2026:MHC:1791C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

RESERVED ON : 28.04.2026

PRONOUNCED ON : 01.06.2026

CORAM:

THE HON'BLE MR JUSTICE N.ANAND VENKATESH

AND

THE HON'BLE MR JUSTICE K.K.RAMAKRISHNAN

C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

and CMP (MD) Nos.1874, 2962, 3943, 4103, 4212 of 2026 &

8904 of 2025

C.M.A(MD)No.517 of 2025

The Branch Manager

ICICI Lombard General Insurance Company Limited

No.2849/1B, Nanjikottai Road,

Thanjavur. ... Appellant/

2

nd

respondent

Vs.

1.Mariyapushpam

2.Antonysamy

3.Velankanni ... 1 to 3 respondents/

Claimants

4.Kamatchi ... 4

th

respondent/

1

st

respondent

PRAYER:- Civil Miscellaneous Appeal filed under section 173 of

the Motor Vehicles Act, 1988 to call for the records pertaining to the

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C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

Fair Order passed by the Motor Accident Claims Tribunal/Special

District Judge, Thanjavur in MCOP No.24 of 2024 dated

18.11.2024, set aside the same by allowing the appeal.

For Appellant: Ms.K.R.Shivashankari

For Respondents: Mr.Gokul Prasanth for R1 and R2

C.M.A(MD)No.213 of 2026

The New India Assurance Co.Ltd.,

The Branch Manager

No.161-A, East Veli Street, Mahal Area,,

Madurai Main, Madurai – 625001. ... Appellant/

2

nd

respondent

Vs.

1.Banupriya

2.Minor M.Sanjana

3.Minor Prathipkannan

4.Guruvammal

5.Ramar ... 1 to 5 respondents/

1 to 5 petitioners

6.D.Bruntha ... 6

th

respondent/

1

st

respondent

(Minors 2 and 3 are represented through his next friend and guardian

their mother, 1

st

respondent)

PRAYER:- Civil Miscellaneous Appeal filed under section 173 of

Motor Vehicles Act to set aside the order made in M.C.O.P. No. 1471

of 2023 dated 21.03.2025, on the file of the Motor Accident Claims

Tribunal Cum Special District Court to deal with MCOP Cases

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C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

Madurai.

For Appellant: Mr. N.Shyllappakalyan

For Respondents: Mr.A.Selvaraj for R1 to R5

C.M.A(MD)No.327 of 2026

The Oriental Insurance Company Ltd.,

through its Divisional Manager

No.16, KJR Complex, North Veli Street,

Madurai North, Poonthottam, Madurai... Appellant/

2

nd

respondent

Vs.

1.Kanishda

2.Minor Mayuran

3.Minor Sadhurshana ... 1 to 3 respondents/

1 to 3 petitioners

4.Bharaneedharan ... 4

th

respondent/

1

st

respondent

(Minors 2 and 3 are represented through his next friend and guardian

their mother, 1

st

respondent)

PRAYER:- Civil Miscellaneous Appeal filed under section 173 of

Motor Vehicles Act to set aside the award dated 21st November 2025

passed in MCOP No 117 of 2024 on the file of the Special District

Judge (Motor Accident Claims Tribunal) of Madurai by allowing

this appeal.

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C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

For Appellant: Mr. V.Sakthivel

For Respondents: Ms.R.Ananda Lakshmi for R1 to R3

C.M.A(MD)No.419 of 2026

Reliance General Insurance Co., Ltd.,

Having its office at Door No.55

Sree Meenatchi Plaza First Floor

80 Feet Road, Anna Nagar

Madurai – 625 020. ... Appellant/

4

th

respondent

Vs.

1.Subhashini

2.Minor Hariharan

3.Minor Gurudev

4.Ranjitham

... 1 to 4 respondents/

1 to 4 petitioners

5.Anthonysamy ... 5

th

respondent/

1

st

respondent

6.Rajkumar ... 6

th

respondent/3

rd

respondent

PRAYER:- Civil Miscellaneous Appeal filed under section 173 of

Motor Vehicles Act to set aside the order passed in MCOP No.519 of

2024 dated 30.04.2025, on the file of the Motor Accident Claims

Tribunal cum Honourable Special Subordinate Court, Dindigul.

For Appellant: Mr. N.Shyllappakalyan

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C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

C.M.A(MD)No.432 of 2026

Bajaj Allianz General Insurance Company Ltd.,

through its Branch Manager,

No.184/25, Bye Pass Road, Shopping Arcade,

Madurai – 10. ... Appellant/

2

nd

respondent

Vs.

1.Kala

2.Sivapandi ... 1 to 2 respondents/

1 to 2 petitioners

Jeyakumar (Died)

3.Indra ... 3

rd

respondent/

1

st

respondent

PRAYER:- Civil miscellaneous appeal filed under section 173 of

motor vehicles act to set aside the Award passed in M.C.O.P.No.

1920 of 2023 on the file of the Motor Accident Claims Tribunal,

Special District Court for MCOP Cases, Madurai dated 11.11.2025

and allow the Civil Miscellaneous Appeal.

For Appellant: Ms. K.R.Shivashankari

For Respondents: Mr.Gokul Prasanth for R1 to R2

C.M.A(MD)No.442 of 2026

M/s.United India Insurance Company Ltd.,

through its Branch Manager

Door No.7A, West Velli Street,

Madurai – 1. ... Appellant/

2

nd

respondent

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C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

Vs.

1.Somu

2.Banupriya

3.Maheswari

... 1 to 3 respondents/

1 to 3 petitioners

4.Revathy ... 4

th

respondent/

1

st

respondent

PRAYER:- Civil Miscellaneous Appeal filed under section 173 of

Motor Vehicles Act to set aside the order of the Tribunal of MACT

cum Special District Court, Madurai made in M.C.O.P. No. 1140 of

2023 dated 14.03.2025 and allow the appeal with costs.

For Appellant: Mr.C.Jawahar Ravindran

For Respondents: Mr.S.Varatharajan for R1 to R3

J U D G M E N T

(Judgment of the Court was delivered by

N.ANAND VENKATESH , J.)

These statutory appeals under Section 173 of the Motor

Vehicles Act, 1988, at the instance of various insurance companies, raises

an important question of law concerning the doctrine of “pay and

recover” under the Motor Vehicles Act, 1988.

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C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

2.For the sake of convenience and clarity, the nature of claims

made, and award(s) passed thereon together with the issues raised by the

insurance companies are tabulated hereunder:

Sl.

No.

Case

No.

Name of the

Insurance

Company

Nature of claim

made

Award passedIssue raised

1.CMA

(MD)

No.517

of 2025

ICICI

Lombard

General

Insurance

Company

Limited

The deceased was

standing nearer a

garment shop and

at that point of

time, the

offending

vehicle, which is

a two-wheeler,

was driven in a

rash and

negligent manner

and it hit the

deceased. As a

result of which he

succumbed to the

injuries. The

claimants are

wife, son and

daughter.

MACT,

Thanjavur, in

MCOP No.

640 of 2023,

by award dated

18.11.2024,

fixed a total

compensation

of Rs.

7,83,600/-

payable with

7.5% interest

per annum was

awarded.

Rider of the

two-wheeler

did not

possess a

valid driving

licence and

there was a

policy

violation.

However,

the Tribunal

ordered pay

and

recovery.

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C.M.A(MD)Nos.517 of 2025 and 213, 327, 419, 432, 442 of 2026

2.CMA

(MD)

No.432

of 2026

Bajaj Allianz

General

Insurance

Company

Limited

The deceased was

riding his two-

wheeler in

Madurai to Theni

road and when

the two-wheeler

came near Sai

Hospital,

Nagamalai

Pudukottai, the

offending

vehicle, which

was also a two-

wheeler, came in

the opposite

direction and it

was driven in a

rash and

negligent manner

and it hit the two-

wheeler driven by

the deceased. The

deceased

sustained

grievous injuries

and succumbed to

the injuries. The

claimants are

mother and father

of the deceased.

MACT,

Madurai, in

M.C.O.P. No.

1920 of 2023,

by award dated

11.11.2025,

fixed a total

compensation

of Rs.

19,24,400/-

payable with

interest at the

rate of 7.5%

per annum.

Rider of the

two-wheeler

did not

possess a

valid driving

licence and

there was a

policy

violation.

However,

the Tribunal

ordered pay

and

recovery.

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3.CMA

(MD)

No.419

of 2026

Reliance

General

Insurance

Company

Limited

The deceased was

travelling in a

two-wheeler as a

pillion rider of

the vehicle was

plying at

Dindigul–

Oddanchatram

Highway and

when it came

near Mankarai

Division, the

offending vehicle

was driven in a

rash and

negligent manner

and hit the

vehicle in which

the deceased was

travelling. The

deceased

sustained

grievous injuries

and succumbed to

the injuries. The

claimants are

wife, 2 sons and

the mother of the

deceased.

MACT,

Dindigul, in

M.C.O.P. No.

519 of 2024,

by award dated

30.04.2025,

fixed a total

compensation

of Rs.

34,37,000/-

payable with

interest at the

rate of 7.5%

per annum.

Rider of the

two-wheeler

possessed

only a

learner’s

licence and

therefore,

there is a

policy

violation.

However,

the Tribunal

ordered pay

and

recovery.

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4.CMA

(MD)

No.213

of 2026

The New

India

Assurance

Co.Ltd.

The deceased was

riding a two-

wheeler at

Sayalgudi to

Aruppukottai

road and when

the vehicle was

plying near

Sankar Ganesh

Hotel, the

offending

vehicle, which is

a lorry, coming

from the opposite

direction was

driven in a rash

and negligent

manner and it hit

the two-wheeler.

As a result of

which, the

deceased

sustained

grievous injuries

and he

succumbed to the

injuries. The

claimants are

wife, two minor

children of the

deceased, mother

and father of the

deceased.

MACT,

Madurai, in

M.C.O.P. No.

1471 of 2023,

by award dated

21.03.2025,

fixed a total

compensation

of Rs.

37,70,104/-

payable with

interest at the

rate of 7.5%

per annum.

The vehicle

was plied

without

valid permit

and fitness

certificate

and

therefore,

there is a

policy

violation.

However,

the Tribunal

ordered pay

and

recovery.

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5.CMA

(MD)

No.442

of 2026

M/s.United

India

Insurance

Company

Ltd.

The deceased was

riding a two-

wheeler at

Pollachi–

Coimbatore Road

and when the

vehicle was

plying near

Cheran Nagar,

the offending

vehicle, which is

a TATA Benz

recovery

van/towing van,

was driven in a

rash and

negligent manner

and hit the two-

wheeler. As a

result of which,

the deceased

sustained

grievous injuries

and succumbed to

the injuries. The

claimants are

father and two

sisters of the

deceased.

MACT,

Madurai, in

M.C.O.P. No.

1140 of 2023,

by award dated

14.03.2025,

fixed a total

compensation

of Rs.

24,56,700/-

payable with

interest at the

rate of 7.5%

per annum.

The driver of

the

offending

vehicle had

consumed

alcohol and

was under its

influence

and

therefore,

there is a

policy

violation.

However,

the Tribunal

ordered pay

and

recovery.

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6.CMA

(MD)

No.327

of 2026

The Oriental

Insurance

Company

Ltd.

The deceased was

travelling in a

two-wheeler as a

pillion rider and

when the vehicle

was plying near

Sathankulam Bus

Stop, the

offending

vehicle, which is

also a two-

wheeler, was

driven in a rash

and negligent

manner and hit

the two-wheeler

in which the

deceased was

travelling as a

pillion rider. The

claimants are

wife and two

children of the

deceased.

MACT,

Madurai, in

M.C.O.P. No.

117 of 2024,

by award dated

21.11.2025,

fixed a total

compensation

of Rs.

24,34,800/-

payable with

interest at the

rate of 7.5%

per annum.

Rider of the

offending

vehicle did

not possess a

valid driving

licence.

However,

Tribunal

ordered pay

and

recovery.

3.The main ground raised in these appeals is that there was a

policy violation in terms of not possessing a valid driving license/driving

the vehicle under the influence of alcohol or driving the vehicle without a

valid permit, despite which, the Tribunal, in each of these cases, has

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directed the insurance companies to pay the claimants and thereafter

recover the same from the respective insured.

