Statutory duty to 'pay and recover' remains intact despite Motor Vehicles Act 2019 amendments.

On 12.03.2023, the deceased Ramesh, aged 38 years and working as a centring mason earning Rs. 25,000/- per month, was riding a two-wheeler (Reg. No. TN 99 H 6928) from Valukkuparai to Nachpalayam when the Bajaj CT 125 motorcycle (Reg. No. TN 99 Y 1568), driven by the 5th respondent herein, came from the opposite direction in a rash and negligent manner and dashed against him, causing his death on the spot

The claimants (Respondents 1–4: widow, two minor daughters, and minor son) filed MCOP No. 596 of 2023 before the MACT, V Additional District Judge, Coimbatore

The appellant Insurance Company contested liability, contending that the driver of the insured vehicle did not possess a valid and effective driving licence on the date of the accident, contrary to Section 3 of the Motor Vehicles Act, 1988, and that its liability stood exonerated under the Motor Vehicles (Amendment) Act, 2019; it also pleaded contributory negligence alleging the deceased rode in a zig-zag manner

The Tribunal fixed the deceased's notional income at Rs. 15,000/- per month (Rs. 600/day × 25 days), added 40% towards future prospects, deducted 1/4th towards personal expenses, applied multiplier "15," and awarded a total of Rs. 31,59,000/-

Relying on Ex.R2 (Motor Vehicle Inspection Report), the Tribunal found the driver held no valid licence and directed the insurer to pay the compensation and recover it from the owner

1. Whether the Insurance Company stands exonerated from liability to pay compensation to third-party claimants on account of the driver not possessing a valid driving licence, in view of the Motor Vehicles (Amendment) Act, 2019 having come into force on 01.04.2022, prior to the accident dated 12.03.2023?

2. Whether the Tribunal's "pay and recovery" direction is sustainable in law notwithstanding the established breach of policy conditions?

3. Whether the quantum of compensation of Rs. 31,59,000/- awarded by the Tribunal is just and proper?

Sections 147(2), 150(1) and 150(2) of the Motor Vehicles Act, 1988 (as amended by Act 32 of 2019), read with Rule 2 of the Third-Party Insurance (Base Premium and Liability) Rules, 2022 providing for unlimited third-party liability

The deletion of the proviso to Section 149(4) and Section 149(5) does not obliterate the insurer's statutory duty to satisfy third-party awards; that this duty flows from Section 150(1) and remains unhindered even where the insurer establishes a contractual defence under Section 150(2), in which event the insurer may recover the amount from the insured per paragraph 110(x) of National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297

Non-possession of a driving licence alone cannot attribute contributory negligence (Sudhir Kumar Rana v. Surinder Singh, (2008) 12 SCC 436)

Sarla Verma v. DTC, 2009 (2) TNMAC 1 (SC) (multiplier method) and National Insurance Co. Ltd. v. Pranay Sethi, 2017 (2) TNMAC 609 (SC) (future prospects and conventional heads)

The admitted non-possession of a driving licence by the insured vehicle's rider cannot, by itself, fasten contributory negligence on the deceased

The insurer's duty towards third-party victims is statutory in character under Section 150(1) and survives the 2019 Amendment; the insurer's success in establishing a Section 150(2) defence merely absolves it contractually vis-à-vis the insured, entitling it only to recovery from the owner after satisfying the award

The Tribunal's pay-and-recovery order "cannot be found fault with"

The award — computed per Sarla Verma and Pranay Sethi — to be "just and proper," declining interference (and impliedly rejecting the contention that the award exceeded the claimed amount)

The "pay and recovery" direction is valid, entitling the insurer to recover the paid amount from the vehicle owner per Swaran Singh

The Court dismissed the Civil Miscellaneous Appeal and confirmed the award dated 23.07.2025 in MCOP No. 596 of 2023