Case Title: Balu Krishna Chavan vs Reliance General Insurance Company Limited | 2022 LiveLaw
Summary
The Supreme Court ruled that a directive to “pay and recover” is not customary in cases where the insurance company is not liable. The court noted that the claimant would be prejudiced if they couldn’t obtain the full amount of compensation from the vehicle’s owner. However, the Insurance Company would not be prejudiced if ordered to pay the appellant and recover the amount from the vehicle’s proprietor. The court directed the Insurance Company to remit the compensation amount to the MACT within eight weeks of receiving the judgment, and the MACT would release the compensation to the appellant.
About the case
The Supreme Court noted that in cases where the insurance company is not liable, a directive to “pay and recover” is not customary. The bench, consisting of Justices AS Bopanna and PS Narasimha, made this observation while reviewing a claimant’s appeal against the Bombay High Court’s decision that the Insurance Company was not responsible for reimbursement of the compensation. In this appeal, the question arose as to whether the Insurance Company ought to be ordered to “pay and recover” in light of the circumstances surrounding the case.
“The law is well established that if the liability of the Insurance Company is decided and they are held not to be liable, ordinarily, there shall be no direction to “pay and recover”. The bench noted, “However, appropriate orders are required to be made by this Court in accordance with the facts and circumstances of each case in order to achieve the ends of justice… it is clear that in all cases, such an order of “pay and recover” would not arise when the insurance company is not liable, but it would be considered by this Court to achieve the ends of justice in light of the facts and circumstances.” However, the court noted that the claimant would be prejudiced if he were unable to obtain the full amount of compensation awarded in his favor at this juncture from the vehicle’s owner.
“However, the Insurance Company would not be prejudiced to that extent if ordered to pay the appellant and recover the amount from the vehicle’s proprietor. In disposing of the appeal, the bench stated in the order, “Therefore, with all relevant factors considered and without seeking to establish a precedent, and solely to serve the interests of justice in this particular case’s facts, we direct respondent no.1 (Insurance Company) to remit the compensation amount to the MACT within eight weeks from the date it receives a copy of this judgment; thereafter, the MACT shall release the compensation to the appellant.”
