The central legal point established in the judgment is that the liability of an insurance company under a 'liability only policy' and the application of the doctrine of 'pay and recovery' depend on the nature of the insurance coverage and the status of the claimant.

JUDGMENT :

(Prayer: Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, 1988, against the award made in M.C.O.P.No.164 of 2013, dated 21.08.2015, on the file of the Motor Accidents Claims Tribunal cum IV Additional Sub Judge, Madurai.)

1. The Civil Miscellaneous Appeal has been filed under Section 173 of Motor Vehicle Act, 1988, challenging the award made in M.C.O.P.No.164 of 2013, dated 21.08.2015, on the file of the Motor Accidents Claims Tribunal cum IV Additional Sub Judge, Madurai.

2. The Appellant/Insurance Company, which was made liable along with the owner of Auto Rickshaw to pay compensation of Rs.1,77,000/- with interest at 7.5% per annum to the claimant, who was a passenger in the auto Rickshaw, for the injury suffered by him, consequent to an accident occurred on 09.03.2012, involving the auto Rickshaw bearing Registration No.TN 67 R 5349, questioned the liability mulcted on it and more particularly, the application of doctrine of 'pay and recovery' adopted by the Tribunal.

3. The Appellant/Insurance Company has neither challenged the finding of the Tribunal that the auto Rickshaw driver was responsible for the accident nor the quantum arrived at by the Tribunal. The main defence of the appellant/insurer is that the Auto was only covered by an Act Policy that the injured/claimant was only a gratuitous passenger and that therefore, the appellant is in noway liable for the claim and the decision of the Tribunal fastening liability on it by invoking the doctrine of 'pay and recovery' is improper and is not in accordance with law. It is their further case that the auto driver was not possessing a valid driving license on the date of accident and on that ground also, they are not liable.

4. The only point that arises for consideration is Whether the Tribunal erred in applying and adopting the doctrine of 'pay and recovery' despite production of ample materials to show that the policy issued is an Act Policy, that the claimant was a gratuitous passenger in the said vehicle and that therefore, the Insurance Company is not at all liable for the claim?

5. Before entering into further discussion, it is necessary to refer the Insurance Policy under Ex.R.1, wherein, it has been specifically shown 'liability only policy' and it is further evident from Ex.R.1 that PA coverage for owner and driver was also taken. As rightly contended by the learned counsel for the Appellant, Ex.R.1 is not a 'comprehensive policy', and it is only 'liability only policy', which covers only third party risk. Before the Tribunal, the claimant had taken a stand that he was only a third party so far as the Insurance Company is concerned and that therefore, they are liable to pay compensation.

6. At this juncture, it is necessary to refer the decisions relied on by the learned counsel for the Appellant;

(i) 2015(1) TN MAC 19 (DB): New India Assurance Company Limited Vs. S.Krishnasamy and others:

“18. In view of the rulings cited above, we are of the considered view that since, the Policy is only an Act Policy issued by the Appellant-Insurance Company to the Insurer and the deceased Palanisamy was only an occupant of the Private Car, cannot be considered as 'Third Party' of the vehicle and the Policy is covered risks to the third party alone. Hence, the deceased was only the occupant of the Private Car and the said Policy will not cover the risk of the deceased. The Doctrine of Pay and Recovery cannot be applied to the facts of the case, since the Appellant- Insurance Company is not liable to pay the compensation. Hence, pay amount to the Claimants and then recover the same from the owner of the vehicle involved in the accident cannot be ordered and in view of the above, the rulings cited on the side of the Respondents 1 to 5/Claimants are not applicable to the facts of the present case.

19. Hence, we are of the considered view that since the Act Policy did not cover the risk, the Insurance Company is not liable to pay any Compensation to