Insurance company must pay compensation for death of unauthorized passenger in tractor-trailer but can recover amount from vehicle owner under 'pay and recovery' principle.

Headnote:(A) Motor Vehicles Act, 1988 - Sections 146, 147, 149, 168 and 173 - Death in motor accident - Liability of insurer - Tractor & Trailer accident - Deceased was an agricultural coolie traveling as an unauthorized passenger in the tractor-trailer - Policy covered third party risks but not unauthorized passengers - Driver did not possess valid driving license - Tribunal awarded full compensation and held insurer jointly and severally liable - Appeal by insurer. (Paras 1, 6, 14, 16)

(B) Motor Vehicles Act, 1988 - Section 149 - Duty of insurer to satisfy judgments - Insurer can be directed to pay compensation and then recover from owner (pay and recovery) even if there was a breach of policy conditions like carrying unauthorized passengers or driver without license - Insurer cannot be exonerated where policy is mandatory and risk to third parties is involved - Agricultural coolies traveling by tractor and trolley is a common practice and policy must cover such risks. (Paras 16, 17, 18, 19, 20, 21)

(C) Evidence - Burden of proof - To avoid liability on ground of driver not having valid license, insurer must prove that owner had knowledge of such disqualification - Mere plea of delay in lodging FIR is not sufficient to discredit claim without evidence. (Paras 14, 15)

Facts of the case:
On 15.03.2016, the deceased, a woman, after completing agricultural coolie work, boarded a Tractor & Trailer along with others. The driver drove rashly and negligently at high speed, causing the trailer to jump, resulting in the deceased falling and sustaining injuries. She died on 21.03.2016 while undergoing treatment. The claimants (husband and two minor children) sought compensation of Rs.7,00,000/- before the Motor Accidents Claims Tribunal, which was granted in full. The Insurance Company appealed, contending that the deceased was an unauthorized passenger and the driver did not have a valid driving license, so the insurer should be exonerated. (Paras 2, 4, 8)

Findings of Court:
The High Court held that the insurance company cannot be exonerated. It noted that agricultural coolies traveling by tractor and trolley is a common and well-known practice in rural India, and insurance policies must cover such risks. The court further held that the insurer failed to prove that the driver lacked a valid license with the owner's knowledge. However, applying the principle from National Insurance Co. Ltd vs. Swaran Singh, the court directed the insurer to pay the award amount and then recover it from the owner of the offending vehicle. (Paras 16, 17, 22)

Issues: (i) Whether the Insurance Company is liable to pay compensation when the deceased was an unauthorized passenger in the tractor-trailer. (ii) Whether the driver's lack of a valid driving license absolves the insurer of liability. (iii) Whether the principle of 'pay and recovery' applies in this case.

Ratio Decidendi: The liability of the insurance company to satisfy the award at the first instance and to recover the awarded amount from the owner or driver is well-settled. Even if there is a breach of policy conditions (such as carrying unauthorized passengers or a driver without a valid license), the insurer is bound to pay compensation to the victims/claimants as per the mandate of the Motor Vehicles Act, 1988, and can then recover the same from the insured owner. (Paras 18, 19, 20, 21) Result : Appeal allowed in part. The appellant/Insurance Company is directed to satisfy the award and is entitled to recover the amount from the owner of the offending vehicle. No costs. (Para 22, 23)

Table of Content
1. introduction and factual background of the motor accident case (Para 1 , 2 , 3 , 4 , 5)
2. proceedings before the tribunal and initial findings on negligence (Para 6 , 7)
3. arguments of the insurance company and the claimants (Para 8 , 9 , 10 , 11)
4. court's analysis of insurance policy, unauthorized passenger status, and driving license issue (Para 12 , 14 , 15)
5. application of swaran singh and pay-and-recover principle; liability for agricultural coolies (Para 16 , 17 , 18 , 19 , 20 , 21)
6. final order allowing appeal in part with pay-and-recover direction (Para 22 , 23)

JUDGMENT:

1. The appellant/Insurance Company filed this appeal under Section 173 of the Motor Vehicles Act, 1988 against the award, dated 06.02.2023 passed in M.V.O.P.No.147 of 2017 on the file of the Court of the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Kadapa at Proddatur (for short ‘the Tribunal’).

