Allowed¶18

(O&M) Mohammad Sadique v. Gagan Jindal and Others

Punjab & Haryana HC14 Jul 2026FAO/3109/2002

Case brief

AI extract

What is this about?

Punjab & Haryana High Court, FAO-3109-2002 (O&M), decided 14.07.2026 by Justice Yashvir Singh Rathor: pay-and-recover direction against driver set aside — no contract of insurance/privity between driver and insurer; insurer exonerated for expired driving licence (breach of policy conditions) but may recover awarded amount from owner/insured only; MACT Sangrur award dated 24.11.2001; Oriental Insurance Company; Section 166 Motor Vehicles Act; accident 19.06.1995, Truck PNT-4119 vs Car DL-2CA-5996; claimants Gagan Jindal, Prem Lata, Lalit Jindal.

What did the court decide?

Appeal allowed with costs; the Tribunal's recovery direction against the driver set aside; Insurance Company permitted to recover the awarded amount from the owner/insured only and not from the driver; pending miscellaneous applications disposed of. ¶18

(O&M) Mohammad Sadique Vs Gagan Jindal and… — Motor Accident Claims | Punjab & Haryana HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the direction given to the Insurance Company (exonerated of liability to indemnify for want of a valid driving licence but directed to pay compensation and then recover) to recover the awarded amount from the driver is sustainable, there being no contract of insurance between the driver and the insurer.

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Court's answer

On the date of accident the driver did not possess a valid and effective driving licence (the licence had expired prior to the accident and was renewed only on 11.12.1997), constituting a violation of the terms and conditions of the insurance policy; the Insurance Company was rightly exonerated of its liability to indemnify the insured.

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Ratio / Principle

A contract of insurance exists between the owner/insured and the insurer/Insurance Company alone and not between the driver and the Insurance Company; consequently, the Insurance Company has no right to recover the awarded amount from the driver.

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Key takeaways

The directions given by the Tribunal entitling the Insurance Company to recover the amount from the driver are not sustainable and are set aside; the Insurance Company can recover the amount from the owner/insured only.ratio¶17

Detailed headnote1 paragraphs

Motor accident first appeal by Mohammad Sadique, driver of Truck No.PNT-4119, against the award dated 24.11.2001 of the MACT, Sangrur in MACT case Nos.20, 19, 18 of 27.05.1997 (petition under Section 166 of Motor Vehicles Act) arising out of the collision of 19.06.1995 near village Kup Khurd with Car No.DL-2CA-5996, injuring claimants Gagan Jindal, Prem Lata and Lalit Jindal. The Tribunal, holding that the driver's driving licence had expired on the date of accident (renewed only on 11.12.1997) in violation of the terms and conditions of the insurance policy, exonerated the insurer of its liability to indemnify the insured but directed it to pay the compensation and then recover the amount from both the owner and the driver. Held: the contract of insurance exists between the owner/insured and the insurer alone and not between the driver and the Insurance Company; hence the insurer has no right to recover the amount from the driver. The Tribunal's recovery direction against the driver was set aside, recovery lying against the owner/insured only. Appeal allowed with costs. Insurer: Oriental Insurance Company (respondent No.5).

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FAO-3109-2002 (O&M) - 1 -

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253 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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FAO-3109-2002 (O&M) Date of Decision: 14.07.2026

MOHAMMAD SADIQUE

......... Appellant

VERSUS

GAGAN JINDAL AND OTHERS

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..... Respondents

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CORAM: HON'BLE MR. JUSTICE YASHVIR SINGH RATHOR

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Present : Ms. Promila Nain, Sr. Advocate with Mr. Pranab Bansal, Advocate Ms. Kanchan, Advocate for the appellant.

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Mr. Neeraj Khanna, Advocate for Mr. Ravinder Arora, Advocate for respondent No.5-Oriental Insurance Company.

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YASHVIR SINGH RATHOR, J. (Oral)

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Notice issued to respondent No.4/owner has been received back unserved with the report that the firm stands closed.

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A perusal of the Award shows that Insurance Company was exonerated of its liability to indemnify the insured as the driving licence of the driver had expired on the date of accident. However, it was directed that the Insurance Company shall pay compensation to the claimants and then it shall recover the same from the owner and driver.

