Madras High Court
The Divisional Manager vs Sakthi … 1St on 16 July, 2025
C.M.A.(MD)No.677 of 2025
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 16.07.2025
CORAM:
THE HON'BLE MR.JUSTICE K.K.RAMAKRISHNAN
C.M.A.(MD)No.677 of 2025
and
C.M.P.(MD)No.10805 of 2025
The Divisional Manager,
United India Insurance Company Ltd.,
No.39, Gandhiji Road,
LIC building,
Thanjavur Town. ... Appellant/
2nd Respondent
Vs.
1.Sakthi ... 1st Respondent/
Petitioner
2.Senthil Kumar ... 2nd Respondent/
1st Respondent
Prayer : This Civil Miscellaneous Appeal has been filed under Section
173 of Motor Vehicles Act, to set aside the fair and decreetal order dated
16.04.2025 passed in M.C.O.P.No.1319 of 2023 on the file of Motor
Accident Claims Tribunal, Special Subordinate Judge, Thanjavur.
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C.M.A.(MD)No.677 of 2025
For Appellant : Mr.I.Suthakaran
JUDGMENT
The Civil Miscellaneous Appeal has been preferred by the Insurance
Company against the award dated 16.04.2025 passed in M.C.O.P.No.1319
of 2023 by the Special Subordinate Judge / Motor Accident Claims
Tribunal, Thanjavur.
2. The facts of the case are as follows :- On 19.09.2023 at about
06.45 p.m., when the first respondent / claimant, after attending funeral
ceremony of his relative, was walking along Saliyamangalam – Papanasam
road in irumputhalai vettuvaykal bridge from North to South direction on
the extreme left side of the road, a TVS Star City two wheeler bearing
Registration No.TN-68-AF-6473, which came in the opposite direction in
a rash and negligent manner, had dashed against the first respondent /
claimant and as a result, the first respondent / claimant sustained grievous
multiple injuries. The first respondent / claimant was immediately taken to
Thanjavur Government Medical College Hospital and thereafter, he was
admitted in Thanjavur Shanthi Private Hospital for further treatment. A
case came to be registered in Crime No.181 of 2023 against the rider of
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C.M.A.(MD)No.677 of 2025
the two wheeler one Ayyappan and after completing investigation, final
report was filed against the said Ayyappan for the offences under Sections
279 and 338 IPC. The claim petition was filed by the first respondent /
claimant seeking compensation to the tune of Rs.15,00,000/-.
3. The second respondent / first respondent, owner of the vehicle,
remained ex-parte before the Tribunal and the claim petition was opposed
by the appellant / insurer.
4. The defence of the appellant / insurer is that the offending vehicle
was driven by a person not having valid driving license and as such, the
appellant / insurer is not liable to pay any amount, that since the second
respondent / first respondent, allowed his minor son Ayyappan to ride the
two wheeler without license, the compensation is to be paid only by him
and not by the appellant / insurer and that the the first respondent /
claimant suddenly entered the road to cross the road without looking at the
vehicle or traffic on the road and in the process, he was hit and sustained
injuries.
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C.M.A.(MD)No.677 of 2025
5. Before the Tribunal to prove their case, the first respondent /
claimant has examined himself as P.W.1 and exhibited 8 documents as
Ex.P.1 to Ex.P.8. The appellant / insurer has examined 1 witness as R.W.1
and exhibited 6 documents as Ex.R.1 to Ex.R.6. The disability certificate
was exhibited as Ex.C.1.
6. The learned trial Judge, after considering the evidence, both oral
and documentary, has passed the impugned award dated 16.04.2025,
holding that the two wheeler rider was responsible for the accident and
directed the appellant / insurer to pay the award amount of Rs.3,48,190/-
to the first respondent / claimant and then to recover the same from the
second respondent / first respondent. Aggrieved by the said award, the
insurer has come up with the present appeal.
7. It is pertinent to note that the appellant / insurer has not
challenged the finding of the Tribunal that the accident had occurred only
due to the rash and negligence driving of the two wheeler rider and that
they have also not challenged the quantum of compensation awarded by
the Tribunal.
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C.M.A.(MD)No.677 of 2025
8. The only contention of the learned counsel appearing for the
appellant / insurer is that since the terms and conditions of the Policy was
violated by allowing the minor to drive the two wheeler without valid
driving license, the appellant / insurer cannot be fastened even with the
liability of pay and recovery and that after amendment to the Motor
Vehicles Act by the Central Act 32 of 2019 and the deletion of proviso to
Section 149(4) of the Motor Vehicles Act, the Tribunal cannot order pay
and recovery.
9. It is not in dispute that the second respondent / first respondent is
the owner of the two wheeler bearing Registration No.TN-68-AF-6473
and the same was insured with the appellant / insurer and that the
insurance policy was in force on on the date of accident. It is also not in
dispute that the two wheeler rider Ayyappan was a minor and aged 17
years 9 months at the time of accident.
10. The points for consideration are:-
(i) Whether the Tribunal is empowered to order pay and recovery
against insurer in case of violation of policy conditions after deletion of
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C.M.A.(MD)No.677 of 2025proviso to old Section 149 (4) and 149 (5) [now amended as Section 150]
of Motor Vehicles Act, 1988, by Motor Vehicles Amendment Act (Central
Act 32 of 2019), with effect from 01.04.2022?
(ii) Whether the Tribunal erred in mulcting liability and adopting
the doctrine of pay and recovery, in spite of producing the evidence to
show that the two wheeler rider was a minor and had no valid driving
license to drive the two wheeler at that time?
11. When similar issues were raised before the Principal Seat of this
Court in C.M.A.No.554 of 2025 and batch reported in 2025/MHC/991, a
learned Single Judge has held that notwithstanding the deletion of proviso
to old Section 149(4) of MV Act (New Section 150), the Motor Accident
Claims Tribunal can order pay and recovery. The relevant observation of
this Court in 2025/MHC/991 reads as follows:-
“28. The very same title or caption is retained in
New Section 150 of Motor Vehicles Act. Further, defences
enumerated under Section 150(2) are result of
breach/omission by insured over which innocent third
parties have no control. Hence, it is highly inequitable to
interpret the section against its own title and object of
main enactment. In this regard, it would be appropriate to6/12
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C.M.A.(MD)No.677 of 2025refer to observation of Apex Court in British India General
Insurance Co. Ltd., vs. Captain Itbar Singh and others
reported in 1959 SCC OnLine SC 32, which reads thus:-
“17. … … … … It was said that the assured
might be a man of straw and the insurer might not be
able to recover anything from him. But the answer to
that is that it is the insurer’s bad luck. In such
circumstances the injured person also would not have
been able to recover the damages suffered by him
from the assured, the person causing the injuries. The
loss had to fall on some one and the statute has
thought fit that it shall be borne by the insurer. That
also seems to us to be equitable for the loss falls on
the insurer in the course of his carrying on his
business, a business out of which he makes profit, and
he could so arrange his business that in the net result
he would never suffer a loss. On the other hand, if the
loss fell on the injured person, it would be due to no
fault of his; it would have been a loss suffered by him
arising out of an incident in the happening of which
he had no hand at all.”
(emphasis supplied)
The Apex Court in the above mentioned case
law in a beautiful language emphasised the plight of
third party victims and ability of insurer to cope up
with liability created by law under Section 149(1)https://www.mhc.tn.gov.in/judis ( Uploaded on: 29/07/2025 02:58:58 pm )
C.M.A.(MD)No.677 of 2025[New Section 150(1)]. Therefore, this Court holds
that Section 149(1) [now Section 150 (1)] imposes a
duty on insurer to satisfy award passed against
insured in respect of third party claims and that duty
is not affected by deletion of proviso to Section 149
(4).
