1 2025:CGHC:54929 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1966 of 2018 1 - Branch Manager United India Insurance Company Limited Korba Through Authorised Signatory Assistant Manager ,divisional Office ,2nd Floor Guru Kripa Towers Vyapar Vihar Raod Bilaspur Chhattisgarh., District : Bilaspur, Chhattisgarh ... Appellant versus 1 - Kamla Dhivar Wd/o Shri Basant Dhivar Aged About 50 Years R/o Bhojpur Police Station And Teh. Champa District Janjgir Champa Chhattisgarh., District : Janjgir- Champa, Chhattisgarh 2 - Gopi Dhivar S/o Late Shri Basant Dhivar Aged About 30 Years R/o Bhojpur Police Station And Teh. Champa District Janjgir Champa Chhattisgarh., District : Janjgir-Champa, Chhattisgarh 3 - Govardhan Dhivar S/o Late Shri Basant Dhivar Aged About 23 Years R/o Bhojpur Police Station And Teh. Champa District Janjgir Champa Chhattisgarh., District : Janjgir-Champa, Chhattisgarh 4 - Pushpa Dhiwar D/o Late Shri Basant Dhiwar Aged About 34 Years R/o Bhojpur Police Station And Teh. Champa District Janjgir Champa Chhattisgarh., District : Janjgir-Champa, Chhattisgarh 5 - Yamini Dhivar D/o Late Shri Basant Dhivar Aged About 32 Years R/o Bhojpur Police Station And Tehsil . Champa District Janjgir Champa Chhattisgarh., District : Janjgir-Champa, Chhattisgarh 6 - Durgesh Shrivas S/o Kedarnath Shrivas R/o Aged About 45 Years R/o Shivnagar Champa ,police Station And Tehsil Champa Chhattisgarh .(Driver), District : Janjgir- Champa, Chhattisgarh 7 - Rupani Khamroi S/o Tapan Khamroi Aged About 24 Years R/o New Shankar Nagar Indian Gali Dhangadipar ,raigarh ,police Station Kotwali Raigarh District Raigarh Chhattisgarh., District : Raigarh, Chhattisgarh ... Respondent(s) Digitally signed by SHAYNA KADRI 2 For Appellant : Mr. B. N. Nande, Advocate For Resp. No. 1 to 5 : Mr. Hanuman Prasad Agrawal, Advocate Hon’ble Mr. Justice Amitendra Kishore Prasad Order on Board 11/11/2025 1. This appeal has been filed under Section 173 of the Motor Vehicle Act, 1988, against the award dated 09.05.2018 passed by the learned Motor Accident Claims Tribunal, Janjgir, District- Janjgir – Champa (C.G.), in Motor Accident Claim Case No. 85/2016 whereby an amount of Rs. 8,12,500/- has been awarded in the favour of the claimants of the deceased for their irreparable loss. 2. Brief facts of the case, giving rise to the present claim petition, are that on 22.04.2016, at about 3:15 p.m., the deceased Basant Dhivar, aged 54 years, was travelling as an occupant in a recently sold auto-rickshaw bearing Chassis No. WA08584 and Engine No. GA26911, proceeding from Champa toward Naila. When the vehicle reached near S.D. Palace, Janjgir, the driver of the auto- rickshaw, driving in a rash and negligent manner, collided with an oncoming motorcycle bearing registration CG-11/MB-2368, causing the deceased to sustain grievous head injuries resulting in his instantaneous death. The mishap was reported at Police Station Janjgir on 23.04.2016 at about 3:20 p.m. by the motorcycle rider, Parmanand Kashyap, upon which Crime No. 195/2016 was registered for offences punishable under Sections 3 279, 337, 338, and 304 IPC, along with Section 3/181 of the Motor Vehicles Act, 1988, against the auto-rickshaw driver Durgesh Shrivas (respondent No. 5 herein). Following completion of investigation, a charge-sheet was submitted before the competent criminal court. The deceased was survived by his widow Kamla, two major sons, and two major daughters, who jointly preferred a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal, Raipur, seeking compensation of Rs. 23,45,400/- against the owner, driver, and insurer of the offending auto-rickshaw. While the driver entered appearance and filed his written statement asserting that he was merely a passenger and that the deceased himself was driving the auto-rickshaw at the time of the accident, and further claiming that he too sustained injuries, the owner remained ex parte. The Insurance Company, in its defence, denied liability on the grounds that the vehicle was not insured at the time of the accident, contending that the accident occurred at 3:15 p.m., whereas the insurance cover note was issued only at 3:50 p.m. on the same day, and additionally alleging that the driver did not possess a valid and effective driving licence, amounting to a fundamental breach of policy and statutory conditions. 3. The learned Tribunal framed five issues and, after recording evidence and hearing the parties, partly allowed the claim petition and passed an award. Aggrieved by the findings on both liability and quantum, the Insurance Company has preferred the present 4 appeal. During the proceedings before the Tribunal, the application filed by the insurer under Section 170 of the Motor Vehicles Act seeking permission to contest the claim on all possible grounds, like the owner and driver, was rejected, thereby limiting its defence. 