S. Valliammal, vs M. Kanagaraj,
- Court
- Madras High Court
CMA(MD) NO. 127 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved On 17.09.2026
Pronounced On .11.2026
CORAM
THE HONOURABLE MR.JUSTICE K.K.RAMAKRISHNAN
CMA(MD) NO. 127 of 2022
{CNR: HCMD013699542017}
Case QR
1. S. Valliammal,
2. R. Muthuselvi,
3. G. Saridha
4. S. Vanitha ...Appellant(s)
Vs
1. M. Kanagaraj,
2. The Iffco - Tokio General Insurance Company Ltd.,
Through its Branch Manager,
Office at Thiripura Aracade,
3rd Floor, No. 75,
Trivandrum Road,
Palayamkottai,
Tirunelveli - 627 002. ...Respondent(s)
PRAYER:- Civil Miscellaneous Appeal is filed under Section 173 of the Motor
Vehicle Act, 1988, to fix the liability on the Insurance company for the entire
award amount, allow this appeal and enhance the award amount in M.C.O.P.
No. 609 of 2014 on the file of the Motor Accident Claims Tribunal, (II
Additional District Court) Tirunelveli, dated 18.04.2016.
For Appellant : Mr.T.Selvakumaran
For Respondents : Mr.R.Suriyanarayanan for R1
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CMA(MD) NO. 127 of 2022
: Mr.V.Sakthivel For R2
JUDGMENT
The claimants in M.C.O.P. No. 609 of 2014, on the file of the Motor
Accident Claims Tribunal-cum-II Additional District Court, Tirunelveli, have
filed the present C.M.A.(MD).No. 127 of 2022, seeking enhancement of the
compensation awarded by the Tribunal by its award dated 18.04.2016.
2.Facts of the case:
2.1.The claimants are the dependants of the deceased Murugan. On
22.03.2014, while the deceased was riding his two-wheeler bearing Registration
No. TN-72-AU-3463 at Kallikulam Village, the offending vehicle bearing
Registration No. TN-48-B-9493, belonging to the first respondent, came from
the opposite direction in a rash and negligent manner and rammed into the two-
wheeler. In the accident, the deceased sustained injuries and succumbed to
them. Consequently, an FIR was registered against the driver of the offending
vehicle.
2.2.The claimants instituted the claim petition seeking compensation for
the death of Murugan and impleaded the second respondent insurance company
on the basis of the insurance policy purportedly covering the offending vehicle.
The insurance company filed its counter, disputing the genuineness of the policy
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CMA(MD) NO. 127 of 2022
and contending that the document produced by the claimants was a fake policy.
On that basis, it denied its liability to indemnify the owner or satisfy the
compensation awarded by the Tribunal.
2.3.The first respondent, the owner of the offending vehicle, contested the
claim by disputing the allegation of negligence against the driver of his vehicle
and contending that the accident occurred due to the negligence of the deceased
two-wheeler rider. The owner also maintained that the vehicle had been insured
and that the insurance company was liable to satisfy the award.
2.4.To substantiate their claim, the claimants examined P.W.1 to P.W.3
and marked Exs.P1 to P6. On the side of the respondents, R.W.1 was examined
and Exs.R1 to R7 were marked.
3.Findings of the Tribunal:
3.1.Upon consideration of the oral and documentary evidence, the
Tribunal held that the accident occurred due to the rash and negligent driving of
the first respondent's vehicle and fixed liability accordingly. However, on the
question of insurance liability, the Tribunal accepted the insurance company's
contention that the policy produced in respect of the offending vehicle was fake.
Consequently, the second respondent insurance company was exonerated from
liability, and the first respondent owner was directed to pay compensation of
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CMA(MD) NO. 127 of 2022
Rs.13,51,000/- with interest at 9% per annum.
Sl.No. Heads Amounts in Rs.
1 Loss of dependency 12,48,000/-
2 Loss of Consortium 30,000/-
3 Loss of Love and
Affection
60,000/-
4 Funeral Expenses 5,000/-
5 Loss of Estate 5,000/-
6 Transport Expenses 3,000/-
Total Compensation Awarded Rs.13,51,000/-
3.2.Aggrieved by the quantum of compensation and the exoneration of
the insurance company, the claimants have preferred the present appeal.
