The United India Insurance Company Ltd.,Third Party Claims Office,No.38, Anna Salai,Chennai-2 v. 1. M.Thangavel2. K.S.Kumar

petition before the Tribunal, claiming a sum of Rs.3,00,000/- ascompensation contending that the driver of the lorry was solelyresponsible for the accident and as such, the owner of the vehicle,the 2nd respondent herein and the insurer of the vehicle, theappellant herein, are jointly and severally liable to paycompensation.3. The case of the claimant was resisted by the insurancecompany, which contended that the victim was an unauthorisedpassenger in the goods vehicle. Moreover, the driver of the lorry didnot have a valid licence and hence, there is a statutory violation onthe part of the owner of the vehicle since he had allowed the 1strespondent to travel in the goods vehicle as an unauthorisedpassenger. Therefore, the insurance company is not liable to paycompensation. 4. The Tribunal framed necessary issues and the claimantexamined himself as P.W.1 besides examining one doctor as P.W.2 andmarked Exs.P-1 to P-9 and on the side of the insurance company,neither oral nor documentary evidence was adduced. The Tribunalrejected the plea raised by the insurance company and held that theclaimant was entitled for compensation. The Tribunal awarded a totalcompensation of Rs.1,52,500/- together with interest at 7.5% anddirected the insurance company to pay the same on behalf of the ownerof the vehicle. This award is subject matter of challenge in thisappeal.5. Learned counsel appearing for the appellant insurance companysubmitted that Ex.P-1, copy of the first information report markedon the side of the 1st respondent/claimant would show that the victimhad travelled as a passenger in the goods carriage, which is inviolation of the provisions of Section 147(b)(1) of the Motorvehicles Act. But the Tribunal has not chosen to consider thecontents of the first information report while fixing liability onthe part of the appellant insurance company. In this regard, thelearned counsel further submitted that under section 147 of the MotorVehicles Act, the insurance company is not statutorily liable to paycompensation to the passengers travelling in the goods vehicle sinceit is an admitted fact that the victim was a passenger in goodsvehicle, the appellant insurance company is not liable to paycompensation in this case. In support of his contentions, the learnedcounsel has relied on the decisions reported in NEW INDIA ASSURANCECO.LTD., .vs. ASHA RANI AND OTHERS (2003 ACJ 1), ORIENTAL INSURANCECO.LTD., .vs. DEVIREDDY KONDA REDDY AND OTHERS ((2003) 2 SCC 339),M/s.NATIONAL INSURANCE CO.LTD., .vs. BALJIT KAUR AND OTHERS (2004(1)CTC 210), NEW INDIA ASSURANCE CO.LTD., .vs. VEDWATI AND OTHERS (2007ACJ 1043), ORIENTAL INSURANCE CO.LTD., .vs. MEENA VARIYAL AND OTHERS(2007(3) SUPREME 136), THOKCHOM ONGBI SANGEETA @ SANGI DEVI .vs.ORIENTAL INSURANCE CO.LTD., (CDJ 2007 SC 1163), NATIONAL INSURANCECO.LTD., .vs. PREMA DEVI & OTHERS (CDJ 2008 SC 354), NATIONAL https://hcservices.ecourts.gov.in/hcservices/ INSURANCE CO.LTD., .vs. RATTANI AND OTHERS (2009 ACJ 925), SHANKERRAJU .vs. UNION OF INDIA (2011) 2 SCC 132), BRANCH MANAGER, UNITEDINDIA INSURANCE CO.LTD.,DHARMAPURI TOWN .vs. NAGAMMAL AND OTHERS(2009 (1) TN MAC 1) and NEW INDIA ASSURANCE CO.LTD., THANJAVUR .vs.VINAYAGA MOORTHI AND OTHERS (CDJ 2008 MHC 4293). 6. Per contra, Mr.Thyagarajan, learned Senior Counsel appearingfor the 1st respondent/claimant submitted that as on date, there isan award in favour of the 1st respondent/claimant by the Tribunal.When there is an award in favour of the claimant by the Tribunal,under section 149, the insurer shall pay to the person entitled tothe benefit of the decree and even if there is any violation, theappellant, after paying the amount to the victim, recover the samefrom the owner of the vehicle. Under such circumstances, the scope ofthe interference in the award is very limited. In support of hiscontentions, the learned senior counsel has relied upon the judgmentreported in B.C.CHATURVEDI .vs. UNION OF INDIA AND OTHERS ((1995) 6SCC 749), NEW INDIA ASSURANCE CO.LTD., .vs. SATPAL SINGH (I(2000) ACC1 (SC), NATIONAL INSURANCE CO.LTD., .vs. SWARAN SINGH AND OTHERS(2004(1) TN MAC 104 (SC) and PREMKUMARI AND OTHERS .vs. PRAHLAD DEVAND OTHERS ((2008) 3 MLJ 568 (SC).7. By way of reply, the learned counsel appearing for theappellant submitted that the principle of 'pay and recover' willarise only in the circumstances where the insurance company issuccessful in its defence available to them under section 149, it mayyet be required to pay the amount to the victim and thereafter torecover the same from the owner of the vehicle. If there is anystatutory violation under section 147 by allowing a person to travelin a goods carriage vehicle as an unauthorised passenger, thenabsolutely there is no contract between the