Case Note & Summary
The appellant, Satishbhai Natubhai Baria, filed a first appeal under Section 173 of the Motor Vehicles Act, 1988, challenging the judgment and award dated 07.09.2019 passed by the Motor Accident Claims Tribunal (Auxiliary), Panchmahals at Halol in MACP No.2618/2017. The Tribunal had partly allowed the claim petition and awarded Rs.2,91,525/- with 9% interest per annum from the date of filing till realization, but exonerated the insurance company (respondent no.2) from liability on the ground that the driver-cum-owner of the Chhakdo Rickshaw (registration no.GJ.17.TT.8273) did not hold a valid driving license at the time of the accident. The appellant, a third-party claimant who sustained injuries due to the negligence of the driver, sought to fasten liability on the insurance company with a direction to pay and recover. The appellant's counsel, Mr. K.K. Thakkar, argued that as a third party, the claimant should not suffer due to the owner's breach of policy conditions, and relied on National Insurance Company Ltd. Vs. Swaran Singh & Ors. (2004 (1) G.L.H. 691), Mani Venkatesh S/O Palpandrum Vs. M/s. ICICI Lombard General Insurance Co. Ltd. & Ors. (Civil Appeal No.8526 of 2018), Singh Ram Vs. Nirmala (2018 ACJ 1264), and New India Assurance Co. Ltd. Vs. Manjit Kaur (AIR 2004 SC 2864). The respondent insurance company's counsel, Mr. Rushang D. Mehta, contended that the driver admitted at Ex.35 that he had no valid license, so the Tribunal rightly exonerated the insurer. He further argued that only the Supreme Court could pass a pay-and-recover order under Article 142 of the Constitution, citing National Insurance Company Versus Laxmiben Ramanbhai Patel (First Appeal No.1278/2010). The court analyzed the submissions and held that the principle of pay and recover applies to third-party claims, as established in Swaran Singh and other Supreme Court judgments. The court rejected the argument that only the Supreme Court can pass such orders, noting that the High Court has the power to direct pay and recover in motor accident claims. The court allowed the appeal, set aside the Tribunal's order exonerating the insurance company, and directed the insurance company to pay the awarded amount to the claimant and then recover it from the owner of the vehicle in accordance with law.
Headnote
A) Motor Accident Claims - Third-Party Claim - Pay and Recover - Section 149 of the Motor Vehicles Act, 1988 - The issue was whether the insurance company could be exonerated from liability when the driver of the insured vehicle did not hold a valid driving license. The court held that in third-party claims, the insurance company must first satisfy the award and then recover the amount from the owner, following the principle laid down in National Insurance Company Ltd. Vs. Swaran Singh & Ors. (Paras 1-6). B) Motor Accident Claims - Power of High Court - Pay and Recover - Article 142 of the Constitution of India - The respondent argued that only the Supreme Court could pass a pay-and-recover order under Article 142. The court rejected this, holding that the High Court has inherent power to direct pay and recover in motor accident claims, relying on Swaran Singh and other precedents (Paras 4-6).
Issue of Consideration
Whether the insurance company can be directed to pay compensation to a third-party claimant and then recover the same from the owner when the driver did not hold a valid driving license at the time of the accident.
Final Decision
The appeal is allowed. The impugned judgment and award dated 07.09.2019 passed by the Motor Accident Claims Tribunal (Auxiliary), Panchmahals at Halol in MACP No.2618/2017 is modified to the extent that the insurance company is directed to pay the awarded amount to the claimant and then recover the same from the owner of the vehicle in accordance with law.
Law Points
- Pay and recover principle applies to third-party claims even if driver lacks valid license
- Insurance company must satisfy award and recover from owner
- High Court has power to direct pay and recover in motor accident claims