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The appeal in hand has been instituted by the driver against the right given to the Insurance Company to recover the amount from him and as such, presence of owner is not necessary for adjudication of the

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PRIYANKA THAKUR 2026.07.15 19:55 I attest to the accuracy and integrity of this document

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FAO-3109-2002 (O&M) - 2 -

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present appeal and there is no necessity to issue notice to him.

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This appeal has been instituted by the driver of the offending vehicle against the award dated 24.11.2001 passed in MACT case Nos.20, 19, 18 of 27.05.1997 decided by the MACT, Sangrur ( for short “Tribunal” ) in a petition under Section 166 of Motor Vehicles Act. The appellant has challenged the findings of the Tribunal vide which recovery rights have been given to the Insurance Company to recover the awarded amount from the insured/owner and driver after payment of compensation to the claimants.

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Case of claimant-Gagan Jindal is that he along with Prem Lata and Lalit Jindal was travelling in Car No.DL-2CA-5996 from Ludhiana to Malerkotla and when the car reached the pucca drain bridge near village Kup Khurd at about 3.00/3.30 p.m., it was hit by Truck No. PNT-4119 coming from the opposite direction. The truck was allegedly being driven by respondent No.1 in a rash and negligent manner and at a high speed. As a result of the collision, the claimant sustained multiple injuries and was initially treated at Civil Hospital, Malerkotla. FIR No.54 dated 19.06.1995 under Sections 279, 338 and 427 IPC was registered at Police Station Ahmedgarh against the truck driver. The claimant, aged about 22 years and stated to be earning Rs.4,000/- per month from his business, alleged that he remained bedridden for about two months, incurred medical expenses of approximately Rs.10,000/- and claimed compensation of Rs.1,50,000/- under various heads.

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PRIYANKA THAKUR 2026.07.15 19:55 I attest to the accuracy and integrity of this document

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FAO-3109-2002 (O&M) - 3 -

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Prem Lata-claimant was also travelling with Gagan Jindal and Lalit Jindal. She suffered grievous injuries in the accident. She was shifted to Dayanand Medical College and Hospital, Ludhiana, where she remained admitted from 19.06.1995 to 03.07.1995 and again from 03.07.1996 to 06.07.1996. She suffered a closed fracture of the shaft of the left femur, continued to undergo follow-up treatment and claimed to have suffered permanent disability affecting her mobility. At the time of the accident, she was about 44 years of age and was stated to be earning Rs.4,000/- per month from her business. Alleging that she had incurred medical expenses of nearly Rs.1,00,000/- and had suffered permanent disability, pain and suffering, she claimed compensation of Rs.5,50,000/-.

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Lalit Jindal-claimant was also travelling with Gagan Jindal and Prem Lata. He sustained fracture of the right lower limb and lacerated injuries on his face. He remained admitted at Dayanand Medical College and Hospital, Ludhiana from 19.06.1995 to 29.06.1995 and was again hospitalized from 18.04.1996 for about 12–13 days. At the time of the accident, he was about 24 years of age and was earning Rs.6,000/- per month from his business. He claimed to have incurred medical expenses of about Rs.80,000/- and sought compensation of Rs.4,00,000/- for the injuries, pain and suffering, medical expenses and other consequential losses.

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Driver and owner, in their joint written statement, admitted that M/s Parkash Industries, was the owner of Truck No.PNT-4119 and that the vehicle was duly insured with Insurance Company under a valid

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PRIYANKA THAKUR 2026.07.15 19:55 I attest to the accuracy and integrity of this document

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FAO-3109-2002 (O&M) - 4 -

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insurance policy for the period from 31.07.1994 to 30.07.1995. However, they denied the allegations of rash and negligent driving as well as the involvement of the truck in the accident, contending that the FIR had been lodged on incorrect facts. In the alternative, they pleaded that any liability, if established, would be that of the Insurance Company.

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Insurance Company also admitted the existence of the insurance policy but denied the occurrence of the accident for want of knowledge and pleaded that the compensation claimed was excessive. It further contended that its liability, if any, would be subject to proof that the driver possessed a valid and effective driving licence and that the vehicle had a valid fitness certificate at the time of the accident.

