2026:MHC:1914C.M.A.(MD)No.910 of 2024

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

Reserved on : 27.02.2026

Pronounced on : 05.06.2026

CORAM:

THE HONOURABLE MR.JUSTICE P.VADAMALAI

C.M.A.(MD)No.910 of 2024

1. M.Nagammal,

W/o. Late. Murugan,

Door No. 8-3-60, Ambatkar Nagar,

Singampunari,

Singampunari Taluk,

Sivagangai District.

2. P.Nachammal,

W/o. Late Palani,

Door No.2/144, Palaya Palayam,

Alagapuri, Manaparai Taluk,

Trichy District. ... Appellants/Petitioners

Vs.

1.The Branch Manager,

M/s. APN Trading Company,

No.32/30, North Nadar Street,

Singampunari Taluk and Town,

Sivagangai District.

2.The Branch Manager,

New India Insurance Company,

Door No. 11-2-15/1, Ground Floor,

Near Indian Overseas Bank,

Madurai Main Road,

Thiruppathur Town,

Sivagangai District. ...Respondents/Respondents

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C.M.A.(MD)No.910 of 2024

PRAYER: Civil Miscellaneous Appeal is filed under Section 173 of the

Motor Vehicles Act, 1988, against the judgment and decree in MCOP.No.162

of 2021 on the file of the Motor Accident Claims Tribunal/Additional District

Court, Sivagangai, dated 23.06.2023.

For Appellants: Mr.K.Kumaravel

For R1 : Mr.K.S.Durai Pandian

For R2 : Mr.A.Ilango

JUDGMENT

This Civil Miscellaneous Appeal is preferred against the judgment and

decree, dated 23.06.2023 passed in M.C.O.P.No.162 of 2021 by the Motor

Accident Claims Tribunal/Additional District Court, Sivagangai.

2.The petitioners/claimants in M.C.O.P.No.162 of 2021 are the

appellants herein. The respondents in the claim petition are the respondents

herein.

3.For the sake of convenience, the parties arrayed in M.C.O.P.No.162

of 2021 are adopted hereunder.

4.The brief facts of the case:

On 26.10.2021, the deceased Murugan was travelling as a loadman in

the 1st respondent’s Eicher Lorry bearing registration number TN 63 AF 6112

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C.M.A.(MD)No.910 of 2024

from Alangudi to Singampunari. At about 2.00 a.m., when the vehicle was

coming near the green bamboo Ayyanar Koil Arch in A.Thekkoor to

Singampunari road, the driver of the said lorry had driven in a rash and

negligent manner from north to south and the lorry capsized. The deceased

sustained fatal injuries and died. The deceased Murugan was earning

Rs.20,000/- as a loadman. The vehicle was insured with the 2

nd

respondent/

Insurance Company at the time of the accident. An F.I.R. in Crime No.120 of

2021 was registered by the Nerkuppai police station. Hence, the

petitioners/claimants who are dependents of the deceased Murugan filed a

claim petition seeking compensation of Rs.25,00,000/-.

5.The 1

st

respondent remained ex-parte before the Tribunal.

6.The 2

nd

respondent/Insurance Company objected to the claim petition

by contending that three unauthorized persons, including the deceased

Murugan, were travelling on the roof of the vehicle. The deceased travelled

on the top of the lorry and did not sit in the cabin. The deceased was not a

loadman of the vehicle. So, it is a clear violation of policy conditions and the

MV Act and Rules. There was no premium collected to cover the risk of the

loadman. Since it was a policy package, no cover has been extended to cover

the risk of loadman. The driver of the offending vehicle was also not having a

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C.M.A.(MD)No.910 of 2024

valid driving license. Hence, the 2

nd

respondent/Insurance Company is not

liable to pay any compensation. Therefore, the petitioners are not entitled to

any claim from the 2

nd

respondent/Insurance Company.

