HON’ BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA MACMA No.468 of 2023 JUDGMENT: 1. The appellant/Insurance Company filed this appeal under Section 173 of the Motor Vehicles Act, 1988 against the award, dated 06.02.2023 passed in M.V.O.P.No.147 of 2017 on the file of the Court of the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Kadapa at Proddatur (for short ‘the Tribunal’). 2. The respondent Nos.1 & 3 herein/claimants filed the said O.P seeking compensation of Rs.7,00,000/- for the death of one T. Prameela in a motor accident that occurred on 15.03.2016 involving a Tractor & Trailer bearing registration Nos.AP 21 v 7487 & AP 21 V 7489. As against the claim of Rs.7,00,000/- the Tribunal granted a compensation of Rs.7,00,000/-. Assailing the same the 2nd respondent - Insurance Company in the O.P filed this appeal. 3. For the sake of convenience, the parties herein are referred to as they were arrayed before the Tribunal. Claimant No.1 is the husband of the deceased, whereas, Claimant Nos.2 & 3 are NV, J macma no.468 of 2023 2 minors, represented by Claimant No.1. Respondent No.1 is the driver and Respondent No.3 is the owner of the Tractor & Trailer bearing registration Nos.AP 21 v 7487 & AP 21 V 7489, whereas, Respondent No.2 is the Insurance Company. 4. The brief facts that lead to the filing of the case are that, on 15.03.2016, in the morning, one T. Prameela (herein referred to as ‘deceased’) went to coolie work along with others to the field of one Koneti Subbareddy. After completion of work, the deceased along with others boarded the Tractor & Trailer bearing registration Nos.AP 21 v 7487 & AP 21 V 7489. When the tractor reached the YSR statute at Chowtapalle village, the driver of the tractor drove it in a rash and negligent manner with high speed, due to which the tractor and trailer jumped, as a result of which, the deceased fell down in the road, sustained injuries, shifted to Government Hospital, Proddatur, therefrom she was shifted to SVIMS Hospital and died on 21.03.2016 while undergoing treatment. Based on the complaint of the husband of the deceased, a case in Crime No.53 of 2016 was registered on the file of Proddatur Rural Police Station. By the impugned order, the Tribunal allowed the said M.V.O.P awarding compensation of NV, J macma no.468 of 2023 3 Rs.7,00,000/- against a claim of Rs.7,00,000/-. Aggrieved by the same, the claimant/Insurance company filed this appeal. 5. Before the Tribunal, P.W.1 and P.W.2 were examined and got marked Exs.A-1 to A-5 which happened to be the copy of First Information Report, Inquest Report, Post Mortem Certificate, Charge Sheet, Motor Vehicle Inspectors Report. On behalf of the respondents, R.W.1 & R.W.2 were examined and got marked Exs.B-1 & B-2, Exs.X-1 to X-4, viz, Authorization, True copy of insurance policy, authorization letter, R.C. of crime vehicle, Fitness certificate of Trailer, Permit of the Trailer. 6. While the 1st respondent-owner and 3rd respondent – driver of the tractor and trailer remained ex parte, the 2nd respondent – Insurance Company contested the matter denying all the averments made in the claim petition. It is that the driver of the tractor and trailer involved in the said accident did not possess valid driving licence and hence sought for dismissing the appeal. 7. Based on the pleadings, the Tribunal framed necessary issues one as to the culpability in causing the accident and the entitlement of the just compensation by the claimants. The Tribunal considering the evidence of PW-1 who is none other NV, J macma no.468 of 2023 4 than the husband of the deceased and also the evidence of PW.2 - eye witness to the accident and who was with the deceased on the fateful day and also the Ex.A-1 copy of the F.I.R, Ex.A-2 Copy of the Inquest Report, Ex.A-3 copy of Post Mortem Certificate, Ex.A-4 Charge sheet, Ex.A-5 Copy of the Motor Vehicle Inspector’s Report, observed that the accident occurred due to negligent act on the part of the driver of the 1st respondent’s vehicle i.e. Tractor and Trailer bearing No.AP 21 V 7487 & AP 21 V 7489 which was insured with the 2nd respondent Insurance Company, as such, the 1st respondent being the owner of the vehicle and the 2nd respondent Insurance Company being the insurer to the crime vehicle are jointly and severally liable to pay the compensation. and accordingly granted compensation of Rs.7,00,000/-. 8. and accordingly granted compensation of Rs.7,00,000/-. 8. During hearing, Smt. A. Jayanthi, learned counsel for the appellant herein contended that, the appellant herein is the Insurer/Respondent No.2 and the appellant is not liable to pay compensation and shall be exonerated on the primary ground that the deceased is an authorized passenger travelled in the tractor and trailer. The charge sheet filed in Crime No.53 of 2016 against the driver of the tractor & trailer also does not disclose NV, J macma no.468 of 2023 5 that he possess a valid driving license at the time of offence and it is also not filed for the offence under section 181 of M.V.Act. The policy of the vehicle does not cover the unauthorized passengers travelling on the tractor & trailer. It is further contended that, R.W.2 also admitted during his evidence that the driver of the vehicle is not having valid driving license at the time of incident. When the owner of the tractor has violated the terms and conditions of the policy, the insurer is not liable to pay any compensation and ought to have ordered ‘pay and recovery’. The deceased along with other coolies boarded the tractor for the purpose of travelling and they are no way come under the purview of the policy. In support of her contention, learned counsel for the appellant relied on the judgments of Madras High Court in Divisional Manager, Oriental Insurance Company Limited v. Kalaiarasi1 and