Case Note & Summary
The case arises from a motor accident claim petition filed under Section 166 of the Motor Vehicles Act, 1988, by the legal heirs of deceased Jaydev Meshram (respondent Nos. 1 to 4) against the New India Assurance Co. Ltd. (appellant), the owner Rajendra Katole (respondent No. 5), and the driver Naresh Waghmare (respondent No. 6). The accident occurred on 26.3.2003 when the deceased was travelling in a matador bearing registration No. MH34/A1630, which turned turtle due to rash and negligent driving, causing his death on the spot. The claim petition was resisted only by the insurance company. The claimants failed to take steps to serve respondent No. 5 (the owner), and the Tribunal dismissed the petition against him on 15.7.2010. Respondent No. 6 (the driver) was served but remained absent, and the petition proceeded ex-parte against him. On merits, the Tribunal awarded compensation of Rs. 4,50,000/- with interest at 6% per annum from the date of petition, directing the insurance company to pay the entire amount, while exonerating the owner and driver from liability. The insurance company appealed, contending that the Tribunal erred in fastening liability on it alone when the insured and owner were exonerated. The High Court agreed, holding that the liability of the insurer is co-extensive with that of the insured, and when the insured is exonerated, the insurer cannot be held liable. The court set aside the impugned order and allowed the appeal, leaving the claimants to pursue their remedy against the owner and driver if they so chose.
Headnote
A) Motor Accident Claims - Liability of Insurer - Co-extensive Liability - Section 166 of the Motor Vehicles Act, 1988 - The Tribunal exonerated the insured and owner of the offending vehicle from liability due to claimants' failure to serve them, but directed the insurer to pay compensation. The High Court held that the liability of the insurer is co-extensive with that of the insured, and when the insured is exonerated, the insurer cannot be held liable. The impugned order was set aside and the appeal was allowed. (Paras 1-9)
Issue of Consideration
Whether the Motor Accident Claims Tribunal could fasten liability to pay compensation solely on the insurer while exonerating the insured and owner of the offending vehicle from the same liability.
Final Decision
The appeal is allowed. The impugned judgment and order dated 22.6.2016 passed by the Motor Accident Claims Tribunal, Chandrapur, in Motor Accident Claim Petition No.116/2003 is set aside. The claimants are at liberty to pursue their remedy against the owner and driver of the offending vehicle in accordance with law.
Law Points
- Liability of insurer is co-extensive with that of insured
- Insurer cannot be held liable when insured is exonerated
- Claimants must take steps to serve all necessary parties
- Tribunal cannot fasten liability on insurer alone
