1. The present group of appeals is preferred by the appellant-Insurance Company under Section 173 of the Motor Vehicles Act. The appellant-Insurance Company is arrayed as Opponent No.2 in all the Motor Accident Claims Petitions filed under Section 166 of the Motor Vehicles Act. The appeals arise out of the same accident. The original Opponent No.1 is the owner of the offending vehicle, which is a Tempo bearing RTO Registration No. MH-09/L-8688. The offending vehicle is a goods carriage. On the date of the accident, the said vehicle was insured with the appellant-Insurance Company as a goods carriage. The policy issued in respect of the said vehicle is an Act Policy and not a comprehensive policy of insurance.

2. The owner of the offending vehicle was running a brick kiln at Kolhapur. He had sent the offending vehicle owned by him to Newasa for carrying the workers to be employed at his brick kiln. On 04/11/2011, the said workers, along with their family members, were travelling in the offending vehicle. At about 1:15 a.m., the offending vehicle turned turtle, resulting in the accident. An FIR in respect of the said incident was lodged on the very date of the accident.

3. In all, four families were travelling in the offending vehicle at the time of the accident. As can be seen from the FIR, apart from the driver, there were 15 persons and some children travelling in the offending vehicle at the relevant time.

4. The passengers who had suffered injuries preferred claims for compensation by filing claim petitions, whereas the dependents of the passengers who succumbed to the injuries sustained in the accident preferred claims for compensation on account of death under Section 166 of the Motor Vehicles Act before the learned Motor Accident Claims Tribunal, Ahmednagar.

5. Apart from the quantum of compensation awarded, the facts of the case and the legal issues which arise for consideration are identical in all the appeals, since all the appeals arise out of claim petitions filed on account of the same accident.

6. The fact that the accident had occurred on 04/11/2011 and that the claim petitioners, or the family members of the claim petitioners in the death cases, were travelling in the offending vehicle is not in dispute. It is also not in dispute that the offending vehicle is registered as a goods carriage. Likewise, it is undisputed that the policy issued in respect of the said vehicle is an Act Policy. The ownership of the offending vehicle and the fact that the said vehicle was insured with the appellant-Insurance Company are also not in dispute.

7. The claimants had stated in the claim petitions that they were travelling along with their family members from Newasa to Kolhapur, where the brick kiln of the respondent-vehicle owner is situated, for being employed as workers in the said brick kiln. According to the claimants, the accident occurred when the offending vehicle turned turtle. It was their specific case that no other vehicle was involved in the said accident. The claimants had further stated that they were carrying their household articles and bags containing food grains along with them. According to the claimants, they were travelling gratuitously in the offending vehicle owned by their employer.

8. The respondent-vehicle owner denied that the accident had occurred due to the fault of the driver of the offending vehicle. He stated that the goods belonging to the workers were being carried in the offending vehicle and that the workers were travelling in the said vehicle as owners of the goods.

9. The appellant-Insurance Company filed its written statement contending that the goods carriage was being used for carrying passengers and, therefore, there was a fundamental breach of the terms and conditions of the insurance policy. The appellant-Insurance Company contended that the liability could not be fastened upon it, since the risk of the passengers travelling in the goods carriage is not covered either statutorily or under the policy.

10. The learned Tribunal, after recording the evidence and hearing the arguments advanced by the respective parties, allowed the respective claim petitions and quantified the compensation payable therein. The learned Tribunal directed the owner and the appellant-Insurance Company to jointly and severally pay the respective amounts of compensation to the petitioners in the respective claim petitions.

11. With respect to the principal defence of the appellant-Insurance Company that the liability could not be fastened upon it since passengers were being carried in a goods vehicle, the learned Tribunal held that the evidence on record was sufficient to establish that the persons travelling in the offending vehicle were the owners of the goods which were being carried in the goods carriage. It was, therefore, held that, as owners of the goods, the risk of the said persons was duly covered under the Act Policy. The learned Tribunal further held that the policy did not restrict the number of owners who could travel along with the goods in the goods carriage.

