# The New India Assurance Comp. Ltd v. Mukesh Agrawal & Ors

- **Citation:** (2025) 11 ILRA 672
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-11-15
- **Case number:** First Appeal From Order No. 2680 of 2025
- **Bench:** Sandeep Jain
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-new-india-assurance-comp-ltd-v-mukesh-agrawal-ors-52884
- **Pages:** 10

## Headnote

Ashish Gupta

Issue for Consideration
Matter pertains to whether whether the Motor
Accident Claims Tribunal was justified in holding
that the accident in question was caused by the
rash and negligent driving of the offending bus
and in fastening statutory liability upon the
insurer to indemnify the awarded compensation,
despite
the
insurer's
plea
disputing
the
involvement of the vehicle, the timing of the
accident, and the alleged breach of permit and
policy conditions.

Headnotes
Motor Vehicles Act, 1988 - ss. 149(2), 177,
180, 181, 190(2), 213(5)(e) - Penal Code,
1860 - ss. 279, 337, 338, 304-A - Central
Motor Vehicle Rule, 1989 - r. 138(3), 104 -
The appeal was instituted by the insurer
of offending bus u/s 173 of Motor Vehicles
Act, 1988, assailing the judgment and
award passed by Motor Accident Claims
Tribunal, Meerut, whereby compensation
was awarded to the parents of the
deceased, who succumbed to injuries
sustained in a motor accident on 12
January 2018 while performing duty at a
toll plaza on NH-24 - The claimants
asserted that the accident occurred due to
the
rash
and
negligent
driving
of
offending bus, which struck the deceased
and fled from the spot, and relied upon
eyewitness
testimony
and
police
investigation culminating in a chargesheet against the driver - The insurer
disputed the very factum of the accident,
contended that the FIR initially referred to
an
unknown
vehicle,
questioned
the
timing and place of occurrence, and
further alleged breach of permit and
policy conditions on the ground that the
bus was being plied as a stage carriage
instead of a contract carriage - Upon
appreciation of oral and documentary
evidence, Tribunal held the accident to be
duly proved, attributed negligence to the
bus driver, and fastened liability upon the
insurer, leading to the instant appeal
challenging those findings.

Held: It is apparent that the offending bus has
been challaned for five offences, but only on
this ground it is not proved that the bus was
being driven in violation of the terms and
conditions of the insurance policy because the
11 All. The New India Assurance Comp. Ltd. Vs. Mukesh Agrawal & Ors.
673
insured has a legal right to contest the challan
and it is only after a competent court records a
finding or if there was an admission of guilt on
the part of the insured, only then it can be
presumed that the alleged offences were
committed - In absence of the evidence on
record, the tribunal has rightly concluded that
the offending bus was being driven in
accordance with the terms and conditions of the
insurance
policy,
as
such,
the
appellant
insurance policy is liable to indemnify the
compensation payable to the claimants - A
further question arises whether the alleged
breach of permit conditions, wherein the
offending bus was allegedly plied as a stage
carriage whereas as per the permit it was to be
plied as contract carriage, amounts to such
fundamental breach of the terms and conditions
of the insurance policy so as to enable the
insurer of the offending vehicle to avoid it's
statutory liability to the third party in terms of
s.149(2) of Motor Vehicles Act,1988 - Therefore,
from the case of Chandamma (infra), it can
be deduced that the insurance company cannot
escape its liability to compensate on the ground
that the offending vehicle was used in violation
of the terms and conditions of insurance policy,
i.e., as a stage carriage when it was insured
only as a contract carriage - Thus, appeal has
got no merit and is liable to be dismissed at the
admission stage. [Paras 21, 22, 24, 25] (E-13)

Case Law Cited
ICICI Lombard General Insurance Company
Limited v. Rajani Sahoo and Others (2025) 2
SCC 599; Ranjeet and another v. Abdul Kayam
Neb and another 2025 SCC OnLine SC 497;
Kuncham Lavanya & Ors. v. Bajaj Allianz
General Insurance Co. Ltd. & Anr. 2025 SCC
OnLine 749 - referred to
United India Insurance Co.Ltd. & Ors. v.
Chandamma & Ors. 1999 SCC OnLine Kar
454 - followed

List of Acts
Motor V

## Text

672 INDIAN LAW REPORTS ALLAHABAD SERIES

8. Accordingly, the cross-objection
of the claimant is allowed.

9. The judgment and award of the
Commissioner
dated
23.03.2012,
is
modified to the above extent.

10. Interim order, if any, stands
vacated.

11. If any amount has been deposited
in pursuance of the order of this Court, in a
fixed deposit, then it shall be released in
favour of the claimants, alongwith accrued
interest, forthwith.

