CMA(MD)/1267/2017 of M/S. UNITED INDIA INSURANCE Vs R.SHANMUGAKANI on 2 November 2026

COMMON JUDGMENT

The second respondent United India Insurance Company in M.C.O.P.Nos.149, 150 and 151 of 2008 on the file of the Motor Accidents Claims Tribunal-cum-Subordinate Judge, Kulithalai have filed these present Civil Miscellaneous Appeals, namely C.M.A.(MD).Nos.1266, 1267 and 1268 of 2017, challenging the common award dated 09.01.2012 passed in the said claim petitions. Since the issue involved in all the appeals is identical, they are disposed of by this common judgment.

2. Facts of case:

2.1. The minor claimants in all the three claim petitions pleaded that, on 31.01.2007 at about 04.00 pm., they were travelling in the lorry bearing Registration No.TN-04-Y-2282 belonged to the second respondent herein which was insured with the appellant-Insurance Company. The said lorry was proceeding from Balasamudram towards Srinivasanallur. It is alleged that the driver of the said lorry drove the vehicle in a rash and negligent manner and, in the course of the journey, dashed against the oncoming lorry bearing Registration No.TAS-7045. In the said accident, all the three minor claimants sustained injuries and, therefore, filed separate claim petitions claiming compensation for the injuries sustained by them.

2.2. The appellant-Insurance Company filed its counter disputing its liability to pay compensation. According to the Insurance Company, all the three minor claimants had travelled as gratuitous passengers in the goods vehicle and, therefore, there was a violation of the policy conditions. Hence, the Insurance Company contended that it was not liable to indemnify the owner.

2.3. The insurer of the other vehicle bearing Registration No.TAS-7045 also contested the claim petitions. It was contended that the accident had occurred solely due to the rash and negligent driving of the driver of the lorry bearing Registration No.TN-04-Y-2282, in which the claimants were travelling, and that the driver of the vehicle insured with the said respondent was not responsible for the accident. The said respondent also disputed the quantum of compensation claimed by the injured

claimants.

2.4. During the course of trial, (i) on the side of the claimants P.Ws.1 to 3 were examined and Exs.P1 to P12 were marked. On the side of the respondents, R.Ws.1 to 3 were examined and Exs.R1 and R3 were marked in M.C.O.P.No.149 of 2008. (ii) On the side of the claimants, P.W.1 and P.W.2 were examined and Ex.P1 to Ex.P10 were marked. On the side of the respondents R.W.1 to R.W.3 were examined and Ex.R1 to Ex.R3 were marked in M.C.O.P.No.150 of 2008. (iii) On the side of the claimants, P.W.1 to P.w.3 were examined and Ex.P1 to Ex.P.13 were marked. On the side of the respondents R.W.1 to R.W.3 were examined and Ex.R1 to Ex.R3 were marked in M.C.O.P.No.151 of 2008.

3. Findings of the Tribunal:

3.1. Upon consideration of the oral and documentary evidence, the Tribunal found that the accident had occurred due to the rash and negligent driving of the driver of the lorry bearing Registration No.TN-04-Y-2282, which was insured with the appellant-Insurance Company. The Tribunal further found that the claimants had travelled in the goods vehicle as gratuitous passengers and that there was a violation of the policy conditions. Nevertheless, the Tribunal directed the appellant-Insurance Company to pay the compensation awarded to the claimants in the first instance and thereafter recover the same from the owner of the vehicle. The award passed by the Tribunal is as follows:

3.1.1. M.C.O.P.No.149 of 2008

Sl.N o Heads Amount in Rs.

For future medical expenses 30,000/-

For Medical Expenses 6,620/-

Transportation and Extra Nourishment 3,000/-

Pain and sufferings and discomfort 15,000/- Total 54,620/-

3.1.2. M.C.O.P.No.150 of 2008 Sl.N o Heads Amount in Rs.

For Medical Expenses 8,872/-

Transportation and Extra Nourishment 3,000/-

Pain and sufferings and discomfort 10,000/- Total 21,872/-

3.1.3. M.C.O.P.No.151 of 2008

Sl.N o Heads Amount in Rs.

