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The Karnataka High Court Ruled That The 'pay And Recover' Principle Does Not Apply If A Minor Is Involved In Causing An Accident, Making The Owner Liable To Compensate The Claimants

Esha Goyal ,
  13 June 2024       Share Bookmark

Court :
The Karnataka High Court
Brief :

Citation :
Miscellaneous First Appeal No.7683 Of 2014(Mv-D) Mfa Cross Objection No. 54 Of 2020 (Mv-D)

Case Title:

The New India Assurance Co Ltd. Vs. Bibi Nafisa and others. 

Date of Order:

28th May 2024


Appellant-  The New India Assurance Co Ltd

Respondent-     1. Bibi Nafisa, 

                          2. Aysha Nayyara Mohtisam

                         3.  Mohammad Suhaimi 

                        4.  Mohammad Mustapa


The appeal arises out of the verdict of the lower tribunal which imposed the responsibility on the insurance company to compensate the dependents of the deceased for the accident caused by the minor incompetent to hold a driving license. 



Section 173:- Provisions for appeal in the High Court in case of grievance against the decree. order, award passed by the tribunal.

Section 149:- The procedure of the Insurance company for compensation in the case of motor accidents.

Section 149(1):-  A designated officer shall be appointed by the company upon receiving the information regarding the accident from the claimants, the accident information report, or by any means for settling the claims arising out of the accident. 

Section 149(2):- The designated officer appointed to settle the claims arising out of the insurance shall give the offer of settlement to the claimant 30 days before the day of information is given by the Tribunal. 


  • The following appeal is instituted by the Insurance company  for challenging the award  of compensation and the judgement passed by the lower tribunal dealing with the death a person due to a motor accident
  • The deceased succumbed to injuries due to being dashed by the 2 wheeler who was allegedly involved in reckless driving. Relying on the evidence, the tribunal directed the insurance company to pay Rs. 2,56,000.


  1. Whether the vehicle involved in the accident was driven by the minor child?
  2. Whether the Insurance company liable to pay compensation to the claimants? 
  3. Whether the judgement passed by the motor accident tribunal was erroneous? 


The counsel representing the appellant side made the following submissions:-

  • The underaged driver was incompetent to hold a valid driver's licence, the company is relieved from the liability to pay for compensation. 
  • Relying on the F.I.R. and the chargesheet, the minor was accused of negligent driving leading to the death of the victim. 
  • Considering the fact of being a minor driver, it was prayed that the Insurance company should be exonerated from compensating the claimants. 
  •  The learned counsel representing the appellant side maintained that the theory of “pay and recover” cannot be availed in this case as the vehicle was driven by the minor who is incompetent to hold a driving license. The reliance on the case (New India Assurance Company Ltd. Vs. Yellavva & Another) was negated based on the difference between the factual matrix. 


The counsel representing the Respondent opposed the submissions made by the counsel presenting the Appellant. 

  • The vehicle involved in the accident was driven by respondent No. 4,  who is a major. Considering this fact, the insurance company has to compensate the victim’s family. There were no documentary submissions with the statements. 
  • By the case precedent (New India Assurance Company Ltd. Vs. Yellavva & Another (ILR 2020 KAR 2239)). It was contended that the order of “pay and recovery” can be made. The counsel prayed for pay and recovery in the present case. 


  • Generally, The insurance company can be exonerated from the liability but as per section 149 (1) and (2) of the Motor Vehicle Act, 1988. This does not limit the court from passing an order for “pay and recover”, directing the insurance company to pay on behalf of the person accountable for compensation. 
  • But, in the present case, there is no contractual obligation on the company to compensate on behalf of the driver as he did not attain the majority. Moreover, he did not attain the age of majority, making him unfit to hold a valid driving license. The view was put forth while considering Sub-Clause (ii) of Sub-Section (2) of Section 149 of the Motor Vehicles Act. Hence, the prayer of pay and recovery is rejected by the court of law.
  • The owner handed over the vehicle to the minor, and hence, the burden to compensate the victim was solely on the owner. As a result, the insurance company was relieved from the obligations.
  • The quantum of compensation was erroneous and was set aside by the Hon’ble Court as well, setting the final amount of compensation of Rs.4,44,972 to be borne by the owner of the vehicle. 
  • The amount deposited by the insurance company was to be refunded to the tribunal. 


The Hon’ble High Court, in its judgement, inflicted the responsibility of the vehicle owner in terms of insurance claims. Considering the most recent Porche case, the minors overspeeding with negligence to lose control of the vehicle leading to dire consequences. In this case, too, the vehicle was given by the owner to a sixteen-year-old, without proper supervision. the rash driving resulted in the death of the individual on whom the family relied. The moral responsibility lies with the guardians and caretakers of the child to keep a check on their activities, considering their lack of judgment at this tender age. By taking away the insurance support to pay a lump-sum amount, the verdict of the Karnataka High Court reflects the obligation of the vehicle owners and the parents to be mindful of giving the vehicle to someone who lacks the capacity to hold the license 

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