1. The United India Insurance Company has come up with the present appeal, feeling aggrieved by the award dated 14th August, 2007 passed by the Additional Member of the Motor Accidents Claims Tribunal, Chachoda, District Guna in Claim Case No.14/2006 whereby the learned Claims Tribunal has directed the Insurance Company to pay the amount to the claimants-respondents No.1 to 3 of the deceased and recover the same from the owner of the vehicle.

2. Indisputably, respondents No.4 and 5, owner and driver of the offending vehicle did not prefer any appeal nor file any cross-objection against the award assailing the impugned findings in this appeal. Same is the situation with respondents No.1 to 3 claimants because they did not prefer any appeal for enhancement of compensation. Further there is no dispute about quantum of award by either of the parties.

3. Admitted facts of the case are that on 22nd May 2006, in night, deceased Badambai along with her husband went in a tractor-trolley bearing registration No.MP08/H-9294, driven by Suraj (respondent No.5) and owned by Babulal (respondent No.4). In mid-way, due to negligence and rash driving on the part of the driver, the said tractor and trolley turned turtle. Consequently, Smt. Badambai, wife of Jagannath died on the spot. On reporting the above accident, the crime was registered against the driver and charge-sheet was filed before the Criminal Court. It is also admitted that at the time of accident, the offending tractor was only registered under “Farmer’s Package Insurance” with the Insurer Company-appellant, herein, and the driver of the offending vehicle was having the valid driving licence. The learned Claims Tribunal after considering the evidence adduced from both the sides and after hearing them issued an award in favour of the claimants in the sum of Rs.1,77,000/- (Rs. One lac seventy seven thousand only) in all heads. While recording the aforesaid findings, the Tribunal, however, exonerated the Insurance Company on the ground of violation of the terms of policy known as “Farmer’s Package Insurance” but was directed on the principles of “pay and recover” to satisfy the awarded amount and then recover the same from the owner of the offending vehicle. Being aggrieved, the Insurance Company has submitted the present appeal.

4. Learned counsel appearing for the appellant-Insurance Company submitted that the deceased had travelled as a passenger in the vehicle, which is in violation of the provisions of section 147(b)(1) of the Motor Vehicles Act and the learned Tribunal in this manner has rightly chosen to consider the submissions put forth while fixing liability on the part of the owner of the vehicle.

5. Learned counsel further submitted that the principle of ‘pay and recover’ will arise only in the circumstances where the Insurance Company is successful in its defence available to them under section 149. If there is any statutory violation under section 147 by allowing a person to travel in a vehicle as an unauthorised passenger, then absolutely there is no contract between the insured and the insurer to pay the amount. It is the submission of the learnjed counsel that in this case, the owner of the vehicle, by permitting the deceased to travel in the vehicle as an unauthorised passenger has committed statutory violation. Therefore, under section 147(b)(1) of the Motor Vehicles Act, the Insurance Company cannot be held responsible to pay the compensation and the doctrine of ‘pay and recover’ does not arise in the cases of statutory violation.

6. Further submission put forth on behalf of the appellant is that except the offending tractor, no other attachment parts such as trolley or agricultural implements were insured vide insurance policy (Ex.D-1). It is submitted that at the time of accident, the offending tractor and attached trolley were used for transporting the stone flooring chips while carrying the persons for commercial purposes. No additional premium for carrying su