The insurer is liable to compensate third-party claims despite amendments in the Motor Vehicles Act regarding driving license validity.

JUDGMENT

The Civil Miscellaneous Appeal is directed against the award made in M.C.O.P.No.265 of 2023, dated 20.11.2024, on the file of the Motor Accident Claims Tribunal / Principal District Court, Karur.

2. The appellant/Insurer who was mulcted with the liability to pay compensation of Rs.4,52,000/- with interest at 7.5% per annum to the respondents 1 and 2/claimants for the death of Pappayee, consequent to an accident occurred on 28.03.2023, challenged the liability mulcted on it and consequent application of doctrine of pay and recovery.

3. For the sake of convenience and brevity, the parties will hereinafter be referred as per their status/ranking in their original petition.

4. During trial, the claimants examined the first claimant as P.W.1 and one Muthukumar as P.W.2 and exhibited 14 documents as Exs.P.1 to P.14. The first respondent had remained exparte. The second respondent examined two witnesses as R.W.1 and R.W.2 and exhibited 2 documents as Exs.R.1 and R.2. The learned trial Judge, considering the evidence both oral and documentary and on hearing the arguments of both sides, passed the impugned order dated 20.11.2024 holding that the accident was occurred only due to the rash and negligent driving of the first respondent's driver and also taking note of the fact that the first respondent's driver was not possessed valid driving licence at the time of accident, directed the Insurer to pay compensation of Rs.4,52,000/- with interest and costs to the claimants and then to recover the same from the first respondnet – owner of the vehicle. Aggrieved by the impugned order, the Insurer has preferred the present Civil Miscellaneous Appeal.

5. The learned Counsel for the Insurer would contend that the driving licence of the first respondent's vehicle driver got expired on 03.10.2020 itself, that the said driver has not renewed his licence and he was not possessing any valid driving licence on the date of accident and that since the first respondent allowed his driver to drive the vehicle without driving licence, the Insurer cannot be mulcted with the liability directing them to pay compensation and then to recover from the vehicle owner.

6. The learned Counsel for the Insurer would mainly contend that after the amendment to the Motor Vehicles Act, vide Central Act 32/2019 and the deletion of proviso to Section 149 (4) of the Motor Vehicles Act, the Tribunal has no power or jurisdiction to order pay and recovery. The learned Counsel would further contend that the Tribunal erred in not considering Section 150 (2) of the recent Motor Vehicle Amendment Act 2019, which specifically adumbrates that the Insurer is not liable to pay compensation to the claimants for the breach of policy and permit condition committed by the vehicle owner.

7. At this juncture, it is necessary to refer the decision of this Court inC.M.A.No.554 of 2025 and batch reported in2025/MHC/991, wherein a learned Judge of this Court has held that notwithstanding the deletion of proviso to old Section 149 (4) of MV Act (New Section 150 ), the Motor Accident Claims Tribunal can order pay and recovery and the relevant passages are extracted hereunder:

“28. The very same title or caption is retained in New Section 150 of Motor Vehicles Act. Further, defences enumerated under (2) are result of breach/omission by insured over which innocent third parties have no control. Hence, it is highly inequitable to interpret the section against its own title and object of main enactment. In this regard, it would be appropriate to refer to observation of Apex Court in British India General Insurance Co. Ltd., vs. Captai