Case Note & Summary
The petitioner, United India Insurance Co. Ltd., filed a writ petition challenging the Lok Adalat award dated 3.3.2013 in Motor Accident Claim Petition No.365/2012 passed by the Chairman, Motor Accident Claims Tribunal, Ahmednagar. The respondent no.1/original claimant had filed a claim petition seeking compensation of Rs.6,00,000 for injuries sustained in a motor vehicular accident on 9.4.2012 while riding as a pillion on a motorcycle insured by the petitioner. The insurance policy was an Act Only Policy, which covers only third-party liability and not the occupant of the vehicle. The petitioner's Divisional Manager could not attend the Lok Adalat due to the death of her uncle and deputed a senior advocate to mark presence. However, the advocate's presence was misunderstood as consent for settlement, and an award was passed. The court found that the consent was not valid as it was given without proper verification and authority. The court also noted that under the Act Only Policy, the insurance company is not liable to pay compensation to the pillion rider as he is not a third party. The court quashed the Lok Adalat award and set aside the consequential award, allowing the writ petition.
Headnote
A) Motor Accident Claims - Lok Adalat Award - Validity of Consent - The insurance company challenged the Lok Adalat award on the ground that the consent was given by its advocate without proper verification and authority due to the absence of the Divisional Manager. The court held that the award was liable to be set aside as the consent was not valid and the insurance company was not liable under the Act Only Policy for the pillion rider. (Paras 2-5) B) Insurance Law - Act Only Policy - Liability for Occupant - The insurance policy was an Act Only Policy which covers only third-party liability and not the occupant of the vehicle. The pillion rider is not a third party and thus not covered. The court held that the insurance company is not liable to pay compensation to the pillion rider. (Paras 3-5)
Issue of Consideration
Whether the Lok Adalat award passed on the basis of consent given by the insurance company's advocate without proper authority and verification is valid and binding.
Final Decision
The writ petition is allowed. The compromise recorded below Exh.16 by the Lok Adalat held on 3.3.2013 and the consequential Award below Exh.18 dated 12.3.2013 passed by the Chairman, Motor Accident Claims Tribunal, Ahmednagar are quashed and set aside. Rule made absolute accordingly.
Law Points
- Lok Adalat award can be challenged if consent was not valid
- Act Only Policy does not cover occupant of vehicle
- insurance company not liable for pillion rider under Act Only Policy
