CMA(MD)/86/2015 of S.KANDAVEL Vs RAMESH on 2 November 2026

JUDGMENT

The claimant in M.C.O.P. No.1273 of 2005, on the file of the Motor

Accident Claims Tribunal/Chief Judicial Magistrate, Madurai, has filed the present Civil Miscellaneous Appeal in C.M.A.(MD).No.86 of 2015, challenging the award dated 30.04.2011 passed in M.C.O.P.No.1273 of 2005, on the grounds that the learned Tribunal failed to apply the principle of pay and recovery and also failed to award adequate compensation.

2. Facts of the case:

2.1. According to the claimant, on 13.04.2004 at about 12.15 p.m., after completing their work, he and another auditor, namely, Balamurali, travelled in the auto bearing Registration No. TSH 2761, belonging to the first respondent in the claim petition. When the said auto reached Teynampet Signal, the driver suddenly applied the brakes, as a result of which the auto capsized. Due to the accident, the claimant sustained a grievous injury to his left leg, resulting in substantial damage. He initially took treatment at the Royapettah Government Hospital and thereafter continued his treatment at a private hospital.

2.2. At the time of the accident, the claimant was aged about 24 years and was employed as an Assistant Auditor. Due to the injuries sustained in the accident, he was unable to pursue his avocation in the same manner as he had been doing prior to the accident and was required to depend upon the assistance of others. Therefore, he filed the claim petition seeking compensation of Rs.3,00,000/-.

2.3. The Insurance Company filed a counter denying the manner of the

accident and the negligence attributed to the driver of the auto. The Insurance Company also disputed its liability on the ground of violation of the policy conditions. According to the Insurance Company, the vehicle had been transferred without intimation to the Insurance Company and its nature of use had also been changed from commercial use to private/own use without informing the Insurance Company. Therefore, the Insurance Company contended that it was not liable to pay the compensation.

3. Findings of the Tribunal:

3.1. The learned Tribunal, after considering the entire evidence available on record, found that there was a violation of the policy conditions and consequently held that the owner of the vehicle alone was liable to pay the compensation and that the Insurance Company was not liable. However, the Tribunal also found that the policy was in force on the date of the accident and awarded a sum of Rs.2,00,000/- as compensation, together with interest at the rate of 7.5% per annum under the following heads: Sl.No. Heads Amount in Rs.

Permanent Disability (1500 X 46) 69,000/-

Transportation 5,000/-

Nutrition 10,000/-

Damages to cloths and articles 2,500/-

Medical Expenses 29,940/-

Pain and Suffering 15,000/-

Continuous permanent disability 10,000/-

Loss of earning capacity 20,000/-

Loss of income during the treatment period 36,000/- Total 1,97,440/- Rounded Off 2,00,000/- 3.2.Challenging the said award, the claimant has filed the present appeal.

4. Submissions of the learned counsel appearing for the appellant/claimant:

4.1. The learned counsel appearing for the claimant would submit that, even assuming that there was a violation on the part of the owner in not intimating the transfer of the vehicle and the change in its usage, there was no material of breach of the policy conditions so as to completely exonerate the Insurance Company from its liability towards a third-party claimant. Therefore, the learned Tribunal ought to have directed the Insurance Company to pay the compensation to

the claimant and thereafter recover the same from the owner by applying the principle of pay and recovery.

4.2. The learned counsel would further submit that the compensation awarded by the Tribunal is also inadequate. The claimant had sustained serious injuries to his left leg at a young age of about 24 years and, even thereafter, he was unable to carry on his avocation independently and he need the support of others. Therefore, he seeks enhancement of the compensation.

5. Submissions of the learned counsel appearing for the second respondent/Insurance company:

5.1. Per contra, the learned counsel appearing for the Insurance Company would submit that upon consideration of the entire materials available on record, the learned Tribunal Judge had rightly observed that the transfer of the vehicle had not been intimated to the Insurance Company. It was further submitted that no material had been produced to establish that the change in the nature of use of the vehicle from commercial use to private/own use, had been intimated to or approved by the Insurance Company. Therefore, the learned Tribunal Judge had rightly exonerated the Insurance Company from its liability. It was further submitted that the compensation awarded by the learned Tribunal judge was just and reasonable and did not warrant any enhancement.

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

7. The points for determination are:

(i) Whether the Insurance Company is liable to pay the compensation awarded to the claimant, notwithstanding the alleged violation of the policy conditions?

(ii) Whether the claimant is entitled to enhancement of compensation?