7.Before the Tribunal, on the petitioners' side, two witnesses were

examined as P.W.1 and P.W.2 and Ex.P.1 to Ex.P.10 were marked.

On the 2nd respondent's side, two witnesses were examined as R.W.1 and

R.W.2 and Ex.R.1 was marked. In addition, Ex.X.1 to Ex.X.3 were also

marked.

8. After hearing both sides and after considering the evidences, the

Tribunal has passed the impugned award by holding that the driver of the

1st respondent’s vehicle was responsible for the accident; that since the

1st respondent allowed the passengers travelling outside the cabin without

any premium to cover risk, the 1st respondent alone was liable to pay

compensation and that the 2

nd

respondent/Insurance Company was not liable

to pay any compensation. Accordingly, the Tribunal passed an award granting

total compensation of Rs.16,91,000/-, directing the 1

st

respondent to pay the

same. The claim petition was dismissed in respect of the 2nd respondent/

Insurance Company.

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C.M.A.(MD)No.910 of 2024

9.Aggrieved by the said award, the petitioners/claimants have preferred

this Civil Miscellaneous Appeal.

10.Heard both sides and perused the records in this Civil

Miscellaneous Appeal.

11.The learned counsel appearing for the

appellants/petitioners/claimants submitted that the insurance policy is a

commercial vehicle policy for the period from 14.03.2021 to 13.03.2022.

The policy was in force at the time the accident took place on 26.10.2021.

The policy was issued for a lorry, a goods-carrying public carrier. So, as per

Section 236 of the Tamil Nadu Motor Vehicle Rules, 1929, the basic

third-party premium covers six load men. The Tribunal held that the deceased

was sitting on the top of the vehicle and no additional premium was paid and

so the 2nd respondent is not liable to pay compensation. The Tribunal erred

in considering the Ex.R.1- Policy. Ex.R.1 shows that a total sum of

Rs.26,935/-, including Rs.50/- towards driver, conductor, cleaner and

employed for (oprn) other operations, was collected by the

2nd respondent/Insurance Company and hence, the owner of the vehicle need

not pay any additional premium separately for loadmen in the lorry. If there is

any package policy, the insurance company is liable to pay compensation.

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C.M.A.(MD)No.910 of 2024

Even assuming that the deceased was travelling as a gratuitous passenger, the

insurance company is liable to pay the compensation first and then recover

the same from the owner as per “pay and recovery theory’. Therefore, the

Civil Miscellaneous Appeal may be allowed.

12.In support of his arguments, the learned counsel for the

petitioners/claimants has relied on the following decisions:

(i) 2024 (1) TN MAC 186 in the case of Iffco Tokio General

Insurance Co., Ltd. /v/ Shajahan, wherein it is held in paragraph Nos.41

and 42 as follows:

''41. On the basis of the said contract, as

per the mandate under Section 146(1), the policy

is issued by the insurance service providers under

two categories, viz., (i) Comprehensive

Policy/Package Policy and (ii) Act Only

Policy/Liability Policy, which is not in dispute.

An Act Only Policy/Liability Policy covers the

liability of the insured by the insurer in respect of

liabilities, which have been specifically

undertaken to be covered by the insurer in the said

policy, meaning thereby, that the liability to third

party by the insurer, which is the basis of the

coverage would be only to the extent of the

persons, or classes of persons, who are undertaken

to be insured. Therefore, the indemnification

would be only on the basis of the terms agreed

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C.M.A.(MD)No.910 of 2024

between the first and the second party and the

scope for payment of compensation cannot be

enlarged to classes of persons, who are not

covered by payment of additional premium and,

thereby, the insurer is not liable to indemnify.

42.In case of a Comprehensive

Policy/Package Policy, as the name signifies, is a

Comprehensive Policy, which covers the liability

of the insured, thereby indemnified by the Insurer,

of all such persons, be it the Occupants of the

vehicle or a person outside the vehicle and any

other person, towards any claim made by such

persons, including the Driver of the vehicle as also

the damage to property of the Third party............''.