4.The sum and substance of the contention raised on behalf of

the insurance companies is that by virtue of the Motor Vehicles

(Amendment) Act, 2019 (Central Act 32 of 2019), Chapter XI of the

Motor Vehicles Act, 1988 has been substituted whereby Section 149 of

the Act has now become Section 150. According to the insurance

companies, the doctrine of pay and recover was founded on the proviso

to clause (4) of Section 149 as well as clause (5) of Section 149, as it

stood prior to the Motor Vehicles (Amendment) Act, 2019 (Central Act

32 of 2019). Post the amendment, the proviso to clause (4) of Section

149 as well as clause (5) of Section 149 have been consciously omitted

in the corresponding Section 150. The inference sought to be drawn is

that in view of the said deletion, the legislature has consciously done

away with the doctrine of “pay and recover” and consequently the

MACTs were not justified in directing the insurance companies to pay

and recover. They also urge that their case is squarely covered by an

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order dated 06.02.2026 of a Division Bench of this Court in Manager v

Tamil Selvi, CMA 747 & 753 of 2025.

5.In almost all cases, this Court ordered the insurance company

to deposit the entire compensation amount, with accrued interest, within

the stipulated time and the said condition has been complied with.

6.Considering the importance of the issue involved, this Court

also sought the assistance of the members of the Bar in dealing with the

issue raised in these appeals.

7.We have heard Mr. V. Raghavachari, learned Senior Counsel,

assisted by Mr.P.Pethurajesh, learned counsel appearing for the

appellant/ICICI Lombard General Insurance Company Limited;

Mr.M.B.Raghavan, assisted by Ms.K.R.Shivashankari, learned counsel

appearing for the SBI General Insurance Company Limited;

Mr.S.Srinivasa Raghavan, learned counsel appearing for M/s.Royal

Sundaram Insurance Company Limited; Mr. A.N.Krishnasamy, learned

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counsel for Ms. K.R.Shivashankari, learned counsel appearing for the

appellant/Bajaj Allianz General Insurance Company Limited; Mr.

N.Shyllappakalyan, learned counsel appearing for the appellant/The New

India Assurance Company Limited and Sriram Insurance Company

Limited and Mr. V. Sakthivel, learned counsel appearing for the

appellant/The Oriental Insurance Company Limited.

8.On the side of the claimants we have heard Mr. Sharath

Chandran, learned counsel, assisted by N. Sudhagar, learned counsel; Mr.

A. Elango, Mr. K. Gurunathan and Mrs. R. Anandalakshmi, learned

counsel appearing on behalf of the claimants in various CMA’s.

RIVAL CONTENTIONS

9.On the side of the appellants/insurance companies, the

following contentions were made:

a. Mr.V.Raghavachari, learned senior counsel, invited the

attention of this Court to the decision of the Supreme Court in National

Insurance Co v Swaran Singh, 2004 (3) SCC 297, and submitted that

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the doctrine of pay and recover which has been recognized in the said

decision was based upon the proviso to Section 149(4) and Section

149(5) which no longer exist today in the corresponding Section 150. He

submitted that the substitution of Chapter XI by the Motor Vehicles

(Amendment) Act, 2019 has resulted in the deletion of the proviso as

well as Clause (5). This deletion, it is submitted, was a conscious

omission by the legislature which leads to the conclusion that Parliament

had intentionally done away with pay and recover. The learned senior

counsel also invited the attention of this Court to the decision of the

Supreme Court in Tribhovandas Haribhai Tamboli v State of Gujarat,

(1991) 3 SCC 442, to point out the function of a proviso in a statute, and

also referred to the decision National Insurance Co v Vidyadhar

Mahariwala, AIR 2009 SC 208, and submitted that insurance companies

had been exonerated in the past where violation of policy conditions

were established.

b. Mr.M.B.Raghavan, learned counsel appearing on behalf of

the SBI General Insurance Company submitted that Section 150 has been

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extensively amended by Parliament thereby widening the defenses

available to the insurance companies, and removing the proviso to

Section 149(4) corresponding to Section 150(4). It was submitted that

Parliament has also introduced new Section 150(2)(a)(ii) adding a

defense of the vehicle being driven under the influence of alcohol/drugs,

as well as non-receipt of premium under Section 64-VB of the Insurance

Act, 1938. It was submitted that the legislature had deliberately inserted

Section 147(4) to draw a bright line between policies prior to 01.04.2022

and policies issued thereafter which would be governed by Section 150

without any option to pay and recover.

c. The sum and substance of the argument of learned counsel is

that since the doctrine of pay and recover is a creature of statute traceable

to proviso to Section 149(4) and Section 149(5), its removal in the

corresponding Section 150 puts an end to the practice of ordering pay

and recover. The learned counsel relied upon a number of decisions

which counsel us to be careful of rewriting the provisions of the statute.

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d. The learned counsel also referred to the decision of a learned

single judge of this Court in SBI General Insurance Co v

Muthulakshmi,2025 MHC 991, and pointed out that this decision did

not consider the implication of Section 147(4) nor did it pay close

attention to the express words of Section 149(4) proviso which stipulated

that the amount was payable “by virtue only of this sub-section” shall be

recoverable by the insurer from the insured. In any event, the basis of the

decision in National Insurance Co v Swaran Singh, 2004 (3) SCC 297,

was founded on the proviso to Section 149(4) and 149(5) which no

longer exist today. That apart, the characterization of the proviso to

Section 149(4) as merely declaratory in nature was not correct. The

learned counsel finally submitted that the law has been laid down

correctly in SBI General Insurance v Tamilselvi, (CMA (MD) 747 &

753 OF 2025, order dated 06.02.2026).

e. Mr. A.N.Krishnaswamy, learned counsel submitted that the

doctrine of pay and recover does not rest on equitable considerations. It

rested on a purely statutory basis under the 1939 and the 1988 Act, as it

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stood prior to the 2019 Amendment. The effect of deletion of the proviso

to Section 149(4) and Section 149(5) removes the statutory basis of this

doctrine, and the Court cannot by way of interpretation put back what

Parliament has consciously removed.

f. That apart, Section 147(6) has no application since its

purpose is to override other laws and not to override Section 150. The

defenses which have been expanded must be allowed to operate freely

else the very purpose of the amendment would be defeated. The learned

counsel also pointed out that the decision of the learned single judge in

SBI General Insurance Co v Muthulakshmi,2025 MHC 991 was clearly

erroneous and could not be said to have laid down good law. Reference

was also made to Form No 51 inserted in the Motor Vehicles Rules with

effect from 01.04.2022 in particular to Serial No 12 therein which

exclude liability for cases falling under Section 150(2)(ii) (iii) and (b)

and (c) of the Act.

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g. Similar submissions were made by Mr. Shylappakalyan and

other learned counsel who appeared for the insurance companies.

10.On the other hand, on the side of the respondents/claimants,

Mr. Sharath Chandran, learned counsel appearing on behalf of Mr.

Sudhagar, counsel on record in CMA(MD) 1065 of 2025 made the

following submissions:

a. The entire argument of the insurance companies rested on

the understanding that the proviso to Section 149(4) formed the basis of

the doctrine of pay and recover. This was the basis for the decision of the

Division Bench SBI General Insurance v Tamilselvi, (CMA (MD) 747

& 753 of 2025, order dated 06.02.2026) to conclude that the removal of

the proviso puts an end to the doctrine of pay and recover. It was

submitted that the decision of the Division Bench, has not noticed the

decision of the Supreme Court in United India Insurance Co. Ltd. v.

Lehru, (2003) 3 SCC 338, wherein it was held that the proviso to Section

149(4) was only illustrative in nature.

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b. It was submitted that as correctly pointed out by S. Sounthar,

J in SBI General Insurance Co v Muthulakshmi,2025 MHC 991 the

liability of the insurance company is a blend of statutory and contractual

liability. The liability fastened on the insurance company vis-a-visa third

party is statutory in character whereas the liability of the insurance

company vis-à-vis the insured is contractual in nature governed by the

contract of insurance. Breach of a contractual condition may give the

right to the insurance company to repudiate the contractual liability

between itself and the insurer, but it would not absolve the insurer from

its statutory obligation under Section 150(1) to pay the sum to the third

party. In such cases, the only right of the insurance company is to

proceed against the insured after meeting the claim of the third party.

c. It was then submitted that Section 149(5) operated only a

specific type of case as was pointed out by the Supreme Court in

National Insurance Co v Swaran Singh, 2004 (3) SCC 297. It was

submitted that the provision operated only in cases where the liability of

the insurance company was limited. It was submitted that the deletion of

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Section 149(5) was of no consequence particularly since Parliament had

expressly made the liability of the insurance companies unlimited under

Section 147(2) after the 2019 Amendment and the Motor Vehicles (Third

Party Insurance Base Premium and Liability) Rules, 2022 which has

been introduced pursuant to the powers under Section 147(2). The

attention of this Court was also drawn to the provisions of the Motor

Vehicles Bill 2016 and the Report of the Standing Committee of the

Rajya Sabha making recommendations to the above Bill which

eventually became the 2019 Amendment to show that it was never the

intention of Parliament to tinker with the doctrine of pay and recover.

d. Lastly it was submitted that the actual basis of the doctrine

flows from Section 150(1) as was pointed out in SBI General Insurance

Co v Muthulakshmi,2025 MHC 991 and not the proviso to Section

149(4). It was submitted that if the interpretation made by the insurance

companies is supported, the very objective of compulsory third party

insurance would be rendered otiose.

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e. The aforesaid submissions were adopted by Mr. K.

Gurunathan, Mr. A. Elango, Mrs. R. Anandalakshmi and other learned

counsel who appeared on behalf of the claimants. The learned counsel

also emphasized that the Motor Vehicles Act, 1988 is a beneficial piece

of legislation which must receive liberal interpretation in favor of an

innocent third party who is very often the victim of a motor vehicle

mishap. If the view propounded by the insurance companies is accepted

there will be no effective purpose for taking compulsory motor vehicle

insurance in as much as the protection for the innocent third party would

be defeated.

HISTORY OF COMPULSORY MOTOR VEHICLE INSURANCE

11.To examine the legal issue raised in these appeals, we must

perforce travel back in time to understand the objective of introducing

compulsory third-party insurance for the use of a motor vehicle. For this

purpose, it is imperative to first notice the evolution of the law on third

party insurance under the Motor Vehicles Act, 1939 followed by the

Motor Vehicles Act, 1988.

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12.A contract of insurance is first and foremost a contract of

guarantee. A contract of guarantee is defined in Section 124 of the

Contract Act, 1872 as under:

“A contract by which one party promises to save the other from

loss caused to him by the conduct of the promisor himself, or by

the conduct of any other person, is called a contract of

indemnity.”

Under the general law, a contract is an agreement enforceable by law

which binds parties and their privies. When a motor vehicle injures or

kills a third party, the common law provided a remedy in tort for the

injured or the legal representatives of the deceased to sue the assured

alone as he was the tortfeasor. This was because the contract of insurance

is a contract between the insurer and the insured to which the third party

is not a party. Therefore, a third party, being a stranger to the contract of

insurance, and there being no privity could not sue the insurer directly

under the general law of contract. Many a time it was found that the

decree obtained against the insured could not be enforced as he did not

possess the means. Thus, the innocent victim of a road accident suffered

a double whammy: suffering injury or death and obtaining no

compensation despite obtaining a decree against the owner or driver of

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the vehicle. The introduction of compulsory motor vehicle insurance was

an attempt to resolve this unsatisfactory situation.

13.The development of motor vehicles law in India began with

the enactment of the Indian Motor Vehicles Act, 1914 (Central Act VIII

of 1914) which applied to the whole of British India. The focus of this

Act was on two aspects: (i) prescribing the requirement of a license to

drive a motor vehicle (Section 6) and (ii) prohibiting the use of a motor

vehicle unless the same was registered in the manner prescribed and a

certificate of registration was issued for the said vehicle (Section 10).

14.With the growth of the automobile industry, the sale and

manufacture of cars increased manifold in the late 1910’s and early

1920’s. Expansion naturally led to complexity as instances of accidents

involving motor vehicle became common. In England, prior to 1930 it

was voluntary on the part of car owners to take out insurance against

third party risks. The contract of insurance was, however, only between

the insurer and the assured. The third party being a stranger to the

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contract could not sue the insurance company directly due to lack of

privity and was perforce required to sue the car owner for damages in

tort. As pointed out earlier, decrees obtained by an innocent third party

who was injured or the legal heirs of a third party who had been killed in

a road accident remained unsatisfied as the car owner/judgment debtor

did not possess the means to satisfy the decree or would file for

bankruptcy.