The Manager, HDFC Ergo General Insurance Company vs. Kannamma2. On the strength of the principle laid down in the above judgments, learned counsel for the appellant contends that, in the present case, the Tribunal ought to have proceeded to conclude that the persons who 1 2024 Law Suit (Mad) 61 2 2020 Law Suit (Mad() 2451 NV, J macma no.468 of 2023 6 travelled in the trailer were agricultural coolies and the policy with the tractor and trailer has been insured covers only the agricultural purpose. She further submits that, the definition of both tractor and trailer makes very clear that both tractor and trailer are intended to carry any passengers. In the present case, the deceased and others passengers comes under the purview of unauthorized passengers and hence, fixing liability on the insurer is unsustainable under the Act. In case of fixing liability, the tribunal ought to have proceeded on pay and recovery basis from the owner and driver of the vehicle and finally prayed to allow the appeal. 9. Sri M. Solmon Raju, learned counsel for Respondent Nos.1 to 3 contends that the Tribunal, after perusing the oral and documentary evidence, rightly came to conclusion that owner of the vehicle and insurance company are jointly and severally liable for payment of award amount. The Tribunal has assessed the daily wage of the deceased as Rs.400/-, the income for 30 days should be Rs.12,000/-. Since the claimants (includes husband and two minor children) are depending upon the deceased, so by deducting 1/3rd towards the personal expenditure should be 1/3rd, therefore, the calculation might have been for monthly income NV, J macma no.468 of 2023 7 should be taken as Rs.9,000/-, but erroneously taken as Rs.6,000/-. He further submits that, the Court below has not granted compensation under different heads viz., future prospects and not granted proper amount under love and affection, consortium, but the Court below finally awarded only Rs.7,00,000/- though arrived at a conclusion that they are entitled for Rs.8,00,000/-. 10. He submits that, even though the claimants are having good case, but for filing cross objections or appeal for enhancement of the award amount ordered by the Tribunal, the claimants are not financially sound, since the 1st claimant who is none other than the deceased is suffering from kidney related problems and claimant Nos.2 & 3 are minor children, therefore, they are in dire need of the award proceeds, as such, they did not prefer for cross objections or enhancement of compensation. 11. He submits that, the appellant – insurance company pleaded for exoneration of its liability, since the deceased travelled as unauthorized person in the Tractor and Trailer, which is in deviation of the terms and conditions of the policy, therefore, the insurance company is not liable for any payment of NV, J macma no.468 of 2023 8 compensation. He further contended that, it is a case of pay and recovery, and the insurance company cannot escape its liability from being exonerated and placed reliance on the judgments of the Hon’ble Apex Court in National Insurance Co. Ltd vs. Swaran Singh3, National Insurance Co. Ltd vs. Pranay Sethi4 and Magma General Insurance Co. Ltd vs. Nanu Ram alias Chuhru Ram5. Therefore, in view of the facts and circumstances, as well as the ratio laid down by the Hon’ble Apex Court, learned counsel contends that the order of the Tribunal does not warrant any interference by this Court and the present appeal is liable to be dismissed. 12. Heard learned counsel for the Appellant– Insurance Company and learned counsel for the Respondent Nos.1 to 3/claimants. Perused the impugned order passed by the Tribunal. 13. It is an admitted fact that there is an existing and enforceable insurance policy in respect of the subject tractor and trailer issued by the appellant herein. As per the terms of the policy, the insurer/insurance company/appellant herein promised 3 2005 (1) JLJ 85 4 2017 SCC (16) 680 5 2018 SCC (18) 130 NV, J macma no.468 of 2023 9 to indemnify the insured i.e. the owner of the vehicle in respect of third party risks. The nature of vehicle insured is Tractor & Trailer bearing registration Nos.AP 21 v 7487 & AP 21 V 7489. The contention of the learned counsel for the appellant that the deceased is an unauthorized passenger and not covered as per the terms and conditions of the policy issued by the insurance company. As per the terms of the policy, it is clear and specific that it covers third party risks apart from the driver of the vehicle. But, the deceased herein has travelled in the tractor and trailer as unauthorized passenger and does not come under the purview of passenger and also not third party to the vehicle, therefore, the liability of the company should be exonerated, as such, finding of the Tribunal that the insurance company is jointly and severally liable is not valid and acceptable and contrary to law. 14. The other contention that, the charge sheet filed in Crime No.53 of 2016 against the driver of the tractor and trailer does not disclose that he possessed valid driving license at the time of accident. But, the appellant – insurance company was unable to prove the same by R.W.1 & R.W.2 during their cross-examination that the driver of the tractor and trailer /1st respondent did not possess valid driving license. Therefore, possessing of driving NV, J macma no.468 of 2023 10 license by the driver is not proved by the appellant. Even assuming that there is no valid driving license possessed by the driver of the tractor and trailer, unless it is proved by the appellant that the insured having known/with prior knowledge, engaged the services of the driver without there being any valid driving license. In the absence of such specific evidence, it is presumed that there is a deviation to the terms and conditions of the policy. Therefore, it is well known settled law that, in view of the ratio laid down by the Constitutional Bench of the Hon’ble Apex Court in National Insurance Co. Ltd vs Swaran Singh (referred supra) the appellant shall make good the award of the Court below and recover the same from the owner of the vehicle. But, in the instant case, the appellant did not prove that there is no driving license, since the driver and owner of the tractor and trailer have become ex parte before the Court below. 