12. Mr. Swapnil Rathi, the learned advocate for the appellant-Insurance Company, vehemently submits that the learned Tribunal has completely misinterpreted the evidence on record as well as the relevant statutory provisions. His contention is that all the passengers were travelling from Newasa to Kolhapur and that the purpose of their travel was to join employment at Kolhapur. The learned advocate submits that, incidentally, some necessary belongings were being carried by the passengers along with them. His contention is that the passengers were carrying luggage with them and, therefore, the finding recorded by the learned Tribunal that the goods carriage was being utilised for transportation of goods and that the owners of the goods were travelling along with the goods is unsustainable.

13. The learned advocate places reliance upon the judgment of the Hon'ble Supreme Court in the case of National Insurance Company Limited Vs. Rattani and Others, reported in AIR 2009 Supreme Court 1499, in support of his contention. Apart from the said judgment, reliance is also placed upon the judgment of this Court in the case of New India Assurance Company Limited Vs. Prabhakar Mohanappa Tamshete and Another, reported in 2024 (3) ABR 25. The learned Advocate for the appellant-Insurance Company further submits that even the principle of pay and recover cannot be made applicable in the present case, since the appellant-Insurance Company was not required to insure the claims of the deceased and injured passengers.

14. The learned Advocate Ms. Madhaveshwari S. Mhase also places reliance upon the judgment of this Court in the case of IFFCO TOKIO General Insurance Company Ltd. Vs. Sudamati w/o Kishanrao Kale and Another, reported in 2018 (4) Mh.L.J. 141. Her contention is that the passengers travelling in the offending vehicle were owners of the goods which were being transported in the said vehicle and, as such, their risk was covered by the insurance policy in view of Section 147 of the Motor Vehicles Act, which provides for coverage in respect of death or bodily injury caused to an owner of the goods or his authorised representative travelling in a goods carriage.

15. As against this, the learned Advocate for the original claimants submits that mere breach of the policy conditions by carrying passengers in a goods vehicle would not absolve the Insurance Company from its liability to satisfy the claims. In support of her contention, she places reliance upon the judgment of the Hon'ble Supreme Court in the case of B. V. Nagaraju Vs. Oriental Insurance Co. Ltd., reported in (1996) 4 Supreme Court Cases 647.

16. The learned Advocate lastly submits that even if the contention of the appellant-Insurance Company that the claims are not covered under Section 147 of the Motor Vehicles Act is accepted, the principle of pay and recover ought to be made applicable in the present case.

17. Upon hearing the rival submissions and upon perusing the record, the following points arise for our consideration in the present appeals :

                    (A) Whether the claims of the passengers travelling in the offending vehicle are covered under Section 147 of the Motor Vehicles Act and, consequently, whether the appellant-Insurance Company is liable to satisfy the said claims?

                    (B) In the event the appellant-Insurance Company is held not liable to satisfy the claims, whether the principle of pay and recover can be made applicable in the present case?

POINT (A) :

18. It is not in dispute that the offending vehicle is a goods carriage. Perusal of the FIR would indicate that 15 passengers and some children were travelling in the offending vehicle, in addition to the driver. The passengers were members of four different families. Persons who were to be employed in the brick kiln of the owner of the offending vehicle, along with their respective family members. Perusal of the spot panchanama would indicate that personal belongings of the passengers, such as bags containing food grains, utensils, clothes, etc., were found at the spot of the accident.

19. In order to answer the issue as to whether the passengers were travelling in the offending vehicle as owners of the goods or whether they were merely travelling as passengers while carrying their personal belongings with them, it would be appropriate to refer to the pleadings and the evidence of the claimants.

20. It is categorically stated in the claim petitions as well as in the evidence that the owner of the offending vehicle had sent the said vehicle to Newasa for bringing labourers to be engaged in his brick kiln. The persons travelling in the offending vehicle were either to be employed in the brick kiln or were the family members of the persons who were to be so employed. The passengers were carrying food grains and their personal belongings along with them.

21. In all, 15 persons, along with some children, were travelling in the offending vehicle. They belonged to four different families. The cross-examination of the witnesses examined on behalf of the claimants would indicate that the principal purpose of their travel was to go to Kolhapur for employment in the brick kiln of the owner of the offending vehicle.