(ii) 2026 (1) TN MAC 1 (SC) in the case of Sunita & Ors. /v/ United

Indian Insurance Co., Ltd., & Ors., wherein it is held in paragraph

Nos.13 to 18 as follows:

''13.Adverting to the facts in hand, from a

bare perusal of the record, it is borne that the

vehicle in question was insured with “Liability

Only Policy” and no premium was paid to cover

the driver, owner, or a gratuitous passenger

travelling therein. However, even then, in our

view, the Courts below erred in holding that the

Insurance Company is not liable to pay the

compensation to the claimant-appellants, for the

principle of “Pay and Recover” ought to have

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C.M.A.(MD)No.910 of 2024

been invoked. As such, we are inclined to interfere

with the above findings of the Courts below.

14.We must advert to the exposition of this

Court in National Insurance Co. Ltd. v. Baljit

Kaur. The deceased therein was travelling as a

gratuitous passenger, and due to the rash and

negligent driving of the offending vehicle, lost his

life. The Insurance Company was directed to

satisfy the amount awarded by the Courts below

and recover the same from the owner of the

vehicle, as the premium was not paid by the owner

of the vehicle towards gratuitous passenger.

15.The above position has been followed by

this Court in Anu Bhanvara v. IFFCO Tokio

General Insurance Co. Ltd., wherein the injured

person was travelling as a gratuitous passenger

and was not covered under the Insurance Policy,

the driver and owner of the vehicle was held liable

for payment of compensation amount. This Court

applied the principle of “Pay and Recover” and

directed the Insurance Company to pay the

amount and, thereafter, recover the same from the

owner of the vehicle.

16.The aforementioned principle was

adopted by this Court in various judgments of this

Court in Amrit Lal Sood v. Kaushalya Devi

Thapar; New India Assurance Co. Ltd. v.

C.M. Jaya; National Insurance Co. Ltd. v. Challa

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Upendra Rao; New India Assurance Co. Ltd. v.

Vimal Devi; National Insurance Co. Ltd. v. Saju

P. Paul; Manuara Khatun v. Rajesh Kumar Singh;

and Puttappa v. Rama Naik .

17.Applying the above expositions of law,

the Courts below ought to have directed the

Insurance Company to indemnify the amount and

thereafter recover the same.

18.Therefore, in light of the attending facts

and circumstances of the case, we are of the view

that the Insurance Company is liable to indemnify

the compensation amount awarded by the

Tribunal and recover the same only from the

owner of the offending vehicle.”

13.The learned counsel for the 1

st

respondent/owner has submitted

almost the very same argument putforth by the appellants/claimants' side and

prayed to fix the liability on the 2

nd

respondent/Insurance Company as per

‘pay and recovery theory’. The learned counsel for the first respondent has

also filed his written arguments.

14.Per contra, the learned counsel for the 2nd respondent/Insurance

Company has mainly argued that the deceased was travelling as a loadman on

the top of the offending vehicle. The Ex.R.1 - Policy was issued on receipt of

additional premium only to cover the legal liability to the paid driver,

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C.M.A.(MD)No.910 of 2024

conductor, and cleaner employed for operation and no premium was collected

covering the loadman. R.W.2 has also categorically stated the same in his

evidence. General Regulations (GR) 39 of the Indian Motor Tariff provides

cover for a loadman travelling in the offending vehicle only on payment of an

additional premium under a special contract, as held by the Hon’ble Supreme

Court in Asha Rani’s case. The Hon’ble Supreme Court has held as such in

various decisions that only on payment of additional premium, the loadman is

entitled to claim compensation. In these facts and circumstances, the

2nd respondent insurance company is not liable to pay any compensation, but

only the owner is liable to pay the compensation. The Tribunal has correctly

held that the 2

nd

respondent insurance company is not liable to pay

compensation as no additional premium was paid. Therefore, this civil

miscellaneous appeal may be dismissed. In support of his argument, the

learned counsel relied on the following citations:

(i) 2008 (2) TN MAC 29 SC in the case of

National Insurance Company Ltd. /v/ Cholletti

Bharatamma and Ors.

