Case Note & Summary
The present appeal was preferred by Bajaj General Insurance Co. Ltd. (formerly Bajaj Allianz General Insurance Co. Ltd.) against the judgment and award dated 24.11.2025 passed by the Motor Accident Claims Tribunal (Auxi.) Bharuch in Motor Accident Claim Petition No.415 of 2014. The brief facts are that on 27.09.2014, the original claimant was walking on the side of the road opposite Saidarshan Society on the way to Mandva, when the opponent no.1 came driving a motorcycle bearing Reg. No.GJ-16-BF-4671 in a rash and negligent manner, lost control, and knocked down the claimant, causing grievous injuries. The learned Tribunal partly allowed the petition and exonerated the appellant Insurance Company, but directed the appellant to first pay the amount of compensation to the claimant and then recover the same from the owner (opponent no.2/respondent no.2). The Insurance Company challenged this direction, submitting that the Tribunal erred in directing pay and recover despite a clear fundamental breach of policy as the driver did not possess a valid and effective driving licence on the date of the accident. The court considered the submissions and held that the absence of a valid driving licence constitutes a fundamental breach of policy conditions, and the insurer cannot be saddled with liability even on a pay and recover basis. The court allowed the appeal, setting aside the pay and recover direction and exonerating the Insurance Company from liability.
Headnote
A) Motor Accident Claims - Insurance - Fundamental Breach - Pay and Recover - Section 149 Motor Vehicles Act, 1988 - The issue was whether the Insurance Company could be directed to pay compensation and then recover from the owner when the driver did not have a valid driving licence, constituting a fundamental breach of policy conditions. The court held that such a breach exonerates the insurer from liability, and the pay and recover direction was erroneous. (Paras 1-4) B) Motor Accident Claims - Driving Licence - Validity - Fundamental Breach - Section 149 Motor Vehicles Act, 1988 - The court considered the requirement of a valid driving licence as a fundamental condition of the insurance policy. The absence of a valid licence at the time of accident amounts to a fundamental breach, and the insurer is not liable to pay compensation even on a pay and recover basis. (Paras 3-4)
Issue of Consideration
Whether the Insurance Company can be directed to pay and recover compensation when there is a fundamental breach of policy conditions, specifically the driver not possessing a valid driving licence.
Final Decision
Appeal allowed. The direction to pay and recover is set aside. The Insurance Company is exonerated from liability.
Law Points
- Fundamental breach of insurance policy
- valid driving licence requirement
- pay and recover order
- insurer's liability under Motor Vehicles Act
- 1988