22. As recorded hereinabove, the learned Tribunal has held that the claims of all the passengers were covered under Section 147 of the Motor Vehicles Act, since they were travelling in the goods carriage as owners of the goods being transported. The learned Tribunal has further held that the policy does not restrict the number of owners who could travel in the vehicle along with their goods.

23. Perusal of Section 147 of the Motor Vehicles Act would demonstrate that the claim of the owner of the goods or his authorised representative, while travelling in a goods carriage, is covered by the said provision.

24. The persons occupying the offending vehicle were travelling for the purpose of being employed in a brick kiln at Kolhapur. The other passengers were the family members of the persons who were to be employed therein. The contention of the claimants and the owner of the offending vehicle that the goods were being transported and that the owners of the goods were accompanying the same, therefore, cannot be accepted.

25. It appears that general statements that food grains and other personal belongings were being transported in the offending vehicle have been made by the claimants and the owner of the offending vehicle in order to bring their case within the framework of Section 147 of the Motor Vehicles Act. The evidence on record clearly indicates that the journey was undertaken only for the purpose of reaching the place of employment and that the goods were being carried along with the passengers incidentally.

26. It must further be stated that neither the quantity of food grains nor the particulars of the other goods allegedly being transported have been mentioned either in the pleadings or in the evidence. In all, 15 persons along with some children, in addition to the driver, were travelling in a Tempo which was registered and insured as a goods carriage.

27. In view of the above, the finding recorded by the learned Tribunal that the case was one where the owners of the goods were travelling along with the goods in a goods carriage and, therefore, their claims were covered under Section 147 of the Motor Vehicles Act, is completely unsustainable. In the considered opinion of this Court, however, the evidence on record clearly suggests that the purpose of the journey was not transportation of goods.

28. The reliance placed upon the judgment in the case of Sudhamati w/o Kishanrao Kale (supra) is misplaced. In the said case, three to four members of a band party were travelling in a goods carriage along with their musical instruments. The carrying capacity of the vehicle was only one plus one person. This Court held that the members of the band party were travelling in the Tempo as owners of the goods and, therefore, their claims were covered under Section 147 of the Motor Vehicles Act. While dealing with the contention that personal luggage or personal effects of passengers cannot be treated as goods for the purpose of Section 147 of the Motor Vehicles Act, this Court, in paragraph 13 of the said judgment, held that the musical instruments of the band party which were being carried in the vehicle were delicate instruments, which were difficult to handle and risky to carry in a goods vehicle. It was, therefore, held that the members of the band party were travelling along with their goods in the goods vehicle. It was further held that, in order to invoke Section 147 of the Motor Vehicles Act, it is not necessary that the person travelling in the goods carriage must be the owner of the entire goods being transported in the vehicle. Even if an owner, whose goods are carried in a portion of the goods vehicle, travels along with his goods, his claim would be covered under Section 147 of the Motor Vehicles Act.

29. Perusal of the said judgment will demonstrate that the owner of the vehicle was paid hire charges for carrying the musical instruments. The relevant observations contained in paragraphs 13 and 15 of the said judgment are reproduced hereinbelow:

                    “13. On the fateful day of incident, the vehicle tempo involved in accident was hired for carrying musical instruments of Band party for performance in the marriage ceremony at Parbhani. The FIR (Exhibit-26) adumbrates that deceased Mangesh and his associate members of the Band party hired the vehicle for carrying their musical instruments to play the same in marriage ceremony at Parbhani town. Obviously, the musical instruments of the Band party being delicate were difficult to handle and risky to carry in 'goods vehicle'. Therefore, deceased Mangesh and his associates to whom musical instruments were assigned for performance in the marriage ceremony at Parbhani, were carrying their instruments with due diligence and reasonable precaution. In such circumstances, it would be perceivable that deceased Mangesh being owner or authorised agent was carrying his musical instruments from Pathri town to Parbhani in the vehicle hired for the same.”

                    “15. The aforesaid definition of term "goods" indicates that musical instruments carrying in the offending vehicle were the "goods" within the meaning of section 2(13) of the Act of 1988. The deceased Mangesh was travelling in the vehicle being owner or his authorised representative for carrying the goods i.e. musical instruments. The hire charges were paid to the owner of the vehicle. In view of Motor Vehicle Rules, it was not necessary that entire vehicle should be hired. Even if persons carried some goods in the vehicle and pays hire charges for transportation of the same goods, and, even if those 'goods' occupy only some portion of the vehicle still it would amount to hire of the vehicle within purview of law. Therefore, it would not necessary that the entire vehicle should be hired for carrying 'goods'.”

