Partly allowed¶36

The Branch Manager v. M. Shanmugapriya

Madras HC13 Mar 2026CMA/1954/2020

Case brief

AI extract

What is this about?

Insurer liability despite driver's valid driving licence not produced; policy condition breach; vehicle owners ex-parte; insurer neither cancelled policy nor refused renewal; pay award and recover from owner (recovery liberty); Award modified; Section 173 Motor Vehicles Act 1988 appeal; MCOP No.1942 of 2017 Motor Accident Claims Tribunal Special District Court Salem; Reliance General Insurance; fatal accident claim; K. Kumaresh Babu J.; decided 13-03-2026; CMA No. 1954 of 2020; no cases cited; compensation quantum not stated in judgment.

What did the court decide?

The Award stands modified: the appellant is absolved of direct liability, but with a direction to pay the Award and recover the same from the owner of the vehicle which stood insured to it; no order as to costs. ¶36

The Branch Manager Vs M. Shanmugapriya — Motor Accident Claims | Madras HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the appellant-insurer bears any liability to pay the Tribunal-determined compensation when, according to the appellant, the driver did not hold a valid driving licence and the vehicle owners remained ex-parte without producing the licence. +1 more

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Court's answer

Although the policy conditioned cover on the vehicle being driven by a person holding a valid driving licence and no such licence was produced, the appellant-insurer produced no document showing that on learning of the violation it cancelled the policy or declined its renewal; not having resiled from the insurance agreement, the appellant remains bound to pay the compensation determined by the Tribunal.

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Ratio / Principle

The appellant is given liberty to recover the compensation so paid from the owner of the insured vehicle, and cannot be absolved of its agreement in its entirety.

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Detailed headnote1 paragraphs

Madras High Court (K. Kumaresh Babu, J.), CMA No. 1954 of 2020 and CMP.No.14452 of 2020, decided 13-03-2026: Appeal under Section 173 of the Motor Vehicles Act, 1988 against the Award dated 12.03.2020 of the Motor Accident Claims Tribunal, Special District Court, Salem in MCOP No.1942 of 2017, a fatal-accident claim by respondents 1 to 3 (widow and minor children of the deceased). The vehicle owners (respondents 4 and 5), though noticed to produce the driver's driving licence, remained ex-parte before the Tribunal and this Court. The policy carried a condition that the vehicle be driven by a person holding a valid driving licence, but the insurer showed no step cancelling the policy or refusing renewal after learning of the violation. Held: the insurer, not having resiled from the agreement of insurance, cannot be absolved of it in its entirety; the Award stands modified — the appellant is absolved of direct liability but directed to pay the Tribunal-determined compensation with liberty to recover the same from the owner of the insured vehicle; no order as to costs.

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CMA No. 1954 of 2020

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 13-03-2026

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CORAM

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THE HON'BLE MR.JUSTICE K.KUMARESH BABU

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CMA No. 1954 of 2020 and CMP.No.14452 of 2020

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The Branch Manager Reliance General Ins. Co. Ltd., Sakthi Super Market, 3rd Floor, 408, Perundurai Road, Erode 638001.

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..Appellant(s)

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M. Shanmugapriya W/o. Late Moorthy,

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Minor Gowsik S/o.Late Moorthy,

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Minor Udaya S/o. Late Moorthy, (minors Rep By Their Mother N F.Shanmugapriya)

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Mr.S.Kamaraj S/o. Subramanian,

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Saraswathi W/o. Late Kandasamy,

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..Respondent(s)

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PRAYER:- Civil Miscellaneous Appeal has been filed under Section 173 of the Motor Vehicles Act, 1988, to set aside the Decree and Judgment dated 12.03.2020 passed in MCOP No.1942 of 2017, by the Hon’ble Motor Accident Claims Tribunal, Special District Court at Salem.

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https://www.mhc.tn.gov.in/judis

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CMA No. 1954 of 2020

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For Appellant(s): Ms.C.Bhuvanasundari For Respondent(s) Mr. S.P. Yuaraj for RR1 To 3 (RR2 And 3 minors Rep By R1)

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JUDGMENT

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This Civil Miscellaneous Appeal has been filed challenging the Award dated 12.03.2020 passed in MCOP No.1942 of 2017, by the Motor Accident Claims Tribunal, Special District Court at Salem.

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Heard Ms.C.Bhuvanasundari, learned counsel for the appellant and Mr.S.P.Yuaraj, learned counsel appearing on behalf of the respondents 1 to 3.

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Ms.C.Bhuvanasundari, learned counsel for the appellant would submit that the respondents 1 to 3 had filed a Claim Petition seeking for compensation which arose out of the death of the first respondents’s husband arising out of an accident involving the vehicle of respondents 4 & 5. She would submit that in spite of notice sent to the respondents 4 & 5 for production of driving licence of the driver, they had failed to respond to the said show cause notice and they had also remained ex-parte. She would submit that even in the present Appeal, they had remained ex-parte. As the respondents driver did not have a valid driving license, there is no liability on behalf of the appellant to indemnify them and therefore, the Award should not have been made against the appellant and

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https://www.mhc.tn.gov.in/judis

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CMA No. 1954 of 2020

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should have been made only against the owner of the vehicle. Failing to notice the above, the Tribunal had fixed the liability and directed the appellant to pay the compensation as jointly and severally. She would submit that the Tribunal had erred in fixing the liability on the appellant and therefore, seeks indulgence of this Court.

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Countering her arguments, Mr.S.P. Yuaraj, learned counsel appearing on behalf of the respondents 1 to 3 would submit that even assuming that there has been no proof that the driver had possessed a valid driving license, it is a case where it is not disputed by the appellant that the vehicle had been insured with them. In that case, the appellant having entered into an agreement with the respondent cannot wriggle out its liability to make good the compensation which arose out of an accident of the insured vehicle with it. Hence, seeks dismissal of the Appeal.

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I have considered the submissions made by the learned counsels appearing on either side and perused the materials available on record.

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The respondents 4 & 5 who are the owners of the vehicle, in spite of notice given by the appellant, had failed to produce the driving license and they have also remained ex-parte not only before the Tribunal but also before this Court. It is true that the appellant who is the insurer would be bound by the

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Page3 of 5

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https://www.mhc.tn.gov.in/judis

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CMA No. 1954 of 2020

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terms of the policy, wherein a condition had been imposed that the vehicle should be driven by the persons who is holding a valid driving license. Even though, such a valid driving license had not been produced to absolve the payment under the insurance policy, the appellant had failed to produce any documents that immediately on knowing that there there is a violation of agreement of insurance it had taken any steps to cancel the insurance policy nor it had not produced any documents that for the future it had not renewed the said policy. In such circumstances, even though, there is no liability on part of the respondent, in view of it not resiling from the said agreement of insurance, the appellant can be held to make the payment of compensation determined by the Tribunal but with liberty to recover the same from the owner of the vehicle, but cannot be absolved of its agreement in its entirety.

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For the aforesaid reasons, the Awards stands modified absolving the appellant of its liability however, with a direction to the appellant to pay the Award and recover the same from the owner of the vehicle which stood insured to it. However, there shall be no order as to costs.

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13-03-2026

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Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No GBA

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https://www.mhc.tn.gov.in/judis

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CMA No. 1954 of 2020

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K.KUMARESH BABU, J.