to establish the defence raised by the Insurance Company, the
latter may legitimately rely upon such evidence to
substantiate its contention.
9 . In the present case, the evidence on record, as
discussed hereinabove, establishes the factual position that
the deceased was travelling in the utility jeep without any
goods. In view of this factual distinction, the judgment of the
Division Bench in Savitaben ( supra ) is distinguishable on the
facts of the present case. As regards the applicability of the
principle of pay and recovery , the decision in Savitaben
( supra ) is required to be considered in the light of the
judgment delivered by the Hon’ble Supreme Court in
Kaminiben v. Oriental Insurance Company Limited , 2026
LiveLaw (SC) 174 . The Hon’ble Supreme Court held that
where the victim was travelling as a gratuitous passenger, the
insurer of the offending vehicle was required to satisfy the
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awarded amount in the first instance and was thereafter
entitled to recover the same from the insured in the same
proceedings. Paragraphs 10 to 12 of the said judgment are
relevant and are reproduced hereinbelow:
“ 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 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 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
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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 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 ].”
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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. Thus, the Insurance Company has successfully
established a breach of the terms and conditions of the
insurance policy, as the evidence on record establishes that
the deceased was travelling in a goods carriage vehicle
without any goods and the risk of such a passenger was not
covered under the insurance policy. Therefore, this is a fit
case to exonerate the Insurance Company from its liability,
while applying the principle of pay and recovery .
11. In light of the aforesaid discussions, the following
order is passed:
11.1 The appeal is partly allowed. The impugned
judgment and award dated 29.08.2018 passed by the Motor
Accident Claims Tribunal (Auxiliary), Limbdi, District
Surendranagar, in MACP No. 1262 of 2012 (Old No. 172 of
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2008), is modified to the extent that original opponent Nos. 1
and 2 shall be jointly and severally liable to pay the
compensation awarded by the learned Tribunal.
11.2 Reliance General Insurance Company Limited is
exonerated from its liability to pay the compensation.
However, in application of the principle of pay and recovery ,
Reliance General Insurance Company Limited shall first
satisfy the award passed by the learned Tribunal and shall
thereafter be entitled to recover the amount so paid from the
owner of the offending vehicle by executing the present
judgment in accordance with law.
11.3 The remaining directions issued by the learned
Tribunal shall remain unaltered.
11.4 The learned Tribunal shall disburse the entire
amount of compensation to claimant No 2 - Champaben, as
claimant No. 1 has expired during the pendency of the present
appeal.
11.5 The learned Tribunal shall pass fresh order for
disbursement of the amount, if required.
11.6 The Tribunal shall disburse the entire amount lying
in the FDR and/or with the Tribunal, with accrued interest
thereon, if any, to the claimant/s, by account payee cheque /
NEFT / RTGS, after proper verification and after following due
procedure.
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11.7 While making the payment, the Tribunal shall
deduct the courts fees, if not paid, in accordance with
rules/law.
11.8 Record and proceedings, if any, be sent back to the
concerned Tribunal, forthwith.
(J. C. DOSHI,J)
MANOJ
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