4.Submissions of the learned counsel appearing for the
appellant/claimant:
4.1.The learned counsel appearing for the claimants would submit that the
Tribunal erred in exonerating the insurance company without considering the
applicability of the principle of pay and recover. He would further contend that
the compensation awarded by the Tribunal is inadequate. Though the deceased
was engaged in agricultural activities and vegetable vending and was earning
more than Rs.10,000/- per month, the Tribunal fixed his monthly income at only
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CMA(MD) NO. 127 of 2022
Rs.6,500/-. The learned counsel would therefore seek enhancement of the
income and consequential enhancement of the compensation, including the
amount awarded under the conventional heads.
5.Submission of the learned counsel appearing for the
respondent/Insurance Company:
5.1.Per contra, the learned counsel appearing for the second respondent
insurance company would submit that the Tribunal, upon consideration of the
evidence, specifically found that the policy produced by the claimants was fake.
According to him, the principle of pay and recover cannot be invoked in a case
where no genuine insurance policy existed. He would distinguish the decisions
of the Hon'ble Supreme Court relied upon in support of the claimants'
contention by submitting that, in those cases, the insurance companies had
failed to establish their plea concerning the invalidity or falsity of the insurance
policy, whereas, in the present case, the Tribunal had recorded a specific finding
that the policy was fake. He would further point out that the owner did not
effectively contest the insurance company's contention regarding the
genuineness of the policy. On these grounds, he would seek dismissal of the
appeal.
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6.This Court considered the rival submissions and perused the entire
materials available on record.
7.In view of the rival submissions and the materials available on record,
the following points arise for consideration:
(i) Whether the second respondent insurance company is liable to satisfy
the award, notwithstanding the finding that the insurance policy produced in
respect of the offending vehicle was fake, and whether the principle of pay and
recover can be applied in the facts and circumstances of the case?
(ii) Whether the compensation of Rs.13,51,000/- awarded by the Tribunal
is just and reasonable or requires enhancement?
8.Discussion on the liability of the insurance company:
8.1.The learned counsel appearing for the insurance company would
contend that, once the Tribunal has recorded a specific finding that the policy
was fake, the insurance company cannot be fastened with liability in the absence
of a valid contract of insurance. He would further submit that the decisions of
the Hon'ble Supreme Court directing insurance companies to pay compensation
and thereafter recover the same from the vehicle owners are distinguishable, as
the plea regarding the falsity of the policy was not established in those cases.
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8.2.The question, therefore, is not merely whether the document produced
by the claimants was found to be fake, but whether, in the circumstances
established by the evidence, the claimants can nevertheless invoke the principle
of pay and recover. The distinction between a case in which the insurer fails to
establish its defence and a case in which the falsity of the policy is affirmatively
established is relevant to the determination of this question.
8.3.In the present case, the Tribunal, upon consideration of the evidence
adduced on behalf of the insurance company, accepted its contention that the
policy was fake. The owner of the offending vehicle did not effectively rebut
that contention. In the absence of a genuine policy, the contractual liability of
the insurance company cannot be presumed merely because the claimants are
third parties.
8.4.The principle of pay and recover must therefore be considered with
reference to the applicable statutory provisions and the principles laid down by
the Hon'ble Supreme Court in the relevant decisions. The mere fact that the
claimants are third parties does not, by itself, establish that an insurer is liable
under a policy that has been affirmatively found to be fake. Equally, the precise
basis and evidentiary foundation of the Tribunal's finding must be examined
before concluding that the insurer is entitled to complete exoneration.
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8.5.In the present case, having regard to the specific finding of the
Tribunal regarding the falsity of the policy and the evidence relied upon to
sustain that finding, this Court is not inclined to direct the insurance company to
pay the compensation and recover the same from the owner.
8.6.Insofar as the plea for application of the principle of pay and recover
is concerned, for the reasons discussed above, the same is declined. The finding
of the Tribunal exonerating the second respondent insurance company from
liability is sustained, and the first respondent, being the owner of the offending
vehicle, shall be liable to satisfy the enhanced compensation.