4. Learned counsel for the appellant / insurance company submits that the impugned award suffers from serious legal infirmities and a complete misappreciation of the defence set forth by the insurer. It is submitted that the learned Claims Tribunal failed to appreciate that the offending vehicle was seized only on 03.05.2016, whereas the accident allegedly occurred on 22.04.2016, and the seizure memo (Ex. A-9) does not mention the chassis number or engine number of the vehicle. Instead, it merely refers to a slip pasted between the headlights describing “Sold Bajaj RE MDZA47 AZ 9GC WA 08584”. The absence of specific engine and chassis details at the time of seizure casts a serious doubt on the identity of the vehicle involved in the accident. It is further submitted that only in a subsequent seizure conducted on 30.07.2016, the owner produced a Cash Credit Memo dated 22.04.2016 purportedly showing the chassis and engine numbers. If both these seizure memos been properly appreciated, along with a correct marshalling of evidence, the Tribunal would have concluded that the auto-rickshaw had left the premises of the seller without carrying mandatory documentation, resulting in no valid seizure of such documents at the time of its first seizure. It is 5 further urged that the non-appearance of the owner before the Tribunal casts a serious cloud over his conduct, as it was his legal obligation to place on record all essential documents concerning ownership, the driver, and the papers of the vehicle, and he cannot escape liability merely because the vehicle was insured. Learned counsel for the appellant also contends that the Tribunal failed to appreciate the core defence of insurer regarding the time of issuance of the cover note, as reflected from Cover Note N.A-2, which shows that the policy came into force at 3:50 p.m., whereas the accident occurred at 3:15 p.m., meaning the risk was not covered at the relevant time. It is further argued that the driver did not hold a valid and effective driving licence. The learning licence (N.A-1) was valid from 30.01.2016 to 29.07.2016, and the regular licence (Ex. N.A(1)-2) became effective only from 12.07.2016; thus on the date of accident, only a learner’s licence was held, and no evidence was produced to show compliance with conditions of a learner’s licence, namely, that the vehicle was being driven under the supervision of an instructor or an experienced driver holding a valid licence. This, according to the insurer, constitutes a fundamental breach of policy and statutory conditions. It is also argued that the insurer has been prejudiced because its application under Section 170 of the Motor Vehicles Act seeking permission to contest the claim on all grounds was erroneously rejected, depriving it of a meaningful opportunity to present its full defence. Therefore, it is prayed that the award be 6 set aside insofar as it fastens liability upon the Insurance Company and to the extent of the excessive quantum awarded, and that the appellant be exonerated from liability. 5. On the other hand, it has argued on behalf of the counsel for respondents No. 1 to 5 – claimants that the objections of insurer regarding seizure, coverage of policy, and driving licence are unfounded and were rightly rejected by the Tribunal. The compensation awarded is already on the lower side and does not warrant any reduction. Hence, the appeal filed by the Insurance Company is devoid of merit and deserves to be dismissed. 6. I have heard learned counsel for the parties and carefully perused the entire material available on record, including the documentary exhibits and the reasoning assigned by the learned Claims Tribunal. 7. The controversy in the present appeal revolves around the correctness of the finding of the learned Motor Accident Claims Tribunal fastening liability upon the Insurance Company despite the categorical defence that the driver of the offending auto- rickshaw did not possess a valid and effective driving licence on the date of the accident. 8. The undisputed factual matrix reveals that the accident occurred on 22.04.2016 at 3:15 p.m., resulting in the death of Basant Dhivar. The material placed on record shows that the driver of the offending vehicle, respondent No. 5, held only a learner’s licence, valid from 30.01.2016 to 29.07.2016 (Ex. N.A-1). The regular 7 driving licence (Ex. N.A(1)-2) came into effect only from 12.07.2016, much after the accident. Thus, on the date of occurrence, the driver was admittedly driving merely on the strength of a learner’s licence. 