Case Note & Summary
The case involves an appeal by The New India Assurance Co. Limited against the judgment and order dated 15/01/2008 of the Motor Accident Claims Tribunal, Washim, in M.A.C.P. No. 171/2006. The Tribunal had awarded compensation of Rs.1,00,000/- with interest at 6% per annum to the respondents-claimants, who are the legal heirs of Ashok Vaidya. Ashok Vaidya was the owner of a motorcycle bearing registration No. MH 31-C-5548, which was insured with the appellant for third party risk and also covered personal accident insurance of Ashok for Rs.1,00,000/-. On 26/04/2006, while driving the motorcycle, Ashok drove rashly and negligently, causing the motorcycle to slip, resulting in his death on the spot. The respondents filed a petition under Section 163A of the Motor Vehicles Act, 1988 seeking compensation of Rs.3,00,000/-. The insurance company resisted the claim, contending that the deceased did not possess a valid driving licence, which was a breach of the insurance policy, and therefore the company was not liable. The Tribunal, however, awarded compensation. The insurance company appealed to the High Court. The High Court considered the issue of whether the claim under Section 163A is maintainable when the deceased was the owner-driver and was driving without a licence. The court noted that the claim was for the death of the owner-driver himself, not a third party, and that the policy covered personal accident insurance subject to policy conditions. The court held that the breach of policy condition (driving without a licence) is a valid defence for the insurer, and the claim under Section 163A is not maintainable as the deceased was not a third party. The court allowed the appeal, set aside the Tribunal's award, and dismissed the claim petition.
Headnote
A) Motor Vehicles Act - Section 163A - Claim by Legal Heirs of Owner-Driver - The claim petition was filed under Section 163A of the Motor Vehicles Act, 1988 by the legal heirs of the deceased owner-driver of a motorcycle, who died in a single-vehicle accident due to his own rash and negligent driving. The insurance company resisted on the ground that the deceased did not have a valid driving licence, constituting a breach of policy conditions. The Tribunal awarded compensation of Rs.1,00,000/- with interest. On appeal, the High Court held that the claim under Section 163A is not maintainable as the deceased was not a third party but the owner-driver, and the breach of policy condition (no driving licence) absolves the insurer of liability. The appeal was allowed and the claim petition was dismissed. (Paras 1-10) B) Insurance Law - Personal Accident Cover - Breach of Policy Condition - The insurance policy covered personal accident insurance of the deceased to the extent of Rs.1,00,000/-. However, the deceased was driving without a valid driving licence, which is a fundamental breach of the policy conditions. The High Court held that the insurance company is not liable to pay any compensation under the personal accident cover as the breach of policy condition is established. The court relied on the principle that the insurer is not liable when the insured violates the terms of the policy. (Paras 4-10)
Issue of Consideration
Whether the insurance company is liable to pay compensation under Section 163A of the Motor Vehicles Act, 1988 for the death of the owner-driver of the insured vehicle in a single-vehicle accident, when the deceased did not possess a valid driving licence.
Final Decision
The appeal is allowed. The judgment and order dated 15/01/2008 passed by the Motor Accident Claims Tribunal, Washim in M.A.C.P. No. 171/2006 is set aside. The claim petition stands dismissed. No order as to costs.
Law Points
- Section 163A of Motor Vehicles Act
- 1988
- personal accident insurance
- own damage claim
- breach of policy condition
- driving without licence
- owner-driver not third party