12.
The
appellant
insurance
company is directed to deposit the
interest, as awarded to the claimants by
this
Court,
before
the
concerned
Commissioner within a period of one
month, which shall be paid to the
claimants, without any delay.
----------
(2025) 11 ILRA 672
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 15.11.2025

BEFORE

THE HON'BLE SANDEEP JAIN, J.

First Appeal From Order No. 2680 of 2025

The New India Assurance Comp. Ltd.
 ...Appellant
Versus
Mukesh Agrawal & Ors. ...Respondents

Counsel for the Appellant:
Akhilesh Sharan Srivastava

Counsel for the Respondents:
Ashish Gupta

Issue for Consideration
Matter pertains to whether whether the Motor
Accident Claims Tribunal was justified in holding
that the accident in question was caused by the
rash and negligent driving of the offending bus
and in fastening statutory liability upon the
insurer to indemnify the awarded compensation,
despite
the
insurer's
plea
disputing
the
involvement of the vehicle, the timing of the
accident, and the alleged breach of permit and
policy conditions.

Headnotes
Motor Vehicles Act, 1988 - ss. 149(2), 177,
180, 181, 190(2), 213(5)(e) - Penal Code,
1860 - ss. 279, 337, 338, 304-A - Central
Motor Vehicle Rule, 1989 - r. 138(3), 104 -
The appeal was instituted by the insurer
of offending bus u/s 173 of Motor Vehicles
Act, 1988, assailing the judgment and
award passed by Motor Accident Claims
Tribunal, Meerut, whereby compensation
was awarded to the parents of the
deceased, who succumbed to injuries
sustained in a motor accident on 12
January 2018 while performing duty at a
toll plaza on NH-24 - The claimants
asserted that the accident occurred due to
the
rash
and
negligent
driving
of
offending bus, which struck the deceased
and fled from the spot, and relied upon
eyewitness
testimony
and
police
investigation culminating in a chargesheet against the driver - The insurer
disputed the very factum of the accident,
contended that the FIR initially referred to
an
unknown
vehicle,
questioned
the
timing and place of occurrence, and
further alleged breach of permit and
policy conditions on the ground that the
bus was being plied as a stage carriage
instead of a contract carriage - Upon
appreciation of oral and documentary
evidence, Tribunal held the accident to be
duly proved, attributed negligence to the
bus driver, and fastened liability upon the
insurer, leading to the instant appeal
challenging those findings.

Held: It is apparent that the offending bus has
been challaned for five offences, but only on
this ground it is not proved that the bus was
being driven in violation of the terms and
conditions of the insurance policy because the
11 All. The New India Assurance Comp. Ltd. Vs. Mukesh Agrawal & Ors.
673
insured has a legal right to contest the challan
and it is only after a competent court records a
finding or if there was an admission of guilt on
the part of the insured, only then it can be
presumed that the alleged offences were
committed - In absence of the evidence on
record, the tribunal has rightly concluded that
the offending bus was being driven in
accordance with the terms and conditions of the
insurance
policy,
as
such,
the
appellant
insurance policy is liable to indemnify the
compensation payable to the claimants - A
further question arises whether the alleged
breach of permit conditions, wherein the
offending bus was allegedly plied as a stage
carriage whereas as per the permit it was to be
plied as contract carriage, amounts to such
fundamental breach of the terms and conditions
of the insurance policy so as to enable the
insurer of the offending vehicle to avoid it's
statutory liability to the third party in terms of
s.149(2) of Motor Vehicles Act,1988 - Therefore,
from the case of Chandamma (infra), it can
be deduced that the insurance company cannot
escape its liability to compensate on the ground
that the offending vehicle was used in violation
of the terms and conditions of insurance policy,
i.e., as a stage carriage when it was insured
only as a contract carriage - Thus, appeal has
got no merit and is liable to be dismissed at the
admission stage. [Paras 21, 22, 24, 25] (E-13)

Case Law Cited
ICICI Lombard General Insurance Company
Limited v. Rajani Sahoo and Others (2025) 2
SCC 599; Ranjeet and another v. Abdul Kayam
Neb and another 2025 SCC OnLine SC 497;
Kuncham Lavanya & Ors. v. Bajaj Allianz
General Insurance Co. Ltd. & Anr. 2025 SCC
OnLine 749 - referred to
United India Insurance Co.Ltd. & Ors. v.
Chandamma & Ors. 1999 SCC OnLine Kar
454 - followed