15.The same position existed in India prior to the Motor

Vehicles Act, 1939 as is seen in the decision of the Bombay High Court

in British India General Insurance Co., Ltd. v. Janardan Vishwanath

Naik, AIR 1938 Bom 217, where the legal representatives of one

Balakrishna filed a suit against the driver, the owner and the insurance

company which had insured the bus which had met with an accident

resulting in the death of Balakrishna. The trial court passed a decree

against all three defendants, which was affirmed on appeal. The High

Court set aside the decree against the insurance company holding as

under:

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“The only point taken is that Balkrishna being a stranger to

the contract of insurance could not sue the insurance

company. It is not disputed that the general law is that. a

stranger to a contract cannot sue on it, though it is a rule

which is subject to certain exceptions. The English rule as

regards contracts of insurance (apart from certain statutory

provisions not in force in India) is laid down as follows in

Halsbury, Vol. 18 para 859;

“The person who has suffered the injury or damage for which

the assured is liable is not a party or privy to the contract of

insurance, and had not, either at Common law or in equity,

any right to the money payable under the policy which he

could enforce directly against either the insurers or the

assured.”

16.In England the situation became so acute that a Royal

Commission was appointed to go into the matter and find a solution. The

Commission submitted its Report titled “The Control of Traffic on

Roads” in July 1929 and proposed a Bill which eventually became the

Road Traffic Act, 1930. This Act provided for the regulation of the use of

motor vehicles on public road and for protection of third parties against

risks arising out of the use of automobiles. Part II of the Act (Sections

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35-44) made it mandatory for every motor vehicle to be compulsorily

insured before it was used in a public place. Section 35 made it penal for

any person to use a motor vehicle unless there existed an insurance

policy in respect of third-party risks specified in the Act. The purpose of

introducing compulsory insurance was explained by the Government on

the floor of the House of Commons as under:

“There have been a large number of cases of persons,

sometimes poor persons, killed or injured in a motor

accident, where the driver was convicted of negligence or bad

driving, but because the driver was not insured and was not a

person of substance, the relatives of the person killed or the

person injured were unable to get damages for the injury

done. As against that, the Government had to face the great

difficulties involved in compulsory third party insurance, but,

on balance, we decided that we would face the difficulties and

deal with an intolerable injustice which ought not to be

allowed to exist.”

17.Section 36 of the Act required the policy to be taken out

from an authorized insurer and was required to cover any liability which

the insured may incur on account of the death of or bodily injury to a

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person caused by or arising out of the use of the car on the road. Section

38 of the Act provided that the claims of third parties shall not be

affected by any conditions in a policy except those which relate to

something which the policy requires to be done or omitted after the

occurrence of the event giving rise to a claim under the policy.

18.The Third Parties (Right against Insurers) Act, 1930 was

enacted thereafter. This Act sought to partly remedy the situation by

providing that third parties could sue the insurer in the event of the

insured going bankrupt or being wound up. This limited protection was

however found to be illusory as could be seen from the decision in

Richards v Port of Manchester Insurance Co Limited,(1934) 50 Ll. L.

Rep. 88 where the insurers were permitted to escape from liability by

relying on a clause which exempted them if, at the time of accident, the

car was being driven by a Jew, a bookmaker or an actor ! This bizarre

result made the Court of Appeal in the UK to make the following

observations in Zurich General Accident and Liability Insurance Co v

Morrison, 1942 2 KB 53:

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“Part II. of the Road Traffic Act, 1934 , was passed to remedy

a state of affairs that became apparent soon after the

principle of compulsory insurance against third party risks

had been established by the Road Traffic Act of 1930. That

Act and the Third Parties' (Rights against Insurers) Act,

passed in the same year, would naturally have led the public,

at least those who were neither lawyers nor connected with

the business of insurance, to believe that if thereafter they

were, through no fault of their own, injured or killed by a

motor car they or their dependants would be certain of

recovering damages, even though the wrong-doer was an

impecunious person. How wrong they were quickly appeared.

Insurance was left in the hands of companies and

underwriters who could impose what terms and conditions

they chose. Nor was there any standard form of policy, and

any company who could fulfill the not very onerous financial

requirements that were necessary for acceptance as an

approved insurer could hedge round the policies with so many

warranties and conditions that no one advising an injured

person could say with any certainty whether, if damages were

recovered against the driver of the car, there was a prospect

of recovering against the insurers.”

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19.To remedy the situation, the UK Parliament introduced the

Road Traffic Act, 1934. Section 10 of the said Act purported to alter the

common law that a stranger to a contract could not sue to recover by

declaring that the insurer was bound to satisfy any judgment which was

obtained by the third party against the insured.

20.After the enactment of the Road Traffic Act, 1934 in the

UK, the Government of India constituted the Motor Vehicles Insurance

Committee in 1936 under the Chairmanship of N.J Roughton, ICS. The

Committee made a detailed empirical study of the obtaining legal

position in the Presidencies and the Provinces. For instance, in Madras it

was noted that suits had been filed for damages and decrees had been

passed for a sum of Rs 2018 was passed out of which only Rs 732 was

realized. The Committee recommended that insurance against third party

risks should be made compulsory. For the present purpose, the following

two recommendations in Chapter XX of the Report are relevant:

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“(9) Injured parties should be given the right to proceed

against the insurer when a decree has been passed against the

assured (paragraph 80)

(10) The English law should be followed so far as third parties

are protected against any repudiation of policies by insurers

on certain grounds.”

21.In the light of the above recommendations, the Motor

Vehicles Act, 1939 was enacted but Chapter VIII dealing with

“Insurance of Motor Vehicles Against Third Party Risks” was not

brought into effect till 01.07.1943. Section 95 of the 1939 Act dealt with

requirements of policies and limits of liability and was borrowed from

Section 36 of the Road Traffic Act, 1930 (as amended). Section 95(1) set

out the requirements of a valid policy of insurance. Section 95(2)

prescribed the limits of liability which was classified on the basis of the

nature of the vehicle. It is important to note that unlike Section 147(2)(a)

of the Motor Vehicles Act, 1988 which prescribes unlimited liability, the

provisions of Section 95(2) pegged the maximum monetary liability of

the insurer to certain specified limits based on the nature of the vehicle

used.

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22.Section 96 of the Motor Vehicles Act, 1939 dealt with the

duty of the insurers to satisfy judgments and decrees and was borrowed

substantially from the provisions of Sections 10 & 12 of the Road Traffic

Act, 1934 as has been already pointed out, supra. Section 96(1) of the

1939 Act corresponds to Section 149(1) of the Motor Vehicles Act, 1988.

After the Motor Vehicles Amendment Act, 2019 Section 149(1) has

become Section 150(1).

23.A Full Bench of the Kerala High Court in National

Insurance Co. Ltd. v. Roy George, (1993) ACJ 343, has held that there

can be no dispute that Section 10 of the Road Traffic Act, 1934 is the

precursor of Section 96 of the Motor Vehicles Act, 1939 which

corresponds to Section 149 and presently Section 150 of the Motor

Vehicles Act, 1988. For better appreciation, Section 10 of the Road

Traffic Act, 1934 reads as follows:

“Section 10: Duty of insurers to satisfy judgments against

persons insured in respect of third-party risks

(1) If, after a certificate of insurance has been delivered

under subsection (5) of section thirty-six of the principal Act

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to the person by whom a policy has been effected, judgment in

respect of any such liability as is required to be covered by a

policy under paragraph (b) of subsection (1) of section thirty-

six of the principal Act (being a liability covered by the terms

of the policy) is obtained against any person insured by the

policy, then, notwithstanding that the insurer may be entitled

to avoid or cancel, or may have avoided or cancelled, the

policy, the insurer shall, subject to the provisions of this

section, pay to the persons entitled to the benefit of the

judgment any sum payable thereunder in respect of the

liability, including any amount payable in respect of costs and

any sum payable in respect of interest on that sum by virtue of

any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under the

foregoing provisions of this section—

(a) in respect of any judgment, unless before or within seven

days after the commencement of the proceedings in which the

judgment was given, the insurer had notice of the bringing of

the proceedings; or

(b) in respect of any judgment, so long as execution thereon is

stayed pending an appeal; or

(c) in connection with any liability, if before the happening of

the event which was the cause of the death or bodily injury

giving rise to the liability, the policy was cancelled by mutual

consent or by virtue of any provision contained therein, and

either—

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(i) before the happening of the said event the certificate was

surrendered to the insurer, or the person to whom the

certificate was delivered made a statutory declaration stating

that the certificate had been lost or destroyed, or

(ii) after the happening of the said event, but before the

expiration of a period of fourteen days from the taking effect

of the cancellation of the policy, the certificate was

surrendered to the insurer, or the person to whom the

certificate was delivered made such a statutory declaration as

aforesaid, or

(iii) either before or after the happening of the said event, but

within the said period of fourteen days, the insurer has

commenced proceedings under this Part of this Act in respect

of the failure to surrender the certificate.

(3) No sum shall be payable by an insurer under the

foregoing provisions of this section, if, in an action

commenced before, or within three months after, the

commencement of the proceedings in which the judgment was

given, he has obtained a declaration that, apart from any

provision contained in the policy, he is entitled to avoid it on

the ground that it was obtained by the non-disclosure of a

material fact, or by a representation of fact which was false in

some material particular, or, if he has avoided the policy on

that ground, that he was entitled so to do apart from any

provision contained in it:

Provided that an insurer who has obtained such a declaration

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as aforesaid in an action shall not thereby become entitled to

the benefit of this subsection as respects any judgment

obtained in proceedings commenced before the

commencement of that action, unless before or within seven

days after the commencement of that action he has given

notice thereof to the person who is the plaintiff in the said

proceedings specifying the non-disclosure or false

representation on which he proposes to rely, and any person

to whom notice of such an action is so given shall be entitled,

if he thinks fit, to be made a party thereto.

(4) If the amount which an insurer becomes liable under this

section to pay in respect of a liability of a person insured by a

policy exceeds the amount for which he would, apart from the

provisions of this section, be liable under the policy in respect

of that liability, he shall be entitled to recover the excess from

that person.

(5) In this section the expression "material" means of such a

nature as to influence the judgment of a prudent insurer in

determining whether he will take the risk, and, if so, at what

premium and on what conditions, and the expression "liability

covered by the terms of the policy" means a liability which is

covered by the policy or which would be so covered but for

the fact that the insurer is entitled to avoid or cancel, or has

avoided or cancelled, the policy.

(6) In this Part of this Act references to a certificate of

insurance in any provision relating to the surrender, or the

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loss or destruction, of a certificate of insurance shall, in

relation to policies under which more than one certificate is

issued, be construed as references to all the certificates, and

shall, where any copy has been issued of any certificate, be

construed as including a reference to that copy.”

24.The interpretation of Section 10(1) was considered by the

Privy Council in Motor and General Insurance Co Ltd v Pavy, (1994) 1

WLR 462, where the following was observed:

“The third party must rely on section 10(1) of the Act. The

relevant words, having regard to the 1974 amendment of

section 4(1)( b ), may for present purposes be paraphrased as

follows: “If judgment in respect of any liability arising from

the death of or bodily injury to or damage to the property of a

third party (being a liability covered by the terms of the policy)

is obtained against the insured, then the insurers shall pay to

the third party the sum payable under the judgment in respect

of the liability.” The insurers must therefore pay provided the

insured's liability is a liability covered by the terms of the

policy. These words are defined in section 10(5) as:

“a liability which is covered by the policy or which would be

so covered but for the fact that the insurer is entitled to avoid

or cancel, or has avoided or cancelled, the policy.”

It should be noted that third parties are entitled to recover

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from the insurers under section 10(1) in every case in which

judgment is obtained and section 4(1)( b ), as amended,

applies, and not only in cases where the insured is insolvent or

is in breach of or not covered by the policy.

The insurers contend, as they must if they are to succeed, that

the liability which has been incurred by the insured in the

present case is not a liability covered by the terms of the policy

on the ground that liability ceased and they were no longer on

risk because of the breach of condition 1 by the insured. This

argument, in the view of their Lordships, involves a

misinterpretation of the relevant words. The definition in

section 10(5) shows that a liability which is covered by the

terms of the policy does not fail to be so covered unless the

insurer either is entitled to avoid or cancel the policy or has

actually done so. But the insured's breach after the event

which gave rise to the claim entitled the insurers, not to avoid

or cancel the policy, but merely to repudiate liability in respect

of that particular event; the policy remained in force and (in

the absence of a special condition) the insurers would still

have been on risk if a subsequent event giving rise to a claim

had occurred during the currency of the policy.”

