Manuara Khatun & Ors. – Appellant(s) VERSUS Rajesh Kr. Singh & Ors. – Respondent(s)

Core ratio / Key holding

Headnote

Motor Vehicles Act, 1988 — Section 147 — Insurance Liability — Gratuitous Passenger — Pay and Recover Principle.

Issues for determination

• Whether the appellants are entitled for an order against the Insurer of the offending vehicle, i.e., (respondent No. 3) to pay the awarded sum to the appellants and then to recover the said amount from the insured (owner of the offending vehicle-Tata Sumo)-respondent No.1 in the same proceedings.

Ratio decidendi

• Even where a victim is a gratuitous passenger in an offending vehicle, the insurer of the offending vehicle can be directed to first pay the awarded compensation to the claimants and then recover the said amount from the insured (owner of the offending vehicle) in the same proceedings, applying the principle of 'pay and recover'.

Important points

• Held: The principle of 'pay and recover' is applicable even when victims are gratuitous passengers in the offending vehicle.
• Clarified: The pendency of a reference to a larger Bench does not preclude the application of the 'pay and recover' principle in appropriate cases.
• Directed: United India Insurance Company Ltd. (insurer of the offending vehicle) shall first pay the awarded sum to the appellants (claimants).
• Directed: United India Insurance Company Ltd. is entitled to recover the entire paid awarded sum from the owner of the offending vehicle in the same execution proceedings.