In a fatal accident claim, the Madras High Court held that absence of a valid driving licence does not by itself prove contributory negligence, and the insurer must first satisfy the third-party award before recovering the amount from the vehicle owner. The Court has also held that non-possession of a valid driving licence does not, by itself, establish contributory negligence.
Separately, even if the insurer proves a statutory or contractual defence such as absence of a valid licence, the insurer’s obligation to satisfy a third-party award remains, and it can thereafter recover the amount from the insured/owner. The 2019 amendment to the Motor Vehicles Act does not wipe out this pay and recover mechanism in third-party claims.
The Division Bench comprising Justice N. Sathish Kumar and Justice M. Jothiraman noted that the Tribunal had already found, based on the material on record and the RTO evidence, that the rider of the vehicle did not possess a valid driving licence at the time of the accident. The insurer argued that since the accident occurred after the coming into force of the Motor Vehicles (Amendment) Act, 2019, the Tribunal should have completely exonerated the insurer instead of applying the pay and recover principle.
The Court then observed that mere absence of a driving licence, by itself, cannot lead to a finding of contributory negligence. For this proposition, it referred to the Supreme Court decision in Sudhir Kumar Rana v. Surinder Singh [2008 (12) SCC 436], which held that non-possession of a driving licence alone is not enough to attribute negligence to the victim or to alter the finding on causation.
On the issue of insurer liability, the High Court relied on a recent Division Bench ruling of the Madras High Court in The Branch Manager, ICICI Lombard, Thanjavur v. Mariyapushpam [CMA(MD) Nos.517 of 2025]. That decision had clarified that even after the 2019 amendment, the insurer’s statutory obligation toward third-party claimants continues, and where the insurer succeeds in establishing a contractual defence, it must still satisfy the award first and thereafter recover the amount from the insured. The Court applied that principle here and held that the Tribunal’s pay and recover direction was legally correct.
The High Court also reviewed the compensation awarded under the different heads and found that the quantum fixed by the Tribunal was just and proper. It rejected the insurer’s challenge to the compensation amount and found no reason to interfere with the award.
Briefly, the appeal was filed by Iffco Tokio General Insurance Co. Ltd. against the award of the Motor Accidents Claims Tribunal, Coimbatore, which had granted compensation to the family of deceased Ramesh in a motor accident claim. The claimants were the wife and three minor children of the deceased. The insurer challenged the award mainly on the question of liability and the amount awarded.
According to the claimants, the accident took place on March 12, 2023 when Ramesh was riding a two-wheeler from Valukkuparai to Nachpalayam. When he crossed Valukkuparai Athumedu, another motorcycle coming from the opposite direction was allegedly ridden rashly and negligently and hit him. Ramesh fell on the road and died on the spot. The claimants stated that he was about 38 years old and was doing centring masonry work, earning around Rs.25,000 per month.
The insurance company, in its defence, contended that the rider of the insured motorcycle did not hold a valid and effective driving licence on the date of the accident. It also argued that the accident was not solely due to the other rider’s negligence and that the deceased himself had ridden in a rash manner, thereby contributing to the accident. On that basis, the insurer sought either exoneration from liability or apportionment on the ground of contributory negligence.
Before the Tribunal, the wife of the deceased was examined as an eye-witness. The respondents examined an RTO official and produced records including the report relating to absence of driving licence. On appreciation of the evidence, the Tribunal accepted the version of the eye-witness and held that the accident occurred due to the rash and negligent driving of the offending rider. The Tribunal assessed the deceased’s monthly income at Rs.15,000, added 40% towards future prospects, deducted one-fourth towards personal expenses, applied multiplier 15, and awarded a total compensation of Rs. 31.59 lakhs. It also directed the insurer to pay the amount first and then recover it from the owner of the vehicle.
