The insurer remains liable for third-party claims despite insured's policy violations, enforcing the doctrine of pay and recovery per the Motor Vehicles Act.

JUDGMENT

The Civil Miscellaneous Appeal is directed against the order made in M.C.O.P.No.1359 of 2023, dated 17.03.2025, on the file of the Motor Accident Claims Tribunal / Special Subordinate Court, Thanjavur.

2. The appellants/Insurer who were mulcted with the responsibility to pay compensation of Rs.2,40,000/- with interest at 7.5% per annum to the first respondent/claimant for the disability sustained by him consequent to an accident occurred on 09.09.2023, challenged the liability mulcted on it and the 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 claimant examined himself as P.W.1 and exhibited 7 documents as Exs.P.1 to P.7. The first respondent had remained exparte. The respondents 2 and 3 /Insurer examined two witnesses as R.W.1 and R.W.2 and exhibited 9 documents as Exs.R.1 to R.9. The disability certificate issued by the Medical Board to the claimant came to be exhibited as Exs.C.1. The learned trial Judge, considering the evidence both oral and documentary and on hearing the arguments of both sides, passed the impugned order dated 17.03.2025 holding that the accident was occurred only due to the rash and negligent driving of the first respondent's driver, but taking note of the fact that the first respondent's driver had no driving licence on the date of accident and thereby the first respondent violated the policy condition and also the fact that the trailer which had hit against the petitioner, was not at all registered, directed the respondents 2 and 3 / Insurer to pay the compensation of Rs.2,40,000/- with interest and costs and then to recover the same from the first respondent. Aggrieved by the invoking of pay and recovery doctrine, the Insurer has preferred the present appeal. 5. The learned Counsel for the Insurer would mainly contend that the first respondent owner allowed his minor son to ride the two wheeler and without a driving licence, the Insurer cannot be mulcted with any liability, directing them to pay and that then to recover from the owner of the vehicle and 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.

6. 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. Captain Itbar Singh and others reported in 1959 SCC OnLine SC 32 , which reads thus:-

“17. ... ... ... ... It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him. But the answer to that is that it is the insurer's bad luck. In such circumstances the injured person also would not have been able to recover the damages suffered by him from the assured, the person causing the injuries. The loss had to fall on some one and the statute has thought fit that it s