Case Note & Summary
The case arises from a motor accident that occurred on 18.05.1998 when the deceased, Ms. Bhartiben, was travelling in an Ambassador car bearing registration No.GRZ-1049. The car was driven rashly and negligently by the original opponent No.1, who tried to overtake another vehicle and collided with a truck coming from the opposite direction, causing fatal injuries to the deceased. The claimants, being the legal heirs of the deceased, filed a claim petition before the Motor Accident Claims Tribunal (Aux.), Surendranagar, seeking compensation. The Tribunal partly allowed the claim and awarded Rs.98,735/- with 9% interest, but exonerated the Insurance Company from liability on the ground that the driver did not have a valid driving license. Aggrieved by the exoneration of the Insurance Company, the claimants filed the present appeal. The main legal issue was whether the Insurance Company could be absolved from paying compensation to third-party victims due to a breach of policy condition regarding the driver's license. The court, relying on the principle of 'pay and recover', held that the Insurance Company is liable to pay the compensation to the claimants and may recover the amount from the insured. The court also enhanced the compensation to Rs.1,50,000/- with interest at 9% per annum from the date of filing of the claim petition till realization.
Headnote
A) Motor Accident Claims - Third-Party Liability - Pay and Recover - Section 147, 149 Motor Vehicles Act, 1988 - The court considered whether the Insurance Company can be exonerated from liability when the driver did not have a valid driving license. Held that the insurer must pay compensation to third-party victims and may recover from the insured if there is a breach of policy terms. (Paras 1-12) B) Motor Accident Claims - Compensation - Quantum - Section 166 Motor Vehicles Act, 1988 - The court enhanced the compensation amount from Rs.98,735/- to Rs.1,50,000/- with interest at 9% per annum, considering the age and income of the deceased. (Paras 13-15)
Issue of Consideration
Whether the Insurance Company can be exonerated from its liability to pay compensation to the claimants on the ground that the driver of the offending vehicle did not possess a valid driving license at the time of the accident.
Final Decision
The appeal is allowed. The Insurance Company is directed to pay the compensation amount of Rs.1,50,000/- with interest at 9% per annum from the date of filing of the claim petition till realization. The Insurance Company may recover the amount from the insured in accordance with law.
Law Points
- Third-party liability
- pay and recover principle
- breach of policy condition
- Motor Vehicles Act
- 1988
- Section 147
- Section 149
