Case Note & Summary
The case arises from a motor accident claim filed by Babulal Somani and Rukhamanibai, parents of the deceased, who died in a vehicular accident involving a milk tanker owned by Kamdhenu Magasvargiya Milk Producers Sahakari Society Ltd. and driven by Dharmaji G. Dabhade. The Motor Accident Claims Tribunal awarded compensation of Rs. 1,50,000 with interest at 6% per annum, holding the insurance company (Oriental Insurance Co. Ltd.) liable to pay. The insurer appealed, contending that the driver did not possess a valid driving license at the time of the accident, and thus the policy condition was breached. The High Court examined the evidence and found that the driver's license was not valid. However, following the principle of 'pay and recover' established in various Supreme Court judgments, the court held that the insurer is still liable to pay compensation to third-party claimants, but may recover the amount from the owner of the vehicle. The court dismissed the appeal, directing the insurer to pay the awarded amount to the claimants and then recover it from the owner. The court also noted that the owner failed to verify the driver's license, which was a breach of policy condition.
Headnote
A) Motor Vehicles Act - Third-party liability - Pay and recover - Section 149 - Insurer's liability despite breach of policy condition - Where the driver of the offending vehicle did not hold a valid driving license, the insurer is still liable to pay compensation to third-party claimants, but may recover the amount from the owner of the vehicle. (Paras 1-10) B) Motor Vehicles Act - Driving license - Employer's duty - Section 149 - The owner of the vehicle is under an obligation to verify the driving license of the driver before entrusting the vehicle. Failure to do so constitutes a breach of policy condition. (Paras 5-10) C) Motor Vehicles Act - Compensation - Quantum - Section 168 - The Tribunal awarded compensation of Rs. 1,50,000 with interest at 6% per annum to the claimants for the death of their son in a motor accident. The High Court upheld the quantum as just and reasonable. (Paras 3-4)
Issue of Consideration
Whether the insurance company is liable to pay compensation to third-party claimants when the driver did not possess a valid driving license at the time of accident, and whether the insurer can be directed to pay and recover from the owner.
Final Decision
Appeal dismissed. The insurance company is directed to pay the awarded compensation of Rs. 1,50,000 with interest at 6% per annum to the claimants within eight weeks, and thereafter recover the same from the owner of the vehicle in accordance with law.
Law Points
- Motor Vehicles Act
- 1988
- Section 149
- Section 168
- Third-party liability
- Pay and recover
- Breach of policy condition
- Driving license
- Employer's duty to verify license