(ii) 2023 (1) TN MAC 634 (Mdu Bench)

in the case of Branch Manager ICICI Lombard

Insurance Company Ltd., /v/ R.Velsamy.

(iii) 2025 ACJ 330 in the case of United

India Insurance Company Ltd., /v/ Lakshmi

and Others.

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15.On hearing both sides and on perusal of the records, it is clear that

the accident took place upon the rash and negligent driving of the driver of

the goods vehicle bearing registration number TN 63 AF 6112, which

belonged to the 1

st

respondent. It is also clear that the deceased Murugan was

travelling in the vehicle as a load man. The Tribunal has held that the

accident took place due to the rash and negligent act of the driver of the

offending vehicle and that since there is no additional premium for the load

man, the 2

nd

respondent/ Insurance Company need not indemnify the owner.

It is the specific case of the petitioners/claimants that a sum of Rs.50/- was

paid towards driver, conductor, cleaner and persons employed for (oprn)

other operations, as seen from Ex.R.1 - Policy and that as per Section 236 of

Tamil Nadu Motor Vehicle Rules, 1929, six loadmen can be permitted in case

of package policy. This has been vehemently agitated by the

2nd respondent/Insurance Company that no additional premium was

collected to cover the loadman and according to the GR 39 of the Indian

Motor Tariff, the loadman is entitled to coverage only on payment of

additional premium.

16.On perusal of Ex.R.1, it is clear that a total net premium of

Rs.28,861/-, including Rs.50/- towards driver, conductor, cleaner and persons

employed for (oprn) other operations, was collected. The learned counsel for

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C.M.A.(MD)No.910 of 2024

the insurance company relied on rulings of this Court, and submitted that this

Court has held that in circumstances of this nature, the insurance company is

not liable to pay and recover the award in the light of the principle of the

Hon’ble Supreme Court in Asha Rani’s case. Even though the deceased was

held to be gratuitous passenger, the insurance company has to first pay the

award amount and then recover it from owner under ‘Pay and Recovery

Theory”. The same is also the submission of the petitioners/claimants as well

as the 1

st

respondent/owner side. Mere fact that the deceased was a

gratuitous passenger, an insurance company cannot be exonerated from the

liability to pay compensation in motor accident claims cases. This fact has

been affirmed by the Hon’ble Supreme Court in its recent pronouncement in

the Kaminiben case (2026 Live Law SC 174).

17.The Hon’ble Supreme Court reported in 2017 (1) TN MAC 289

(SC), considering Asha Rani’s case and Baljit case, clearly held that since

the question involved was referred to a Larger Bench and the reference made

to the Larger Bench was disposed of by keeping the issue undecided, the

Hon’ble Supreme Court has not taken different view from the one

consistently being taken by this Court in all previous case decisions, namely

that the insurance company has to first satisfy the award amount in favour of

the claimant and thereafter recover the same from the owner of the vehicle.

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C.M.A.(MD)No.910 of 2024

This has been repeatedly held by our Hon’ble Supreme Court in various

motor accident claim cases, as rightly relied on by the petitioners' side as

reported in 2026 (1) TN MAC 1 (SC) in Sunita’s case. The Hon’ble

Supreme Court clearly held that “the deceased therein was travelling as a

gratuitous passenger, and due to the rash and negligent driving of the

offending vehicle, lost his life. The Insurance Company was directed to

satisfy the amount awarded by the Courts below and recover the same from

the owner of the vehicle, as the premium was not paid by the owner of the

vehicle towards gratuitous passenger”. The Hon’ble Supreme Court has

clearly held that this Court applied the principle of “Pay and Recover” and

directed the Insurance Company to pay the amount and, thereafter, recover

the same from the owner of the vehicle and the aforementioned principle was

adopted by this Court in various judgments of this Court in Amrit Lal Sood v.