20% Permanent Disability 40,000/-

Medical Expenses 54,190/-

Transportation and extra nourishment 20,000/-

Pain and sufferings and for discomfort 20,000/- Total 1,34,190/-

3.2. Aggrieved by the said direction, the Insurance Company has preferred the present appeals.

4. Submissions of the learned counsel appearing for the appellant/ United India Insurance company:

4.1. The learned counsel appearing for the appellant-Insurance Company would submit that, once the Tribunal had categorically found that the claimants were gratuitous passengers travelling in a goods vehicle, the Insurance Company could not have been directed to satisfy the award. According to the learned counsel, the finding regarding violation of the policy conditions necessarily disentitled the claimants from seeking indemnification from the Insurance Company. Reliance was placed upon the judgment cited on behalf of the appellant. The learned counsel therefore sought interference with the direction for pay and recovery.

5. Submissions of the learned counsel appearing for the fourth respondent/New India Assurance Company:

5.1. Per contra, the learned counsel appearing for the 4th respondent would

submit that the Tribunal had rightly directed the United India Insurance Company to pay the compensation amount in the first instance and thereafter recover the same from the owner of the offending vehicle. It is submitted that the issue is no longer res integra and has already been considered by this Court in C.M.A.(MD).No.771 of 2023. It is further submitted that the said decision has taken note of the subsequent judgment of the Hon'ble Supreme Court reported in 2026 1 TN MAC 680 (SC) and has affirmed the principle of pay and recovery. Hence, according to the learned counsel, no interference is warranted.

6. This Court considered the rival submissions and perused the materials available on record.

7. The following point arises for consideration:

7.1. Whether the Tribunal was justified in directing the appellant-Insurance Company to pay the compensation to the injured claimants in the first instance and thereafter recover the same from the owner, despite recording a finding that the claimants had travelled as gratuitous passengers in the goods vehicle?

8. Discussion and findings:

8.1. The Tribunal has recorded a specific finding that the claimants travelled in the goods vehicle as gratuitous passengers and that there was a violation of the policy conditions. The appellant-Insurance Company does not dispute the said finding. The limited question, therefore, is whether, the Tribunal was justified in

issuing a direction for pay and recovery, even after observation that the claimants travelled as gratuitous passengers.

8.2. A similar issue came up for consideration before this Court in C.M.A. (MD).No.771 of 2023. In the said case, this Court has elaborately considered the principles governing the direction for pay and recovery, after taking note of the subsequent judgment of the Hon'ble Supreme Court reported in 2026 1 TN MAC 680 (SC). The relevant discussion contained in paragraphs 8.1 and 8.2 of the said judgment is extracted below: “8.1. This issue was authoritatively considered by the Constitution Bench of the Hon'ble Supreme Court in New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223, wherein it was held that an insurer is not statutorily liable to indemnify the owner in respect of gratuitous passengers travelling in a goods vehicle. The said principle was reaffirmed in National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC 1. However, the law did not remain the same thereafter. The subsequent decisions of the Hon'ble Supreme Court have repeatedly invoked the doctrine of "pay and recover" in appropriate cases, notwithstanding the absence of statutory liability, with a view to protecting the interests of innocent third-party victims. The principle has been applied in several decisions, including National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297; Mangla Ram v. Oriental Insurance Co. Ltd., (2018) 5 SCC 656; Shamanna v. Oriental Insurance Co. Ltd., (2018) 9 SCC 650; and other subsequent judgments. The learned counsel for the appellant, however, relied heavily upon Baljit Kaur case and submitted that the Tribunal committed an error in invoking the doctrine of "pay and recover", the same cannot be accepted.

