Tag: Pay and Recover Principle

Insurance Must Pay Victims First: Supreme Court Upholds ‘Pay and Recover’ in Route Deviation Case
13Jan By The Legal ChamberNo Comments
Supreme Court

Insurance Must Pay Victims First: Supreme Court Upholds ‘Pay and Recover’ in Route Deviation Case

This Supreme Court judgment affirms the application of the "pay and recover" principle where an insured vehicle deviates from its permitted route. While the insurer remains statutorily liable to compensate accident victims, it is entitled to subsequently recover the paid amount from the policyholder for breaching the contract's geographical terms. Facts Of The Case: On October 7, 2014, the deceased Srinivasa (alias Murthy) died on the spot after his motorcycle was hit by a rashly and negligently driven bus (KA-52-9099). His dependents filed a claim petition before the Motor Accidents Claims Tribunal (MACT) seeking compensation. The Tribunal awarded ₹18,86,000. Dissatisfied, the claimants appealed to the High Court for enhanced compensation, while the insurance company also appealed...
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“Pay and Recover” Doctrine Upheld: Supreme Court Directs Insurance to Compensate, Then Claim from Owner
15Nov By The Legal ChamberNo Comments
Supreme Court

“Pay and Recover” Doctrine Upheld: Supreme Court Directs Insurance to Compensate, Then Claim from Owner

The Supreme Court applied the "pay and recover" principle, directing the Insurance Company to satisfy the compensation award despite a policy breach due to an invalid driving licence. The insurer was absolved from liability but was ordered to pay the claimant and was permitted to subsequently recover the amount from the insured vehicle owner. Facts Of The Case: The case originated from a fatal vehicular accident on 13th October 2011, in which Nand Kumar, a conductor, died. The accident involved a truck driven by respondent No. 1. The deceased's mother, Rama Bai, filed a claim petition before the Motor Accident Claims Tribunal. The Tribunal awarded a compensation of Rs. 3 Lakhs, payable by the driver and the truck owner (respondent Nos. 1 & 2), after finding that the driver did not po...
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Supreme Court Decides: Who Pays When a Car Insurance Policy is Cancelled?
9Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Decides: Who Pays When a Car Insurance Policy is Cancelled?

This Supreme Court case reaffirms the principle that an insurance policy stands rescinded upon dishonour of the premium cheque and intimation to the concerned parties, absolving the insurer from statutory liability. However, applying the "pay and recover" doctrine, the insurer was directed to pay the awarded compensation to the third-party claimants and was permitted to recover the same from the vehicle owner. Facts Of The Case: On August 22, 2005, Dheeraj Singh died when his motorcycle was hit from behind by a speeding truck (HR 46 A 1020). The deceased, a 36-year-old computer engineer, was found to be earning ₹3,364 per month. His dependents filed a claim before the Motor Accident Claims Tribunal. The appellant, National Insurance Company Ltd., disowned liability by contending that the...
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Landmark Judgment: Supreme Court Upholds LMV License Validity for Commercial Vehicles
14Aug By The Legal ChamberNo Comments
Supreme Court

Landmark Judgment: Supreme Court Upholds LMV License Validity for Commercial Vehicles

The Supreme Court held that a driver with a Light Motor Vehicle (LMV) license can operate a commercial vehicle (gross weight ≤7500 kg) without additional endorsement, affirming Mukund Dewangan. However, the Insurance Company was liable under the "Pay and Recover" principle despite the "Liability Only Policy" excluding gratuitous passengers, citing Baljit Kaur and Pranay Sethi. Compensation was enhanced by 10% under conventional heads. Facts Of The Case: On 27th November 2013, Gokul Prasad, a 32-year-old cloth seller, died in an accident involving a TATA 407 truck (registration No. M.P. 53G/0386) near Kurwaiha Ghati Road. The truck, driven rashly and negligently by Respondent No. 3, was returning from a weekly market. The deceased’s legal representatives (Appellants) filed a claim under S...
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