After Mini-Lorry Carrying 20-Plus People Capsized, Madras HC Upholds Insurer’s Pay-First, Recover-From-Owner Order For Injured Gratuitous Passenger

The claimant was travelling with more than 20 others in an insured mini lorry when it capsized due to the driver’s negligent driving; the Tribunal found the occupants were gratuitous passengers in a goods vehicle

The Tribunal awarded the claimant ₹8,000 with interest at 7.5% and directed the insurer to pay first and recover from the vehicle owner.

The insurer appealed, contending that it should be exonerated because the claimant was a gratuitous passenger.

The Court relied on New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223, and National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC 1, for the principle that an insurer is not statutorily liable to indemnify an owner for gratuitous passengers travelling in a goods vehicle.

It also considered the “pay and recover” doctrine, citing National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, Mangla Ram v. Oriental Insurance Co. Ltd., (2018) 5 SCC 656, and Shamanna v. Oriental Insurance Co. Ltd., (2018) 9 SCC 650, as well as Kaminiben v. Oriental Insurance Co. Ltd., reported in 2026 (1) TN MAC 680 (SC), as cited in the judgment; the latter citation is stated in the judgment to be verified.

The Court applied the principle that pay-and-recover relief may be directed in appropriate cases, with the matter considered on its facts.

The Tribunal’s finding that the claimant was a gratuitous passenger was not challenged for determination in this appeal; the question was the consequence of that finding for the insurer’s liability.

Following its earlier decision in C.M.A.(MD) No. 771 of 2023 and the Supreme Court authorities discussed there, the Court held that the finding of a policy-condition violation did not, in the circumstances, require denial of pay-and-recover relief.

It therefore found no basis to interfere with the Tribunal’s direction.

The insurer was ordered to deposit the award amount, with accrued interest and after crediting any amount already deposited, within eight weeks; it may thereafter recover the amount paid from the vehicle owner in accordance with law.