30. The facts of the said case are clearly distinguishable. In the said case, three to four members of the band party were travelling along with their musical instruments in a goods carriage. The vehicle was hired for transportation of the musical instruments. This Court held that, since the musical instruments were delicate and were at risk of being damaged if transported without due care, the members of the band party were travelling along with the goods. Such is not the case in the present matter. At the outset, the material particulars with respect to the alleged goods being transported have not been brought on record. In particular, neither the quantity of food grains nor the particulars of the other articles allegedly being carried in the vehicle have been mentioned. On the contrary, in all, 15 persons and some children, in addition to the driver, were travelling in the offending vehicle. As stated hereinabove, these persons were members of four different families. The members of the respective families were travelling for the purpose of reaching the place of their employment, whereas the other family members were merely accompanying them. The ratio laid down in the case of Sudhamati w/o Kishanrao Kale (supra) is, therefore, clearly distinguishable and is not applicable to the facts of the present case.

31. The facts of the present case bear resemblance with facts involved in the case of Prabhakar Mohanappa Tamshete (supra), upon which reliance has been placed by Mr. Rathi, the learned Advocate for the appellant-Insurance Company. In the said case, around 31 persons were travelling in a goods carriage. They had stated that they had boarded the vehicle along with the goods relating to their business for the purpose of attending the market (Bazar) in some villages. The vehicle was a delivery van registered as a light goods carriage and was having a permit to carry two persons, including the driver.

32. While dealing with the issue as to whether the persons who had suffered injuries while travelling in the said vehicle could be considered as owners of the goods being transported, this Court held that a person boarding a goods carriage with small baggage by hiring the services of a goods carriage cannot be termed as the owner of the goods or the authorised representative of the owner so as to invoke Section 147 of the Motor Vehicles Act.

33. The relevant observations contained in paragraphs 8, 12 and 17 of the said judgment are reproduced hereinbelow:

                    “8. The claimants have pleaded in the petition that they had boarded in the vehicle along with goods of business for the purpose of attending the bazar at village Waghi. The claimants have also deposed before the Tribunal in the same line. However, no specifications as regards to the goods those were loaded and carried have been mentioned in the pleadings so also the evidence ”

                    “12. ..........Therefore, if any person boarded in the vehicle with small baggage, for which hiring of services of goods carriage would not be required, such person cannot be termed as owner of goods or authorized representative of owner of goods for the purpose of bringing him under the umbrella of statutory insurance cover intended to be extended in view of the amendment of 1994.”

                    “17...........So far as claims pertaining to large number of passengers carried in the goods carriages, there is consistent view that insurer has no liability to pay the compensation. As indicated above, a three Judge Bench of the Supreme Court of India in case of New India Assurance Company Ltd. v. Asha Rani and others reported in (2003) 2 SCC 223:(AIR 2003 SC 607) observed thus :-

                    "in view of the change in relevant provisions in the 1988 Act vis-a-vis 1939 Act we are of the opinion that meaning of words "any person" must be attributed having regard to context in which they have been used i.e. "a third party". Keeping in view the provisions of 1988 Act, we are of the view that the provisions thereof do not enjoin any statutory liability on the owner of the vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, insured would not be liable therefor.”

34. The learned Advocate Mr. Rathi has also placed reliance on the decision of the Hon'ble Supreme Court in Rattani (supra). In the said case, members of a marriage party were travelling in a goods vehicle along with goods, namely, gifts given by the family of the wife to the family of the husband. In all, 30 to 40 persons were travelling in the goods carriage when it met with an accident. The question before the Hon'ble Supreme Court was whether the claims of the injured persons could be considered by treating them as representatives of the owner of the goods.

35. The Hon'ble Supreme Court held that 30 to 40 persons travelling in a goods vehicle could not be treated as representatives of the owners of the goods and, accordingly, held that the Insurance Company was not liable to pay the amount of compensation.

