Madras High Court

M/S. National Insurance Company ... vs Radha on 30 June, 2025

                                                                                            C.M.A.No.1784 of 2022


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                       Reserved on                             04.06.2025
                                      Pronounced on                            30.06.2025
                                                          CORAM


                  THE HONOURABLE MRS.JUSTICE K.GOVINDARAJAN THILAKAVADI

                                            C.M.A.No.1784 of 2022 and
                                             C.M.P. No.12895 of 2022


                  M/s. National Insurance Company Limited,
                  L.R.N. Colony,
                  Saradha College Main Road,
                  Hasthampatti, Salem-7.                                                       …Appellant
                                                      Vs.
                  1. Radha
                  2. P. Elumalai                                                            …Respondents


                  Prayer: This Civil Miscellaneous Appeal is filed under Section 173 of Motor
                  Vehicles Act,1988, praying to set aside the decree and judgment passed in
                  MACT O.P. No.69 of 2018 dated 03.01.2022 on the file of the Motor
                  Accident Claim Tribunal, Special District Court, Salem.
                                         For Appellant              : Ms.N.B.Surekha
                                         For Respondents            : Mr.T. Saikrishnan for R1
                                                                      No Appearance for R2


                  1/12




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                                                                                            C.M.A.No.1784 of 2022


                                                            JUDGMENT

The above Civil Miscellaneous Petition is directed against the

judgment and decree dated 03.01.2022 in MACT O.P. No.69 of 2018 on the

file of the Motor Accident Claim Tribunal, Special District Court, Salem.

2. The brief facts of the case are as follows:

2.1. On 28.06.2012, at about 16.30 hours, when the deceased minor

Selvam was travelling in a tractor bearing Registration No. TN 28-L-3622

with Trailer bearing Registration No. TN 27 T 1936 as a non fare paying

passenger, near Chinnagoundampatti burial ground, the driver of the tractor

drove the same in a rash and negligent manner and applied sudden brake, due

to which the tractor capsized, the said Selvam fell down and the tractor ran

over him. On account of the same, the said Selvam died on the spot. The

deceased was aged about 12 years and was studying in 5th standard at the time

of accident.

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2.2. The mother of the deceased filed a Claim Petition before the

Tribunal claiming compensation of Rs.10,00,000/-.

2.3. The appellant Insurance Company contested the case by filing a

counter, wherein it is stated that the deceased Selvam was sitting on the

“mudguard” of the tractor. The tractor is a goods vehicle. The driver of the

tractor allowed the deceased to sit in the tractor as a non fare paying

passenger and thus violated the policy conditions. Hence, the

appellant/Insurance Company prayed for dismissal of the said petition with

costs.

2.4. On the side of the claimant, the claimant examined herself as

P.W.1 and one another witness as P.W.2 and marked Ex.P1 to Ex.P8. On the

side of the second respondent/Insurance Company R.W.1 to R.W.4 were

examined and Ex.R1 to Ex.R3 were marked. Ex.X1 to Ex.X5 were also

marked.

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2.5. The Tribunal, based on the oral and documentary evidence, has

come to the conclusion that the driver of the tractor is responsible for the

accident and awarded a compensation of Rs.5,00,000/- to the claimant along

with interest at the rate of 7.5% per annum. The Tribunal while awarding

the compensation to the claimant, directed the appellant Insurance Company

to pay the compensation amount to the claimant in the first instance, and then

recover the same from the second respondent herein, the owner of the tractor.

3. Dissatisfied with the said Award, the appellant Insurance

Company has filed the present appeal on the ground that, in cases where an

unauthorised passenger travels in a goods vehicle or non passenger vehicle,

the insurer is generally not statutorily obligated to cover the liability for such

passenger. The learned counsel for the appellant/ Insurance Company, in

support of her contention, has relied upon the following judgements.

1) C.M.A. No.3817 of 2011 dated 15.02.2021.

2) C.M.A.(MD) No.963 of 2016 dated 23.03.2021

3) C.M.A.(MD) No.417 of 2019 dated 15.07.2021.

4) C.M.A. No.2649 of 2017 dated 10.03.2022.

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5) C.M.A. No.789 of 2024 dated 02.07.2024.

6) C.M.A. No. 2617 of 2014 dated 02.09.2021.

7) C,M.A. No.3414 of 2013 dated 25.02.2021

8) C.M.A. No.1893 of 2020 dated 19.07.2023.

The learned counsel for the appellant thus submitted that the appellant

Insurance Company has proved the violation of policy conditions by the

owner of the vehicle and therefore, the Insurance Company is not liable to pay

any amount.

4. On the other hand, the learned counsel for the first

respondent/claimant contended that as per the judgment of the Hon'ble

Supreme Court as well as this Court, the Insurance Company is liable to pay

the compensation at the first instance and then recover the same from the

owner, in the case of violation of policy conditions. In support of his

contentions, the learned counsel for the first respondent relied on the

following judgments.

