Case Note & Summary
The appeal was filed by the New India Assurance Company Ltd. challenging the award of compensation by the Motor Accident Claims Tribunal, Aurangabad. The deceased, Khandu Solat, was traveling in a TATA chassis bearing registration No. MH-12/685 on 24.05.1998. The chassis was covered under a transit policy issued by the appellant. The vehicle met with an accident due to rash and negligent driving of both vehicles, resulting in the death of Khandu Solat. The claimant, respondent no.1, filed a petition for compensation. The Tribunal awarded compensation. The Insurance Company appealed, contending that the chassis was neither a goods vehicle nor a passenger vehicle, and the transit policy did not cover the risk of passengers or goods. The court considered the issue of whether the Insurance Company is liable under a transit policy. The court held that the transit policy covers third-party risk and the insurer is liable to pay compensation. The appeal was dismissed.
Headnote
A) Motor Accident Claims - Transit Policy - Liability of Insurer - The issue was whether the Insurance Company is liable to pay compensation for death of a passenger in a chassis covered under a transit policy. The court held that the transit policy covers third-party risk and the insurer is liable to pay compensation. (Paras 1-4)
Issue of Consideration
Whether the Insurance Company is liable to pay compensation when the vehicle was covered under transit policy.
Final Decision
Appeal dismissed. The Insurance Company is liable to pay compensation under the transit policy.
Law Points
- Transit policy covers third-party risk
- Breach of policy condition must be fundamental to avoid liability
- Insurance company liable for third-party claims even if vehicle is chassis