36. In view of the reasons recorded hereinabove, it must be held that the claims of the claimants are not covered under Section 147 of the Motor Vehicles Act. Consequently, the appellant-Insurance Company cannot be held liable to satisfy the amount of compensation awarded by the learned Tribunal.

POINT (B) :

37. Having answered point (A) in favour of the appellant-Insurance Company, it now needs to be examined as to whether the principle of pay and recover can be applied in the case at hand.

38. Mr. Rathi, the learned Advocate for the appellant-Insurance Company, contends that the principle of pay and recover can be applied only where the claim of the victim of the accident is covered under the policy of insurance and the Insurance Company comes up with a defence of breach of the terms and conditions of the policy. He submits that, since the claims of the injured passengers and the dependents of the deceased passengers are not covered under the policy, the principle of pay and recover cannot be applied.

39. The learned Advocate places reliance upon the aforesaid judgment in the case of Prabhakar Mohanappa Tamshete (supra) in support of his contention. He has drawn attention to the observations contained in paragraphs 16 and 17 of the said judgment to substantiate his submission:

                    “16. ...........The Mechanism of passing the award in the nature of pay and recover has been evolved by the Supreme Court of India for the cases where victim of the accident is compulsory covered under the policy of insurance issued in terms of section 147 of Act, but owing to default in observance of terms of contract, insurer is entitled to avoid liability in terms of defense provided under section 149 of Motor Vehicles Act 1988.”

                    “17. Although, Supreme Court of India in cases of

                    1] Manuara Khatun and others v. Rajesh Kumar Singh and others, reported in (2017) 4 SCC 796: (AIR 2017 SC 1204),

                    2] Sanju P. Paul v. National Insurance Company reported 2012 ACJ 1852: (AIROnline 2011 Ker 21) and

                    3] Anu Bhanvara and others v. Iffco Tokio General Insurance Company Limited and others reported in (2020) 20 SCC 632 :(AIR 2019 SC 3934) directed the insurer to satisfy the award at first instances and recover the compensation amount from the insured/owner of the vehicle, minute reading of such judgments would depict that such directions are given in exercise of plenary powers under Article 142 of the Constitution of India.”

The learned Advocate, therefore, contends that the principle of pay and recover also cannot be applied in the present case.

40. Per contra, the learned Advocate for the claimants submits that the principle of pay and recover is well recognised and that the same ought to be made applicable to the facts of the present case as well.

41. Perusal of paragraph 17 of the judgment in Prabhakar Mohanappa Tamshete (supra) would demonstrate that this Court has referred to the decisions of the Hon'ble Supreme Court in the cases of Manuara Khatun and Others Vs. Rajesh Kumar Singh and Others and Anu Bhanvara and Others Vs. Iffco Tokio General Insurance Company Limited and Others, and has held that the directions for pay and recover in the said cases were issued in exercise of the powers under Article 142 of the Constitution of India.

42. It is obvious that the learned Tribunal and this Court do not have the same plenary jurisdiction as is available to the Hon'ble Supreme Court under Article 142 of the Constitution of India.

43. In this regard, it would be appropriate to refer to the judgment of the Hon'ble Supreme Court in the case of Sunita and Others Vs. United India Insurance Company Limited and Others, reported in 2025 SCC OnLine SC 1464. In the said case, the deceased was travelling in a goods vehicle. The Insurance Company was exonerated on merits from making payment of the amount of compensation. While dealing with the contention that the principle of pay and recover ought to be applied, the Hon'ble Supreme Court held that the principle of pay and recover was applicable in the said case. The Hon'ble Supreme Court, after referring to several decisions of the Apex Court wherein directions to pay and recover had been issued, held that the learned Tribunal and the High Court ought to have followed the said principle by directing the Insurance Company to make payment of the compensation to the claimants in the first instance and thereafter recover the same from the owner of the offending vehicle. The direction for pay and recover in the said case was not issued in exercise of the powers under Article 142 of the Constitution of India. The Hon'ble Supreme Court clearly held that the said principle ought to have been applied by the learned Tribunal.

44. It is also relevant to note that, in the said case, the claim of the deceased was obviously not covered under the Act Policy and no separate premium was paid in respect of the deceased, who was travelling in the goods carriage as a gratuitous passenger. In view of the aforesaid decisions, in the considered opinion of this Court, the principle of pay and recover must be applied in the present case as well. It must be stated that, in the present case also, there is no dispute that all the victims of the accident were travelling as gratuitous passengers.

45. It would also be appropriate to refer to the judgment of the Hon'ble Supreme Court in the case of Sanju P. Paul Vs. National Insurance Company, reported in (2003) 2 SCC 41. In the said case, around 50 unauthorised passengers were travelling in a goods carriage. The claim was lodged by one of the passengers, who was an employee of the owner of the offending vehicle. However, the claimant was not engaged as a driver on the offending vehicle. He was travelling as a spare driver and his risk was not covered under the policy. The purpose of his travel was to reach a particular place as directed by his employer, namely, the owner of the offending vehicle. While dealing with the contention that the claim of the spare driver was covered in view of Section 147 of the Motor Vehicles Act, the Hon'ble Supreme Court rejected the said contention and held that the Insurance Company was not liable to satisfy the claim. However, having so held, the Hon'ble Supreme Court applied the principle of pay and recover in the said case.

46. In the present case also, more than 15 unauthorised passengers were travelling in a goods carriage. The facts of the present case, therefore, bear resemblance to the aforesaid case where, despite holding that the claim was not covered under the policy, the principle of pay and recover was applied. It appears that the aforesaid judgment and several other judgments on the point were considered in the case of Sunita (supra), wherein the Hon'ble Supreme Court has held that the Courts below had erred in not applying the principle of pay and recover. This would indicate that the direction to pay and recover is not necessarily restricted to the exercise of powers under Article 142 of the Constitution of India.

47. It will be appropriate to refer to the judgment of the Hon’ble Supreme Court in the case of Shamanna and Another v. The Divisional Manager, The Oriental Insurance Co. Ltd. and Others, (2018) 9 Supreme Court Cases 650. In the said case, the learned Tribunal had allowed the claim petition filed under Section 166 of the Motor Vehicles Act, holding that although it was held that the owner had committed breach of policy conditions. However, having held so, the pay and recover principle was applied by directing the Insurance Company to pay the amount of compensation and recover the same from the owner. The Insurance Company challenged the judgment and award by filing an appeal under Section 173. The judgment and award was maintained by the High Court however, the direction to the Insurance Company to make payment of the amount to the claimant and recover the same from the owner was set aside by the High Court. The claimant, therefore, approached the Hon’ble Supreme Court challenging the appellate judgment delivered by the High Court. The Hon’ble Supreme Court allowed the appeal, restoring the directions for pay and recover issued by the learned Tribunal. This case considers earlier Judgments where the "pay and recover" principle was applied, and also in decisions where correctness of the said principle was doubted by the Hon’ble Supreme Court, it was noted that the reference made in the case of National Insurance Company Limited v. Parvathneni, (2009) 8 SCC 785, was disposed of by a Bench of three Hon'ble Judges, keeping the question of law open to be decided in an appropriate case. In view of the aforesaid, the Hon’ble Supreme Court held that the principle of "pay and recover" laid down in National Insurance Company Limited v. Swaran Singh, (2004) 3 SCC 297 and National Insurance Company Limited v. Laxmi Narain Dhut, (2007) 3 SCC 700, will have to be followed. The Hon'ble Supreme Court has held that the High Court ought not to have interfered with the order passed by the learned Tribunal directing the insurance company to pay the amount of compensation and then to recover the same from the vehicle owner. The judgment clearly indicates that the power to direct the insurance company to make payment of the amount and then to recover the same from the owner is not relatable only to Article 142 of the Constitution of India. It is, therefore, that the directions for "pay and recover" issued by the Tribunal were upheld by the Supreme Court.

48. It will also be appropriate to refer to the judgment of this Court in the case of New India Assurance Company Limited v. Namdeo Tukaram Khade, 2025 BHC-AUG-36683. In paragraph 9 of the judgment, this Court has noticed that there are judgments holding that insurance companies should first pay and then recover the amount from the owner of the offending vehicle, and also judgments which hold that in case of a claim by a gratuitous passenger travelling in a goods vehicle, the insurance company is not liable and, therefore, the "pay and recover" principle cannot be applied.

