Case Note & Summary
The case arises from a motor accident claim where the claimant, Karbhari Shinde, sustained serious injuries resulting in amputation of his left leg after the auto rickshaw he was traveling in collided with a bullock cart. The claimant filed a petition seeking compensation of Rs. 5,00,000. The Motor Accident Claims Tribunal awarded Rs. 4,71,658 with 7.5% interest. The insurance company appealed, arguing that the driver did not hold a valid driving licence, constituting a breach of policy conditions. The court examined the policy and found that while the driver lacked a valid licence, the insurance company was still liable to pay compensation to the third-party claimant. The court directed the insurer to pay the awarded amount and then recover it from the owner of the vehicle. The appeal was dismissed with the modification that the insurer could recover the amount from the owner.
Headnote
A) Motor Accident Claims - Third-Party Liability - Breach of Policy Condition - Insurance Company's Liability - The issue was whether the insurer could avoid liability for a third-party claim on the ground that the driver did not hold a valid driving licence. The court held that the insurer is liable to pay compensation to the third party and may recover the amount from the insured owner, following the principle of 'pay and recover' under the Motor Vehicles Act, 1988. (Paras 3-5)
Issue of Consideration
Whether the insurance company is absolved from liability to pay compensation to a third party when the driver of the insured vehicle did not hold a valid driving licence at the time of the accident.
Final Decision
Appeal dismissed. The insurance company is directed to pay the awarded amount to the claimant and may recover the same from the owner of the vehicle in accordance with law.
Law Points
- Breach of policy condition
- valid driving licence
- third-party liability
- pay and recover
- Motor Vehicles Act
- 1988
Case Details
2010 LawText (BOM) (06) 5
First Appeal No. 2744 of 2009
S. G. Chapalgaonkar for appellant, R.A. Tambe for respondent no. 1, N.V. Gaware for respondent no. 2
New India Assurance Company Ltd.
Karbhari s/o Hiralal Shinde and Anand s/o Lahanu Pansare
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Nature of Litigation
Appeal against award of compensation in motor accident claim
Remedy Sought
Insurance company sought to avoid liability for compensation on ground of breach of policy condition due to driver not holding valid driving licence
Filing Reason
Insurance company aggrieved by judgment and award of Motor Accident Claims Tribunal directing it to pay compensation
Previous Decisions
Motor Accident Claims Tribunal, Sangamner, in MACP No. 69/2004 decided on 17-06-2009 awarded Rs. 4,71,658 with interest at 7.5%
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 accident
Submissions/Arguments
Appellant insurance company argued that there was breach of policy condition as driver did not hold valid driving licence, hence not liable to pay compensation
Appellant also argued that no deduction was considered while calculating compensation for loss of earnings
Ratio Decidendi
In third-party claims, the insurance company is liable to pay compensation even if there is a breach of policy condition regarding driving licence, and the insurer can recover the amount from the insured owner.
Judgment Excerpts
This is an appeal preferred by the insurance company being aggrieved by the judgment and award passed by the Member, Motor Accident Claim Tribunal, Sangamner, Dist. Ahmednagar in MACP no. 69/2004 decided on 1762009 whereby the present appellant and respondent no. 2 are directed to pay compensation of Rs. 4,71,658/ together with interest at the rate of 7.5% from the date of petition till its realisation.
This appeal is preferred by the insurance company on the ground that there was breach of policy in as much as the rickshaw driver was not holding valid driving licence and as such, the insurance company is not liable to pay compensation.
Procedural History
Claimant filed MACP No. 69/2004 before Motor Accident Claims Tribunal, Sangamner, which awarded compensation on 17-06-2009. Insurance company filed First Appeal No. 2744 of 2009 before Bombay High Court, Aurangabad Bench, which was reserved on 24-06-2010 and pronounced on 30-06-2010.
Acts & Sections
- Motor Vehicles Act, 1988:
