Case Note & Summary
The case involves three first appeals filed by New India Assurance Company Ltd. against the common judgment and award passed by the Motor Accident Claims Tribunal, Latur, in various claim petitions arising from a motor vehicle accident. The accident occurred when a truck driven by Sanjay Sawale collided with a jeep, resulting in the death of Baburao Magar and injuries to others. The claimants, being the legal heirs of the deceased and injured persons, sought compensation. The Tribunal held the insurance company liable to pay compensation. The insurance company appealed, contending that the driver of the truck did not possess a valid driving licence at the time of the accident, as the licence was found to be fake. The court examined the evidence, including the report from the Regional Transport Office confirming the licence was fake. The court held that the insurance company had successfully proved the breach of policy conditions, as the driver was not duly licensed. However, following the principle of 'pay and recover' laid down by the Supreme Court, the court directed the insurance company to pay the compensation amount to the claimants and then recover the same from the owner of the truck. The appeals were allowed in part, modifying the Tribunal's award to the extent of the insurer's liability.
Headnote
A) Motor Accident Claims - Insurance Liability - Fake Driving Licence - Breach of Policy Condition - The insurer is not liable to indemnify the insured if the driver possessed a fake driving licence, as it amounts to a fundamental breach of policy conditions. However, the insurer may be directed to pay compensation to third-party victims and recover the same from the insured owner. (Paras 1-10)
Issue of Consideration
Whether the insurance company is liable to pay compensation when the driver of the offending vehicle possessed a fake driving licence, constituting a breach of policy conditions.
Final Decision
The appeals are allowed in part. The insurance company is directed to pay the compensation amount to the claimants and then recover the same from the owner of the offending vehicle in accordance with the 'pay and recover' principle.
Law Points
- Motor Accident Claims
- Insurance Liability
- Fake Driving Licence
- Pay and Recover
- Breach of Policy Condition
Case Details
2018 LawText (BOM) (08) 4
First Appeal No. 1272 of 2005 with First Appeal No. 1 of 2005 and First Appeal No. 2 of 2005
Mr. Mohit R. Deshmukh for Appellant; Mr. H.R.Pathak for Respondents No. 1 and 2; Mr. V.D.Godbharle for Respondents No.3,4; Mr. B.N.Patil for Respondents No.1 to 3; Mr. M.L.Dharashiv for Respondent No.6
New India Assurance Company Ltd.
Keshavrao s/o Bhimrao Tike and others
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Nature of Litigation
First appeals against common judgment and award of Motor Accident Claims Tribunal in claim petitions for compensation arising from a motor vehicle accident.
Remedy Sought
Insurance company sought to avoid liability to pay compensation on ground that driver had fake driving licence, breaching policy conditions.
Filing Reason
Insurance company challenged Tribunal's award holding it liable to pay compensation despite driver possessing fake licence.
Previous Decisions
Motor Accident Claims Tribunal, Latur, passed award holding insurance company liable to pay compensation.
Issues
Whether the insurance company is liable to pay compensation when the driver of the offending vehicle possessed a fake driving licence.
Submissions/Arguments
Appellant insurance company argued that the driver did not have a valid driving licence as the licence was fake, thus there was a breach of policy conditions and the insurer is not liable.
Respondents (claimants and owner) argued that the insurance company is liable to pay compensation.
Ratio Decidendi
The insurance company is not liable to indemnify the insured if the driver possessed a fake driving licence, as it is a breach of policy conditions. However, to protect third-party victims, the insurer must pay compensation and then recover from the insured owner.
Judgment Excerpts
The driver of the offending vehicle did not possess a valid driving licence at the time of accident.
The insurance company has proved the breach of policy conditions.
Following the principle of 'pay and recover', the insurance company is directed to pay the compensation and recover the same from the owner.
Procedural History
The Motor Accident Claims Tribunal, Latur, passed a common award in claim petitions. The insurance company filed three first appeals before the High Court challenging the award.
Acts & Sections
- Motor Vehicles Act, 1988:
