Insurers remain liable to pay compensation to victims immediately despite legislative amendments, reaffirming the 'PAY AND RECOVER' principle to ensure protection of third-party interests under the Motor Vehicles Act.

JUDGMENT :

EFFECT OF MOTOR VEHICLES (AMENDMENT) ACT, 2019 (32 of 2019) ON INSURER’S RIGHT TO RECOVER COMPENSATION FROM OWNER

1. Heard Shri Aditya Singh Parihar, learned counsel for the appellant-Insurance Company, Shri S.D. Ojha, and Shri Shreesh Srivastava, learned counsel for the claimant-respondents and Shri Abhinav Trivedi as well as Shri Adarsh Kumar, learned counsel for vehicle owner and driver in all the connected appeals.

2. All these appeals involve common questions of fact and law and, hence, are being decided by a common judgment. For the sake of convenience, First Appeal From Order No. 1780 of 2024 shall be treated as leading case.

3. The present appeal at the instance of Insurance Company challenges the award dated 01.06.2024, whereby the Presiding Officer, Motor Accident Claims Tribunal, Kanpur Dehat has allowed M.A.C. No. 186 of2022 (Smt. Aarti Devi and others vs. Manager I.C.I.C.I. Lombard General Insurance Company Limited and others) in part awarding a sum of Rs.20,11,800/- towards compensation against the owner and driver of the offending vehicle with an observation that vehicle being insured with the appellant-Company, the appellant shall have right to recover the amount of compensation from the owner and the driver. Initial liability to pay compensation has been fastened upon the appellant-Insurance Company.

4. Brief facts giving rise to the instant appeal are that a road accident took place on 29.05.2022 in which one Pradeep Kumar, who was sitting in Eco Car No. U.P. 90 U-9831, suffered injuries and succumbed to the same on the spot. The accident was caused by Bus No. U.P. 77 T-5052, which was insured with the appellant- Insurance Company. A claim petition was filed by the legal representatives of the deceased claiming compensation. The Tribunal, after framing issues as regards rash and negligent driving of the bus driver and the car driver and as to whether the drivers were having valid driving license on the date of accident, factum of insurance and liability to pay compensation by which party and to what extent, decided the claim petition by the impugned judgment and order.

5. When the appeal came up for consideration on the first date, this Court, after noting down submissions advanced by the appellant including a legal plea raised in the light of omission of proviso to sub-section (4) of Section 149 of the Motor Vehicles Act, 1988 (herein after referred to as Act, 1988) by way of Motor Vehicles (Amendment) Act, 2019 (32 of 2019) admitted the appeal on 27.09.2024 and issued notices to the unrepresented respondents. After the parties were represented, the Court, by an order dated 08.11.2024, summoned the record of the Tribunal. The appeal was heard at length on 09.01.2025 and judgment was reserved.

THE LEGAL ISSUE INVOLVED

6. The decision in these appeals raises a very significant question of law in the light of Motor Vehicles (Amendment) Act, 2019 (32 of 2019) and not yet decided in India, as informed to the Court. Vide notification dated 25.02.2022 issued in exercise of powers under Section 1(2) of the Amending Act, 2019, various sections including Section 51 of the Amending Act came into force w.e.f. 01.04.2022. It is Section 51 that replaces Chapter XI of the Act of 1988 by a new Chapter XI that is relevant for the instant case. When read with Section 166 (3) of the Act where limitation to present a claim petition within 6 months from the occurrence of accident has been prescribed, it infers that the provisions of newly substituted Chapter XI would deal with cases arising from accidents taking place after 01.04.2022. The question is as to whether mere omission of proviso attached to sub-section