Case Note & Summary
The case involves two appeals filed by the Oriental Insurance Company Ltd. under Section 173(1) of the Motor Vehicles Act, 1988, against the judgment and award dated 31.07.2012 passed by the Senior Civil Judge and MACT, T.Narasipura, in MVC Nos. 40/2008 and 39/2008. The Tribunal had awarded compensation of Rs. 13,730/- and Rs. 2,67,130/- respectively with interest at 6% per annum to the claimants, who were third parties injured in a motor accident involving an auto rickshaw bearing registration No. KA.10/2758. The insurer contended that the driver of the auto rickshaw, Sri. Naganna, did not possess a valid driving license at the time of the accident, and therefore, the insurer should not be liable to pay compensation. The court considered the legal position under Section 149 of the Motor Vehicles Act, 1988, which imposes liability on the insurer to satisfy awards against insured persons in respect of third party risks. The court held that even if there is a breach of policy conditions, such as the driver not holding a valid driving license, the insurer is still liable to pay compensation to third parties. However, the insurer can recover the amount paid from the owner of the vehicle. The court found no merit in the appeals and dismissed them, confirming the Tribunal's award. The court directed the insurer to pay the compensation amount to the claimants and then recover the same from the owner of the vehicle in accordance with law.
Headnote
A) Motor Vehicles Act - Third Party Claims - Insurer's Liability - Section 149 of Motor Vehicles Act, 1988 - The insurer is liable to pay compensation to third parties even if there is a breach of policy conditions, such as the driver not holding a valid driving license. The insurer can recover the amount from the owner of the vehicle after paying the compensation. (Paras 4-6) B) Motor Vehicles Act - Appeal Against Award - Section 173(1) of Motor Vehicles Act, 1988 - The insurer's appeal against the award of compensation was dismissed as the court found no grounds to interfere with the Tribunal's findings. The compensation awarded was just and proper. (Paras 4-6)
Issue of Consideration
Whether the insurer can avoid liability to pay compensation to third parties on the ground that the driver did not possess a valid driving license at the time of the accident.
Final Decision
The appeals were dismissed. The court confirmed the award of the Tribunal and directed the insurer to pay the compensation amount to the claimants. The insurer is at liberty to recover the amount from the owner of the vehicle in accordance with law.
Law Points
- Insurer's liability to third parties is not absolved by breach of policy conditions
- Insurer can recover from owner after paying compensation
- Section 149 of MV Act imposes liability on insurer to satisfy awards against insured persons in respect of third party risks