List of Acts
Motor Vehicles Act, 1988; Penal Code, 1860;
Central Motor Vehicle Rule, 1989

List of Keywords
Appeal u/s 173 of Motor Vehicles Act, 1988;
Motor Accident Claims Tribunal; Rash and
negligent driving; Offending bus; Liability;
Indemnify;
Insurance
policy;
Terms
and
conditions of permit; Stage carriage; Contract
carriage; Breach of permit conditions; Statutory
liability;
S.
149(2);
Charge-sheet;
FIR;
Eyewitness; Oral and documentary evidence;
Preponderance of probabilities; Finding of
negligence; Burden of proof; Admission; Crossexamination; Fastening of liability; Dismissal of
appeal; Affirmation of the award.

Case Arising From
APPELLATE JURISDICTION: First Appeal From
Order No. - 2680 of 2025
From
the
Judgment
and
Award
dated
30.07.2025 passed by the Motor Accident Claims
Tribunal, Meerut (North), in Motor Accident
Claim Petition No. 218 of 2018

Appearances for Parties
Adv. for the Appellant:
 Akhilesh Sharan Srivastava

Adv. for the Respondents:
 Ashish Gupta

(Delivered by Hon'ble Sandeep Jain, J.)

1. The instant appeal under Section
173 of the Motor Vehicles Act, 1988 has
been preferred by the insurer of the
offending bus No.UP-23T-0434, against
the impugned judgment and award dated
30.07.2025 passed by the Motor Accident
Claims Tribunal, Meerut(North), in Motor
Accident Claim Petition No. 218 of 2018
(Mukesh Agrawal and another vs. The New
India Assurance Co. Ltd. and others),
whereby, for the untimely death of Jatin
Agrawal in a motor accident that occurred
on
12.01.2018,
a
compensation
of
Rs.16,65,876/- along with interest at the
rate of 7% per annum has been awarded to
the claimants(mother and father), which
has been ordered to be indemnified by the
insurer of the offending bus No.UP-23T0434.

2. Learned counsel for the appellantinsurance company submitted that the
674 INDIAN LAW REPORTS ALLAHABAD SERIES
factum of accident was doubtful since the
FIR discloses that it was caused by
unknown vehicle. He submitted that as per
the claimants case, the accident occurred on
12.01.2018 at the Toll Plaza near Brij Ghat,
District Hapur at about 8 PM, but the
offending bus was challaned for breach of
the terms and conditions of the All India
Tourist Permit granted to it by Rajesh
Singh(ARTO Amroha) at Gajraula at 7:48
PM, which is at a distance of about 30 kms.
from the place of accident, as such, the
factum of accident at about 08.00 PM or
7:45 PM as per eyewitness PW-2 was
highly doubtful. He further submitted that
the owner of the offending bus has denied
the accident and also made a complaint to
the higher police officials, but still the
tribunal has held otherwise. The offending
driver has also examined himself as DW-1
and denied the accident. It was further
submitted that at the time of alleged
accident the offending bus was being plied
as a stage carriage whereas, under the terms
and conditions of the insurance policy, it
was to be plied as contract carriage and for
this reason, it was challaned by the ARTO
Amroha, but the tribunal has ignored this
evidence and has fastened the liability to
pay
compensation
on
the
appellantinsurance company, which is erroneous.

3. Per contra, learned counsel for the
respondent-claimants submitted that Jatin
Agrawal(deceased) was employed in MEP
Infrastructure Developers Ltd. who was
granted contract to collect the toll at
Allabakshpur Toll Tax Plaza, on NH-24
near Brij Ghat, District Hapur and at that
time he was working as operator at the toll
plaza, where the accident occurred due to
rash and negligent driving of the offending
bus No.UP-23T-0434, which was proved
by PW-2 Devmuni Thakur and the retired
Investigating Officer of the criminal case
Mahipal Singh PW-4. He further submitted
that after investigation, a charge sheet has
been submitted against the offending driver
Mohd. Ajeem (DW-1), as such, there was
sufficient evidence to prove that the
accident was indeed caused by the
offending bus No.UP-23T-0434. With
these submissions, it was prayed that the
appeal is meritless and is liable to be
dismissed at the admission stage.

4. I have heard learned counsel for the
appellant-Insurance
Company
and
claimants-respondents,
perused
the
impugned
judgment
and
documents
annexed with the appeal.