insured and the insurerto pay the amount. Therefore, the doctrine of 'pay and recover' doesnot arise in the cases of statutory violation. The learned counselfor the appellant further submitted that the Supreme Court in certaincases under Article 142, on discretion, directed the insurancecompany to pay the amount and recover the same from the owner of thevehicle. Therefore, the same cannot be followed by this Court in allthe cases.8. Per contra, the learned senior counsel for the 1st respondent,by relying upon the decision reported in (1995) 6 SCC 749 (supra)submitted that in the said judgment, it has been held that thoughthere is no provision parallel to Article 142 relating to the HighCourts, the High Court too can exercise power of review, which inhersin every court of plenary jurisdiction and, hence, this Court, byexercising its inherent power, can order for payment of the amount tothe victim and recover the same from the owner of the vehicle.9. Heard the learned counsel for the parties and perused thematerials. https://hcservices.ecourts.gov.in/hcservices/

10. It is the submission of the learned counsel for theappellant that the owner of the vehicle, by permitting the 1strespondent to travel in the goods carriage vehicle as an unauthorisedpassenger, has committed statutory violation. Therefore, undersection 147(b)(1) of the Motor Vehicles Act, the insurance companycannot be held responsible to pay the compensation, whereas it isthe submission of the learned senior counsel for the 1st respondent,as on date, there is an award in favour of the 1st respondent/claimantand hence, under section 149, it is the duty of the insurer tosatisfy the award. In these circumstances, the scope to make aninterference in the award is very limited. Therefore, the insurancecompany could be directed to recover the award amount from the ownerof the vehicle, after making payment to the respondent/claimant.11. In view of the submissions made by the learned counsel oneither side, now the question that arises for consideration is,whether, in case of injuries sustained by the unauthorised passengerwhile travelling in the goods carriage vehicle, can a direction begiven to the insurance company to pay the amount to the victim andrecover the same from the owner of the vehicle ?12. Before discussing the issue with regard to the doctrine of'pay and recover', it could be appropriate to extract the relevantprovisions of the Motor Vehicles Act."S.147. Requirements of policies and limits of liability:-(1) In order to comply with the requirements of this Chapter, apolicy of insurance must be a policy which-(a) is issued by a person who is an authorised insurer; and(b) insures the person or classes of persons specified in thepolicy to the extent specified in sub-section (2) --(i) against any liability which may be incurred by him inrespect of the death of or bodily injury to any personincluding, owner of the goods or his authorisedrepresentative carried in the vehicle or damage to anyproperty of a third party caused by or arising out of the useof the vehicle in a public place".149. Duty of insurers to satisfy judgments and awardsagainst 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 apolicy has been effected, judgment or award in respect of anysuch liability as is required to be covered by a policy underclause (b) of sub-section (1) of Section 147 (being a liabilitycovered by the terms of the policy) or under the provisions ofsection 163-A is obtained against any person insured by thepolicy then, notwithstanding that the insurer may be entitled toavoid or cancel or may have avoided or cancelled the policy, theinsurer shall, subject to the provisions of this section, pay to https://hcservices.ecourts.gov.in/hcservices/ the person entitled to the benefit of the decree any sum notexceeding the sum assured payable thereunder, as if he were thejudgment debtor, in respect of the liability, together with anyamount payable in respect of costs and any sum payable in respectof interest on that sum by virtue of any enactment relating tointerest on judgment.(2) No sum shall be payable by an insurer under sub-section(1) in respect of any judgment or award unless, before thecommencement of the proceedings in which the judgment or award isgiven the insurer had notice through the Court or, as the casemay be the Claims Tribunal of the bringing of the proceedings, orin respect of such judgment or award so long as execution isstayed thereon pending an appeal; and an insurer to whom noticeof the bringing of any such proceedings is so given shall beentitled to be made a party thereto and to defend the action onany of the following grounds, namely;-(a) that there has been a breach of a specifiedcondition of the policy, being one of the followingconditions, namely:-(i) a condition excluding the use of the vehicle--(a) for hire or