Case Note & Summary
The appeal was filed by the owner of a private jeep against the judgment and award of the Motor Accidents Claims Tribunal, Nanded, in M.A.C.P. No. 583 of 2006. The Tribunal had exonerated the Insurance Company from liability on the ground that the vehicle was used as a transport vehicle for carrying goods, which was a breach of the policy condition. The owner was made liable to pay compensation. The claimants, legal representatives of the deceased driver Vijay, had filed a claim under Section 163-A of the Motor Vehicles Act, 1988, alleging that the deceased was driving the jeep on 17.6.2006 when the vehicle left the road and hit a tree, causing his death. The Insurance Company contended that the vehicle was given on hire for carrying newspaper bundles, constituting a breach of policy. The owner denied that the deceased was a third party and sought indemnification. The court, after hearing both sides, held that under Section 163-A, the insurer is liable to pay compensation to third parties even if there is a breach of policy condition, and the insurer can recover the amount from the owner. The court allowed the appeal, set aside the Tribunal's order exonerating the Insurance Company, and directed the Insurance Company to pay the compensation amount to the claimants and then recover it from the owner.
Headnote
A) Motor Vehicles Act - Section 163-A - Liability of Insurer - Breach of Policy Condition - The court considered whether the insurer can avoid liability under Section 163-A when the vehicle was used as a transport vehicle contrary to policy conditions. Held that under Section 163-A, the insurer is liable to pay compensation to third parties even if there is a breach of policy condition, and the insurer can recover the amount from the owner. (Paras 1-6) B) Motor Vehicles Act - Section 163-A - Third Party Claim - Employer-Employee Relationship - The court examined whether the deceased driver was a third party. Held that the driver was an employee of the owner and thus a third party for the purpose of the claim, and the insurer is liable to pay compensation. (Paras 3-5)
Issue of Consideration
Whether the Insurance Company can be exonerated from liability to pay compensation under Section 163-A of the Motor Vehicles Act, 1988, on the ground that the vehicle was used in breach of policy conditions, and whether the owner is liable to pay compensation in such circumstances.
Final Decision
The appeal is allowed. The judgment and award of the Motor Accidents Claims Tribunal, Nanded, in M.A.C.P. No. 583 of 2006, is set aside. The Insurance Company is directed to pay the compensation amount to the claimants and is entitled to recover the same from the owner.
Law Points
- Liability of insurer under Section 163-A of Motor Vehicles Act
- 1988
- Breach of policy condition
- Right of insurer to recover from owner
- Third party claim
- Employer-employee relationship
