Case Note & Summary
The case arises from a motor accident claim filed by the widow and children of Mukunda Kumare, who died after being hit by a Bajaj M80 motorcycle bearing registration No. MH31/B7454 on Umred Road, Nagpur. The accident occurred on 21.02.1991, and the deceased succumbed to injuries on 25.02.1991. The claimants sought compensation of Rs. 2 lakh from the owner of the motorcycle, Deorao Adkuji Pillewan (respondent No.5), and the insurer, United India Insurance Co. Ltd. (the appellant). The owner did not dispute ownership but contended that since he was not driving, he was not liable. The Insurance Company resisted the claim on the ground that the driver, Kashinath Sedam, did not hold a valid driving licence. The Motor Accident Claims Tribunal found that the motorcycle was driven rashly and negligently, awarded Rs. 97,000 as compensation, and directed the Insurance Company to pay. Aggrieved, the Insurance Company appealed. The High Court heard the appeal. The sole issue was whether the Insurance Company could avoid liability due to the driver's lack of a valid licence. The court noted that the Insurance Company had raised the defence of breach of policy condition under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988. The court held that the driver did not possess a valid driving licence, which is a fundamental breach. However, following the principle of 'pay and recover', the court directed the Insurance Company to first pay the awarded amount to the claimants and then recover it from the owner of the vehicle. The appeal was allowed in part, modifying the award to the extent that the Insurance Company could recover the amount from the owner.
Headnote
A) Motor Vehicles Act - Insurance - Breach of Policy Condition - Section 149(2)(a)(ii) Motor Vehicles Act, 1988 - The Insurance Company is not liable to pay compensation if the driver of the insured vehicle did not hold a valid driving licence, as it constitutes a fundamental breach of the policy conditions. The court held that the insurer must be given the benefit of the defence under Section 149(2)(a)(ii) and directed the Insurance Company to pay the award amount to the claimants and then recover it from the owner of the vehicle. (Paras 6-8)
Issue of Consideration
Whether the Insurance Company is liable to pay compensation when the driver of the insured vehicle did not hold a valid driving licence at the time of the accident.
Final Decision
The appeal is allowed in part. The award of the Tribunal is modified to the extent that the Insurance Company shall pay the awarded amount to the claimants and shall be entitled to recover the same from the owner of the vehicle (respondent No.5).
Law Points
- Motor accident claim
- Insurance company liability
- Breach of policy condition
- Valid driving licence
- Section 149 Motor Vehicles Act
- 1988
- Pay and recover
Case Details
2010 LawText (BOM) (03) 164
First Appeal No. 198 of 2000
Shri M. R. Kalar for the appellant
The Manager, United India Insurance Co. Ltd., Branch Office No. 2, Opposite Petrol Pump, Medical College Square, Nagpur
1] Kamalabai Mukunda Kumare, 2] Vinod Mukunda Kumare, 3] Ku. Lata Mukunda Kumare, 4] Nilesh Mukunda Kumare, 5] Deorao Adkuji Pillewan
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Nature of Litigation
First appeal against award of Motor Accident Claims Tribunal in a claim for compensation for death in motor accident.
Remedy Sought
Insurance Company sought to avoid liability to pay compensation on ground that driver did not hold valid driving licence.
Filing Reason
Insurance Company aggrieved by direction to pay compensation despite breach of policy condition.
Previous Decisions
Motor Accident Claims Tribunal awarded Rs. 97,000 as compensation and directed Insurance Company to pay.
Issues
Whether the Insurance Company is liable to pay compensation when the driver of the insured vehicle did not hold a valid driving licence at the time of the accident.
Submissions/Arguments
Appellant/Insurance Company submitted that the driver Kashinath Sedam did not possess a valid and effective driving licence, constituting a breach of policy condition under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988.
Respondent No.5 (owner) contended that since he was not driving, he is not liable to pay compensation.
Ratio Decidendi
The Insurance Company is not liable to pay compensation if the driver of the insured vehicle did not hold a valid driving licence, as it is a fundamental breach of policy conditions. However, following the principle of 'pay and recover', the insurer must first pay the award to the claimants and then recover the amount from the owner.
Judgment Excerpts
The Insurance Company has preferred this appeal against the award passed by the Tribunal.
Insurance Company mainly resisted the application on the ground that the person who was driving the said motor cycle did not hold a valid driving licence.
The learned Judge of the Tribunal found that the motorcycle was being driven in a rash and negligent manner.
Shri Kalar the learned counsel for the appellant submits that the Insurance Company challenged the award only on the ground that the driver of the motorcycle did not possess valid and effective driving licence and as such there was a breach of condition of policy.
The Insurance Company is not liable to pay the compensation. However, following the principle of pay and recover, the Insurance Company shall pay the amount to the claimants and recover it from the owner.
Procedural History
Claimants filed claim petition before Motor Accident Claims Tribunal. Tribunal awarded Rs. 97,000 and directed Insurance Company to pay. Insurance Company filed First Appeal No. 198 of 2000 before High Court of Bombay at Nagpur Bench.
Acts & Sections
- Motor Vehicles Act, 1988: 149, 149(2)(a)(ii)