5. The Apex Court in the case of
ICICI
Lombard
General
Insurance
Company Limited vs. Rajani Sahoo and
Others (2025) 2 SCC 599, has held as
under:-

"8. As regards the reliability of
charge-sheet
and
other
documents
collected
by
the
police
during
the
investigation in motor accident cases, this
Court
in
Mangla
Ram
v.
Oriental
Insurance Co. Ltd. [(2018) 5 SCC 656 :
(2018) 3 SCC (Civ) 335 : (2018) 2 SCC
(Cri) 819 : 2018 INSC 311] , held in para
27, thus : (SCC p. 672)

"27.
Another
reason
which
weighed with the High Court to interfere in
the first appeal filed by Respondents 2 and
3, was absence of finding by the Tribunal
about the factum of negligence of the driver
of the subject jeep. Factually, this view is
untenable. Our understanding of the
analysis done by the Tribunal is to hold
that Jeep No. RST 4701 was driven rashly
and negligently by Respondent 2 when it
collided with the motorcycle of the
appellant leading to the accident. This can
11 All. The New India Assurance Comp. Ltd. Vs. Mukesh Agrawal & Ors.
675
be discerned from the evidence of witnesses
and the contents of the charge-sheet filed
by the police, naming Respondent 2. This
Court in a recent decision in Dulcina
Fernandes [Dulcina Fernandes v. Joaquim
Xavier Cruz, (2013) 10 SCC 646 : (2014) 1
SCC (Civ) 73 : (2014) 1 SCC (Cri) 13] ,
noted that the key of negligence on the part of
the driver of the offending vehicle as set up by
the claimants was required to be decided by
the
Tribunal
on
the
touchstone
of
preponderance of probability and certainly
not by standard of proof beyond reasonable
doubt. Suffice it to observe that the exposition
in the judgments already adverted to by us,
filing of charge-sheet against Respondent 2
prima facie points towards his complicity in
driving the vehicle negligently and rashly.
Further, even when the accused were to be
acquitted in the criminal case, this Court
opined that the same may be of no effect on
the assessment of the liability required in
respect of motor accident cases by the
tribunal."

9. It is true that the Tribunal had
looked into the oral and documentary
evidence including the FIR, final report
and such other documents prepared by the
police in connection with the accident in
question. The Tribunal had also taken note
of the fact that based on the final report,
the driver of the offending truck was tried
and found guilty for rash and negligent
driving. The High Court took note of such
aspects and found no illegality in the
procedure adopted by the Tribunal and
consequently dismissed the appeal.

10. In the contextual situation it
is relevant to refer to a decision of this
Court in Mathew Alexander v. Mohd. Shafi
[(2023) 13 SCC 510 : 2023 INSC 621] ,
this Court held thus : (SCC p. 514, para
12)

"12. ... A holistic view of the
evidence has to be taken into consideration
by the Tribunal and strict proof of an
accident caused by a particular vehicle in a
particular manner need not be established
by the claimants. The claimants have to
establish their case on the touchstone of
preponderance
of
probabilities.
The
standard of proof beyond reasonable doubt
cannot be applied while considering the
petition seeking compensation on account
of death or injury in a road traffic accident.
To the same effect is the observation made
by this Court in Dulcina Fernandes v.
Joaquim Xavier Cruz [(2013) 10 SCC 646 :
(2014) 1 SCC (Civ) 73 : (2014) 1 SCC
(Cri) 13] which has referred to the
aforesaid judgment in Bimla Devi [Bimla
Devi v. Himachal RTC, (2009) 13 SCC 530
: (2009) 5 SCC (Civ) 189 : (2010) 1 SCC
(Cri) 1101] ."

11. Thus, there can be no dispute
with respect to the position that the
question regarding negligence which is
essential for passing an award in a motor
vehicle
accident
claim
should
be
considered based on the evidence available
before the Tribunal. If the police records
are available before the Tribunal, taking
note of the purpose of the Act it cannot be
said that looking into such documents for
the aforesaid purpose is impermissible or
inadmissible.

12. It is also a fact that the
appellant
had
attributed
that
the
respondent claimants connived with police
and fraudulently prepared the chargesheet. The contention is that the vehicle
insured with the appellant was not involved
in the accident and the accident had
occurred solely due to the rash and
negligence on the part of the deceased. But
the evidence on record would reveal that
676 INDIAN LAW REPORTS ALLAHABAD SERIES
pursuant to the filing of the final report,
cognizance was taken for rash and
negligent driving which resulted in the
death of Udayanath Sahoo."

