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IN THE HIGH COURT OF MADHYA PRADESH AT GWALIOR
G.S. AHLUWALIA
Cholamandalam Ms General Insurance Company Limited – Appellant
Versus
Munni Bai – Respondent
| Table of Content |
|---|
| 1. introduction of the case and context. (Para 1) |
| 2. arguments presented by the insurance company. (Para 2 , 3 , 9) |
| 3. court observations on statutory provisions and their amendments. (Para 4 , 5 , 6 , 7) |
| 4. court's reasoning on pay and recover principle. (Para 8) |
| 5. conclusion of the court dismissing the appeal. (Para 10) |
ORDER :
1. This Miscellaneous Appeal, under Section 173 of the Motor Vehicles Act, (for brevity “the Act”) has been filed against Award dated 02.05.2024 passed by Member, Motor Accident Claims Tribunal, Guna (M.P.) in M.A.C.C. No.140/2023.
2. A solitary ground was raised by counsel for the Insurance Company that although the Insurance Company has been exonerated on the ground that the offending vehicle was being driven in violation of the terms and conditions of the insurance policy as the driver of the vehicle was not having valid and effective licence, but the Claims Tribunal has applied the principle of pay and recover. It is submitted that the principle of pay and recover came into force for the first time after the judgment was passed by the Supreme Court in the case of National Insurance Company Limited vs. Swaran Singh and Others, 2004 ACJ 1. Ther
Insurers remain liable under the principle of pay and recover even if exonerated unless they prove fundamental breaches contributing to the liability.
Insurers are statutorily obligated to satisfy judgments for third-party claims, even if policy conditions are violated, following amendments to the Motor Vehicles Act.
An insurer remains liable under the 'pay and recovery' principle for policies issued prior to the 2019 amendment, as contractual obligations and liability criteria are determined according to the law....
The insurer remains liable for compensation despite the rider lacking a valid license as the policy was issued before the relevant amendment to the Motor Vehicles Act.
Section 149(2) deals with insurer's right to defend an action on account of breach of policy condition.
An insurer is not liable for compensation if the policy covering third-party risks was not valid at the time of the accident as mandated by the Motor Vehicle Act.
The insurer may exercise the right to recover compensation paid to claimants if it proves that the insured violated policy terms crucial to the cause of the accident.
An insurer must pay compensation to third parties despite breaches by an insured, unless willful negligence is established.
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