Case Note & Summary
The case arises from a motor accident claim where the claimant, Shankarrao Ganpatrao Jichkar, sustained fractures to his right leg and left clavicle when his motorcycle was hit by an offending motorcycle. The Motor Accident Claims Tribunal, Amravati, awarded compensation of Rs. 45,000 with 7% interest. The appellant, ICICI Lombard General Insurance Company, challenged the award on the ground that the driver of the offending vehicle did not hold a valid driving licence, constituting a fundamental breach of the insurance policy, thus the insurer should not be liable. The respondent claimant supported the award. The High Court, after hearing submissions, held that the insurer must plead and prove the breach of policy by leading cogent evidence. Since the insurer failed to do so, it must satisfy the award. However, the insurer has the remedy to apply before the Tribunal for recovery of the amount from the owner/driver in the same proceedings if it can prove the breach. The court found no reason to interfere with the impugned award and dismissed the appeal.
Headnote
A) Motor Accident Claims - Insurance - Breach of Policy - Insurer's Liability - The insurer must plead and prove fundamental breach of insurance policy by leading cogent evidence; failure to do so results in liability to satisfy the award, but the insurer may recover the amount from the owner/driver in the same proceedings if breach is proved. (Paras 4)
B) Motor Accident Claims - Insurance - Recovery Rights - The Tribunal can pass incidental and consequential orders for recovery by the insurer against the owner/driver in the same proceedings without requiring a separate suit. (Paras 4)
Issue of Consideration
Whether the Insurance Company is liable to pay compensation when the driver of the offending vehicle did not hold a valid driving licence, and whether the insurer can recover the amount from the owner/driver in the same proceedings.
Final Decision
The appeal is dismissed. The impugned judgment and award of the Motor Accident Claims Tribunal is upheld. The insurer is liable to satisfy the award but may recover the amount from the owner/driver in the same proceedings if it can prove fundamental breach of policy.
Law Points
- Insurer must plead and prove fundamental breach of policy
- Insurer can recover amount from owner/driver in same proceedings
- No interference in appeal if insurer has remedy before Tribunal
Case Details
2013 LawText (BOM) (12) 143
First Appeal No. 668 of 2013
Mr R. D. Bhuibhar for appellant, Mr A. A. Sarde for respondent no. 1
ICICI Lombard General Insurance Company Limited
Shankarrao Ganpatrao Jichkar and Ms Malatai Ramesh Dafe
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Nature of Litigation
Appeal against judgment and award of Motor Accident Claims Tribunal awarding compensation for injuries sustained in a motor vehicle accident.
Remedy Sought
The appellant Insurance Company sought to set aside the award on the ground that the driver of the offending vehicle did not hold a valid driving licence, constituting a fundamental breach of policy.
Filing Reason
The appellant felt aggrieved by the judgment and award dated 30th April 2013 passed by the learned Chairman Motor Accident Claims Tribunal, Amravati.
Previous Decisions
The Motor Accident Claims Tribunal awarded compensation of Rs. 45,000 inclusive of no fault liability with interest at 7% from the date of petition till realization.
Issues
Whether the Insurance Company is liable to pay compensation when the driver of the offending vehicle did not hold a valid driving licence?
Whether the insurer can recover the amount paid from the owner/driver in the same proceedings?
Submissions/Arguments
Appellant Insurance Company argued that if the offending motorcycle driver did not hold a valid driving licence, it is a fundamental breach of insurance policy, and the insurer is not liable to pay compensation.
Respondent claimant supported the impugned judgment and award, submitting it is well-reasoned and sound with reference to judicial precedents.
Ratio Decidendi
The insurer must plead and prove fundamental breach of insurance policy by leading cogent evidence. If the insurer fails to do so, it must satisfy the award. However, the insurer has the remedy to apply before the Tribunal for recovery of the amount from the owner/driver in the same proceedings if it can prove the breach.
Judgment Excerpts
It is for insurer to plead the breach of insurance policy and then prove fundamental breach, as alleged, by leading cogent evidence.
Insurer may recover the amount paid from owner/driver of the offending motor vehicle in case the Insurer can satisfy the Tribunal that there was fundamental breach of policy and that Insurer was not liable to pay compensation to the third party.
Procedural History
The Motor Accident Claims Tribunal, Amravati, passed judgment and award on 30th April 2013 awarding compensation. The appellant Insurance Company filed First Appeal No. 668 of 2013 before the Bombay High Court, Nagpur Bench, which was heard and dismissed on 17th December 2013.
Acts & Sections
- Motor Vehicles Act, 1988:
