Case Note & Summary
The appeal was filed by the insurance company challenging the judgment and award of the Motor Accidents Claims Tribunal, Holalkere, in MVC No. 81/2008, which awarded compensation of Rs. 40,300/- with interest at 6% per annum to the claimant for injuries sustained in a road traffic accident on 30.04.2007. The accident occurred due to the rash and negligent driving of a lorry bearing registration No. KA-16/A-2868. The Tribunal directed the appellant-insurance company and respondent No. 2 (owner of the vehicle) to pay the compensation jointly and severally. The insurance company appealed only on the ground of liability, contending that the driver of the offending vehicle did not possess a valid driving licence at the time of the accident, and therefore, the insurer was not liable to pay compensation. The High Court noted that there was no dispute regarding the injuries or the quantum of compensation. The sole issue was whether the Tribunal correctly fastened liability on the insurance company. The court observed that the Tribunal had held that the driver did not possess a valid driving licence, which was a breach of policy conditions. Relying on Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988, the court held that the insurance company is not liable to indemnify the owner in such cases. The court allowed the appeal, set aside the award against the insurance company, and directed the owner of the vehicle to pay the compensation amount to the claimant. The insurance company was directed to pay the amount initially and recover it from the owner.
Headnote
A) Motor Vehicles Act - Liability of Insurance Company - Valid Driving Licence - Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 - The insurance company is not liable to pay compensation if the driver of the offending vehicle did not possess a valid driving licence at the time of the accident, as it amounts to a breach of policy conditions. The Tribunal erred in fastening liability on the insurer despite evidence that the driver had no licence. (Paras 4-6)
B) Motor Vehicles Act - Breach of Policy Conditions - Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 - The owner of the vehicle is primarily liable for the negligence of the driver, and the insurance company can avoid liability if the driver was not duly licensed. The court held that the insurer is not liable to indemnify the owner in such cases. (Paras 5-6)
Issue of Consideration
Whether the finding of the Tribunal on liability in fastening it on the appellant-Insurance Company by holding that the driver of the offending vehicle did not possess valid driving licence is correct.
Final Decision
The appeal is allowed. The judgment and award of the Tribunal dated 11.06.2009 in MVC No. 81/2008 is set aside insofar as it fastens liability on the appellant-insurance company. The insurance company is directed to pay the compensation amount to the claimant and recover the same from the owner of the vehicle (respondent No. 2).
Law Points
- Liability of insurance company
- valid driving licence
- breach of policy conditions
- Motor Vehicles Act
- 1988
Case Details
2016 LawText (KAR) (01) 19
Sri. Narasimhamurthy L. for Sri. S. N. Ashwathanarayan (for appellant), Sri. R. Shashidhara (for respondent 1), Sri. B. L. Kumar (for respondent 2 - absent)
The Divisional Manager, M/s. The Oriental Insurance Co. Ltd., Enkay Complex, Keshavapur, Hubli
1. J. M. Somnath, S/o. Mahalingappa, Aged 40 Years, Agriculturist, R/A. B-Durga, Holalkere Taluk; 2. The Partner, B S V Earth Movers, T. Jayadevappa Building, Bheemasamudra, Chitradurga Taluk
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Nature of Litigation
Appeal against judgment and award of Motor Accidents Claims Tribunal in a claim petition for compensation for injuries sustained in a road traffic accident.
Remedy Sought
The appellant-insurance company sought to set aside the award on the ground of liability, contending that the driver did not possess a valid driving licence.
Filing Reason
The insurance company challenged the Tribunal's decision fastening liability on it despite the driver lacking a valid driving licence.
Previous Decisions
The Tribunal in MVC No. 81/2008 awarded compensation of Rs. 40,300/- with interest at 6% p.a. and directed the insurance company and owner to pay jointly and severally.
Issues
Whether the finding of the Tribunal on liability in fastening it on the appellant-Insurance Company by holding that the driver of the offending vehicle did not possess valid driving licence is correct.
Submissions/Arguments
The appellant-insurance company argued that the driver of the offending vehicle did not possess a valid driving licence at the time of the accident, and therefore, the insurer is not liable to pay compensation.
The respondent-claimant supported the Tribunal's award.
Ratio Decidendi
Under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988, the insurance company is not liable to pay compensation if the driver of the offending vehicle did not possess a valid driving licence at the time of the accident, as it constitutes a breach of policy conditions. The owner of the vehicle is primarily liable for the negligence of the driver.
Judgment Excerpts
As there is no dispute regarding certain injuries sustained by the first respondent - claimant in the road traffic accident occurred on 30.04.2007 due to rash and negligent driving of a lorry bearing registration No.KA-16/A-2868 by its driver and quantum of compensation awarded by the Tribunal the only point that arises for my consideration in this appeal is: ‘Whether finding of the Tribunal on liability in fastening it on the appellant – Insurance company by holding that the driver of the offending vehicle did not possess valid driving licence is correct.’
The Tribunal has held that the driver of the offending vehicle did not possess valid driving licence. Therefore, the insurance company is not liable to pay compensation.
Procedural History
The claimant filed MVC No. 81/2008 before the Civil Judge (Sr.Dn) and MACT, Holalkere, which awarded compensation on 11.06.2009. The insurance company appealed under Section 173(1) of the Motor Vehicles Act, 1988, challenging the liability aspect. The High Court heard the appeal on 22.01.2016 and allowed it.
Acts & Sections
- Motor Vehicles Act, 1988: 149(2)(a)(ii), 173(1)