15. The other contention of the appellant that, there is a delay of more than five days in lodging the report before the concerned police in respect of the subject accident, as such, there is a possibility of filing false report or even a report, it might be with due deliberations or after thought. But the said plea neither put forth before the Tribunal in evidence nor argued before the NV, J macma no.468 of 2023 11 Tribunal, thereby, the said contention is liable to be rejected. Moreover, there is no specific evidence led by R.W.1 & R.W.2 on this issue. The foremost plea of respondent that, the Claimant Nos.2 & 3 being the minors and Claimant No.1 who is bread winner is suffering from renal disease are in dire need of award proceeds, awarded by the Tribunal, needs to be considered. Therefore, to substantiate the award of Tribunal, it is appropriate to draw to relevant provisions under Motor Vehicles Act as under: Section 146. Necessity for insurance against third party risk.— (1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter: Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991 (6 of 1991). Explanation.—A person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle no such policy as is required by this sub-section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force. (2) Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State NV, J macma no.468 of 2023 12 Government and used for Government purposes unconnected with any commercial enterprise. (3) The appropriate Government may, by order, exempt from the operation of sub-section (1) any vehicle owned by any of the following authorities, namely:— (a) the Central Government or a State Government, if the vehicle is used for Government purposes connected with any commercial enterprise; (b) any local authority; (c) any State transport undertaking: Provided that no such order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in accordance with the rules made in that behalf under this Act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur to third parties. Explanation.—For the purposes of this sub-section, ―appropriate Government‖ means the Central Government or a State Government, as the case may be, and— (i) in relation to any corporation or company owned by the Central Government or any State Government, means the Central Government or that State Government; (ii) in relation to any corporation or company owned by the Central Government and one or more State Governments, means the Central Government; (iii) in relation to any other State transport undertaking or any local authority, means that Government which has control over that undertaking or authority. NV, J macma no.468 of 2023 13 147. Requirements of policies and limits of liability. (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which (a) is issued by a person who is an authorised insurer; and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorized representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place: Provided that a policy shall not be required – (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen’s Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or NV, J macma no.468 of 2023 14 (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability Explanation.—For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:— (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand: Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, NV, J macma no.468 of 2023 15 particulars and matters may be prescribed in different cases. (4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe. (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. 149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. (1) If, after a certificate of insurance has been issued under sub- section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 147 (being a liability covered by the terms of the policy)1[or under the provisions of section 163A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. NV, J macma no.468 of 2023 16 (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:— (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:— (i) a condition excluding the use of the vehicle— (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-car being attached where the vehicle is a motor cycle; or ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular. (3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of NV, J macma no.468 of 2023 17 section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India: Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2). (4) Where a certificate of insurance has been issued under sub- section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person. 5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. (6) In this section the expressions ―material fact‖ and ―material particular‖ means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so at what NV, J macma no.468 of 2023 18 premium and on what conditions and the expression ―liability covered by the terms of the policy‖ means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy. (7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. Explanation.—For the purpose of this section, ―Claims Tribunal‖ means a Claims Tribunal constituted under section 165 and ―award‖ means an award made by that Tribunal under section 168. 