9.Discussion on the quantum:
9.1.As regards the quantum of compensation, the deceased was engaged
in vegetable vending and agricultural activities. The accident occurred on
22.03.2014. The Tribunal fixed his monthly income at Rs.6,500/-. Considering
the nature of his occupation and the year of the accident, the said assessment
appears to be on the lower side.
9.2.The learned counsel for the claimants would rely upon the principles
laid down by the Hon'ble Supreme Court concerning the assessment of income
in motor accident claims, including the application of an appropriate cost-index
method where applicable. Having regard to the year of the accident, the nature
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of the deceased's avocation and the materials available on record, this Court is
of the view that the monthly income of the deceased may reasonably be fixed at
Rs.7,500/-.
9.3.In view of the principles laid down by the Hon'ble Supreme Court in
National Insurance Co. Ltd. v. Pranay Sethi, an addition of 40% towards future
prospects is applicable, subject to the deceased's age and employment category
satisfying the relevant criteria. Accordingly, the monthly income of Rs.7,500/-
is enhanced by 40%, resulting in a monthly income of Rs.10,500/- for the
purpose of calculating the loss of dependency.
9.4.Since the deceased was a bachelor, a deduction of 50% towards his
personal and living expenses is ordinarily applicable, subject to the principles
laid down in Sarla Verma v. Delhi Transport Corporation . The multiplier must
be selected with reference to the age of the deceased in accordance with the
applicable principles.
9.5.Accordingly, the monthly income of the deceased is fixed at
Rs.7,500/-. By adding 40% towards future prospects, a sum of Rs.3,000/- is
added, and the total monthly income is arrived at Rs.10,500/-. After deducting
one-third towards the personal and living expenses of the deceased and applying
the multiplier of 16, the loss of dependency is calculated as follows:
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Rs.10,500 × 2/3 × 16 × 12 = Rs.13,44,000/-.
9.6.As regards the conventional heads, considering that the claimants are
four in number, a sum of Rs.40,000/- is awarded to each claimant towards loss
of consortium/love and affection, totalling Rs.1,60,000/-, subject to the nature of
the relationship and the applicable principles laid down by the Hon'ble Supreme
Court. A sum of Rs.20,000/- is awarded towards funeral expenses and
Rs.10,000/- towards loss of estate.
10.Conclusion:
10.1.For the foregoing reasons, the compensation awarded by the
Tribunal to the claimant is re-determined as follows:-
Sl.No Heads Award in
Rs.Amount
awarded by
the Tribunal
Re-quantified
Status
amount by
this Court
1 Loss of
dependency
12,48,000/- 13,44,000/- Enhanced
2 Loss of
Consortium/L
oss of Love
and Affection
90,000/- 1,60,000/- Enhanced
3 Funeral 5,000/- 20,000/- Enhanced
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Expenses
4 Loss of Estate 5,000/- 10,000/- Enhanced
5 Transport
Expenses
3,000/- 3,000/- Confirmed
Total Compensation
Rs.13,51,000/
Rs.15,37,000/
Enhanced
Awarded
-
-
11.Result:
11.1.In the result, this Civil Miscellaneous Appeal is partly allowed.
11.2.The award amount passed in the M.C.O.P. No. 609 of 2014, on the
file of the Motor Accident Claims Tribunal-cum-II Additional District Court,
Tirunelveli is enhanced from Rs.13,51,000/- to Rs.15,37,000/- together with
interest at the rate of 7.5% per annum from the date of the claim petition.
11.3.The plea for pay and recover is rejected, and the liability of the first
respondent owner to satisfy the award is sustained and the owner of the vehicle
is directed to deposit entire award amount including enhanced amount with
7.5% from the date of filing the petition within eight weeks from the date of the
receipt of a copy of this order.
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11.4.Upon such deposit, the claimants are entitled to withdraw the
amount in accordance with the apportionment fixed by the Tribunal.
There shall be no order as to costs.
.11.2026
NCC :Yes/No
Index :Yes/No
Internet :Yes/No
AKM
To
1. Motor Accident Claims Tribunal, (II Additional District Court)
Tirunelveli
2.The Section Officer,
VR Section,
Madurai Bench of Madras High Court, Madurai.
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K.K.RAMAKRISHNAN,J.
AKM
C.M.A.(MD).No.127 of 2022
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