Insurer cannot recover after 12 years, says Himachal HC in Motor Accident case

Shimla, Sept 12,

The Himachal Pradesh High Court has ruled that an insurance company cannot indefinitely pursue recovery of compensation amounts paid under “pay and recover” directions in motor accident cases. The Court held that such execution petitions are bound by the twelve-year limitation period under the Limitation Act, 1963.

The judgment came in Datta Ram & Others v. United India Insurance Company Limited, delivered on September 9, 2025, by  Justice Ajay Mohan Goel.

The petitioners were represented by Ganesh Barowalia, Advocate, while the insurance company was represented by Lalit Kumar Sharma, Advocate.

The case traced back to a 1996 award of Rs 50,000 compensation by the Motor Accident Claims Tribunal (MACT), Sirmaur. In 2005, the High Court modified the award, directing the insurer to first satisfy the claim and later recover the amount from the vehicle owners through execution proceedings before the MACT. The insurer, however, filed execution only in November 2017. The Tribunal allowed it in June 2023, holding that Section 174 of the Motor Vehicles Act placed no limitation on such recovery.

Justice Goel disagreed, observing: “Because it is settled law that the period for the execution of a judgment etc., is 12 years, the Insurance Company should have been vigilant enough to have had approached the executing Court within the limitation period.”

Rejecting the Tribunal’s reasoning, the Court clarified: “This provision [Section 174] cannot be construed to mean that no limitation is there for filing an execution under the Motor Vehicle Act.”

The Court concluded that the insurer’s execution was time-barred and set aside the Tribunal’s order fastening liability on the vehicle owners.

The ruling is significant for motor accident claim jurisprudence, making it clear that insurers must exercise recovery rights within twelve years, even when statutes appear silent on limitation.

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The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.

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Himachalscape bureau

The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.