Case Note & Summary
The case arises from a motor accident claim filed by the mother of a deceased minor, Suryaprakash, who died after falling from a load auto on 01.04.2016. The auto was driven by the minor's father, Jeyaram, and was insured with The New India Assurance Company Ltd. The claimant sought compensation of Rs.10,00,000/-. The Insurance Company objected, contending that the load auto had no permit to carry passengers and the driver lacked a valid driving licence, thus no liability. The Tribunal awarded Rs.7,50,000/- with interest, holding the insurer liable. The Insurance Company appealed. The High Court examined the nature of the vehicle and the status of the deceased as an occupant. It held that the occupant of a goods vehicle is a third party and the insurer is liable under Section 147 of the Motor Vehicles Act, 1988. Even if there was a breach of policy conditions, the insurer must pay compensation to the claimant and can recover the amount from the owner/driver. The court dismissed the appeal, confirming the Tribunal's award and directing the insurer to pay and recover.
Headnote
A) Motor Accident Claims - Load Auto - Occupant as Third Party - The deceased minor was travelling as a passenger in a load auto which is meant for goods, not passengers. The court held that the occupant of a goods vehicle is a third party and the insurer is liable to pay compensation under Section 147 of the Motor Vehicles Act, 1988, subject to the 'pay and recover' principle. (Paras 10-15) B) Insurance Law - Pay and Recover - Policy Breach - Even if the vehicle was used in violation of policy conditions (no permit for passengers, no valid driving licence), the insurer must pay compensation to the claimant and may recover the amount from the owner/driver. The court relied on the principle laid down in various Supreme Court judgments. (Paras 16-20) C) Motor Vehicles Act - Section 149 - Defence of Insurer - The insurer cannot avoid liability to third parties on the ground of breach of policy conditions; it must pay and then recover. The court directed the appellant/insurance company to pay the awarded amount and recover from the owner. (Paras 18-20)
Issue of Consideration
Whether the Insurance Company is liable to pay compensation for the death of a minor who was an occupant of a load auto, when the vehicle was used in violation of policy conditions and the driver did not have a valid driving licence.
Final Decision
The appeal is dismissed. The judgment and decree of the Motor Accidents Claims Tribunal, I Additional District Court, Tirunelveli, in MCOP.No.1090 of 2017 dated 01.12.2020 is confirmed. The appellant/Insurance Company is directed to deposit the entire award amount with accrued interest within a period of eight weeks from the date of receipt of a copy of this judgment. On such deposit, the claimant is permitted to withdraw the amount. The appellant/Insurance Company is at liberty to recover the amount from the owner of the vehicle.
Law Points
- Motor Vehicles Act
- 1988
- Section 147
- Section 149
- Section 173
- pay and recover principle
- third-party liability
- load auto
- occupant
- policy breach
- driving licence
- permit