25.It will be seen that Section 10(1) like Section 149(1)

presently Section 150(1) of the Motor Vehicles Act, 1988 uses the

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following phrase “notwithstanding that the insurer may be entitled to

avoid or cancel, or may have avoided or cancelled, the policy, the

insurer shall, subject to the provisions of this section, pay to the persons

entitled to the benefit of the judgment any sum payable thereunder in

respect of the liability”

26.Section 10(5) of the Road Traffic Act, 1934 defines

"liability covered by the terms of the policy" to mean “a liability which is

covered by the policy or which would be so covered but for the fact that

the insurer is entitled to avoid or cancel, or has avoided or cancelled,

the policy.” Section 10(5) of the 1934 is in pari materia with Section

150(6) of the Motor Vehicles Act, 1988 where the expression “liability

covered by the terms of the policy” has been identically defined.

Explanation (c) to Section 150(6) defines it to mean “a liability which is

covered by the policy or which would be so covered but for the fact that

the insurer is entitled to avoid or cancel or has avoided or cancelled the

policy.”

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27.In his treatise on the Law of Motor Insurance (1949

Editon, Butterworths & Co), Christopher Shawcross has examined the

meaning of the expression “liability covered by the terms of the policy”

occurring in Section 10(5) of the Road Traffic Act, 1934 and has

observed that the phrase is capable of two meanings (pages 280-81):

“a liability in respect of which an indemnity is

enforceable under the terms of the policy or which would

be so enforceable but for the fact that the insurers are

entitled to avoid or cancel the policy”

or

“a liability within the risks specified in the policy or

which would be within the risks specified in the policy

but for the fact that the insurers are entitled to avoid or

cancel the policy … or are entitled to evade liability …”

Shawcross points out that if the first alternative is adopted the “whole

object of this part of this Act would be defeated.” He suggests that the

expression “a liability covered by the policy” means:

“liability which comes within (or arises out of) a risk

apparently insured by the express terms of the policy,

whether or not it is a … liability in respect of which the

insurers are entitled to refuse an indemnity on the

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ground that the assured has committed some breach of

the terms of the policy.”

Thus, to trigger Section 10(1) of the Road Traffic Act, 1934

corresponding to Section 150(1) of the Motor Vehicles Act, 1988 what is

required is that the liability is one which comes within the terms of the

policy notwithstanding the fact that the insurers are entitled to avoid or

cancel the same for breach of some policy condition. The aforesaid

suggestion of Shawcross has been approved as the correct view by the

Privy Council in Motor and General Insurance Co Ltd v Pavy, 1994 1

WLR 46.

BASIS OF LIABILITY: SECTION 149(1)

28.Section 149(1) of the Motor Vehicles Act, 1988 as it stood

prior to its amendment vide Act 32 of 2019 was as follows:

149. Duty of insurers to satisfy judgments and awards against

persons insured in respect of third party risks.—(1) If, after a

certificate of insurance has been issued under sub-section (3)

of section 147 in favour of the person by whom a policy has

been effected, judgment or award in respect of any such

liability as is required to be covered by a policy under clause

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(b) of sub-section (1) of section 147 (being a liability covered

by the terms of the policy) [or under the provisions of section

163A] is obtained against any person insured by the policy,

then, notwithstanding that the insurer may be entitled to avoid

or cancel or may have avoided or cancelled the policy, the

insurer shall, subject to the provisions of this section, pay to

the person entitled to the benefit of the decree any sum not

exceeding the sum assured payable thereunder, as if he were

the judgment debtor, in respect of the liability, together with

any amount payable in respect of costs and any sum payable in

respect of interest on that sum by virtue of any enactment

relating to interest on judgments.

Though Section 149(1) is worded rather complexly, its ingredients can be

broken down as under:

i.There must be a certificate of insurance issued under

Section 147(3) containing the prescribed particulars and

conditions of the policy.

ii.A judgment or award ought to have been passed

against any person insured by the policy in respect of a

liability covered under Section 147(1)(b) ie., (a)death of

or bodily injury to any person including owner of the

goods or his authorised representative carried in the

motor vehicle or damage to any property of a third party

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caused by or (b)arising out of the use of the motor

vehicle in a public place or death of or bodily injury to

any passenger of a transport vehicle, except gratuitous

passengers of a goods vehicle, caused by or arising out

of the use of the motor vehicle in a public place or (c)a

judgment or award passed under Section 163-A.

iii.If (i) and (ii) are satisfied then notwithstanding that

the insurer may be entitled to avoid or cancel or may

have avoided or cancelled the policy, the insurer shall

iv.subject to the provisions of this section

v.pay to the person entitled to the benefit of the award

any sum not exceeding the sum assured payable

thereunder, as if that person were the decree holder, in

respect of the liability, together with any amount payable

in respect of costs and any sum payable in respect of

interest on that sum by virtue of any enactment relating

to interest on judgments.

29.It should be emphasized that Section 149 is titled “duty of

the insurer to satisfy judgments and awards against persons insured in

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respect of third-party risks.” Thus, Section 149 casts a statutory duty on

the insurer who has issued the policy to satisfy an award obtained by a

third party against the insured. In his seminal work titled ‘Fundamental

Legal Conceptions’published in (1913) 23 Yale Law Journal 16, W.N

Hohfeld explains the concept of a “right” in relation to the “duty” it

creates in another person. Therefore, wherever a right exists in one

person, a duty must exist in the other. This relationship has been termed

as the jural correlative. Thus, the right of the third party to enforce a

judgment or award in respect of a liability under the policy against an

insured creates a correlative duty on the insurance company to honor and

satisfy such claims. This right-duty relationship envisaged by Section

149(1) is statutory in character in contradistinction with the relationship

between an insurer and an insured which is contractual in nature.

30.In New India Assurance Co v Yallava,2020 ACJ 2560, a

Full Bench of the Karnataka High Court considered the question as to

whether pay and recover could be ordered in cases where there is a

breach under Section 149(2)(b) entitling the insurance company to treat

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the policy as null and void. In her concurring judgment, Nagarathna, J

(as the Hon’ble Judge then was) observed:

“44. The question is, as to, whether, the insurer is still liable

to satisfy the award when the policy itself is void? The

answer to the same is found in sub-section (1) of Section 149

as well as sub-section (4) of Section 149. It is already noted

that sub-section (1) of Section 149 makes the insurer liable

as if it were a judgment debtor, is subject to the provisions of

Section 149. Sub-section (4) of Section 149 states that where

a certificate of insurance has been issued under Section 147

(3) of the Act to any person by whom a policy has been

effected so much of the policy as purports to restrict

insurance of a person thereby by reference to any condition

other than those in clause (b) of sub-section (2) of Section

149 shall, as respects such liability as are required to be

covered by a policy under Section 147 (1) (b) is of no effect.

That means the liability to satisfy an award or judgment

under Section 149 (1) of the Act by an insurer would apply

even when any of the defences under Section 149(2) of the

Act would arise. Section 149 (2)(b) of the Act, deals with a

situation where the policy itself is void. In such a case, an

exception has been made under sub-section (4) of Section

149 of the Act. But, under Section 149(1), any restriction or

defence raised with regard to Section 149(2) of the Act would

have no effect and the insurer would have to satisfy the

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award or judgment having regard to sub-section (1) of

Section 149 of the Act. Thus, sub-section (1) of Section 149

of the Act being subject to the other provisions of Section

149, sub- section (4) of Section 149 would have to be read

harmoniously having regard to the non-obstante clause in

Section 149(1) of the Act.”

The learned judge thereafter referred to Section 149(6) and noted as

under:

“In this regard it is necessary to refer to sub-section (6) of

Section 149 which categorically states that the expression

"liability covered by the terms of the policy" means a liability,

which is covered by the policy or which would be so covered

but for the fact that the insurer is entitled to avoid or cancel

or has avoided to cancel the policy. The expression "but for

the fact", in sub-section (6) of Section 149 is significant. In

other words, if an insurer is entitled to avoid or tried to

cancel or avoided the policy, in such a case, whether the

insurer is still liable to place his defence under Section

149(2)(b) of the Act and whether the liability covered by the

terms of the policy cannot be enforced in such a situation?

The question further arises, even in a case falling under

Section 149(2)(b), whether, the insurer is liable to satisfy

judgment or award under Section 149 (1) of the Act.”

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Finally, the Hon’ble Judge concluded as under:

“45. I am of the view that in such a situation also, the insurer

is liable to satisfy the judgment and award. This is because,

sub-section (1) of Section 149 uses the expression

"notwithstanding that the insurer may be entitled to avoid or

cancel or may have avoided or cancelled the policy, the

insurer shall pay to the person entitled to the benefit of the

decree". The said expression is couched alongside another

expression namely, "subject to the provisions of this section"

i.e., Section 149. Also, in sub- section (6) of Section 149, the

expression "liability covered by the terms of the policy" is

defined to mean "a liability which is covered by the policy or

which would be so covered but for the fact that the insurer is

entitled to avoid or cancel or has avoided or cancelled the

policy". On a conjoint reading of the aforesaid provisions with

particular emphasis on the aforesaid expressions, it would

emerge that even when a defence under Section 149(2)(b) is

raised by an insurer to the effect that the policy is void on

account of non-disclosure of a material fact or a

misrepresentation of a fact which was false in material

particular at the time of obtaining policy by the insured is

proved in such an event also, the insurer cannot avoid or

cancel the policy and will be liable to satisfy the judgment or

award under sub-section (1) of Section 149.

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46. It is noted that sub-section (1) of Section 149 contains a

non-obstante clause, and, the same has to be read along with

other sub-sections of Section 149. When the same are read

holistically, it would reveal that when a policy is found to be

void and the defence under Section 149(2)(b) is established by

the insurer or the insurer has avoided or cancelled the policy

i.e., repudiated the contract in such a case also, the insurer

can be directed to satisfy the judgment of award. Though the

Parliament has used the expression "subject to the provisions

of this section in Section 149(1)" and also, the expression "but

for the fact that the insurer is entitled to avoid or cancel or has

avoided or cancelled the policy" in sub-section (6) of Section

149 nevertheless the same has to be read in light of the non-

obstante clause in Section 149 (1) of the Act particularly in the

context of compulsory coverage of risks as per Section 147 (1)

(b) of the Act which includes third party risk. Therefore, the

Parliament, being conscious of the fact that a void policy

cannot be enforced and the insured cannot be indemnified on

the basis of a void policy in general law of contract and the

judgment or award obtained by a third party against such an

insured cannot be given effect to, has incorporated the non-

obstante clause in Section 149 (1) of the Act, which is by way

of an exception to the general contract law. This is to protect

the interest of innocent third parties whose risk is considered

under Section 147 (1)(b) of the Act.”

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31.We are in respectful agreement with the aforesaid view

which, in our considered opinion is clearly in line with the object and

purpose of the statute. As pointed out by Nagarathna, J (as she then was)

the key expression in Section 149(1) are the words “notwithstanding that

the insurer may be entitled to avoid or cancel or may have avoided or

cancelled the policy” the object of which is to override the general law

of contract under which the insurer is obliged to “pay to the person

entitled to the benefit of the decree any sum not exceeding the sum

assured payable thereunder, as if he were the judgment debtor, in respect

of the liability, together with any amount payable in respect of costs and

any sum payable in respect of interest on that sum by virtue of any

enactment relating to interest on judgments.”

32.It was, however, contended by Mr. M.B Raghavan, learned

counsel, that the provisions of Section 149(1) are subject to the other

provisions in the section particularly Section 149(2), and consequently

the non-obstante clause in Section 149(1) cannot be pressed into service

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in a case of this nature when there is a breach entitling the insurer to

avoid liability. We are unable to agree.

33.Section 149(2) sets out the defenses which the insurance

company may take to avoid its liability under the policy. In view of the

mandate of Section 147(7) the insurer is debarred from taking any other

defense other than those permitted under Section 149(2). The law in this

regard has been settled by the Supreme Court in British India General

Insurance Co v Captain Itibar Singh, AIR 1959 SC 1331.

34.However, what is often overlooked is the fact that the

defenses under Section 149(2) operate only against the insured and not

against the third party. To be precise, a contract of insurance between the

insurer and the insured can be avoided or repudiated only as against

between themselves ie., the contracting parties and not as against a third

party. Repudiation is of the contract of insurance, and it would be

incorrect to speak of repudiation as between an insurer and a third party

with whom no contract of insurance exists.

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35.In the context of defenses available to the insurer, if the

insurer is unable to make out a case under Section 149(2) the

consequence is that he would be liable to settle the claims of the third

party in full without recourse to the insured. Conversely, if the insurer

can make out a case under Section 149(2) the consequence is that he

would be liable to settle the claims of the third party and thereafter

proceed against the insured for recovery of the sums paid. The breach of

a policy condition prescribed under Section 149(2) gives the right to the

insurer to proceed against the insured which flows from Section 125 of

the Contract Act, 1872.

