Case Note & Summary
The case involves two first appeals filed by National Insurance Company Ltd. against a common judgment and award dated 31st December 2013 passed by the Motor Accident Claims Tribunal (Main) at Rajkot in Motor Accident Claim Petition Nos. 484 of 2005 and 914 of 2005. The Tribunal had partly allowed the claim petitions, awarding compensation of Rs. 1,03,000 and Rs. 10,82,000 respectively with 8% simple interest, holding the respondents jointly and severally liable. The Insurance Company appealed, primarily challenging the award on the ground that the driver of the insured vehicle did not possess an endorsement to drive a goods vehicle in his driving licence, which they argued constituted a breach of policy terms. The appeals were admitted on 24th September 2014, with an interim stay on deposit of the award amount. Subsequently, on 20th November 2014, the court directed the Tribunal to deposit 80% of the award in fixed deposit and release 20% to the claimants. During the hearing, the court noted that the legal issue regarding whether the absence of a goods vehicle endorsement amounts to a breach of policy terms was pending consideration before the Supreme Court in S. Iyyapan vs. United India Insurance Company Limited. The court observed that the Insurance Company had already deposited the entire award amount. Considering the pending Supreme Court decision, the court disposed of the appeals with a direction that the Insurance Company pay the award amount to the claimants, but with liberty to recover the same from the owner of the vehicle after the outcome of the pending case. The court held that the Insurance Company cannot be absolved of its liability to pay third party claimants.
Headnote
A) Motor Accident Claims - Driving Licence Endorsement - Breach of Policy Terms - Pay and Recover - Issue pending consideration in S. Iyyapan vs. United India Insurance Company Limited before Supreme Court - Court directed insurance company to pay award amount with liberty to recover from owner after outcome of pending case - Held that insurance company cannot be absolved of liability to pay third party claimants (Paras 3-4)
Issue of Consideration
Whether absence of endorsement to drive goods vehicle in driving licence constitutes breach of policy terms entitling insurance company to recover award amount from vehicle owner
Final Decision
Appeals disposed of with direction that Insurance Company pay the award amount to claimants with liberty to recover the same from the owner of the vehicle after the outcome of the pending case before the Supreme Court in S. Iyyapan vs. United India Insurance Company Limited
Law Points
- Motor Accident Claims
- Driving Licence Endorsement
- Breach of Policy Terms
- Pay and Recover
