Insurer must specifically plead and prove policy breach to sustain a pay and recovery order.

The appellant, Vikash Jain, is the owner of a motorcycle involved in a fatal accident.

The Motor Vehicles Accident Claims Tribunal, Hazaribagh, passed a judgment and award on February 6, 2019, granting compensation to the claimants (Respondents 3-7) but included a "pay and recovery" order against the appellant.

This order was based on the premise that the appellant willfully allowed a driver without a valid license to operate the vehicle.

The appellant challenged this specific direction, noting that the National Insurance Company’s written statement did not plead the absence of a license but instead argued that the deceased was at fault for driving on the wrong side.

The High Court called for the lower court records to verify the pleadings.

1. Whether a "pay and recovery" order can be sustained when the insurance company fails to specifically plead or prove a breach of policy conditions regarding the driver's license.

2. Whether the burden of proof shifts to the vehicle owner to produce a driving license in the absence of a specific defense raised by the insurer.

The court primarily applied Section 149 of the Motor Vehicles Act, 1988, which governs the defenses available to insurers.

It relied on the principle established in National Insurance Co. Ltd. v. Swaran Singh & Others (2004) and Ram Chandra Singh v. Rajaram & Others (2018), which dictates that the burden of proving a "breach" of insurance policy terms lies squarely on the insurance company.

The court applied the evidentiary rule that no amount of proof can be considered in the absence of specific pleadings.

Distinguished Pappu & Others v. Vinod Kumar Lamba (2018), clarifying that the owner’s obligation to prove the driver’s authorization only arises after the insurer raises a specific defense.

The Court observed that the Insurance Company's written statement contained no allegation that the driver lacked a valid license; in fact, the insurer argued the driver was driving safely in the correct lane.

The insurer’s general plea for protection under Section 149 was deemed too vague to constitute a specific defense regarding the driver's licensing status.

Following Swaran Singh, the Court reasoned that the insurer must not only raise the defense but also establish the "breach" on the part of the owner.

The Court distinguished the Pappu case, noting that in Pappu, the insurer had explicitly pleaded the lack of a license, which was not the case here.

Since the insurer failed to meet its burden of pleading and proof, the Tribunal erred in assuming a breach and ordering recovery from the owner.

The High Court allowed the appeal and quashed the "pay and recovery" direction in the impugned award, directing the discharge of the appellant's bank guarantee and permitting the withdrawal of the statutory deposit with accrued interest.