9. It is trite law that a learner’s licence is not equivalent to a valid and effective driving licence for the purpose of indemnification under a motor insurance policy. A driver holding a learner’s licence is permitted to drive only upon strict compliance with statutory conditions prescribed under Rule 3 of the Central Motor Vehicles Rules, 1989—namely, that the vehicle must display the “L” symbol, and more importantly, the driver must be accompanied by an instructor or another person holding a valid and effective driving licence. The insurer produced evidence to show that no such compliance was established, and significantly, the owner and driver failed to lead any rebuttal evidence to demonstrate that the vehicle was being driven under supervision or that the statutory preconditions were fulfilled. 10. The conduct of the owner in remaining ex parte throughout the proceedings further supports the inference that mandatory statutory safeguards were not followed and that relevant documents were deliberately withheld. When the owner fails to appear and fails to prove that the driver was duly authorised and qualified to drive, the natural consequence is that the insurer cannot be burdened with liability arising from such a breach. The Supreme Court has consistently held that driving a 8 transport/commercial vehicle without a valid and effective licence amounts to a fundamental breach of policy conditions, absolving the insurer of liability. The auto-rickshaw in the present case is a transport vehicle, and therefore a learner’s licence, unaccompanied by a qualified instructor, cannot be treated as sufficient compliance. 11. The learned Tribunal failed to appreciate the legal consequences flowing from this breach and erred in fastening liability upon the insurer. The appellant has also pointed out that its application under Section 170 of the Motor Vehicles Act was rejected, thereby restricting its right to contest the claim on all grounds. However, even within the limited defence permissible, the insurer has successfully demonstrated a statutory violation going to the root of liability. Once a fundamental breach is established, the insurer stands absolved irrespective of the outcome of the Section 170 application. 12. In view of the above analysis, this Court is of the considered opinion that the finding of the learned Tribunal fastening liability on the Insurance Company is legally unsustainable. The breach of policy and statutory conditions is clear and established. Accordingly, liability must be fastened jointly and severally upon the owner (respondent No. 4) and driver (respondent No. 5) of the offending auto-rickshaw. 13. In view of the law laid down by Hon’ble Supreme Court in the matter of Akula Narayana vs. The Oriental Insurance Company 9 Limited and Anr., reported in 2025 SCC OnLine SC 2377, wherein it was held as under “12. Where the contract of insurance is not disputed, even on breach of insurance conditions, this Court had allowed recovery of compensation from the insurer by giving right to the insurer to recover the same from the vehicle owner. The pay and recover principle has been consistently followed even though it was doubted in a reference which remained unanswered. Taking a conspectus of various pronouncements, this Court recently in Rama Bai v. Amit Minerals (2025 SCC OnLine SC 2067) again applied the said principle and while allowing the appeal of the claimant directed that the insurance company shall satisfy the award and may recover from the insured. Following the aforesaid decisions, we deem it appropriate to allow the appeal by directing that the first respondent (i.e., the insurer) shall satisfy the award, though, however, it can recover the amount so paid from the insured (i.e., owner of the vehicle).” 14. In view of the above, the insurance company is directed to pay the awarded compensation from the date of filing of the claim petition in the first instance, and shall be entitled to recover the same from the driver and owner of the offending vehicle in accordance with law. 15. The appeal filed by the appellant-insurance company is allowed to the above extent and direction of the Claims Tribunal fastening liability upon the insurance company is set aside. The driver and 10 owner of the vehicle are held jointly and severally liable to pay the compensation awarded. 16. The award of the Claims Tribunal dated 09.05.2018 is modified accordingly. Appeal is Allowed in Part. Sd/- (Amitendra Kishore Prasad) Judge Shayna