Insurers are statutorily obligated to satisfy judgments for third-party claims, even if policy conditions are violated, following amendments to the Motor Vehicles Act.

JUDGMENT :

1. The common question of law arising for consideration in all these Civil Miscellaneous Appeals is, Whether Motor Accident Claims Tribunals are empowered to order pay and recovery against insurers in case of violation of policy conditions after deletion of proviso to old Section 149 (4) and 149 (5) [now renumbered as Section 150 ] of MOTOR VEHICLES ACT , 1988, by Motor Vehicles Amendment Act (Central Act 32 of 2019), with effect from 01.04.2022?

2. These appeals are either filed challenging the order passed by the Motor Accident Claims Tribunals ordering pay and recovery against the Insurance Companies in view of violation of policy conditions notwithstanding the above said amendment or exoneration of Insurance Companies by the Tribunals on the ground that proviso to old Section 149 (4) was deleted by the Amending Act in New Section 150 (4).

3. Heard the arguments of Mr.J.Michael Visuvasam, learned counsel appearing for the Appellant/Insurance Company in C.M.A.No.554 of 2025, Mr.U.Chithambaram, learned counsel appearing for the appellant/claimant in C.M.A.No.569 of 2025, M/s.Surekha N.B., learned counsel appearing for the Appellant/Insurance Company in C.M.A.No.309 of 2025, Mr.Siva Kollapan.B, learned counsel appearing for the Appellant/Insurance Company in C.M.A.No.671 of 2025 and C.M.A.No.934 of 2024 and Mr.Vinod.K, learned counsel appearing for the Appellant/Insurance Company in C.M.A.No.755 of 2025 and that of Mr.T.Gobinath, learned counsel appearing for the 1^st respondent in C.M.A.No.934 of 2024 and Mr.Siva Kollapan.B, learned counsel appearing for the 2^nd Respondent/Insurance Company in C.M.A.No.569 of 2025.

4. The learned counsel appearing for the Appellant/Insurance Company in C.M.A.Nos.554, 309, 755 and 671 of 2025 and C.M.A.No.934 of 2024 and the learned counsel appearing for the 2^nd respondent/Insurance Company in C.M.A.No.569 of 2025 made their submissions against the pay and recovery order passed by the Tribunals. The learned counsel for appellant/claimant in C.M.A.No.569 of 2025 and other Members of the Bar present in the Court, made their submissions in favour of pay and recovery order.

5. The learned counsel appearing for the Insurance Companies in respective appeals submitted that proviso to Section 149 Sub-Section (4) of un-amended MOTOR VEHICLES ACT , 1988 enabled the Tribunals to order pay and recovery in case of violation of policy conditions and the said proviso was deleted by Motor Vehicles Amendment Act, 2019 with effect from 01.04.2022 and hence, in the absence of enabling provision, the Tribunals are not entitled to order pay and recovery. In other words, it is their submission that once defence available to the insurer under Old Section 149 (2) [New Section 150 (2)] is pleaded and established, the insurer is absolved of its liability from making any payment either to the third party or to the insured. The learned counsel further submitted that by virtue of deletion of proviso to Section 149 Sub-Section (4) and Section 149 Sub-Section (5), the law laid down by the Apex Court in National Insurance Co. Ltd. vs. Swaran Singh and others , (2004) 3 SCC 297, is no longer a good law.