16. Sections 146, 147 and 149 of the Motor Vehicles Act, 1988 contemplates the necessity for insurance policy against third party risks and settlement of claims by insurance company and procedure thereof. Section 147 of the Motor Vehicles Act, 1988 provides for mandatory insurance. The policy of insurance should be to achieve the object and in terms of the said provision must be in relation to the person or classes of person specified in the policy sought to be insured. The insurance would be against any type of liability for which the insured may be exposed and incurs liability. Thus, the Insurance Policy should, inter alia, be in respect of death or bodily injury of the person carried in the NV, J macma no.468 of 2023 19 vehicle. Such person may be the owner of the goods or his authorised representative. In the course of agriculture, operations, the wagers/agricultural coolies are being provided transport from their habitation to the agricultural fields by way of tractor and trolley, which is general/common mode of transport, for the reason that the tractor and trolley is the most important devise of the farming. Therefore, agricultural coolies travelling in tractor and trolley is predominant and most common thing in agricultural sector and well known fact in real rural world, any policy omitting the said real fact of travelling of coolies vide tractor and trolley and claiming that deceased or the coolie is not a valid passenger and not a third party to the vehicle as per policy, is contrary to the mandate and object of welfare legislation which envisages that compulsory/mandatory insurance on behalf of the insured. Hence, the terms of policy may be do not recognize the coolies as possessor of the tractor and trolley, but in real, agricultural rural world, they are passengers of the tractor and trolley. 17. These two sections are beneficial for victims of accidents to claim compensation from the insured or insurer/insurance company. Therefore, in view of the mandatory insurance, the NV, J macma no.468 of 2023 20 appellant company shall make a policy and collect the premium even in respect of agricultural coolies who used to travel in the tractor and trolley, which is common/regular practice in agricultural operations. Therefore, the appellant – insurance company cannot be exonerated from its liability, in view of the mandatory insurance. The appellant/Insurance Company also pleaded in its ground that this Court may consider the principle laid down in National Insurance Co. Ltd. v. Swaran Singh (referred supra) i.e. pay and recovery. Accordingly, the issue is answered in favour of the appellant. 18. The Hon’ble Apex Court in National Insurance Co. Ltd vs. Swaran Singh (referred supra), held as follows: ―83. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does not mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub- section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. The right to avoid liability in terms of sub-section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say NV, J macma no.468 of 2023 21 that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading.‖ 102. It is, therefore, evident from the discussions made hereinbefore that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time.‖ 19. In National Insurance Co. Ltd. v. Swaran Singh (referred supra), while considering the question whether a third party involved in an accident is entitled to the amount of compensation granted by the Motor Accidents Claims Tribunal although the driver of the vehicle at the relevant time might not have a valid driving licence, held insurer should pay and would be entitled to recover the same from the owner or driver thereof. 20. Therefore, from the above judgment, it is clear that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver. NV, J macma no.468 of 2023 22 21. In K. Nagendra vs. The New India Insurance Co. Ltd6, the Hon’ble Apex Court held that, the purpose of an insurance policy in the present context is to shield the owner/operator from direct liability when such an unforeseen/unfortunate incident takes place. To deny the victim/dependents of the victim compensation simply because the accident took place outside the bounds of the permit and, therefore, is outside the purview of the insurance policy, would be offensive to the sense of justice, for the accident itself is for no fault of his. Then, the Insurance Company most certainly ought to pay. At the same time though, when an Insurance Company takes on a policy and accepts payments of premium in pursuance thereto, it agrees to do so within certain bounds. The contract lays down the four corners within which such an insurance policy would operate. If that is the case, to expect the insurer to pay compensation to a third party, which is clearly outside the bounds of the said agreement would be unfair. Balancing the need for payment of compensation to the victim vis-à-vis the interests of the insurer, the order of the High Court applying the 6 2025 INSC 1270 NV, J macma no.468 of 2023 23 pay and recover principle, in our considered view, is entirely justified and requires no interference. 22. In the result, the appeal filed by the Insurance Company is allowed in part. The appellant/Insurance Company is directed to satisfy the award, at the earliest and is entitled to recover the said amount from the fourth respondent, owner of the offending Tractor and Trailer Bearing registration Nos.AP 21 v 7487 & AP 21 V 7489, by executing its judgment as against the fourth respondent. 23. Consequently, miscellaneous applications if any, shall stand closed. No costs. ________________________________ VENKATESWARLU NIMMAGADDA, J Date:31.12.2025 SP NV, J macma no.468 of 2023 24 HON’ BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA MACMA No.468 of 2003 31.12.2025 W SP