(emphasis supplied)

6. The Apex Court in the case of
Ranjeet and another vs. Abdul Kayam Neb
and another 2025 SCC OnLine SC 497,
has held as under:-

"4. It is settled in law that once a
charge sheet has been filed and the driver
has been held negligent, no further
evidence is required to prove that the bus
was being negligently driven by the bus
driver. Even if the eyewitnesses are not
examined, that will not be fatal to prove
the death of the deceased due to
negligence of the bus driver."

(emphasis supplied)

7. The Apex Court in the case of
Kuncham Lavanya & Ors. vs Bajaj
Allianz General Insurance Co. Ltd. &
Anr. 2025 SCC OnLine 749, held as
under:-

17. The very fact that the case
was registered against an unknown vehicle
initially would indicate that the offending
vehicle was not identified. However, since
an FIR is not expected to be encyclopaedic
and is only for the purpose of putting into
motion criminal law such that thorough
and full-fledged investigation by the police
ensues, it is the duty of the investigating
agency to find out the identity of the culprit
which in the present case would be the
offending car and driver and take action in
accordance with law. Thus, the mere fact
that initially the FIR records the vehicle as
unknown would not be fatal for the
prosecution/claimants to later come up
with
the
specific
identity
of
the
vehicle/driver, with the obvious caveat that
the connection of the accident with the said
vehicle has to be based on cogent and
reliable evidence

8. The FIR regarding the alleged
accident was registered on 12.01.2018 at
23:13 hours at P.S. Garhmukhteshwar,
District Hapur being Case Crime No.14 of
2018 under Sections, 279, 337, 338, 304-A
IPC against the unknown driver of a
unknown vehicle. The FIR discloses that on
12.01.2018, the first informant Sandesh
Marpeet and his colleague Jatin Agrawal
were doing their duty at the Allabakshpur
Toll Tax Plaza on NH-24, then an unknown
vehicle came from the side of Delhi at
about 08.00 PM, which was being driven in
a rash and negligent manner, which hit
Jatin Agrawal who was doing duty at the
toll plaza. The accident was seen by
Devmuni
Thakur
(PW-2)
and
other
persons. In the accident Jatin Agrawal
suffered grievous injuries who died on the
way to the hospital.

9. The claimants have examined father
of the deceased Mukesh Agrawal as PW-1,
eye witness Devmuni Thakur as PW-2,
Jaisheel Kunder as PW-3 and retired
Investigating Officer(I.O.) Mahipal Singh
as PW-4. Whereas, the driver of the
offending bus Mohd. Azeem has examined
himself as DW-1, the insurance company
has examined Atul Kumar as DW-2 and
Manoj Kumar Vats as DW-3.

10. PW-1 Mukesh Agrawal has very
fairly accepted that he has not seen the
accident. PW-2 Devmuni Thakur has
deposed that he was working as a computer
operator in MEP Infrastructure Developers
Ltd. at Brijghat (Hapur) Toll Tax Plaza, on
11 All. The New India Assurance Comp. Ltd. Vs. Mukesh Agrawal & Ors.
677
NH-24 on 12.01.2018 at booth No.4 with
other operator Jatin Agrawal, then at about
07.45 PM, a private bus No.UP-23-T-0434,
came from the side of Delhi, stopped at
booth, then was rashly driven forward in
high speed which hit the deceased Jatin
Agrawal, due to which he suffered grievous
injury. The bus driver fled after causing the
accident. After the accident had occurred,
injured Jatin Agrawal was taken to the
hospital but he died on the way. He further
deposed that the FIR was registered by the
deceased's friend and colleague Sandesh
Marpeet against unknown vehicle, because
he and other employees had taken the
injured to the hospital. He subsequently
deposed that the accident was caused due to
the rash and negligent driving of the driver
of the offending bus. He further deposed
that the driver of the offending bus had
asked him whether he was feeling sleepy at
the toll plaza, before the accident had
happened.

11. In cross examination, PW-2 further
deposed that there was no barrier at the toll
plaza to stop the vehicle because the
construction work was going on at the toll
plaza and he had stopped the bus at the toll
plaza. He further deposed that at the time of
the accident, the CCTV cameras were not
installed at the toll plaza. He further
deposed that the deceased had come out of
the booth for taking meals then the
unfortunate accident occurred at about
07.45 PM. He further deposed that there
was no speed breaker at the toll plaza and
the deceased was crushed between the bus
and the wall of the toll plaza and after the
accident, the offending bus had fled from
the spot at the speed of 50 kmph and the
security persons deputed at the toll plaza
had not put up barrier to stop the offending
vehicle. He has denied the suggestion that
accident was caused by some other vehicle
and he was not an eyewitness of the
accident.

