Case Note & Summary
The case arises from a motor accident claim petition filed by the legal representatives of the deceased, who died in a road accident on 28 June 2006 involving a tempo bearing registration No. MH20/AA7724. The Motor Accident Claims Tribunal, Kopargaon, awarded compensation of Rs.7,21,000 and fastened joint and several liability on the driver, owner, and insurer of the tempo. The insurance company, The New India Assurance Company Ltd., appealed against the award, primarily contending that the driver did not hold a valid driving license at the time of the accident, thereby breaching the policy conditions. The court examined the evidence, including the testimony of the owner and the driver, and noted that the insurer failed to prove that the owner knowingly allowed the vehicle to be driven by an unlicensed driver. The court held that the burden of proving willful breach of policy conditions lies on the insurer, and in the absence of such proof, the insurer cannot avoid its liability to pay compensation to third parties. The court upheld the Tribunal's award, directing the insurer to pay the compensation with interest, but granted liberty to the insurer to recover the amount from the owner if it could prove the breach in separate proceedings. The appeal was dismissed.
Headnote
A) Motor Accident Claims - Joint and Several Liability - Section 166, Motor Vehicles Act, 1988 - Compensation for death in road accident - Tribunal awarded Rs.7,21,000 with joint liability on driver, owner, and insurer - Insurance company challenged on ground of breach of policy condition as driver had no valid license - Held that insurer failed to prove willful breach; liability upheld (Paras 1-10).
B) Motor Accident Claims - Breach of Policy Conditions - Section 149(2), Motor Vehicles Act, 1988 - Insurer's defense of breach of condition regarding driving license - Burden on insurer to prove that owner knowingly allowed unlicensed driver - In absence of such proof, insurer cannot avoid liability - Held that insurer must pay and may recover from owner if breach proved (Paras 5-9).
Issue of Consideration
Whether the Motor Accident Claims Tribunal erred in fastening joint and several liability on the insurance company despite alleged breach of policy conditions by the driver not holding a valid driving license.
Final Decision
The appeal is dismissed. The judgment and award of the Motor Accident Claims Tribunal, Kopargaon, in Motor Accident Claim Petition No. 83 of 2006 is upheld. The insurance company is directed to pay the awarded compensation with interest. However, the insurer is granted liberty to recover the amount from the owner if it can prove the breach of policy conditions in separate proceedings.
Law Points
- Motor Accident Claims
- Joint and Several Liability
- Breach of Policy Conditions
- Burden of Proof on Insurer
- Negligence of Driver
Case Details
2018 LawText (BOM) (10) 8
First Appeal No. 840 of 2013
Mr. A.B. Kadethankar for Appellant, Mr. S.S. Deo for Respondent nos.1 to 3, Mr. S.S. Deshmukh for Respondent nos.4 and 5
The New India Assurance Company Ltd.
Punjabai Bansi Solase, Master Prashant s/o Bansi Solase, Master Nitin s/o Bansi Solase, Wajedkhan Sultankhan Kureshi, Shaikh Abbas Shaikh Mannan Kureshi
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Nature of Litigation
First appeal against judgment and award of Motor Accident Claims Tribunal in a claim petition for compensation for death in road accident.
Remedy Sought
Insurance company sought to set aside the award and avoid liability on ground of breach of policy conditions.
Filing Reason
Insurance company challenged the award on the ground that the driver did not hold a valid driving license, thus breaching policy conditions.
Previous Decisions
Motor Accident Claims Tribunal, Kopargaon, in Motor Accident Claim Petition No. 83 of 2006 awarded Rs.7,21,000 with joint and several liability on driver, owner, and insurer.
Issues
Whether the Tribunal erred in fastening joint and several liability on the insurance company despite alleged breach of policy conditions by the driver not holding a valid driving license.
Submissions/Arguments
Appellant insurance company argued that the driver did not hold a valid driving license, thus there was a breach of policy conditions and the insurer is not liable.
Respondents (claimants) argued that the insurer failed to prove that the owner knowingly allowed an unlicensed driver, and thus the insurer is liable to pay compensation.
Ratio Decidendi
The burden of proving willful breach of policy conditions lies on the insurer. In the absence of proof that the owner knowingly allowed an unlicensed driver, the insurer cannot avoid its liability to pay compensation to third parties. The insurer may pay and then recover from the owner if breach is proved.
Judgment Excerpts
Original respondent no.3 insurance company has challenged the vires of the judgment and award, passed by the Motor Accident Claims Tribunal, Kopargaon, in Motor Accident Claim Petition No. 83 of 2006, whereby compensation of Rs.7,21,000 is awarded by the Tribunal and joint and several liability is fastened on original respondent nos. 1 to 3 i.e. driver, owner and insurer of the tempo bearing No. MH20/AA7724.
The court held that the insurer failed to prove that the owner knowingly allowed the vehicle to be driven by an unlicensed driver, and thus the insurer is liable.
Procedural History
The Motor Accident Claims Tribunal, Kopargaon, passed an award in Motor Accident Claim Petition No. 83 of 2006 on an unspecified date, awarding compensation of Rs.7,21,000 with joint and several liability on driver, owner, and insurer. The insurance company filed First Appeal No. 840 of 2013 before the Bombay High Court, Bench at Aurangabad, challenging the award. The appeal was reserved on 04.10.2018 and pronounced on 22.10.2018.
Acts & Sections
- Motor Vehicles Act, 1988: Section 166, Section 149(2)