reward, where the vehicle is on thedate of the contract of insurance a vehicle notcovered 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 underwhich the vehicle is used, where the vehicle is atransport vehicle, or(d) without side-car being attached where the vehicleis a motor cycle; or(ii) a condition excluding driving by a named person orpersons or by any person who is not duly licensed, or byany person who has been disqualified for holding orobtaining a driving licence during the period ofdisqualification; or(iii) a condition excluding liability for injury caused orcontributed to by conditions of war, civil war, riot orcivil commotion; or(b) that the policy is void on the ground that it was obtainedby the non-disclosure of a material fact or by a representationof fact which was false is some material particular....(4) Where a certificate of insurance has been issued undersub-section (3) of Section 147 to the person by whom a policy hasbeen effected, so much of the policy as purports to restrict theinsurance of the persons insured thereby by reference to anyconditions other than those in clause (b) of sub-section (2)shall, as respects such liabilities as are required to be coveredby a policy under clause (b) of sub-section (1) of Section 147, beof no effect: https://hcservices.ecourts.gov.in/hcservices/ Provided that any sum paid by the insurer in or towards thedischarge of any liability of any person which is covered by thepolicy by virtue only of this sub-section shall be recoverable bythe insurer from that person.(5) If the amount which an insurer becomes liable under thissection to pay in respect of a liability incurred by a personinsured by a policy exceeds the amount for which the insurer wouldapart from the provisions of this section be liable under thepolicy in respect of that liability, the insurer shall be entitledto recover the excess from that person".13. It is to be noted that in Section 147(b)(1), the expression"injury to any person including, owner of the goods or his authorisedrepresentative carried in the vehicle" was substituted by Act 54 of1994 with effect from 14.11.1994. In view of the said amendment, theinsurance company is liable to pay compensation in respect of thepersons travelling in goods vehicle accompanying the goods or theauthorised representative. Except the 'persons' classified in thesaid clause, the insurance company is not statutorily liable to paythe compensation. In I (2000) ACC 1 (SC), which was decided on02.12.1999, when the question came up before the Hon'ble SupremeCourt in the case of NEW INDIA ASSURANCE COMPANY .vs. SATPAL SINGHAND OTHERS with regard to the liability of insurance company inpaying the compensation to the gratuitous passengers under section147(2), the Hon'ble Supreme Court has held as follows:"8. Proviso to Section 147 (1) of the new Act shows that itis a recast provision by placing the erstwhile clause (iii) asthe present clause (ii). In other words, clause (ii) of theproviso in Section 95(1) of the old Act is totally non-existentin the proviso to Section 147 (1) of the new Act.9. Under Section 147 of the new Act, the policy must be apolicy which insures the person or classes of persons specifiedin the policy to the extent specified in sub- section (2)---(i) against any liability which may be incurred byhim in respect of the death of or bodily (injury to anyperson, including owner of the goods or his authorisedrepresentative carried in the vehicle) or damage to anyproperty of a third party - caused by or arising out ofthe use of the vehicle in a public place:(ii) against the death of or bodily injury to anypassenger of a public, service vehicle caused by orarising out of the use of the vehicle in a public place.10. The proviso to the said sub-section is not relevanthere as it pertains to death or bodily injury to the employeementioned therein. Sub-section (2) provides that a policy ofinsurance shall cover any liability incurred in respect of anyaccident, up to the following limits, namely:-(i) save as provided in clause (b) the amount ofliability incurred; https://hcservices.ecourts.gov.in/hcservices/ (ii) in respect of damage to any property of a thirdparty, a limit: of rupees six thousand:Provided that any policy of insurance issued with anylimited liability and in force, immediately before thecommencement of this Act, shall continue to be effectivefor a period of four months after such commencement ortill the date of expiry of such policy whichever isearlier.Hence, under sub-section(2), there is no upper limitation forthe insurer regarding the amount of compensation awarded inrespect of death or bodily injury of a victim of the accident.It is therefore, apparent that the limit contained in the oldAct has been removed and the policy should insure the liabilityincurred and cover injury to any person including owner of thegoods