CMA(MD)/441/2014 of THE BRANCH MANAGER Vs PAKKIYARAJ on 2 November 2026

JUDGMENT

The second respondent in M.C.O.P.No.243 of 2002 on the file of the Motor Accidents Claims Tribunal-cum-Additional District Judge has filed the present C.M.A.(MD).No.441 of 2023, challenging the award dated 10.08.2007 passed in M.C.O.P.No.243 of 2002.

2. Facts of the case:

2.1. The claimant in the said M.C.O.P., along with several other persons, travelled in the mini lorry bearing Registration No.TN-29-B-1823, which was insured with the appellant-Insurance Company. It is stated that, due to the rash and negligent driving of the driver of the said mini lorry, the vehicle capsized. At the time of the accident, more than 20 persons were travelling in the vehicle and several of them sustained injuries. The injured persons consequently filed separate claim petitions before the Tribunal seeking compensation for the injuries sustained by them.

2.2. The appellant-Insurance Company contested the claim petitions

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C.M.A.(MD).No.441 of 2014 contending that the claimants were gratuitous passengers travelling in a goods vehicle and that the risk of such passengers was not covered under the policy. It was further contended that the claimants had travelled in the vehicle as persons who had paid for their journey and, therefore, the Insurance Company was not liable to indemnify the owner in respect of such passengers. The Insurance Company also disputed its liability on the ground of violation of the policy conditions.

2.3. Before the Tribunal, the respective claimants adduced oral and documentary evidence in support of their claims. Exs.P1 to P26 were marked on the side of the claimants. On the side of the respondents, R.W.1 was examined and Ex.R1 was marked.

3. Findings of the Tribunal:

3.1. Upon consideration of the evidence available on record, the Tribunal found that the accident had occurred due to the rash and negligent driving of the driver of the insured mini lorry. The Tribunal also found that the claimants had travelled in the vehicle as gratuitous passengers. Nevertheless, taking note of the prevailing legal position, the Tribunal directed the Insurance Company to satisfy the award in the first instance and thereafter recover the amount from the owner of the vehicle and awarded a sum of Rs.8,000/- as a compensation at the rate of 7.5% interest.

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C.M.A.(MD).No.441 of 2014

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

4. Submission of the learned counsel appearing for the appellant:

4.1. The learned counsel appearing for the appellant-Insurance Company would submit that, once the Tribunal had recorded a finding that the claimants were gratuitous passengers in a goods vehicle, the Insurance Company was not liable to indemnify the owner. According to the learned counsel, the Tribunal ought to have exonerated the Insurance Company and ought not to have issued a direction for pay and recovery. Reliance was placed upon the judgment cited on behalf of the appellant.

5. Submissions of the learned counsel appearing for the respondent:

5.1. Per contra, the learned counsel appearing for the claimant would submit that the Tribunal passed the award on 10.08.2007, having regard to the legal position prevailing at the relevant point of time, and rightly directed pay and recovery. It is further submitted that the question relating to the power of the Court to direct pay and recovery, even in cases involving violation of policy conditions, has subsequently been considered elaborately by this Court in C.M.A.(MD) No.771 of 2023. Therefore, the direction issued by the Tribunal does not warrant interference.

6. This Court has considered the rival submissions and perused the materials

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C.M.A.(MD).No.441 of 2014 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 claimant in the first instance and thereafter recover the same from the owner, despite recording a finding that the claimant had travelled as a gratuitous passenger in the goods vehicle?

8. Discussion and findings:

8.1. The evidence available on record establishes that the claimant was travelling in the insured mini lorry along with several other persons and that the vehicle capsized due to the negligence of its driver. The Tribunal has specifically found that the occupants were gratuitous passengers in the goods vehicle.

8.2. Therefore, this Court need not decide the issue whether the claimant was a gratuitous passenger. The said finding has already been recorded by the Tribunal. The question is confined to the legal consequence of such finding and, in particular, whether the Tribunal was justified in directing the Insurance Company to satisfy the award in the first instance and thereafter recover the amount from the owner.

8.3. In this regard, a similar issue has already been considered by this Court

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C.M.A.(MD).No.441 of 2014 in C.M.A.(MD).No.771 of 2023. The said decision has elaborately considered the principles governing the direction for pay and recovery, including the subsequent decision of the Hon'ble Supreme Court reported in 2026 1 TN MAC 680 [citation to be verified].

8.4. The relevant discussion contained in paragraphs 8.1 and 8.2 of the judgment in C.M.A.(MD) No.771 of 2023 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

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C.M.A.(MD).No.441 of 2014 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.”

8.5. The principle laid down in the said decision applies to the facts of the present case. The finding that the claimant was a gratuitous passenger and that there was a violation of the policy condition does not, in the facts of the present case, require the claimants to be denied the benefit of the award as against the insurer with direction to pay and recover from the owner of the vehicle. The direction for pay and recovery issued by the Tribunal is consistent with the principle subsequently

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C.M.A.(MD).No.441 of 2014 recognised in the decisions referred to above.

8.6. This Court therefore finds no ground to interfere with the direction issued by the Tribunal requiring the appellant-Insurance Company to satisfy the award in the first instance and thereafter recover the amount from the owner of the vehicle. In view of the above discussion, the challenge made by the appellant- Insurance Company fails.

9. Result:

9.1. Accordingly, C.M.A.(MD).No.441 of 2023 is dismissed. The award dated 10.08.2007 passed in M.C.O.P.No.243 of 2002 by the Motor Accidents Claims Tribunal-cum-Additional District Judge is confirmed insofar as the direction for pay and recovery is concerned. The appellant-Insurance Company is directed to deposit the entire award amount, together with accrued interest, after adjusting the amount, if any, already deposited, within a period of eight weeks from the date of receipt of a copy of this judgment. On such deposit, the claimant is entitled to withdraw the amount in accordance with law and the procedure prescribed by the Tribunal. The Insurance Company shall thereafter be entitled to recover the amount so paid from the owner of the insured vehicle, in accordance with law. There shall be no order as to costs.

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C.M.A.(MD).No.441 of 2014 02-11-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No sbn

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C.M.A.(MD).No.441 of 2014 To

1. The Motor Accident Claims Tribunal Additional District Court, Pudukkottai.

2. The Section Officer, V.R.Section, Madurai Bench of Madras High Court, Madruai.

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C.M.A.(MD).No.441 of 2014 K.K.RAMAKRISHNAN, J. sbn CMA(MD)No.441 of 2014 02-11-2026

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