8.2. This Court finds considerable force in the submissions advanced on behalf of the claimants that in view of the latest judgment of the Hon'ble Supreme Court in the case of

Kaminiben and Others -vs- Oriental Insurance Co.Ltd., and Ors reported in 2026 (1) TN MAC 680 (SC), the Hon'ble Supreme Court has once again considered the correctness of applying the doctrine of "pay and recover" in such cases by framing the specific question whether the High Court was justified in reversing the finding of Motor Accident Claims Tribunal which had directed the insurance company to pay the amount of compensation to the claimants and thereafter recover the same from the owner of the vehicle and has affirmed the exercise of such power by the Motor Accident Claims Tribunals and set aside the judgment of the High Court after elaborate discussion and following the decision of the “Saju P.Paul” and “Manuara Khatun” and distinguishing the “Amudhavalli” case. Further the reference was disposed of by the Hon'ble Supreme Court with observation to consider the cases on case to case basis. When the Hon'ble Supreme Court has reiterated the applicability of the “pay and recover” doctrine in the case of Kaminiben and Others -vs- Oriental Insurance Co.Ltd., and Ors reported in 2026 (1) TN MAC 680 (SC), this Court, being bound under Article 141 of the Constitution of India, has no jurisdiction to take a contrary view by placing reliance exclusively upon Baljit Kaur, ignoring the subsequent law holding the field. Judicial discipline demands that this Court has to follow the law as explained in the later binding precedents of the Hon'ble Supreme Court on the basis of binding nature of article 141 of Constitution of India, which says that the law declared by the Hon'ble Supreme Court to be binding on all Courts. Consequently, the direction issued by the learned Tribunal directing the insurer to satisfy the award in the first instance and thereafter recover the amount from the owner of the offending vehicle is fully in accordance with the settled legal position and calls for no interference. Accordingly, the contention advanced by the learned counsel for the appellant- Insurance Company is rejected.

8.3. The principle laid down in the said decision squarely applies to the facts of the present case. The mere fact that the Tribunal has recorded a finding

regarding violation of the policy conditions does not, in the facts of the present case, warrant interference against the direction requiring the Insurance Company to satisfy the award in the first instance and thereafter recover the amount from the owner of the offending vehicle.

8.4. In view of the above legal position and following the decision of this Court in C.M.A.(MD).No.771 of 2023, this Court finds no reason to interfere with the direction issued by the Tribunal for pay and recovery.

8.5. The appellant-Insurance Company has not challenged the quantum of compensation awarded by the Tribunal. Therefore, there is no necessity to examine the quantum of compensation in these appeals.

8.6. Accordingly, the direction of the Tribunal for pay and recovery is hereby confirmed. The appellant-Insurance Company shall satisfy the respective awards passed in M.C.O.P.Nos.149, 150 and 151 of 2008 and shall thereafter be entitled to recover the amounts so paid from the owner of the vehicle, in accordance with law.

9. Result:

9.1. In the result, C.M.A.(MD).Nos.1266, 1267 and 1268 of 2017 are dismissed.

9.2. The common award dated 09.01.2012 passed in M.C.O.P. Nos.149, 150 and 151 of 2008 on the file of the Motor Accident Claims Tribunal, Subordinate

Court, Kulithalai are hereby confirmed including the direction for pay and recovery.

9.3. The appellant-Insurance Company is directed to deposit the respective award amounts, together with accrued interest, within a period of eight weeks from the date of receipt of a copy of this judgment, after adjusting the amount, if any, already deposited.

9.4. On such deposit, the respective claimants are entitled to withdraw the award amounts in accordance with law and the procedure prescribed by the Tribunal. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed. 02-11-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No sbn To

1. The Motor Accident Claims Tribunal Subordinate Court, Kulithalai, Karur District.

2. The Section Officer, VR Section, Madurai Bench of Madras High Court, Madurai.

K.K.RAMAKRISHNAN.,J. sbn CMA(MD) No.1267 of 2017, CMA(MD) No.1266 of 2017 and CMA(MD) No.1268 of 2017 02-11-2026