2. The respondent Nos.1 & 3 herein/claimants filed the said O.P seeking compensation of Rs.7,00,000/- for the death of one T. Prameela in a motor accident that occurred on 15.03.2016 involving a Tractor & Trailer bearing registration Nos.AP 21 v 7487 & AP 21 V 7489. As against the claim of Rs.7,00,000/- the Tribunal granted a compensation of Rs.7,00,000/-. Assailing the same the 2^nd respondent - Insurance Company in the O.P filed this appeal.

3. For the sake of convenience, the parties herein are referred to as they were arrayed before the Tribunal. Claimant No.1 is the husband of the deceased, whereas, Claimant Nos.2 & 3 are minors, represented by Claimant No.1. Respondent No.1 is the driver and Respondent No.3 is the owner of the Tractor & Trailer bearing registration Nos.AP 21 v 7487 & AP 21 V 7489, whereas, Respondent No.2 is the Insurance Company.

4. The brief facts that lead to the filing of the case are that, on 15.03.2016, in the morning, one T. Prameela (herein referred to as ‘deceased’) went to coolie work along with others to the field of one Koneti Subbareddy. After completion of work, the deceased along with others boarded the Tractor & Trailer bearing registration Nos.AP 21 v 7487 & AP 21 V 7489. When the tractor reached the YSR statute at Chowtapalle village, the driver of the tractor drove it in a rash and negligent manner with high speed, due to which the tractor and trailer jumped, as a result of which, the deceased fell down in the road, sustained injuries, shifted to Government Hospital, Proddatur, therefrom she was shifted to SVIMS Hospital and died on 21.03.2016 while undergoing treatment. Based on the complaint of the husband of the deceased, a case in Crime No.53 of 2016 was registered on the file of Proddatur Rural Police Station. By the impugned order, the Tribunal allowed the said M.V.O.P awarding compensation of Rs.7,00,000/- against a claim of Rs.7,00,000/-. Aggrieved by the same, the claimant/Insurance company filed this appeal.

5. Before the Tribunal, P.W.1 and P.W.2 were examined and got marked Exs.A-1 to A-5 which happened to be the copy of First Information Report, Inquest Report, Post Mortem Certificate, Charge Sheet, Motor Vehicle Inspectors Report. On behalf of the respondents, R.W.1 & R.W.2 were examined and got marked Exs.B-1 & B-2, Exs.X-1 to X-4, viz, Authorization, True copy of insurance policy, authorization letter, R.C. of crime vehicle, Fitness certificate of Trailer, Permit of the Trailer.

6. While the 1^st respondent-owner and 3^rd respondent – driver of the tractor and trailer remained ex parte, the 2^nd respondent – Insurance Company contested the matter denying all the averments made in the claim petition. It is that the driver of the tractor and trailer involved in the said accident did not possess valid driving licence and hence sought for dismissing the appeal.

7. Based on the pleadings, the Tribunal framed necessary issues one as to the culpability in causing the accident and the entitlement of the just compensation by the claimants. The Tribunal considering the evidence of P

Click Here to Read the rest of this document

2025 Supreme(Online)(AP) 16695

HIGH COURT OF ANDHRA PRADESHVENKATESWARLU NIMMAGADDASHRIRAM GENERAL INSURANCE COMPANY LIMITED – AppellantVersusTIMMAGALLA @ TIMMANAGALLA DEVARAJU – RespondentMACMA 468/2023

Insurance company must pay compensation for death of unauthorized passenger in tractor-trailer but can recover amount from vehicle owner under 'pay and recovery' principle.

HIGH COURT OF ANDHRA PRADESH
VENKATESWARLU NIMMAGADDA
SHRIRAM GENERAL INSURANCE COMPANY LIMITED – Appellant
Versus
TIMMAGALLA @ TIMMANAGALLA DEVARAJU – Respondent
MACMA 468/2023