or his authorised representative carried in the vehicle.The Legislature has also taken care even the policies whichwere in force on the date of commencement of the Act byspecifically providing that any policy of insurance containingany limit regarding insurer's liability shall continue to beeffective of a period of four months from commencement of theAct or till the date of expiry of such policy, whichever isearlier. This means, after the said period of four months a newinsurance policy consistent with the new Act is required to beobtained.11. The result is that under the new Act an insurancepolicy covering third party risk is not required to excludegratuitous passengers in a vehicle, no matter that the vehicleis of any type or class. Hence the decisions rendered under theold Act vis-a-vis gratuitous passengers are of no avail whileconsidering the liability of the insurance company in respectof any accident which occurred or would occur after the new Actcame into force".14. In the above case, the Supreme Court has held that underthe new Act, an insurance policy covering third party risk is notrequired to exclude gratuitous passengers in vehicle of any type orclass. Following the said dictum, the Tribunals, in the case ofgratuitous passengers travelling in a goods vehicle, directed theinsurance company to pay the compensation to the victims and permitthem to recover the same from the owner of the vehicle. But,subsequently, the Hon'ble Supreme Court in the case of NEW INDIAASSURANCE CO.LTD., .vs. ASHA RANI AND OTHERS (2003(I) ACC 1) has heldthat the decision rendered in SATPAL SINGH's case has not laid downthe correct law and thus, overruled the same. The dictum laid down inthe ASHA RANI's case was upheld as a correct law in the judgmentreported in M/s.NATIONAL INSURANCE CO.LTD., .vs. BALJIT KAUR ANDOTHERS (2004(1) CTC 210) delivered by a Full Bench of the SupremeCourt, wherein the relevant paragraphs are extracted hereunder:"17. By reason of the 1994 Amendment what was added as"including the owner of the goods or his authorised https://hcservices.ecourts.gov.in/hcservices/ representative carried in the vehicle". The liability of theowner of the vehicle to insure it compulsorily, thus, by reasonof the aforementioned amendment included only the owner of thegoods or his authorised representative carried in the vehiclebesides the third parties. The intention of the Parliament,therefore, could not have been that the words 'any person'occurring in Section 147 would cover all persons who weretravelling in a goods carriage in any capacity whatsoever. Ifsuch was the intention there was no necessity of the Parliamentto carry out an amendment inasmuch as expression 'any person'contained in sub-clause (i) of clause (b) of sub-section (1) ofSection 147 would have included the owner of the goods or hisauthorised representative besides the passengers who aregratuitous or otherwise.18. The observations made in this connection by the Courtin Asha Rani case (supra) to which one of us, Sinha, J, was aparty, however, bear repetition:"26. In view of the changes in the relevantprovisions in the 1988 Act vis-a-vis the 1939 Act, we areof the opinion that the meaning of the words "any person"must also be attributed having regard to the context inwhich they have been used i.e. "a third party". Keeping inview the provisions of the 1988 Act, we are of the opinionthat as the provisions thereof do not enjoin any statutoryliability on the owner of a vehicle to get his vehicleinsured for any passenger traveling in a goods vehicle,the insurers would not be liable therefor."19. In Asha Rani (supra), it has been noticed that sub-clause (i) of clause (b) of sub-section (1) of Section 147 ofthe 1988 Act speaks of liability which may be incurred by theowner of a vehicle in respect of death of or bodily injury toany person or damage to any property of a third party caused byor arising out of the use of the vehicle in a public place.Furthermore, an owner of a passenger-carrying vehicle must paypremium for covering the risks of the passengers travelling inthe vehicle. The premium in view of the 1994 Amendment wouldonly cover a third party as also the owner of the goods or hisauthorised representative and not any passenger carried in agoods vehicle whether for hire or reward or otherwise.20. It is therefore, manifest that in spite of theamendment of 1994, the effect of the provision contained inSection 147 with respect to persons other than the owner of thegoods or his authorized representative remains the same.Although the owner of the goods or his authorized representativewould now be covered by the policy of insurance in respect of agoods vehicle, it was not the intention of the legislature toprovide for the liability of the insurer with respect to https://hcservices.ecourts.gov.in/hcservices/ passengers, especially