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From the pleadings of parties, following issues were framed

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by the Tribunal:-

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“1. Whether the petitioner is entitled to compensation as prayed for? If so, to what extent and from whom? OPP

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2. Whether the petitioner suffered injuries in the accident occurred due to rash and negligent driving of respondent No.1 as alleged in the petition? OPP

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3. Whether the respondent No.3 is not liable to pay the compensation amount on the ground mentioned in the written statement? OPR-3

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4. Relief.”

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Thereafter, the parties led their respective evidence. 12. After hearing the parties and on going through the material

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PRIYANKA THAKUR 2026.07.15 19:55 I attest to the accuracy and integrity of this document

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FAO-3109-2002 (O&M) - 5 -

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on record, the Tribunal came to the conclusion that accident in question had taken place on account of rash and negligent driving on the part of its driver/appellant while driving the offending vehicle in a rash and negligent manner. However, it was held that the driving licence of the driver was not valid and that it constituted a violation of the terms and conditions of the insurance policy and Insurance Company was exonerated of its liability and it was ordered that Insurance Company shall first of all make the payment of the awarded amount to the claimants and thereafter, it shall have a right to recover the same from the driver and owner i.e. respondents No.1 and 2 before the Tribunal.

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Feeling aggrieved, the present appeal has been filed by the appellant, who is the driver of the offending vehicle. The material on file has been perused and parties have been heard.

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Learned counsel for the appellant argued that the claimants have been awarded compensation by the Tribunal. The vehicle was insured with respondent No.4. However, under Issue No.3, it was held that the driving licence of the driver Ex.R1 had expired on 19.06.1995, i.e. on the date when the accident took place and same was renewed on 11.12.1997 and since the licence had expired, Insurance Company was absolved to its liability to indemnify the insured. However, a direction was issued to the Insurance Company to pay compensation to the claimants and thereafter, right to recover the amount from owner and driver was given to the Insurance Company whereas no such recovery rights would have been given against the driver as there is no contract of

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PRIYANKA THAKUR 2026.07.15 19:55 I attest to the accuracy and integrity of this document

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FAO-3109-2002 (O&M) - 6 -

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insurance between the driver and the Insurance Company and it will only the insured/owner from whom amount can be recovered by the Insurance Company. Learned counsel prayed that the appeal in hand be accepted and award be modified to that extent.

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On the other hand, learned counsel for Insurance Company submits that the Award is well reasoned and justified. Insurance Company can recover the amount paid to claimants from both the driver as well as the owner and the appeal in hand be dismissed.

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After hearing counsel for the parties, I am of the considered opinion that the appeal in hand deserves to be accepted for the reasons discussed hereinafter.

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Admittedly, the offending vehicle was insured with respondent No.5-Insurance Company and on the date of accident, the driving licence of the driver was not valid as the same had expired prior to the accident and it was renewed only after the accident on 11.12.1997. As such, the driver did not possess a valid and effective driving licence on the date of accident and there was violation of terms and conditions of the Insurance policy. The Insurance Company thus has rightly been exonerated of its liability to indemnify the insured but a direction has been given to the Insurance Company to pay the amount to the claimants and then recover the same from the owner as well as driver. However, the contract of insurance exists between the owner/insured and the insurer/Insurance Company and not between the driver and the Insurance Company and the Insurance Company thus has no right to recover the

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PRIYANKA THAKUR 2026.07.15 19:55 I attest to the accuracy and integrity of this document

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FAO-3109-2002 (O&M) - 7 -

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amount from the driver and the directions given by the Tribunal in this regard are thus not sustainable and are set aside.

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As a result of aforesaid discussion, the appeal in hand is allowed with costs and it is ordered that Insurance Company can recover the amount from the owner/insured only and not from the driver.

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Pending miscellaneous application(s), if any, shall also stand disposed of.

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(YASHVIR SINGH RATHOR) JUDGE

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14.07.2026

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Priyanka Thakur

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Whether speaking/reasoned Yes/No Whether Reportable Yes/No

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PRIYANKA THAKUR 2026.07.15 19:55 I attest to the accuracy and integrity of this document

(O&M) Mohammad Sadique v. Gagan Jindal and Others

Case brief

What is this about?

What did the court decide?

(O&M) Mohammad Sadique v. Gagan Jindal and Others

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

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