Case Note & Summary
The case arises from a motor accident claim where the deceased, Ashwinbhai Dalsukhbhai Bhamaniya, a watchman, was fatally hit by a tempo on 06.08.2010 near Sant Road Panam Bridge. The claimants, legal heirs of the deceased, filed MACP No.1346 of 2010 before the Motor Accident Claims Tribunal (Aux.), Panchmahals at Godhra, which awarded compensation. The insurance company, United India Insurance Company Limited, appealed against the award primarily on the ground that the offending tempo did not possess a valid permit on the date of the accident, and thus the insurer should be exonerated. The appellant examined the RTO Officer (Exhibit 52) to prove the absence of permit under Section 66 of the Motor Vehicles Act, 1988. The respondents (claimants) argued that the absence of a permit is not a fundamental breach and the insurer is liable to third parties. The court, after hearing both sides, held that the breach of permit condition is not fundamental to the risk of accident and does not absolve the insurer of liability to third parties. The court directed the insurance company to pay the compensation to the claimants and then recover the amount from the owner of the vehicle in accordance with law. The appeal was dismissed with the modification that the insurer can recover the amount from the owner.
Headnote
A) Motor Vehicles Act - Insurance - Third Party Liability - Absence of Permit - The insurance company sought exoneration on the ground that the vehicle lacked a valid permit under Section 66 of the Motor Vehicles Act, 1988. The court held that the absence of a permit does not constitute a fundamental breach of policy conditions so as to absolve the insurer of liability to third parties. The insurer is liable to pay compensation to the claimants but may recover the amount from the owner/insured. (Paras 1-7) B) Motor Vehicles Act - Permit - Section 66 - Breach of Condition - The court examined whether the absence of a permit is a fundamental breach. Relying on precedents, it held that the breach of permit condition is not fundamental as it does not increase the risk of accident. The insurer must pay and can recover from the owner. (Paras 6-7)
Issue of Consideration
Whether the insurance company can be exonerated from liability to third parties on the ground that the offending vehicle did not possess a valid permit at the time of the accident.
Final Decision
The appeal is dismissed. The insurance company is directed to pay the compensation amount to the claimants and thereafter recover the same from the owner of the offending vehicle in accordance with law.
Law Points
- Insurance liability
- permit requirement
- fundamental breach
- third-party risk
- pay and recover
