Case Note & Summary
The case involves an appeal by The Oriental Insurance Co. Ltd. against the judgment and award dated 28.06.2016 passed by the II Additional Senior Civil Judge & MACT, Kalaburagi, in MVC No.942/2014. The Tribunal had allowed the claim petition filed by the respondents No.1 to 3 (claimants) and directed the appellant/insurer to satisfy the award. The insurer appealed, contending that the owner of the vehicle (respondent No.4) drove the motorcycle without a valid driving license, which was a gross violation of the policy conditions. The crucial question raised was whether the Tribunal was justified in directing the insurer to indemnify the insured despite such violation. The court noted that the owner drove the vehicle without a license, which was a clear breach. The court held that the Tribunal erred in directing the insurer to pay the award without considering the breach. The court allowed the appeal, setting aside the award against the insurer, but directed the insurer to pay the award amount to the claimants and then recover the same from the owner/insured in accordance with law. The court relied on the principle that the insurer can be directed to pay and recover from the insured in case of breach of policy conditions.
Headnote
A) Motor Vehicles Act - Insurance - Breach of Policy Condition - Section 149(2)(a)(ii) Motor Vehicles Act, 1988 - Insurer's Liability - The crucial question was whether the insurer could be held liable to indemnify the insured when the owner drove the vehicle without a valid driving license, causing the accident. The court held that the Tribunal erred in directing the insurer to pay the award despite the clear breach of policy condition, as the owner's act of driving without a license was a fundamental violation. (Paras 2-4) B) Motor Vehicles Act - Third-Party Claim - Insurer's Right to Recover - Section 149(4) Motor Vehicles Act, 1988 - Pay and Recover - The court considered the principle of 'pay and recover' but found that the Tribunal had not applied it. The court held that the insurer is entitled to recover the amount paid from the owner/insured, as the breach was on the part of the owner. (Para 4)
Issue of Consideration
Whether the Tribunal was justified in directing the insurer to satisfy the award despite the owner driving the vehicle without a valid driving license, constituting a gross violation of policy conditions.
Final Decision
The appeal is allowed. The judgment and award dated 28.06.2016 in MVC No.942/2014 passed by II Addl. Senior Civil Judge & MACT, Kalaburagi, is set aside insofar as it directs the insurer to pay the award. However, the insurer is directed to pay the award amount to the claimants and recover the same from the owner/insured in accordance with law.
Law Points
- Insurer's liability
- breach of policy condition
- driving without license
- third-party claim
- indemnification