gratuitous passengers, who were neithercontemplated at the time the contract of insurance was enteredinto, nor any premium was paid to the extent of the benefit ofinsurance to such category of people.21. The upshot of the aforementioned discussions is thatinstead and in place of the insurer the owner of the vehicleshall be liable to satisfy the decree. The question, however,would be as to whether keeping in view the fact that the law wasnot clear so long such a direction would be fair and equitable.We do not think so. We, therefore, clarify the legal positionwhich shall have prospective effect. The Tribunal as also theHigh Court had proceeded in terms of the decisions of this Courtin Satpal Singh (supra). The said decision has been overruledonly in Asha Rani (supra)".15. The Hon'ble Supreme Court, in ORIENTAL INSURANCE CO.LTD., .vs. DEVIREDDY KONDA REDDY AND OTHERS ((2003) 2 SCC 339), has alsoheld that the Tribunal and the High Court were not justified inholding that the insurer had the liability to satisfy the award inthe case of persons travelling in a goods carriage. The relevantparagraph reads as follows:"11. Our view gets support from a recent decision of athree-Judge Bench of this Court in New India Assurance Co.Ltd.vs. Asha Rani ((2003) 2 SCC 223) in which it has been heldthat Satpal Singh case ((2000) 1 SCC 237) was not correctlydecided. That being the position, the Tribunal and the Highcourt were not justified in holding that the insurer had theliability to satisfy the award.16. Subsequently, the issue with regard to the liability of theinsurance company in paying compensation to the persons travelling ina goods vehicle is settled in the case of NEW INDIA ASSURANCECO.LTD., .vs. VEDWATI AND OTHERS (2007 ACJ 1043), wherein the Hon'bleApex Court has held as follows:"14. The inevitable conclusion, therefore, is thatprovisions of the Act do not enjoin any statutory liabilityon the owner of a vehicle to get his vehicle insured for anypassenger travelling in a goods carriage and the insurerwould have no liability therefor.15. Our view gets support from a recent decision of athree- Judge Bench of this Court in New India AssuranceCompany Limited v. Asha Rani and Ors. , 2003 ACJ 1 (SC), inwhich it has been held that Satpal Singh's case, 2000 ACJ 1(SC) was not correctly decided. That being the position, theTribunal and the High Court were not justified in holdingthat the insurer had the liability to satisfy the award". https://hcservices.ecourts.gov.in/hcservices/

17. Thereafter, in several cases, various High Courts have heldthat the insurance company is not liable to pay the compensation inrespect of the persons travelling in the goods carriage vehicle. Someof the judgments relied on by the learned counsel for the appellantare as follows:In 2007(3) Supreme 136, it reads as under:"10. ..... Section 149(1), which casts an obligation onan insurer to satisfy an award, also speaks only of award inrespect of such liability as is required to be covered by apolicy under clause(h) of sub-section (1) of Section 147,(being a liability covered by the terms of the policy). Thisprovision cannot therefore be used to enlarge the liability ifit does not exist in terms of Section 147 of the Act.11. The object of the insistence on insurance underChapter XI of the Act thus seems to be to compulsorily coverthe liability relating to their person or properties of thirdparties and in respect of employees of the insured employer,the liability that may arise under the Workmen's CompensationAct, 1923 in respect of the driver, the conductor and the onecarried in a goods vehicle carrying goods. On this plainunderstanding of Section 147, we find it difficulty to holdthat the insurance company, in the case on hand, was liable toindemnify the owner, the employer Company, the insured, inrespect of the death of one of its employees, who according tothe claim, was not the driver. Be it noted that the liabilityis not one arising under the Workmen's Compensation Act, 1923and it is doubtful, on the case put forward by the claimant,whether the deceased could be understood as a workman comingwithin the Workmen's Compensation Act, 1923. Therefore, on aplain reading of Section 147 of the Act, it appears to be clearthat the insurance company is not liable to indemnify theinsured in the case on hand". 