36.From the standpoint of a third party, in either of the two

scenarios pointed out above, the statutory duty of the insurer vis-à-visa

third party to satisfy the sums payable under a decree flowing from

Section 149(1) remains unaffected. This conclusion is fortified by the

expression “notwithstanding that the insurer may be entitled to avoid or

cancel or may have avoided or cancelled the policy” which clearly

points to the fact that the duty of the insurer to satisfy an award remains

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unaffected by the fact that the insurer has actually avoided or cancelled

or is entitled to avoid or cancel the policy on any of the grounds

specified in Section 149(2).

37.The aforesaid construction is fortified by the fact that under

Section 150(1) as it presently stands, insurer is under a statutory duty to

satisfy a “judgment or award in respect of any suchliability as is

required to be covered by a policyunder clause (b) of sub-section (1) of

section 147 (being a liability covered by the terms of the policy). The

expression “liability covered by the terms of the policy” occurring in

Section 150(1) is defined in Explanation (c) to Section 150 as under:

“(c) “liability covered by the terms of the policy” means

the liability which is covered by the policy or which

would be so covered but for the fact that the insurer is

entitled to avoid or cancel or has avoided or cancelled

the policy;”

Thus, the expression “liability covered by the terms of the policy” covers

both scenarios viz., (a) a liability which, in fact, is actually covered by

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the policy and (b) a liability which would be covered but for the fact that

the insurer has or intends to avoid or cancel the policy in terms of

Section 150(2). This is a clear indicator that for the purposes of statutory

liability vis-à-vis an insurer and a third party in terms of Section 150(1),

the fact that the insurer can avoid a policy or has actually avoided the

policy for breach of a policy condition vis-à-vis itself and the insured

does not absolve it of its statutory duty to satisfy the claims of a third

party under the award.

38.We are supported in taking the aforesaid view by a

judgment of the Supreme Court in New Asiatic Insurance Co. Ltd. v.

Pessumal Dhanamal Aswani, AIR 1964 SC 1736, wherein it was held

as follows:

“The Act contemplates the possibility of the policy of

insurance undertaking liability to third parties providing

such a contract between the insurer arid the insured, that is,

the person who effected the policy, as would make the

company entitled to recover the whole or part of the amount

it has paid to the third party from the insured. The insurer

thus acts as security for the third party with respect to its

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realising damages for the injuries suffered, but vis-a-vis the

insured, the company does not undertake the liability or

undertakes it to a limited extent. It is in view of such a

possibility that various conditions are laid down in the

policy. Such conditions, however, are effective only between

the insured and the company, and have to be ignored when

considering the liability of the company to third parties.”

The Supreme Court finally concluded as follows:

“Thus the contract between the insured and the company may

not provide for all the liabilities which the company has to

undertake vis-a-vis the third parties, in view of the provisions

of the Act. We are of opinion that once the company had

undertaken liability to third parties incurred by the persons

specified in the policy, the third parties' right to recover any

amount under or by virtue of the provisions of the Act is not

affected by any condition in the policy.”

Consequently, in view of the above discussion we hold that the insurance

company cannot evade its duty to satisfy the award to the third-party

claimant in terms of Section 150(1) of the Act (as amended by Act 32 of

2019). In cases where the insurance company can plead, prove and

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establish a defense under Section 150(2), it is required to first pay the

sum under the award to the third party and thereafter recover the same

from the insured.

BENEFICIAL CONSTRUCTION

39.We cannot also lose sight of the fact that the compulsory

insurance regime itself was brought to tackle the problem of third parties

suing the insured and failing to recover the sum payable under the

decree. As pointed out by the Supreme Court in New Asiatic Insurance

Co. Ltd. v. Pessumal Dhanamal Aswani, AIR 1964 SC 1736, the insurer

“acts as security for the third party with respect to its realising damages

for the injuries suffered” (emphasis supplied by us). Vis-à-vis the insured

“the company does not undertake the liability or undertakes it to a

limited extent.”

40.In the context of motor vehicles law, the Supreme Court had

observed in Shivaji Dayanu Patilv.Vatschala Uttam More, (1991) 3

SCC 530, as under:

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“In the matter of interpretation of a beneficial legislation the

approach of the courts is to adopt a construction which

advances the beneficent purpose underlying the enactment in

preference to a construction which tends to defeat that

purpose.”

41.In K.H. Nazarv.Mathew K. Jacob, (2020) 14 SCC 126, it

was held:

“11. Provisions of a beneficial legislation have to be construed

with a purpose-oriented approach. [Kerala Fishermen's

Welfare Fund Boardv.Fancy Food, (1995) 4 SCC 341] The Act

should receive a liberal construction to promote its objects.

[Bombay Anand Bhavan Restaurantv.ESI Corpn., (2009) 9

SCC 61 : (2009) 2 SCC (L&S) 573 andUnion of

Indiav.Prabhakaran Vijaya Kumar, (2008) 9 SCC 527 : (2008)

3 SCC (Cri) 813] Also, literal construction of the provisions of

a beneficial legislation has to be avoided. It is the Court's duty

to discern the intention of the legislature in making the law.

Once such an intention is ascertained, the statute should

receive a purposeful or functional interpretation. [Bharat

Singhv.New Delhi Tuberculosis Centre, (1986) 2 SCC 614 :

1986 SCC (L&S) 335]”

Once it is clear that the very purpose of Chapter XI in the Motor Vehicles

Act, 1988 is to protect the innocent third party from the vagaries of the

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solvency of the insured upon obtaining an award, we are under an

obligation to place an interpretation upon Section 150 that preserves the

remedy of the intended beneficiary ie.,the third party who is an innocent

victim in a motor vehicle accident.

EVOLUTION OF DOCTRINE OF ‘PAY AND RECOVER’

42.The doctrine of pay and recover under the MV Act, 1988

came for discussion before the Supreme Court in New India Assurance

Co. v. Kamla, (2001) 4 SCC 342, United India Insurance Co. Ltd. v

Lehru, (2003) 3 SCC 338 and National Insurance Co. Ltd. v Swaran

Singh, (2004) 3 SCC 297.

43.In Kamala’s case, the question was whether the insurance

company could avoid payment of compensation in respect of a motor

accident which had occurred while the vehicle was being driven by a

person holding a sham license. It was contended that once it was found

that the licence was fake, the company was entitled to avoid liability in

terms of Section 149(2). Rejecting this contention it was held:

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“A reading of the proviso to sub-section (4) as well as the

language employed in sub-section (5) would indicate that they

are intended to safeguard the interest of an insurer who

otherwise has no liability to pay any amount to the insured but

for the provisions contained in Chapter XI of the Act. This

means, the insurer has to pay to the third parties only on

account of the fact that a policy of insurance has been issued in

respect of the vehicle, but the insurer is entitled to recover any

such sum from the insured if the insurer were not otherwise

liable to pay such sum to the insured by virtue of the conditions

of the contract of insurance indicated by the policy.”

To repeat, the effect of the above provisions is this: when a

valid insurance policy has been issued in respect of a vehicle as

evidenced by a certificate of insurance the burden is on the

insurer to pay to the third parties, whether or not there has

been any breach or violation of the policy conditions. But the

amount so paid by the insurer to third parties can be allowed to

be recovered from the insured if as per the policy conditions the

insurer had no liability to pay such sum to the insured.”

44.In United India Insurance Co. Ltd. v. Lehru,(2003) 3 SCC

338, it was contended that the decision in Kamla’s casewas incorrectly

decided in as much as the insurer ought to have been exonerated as soon

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it has established a defense under Section 149(2)(ii). After adverting to

the provisions of Section 149, it was held:

“Thus under sub-section (1) the insurance company must pay to

the person entitled to the benefit of the decree, notwithstanding

that it has become “entitled to avoid or cancel or may have

avoided or cancelled the policy”. The words “subject to the

provisions of this section” mean that the insurance company

can get out of the liability only on grounds set out in Section

149. Sub-section (7), which has been relied on, does not state

anything more or give any higher right to the insurance

company. On the contrary, the wording of sub-section (7) viz.

“no insurer to whom the notice referred to in sub-section (2) or

sub-section (3) has been given shall be entitled to avoid his

liability” indicates that the legislature wanted to clearly

indicate that insurance companies must pay unless they are

absolved of liability on a ground specified in sub-section (2).

This is further clear from sub-section (4) which mandates that

conditions, in the insurance policy, which purport to restrict

insurance would be of no effect if they are not of the nature

specified in sub-section (2). The proviso to sub-section (4) is

very illustrative. It shows that the insurance company has to pay

to third parties but it may recover from the person who was

primarily liable to pay. The liability of the insurance company

to pay is further emphasised by sub-section (5). This also shows

that the insurance company must first pay, then it can recover. If

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Section 149 is read as a whole it is clear that sub-section (7) is

not giving any additional right to the insurance company. On

the contrary it is emphasising that the insurance company

cannot avoid liability except on the limited grounds set out in

sub-section (2).”

45.It is clear from the aforesaid observations of the Supreme

Court, that the proviso to Section 149(4) was characterized only as being

“very illustrative” in nature. It would therefore be obvious that the

Supreme Court has not regarded Section 149(4) as being exhaustive or as

the source or sole repository of power to order pay and recover as has

been sought to be contended by the insurance companies. We cannot

interpret the provision in a manner that is exactly the opposite of what

the Supreme Court had intended. Furthermore, as we have pointed out

earlier the substantive basis to fasten statutory liability on the insurer is

traceable to Section 149(1) of the Motor Vehicles Act, 1988 and not to

the proviso to Section 149(4).

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46.The correctness of the decisions in Kamla’s caseand

Lehru’s case came up for consideration before a bench of three judges of

the Supreme Court in National Insurance Co. Ltd. v. Swaran Singh,

(2004) 3 SCC 297. After considering all the decisions on the point the

following observations were made:

“73. The liability of the insurer is a statutory one. The liability of

the insurer to satisfy the decree passed in favour of a third party

is also statutory.

82. Proviso appended to sub-section (4) of Section 149 is

referable only to sub-section (2) of Section 149 of the Act. It is an

independent provision and must be read in the context of Section

96(4) of the Motor Vehicles Act, 1939. Furthermore, it is one

thing to say that the insurer will be entitled to avoid its liability

owing to breach of terms of a contract of insurance but it is

another thing to say that the vehicle is not insured at all. If the

submission of the learned counsel for the petitioner is accepted,

the same would render the proviso to sub-section (4) as well as

sub-section (5) of Section 149 of the Act otiose; nor can any

effective meaning be attributed to the liability clause of the

insurance company contained in sub-section (1) of Section 149.

The decision in Kamla case [(2001) 4 SCC 342 : 2001 SCC (Cri)

701] has to be read in the aforementioned context.”

(emphasis supplied)

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47.It is evident from the above, that the Supreme Court had

regarded Section 149(1) as the liability clause and not the proviso to

Section 149(4) or 149(5). Adverting to Section 149(5) it was held:

“Sub-section (5) of Section 149 which imposes a liability on the

insurer must also be given its full effect. The insurance company

may not be liable to satisfy the decree and, therefore, its liability

may be zero but it does not mean that it did not have initial

liability at all. Thus, if the insurance company is made liable to

pay any amount, it can recover the entire amount paid to the third

party on behalf of the assured.If this interpretation is not given to

the beneficent provisions of the Act having regard to its purport

and object, we fail to see a situation where beneficent provisions

can be given effect to. Sub-section (7) of Section 149 of the Act, to

which pointed attention of the Court has been drawn by the

learned counsel for the petitioner, which is in negative language

may now be noticed. The said provision must be read with sub-

section (1) thereof. The right to avoid liability in terms of sub-

section (2) of Section 149 is restricted as has been discussed

hereinbefore. It is one thing to say that the insurance companies

are entitled to raise a defence but it is another thing to say that

despite the fact that its defence has been accepted having regard

to the facts and circumstances of the case, the Tribunal has power

to direct them to satisfy the decree at the first instance and then

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direct recovery of the same from the owner. These two matters

stand apart and require contextual reading.”

