Case Note & Summary
The appeal was filed by The New India Assurance Co. Ltd. against the judgment and award dated 19/03/2010 passed by the Motor Accident Claims Tribunal, Akola in M.A.C.P. No.52 of 2007. The Tribunal had awarded a sum of Rs.4,15,000 by way of compensation along with interest at the rate of 7.5% per annum from the date of the petition till realization, directing the insurer to pay the amount and then recover the same from the owner/driver of the offending motor vehicle. The facts of the case are that on 27/03/2006, the victim Shivshankar Sahebrao Jambhulkar was a pillion rider on a motorcycle bearing registration No.MH30 S5693 owned and ridden by respondent No.4 Bhaskar Tarhale. The rider lost control and dashed against a tree, causing injuries to the pillion rider, who died on 08/04/2006 at the age of 32 years. The claimants, being the widow and minor children of the deceased, filed a claim under Section 163A of the Motor Vehicles Act, 1988 for compensation on a structured formula basis, contending that the deceased was earning Rs.3,000 per month. The Tribunal found that the owner was riding the motorcycle without a valid driving licence, which was a breach of the policy condition. However, following the principle of pay and recover, the Tribunal directed the insurer to pay the compensation and then recover the same from the owner. The insurer appealed, arguing that it should not be liable to pay at all. The High Court, after hearing the parties, held that the Tribunal's order was correct and in accordance with law. The court noted that the insurer is liable to pay compensation to third parties even if there is a breach of policy condition, but it has the right to recover the amount from the insured. The court dismissed the appeal, confirming the award and the direction to pay and recover. The court also directed that the amount deposited by the insurer be paid to the claimants with accrued interest.
Headnote
A) Motor Accident Claims - Section 163A Compensation - Pay and Recover - Owner Driving Without Licence - The insurer was directed to pay compensation to the claimants and then recover the same from the owner/driver, as the owner was riding the motorcycle without a valid driving licence, constituting a breach of policy condition. The court upheld the Tribunal's order of pay and recover, relying on the principle that the insurer must compensate third parties but can recover from the insured for breach of policy conditions. (Paras 1-6) B) Motor Vehicles Act, 1988 - Section 163A - Structured Formula - The claim was under Section 163A for compensation on structured formula basis, and the Tribunal awarded Rs.4,15,000 with interest at 7.5% per annum. The court did not interfere with the quantum of compensation. (Paras 1-4)
Issue of Consideration
Whether the insurer is liable to pay compensation under Section 163A of the Motor Vehicles Act, 1988 when the owner of the vehicle was riding without a valid driving licence, and whether the Tribunal's direction to pay and recover is correct.
Final Decision
The High Court dismissed the appeal and confirmed the judgment and award of the Motor Accident Claims Tribunal, Akola dated 19/03/2010 in M.A.C.P. No.52 of 2007. The court directed that the amount deposited by the appellant insurance company be paid to the claimants with accrued interest.
Law Points
- Section 163A Motor Vehicles Act
- 1988
- structured formula compensation
- pay and recover
- breach of policy condition
- owner driving without licence
- insurer's liability to third party
- recovery right of insurer