18. The Hon'ble Apex Court in THOKCHOM ONGBI SANGEETA @ SANGIDEVI .vs. ORIENTAL INSURANCE CO.LTD., (CDJ 2007 SC 1163), has held asfollows:"9. The difference in the language of "goods vehicle" asappearing in the Old Act and "goods carriage" in the Act is ofsignificance. A bare reading of the provisions makes it clearthat the legislative intent was to prohibit goods vehicle fromcarrying any passenger. This is clear from the expression "inaddition to passengers" as contained in definition of "goodsvehicle" in the Old Act. The position becomes further clearbecause the expression used is "goods carriage" is solely forthe "carriage of goods". Carrying of passengers in a goodscarriage is not contemplated in the Act. There is no provisionsimilar to clause (ii) of the proviso appended to Section 95 ofthe Old Act prescribing requirement of insurance policy. Even https://hcservices.ecourts.gov.in/hcservices/ Section 147 of the Act mandates compulsory coverage againstdeath of or bodily injury to any passenger of "public servicevehicle". The proviso makes it further clear that compulsorycoverage in respect of drivers and conductors of public servicevehicle and employees carried in goods vehicle would be limitedto liability under the Workmen's Compensation Act, 1923. Thereis no reference to any passenger in "goods carriage". 19. In NATIONAL INSURANCE CO.LTD., .vs. PREMA DEVI & OTHERS (CDJ2008 SC 354), the Hon'ble Apex Court, after extracting the relevantparagraphs reported in (2007) ACJ 1043), has held as under: "7. .....14. The inevitable conclusion, therefore, is thatprovisions of the Act do not enjoin any statutoryliability on the owner of a vehicle to get his vehicleinsured for any passenger travelling in a goods carriageand the insurer would have no liability therefor.15. Our view gets support from a recent decision of athree-Judge Bench of this Court in New India AssuranceCompany Limited v. Asha Rani and Ors. (2002 (8) Supreme594] in which it has been held that Satpal Singh's case(supra) was not correctly decided. That being theposition, the Tribunal and the High Court were notjustified in holding that the insurer had the liability tosatisfy the award.16. This position was also highlighted in OrientalInsurance Co. Ltd. v. Devireddy Konda Reddy and Others(2003(2) SCC 339). Subsequently also in National InsuranceCo. Ltd. v. Ajit Kumar and Others (2003(9) SCC 668), inNational Insurance Co. Ltd. v. Baljit Kaur and Others(2004 (2) SCC 1) and in National Insurance Co. Ltd. v.Bommithi Subbhayamma and Others (2005 (12) SCC 243), theview in Asha Rani's case (supra) was reiterated.8. Above being the position, the impugned order of the High Courtis not sustainable and is set aside. It is open to the claimantto recover the amount awarded from the owners of the offendingvehicles".20. In NATIONAL INSURANCE CO.LTD., .vs. RATTANI AND OTHERS (2009ACJ 925), it has been held as follows:"14. An admission made in the pleadings, as is well-known,is admissible in evidence proprio vigore. We, thus, are of theopinion that the Tribunal as also the High Court committed aserious error in opining that the insurance company was liable.... https://hcservices.ecourts.gov.in/hcservices/ We, therefore, in the facts and circumstances of the case,have no hesitation to hold that the victims of the accident weretravelling in the truck as gratuitous passengers and in thatview of the matter, the appellant herein was not liable to paythe amount of compensation to the claimants".21. The Apex Court in SHANKER RAJU .vs. UNION OF INDIA (2011) 2SCC 132), has held as follows:"18. The second observation we wish to make is, thedoctrine of binding precedent has the merit of promotingcertainty and consistency in judicial decisions. Thepronouncement of law by a larger Bench of this Court is bindingon a Division Bench of this court, especially where theparticular determination by this Court not only disposes of thecase, but also decides a principle of law. We further add thatit would be inappropriate to reagitate the very issue or aparticular provision, which this Court had already consideredand upheld".22. In BRANCH MANAGER, UNITED INDIA INSURANCE CO.LTD.,DHARMAPURITOWN .vs. NAGAMMAL AND OTHERS (2009 (1) TN MAC 1, a Full Bench ofthis Court has held as follows:"31. Thus from an analysis of the statutory provisions asexplained by the Supreme Court in various decisions renderedfrom time to time, the following picture emerges :(i) The Insurance Policy is required to cover theliability envisages under Section 147, but wider riskcan always be undertaken.(ii) Section 149 envisages the defences which are opento the Insurance Company. Where the Insurance Company isnot successful in its defence, obviously it is requiredto satisfy the decree and the award. Where it issuccessful in its defence, it may yet be required to paythe amount to the claimant and thereafter recover thesame from the owner under such circumstance envisagedand enumerated in Section 149(4) and Section 149(5). (iii) Under Section 147 the Insurance Company is notstatutorily required to cover the liability in respectof a passenger in a goods vehicle unless such passengeris the owner or agent of the owner of the goodsaccompanying such goods in the concerned goods vehicle.(iv) Since there is no statutory requirement to coverthe liability in respect of a passenger in a goodsvehicle, the principle of 'pay and recover', asstatutorily recognised in Section 149(4) and Section 149 https://hcservices.ecourts.gov.in/hcservices/ (5), is not applicable ipso facto to such cases and,therefore, ordinarily the Court is not expected to issuesuch a direction to the Insurance Company to pay to theclaimant and thereafter recover from the owner. (v) Where, by relying upon the decision of the SupremeCourt in Satpal Singh's case, either expressly or evenby implication, there has been a direction by the TrialCourt to the Insurance Company to pay, the appellatecourt is obviously required to consider as to whethersuch direction should be set aside in its entirety andthe liability should be fastened only on the driver andthe owner or whether the Insurance Company should bedirected to comply with the direction regarding paymentto the claimant and recover thereafter from the owner. (vi) No such direction can be issued by any trial courtto the Insurance Company to pay and recover relating toliability in respect of a passenger travelling in agoods vehicle after the decision in Baljit Kaur's casemerely because the date of accident was before suchdecision. The date of the accident is immaterial. Sincethe law has been specifically clarified, no trial courtis expected to decide contrary to such decision. (vii)Where, however, the matter has already been decided bythe trial court before the decision in Baljit Kaur'scase, it would be in the discretion of the appellatecourt, depending upon the facts and circumstances of thecase, whether the doctrine of 'pay and recover' shouldbe applied or as to whether the claimant would be leftto recover the amount from the person liable i.e., thedriver or the owner, as the case may be".23. In THE DIVISIONAL MANAGER, THE NEW INDIA ASSURANCE COMPANYLIMITED, THANJAVUR .vs. VINAYAGA MOORTHI & OTHERS (CDJ 2008 MHC4293), it has been held by a Madurai Bench of this Court, as follows: "24. Article 136 read with Article 142 of theConstitution of India, confers an extraordinary jurisdictionon the highest court of the country to issue any directionand exercise their power to do complete justice and Tribunalsdo not have the power, similar to that conferred underArticle 142 and any attempt to follow the exercise of suchpower will lead to incongruous and disastrous results.25. Therefore, the decision of the Tribunal to follow adirection issued by the Supreme Court in exercise of itsextraordinary jurisdiction under Article 142 of theConstitution of India, to the present claim petitions is notin accordance with law, and therefore, I have no hesitationto hold that there is an excess of jurisdiction. In the light https://hcservices.ecourts.gov.in/hcservices/ of the decisions of the Supreme Court on the issue, thefinding of the Tribunal fastening the liability on theappellant insurance Company to pay compensation to all thevictims and to recover the same from the owner is liable tobe set aside and accordingly set aside. The insured, thirdrespondent is liable to compensation each of the victims. Itis for the respondents/claimants to take up appropriateproceedings before the Tribunal to recover the compensationfrom the insured. The amount deposited by the appellantinsurance company in respect of each of the claim petitionsshall be refunded to them to the Company, within two weeksfrom the date of receipt of this order. The common judgmentand decree of the Tribunal in M.C.O.P.Nos.277/2003 etc.,dated 14.8.2007 are set aside. The Civil MiscellaneousAppeals are allowed. No costs".24. A reading of the above judgments would show that only in acase, where the insurance company is successful in its defence undersection 149, it may yet be required to pay the amount to the claimantand thereafter, it may recover from the owner of the vehicle. Whenthe insurance company is not statutorily required to cover theliability in respect of a passenger in a goods vehicle under section147 unless such passengers is the owner or agent of the owner of thegoods accompanying such goods absolutely there is no need for theinsurance company to pay compensation since there is no contractualliability under the statute to pay the amount to the gratuitouspassenger travelling in the goods carriage vehicle. Under suchcircumstances, in my considered opinion, a direction could not begiven to the insurance company to pay the owner and recover from theowner of the vehicle.25. Now, coming to the decisions relied upon by the learnedsenior counsel for the 1st respondent, I find that in all those cases,the driver of the vehicle did not have the valid driving licence,such as without badge endorsement in the licence to drive thecommercial vehicle, etc. The facts in PREMKUMARI .vs. PRAHLAD DEV(2008)3 MLJ 568 (SC) would show that the insurance company wasexonerated from its liability in paying compensation on the groundthat the driver of the offending vehicle did not have a valid andeffective driving licence on the date of accident and the same wasconfirmed by the High Court; but the Hon'ble Supreme Court set asidethe finding of the Tribunal stating that though the conclusion was infavour of the insurance company, the appellants, being the widow andminor children of the deceased, need not repay the amount claimed tohave been paid to the appellants and only in those circumstances,when the insurance company succeeded in its defence available to themunder section 149, permission was given to the insurance company torecover the same from the owner of the vehicle. https://hcservices.ecourts.gov.in/hcservices/

26. But, so far as this case is concerned, there is a statutoryviolation under section 147 of the Act. Therefore, following theprinciples laid down in BALJIT KAUR's case (supra), which was decidedon 06.01.2004, I am of the view that the insurance company is notliable to pay compensation. Therefore, the judgments relied on by thelearned senior counsel for the 1st respondent cannot be madeapplicable to the facts of this case. When there is no statutoryliability to pay compensation by the insurance company to the victim,who has travelled as unauthorised passenger in the vehicle, theinsurance company cannot be directed to pay the compensation amountand recover the same from the owner of the vehicle and, hence, I amnot inclined to accept the submission made by the learned seniorcounsel for the 1st respondent that since there was an award in favourof the claimant, the insurance company is bound to satisfy the saidaward and the scope of interference in such an award by the HighCourt is limited.27. Lastly, I deal with the submission made by the learnedSenior counsel for the 1st respondent, who, after placing his relianceon para 23 of the judgment referred to in B.C.CHATURVEDI .vs. UNIONOF INDIA AND OTHERS reported in (1995) 6 SCC 749, advanced hisargument that the dictum laid down in that case describing theprinciple of law by the Supreme Court in the light of Article 142 ofthe Constitution shall be taken into consideration for exercising apower of review and on that basis, the insurance company may bedirected to pay the amount and recover the same from the owner of thevehicle. The above argument may not be availed of by the learnedSenior Counsel for the 1st respondent in the instant case for thereason that the view expressed by one of the Hon'ble Judges of theBench is without the concurrence of the Full Bench and hence, theabove opinion cannot be termed as a decision of the Bench. It is onlyan opinion of one of the Hon'ble Judges, but not the principle of lawlaid down by the entire Bench. Hence, I do not find any force in thesubmission made by the learned Senior Counsel for the 1st respondent.28. Further, a reading of above judgment relied upon by thelearned senior counsel for the 1st respondent would show that theinherent power of the High Court is not as wide as which the Hon'bleSupreme Court has under Article 142. Moreover, the said dictum waslaid down by the Hon'ble Supreme Court in a case related to servicelaw and as such, the opinion expressed in the said decision cannot bemade use of for directing the insurance company to pay the amount andrecover the same from the owner of the vehicle since there is nostatutory liability on the part of the insurance company to paycompensation to the injuries sustained by the unauthorisedpassengers or to the legal heirs of the deceased, who had travelledas unauthorised passengers in the goods carrying vehicle. Thedoctrine of 'pay and recover' would be ordered only in the case wherethe insurance company is successful in its defence available under https://hcservices.ecourts.gov.in/hcservices/ section 149 it may yet be required to pay the amount to the victimand thereafter, to recover the same from the owner of the vehicle andnot in the case where there is no statutory liability to paycompensation by the insurance company to the victim. Under suchcircumstances, I am of the view that no direction could be given tothe insurance company to pay compensation to the claimant andrecover the same from the owner of the vehicle and hence, thefinding of the Tribunal is not legally sustainable and is liable tobe set aside.For the reasons stated above, the award dated 12.09.2008 is setaside and the civil miscellaneous appeal is allowed. No costs. Theinsurance company is permitted to withdraw the award amount depositedif any and the 1st respondent is permitted to proceed and recover theaward amount from the 2nd respondent, the owner of the vehicle, inaccordance with law. Sd/ Asst. Registrar/true copy/Sub Asst.RegistrarglTo1.The Subordinate Judge, (Motor Accidents Claims Tribunal),Ponneri.2.The Section Officer, VR Section, High Court, Madras 1 cc To Mr.D.Bhaskaran, Advocate, SR.67678judgment in CMA.No.84 of 2010JSV(CO)RH (12.12.11)