48.The above observations must be read in conjunction with

the following conclusions in sub-paragraphs (x) and (xi) of paragraph

110 of the judgment which is as follows:

“(x) Where on adjudication of the claim under the Act the

Tribunal arrives at a conclusion that the insurer has

satisfactorily proved its defence in accordance with the

provisions of Section 149(2) read with sub-section (7), as

interpreted by this Court above, the Tribunal can direct that the

insurer is liable to be reimbursed by the insured for the

compensation and other amounts which it has been compelled

to pay to the third party under the award of the Tribunal. Such

determination of claim by the Tribunal will be enforceable and

the money found due to the insurer from the insured will be

recoverable on a certificate issued by the Tribunal to the

Collector in the same manner under Section 174 of the Act as

arrears of land revenue. The certificate will be issued for the

recovery as arrears of land revenue only if, as required by sub-

section (3) of Section 168 of the Act the insured fails to deposit

the amount awarded in favour of the insurer within thirty days

from the date of announcement of the award by the Tribunal.

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(xi) The provisions contained in sub-section (4) with the proviso

thereunder and sub-section (5) which are intended to cover

specified contingencies mentioned therein to enable the insurer

to recover the amount paid under the contract of insurance on

behalf of the insuredcan be taken recourse to by the Tribunal

and be extended to claims and defences of the insurer against

the insured by relegating them to the remedy before regular

court in cases where on given facts and circumstances

adjudication of their claims inter se might delay the

adjudication of the claims of the victims.”

From the above, it is clear that Section 149(4) and its proviso as well as

Section 149(5) were intended to only cover “ specified contingencies

mentioned therein” as pointed out by the Supreme Court. Section 149(4)

and (5), as it stood prior to the amendment, was as follows:

“(4) Where a certificate of insurance has been issued under sub-

section (3) of section 147 to the person by whom a policy has

been effected, so much of the policy as purports to restrict the

insurance of the persons insured thereby by reference to any

conditions other than those in clause (b) of sub-section (2) shall,

as respects such liabilities as are required to be covered by a

policy under clause (b) of sub-section (1) of section 147, be of

no effect:

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Provided that any sum paid by the insurer in or towards the

discharge of any liability of any person which is covered by the

policy by virtue only of this sub-section shall be recoverable by

the insurer from that person.

(5) If the amount which an insurer becomes liable under this

section to pay in respect of a liability incurred by a person

insured by a policy exceeds the amount for which the insurer

would apart from the provisions of this section be liable under

the policy in respect of that liability, the insurer shall be entitled

to recover the excess from that person.”

49.On a close reading of Section 149(4) and its proviso it

becomes clear that its object is to disable the insurer from setting up

defenses by setting up conditions other than those contained in clause (b)

of Section 149(2) by declaring that such conditions outside the scope of

Section 149(2) (b) were void and of no effect. It is further clear that the

operation of the proviso to Section 149(4) is restricted to sums paid by

the insurer “by virtue only of this sub-section”. This is one type of

specified contingency.

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50.The other is set out in Section 149(5) which is in pari

materia with Section 10(4) of the Road Traffic Act, 1939. The expression

“exceeds the amount for which the insurer would apart from the

provisions of this section be liable under the policy in respect of that

liability” occurring in Section 149(5) is crucial. So also, the phrase

“insurer shall be entitled to recover the excess from that person” which

immediately follows the said expression is equally important. As pointed

out by Shawcross in his “Treatise on the Law of Motor Insurance”,

(page 313) that Section 10(4) which corresponds to Section 149(5) was

intended to apply to cases where the insurers have limited their liability

in respect of third-party claims under the policy to a certain sum. It must

be pointed out that Section 149(5) corresponds to Section 96(4) of the

Motor Vehicles Act, 1939. Section 95(2) of the 1939 Act expressly

limited the liability of the insurance company to certain fixed sums. The

scope of Section 96(4) of the Motor Vehicles Act, 1939 came up for

consideration before a Full Bench of the Kerala High Court in National

Insurance Co v Roy George, 1993 ACJ 343, the following observations

were made:

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“No doubt, Section 96(4) enables the insurer to recover the

"excess" from the insured. But this does not refer to a situation

where the insurer pays the entire amount covered by the

judgment to the claimants and to its recovering the excess over

the statutory liability from the insured. This is because the

basic liability of the insurer is only to the statutory liability

covered by Section 95(1)(b) read with Section 95(2). But, the

provisions of Section 96(4) are not redundant or otiose. They

have a meaning and are meant to cover at least one of two

different situations. In a case where the entire policy is avoided

under Section 96(6) by the insurer on grounds mentioned in

Section 96(2) as against the insured, the insurer may, after

paying to the claimants the amount covered up to its statutory

liability under Section 95(1)(b) read with Section 95(2), recover

whatever it has so paid to the claimants, from the insured. In

that case, it can get back the whole of the amount covered by

the statutory liability from the insured and it would be a case of

"excess over nil" as stated by Lord Diplock in Harker's case

[1980] 1 Lloyd's Rep 556. There can also be a second situation

where after paying to the claimants the amount covered by the

statutory liability under Section 95(1)(b) read with Section

95(2) together with interest and costs, the insurer could recover

the "excess" amount over and above the specific statutory

figure, governing its liability under Section 95(1)(b) read with

Section 95(2) and obviously the word "excess" would then

mean that the insurer could recover the costs and interest from

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the insured. Of course, there is no practice in our country for

the general insurance companies to proceed to recover the

interest and costs from the insured nor are we to be understood

as permitting such a course by laying down a new convention.”

51.The same view has been taken by a Constitution Bench of

the Supreme Court in New India Assurance Co. Ltd. v. C.M. Jaya,

(2002) 2 SCC 278.The aforesaid decision makes it clear that Section

96(4) applied to a situation where the insurer avoids the policy in its

entirety under Section 96(6) on one or more of the grounds specified in

Section 96(2). In such a situation, the insurer was liable to pay the

claimant the sum up to the maximum specified in Section 95(2) and

could recover the said amount also from the insured. However, under the

Motor Vehicles Act, 1988, Section 147(2)(a), made it clear the liability of

the insurer is unlimited in respect of claims for death and bodily injury.

Thus, the concept of “excess” in the sense indicated by the Kerala High

Court in National Insurance Co v Roy George, 1993 ACJ 343 did not

arise except in cases where the damage was in respect of property of the

third party in which case the statutory maxima was pegged at Rs 5000

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under Section 147(2)(b).

MOTOR VEHICLES (AMENDMENT) ACT, 2019

52.We must now address the sheet anchor of the case of the

insurance companies which is to the effect that Parliament had

deliberately and consciously deleted the proviso to Section 149(4) and

Section 149(5) in the corresponding Section 150 in the newly substituted

Chapter XI pursuant to the Motor Vehicles (Amendment) Act, 2019.

Consequently, the doctrine of “pay and recover” has met its waterloo

with the deletion of these provisions. The learned counsel appearing for

the insurance companies repeatedly harped upon the point that

Parliament has consciously omitted proviso to Section 149(4) and

Section 149(5) signaling a clear intention to do away with the doctrine of

pay and recover.

53.The precursor to the 2019 Amendment Act is the Motor

Vehicles (Amendment) Bill, 2016. Clause 49 of the said Bill sought to

substitute Chapter XI of the Act and replace Section 149 with Section

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150. The proposed Section 150 was as follows:

“Duty of insurers to satisfy judgments and awards against

persons insured in respect of third-party risks.

150. (1) If, after a certificate of insurance has been issued under

sub-section (3) of section 147 in favour of the person by whom a

policy has been effected, judgment or award in respect of any

such liability as is required to be covered by a policy under

clause (b) of sub-section (1) of section 147 (being a liability

covered by the terms of the policy) or under the provisions of

section 164 is obtained against any person insured by the

policy, then, notwithstanding that the insurer may be entitled to

avoid or cancel or may have avoided or cancelled the policy,

the insurer shall, subject to the provisions of this section, pay to

the person entitled to the benefit of the award any sum not

exceeding the sum assured payable thereunder, as if that person

were the judgment debtor, in respect of the liability, together

with any amount payable in respect of costs and any sum

payable in respect of interest on that sum by virtue of any

enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under sub-section (1)

in respect of any judgment or award unless, before the

commencement of the proceedings in which the judgment or

award is given the insurer had notice through the court or, as

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the case may be, the Claims Tribunal of the bringing of the

proceedings, or in respect of such judgment or award so long as

its execution is stayed pending an appeal; and an insurer to

whom notice of the bringing of any such proceedings is so given

shall be entitled to be made a party thereto, and to defend the

action on any of the following grounds, namely:

(a) that there has been a breach of a specified condition of the

policy, being one of the following conditions, namely:

(i) a condition excluding the use of the vehicle—

(A) for hire or reward, where the vehicle is on the date of the

contract of insurance a vehicle not covered by a permit to ply

for hire or reward; or

(B) for organised racing and speed testing; or

(C) for a purpose not allowed by the permit under which the

vehicle is used, where the vehicle is a transport vehicle; or

(D) without side-car being attached where the vehicle is a two

wheeled vehicle; or

(ii) a condition excluding driving by a named person or by any

person who is not duly licensed or by any person who has been

disqualified for holding or obtaining a driving licence during

the period of disqualification; or

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(iii) a condition excluding liability for injury caused or

contributed to by conditions of war, civil war, riot or civil

commotion; or

(b) that the policy is void on the ground that it was obtained by

nondisclosure of any material fact or by representation of any

fact which was false in some material particular; or

(c) that there is non-receipt of premium as required under

section 64VB of the Insurance Act, 1938.

(3) Where any such judgment or award as is referred to in sub-

section (1) is obtained from a court in a reciprocating country

and in the case of a foreign judgment is, by virtue of the

provisions of section 13 of the Code of Civil Procedure, 1908

conclusive as to any matter adjudicated upon by it, the insurer

(being an insurer registered under the Insurance Act, 1938 and

whether or not that person is registered under the

corresponding law of the reciprocating country) shall be liable

to the person entitled to the benefit of the decree in the manner

and to the extend specified in subsection (1), as if the judgment

or award were given by a court in India: Provided that no sum

shall be payable by the insurer in respect of any such judgment

or award unless, before the commencement of the proceedings

in which the judgment or award is given, the insurer had notice

through the court concerned of the bringing of the proceedings

and the insurer to whom notice is so given is entitled under the

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corresponding law of the reciprocating country, to be made a

party to the proceedings and to defend the action on grounds

similar to those specified in subsection (2).

(4) Where a certificate of insurance has been issued under sub-

section (3) of section 147 to the person by whom a policy has

been effected, so much of the policy as purports to restrict the

insurance of the persons insured thereby, by reference to any

condition other than those in sub-section (2) shall, as respects

such liabilities as are required to be covered by a policy under

clause (b) of sub-section (1) of section 147, be of no effect:

Provided that any sum paid by the insurer in or towards the

discharge of any liability of any person which is covered by the

policy by virtue of this sub-section shall be recoverable by the

insurer from that person.

(5) If the amount which an insurer becomes liable under this

section to pay in respect of a liability incurred by a person

insured by a policy exceeds the amount for which the insurer

would apart from the provisions of this section be liable under

the policy in respect of that liability, the insurer shall be entitled

to recover the excess amount from that person.

(6) No insurer to whom the notice referred to in sub-section (2)

or sub-section (3) has been given shall be entitled to avoid his

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liability to any person entitled to the benefit of any such

judgment or award as is referred to in sub-section (1) or in such

judgment as is referred to in sub-section (3) otherwise than in

the manner provided for in sub-section (2) or in the

corresponding law of the reciprocating country, as the case may

be. (7) If on the date of filing of any claim, the claimant is not

aware of the insurance company with which the vehicle had

been insured, it shall be the duty of the owner of the vehicle to

furnish to the tribunal or court the information as to whether

the vehicle had been insured on the date of the accident, and if

so, the name of the insurance company with which it is insured.

(7) If on the date of filing of any claim, the claimant is not

aware of the insurance company with which the vehicle had

been insured, it shall be the duty of the owner of the vehicle to

furnish to the tribunal or court the information as to whether

the vehicle had been insured on the date of the accident, and if

so, the name of the insurance company with which it is insured.

Explanation.— For the purposes of this section,— (a) "award"

means an award made by the Claims Tribunal under section

168; 165; (b)"Claims Tribunal" means a Claims Tribunal

constituted under section (c) "liability covered by the terms of

the policy" means the liability which is covered by the policy or

which would be so covered but for the fact that the insurer is

entitled to avoid or cancel or has avoided or cancelled the

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policy; and (d) "material fact" and "material particular" means,

respectively, a fact or particular of such a nature as to influence

the judgment of a prudent insurer in determining whether he

shall take the risk and, if so, at what premium and on what

conditions.”

