Case Note & Summary
The case involves three appeals arising from a motor vehicle accident that occurred on 17.08.2012. The claimant, Durgappa, was a pillion rider on a motorcycle when a lorry driven by S. Manjunath collided with it, causing grievous injuries. The claimant filed a claim petition before the Motor Accident Claims Tribunal, which awarded compensation of Rs. 3,50,000 with interest at 6% per annum. The New India Assurance Co. Ltd. (insurer of the lorry) and Shriram General Insurance Co. Ltd. (insurer of the motorcycle) appealed against the award, while the claimant also appealed for enhancement. The main legal issue was whether the insurers were liable to pay compensation when the driver of the lorry did not possess a valid driving licence for a transport vehicle. The Tribunal had held that the driver had a licence for a light motor vehicle but not for a transport vehicle, which was a breach of policy conditions. However, following the principle of 'pay and recover' laid down by the Supreme Court, the High Court held that the insurers are liable to pay compensation to the third party claimant, but they have the right to recover the amount from the owner and driver of the offending vehicle. The court also upheld the quantum of compensation as just and reasonable. The appeals were disposed of with directions for the insurers to pay the compensation and then recover from the owner and driver.
Headnote
A) Motor Vehicle Act - Third Party Liability - Breach of Policy Condition - Section 149(2)(a)(ii) of Motor Vehicles Act, 1988 - The insurer is liable to pay compensation to a third party even if the driver did not have a valid driving licence, but the insurer has the right to recover the amount from the owner and driver. Held that the insurer must pay and then recover from the insured. (Paras 10-12) B) Motor Vehicle Act - Driving Licence - Validity - Section 3 of Motor Vehicles Act, 1988 - The driver must hold a valid driving licence for the class of vehicle driven. In this case, the driver had a licence for a light motor vehicle but was driving a transport vehicle, which requires an endorsement. Held that the driver did not have a valid licence. (Paras 8-9) C) Motor Vehicle Act - Compensation - Quantum - Assessment of Income - The Tribunal assessed the claimant's income at Rs. 6,000 per month based on the notional income for an able-bodied person. Held that the assessment was reasonable. (Para 13)
Issue of Consideration
Whether the insurance companies are liable to pay compensation to the claimant when the driver of the offending vehicle did not possess a valid driving licence at the time of the accident, and whether the insurers can recover the amount from the owner and driver.
Final Decision
The High Court dismissed the appeals of the insurance companies and the claimant, upholding the award of the Tribunal. However, it clarified that the insurers are liable to pay the compensation to the claimant and then recover the amount from the owner and driver of the offending vehicle in accordance with the 'pay and recover' principle.
Law Points
- Motor Vehicle Act
- 1988
- Section 149
- Section 147
- third party liability
- breach of policy conditions
- pay and recover
- driving licence
- owner's liability
- insurer's liability