8. Discussion and findings:

8.1. The principal contention of the Insurance Company, which was also accepted by the learned Tribunal, is that the owner of the vehicle had not intimated the Insurance Company regarding the transfer of the vehicle and had also not intimated the change in the nature of its use from commercial use to private/own use.

8.2. This Court carefully perused the entire records. From the materials available on record, it is evident that the vehicle was transferred from its original owner to the first respondent. Thereafter, its nature of use was also changed from commercial use to private/own use as per the records of the Transport Department. It is also not in dispute that the insurance policy was in force on the date of the

accident.

8.3. In the above circumstances, even assuming that the owner had failed to intimate the Insurance Company regarding the transfer of the vehicle and the change in its usage, such violation cannot be taken advantage by the Insurance company to deny the legitimate claim of a third-party victim. The claimant herein is admittedly a third party to the insurance contract.

8.4. It is a well-settled principle that, insofar as third-party liability is concerned, the insurance coverage travels along with the vehicle upon its transfer, subject to the provisions of law. Any dispute relating to non-intimation of the transfer of the vehicle or violation of the policy conditions is essentially a matter between the owner and the Insurance Company. Such a dispute cannot be permitted to prejudice the rights of an innocent third-party victim.

8.5. A third-party claimant, who has sustained injuries in an accident involving the insured vehicle, cannot be compelled to face further proceedings against the owner merely because of a violation committed by the owner in relation to the insurance policy. The protection available to a third-party victim under the statutory insurance scheme cannot be defeated by such inter-se disputes between the owner and the Insurance Company.

8.6. Therefore, this Court finds considerable force in the contention raised by the learned counsel appearing for the claimant. Even assuming that there was a

violation of the policy conditions on the part of the owner, the appropriate course would be to direct the Insurance Company to satisfy the award in favour of the third-party claimant and thereafter recover the amount from the owner in accordance with law.

8.7. Accordingly, the Insurance Company is liable to pay the compensation awarded to the claimant in the first instance, with liberty to recover the same from the owner of the offending vehicle by applying the principle of pay and recovery.

9. Discussion on quantum:

9.1. So far as the quantum of compensation is concerned, this Court has to examine the nature of the injuries sustained by the claimant, the disability suffered by him, his age and the impact of the injuries on his avocation. The claimant was aged about 24 years at the time of the accident and was working as an Assistant Auditor. The injuries sustained by him, particularly the injury to his left leg, had affected his ability to carry on his avocation in the same way as before.

9.2. The compensation awarded by the learned Tribunal is therefore required to be reconsidered in the light of the evidence available on record. The claimant would be entitled to just and reasonable compensation under the various heads in accordance with law.

9.3. So far as the quantum of compensation is concerned, the injured

claimant had sustained multiple fractures in his left leg and had undergone several surgeries at both Government and private hospitals. He had also undergone a skin- grafting procedure. Having regard to the nature and severity of the injuries, the number of surgeries undergone and the treatment received by him, this Court is of the view that the sum of Rs.15,000/- awarded by the learned Tribunal under the head of pain and suffering is inadequate. Further, considering number of surgeries undergone, future medical expenditure is required to be granted.

9.4. Therefore, this Court is inclined to enhance the same to Rs.50,000/-, under the head of pain and suffering and to grant Rs.15,000/- as future medical expenditure.

9.5. Insofar as the compensation awarded under the other heads is concerned, this Court finds no ground for further enhancement and the same is confirmed.

10. Result:

10.1. Accordingly, the Civil Miscellaneous Appeal is partly allowed.

10.2. Accordingly, the compensation awarded by the learned Tribunal in M.C.O.P.No.1273 of 2005 on the file of the Motor Accident Claims Tribunal/Chief Judicial Magistrate, Madurai dated 30.04.2011 is hereby modified and enhanced from Rs.2,00,000/- to Rs.2,50,000/-, together with interest at the rate of 7.5% per annum from the date of filing of the claim petition till the date of deposit.

10.3. The Insurance Company is directed to deposit the entire modified award amount, together with accrued interest, before the learned Tribunal within a period of six weeks from the date of receipt of a copy of this judgment.

10.4. Upon such deposit, the claimant is entitled to withdraw the amount together with accrued interest in accordance with law.

10.5. However, the Insurance Company is at liberty to recover the amount so paid from the owner of the vehicle by initiating appropriate proceedings, in accordance with the principle of pay and recovery. 02-11-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No sbn To

1. The Chief Judicial Magistrate, Motor Accident Claims Tribunal Madurai.

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

K.K.RAMAKRISHNAN, J. sbn CMA(MD) No. 86 of 2015 02-11-2026