It is clear from a reading of Section 150, proposed under the Motor

Vehicles Bill, 2016, that the proviso to Section 150 (4) as well as Section

150(5) corresponding to proviso to Section 149 (4) as well as Section

149(5) were retained.

54.At this juncture we must also notice Section 147(2) as

proposed by the Motor Vehicles Bill, 2016 which was as follows:

(2) Notwithstanding anything contained under any other law for

the time being in force, for the purposes of third party insurance

related to either death of a person or grievous hurt to a person,

the Central Government shall prescribe a base premium and the

liability of an insurer in relation to such premium for an

insurance policy under subsection (1) in consultation with the

Insurance Regulatory and Development Authority:

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Provided that the payment to a person by an insurer, under the

third party insurance policy, shall be a sum of not exceeding ten

lakh rupees in case of death and not exceeding five lakh rupees

in case of grievous hurt, as may be prescribed by the Central

Government from time to time.”

55.Thus, under the 2016 Bill as originally conceived, the

liability of an insurance company was capped at Rs 10 lakhs for death

and 5 lakhs for grievous hurt under the proviso to Section 147(2). In

other words, the law makers wanted to originally do away with the

concept of unlimited liability under Section 147(2)(a) and replace it with

limited liability as was the case under its previous avatar under Section

95(2) of the 1939 Act.

56.The 2016 Bill was thereafter referred to a Standing

Committee of the Rajya Sabha which submitted its 243

rd

Report to

Parliament on 8

th

February 2017. After referring to Clause 49 of the Bill

and in particular with reference to the changes proposed to be made to

Section 147(2) and new Section 150 it was observed:

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“189. The Ministry further added that the Motor Vehicles

(Amendment) Bill, 2016 aims to reform the third party motor

vehicle insurance by providing for-

1.Fixing the limits of minimum compensation so as to ensure a

fair and reasonable compensation to accident victims from

present limit of Rs.50000/- to the revised limit of upto Rs.10 lacs

in cases of no-fault liability ; 2. Providing for payment of part of

compensation as interim relief ; 3. Increased compensation in hit

& run cases of Rs.2 lacs as against the present provision of Rs.

25000/- in case of death and Rs.50000/- as against Rs.12500/- in

case of grievous hurt. 4. Treatment to the accident victims during

golden hour. 5. Inclusion of hired drivers for compensation

payment. 6. Specifying the upper limit for which the insurance

company would be liable for.”

The Committee finally concluded:

“190. The Committee was informed that under section 147(2) of

the Bill it is proposes to cap the liability of general insurance

companies to Rs.5 lakh to 10 lakh in compensating the third

party claims in case of road accident. It was submitted to the

Committee that the proposal would expose millions of Third

Party Vehicle insurance policy holders to unlimited risk. If a

Tribunal or court awards compensation above 5 lakhs in case of

injury and Rs.10 lakhs in case of death, the owner of the vehicle

has to bear the burden of paying over and above to the third

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party. The Committee is of the view that the basic aim of

insurance is to defray individual risk collectively over a vast

group of premium contributors especially when the risk

apprehended is likely to be beyond all the means of the

individual. If this main purpose to save the individual is defeated

there seems to be no necessity for insurance policy to mitigate

the risk which an individual could not meet by himself. There is

no mens rea in accidents and very purpose of insurance is to

underwrite the cost of unforeseen contingencies. FDI was

liberalized in insurance to strengthen the concept of insurance in

a country in which life essentially is exposed to all sorts of

unforeseen contingencies and calamities. Insurance Companies

cannot run away from their basic responsibilities after

collecting hefty amount of no claim insurance premium.

191. The Committee, therefore, recommends that the capping

of liability of the insurance companies under third party

insurance policy is patently incorrect and against the interest

of the millions of road users. The Committee, therefore,

recommends that proviso to section 147 (2) as included in

Clause 49 may be omitted.”

It is thus, obvious, that Standing Committee had taken serious exception

to the proposed amendment which sought to limit the statutory liability

of insurance companies.

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57.In response to the aforesaid recommendations of the

Standing Committee, notice of amendments were given to Parliament by

the Minister for Transport on 05.04.2017. Serial No 21 purported to give

effect to the recommendations of the Standing Committee by deleting the

proviso to Section 147(2) which capped the liability of the insurance

company. Simultaneously, the proviso to Section 150(4) and Section

150(5) in the Motor Vehicles Bill, 2016 were deleted via Serial No 26 &

27 of the notice of amendments. Thereafter, the Bill was reintroduced in

Parliament as the Motor Vehicles Amendment Bill 2017.

58.When the Bill was tabled before the Lok Sabha on

10.04.2017 by the Hon’ble Minister for Road Transport Shri Nitin

Gadkari, the following was the assurance given on the floor of the

House:

Free English translation runs as follows:

SHRI NITIN GADKARI: Madam, regarding the important

issues raised here by the hon. Members and the concerns

expressed, I definitely agree with some of their points and

also wish to clarify certain matters. The hon. Members

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Shrimati Arpita Ghosh, Shri Shankar Prasad Datta, and

some other members have expressed concerns about third-

party insurance. I want to make it clear in this regard that

in this Bill, there is no upper limit set on the amount of

compensation by the Claims Tribunal. Therefore, please

do not worry about this. Secondly, accepting the

recommendation of the Standing Committee, a provision

has also been made that the full amount of compensation

will be paid by the insurance companies. If they have got

their vehicle insured, then no liability will fall on the

vehicle owners.… (Interruption)

59.Thus, the real debate in Parliament was whether the liability

of the insurer should be capped, which was the position under Section

95(2) of the Motor Vehicles Act, 1939 or should be made unlimited. We

have extensively gone through the Standing Committee Reports as well

as the debates on the floor of Parliament in respect of the Motor Vehicle

Bills which eventually culminated in the Motor Vehicles Amendment

Act, 2019 and we are unable to find any discussion therein to show that

Parliament had consciously intended to do away with the doctrine of pay

and recover. We are therefore unable to subscribe to the inference sought

to be drawn by the insurance companies that the deletion of the proviso

to Section 149(4) and Section 149(5) sounded the death knell of the

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doctrine of pay and recover.

60.On the contrary, we are of the considered view that the

deletion of Section 149(5) was necessary consequence of the liability of

the insurance company being made unlimited under Section 147(2) after

the 2019 Amendment. We have already pointed out that operation of

Section 149(5) was confined only to a specified contingency, as pointed

out in Swaran Singh’s case, where the statutory maxima was pegged at

Rs 5000 under Section 147(2)(b) for damage caused to the property of a

third party. In such situations, Section 149(5) enabled the insurance

company to first pay the entire amount to the third party and then recover

the excess sum paid over and above the statutory maxima ie., Rs 5000

from the insured. Under the new regime, Section 147(2) read with Rule 2

of the Third-Party Insurance (Base Premium and Liability) Rules, 2022

makes the liability of the insurance company unlimited rendering the

concept of “excess” under old Section 149(5) redundant. It was for this

reason that Section 149(5) was deleted simultaneously with the proviso

to Section 147(2) limiting the liability of insurance companies in the

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Motor Vehicles Bill 2017.

61.Turning to Section 149(4) we are of the opinion that the

deletion of the proviso does not alter the consequences flowing from

Section 149(1). Even under the regime prior to the Motor Vehicles

(Amendment) Act, 2019, the proviso to Section 149(4) was being

employed to order pay and recover in cases falling under Section 149(2)

(a) alone. As pointed out by the Supreme Court in United India

Insurance Co. Ltd. v. Lehru, (2003) 3 SCC 338, the proviso to Section

149(4) was merely illustrative in nature. It was for this reason that the

Full Bench of the Karnataka in New India Assurance Co v Yallava,2020

ACJ 2560, had held that the power to order pay and recover flows from

the statutory command of Section 149(1) and can be ordered even in

cases falling under Section 149(2)(b) which fell outside the scope of

Section 149(4) and its proviso.

62.At this juncture it is necessary to notice the changes made

in Section 150(2) by the Motor Vehicles (Amendment) Act, 2019.

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Section 150(2) has expanded the list of defenses to include cases where

the vehicle was being driven under the influence of alcohol or drugs.

There is also an exclusion for non-receipt of premium under Section

64VB of the Insurance Act, 1938. Section 150(4) has now been recast as

follows:

“(4) Where a certificate of insurance has been issued under sub-

section (3) of section 147 to the person by whom a policy has

been effected, so much of the policy as purports to restrict the

insurance of the persons insured thereby, by reference to any

condition other than those in sub-section (2) shall, as respects

such liabilities as are required to be covered by a policy under

clause (b) of sub-section (1) of section 147, be of no effect.”

A close reading of Section 150(4) with its previous avatar in Section

149(4) would show that under the new regime, any defense other than

those under Section 150(2) are rendered void unlike Section 149(4)

which rendered void any condition other than those in Section 149(2)(b).

63.The changes made in Section 150(2) were recommended by

the Law Commission of India way back in 1994 in its 149

th

report on

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“Some Deficiencies in the Motor Vehicles Act, 1988”. In the said report

it was observed as follows:

“4.3. In the 1988 Act, S. 149 replaces the S. 96 of the 1939-Act,

Ss. 149(1), (3), (4), (5), (6) & (7) of the 1988-Act re-enacts Ss.

96(1), (2-A), (4), (5) and (6) of the 1939-Act respectively with

minor changes not material for our present purposes. S. 149(2),

however, re-enacts S. 96(2) of the 1939 Act with one major

difference, viz., the omission of cl. (a) thereof. Thus, S. 149(2)

has only two cl. (a) and which correspond to cls. (b) and (c) of

S. 96(7) of the 1939 Act. In other words, the new Act, in

enacting S. 149, intended no material deviation from the

provisions of S. 96, save only the omission of S. 96(2)(a). S.

149(4). however, repeats the language of S. 96(3) of the 1939

Act verbatim, except that “sub-s. (4) of S. 95” and “cl. (b) of

sub-s. (1) of S. 95” have been replaced by “sub-s. (3) of S.

147” and “cl. (b) of sub-s. (1) of S. 147” consequent on the re-

enactment of S. 95 of the old Act as S. 147 with some changes.

But it retained the reference to “conditions other than those in

cl. (b) of sub-s. (2)” overlooking that the said “cl. (b)” had

become “cl. (a)” in the new S. 149(2). This is clearly a mistake.

We, therefore recommend that, in S. 149(4) of the Act, the words

“cl. (a) of sub-s. (2)” should be substituted for the words “Cl.

(b) of sub-s. (2)”

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64.It is a matter of some surprise that Courts across the country

have been interpreting Section 149(4) as voiding the defenses under

Section 149(2)(a) and thereby ordering pay and recover when such an

obvious error was flagged by the Law Commission way back in 1994. It

has taken nearly 25 years for the Parliament to set right the anomaly

pointed out by the Law Commission. We suppose that it is better late

than never. We are therefore unable to subscribe to the argument of the

insurance companies that the deletion of the proviso to Section 149(4)

presently Section 150(4) puts an end to the doctrine of pay and recover.

65.We must also notice the decision of S Sounthar, J in SBI

General Insurance Co v Muthulakshmi, (2025) 1 TN MAC 597, where

the learned judge has held as follows:

“17. In case, the insurer becomes successful in pleading

and proving defences available to it under Section 150

Sub-Section 2, it need not honour its duty under the

contract of insurance towards the insured. However, the

statutory liability under Section 150(1) towards third

party remains unaffected, the natural corollary would be

after making payment under Section 150 (1), the insurer

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is entitled to recover the said amount from the insured by

virtue of its successful defence raised under Section 150

(2). The liability of insurer under Section 149 (1) [New

Section 150 (1)] is a statutory liability and on the other

hand it is concomitant with liability of insurer towards

insured. If we say that the liability of insurer to satisfy

award passed against insured is subject to terms and

conditions of contract between insurer and insured, over

which innocent third party victims have no control, the

very object of statutory liability enshrined in Section 147

(1)(b) read with Section 149 (1) [New Section 147 (1)(b)

read with Section 150 (1)] of Motor Vehicles Act will get

defeated. The object of said provision is better served by

concept of “pay and recovery” enunciated in Swaran

Singh case cited infra. Infact, in Swaran Singh case (in

paragraphs 96 and 97), the Apex Court emphasised that

the concept of pay and recovery has been holding the

field for a long time and the same need not be deviated.

The concept of “pay and recovery” will achieve the

object of providing hassle free mechanism for poor

accident victims to recover the damages awarded to them

with certainty and on the other hand it also takes care of

insurer's right under contract of insurance by enabling

insurer to recover the amount paid by it to third parties,

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which insurer is not bound to pay to the insured.