Kaushalya Devi Thapar; New India Assurance Co. Ltd. v. C.M. Jaya;

National Insurance Co. Ltd. v. Challa Upendra Rao; New India Assurance

Co. Ltd. v. Vimal Devi; National Insurance Co. Ltd. v. Saju P. Paul; Manuara

Khatun v. Rajesh Kumar Singh; and Puttappa v. Rama Naik”.

18.In view of the above settled principle, this Court is of the

considered view that the Tribunal erred in exonerating the

2

nd

respondent/Insurance Company from fixing liability upon “Pay and

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Recovery Theory.” In the case of accident claims, the Tribunal has to adopt

settled principles while awarding compensation favouring the claimants

rather than the insurance companies. It is pertinent to mention here that the

owner of the vehicle remained exparte before the Tribunal, however, the 1

st

respondent appeared before this Court and accepted the “Pay and Recovery

theory”. Hence, the citations relied on by the 2

nd

respondent/Insurance

Company are not applicable to the facts and circumstances of this case,

whereas the citations relied on by the petitioners/claimants side are

applicable to the case on hand.

19.There is no dispute that the deceased was aged 50 years and he was

working as a loadman. Though the petitioners/claimants claimed that the

deceased was earning Rs.20,000/-, in the absence of proof of income, the

Tribunal has correctly fixed notional income as Rs.12,000/- plus 25%

towards future prospects. The deceased being a family man, the Tribunal has

correctly deducted 1/3 towards personal expenses. In this regard, there is no

dispute in respect of arriving at the total compensation of Rs.16,91,000/- by

the Tribunal and apportionment ordered by it. Therefore, the compensation

awarded by the Tribunal is held correct and the same is not liable to be set

aside.

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20.In view of the aforesaid facts and circumstances, this Court holds

that the appeal is to be allowed and the award passed by the tribunal has to be

modified. The dismissal of the claim petition against the

2

nd

respondent/Insurance Company is liable to be set aside with a direction to

pay the award amount to the petitioners/claimants and recover it from the

owner/1

st

respondent.

21.In the result,

i)This Civil Miscellaneous Appeal is partly allowed. No costs.

ii)The order, dated 23.06.2023 passed in M.C.O.P.No.162 of 2021 by

the Motor Accident Claims Tribunal/Additional District Court, Sivagangai, in

respect of dismissal as against the 2nd respondent/Insurance Company is set

aside and the same is modified.

iii)The 2

nd

respondent/Insurance Company is directed to deposit the

entire compensation amount of Rs.16,91,000/- (Rupees Sixteen Lakhs and

Ninety One Thousand only) together with interest at the rate of 7.5% per

annum from the date of claim petition till the date of deposit to the credit of

M.C.O.P.No.162 of 2021 by the Motor Accident Claims Tribunal/Additional

District Court, Sivagangai within a period of six weeks from the date of

receipt of a copy of this order.

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C.M.A.(MD)No.910 of 2024

iv)The 2

nd

respondent/Insurance Company is at liberty to recover the

aforesaid deposited amount from the 1

st

respondent/owner.

v)On such deposit being made by the 2

nd

respondent/Insurance

Company, the claimants/petitioners herein are permitted to withdraw their

respective entire share amount as apportioned by the Tribunal with

proportionate interest and cost by filing an appropriate application before the

Tribunal.

05.06.2026

NCC : Yes / No

Index : Yes / No

Internet : Yes / No

VSD

To

1.The Motor Accident Claims Tribunal/

Additional District Court,

Sivagangai.

2.The Record Keeper,

Vernacular Section,

Madurai Bench of Madras High Court,

Madurai.

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C.M.A.(MD)No.910 of 2024

P.VADAMALAI, J.

VSD

Pre - Delivery Judgment made in

C.M.A.(MD)No.910 of 2024

05.06.2026

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