The High Court allowed an appeal by United India Insurance Company Limited, challenging a Tribunal's award of compensation to the legal heirs of a deceased driver. The driver died in an accident caused by his own negligence while driving a Tavera car. The Tribunal had awarded compensation under Section 166 of the Motor Vehicles Act, 1988 (MV Act), but the Court found that the claim was filed under Section 167 of the MV Act, and the insurance policy lacked additional premium for legal liability towards the paid driver. The Court held that such liability is contractual, not statutory under Section 147 of the MV Act, and the insurance company could not be held liable. The Tribunal's award was set aside, and compensation was to be recalculated under the Workmen Compensation Act, 1923.
Motor Vehicles Act, 1988-- Sections 147, 166, 167 and 173-- Workmen Compensation Act, 1923-- Section 4--Accident-- Deceased rammed the vehicle in a stationary tanker-- Death of driver of offending vehicle-- Serious injuries caused to the passengers who were travelling in offending vehicle-- Claim for compensation filed by claimants U/s 167 of MV Act-- Claim for compensation partly allowed-- Aggrieved--Challenged by Insurance company in an appeal-- Contention of the appellant side that the deceased driver of offending vehicle was liable for causing accident etc-- No additional premium was paid under the head of "legal liability towards paid driver''-- Additional premium for compulsory PA cover to owner-driver is a contractual liability and not a statutory liability U/s 147 of MV Act-- Not open to claimants to avail both remedies under MV Act and Workmen compensation Act, 1923-- Deceased himself was tortfeasor-- Deceased was aged 30 years-- Minimum wages applied-- Factor of 207.98 required to be applied-- Claimants entitled to Rs 8,31,920/- (Rs 4000*207.98) U/s 4 of Workmen Compensation Act, 1923-- Interest awarded 12% per annum-- Award modified-- Amount of compenstion reduced-- Appeal Parlty allowed
Para-- 5.0, 5.1, 5.3, 6, 7
The High Court allowed the appeal, set aside the Tribunal's award, and held that the insurance company is not liable to pay compensation as no additional premium was paid for legal liability towards the paid driver. The Court directed that compensation be calculated under Section 4 of the Workmen Compensation Act, 1923 based on minimum wages.
Citation: 2026 LawText (GUJ) (01) 2
Case Number: R/First Appeal No. 3904 of 2025 with Civil Application (For Stay) No. 1 of 2025
Date of Decision: 2026-01-06
Case Title: The Issue of whether the insurance company is liable to pay compensation for the death of a driver who was the sole tortfeasor, when no additional premium was paid for legal liability towards the paid driver under the insurance policy
Before Judge: Hasmukh D. Suthar J.
Equivalent Citations: 2026:GUJHC:670
Advocate(s): Ms Masumi V Nanavaty, Mr Vibhuti Nanavati, Mr Nishit A Bhalodi
Appellant: United India Insurance Company Limited
Respondent: Bharatbhai Manuprasad Upadhyay & Ors.
Nature of Litigation: Appeal under Section 173 of the Motor Vehicles Act, 1988 against a Tribunal's award in a motor accident claim petition
Remedy Sought: The appellant insurance company sought to set aside the Tribunal's award and avoid liability for compensation
Filing Reason: The appeal was filed due to alleged errors by the Tribunal in holding the insurance company liable despite lack of additional premium for legal liability towards the paid driver
Previous Decisions: The Motor Accident Claims Tribunal awarded compensation of Rs.22,03,800/- with interest at 6% per annum to the legal heirs of the deceased driver under Section 166 of the MV Act
Issues: Whether the insurance company is liable to pay compensation when no additional premium was paid for legal liability towards the paid driver under the insurance policy Whether the claim petition filed under Section 167 of the MV Act entitles the claimants to compensation under Section 166 of the MV Act for a tortfeasor's death
Submissions/Arguments: The appellant argued that the Tribunal erred in holding the insurance company liable as no additional premium was paid for legal liability towards the paid driver, making it a contractual liability not covered under Section 147 of the MV Act The appellant contended that the deceased driver was the sole tortfeasor and cannot benefit from his own wrong under Section 166 of the MV Act The respondents argued that the claimants have a right to file under Section 167 of the MV Act and the Tribunal correctly applied the law based on precedent
Ratio Decidendi: Additional premium for legal liability towards a paid driver is contractual and not statutory under Section 147 of the Motor Vehicles Act, 1988. In absence of such premium, the insurance company cannot be held liable. A tortfeasor cannot claim compensation for their own negligence under Section 166 of the MV Act when the claim is filed under Section 167 of the MV Act.
Judgment Excerpts: The learned Tribunal has committed an error in not appreciating the evidence produced on record and erred in deciding the issue of liability on the part of the appellant – insurance company The additional premium for compulsory PA cover to owner-driver is a contractual liability and not a statutory liability under Section 147 of the MV Act In absence of any premium, once the insurance company has not accepted any contractual liability or received any premium, the appellant – insurance company cannot be held liable to pay the compensation
Procedural History: The accident occurred on 21.08.2017, leading to the death of the driver. The legal heirs filed a claim petition under Section 167 of the MV Act. The Tribunal awarded compensation on 17.02.2025. The insurance company filed an appeal under Section 173 of the MV Act on 06.01.2026, which was admitted and heard with consent for final hearing.