18. Therefore, the insurer has to pay and recover in the

event of it's success in respect of defences under Section

150 (2). This position has been clearly declared by Apex

Court in National Insurance Co. Ltd. v. Swaran Singh,

(2004) 3 SCC 297, wherein Apex Court held that in the

event of insured being guilty of negligence or has failed

to exercise reasonable care in fulfilling conditions of

contract of insurance and the breach was so fundamental

and was found to have contributed to the accident, the

insurer is entitled to avoid it's liability towards insured. I

would like to emphasis, even in that event insurer is not

entitled to avoid it's statutory liability towards third

parties. It can only avoid it's liability under contract of

insurance towards insured and hence, entitled to recover

the amount paid by it from insured. I would like to add

that liability of insurer under Motor Vehicles Act is a

blend of liability under statute and liability under

contract of indemnity. Its liability under Section 150(1)

towards third party is a statutory one. Its liability

towards insured is under contract of indemnity (contract

of insurance).”

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We are in complete agreement with the aforesaid exposition of law which

correctly sums up the basis of liability of the insurance company to a

third party as being traceable to Section 150(1) of the Act.

66.The learned counsel for the insurance companies took

exception to the finding of the learned single judge in paragraph 25 of

the judgment in Muthulakshmi’s case, supra where the learned judge

proceeds to observe that the proviso to Section 149(4) is merely

declaratory in character. It may perhaps have been more appropriate to

characterize the same as being illustrative in nature as was done by the

Supreme Court in United India Insurance Co. Ltd. v. Lehru, (2003) 3

SCC 338. We accordingly clarify the aforesaid aspect while agreeing

with the ultimate conclusions of the learned single judge. We are also

informed that a similar conclusion has been arrived at by the Allahabad

High Court in ICICI Lombard General Insurance Co v Aarti Devi,

2025 Supreme(All) 2741. A similar view has been taken by one of us

(K.K Ramakrishnan, J) in C.M.A.(MD)No.653 of 2025 dated,

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10.07.2025.

67.Our attention was drawn to a Division Bench judgment of

this Court in Manager v Tamil Selvi, CMA 747 & 753 of 2025, which

was rendered on 06.02.2026. We have carefully gone through the said

decision, and we must confess our inability to comprehend what exactly

is sought to be conveyed by the Division Bench. In paragraph 12, the

Division Bench has stated as follows:

“12.Thus, it is clear that the amendment to Section 150 of the

Motor Vehicles Act came into effect on 01.04.2022. As per the

amendment, the proviso states that any sum paid by the insurer

in or towards the discharge of any liability of a person covered

by the policy, by virtue only of this sub-section, shall be

recoverable by the insurer of that person.”

13.This proviso now applies as per the amendment effective

from 01.04.2022.”

With utmost respect to the Division Bench, we are constrained to point

out that the aforesaid conclusions are incorrect. The Amendment Act

which came into force from 01.04.2022 deleted the proviso to Section

150(4) ie., old Section 149(4) which has been referred to by the Division

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Bench in paragraph 12 as having come into force on 01.04.2022. We are

therefore extremely surprised to find that the Division Bench has

concluded that the proviso had come into force on 01.04.2022 when in

reality the same had been deleted with effect from 01.04.2022. It appears

that the Division Bench realized this later because in paragraph 15 it has

been observed as follows:

“15.When the particular provision of Section 149 of the Motor

Vehicles Act, 1988, was deleted by way of amendment in

Section 150 of the Motor Vehicles (Amendment) Act, 2019, with

effect from 01.04.2022, the pay and recovery cannot be ordered

by the Courts. When the legislature specifically deleted the

proviso for pay and recovery, it is the duty of the Court to act in

accordance with the intent of the legislature.”

Thus, on the one hand the Division Bench in paragraphs 12 and 13 states

that the proviso, which in reality had been deleted, has come into effect

from 01.04.2022 and in another paragraph (paragraph 15) it holds that

the very same proviso has been deleted. We are, therefore, unable to

follow this decision as it does not appear to lay down any coherent

reasons which constitutes binding precedent. That apart, in attempting to

conclude that the deletion of the proviso to Section 149(4) put an end to

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the doctrine of pay and recover, the Division Bench did not consider the

decision of the Supreme Court in United India Insurance Co. Ltd. v.

Lehru, (2003) 3 SCC 338,wherein it was held “The proviso to sub-

section (4) is very illustrative”.

FORM 51 CENTRAL MOTOR VEHICLES RULES, 1989

68.We must now deal with the contention raised by the

insurance companies on the basis of Form 51 of the Central Motor

Vehicle Rules, 1989. Form 51 deals with the format of certificate of

insurance and is issued under Rule 141 of the Central Motor Vehicle

Rules, 1989. For ease of reference, Rule 141 reads as follows:

“141. Certificate of insurance.—An authorised insurer

shall issue to every holder of a policy of insurance, a

certificate of insurance in Form 51 in respect of each such

vehicle.”

69.Under Form 51, as it stood prior to the Amendment,

contained 11 items and for the present purpose Serial Nos 10 and 11

were as follows:

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“10. Limitations as to use:Stage carriage/contract

carriage/ goods carriage/private service vehicle The

policy covers use only under a permit within the meaning

of the Motor Vehicles Act, 1988, or such a carriage falling

under sub-section (3) of section 66 of the Motor Vehicles

Act, 1988. The policy does not cover use for -- (a)

organized racing, or (b) speed testing.

11. Private service vehicle and non-transport vehicle:

The policy covers use for any purpose other than -- (a)

hire or reward, (b) organized racing, or (c) speed testing.”

The aforesaid limitations were traceable to Section 149(2)(a)(i)(a) and

Section 149(2)(a)(i) (b).

70.After the coming into force of Central Act 32 of 2019, and

substitution of Chapter XI in the Motor Vehicles Act, 1988 by the said

amendment, Form 51 has been amended to add a 12

th

column which reads

as follows:

“12. All vehicles The policy does not cover liability for

death, bodily injury or damage as excluded in section

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150(2)(ii) and (iii); (b) and (c) of the Motor Vehicles Act,

1988.”

By relying on the aforesaid column in Form 51 it was contended that the

insurance companies were under no obligation to pay anything to the

third party in the event of breach of the conditions of the policy attracting

Section 150(2)(ii) and (iii); (b) and (c) respectively.

71.In the first place, we must immediately point out that this

contention is based on a completely fallacious understanding that the

forms prescribed in a subordinate legislation can control the

interpretation given in the parent enactment. The law is otherwise. In

CIT v. Tulsyan NEC Ltd., (2011) 2 SCC 1, it was held:

“Lastly, it is immaterial that the relevant form prescribed under

the Income Tax Rules, at the relevant time (i.e. before

1-4-2007), provided for set-off of MAT credit balance against

the amount of tax plus interest i.e. after the computation of

interest under Section 234-B. This was directly contrary to a

plain reading of Section 115-JAA(4). Further, a form

prescribed under the Rules can never have any effect on the

interpretation or operation of the parent statute.”

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Consequently, we cannot permit the tail to wag the dog by allowing the

form to control the meaning and interpretation to be given to Section

150.

72.Section 147(1) spells out that every policy of insurance

must insure the person or classes of persons specified in the policy to the

extent specified Section 147(2). Section 147(2) reads as follows:

“(2) Notwithstanding anything contained under any other law

for the time being in force, for the purposes of third party

insurance related to either death of a person or grievous hurt to

a person, the Central Government shall prescribe a base

premium and the liability of an insurer in relation to such

premium for an insurance policy under sub-section (1) in

consultation with the Insurance Regulatory and Development

Authority.”

73.Pursuant to Section 147(2), the Central Government has

framed the Motor Vehicles (Third Party Insurance Base Premium and

Liability) Rules, 2022. Rule 2 of the said Rules prescribes the base

premium for third party insurance for unlimited liabilityfor the various

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classes of vehicles set out in the table therein. Section 150(2)(ii) and (iii);

(b) and (c) respectively are defences which are available to the insurer in

terms of Section 150(5). As we have already pointed out earlier, the

liability of the insurer to the third party flowing from Section 150(1) is

notwithstanding the fact that the insurer may be entitled to avoid or

cancel or may have avoided or cancelled the policy. This is further

clarified by Explanation (c) to Section 150. Consequently, breach of a

condition falling within Section 150(2)(ii) and (iii); (b) and (c) may

entitle the insurer to repudiate the contract of insurance between itself

and the insured. However, the statutory obligation to first satisfy the

claim of the third party under Section 150(1) does not vanish. The

insurer must first satisfy and then proceed against the insured in such

cases.

74.We are fortified in taking this view since even under the

unamended Form 51, Serial Nos 10 and 11 stated that the policy does not

cover use for -- (a) organized racing, or (b) speed testing and (c) use for

hire or reward which were all permissible defences under Section 149(2)

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(a)(i)(a) and 149(2)(a)(i)(b). However, even under the regime which

existed prior to the Motor Vehicles (Amendment) Act, 2019 in all such

cases also the insurer was first bound to satisfy the claim of the third

party under the award and then proceed to recover the same from the

insurer. Consequently, this contention also fails.

CONCLUSION

75.For the reasons stated above, we hold and declare that:

a. The deletion of the proviso to Section 149(4) and Section

149(5) in the Motor Vehicles Act, 1988, as it stood prior to

the amendment by the Motor Vehicles (Amendment) Act,

2019 (Act 32 of 2019), does not have the effect of

obliterating the statutory duty of the insurer to pay the claims

made under an award or decree in respect of liability covered

under a policy of insurance.

b. The duty vis-à-vis a third party is statutory in character

and flows from Section 150(1) of the Motor Vehicles Act,

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1988, as amended by Act 32 of 2019, and remains

unhindered by the fact that the insurance company has

succeeded in establishing a contractual defense permitted

under Section 150(2).

c. In the event the insurance company succeeds in

establishing a defense under Section 150(2), the insurer will

stand absolved from its contractual liability vis-à-visthe

insured. Consequently, the insurer, after satisfying its

statutory liability under Section 150(1) can proceed to

recover the sum so paid from the insured. The insurance

company can proceed to recover the same in terms of the

directions contained in paragraph 110 (x) of the decision of

the Supreme Court in National Insurance Co. Ltd v Swaran

Singh, (2004) 3 SCC 297.

d. Conversely, if the insurance company does not succeed in

establishing a defense under Section 150(2) the burden to

meet the entire claim will fall on the insurer by virtue of

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Section 147(2) as amended by Act 32 of 2019, and Rule 2 of

the Third-Party Insurance (Base Premium and Liability)

Rules, 2022 which provides for unlimited liability in respect

of third party insurance under Chapter XI of the Act.

76.In these batch of appeals, there is a factual finding of a

violation of one of the policy conditions on one or more grounds set out

in Section 150(2) of the Motor Vehicles Act, 1988. Consequently, the

Motor Accident Claims Tribunals (MACT) has directed the insurance

companies to first pay the third party and thereafter recover the sums so

paid under the award from the insured. In so far as CMA (MD) 213 of

2026 is concerned, we observe that in Sunita v United India Insurance

Company, 2025 SCC Online SC 1464, the Supreme Court directed pay

and recover even in the absence of a fitness certificate which constituted

a breach of a policy condition.

77.In so far as the quantum of compensation fixed by the

Tribunal in each of these cases, we have carefully gone through the

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various heads under which compensation has been fixed, and we find the

same to be just and proper in the facts and circumstances of the

respective cases.

78.In view of the discussion made and the conclusions arrived

at, supra, we find absolutely no error in the aforesaid directions to pay

and recover made by the MACT in all these appeals.

79.In the result, these appeals fail and will stand dismissed.

The claimants are at liberty to withdraw the sums deposited into this

Court on proper identification. Costs made easy. Consequently, the

connected miscellaneous petitions are closed.

[N.A.V., J.] [K.K.R.K., J.]

01.06.2026

NCC :Yes

Index :Yes

PKN

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To

1.The Motor Accident Claims Tribunal/Special District Judge,

Thanjavur.

2. The Motor Accident Claims Tribunal Cum Special District Court

to deal with MCOP Cases Madurai.

3.The Motor Accident Claims Tribunal cum Honourable Special

Subordinate Court, Dindigul.

4.The Record Keeper (Vernacular Records),

Madurai Bench of Madras High Court,

Madurai.

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N. ANAND VENKATESH,J.

AND

K.K.RAMAKRISHNAN,J.

PKN

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01.06.2026

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