IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/FIRST APPEAL NO. 2057 of 2024 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR ========================================================== Approved for Reporting Yes No ========================================================== UNITED INDIA INSURANCE CO. LTD. Versus RAMBABU RAMPUJAN THAKUR & ORS. ========================================================== Appearance: MR PALAK H THAKKAR(3455) for the Appellant(s) No. 1 NISHIT A BHALODI(9597) for the Defendant(s) No. 1 NOTICE SERVED for the Defendant(s) No. 2 UNSERVED EXPIRED (N) for the Defendant(s) No. 3 ========================================================== CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR Date : 20/01/2026 ORAL JUDGMENT 1. Being aggrieved and dissatised with the judgment and award dated 22.11.2023 passed by the Motor Accident Claims Tribunal Bharuch, in Motor Accident Claim Petition No. 349/2014, led under Section 166 of the Motor Vehicles Act, 1988 (for short, “the MV Act”), the appellant – Insurance Company prefers appeal under Section 173 of the Motor Vehicles Act, 1988, whereby, the Tribunal has been pleased to partly allow the claim petition and awarded compensation of Rs.5,29,782/-. 2. Heard Mr. Palak Thakkar, learned advocate for the appellant- Insurance Company and Mr. Nishit Bhalodi, learned advocate appearing for respondent Nos.1. Though served, none appears for respondent No.2. 3. With consent of learned counsel for both the sides and considering the issue involved in the appeal, the same is taken up for nal disposal. p. 1 4. Learned counsel for the appellant has submitted that the Tribunal has materially erred in law and on facts in holding the insurance company jointly and severally liable to pay compensation. The Tribunal has further committed a grave error in passing an order of “pay and recover” despite there being a statutory breach of the conditions of the insurance policy. It is evident from the record that the driver of the o;ending truck was not holding any driving licence at the time of the accident. In such circumstances, instead of exonerating the insurance company from liability, the Tribunal erroneously directed the insurer to pay the compensation and thereafter recover the same. An order of “pay and recover” can be passed only in cases involving a defective or invalid licence or disqualication of the driver. In the present case, no licence whatsoever was held by the driver, and therefore the Tribunal had no authority to pass an order of “pay and recover”. Accordingly, it is prayed that the insurance company be exonerated from liability to pay compensation. 5. Learned counsel for the original claimant has opposed the present appeal and submitted that the Tribunal has not committed any error in passing the order of pay and recover. Therefore, the Tribunal has rightly passed an order of pay and recover in favour of the insurance company. 6. Upon perusal of the record, it appears that the Tribunal has properly appreciated the evidence produced by the claimant at Exh. 27 and the evidence of opponent No.1 produced below Exh. 49. The quantum of compensation is not under challenge. Only the issue of liability has been raised, and therefore the present appeal is required to be decided within a narrow compass. The main contention of the learned counsel for the appellant is that the Tribunal, having arrived at the conclusion that the driving licence of the driver was not produced on record, erred in fastening liability upon the insurance company. Reliance has been placed on the evidence of opponent No.1, wherein it has been stated that opponent No.1 was not holding a driving licence at the time of the accident. It is not in p. 2 dispute that on the date of the accident, i.e. 30.06.2014, opponent No.1 did not possess a driving licence. However, the Tribunal has relied upon the decisions of the Hon’ble Supreme Court in Kempaiah v. S.S. Murthy, reported in 2017 (0) AIJEL-SC 60167, and National Insurance Co. Ltd. v. Swaran Singh and Others, reported in 2004 (2) GLR 989 (SC), wherein it has been held that disqualication of the driver or possession of an invalid driving licence, as contemplated under Section 149(2)(a)(ii) of the Motor Vehicles Act, must be proved to have been committed by the insured in order to enable the insurer to avoid its liability. Mere absence, fake or invalid driving licence, or disqualication of the driver at the relevant time, by itself, does not constitute a valid defence available to the insurer either against the insured or the third party. Further, in view of the decision rendered in Kusum Lata and Others v. Satbir and Others, reported in 2011 ACJ 926, the Tribunal has not committed any error in passing an order of “pay and recover”. 7. The Insurance Company has submitted that on the ground of violation of the terms and conditions of the insurance policy, it is required to be exonerated from its liability. However, an insurance policy is a statutory contract entered into between the insurer and the insured for the benet of third parties. The aforesaid ratio has also been followed by the Hon’ble Apex Court in Shamanna vs. Oriental Insurance Co. Ltd., (2018) 9 SCC 650, wherein, while considering Sections 147 and 149 of the Motor Vehicles Act, it has been held that the victim of a motor vehicle accident is a third party, and it is the statutory duty of the insurer to satisfy the award. The principle of “pay and recover” has been reiterated, holding that if the driver had no valid driving licence and there was a breach of policy conditions, the High Court ought not to interfere with the order of “pay and recover” passed by the Tribunal. If the Insurance Company has paid any amount, the mode of recovery is also provided, and the insurer has the liberty to initiate proceedings before the executing Court concerned, if the dispute is between the insurer and the owner. In the present case, the claimants are p. 3 third party and has no concern with the inter se terms and conditions of the insurance policy. Hence, in view of the decisions of the Hon’ble Supreme Court in Anu Bhanvara & Ors. vs. IFFCO Tokio General Insurance Co. Ltd. & Ors., (2020) 20 SCC 632; Sunita & Ors. vs. United India Insurance Co. Ltd. & Ors.; and Rama Bai vs. M/s. Amit Minerals, 2025 INSC 1162, the learned Tribunal has not committed any error in awarding compensation. 