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1) 2016 SCC Online Mad 16691(V. Karuppiah (died) and others vs.

B.Muthulakshmi and Oriental Insurance Co. Ltd.,)

2) 2017 SCC Online Mad 34617 (New India Assurance Company Limited

represented by its Branch Manager vs. Lakshmi Ammal and another).

3) C.M.A. No.96 of 2013 dated 24.03.2022.

5. Despite notice, the second respondent/owner f the vehicle failed

to appear before this Court.

6. It is seen that the deceased travelled as an unauthorised passenger

in a goods vehicle, which is in violation of policy conditions. However, the

Tribunal has held that the Insurance Company is liable to pay the

compensation at the first instance and then recover the same from the owner

of the vehicle.

7. The Full Bench of this Court in UNITED INDIA INSURANCE

COMPANY VS. NAGAMMAL AND OTHERS reported in 2009 (1) CTC 2

has held as follows:

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“31.Thus from an analysis of the statutory provisions as

explained by the Supreme Court in various decisions rendered

from time to time, the following pictures emerges:

(i)The Insurance Policy is required to cover the liability

envisaged under Section 147, but wider risk can always be

undertaken.

(ii)Section 149 envisages the defences which are open to the

Insurance Company. Where the Insurance Company is not

successful in its defence, obviously it is required to satisfy the

decree and the award. Where it is successful in its defence, it

may yet be required to pay the amount to the claimant and

thereafter recover the same from the owner under such

circumstance envisaged and enumerated in Section 149(4) and

Section 149(5).

(iii)Under Section 147 the Insurance Company is not statutorily

required to cover the liability in respect of a passenger in a

goods vehicle unless such passenger is the owner or agent of the

owner of the goods accompanying such goods in the concerned

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goods vehicle.

(iv)Since there is no statutory requirement to cover the liability

in respect of a passenger in a goods vehicle, the principle of

“pay and recover”, as statutorily recognised in Section 149(4)

and Section 149(5), is not applicable ipso facto to such cases

and, therefore, ordinarily the Court is not expected to issue such

a direction to the Insurance Company to pay to the claimant and

thereafter recover from the owner.

(v)Where, by relying upon the decision of the Supreme Court in

Satpal Singh's case, either expressly or even by implication,

there has been a direction by the Trial Court to the Insurance

Company to pay, the Appellate Court is obviously required to

consider as to whether such direction should be set aside in its

entirety and the liability should be fastened only on the driver

and the owner or whether the Insurance Company should be

directed to comply with the direction regarding payment to the

claimant and recover thereafter from the owner.

(vi)No such direction can be issued by any Trial Court to the

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Insurance Company to pay and recover relating to liability in

respect of a passenger travelling in a goods vehicle after the

decision in Baljit Kaur's case merely because the date of

accident was before such decision. The date of the accident is

immaterial. Since the law has been specifically clarified, no

Trial Court is expected to decide contrary to such decision.

(vii)Where, however, the matter has already been decided by the

Trial Court before the decision in Baljit Kaur's case. It would be

in the discretion of the Appellate Court, depending upon the

facts and circumstances of the case, whether the doctrine of

“pay and recover” should be applied or as to whether the

claimant would be left to recover the amount from the person

liable i.e., the driver or the owner, as the case may be.“

8. In THE MANAGER, IFFCO – TOKYO GENERAL

INSURANCE CO. LTD., V.G.RAMESH, (2012 (1) TN MAC 820) this Court

referring Asha Rani's case and other judgments, has held as follows:

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“......the question as to whether the Insurance Company is statutorily liable to cover the liability in respect of risk of gratuitous passenger, is clearly laid down by Hon'ble Apex Court in Asha Rani's case by reversing the earlier decision in Saptal Singh's case and further question as to whether the doctrine of “Pay and Recover” theory, which is applied till then, by directing the Insurer to satisfy the award and to recover the amount from the insured even though the Insurer was not statutorily required to cover the liability in respect of such passengers carried in goods vehicle, is clarified in Full Bench judgment of our High Court. As per which, after the decision of Baljit Kaur's case rendered on 06.01.2004 no such direction can be issued by the Trial Court to the Insurance Company on the principle of “Pay and Recover” relating to the liability in respect of risk of gratuitous passengers travelling in a goods vehicle and no Trial Court is expected to decide contrary to the decision made thereon.”

9. Coming to the present case on hand, the deceased travelled in

mudguard of the Tractor, which cannot be used for carrying passengers as

transport vehicle. Therefore, owner of the vehicle, respondent No.2 herein is

liable to pay compensation to the first respondent/claimant.

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10. In view of the dictum laid down by the Hon'ble Supreme Court

and taking note of the judgments of this Court, the question involved in the

present appeal is answered in favour of the appellant/Insurance Company.

11. In the result, the appeal stands allowed only in respect of the

liability fastened by the tribunal against the appellant/Insurance Company to

pay compensation. The quantum of compensation awarded by the tribunal is

confirmed. There will be an award only against the owner of the vehicle viz.,