An insurance company cannot be held liable under the 'pay and recover' principle when the underlying insurance policy is established to be fraudulent, as no privity of contract exists between the insurer and the vehicle owner.

COMMON JUDGMENT:

Heard Sri A.Ramakrishna Reddy, learned counsel for the appellants and Sri Bajrang Singh Thakur, learned counsel for claimants/respondents at length.

2. M.A.C.M.A.No.604 of 2024 is filed by the Appellant-United India Insurance Company Limited being aggrieved by the Award and decree dated 04.10.2023 passed in M.V.O.P.No.349 of 2017 on the file of the Motor Accidents Claims Tribunal –cum-Judge, Family Court-cum-III Additional District Judge, Mahabubnagar in partly allowing the claim granting compensation of Rs.14,75,200/- with proportionate costs and interest @ 7.5 p.a. from the date of petition till date of realization, out of the claim of Rs.25,00,000/-.

3. M.A.C.M.A.No.608 of 2024 is also filed by the Appellant-United India Insurance Company Limited being aggrieved by the Award and decree dated 04.10.2023 passed in M.V.O.P.No.350 of 2017 on the file of the Motor Accidents Claims Tribunal –cum-Judge, Family Court-cum-III Additional District Judge, Mahabubnagar (for short ‘the Tribunal’) in partly allowing the claim granting compensation of Rs.11,75,000/- with proportionate costs and interest @ 7.5 p.a. from the date of petition till date of realization, out of the claim of Rs.20,00,000/-.

4. Cross Objections No.91 of 2024 is filed against M.A.C.M.A.No.608 of 2024 while Cross Objections Nos.95 of 2024 is filed against M.A.C.M.A.No.604 of 2024 by the claimants seeking enhancement of compensation granted by the learned Tribunal.

5. Since, the crime vehicle involved in the accident i.e. Swaraj Mazda Mini bus bearing No.AP-29U-7933 (for short ‘the crime vehicle’) on 01.05.2017 and travelers/passengers to the incidents as well as the owner of the crime vehicle is one and the same, these Appeals and Cross Objections are being disposed of by this common Judgment.

6. The facts leading to filing of M.V.O.P.No.349 of 2017 and M.V.O.P.No.350 of 2017 are that on 01.05.2017, when the deceased Thakur Anil Singh and his cousin deceased Thakur Bheem Singh were proceeding towards Thellapur village from Gandipet on motor cycle bearing No.TS-15EC-7107 and reached near Coca-Cola Company, outskirts of Khanapur village, the crime vehicle said to have been driven by the driver, who is respondent No.1 in the said OPs, at high speed in a rash and negligent manner came in opposite direction on extremely right side of the road, dashed against the motor cycle resulting the death of the deceased.

7. Basing on the report, a case in Crime No.319/2017 was registered under Section 304-A IPC by Narsingi Police against the driver of the crime vehicle and investigated into.

8. It was contended in MACMA 604 of 2024 that at the time of death of the deceased Thakur Anil Singh, was hale and healthy, aged about 20 years and said to have been working as driver to vehicle bearing No.AP-28DU-9186, thereby used to earn Rs.12,500/- p.m. besides Rs.100/- towards batta every day and used to contribute to the family. On account of the sudden death of Thakur Anil Singh, his family was under deep depression and as such, parents of the deceased, wife and two minor children filed claim petition before the learned Tribunal claiming compensation of Rs.25,00,000/- against respondents therein jointly and severally.

9. In respect of M.A.C.M.A.No.608 of 2024, the same was filed by the claimants of deceased Thakur Bheem Singh claiming compensati