8. Further, this Court deems it t to refer to the judgment of the Hon’ble Apex Court in Sadhna Tomar v. Ashok Kushwaha, 2025 SCJ 414, wherein the Tribunal was pleased to pass an award of compensation in favour of the claimant, holding that the Insurance Company shall pay the amount of compensation to the claimant and thereafter recover the same from the driver and owner of the o;ending vehicle, who were held jointly and severally liable, relying on the decision in Swaran Singh (supra). The said view was aDrmed by the High Court, and the order of “pay and recover” was also upheld by the Hon’ble Apex Court. In view of the above, the learned Tribunal has not committed any error in passing the order of “pay and recover”. 9. The Hon’ble Supreme Court in the cases of Shamanna (supra), Rama Bai (supra), and Swaran Singh (supra) has consistently held that the insurer must rst pay the compensation amount to the third party and may thereafter recover the same from the insured. Even though the insurer is entitled to raise a valid defence regarding the driver not possessing a valid driving licence under Section 149(2)(a)(ii) to avoid liability, and even if the conditions of law are satised to absolve the insurer from paying the compensation, the doctrine of “pay and recover” continues to apply. 10. In view of the judgment of the Hon’ble Supreme Court in Rambabu Tiwari vs. United India Insurance Co., (2008) 8 SCC 165, wherein the Court exonerated the Insurance Company from liability for breach of policy conditions but refused to interfere with the order of “pay and recover”, the direction issued by the learned Tribunal in the present case also does not p. 4 warrant any interference. 11. In view of the reliance placed by the learned advocate for the appellant, no assistance can be derived by the appellant–Insurance Company, as the Hon’ble Supreme Court has reaDrmed the social welfare intent underlying the Motor Vehicles Act. The principle or order of “pay and recover” embodies judicial empathy, ensuring that victims are not left uncompensated due to disputes between the owner and the insurer. At the same time, considering contractual accountability, an owner who breaches the conditions of the policy cannot escape nancial responsibility, as insurers retain the right to recover the amount paid to the claimant. This dual balance justice to the victim and fairness to the insurer strengthens the integrity of the Motor Vehicles accident compensation system. 12. As regards the authority relied upon by the learned advocate for the appellant, in view of several judgments wherein the Hon’ble Apex Court has passed order in the case of Shamanna (supra), Parminder Singh v. New India Assurance Company Limited, (2019) 7 SCC 217, the learned Tribunal has not committed any error. The authorities relied upon by the learned advocate for the appellant nowhere refer to the case of Samanna (supra). 13. In view of the above, the Hon’ble Apex Court has already decided the issue in Swaran Singh (supra). Considering the subsequent pronouncements discussing the scope of the ‘pay and recover’ order and the benevolent object of the legislation, as earlier explained in paragraph 14 of this order, the principle of ‘pay and recover’ reFects judicial empathy ensuring that victims are not left uncompensated due to disputes between the owner and the insurer. Therefore, the argument canvassed by the learned advocate for the appellant regarding contractual accountability is not acceptable and Tribunal has not committed any error in passing the order of “pay and recover”. 14. The appellant–Insurance Company is directed to pay the amount of compensation determined by the Tribunal, with liberty to recover the same from the owner of the o;ending vehicle in accordance with law. In view of p. 5 the law laid down by the Hon’ble Apex Court in Oriental Insurance Co. Ltd. v. Nanjappan, (2004) 13 SCC 224, it is always open for the Insurance Company to recover the amount from owner by initiating appropriate proceedings before the Executing Court, without being required to le a separate suit. While passing the order of "pay and recover", the Tribunal shall issue appropriate directions to protect the interest of the Insurance Company, as directed by the Hon’ble Apex Court in Nanjappan (supra), subject to suitable conditions and safeguards.. 15. In view of the above conspectus, no interference is called for in order passed by the learned Tribunal of “pay and recover”. The present First Appeal stands dismissed. 16. The appellant – insurance company is directed to deposit the entire amount of compensation as awarded by the learned Tribunal in the impugned judgment and award alongwith accrued interest on the said amount within a period of four weeks from the date of receipt of this order with the learned Tribunal. 17. After deposit of the amount of compensation by the appellant – insurance company, the same shall be disbursed in favour of the claimant and/or through RTGS, after proper verication. The bank account details shall be furnished by the learned advocate for the claimant to the Nazir Department of the learned Tribunal concerned. The Court fees, if any, payable by the claimant on compensation be deducted from the said amount and the remaining amount of compensation be disbursed in favour of the claimants on due verication. 18 Record and proceedings, if any, be sent back to the concerned Tribunal forthwith. (HASMUKH D. SUTHAR,J) SUCHIT p. 6 Original copy of this order has been signed by the Hon'ble Judge. Digitally signed by: PATEL SUCHIT JAYESHBHAI(HC01083), Private Secretary, at High Court of Gujarat on 21/01/2026 17:22:41