Authority: High Court of Judicature at Madras

Order Date: 08-07-2026

Case Overview

  • Parties: Appellant – Iffco‑Tokio General Insurance Company Ltd (servicing office, Shimoga, Karnataka). Respondents – multiple claimants: Manjunatha & Chudappa (CMA No. 273); Chikkammaiah, Latha, Geetha, Bhagya (CMA No. 275); Kenchamma, Manjula, Manjunath, Chudappa (CMA No. 387). Legal representatives: Mr. B. Siva Kollappan for the insurer; Mr. Mukund R. Pandiyan and Mr. C. Prabakaran for the claimants.
  • Nature of Proceeding: Civil Miscellaneous Appeals (CMA Nos. 273, 275 & 387 of 2020) filed to set aside the common judgment and decrees dated 06‑09‑2019 passed by the Motor Accidents Claims Tribunal (Additional District Judge), Hosur, in MCOP Nos. 179, 26 and 27 of 2018.
  • Background Accident: On 02‑05‑2017 at ~3:30 p.m., an Eicher lorry (Reg. No. KA‑05‑AB‑7404) carrying three coolies – deceased Mr. Yellappa (Ellappa), deceased Mr. Muniraj (Chithurappa) and injured Mr. Manjunatha – overturned near Akka Thangachi Gundu after the driver lost control. The two deceased and the injured claimant’s dependants filed separate claim petitions.
  • Tribunal Findings (06‑09‑2019):

1. The passengers were unauthorized, violating policy conditions; liability to pay compensation rested with the vehicle owner, but the insurer (second respondent) was directed to pay and later recover from the owner.

2. Compensation awarded:

  • MCOP No. 26 (deceased passengers): Rs 5,71,000 with 7.5% p.a. interest.
  • MCOP No. 27 (deceased passengers): Rs 11,39,600 with 7.5% p.a. interest.
  • MCOP No. 179 (injured claimant): Rs 2,57,728 with 7.5% p.a. interest.
  • Appellant’s Arguments: Asserted that because the passengers were gratuitous, the Tribunal should not have imposed pay‑and‑recover on the insurer; relied on Division Bench judgments (2018 (2) TNMAC 731; 2019 (2) TNMAC 86).
  • Respondents’ Counter‑Arguments: Emphasised that the policy is both a statutory policy under Section 147 of the Motor Vehicles Act and a contractual indemnity; argued that the insurer could not evade liability and cited Supreme Court decision (2013 1 SCC 731) distinguishing “Act policy” from “comprehensive/package policy”.
  • Court’s Reasoning:
  • Recognised the policy as a composite of statutory and contractual components; while the statutory portion cannot be cancelled, the contractual portion can be repudiated only if the insurer has acted to rescind it, which it had not.
  • Found no material showing the insurer had taken steps to rescind the contractual part; therefore, the principle of pay‑and‑recover remains applicable.
  • Referred to Division Bench precedent that in pure statutory liability cases pay‑and‑recover may not apply, but held that the present policy is not purely statutory.
  • Cited Supreme Court judgments, notably Akalya Narayana v. The Oriental Insurance Co. Ltd (Civil Appeal No. 013509 of 2025, dated 10‑11‑2025) and Rama Bai v. Amit Minerals, confirming that where the insurance contract is not disputed, the insurer must satisfy the award and may recover from the vehicle owner.
  • Conclusion: The High Court found no error in the Tribunal’s common award and saw no ground for interference.

Final Outcome

  • All three Civil Miscellaneous Appeals are dismissed.
  • No order as to costs.
  • The insurer (Iffco‑Tokio) is directed to satisfy the awarded compensation amounts and retains the right to recover the same from the vehicle owner.
  • Connected Miscellaneous Petitions are closed.

Topics: Insurance Liability, Pay‑and‑Recover Principle