29. Section 149(5) mandates that any amount paid
by the insurer to the third party over and above the amount
payable by insurer to the insured under the policy, shall be
recovered by the insurer from the insured. Now, by virtue
of new Section 147(2), the Central Government is
empowered to prescribe a base premium and liability of
the insurer in respect of such premium for the insurance
policy. Since the liability of the insurer in respect of third
party insurance is sought to be limited, by virtue of
notification by Government in consultation with Insurance
Regulatory and Development Authority, Sub-Section 5 of
old Section 149 is deleted to remove doubt. The deletion of
Sub-Section 5 of old Section 149 is in tune with the
amendment introduced under Section 147(2).
30. In view of the discussions made earlier, this
Court holds that notwithstanding deletion of proviso to
Sub-Section (4) of Old Section 149 and Sub-Section (5) of
very same Section which is renumbered as Section 150, the
insurer’s liability to honour the award passed against the
insured in respect of third party claims continues and in
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C.M.A.(MD)No.677 of 2025
the event of insurer’s success in raising a defence under
Sub-Section (2) of New Section 150, the Tribunal can very
well order pay and recovery. In view of the same, the first
argument made by the learned counsel for the appellant is
rejected.”
12. The above decision is squarely applicable to the case on hand.
From the reading of the above said judgment, it is clear that the learned
Single Judge has also followed the similar view taken by the Allahabad
High Court in ICICI Lombard General Insurance Co Ltd Vs. Arti Devi
and others dated 31.01.2025 with regard to pay and recovery.
13. At this juncture, the learned counsel appearing for the appellant
would submit that against the judgment of the Allahabad High Court, the
Insurance Company preferred SLP and stay was also granted on
20.05.2025. Mere pendency of the appeal before the Hon’ble Supreme
Court does not erase effect of the pronouncement made in C.M.A.
(MD)No.554 of 2025 and batch. Therefore, this Court has no other option
but to follow the learned Single Judge’s view taken in C.M.A.No.554 of
2025 and batch.
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C.M.A.(MD)No.677 of 2025
14. This Court also perused the Motor Vehicles (Amendment) Bill,
2022 submitted before Lok Sabha. It is appropriate to incorporate the
object of the bill, which reads as follows:
“Furthermore, other defences provided in clause (a)
of sub-section (2) of section 150 shall be restricted in such
a way that the insurer shall, in such a circumstance, pay
the awarded compensation in the first instance to third
parties including gratuitous passengers and pillion riders
and may thereafter recover the same from the insured. The
Act shall perform as a welfare legislation for the benefit of
third parties by ensuring that they receive the fruits of the
awards obtained by them straightaway with an element of
certainty and not to make them wait for a prolonged
recovery proceeding as against the owner of the vehicle.”
15. Considering the above, this Court is not inclined to interfere the
impugned judgment. Accordingly, this Civil Miscellaneous Appeal is
dismissed and the award dated 16.04.2025 passed in M.C.O.P.No.1319 of
2023 on the file of Motor Accident Claims Tribunal / Special Subordinate
Court, Thanjavur, is confirmed. The appellant / insurer is directed to
deposit the entire award amount with accrued interest and costs, within a
period of six weeks from the date of receipt of a copy of this judgment, if
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C.M.A.(MD)No.677 of 2025
not already deposited and on such deposit being made, the first respondent
/ claimant is permitted to withdraw the said amount, with accrued interest
and costs. Consequently, connected Miscellaneous Petition is closed. No
costs.
16.07.2025
NCC : Yes/No
Index : Yes/No
Internet: Yes/No
csm
To:
1.The Special Subordinate Judge,
Motor Accident Claims Tribunal,
Thanjavur.
2.The Record Keeper,
Vernacular Section,
Madurai Bench of Madras High Court,
Madurai.
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C.M.A.(MD)No.677 of 2025
K.K.RAMAKRISHNAN,J.
csm
Judgment made in
C.M.A.(MD)No.677 of 2025
and
C.M.P.(MD)No.10805 of 2025
Dated : 16.07.2025
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