49. Having observed so, this Court, for the following reasons recorded in paragraphs 10 and 11, has held that even in a case where a gratuitous passenger meets with an accident while travelling in a goods vehicle, the principle of "pay and recover" is applicable. The contention that the power to direct the insurance company to pay the amount and thereafter recover the same is relatable only to Article 142 of the Constitution of India is specifically rejected. Relevant observations in paragraphs 10 and 11 of the judgment are reproduced hereinbelow for ready reference :

                    “10. This court has perused all the rulings and judgments relied by appellate court. In the rulings relied by learned counsel Shri Hange for respondents/original claimants, i.e. Sunita and Ors. (supra) decided recently by the Hon’ble Apex Court, its own previous judicial pronouncements in the case of Mukund Dewangan v. Oriental Insurance Company Ltd. & Others, (2017) 14 SCC 663; Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi, (2024) 1 SCC 818;National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC 1, and Anu Bhanvara v. IFFCO Tokio General Insurance Co. Ltd., (2020) 20 SCC 632; upheld the High Court’s order, holding that although insurer was technically not liable under the terms of policy, justice and precedent demanded application for ‘pay and recover’. Similar view is again taken very recently by the Hon’ble Apex Court in the case of K. Nagendra v. New India Insurance Co. Ltd. And Ors, 2025 SCC OnLine SC 2297, in paragraph 9 and 10 observed as under :

                    “9. 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.

                    10. 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-a-vis the interests of the insurer, the order of the High Court applying the pay and recover principle, in our considered view, is entirely justified and requires no interference.”

                    11. The above observations answer’s also the submission raised by the learned counsel for insurance company that the orders of Hon’ble Apex court were in exercise under Article 142 and the same is not permissible for this court. In order to render justice and to meet the objectives of ‘benevolent legislation’ and also to further ‘grant immediate reprieve’ to the victims, order of “Pay and Recover’’ passed by learned tribunal, is justified and is consequently required to be upheld.”

50. However, the Hon'ble Supreme Court in the case of Amudhavalli & Ors. v. HDFC Ergo General Insurance Company Ltd. & Ors., reported in 2025 INSC 1219, wherein the principle of pay and recover was refused to be applied since the injured claimant was travelling in a goods carriage as a fare-paying passenger. It was held that carrying a fare-paying passenger in a goods carriage amounts to a fundamental breach of the policy conditions and, in such a case, the principle of pay and recover cannot be applied.

51. Having regard to the fact that the passengers in the present case were not fare-paying passengers, in the considered opinion of this Court, the principle of pay and recover would be applicable. Point (B) is accordingly answered against the appellant-Insurance Company and in favour of the respondents.

52. Apart from the aforesaid, in four appeals, viz. First Appeal No. 1978 of 2017, First Appeal No. 1979 of 2017, First Appeal No. 1981 of 2017 and First Appeal No. 2854 of 2017, the quantum of compensation awarded is also disputed.

53. The learned Advocate Mr. Swapnil Rathi submits that the learned Tribunal has not applied the correct percentage in respect of the head of future prospects and that the amount of compensation awarded towards loss of consortium is also on the higher side. The learned Advocate places reliance upon the judgment of the Hon'ble Supreme Court in the case of National Insurance Company Ltd. Vs. Pranay Sethi, reported in (2017) 16 SCC 680, in support of his contention. It would, therefore, be appropriate to deal with the quantum of compensation awarded in the said four appeals.

54. The First Appeal No.1978 of 2017 is preferred by the Appellant – Insurance Company challenging the Judgment and Award dated 08/05/2015 passed by the learned Member, Motor Accident Claims Tribunal, Ahmednagar in M.A.C.P. No.896 of 2011, wherein the learned Tribunal allowed the claim petition and awarded compensation of Rs.16,05,000/- (Rupees Sixteen Lac Five Thousand only) with interest at the rate of 9% per annum from the date of filing of the petition (14/12/2011) till realization, payable jointly and severally by the opponents.

The petitioners are the widow, four children and parents of the deceased. The deceased was 35 years of age at the time of his demise. His monthly income is taken at Rs. 5,000/- per month, which is not disputed. The compensation payable is, therefore, re-computed as under: