Case Note & Summary
The present appeal was filed by the National Insurance Co. Ltd. against the judgment and award dated 07/01/2011 in Claim Petition No. 14 of 2008 passed by the Motor Accident Claims Tribunal, North, Panaji. The Tribunal had held the appellant Insurance Company along with respondent no.2 (driver), respondent no.3 (instructor), and respondent no.4 (owner) liable to pay compensation to the claimant, respondent no.1. The accident occurred when a vehicle being used as a driving school vehicle met with an accident. The driver, respondent no.2, held only a learner's license and was not accompanied by a licensed driving instructor at the time of the accident. The Insurance Company contended that this was a breach of the policy condition and that they were not liable to pay compensation. The court analyzed the provisions of the Motor Vehicles Act, 1988, particularly Section 3 which requires a learner driver to be accompanied by a person holding a valid driving license. The court found that the absence of a licensed instructor was a fundamental breach of the policy condition, and thus the insurer was not liable to pay compensation. The court allowed the appeal, setting aside the award against the Insurance Company, and directed that the Insurance Company is not liable to pay the compensation amount. The court also held that the doctrine of 'pay and recover' does not apply in this case as the breach was fundamental.
Headnote
A) Motor Vehicles Act - Third Party Claim - Liability of Insurer - Section 149 - The insurer sought to avoid liability on the ground that the driver held only a learner's license and was not accompanied by a licensed instructor, which was a breach of policy condition. The court held that the insurer is not liable to pay compensation as the breach was fundamental and not a mere technical violation. (Paras 1-10) B) Motor Vehicles Act - Learner's License - Requirement of Accompaniment - Section 3 - The court interpreted Section 3 of the Motor Vehicles Act, 1988, which requires a learner driver to be accompanied by a person holding a valid driving license. The court held that the absence of a licensed instructor at the time of accident constitutes a violation of the policy condition, entitling the insurer to avoid liability. (Paras 5-8) C) Insurance Law - Breach of Policy Condition - Pay and Recover - The court considered the doctrine of 'pay and recover' but held that it applies only when the breach is not fundamental. In this case, the breach was fundamental, and thus the insurer was not liable even to pay and recover. (Paras 9-10)
Issue of Consideration
Whether the Insurance Company is liable to pay compensation when the driver of the vehicle involved in the accident held only a learner's license and was not accompanied by a licensed driving instructor, thereby violating the conditions of the insurance policy.
Final Decision
Appeal allowed. The judgment and award of the Motor Accident Claims Tribunal, North, Panaji dated 07/01/2011 in Claim Petition No. 14 of 2008 is set aside insofar as it holds the appellant Insurance Company liable. The Insurance Company is not liable to pay compensation.
Law Points
- Motor Vehicles Act
- 1988
- Section 3
- Section 149
- Learner's License
- Driving Instructor
- Insurance Policy
- Breach of Condition
- Pay and Recover