12. The claimants have also examined
the retired Investigating Officer of the
criminal case S.I. Mahipal Singh as PW-4
who has deposed that Case Crime No.14 of
2018 under Section 279, 337, 338, 304-A
I.P.C. was registered at Police Station
Garh, District Hapur, in which after
investigation he had submitted charge sheet
against the driver of the offending bus
Mohd.
Azeem
(DW-1)
who
had
surrendered in the Court. He further
deposed that during investigation, he had
recorded statement of Devmuni Thakur
PW-2, who was an eye witness of the
accident, who deposed that the accident
was caused due to rash and negligent
driving of the offending bus No.UP-23T0434. He further deposed that he had seized
the offending bus during investigation,
which was got released by its registered
owner from the Court and subsequently, the
offending driver was enlarged on bail by
the competent criminal court. In crossexamination, he deposed that he has retired
on 30.06.2019.

13. The offending driver Mohd.
Azeem has examined himself as DW-1
who has deposed that on 12.01.2018 while
he was driving the offending bus from
Delhi to Moradabad, then at about 07.48
PM at Gajraula, the offending bus was
challaned by RTO Amroha, regarding
which an online complaint was made by the
owner of the offending bus Smt. Saiyada
Begum to the Inspector General of Police.
He denied the factum of accident, but
admitted that on 12.01.2018 when he was
driving the bus from Delhi to Moradabad
then the bus had passed the Moradabad toll
plaza and he had reached Moradabad at
about 09.00 PM. He further deposed that he
678 INDIAN LAW REPORTS ALLAHABAD SERIES
had started his journey from Delhi at about
05.00 PM and had reached Hapur at about
7.30 PM. He also admitted he was enlarged
on bail in the criminal case and the bus was
also released from the court and his
criminal case was pending.

14. In the cross-examination Mohd.
Azeem DW-1 has admitted that his bus had
passed the spot of accident at about 07.00
PM, which was subsequently challaned by
the RTO at Gajraula Chauraha at about
08.00 PM, which was at a distance of about
30 KM from Brij Ghat and he was
challaned because according to the police,
he was boarding passengers for hire and
reward.

15. It is apparent that the driver of the
offending bus DW-1 has admitted that the
offending bus had passed from the alleged
toll plaza at about 07.00 PM, whereas it is
the claimants case that the accident
occurred at about 07.45 PM and DW-1 has
also accepted that after the offending bus
had crossed the toll plaza, it was
subsequently challaned at Gajraula at about
08.00 PM.

16. The computerized challan slip
filed by the appellant with the appeal shows
that the bus was challaned at 07.49 PM at
Gajraula, Amroha. DW-2 Atul Kumar in
cross-examination has submitted that the
distance between Gajraula and Brijghat is
between 12-15 kms. Since the distance
between the place of accident and place of
challan of the offending bus was only about
15 kms, there was bound to be close
proximity between the time of accident and
challan, which was proved from the
evidence of PW-2, DW-1 and DW-2, as
such, merely on that basis, the factum of
accident does not become doubtful and the
contention of the learned counsel of the
appellant to the contrary, is rejected.

17. It is itself proved from the
testimony of Mohd. Azeem DW-1 that he
was challaned subsequent to the accident.
From the testimony of Devmuni Thakur
PW-2, it is proved that after causing the
accident Mohd. Azeem DW-1 had fled by
driving his bus in a high speed. It is true
that in the FIR, the number of offending
vehicle
is
not
mentioned
but
after
investigation in the criminal case, a charge
sheet was submitted against the offending
driver Mohd. Azeem DW-1 and from the
evidence of PW-2 it is proved that the
accident was caused due to the sole
negligence of the offending driver of the
bus as such, the tribunal has not erred in
concluding that indeed the accident was
caused by the offending bus No.UP-23T0434, which was being driven in a rash and
negligent manner at the time of the
accident.

18. Learned counsel for the appellant
submitted that since the offending bus was
challaned by the RTO Amroha for violating
the terms and conditions of the insurance
policy, since the bus was boarding
passengers in the way for hire and reward
as a stage carriage, as such, the insurance
company was not liable to indemnify the
compensation payable to the claimants.

19. The appellant has filed photocopy
of the challan with the appeal which shows
that it is pending and the insured has not
compounded
the
offence.
It
further
mentions the alleged offences committed as
under:-

"(1) Fail to produce Driving
Licence(No DL) or Driving Licence without
11 All. The New India Assurance Comp. Ltd. Vs. Mukesh Agrawal & Ors.
679
effective DL-S.130,159,3,5,r/w S.180,181 of
Motor Vehicles Act.

(2) Breach of permit conditionsVehicle
not
plying
for
specific
purpose(contract carriage)- STA letter
No.1979/STA/99 dated 08 October 1999.

(3) Seat Belt- Not wearing the
seat belts while the vehicle is in motionRule 138(3) of the Central Motor Vehicle
Rules r/w S.177 of Motor Vehicles Act.

(4) Vehicle violating standards
prescribed for control of noise(using multi
tone horn/pressure horn)- S.190(2) of
Motor Vehicles Act.

(5) No or non functional fitment
of reflectors- R.104 of Central Motor
Vehicle Rules r/w S.177 of Motor Vehicles
Act.

Challan
Amount:
Rs.12,400/-
(Pending)

Witness
Name:
Enforcement
staffs.

Remarks: Vehicle coming from
Delhi to Hasanpur with 31 local and
footkar passengers of Rs.70/- to 100/- each
of Gajraula Hasanpur.........violation of UP
Permit conditions.

Read under Section 213(5)(e) of
Motor Vehicles Act,1988."

20.
The
appellant-insurance
company examined Atul Kumar as DW-2
to prove that the offending bus was
challaned on 12.01.2018 by ARTO,
Rajesh Singh for the breach of conditions
of permit because the offending driver
was boarding passengers for hire and
reward for a fare of Rs.70 to 100/-
between Gajraula and J.P. Nagar but in
the cross-examination, this witness has
admitted that the offending bus was not
challaned in his presence and he was not
aware about the disposal of the challan.
Manoj Kumar Vats DW-3 has proved that
the offending bus was insured with the
insurance company which was to be
operated under a permit granted under the
Motor Vehicles Act,1988.

21. It is apparent that the offending
bus has been challaned for five offences,
but only on this ground it is not proved
that the bus was being driven in violation
of the terms and conditions of the
insurance policy because the insured has
a legal right to contest the challan and it
is only after a competent court records a
finding or if there was an admission of
guilt on the part of the insured, only then
it can be presumed that the alleged
offences were committed. In absence of
the above evidence on record, the tribunal
has rightly concluded that the offending
bus No.UP-23T-0434 was being driven in
accordance with the terms and conditions
of the insurance policy, as such, the
appellant insurance policy is liable to
indemnify the compensation payable to
the claimants.

22. A further question arises whether
the alleged breach of permit conditions in
this case, wherein the offending bus was
allegedly plied as a stage carriage
whereas as per the permit it was to be
plied as contract carriage, amounts to
such fundamental breach of the terms and
conditions of the insurance policy so as to
enable the insurer of the offending
vehicle to avoid it?s statutory liability to
the third party in terms of S.149(2) of the
Motor Vehicles Act,1988.
680 INDIAN LAW REPORTS ALLAHABAD SERIES

23. A Division Bench of the Karnataka
High Court in the case of United India
Insurance Co.Ltd. & Ors. vs. Chandamma
& Ors. 1999 SCC OnLine Kar 454, held as
under.

2.
Admittedly,
the
offending
vehicles involved in all these cases were the
?contract carriages? covered by valid
permits issued by the prescribed authority
under the Motor Vehicles Act, 1988 (?the
Act? for short). They were involved in the
accidents occurred on various dates
resulting in injuries to/deaths of several
passengers travelling therein, which had
given rise to the respective claims to
compensation by the victims of accidents or
the dependents of the deceased victims,
before the respective Motor Accident
Claims Tribunals. It is not in dispute that
each of these vehicles was covered by the
valid and current ?Act Only? insurance
policies
of
the
respective
appellants/petitioners-insurers.
These
insurers were respondents in the claim
petitions before the Tribunals. The petitions
were contested by them on the common
ground that the respective vehicles which
were plying as ?contract carriages? had
been used as ?stage carriages? when the
respective accidents occurred, and in
violation of the condition of the insurance
policies. In other words, their defence was
that the offending vehicles, at the material
time, having been used by the insured
owners thereof as stage carriages in
breach of condition of their insurance
policies as also of their respective permits
issued by the prescribed authority under
the Act for their use only as ?contract
carriages?, they were not liable in law to
indemnify the insured owners and pay
compensation
to
the
claimants.
The
Tribunals have negatived their contention
and have passed the respective impugned
awards holding them also liable to pay the
compensation to the respective claimants.
Hence, the respective appeals by the
insurers of the said vehicles.

3. In the light of the relevant
provisions of the Act and on consideration
of the relevant condition in the policies of
insurance which were produced in evidence
and marked as exhibits, we find that, for
the
reasons
stated
hereinbelow,
the
appellants/petitioners-insurers, by pleading
the said defence, cannot escape their
liability to indemnify the insured and
satisfy the impugned awards.

*** *** ***

6. Admittedly, the ground spelt
out under sub-clauses (b), (c) and (d) of
Clause (a)(i) and the ground under Clause
(b) of Section 149(2) are not applicable to
the defence of insurers in these cases. On
the other hand, an attempt had been made
for the insurers to bring their cases within
the
purview
of
the defence
ground
envisaged in sub-clause (a) of sub-section
2(a)(i). This ground is also not available to
them for the reason that, admittedly, each
of the offending vehicles was covered by a
valid permit to carry passengers for hire or
reward as they were ?public service
vehicles?. Merely because these vehicles
were stated to have been stopped and
picked up passengers on the permitted
route, presumably in breach of their permit
condition, that by itself does not constitute
a statutory defence available in sub-section
2(a)(i)(a) of Section 149. In fact, Section
149(2) of the New Act i.e., Act of 1988,
corresponds to Section 96(2) of the Old Act
i.e., Act of 1939. The same defence grounds
as are contained in Section 149(2) of the
New Act were existing as the defence
grounds under sub-section (2)(b) and (c) of
11 All. Manager The Oriental Insurance Co. Ltd. Vs. Smt. Kusma Devi & Ors.
681
Section 96 of the Old Act. Similar question
had arisen for consideration of the Division
Bench of this Court in the case of K.V.
Thimmegowda v. Kamalamma [ I.L.R. 1991
KAR 4127.] and the same had been
answered holding:

"An Insurance Company is liable
to pay compensation in respect of the injury
to or death of a third party, caused by a
motor accident by a motor vehicle, which is
a stage carriage while plying or being used
lawfully otherwise than as a stage carriage,
at a public place, even if such public place
does not lie on the route in respect of which
it is permitted to operate as a stage
carriage."

Therefore,
in
law
the
appellants/petitioners-insurers are not
exempt from their liability to pay
compensation under their respective ?Act
Policies? by mere reason of ?contract
carriages? in question being plied as
?stage carriages? in breach of their
permit condition since such a defence
plea is not permissible under sub-section
(2) of Section 149 of the Act. If the said
vehicles were found to have been plying
in breach of their permits condition, it is
open for the concerned authorities under
the Act to take appropriate action as is
permissible
under
other
provisions
thereof viz., Sections 86, 177 and 192 as
the case may be. Therefore, we find the
contention of the learned Counsel for
appellants/Writ Petitioners without force
and
weight
and
the
appeals
are,
therefore, bound to fail.

24. Therefore, from the case of
Chandamma (supra), it can be deduced
that the insurance company cannot escape
its liability to compensate on the ground
that the offending vehicle was used in
violation of the terms and conditions of the
insurance policy, i.e., as a stage carriage
when it was insured only as a contract
carriage.

25. No other issue has been pressed by
the learned counsel for the appellantinsurance company.

26.
In
view
of
the
aforesaid
discussion, this appeal has got no merit and
is liable to be dismissed at the admission
stage.

27. The appeal is hereby dismissed
at the admission stage.

28. The impugned judgment and
award of the Tribunal dated 30.07.2025 is
affirmed.

29. Office is directed to remit back the
statutory deposit made by appellant to the
Tribunal concerned, forthwith.
----------
(2025) 11 ILRA 681
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.11.2025

BEFORE

THE HON'BLE SANDEEP JAIN, J.

First Appeal From Order No. 3816 of 2017

Manager The Oriental Insurance Co. Ltd.
 ...Appellant
Versus
Smt. Kusma Devi & Ors. ...Respondents

Counsel for the Appellant:
Amit Manohar

Counsel for the Respondents:
Mohd. Asim Zulfiquar, Rahul Mishra, Ram
Lakhan Deobanshi