Case Note & Summary
The appeal was filed by United India Insurance Co. Ltd. against the judgment and award dated 15.09.2010 passed by the Fast Track Court-I, MACT, Mysore in MVC No.1030/2009. The Tribunal had awarded compensation of Rs.1,85,000 with interest at 6% p.a. to the claimant, S.N. Somashekar, for injuries sustained in a motor vehicle accident on 18.06.2009 due to rash and negligent driving of an auto-rickshaw cab bearing No.KA-09-A-9251. The Tribunal held the owner, insurer, and driver jointly and severally liable and directed the insurer to deposit the award amount with liberty to recover from the owner. The insurer appealed, contending that the vehicle was used in violation of permit conditions as it was a goods vehicle but was used to carry passengers. The court heard the counsel for both sides. The court noted that the Tribunal had already directed the insurer to pay and recover from the owner. The court upheld this direction, finding that the breach was of a policy condition and not a fundamental breach that would exonerate the insurer entirely. The court dismissed the appeal, confirming the award and the pay and recover direction.
Headnote
A) Motor Vehicles Act - Insurance - Pay and Recover - Section 149 Motor Vehicles Act, 1988 - Breach of Policy Condition - The insurer sought to avoid liability on the ground that the auto-rickshaw was used as a goods vehicle in violation of permit conditions - The court held that the insurer must pay the award amount to the claimant and recover it from the owner, as the breach was of a policy condition and not a fundamental breach - Held that the 'pay and recover' principle applies when the insurer is otherwise liable but the owner has breached the policy terms (Paras 1-3).
Issue of Consideration
Whether the insurer can be exonerated from liability when the vehicle was used in violation of permit conditions, and whether the 'pay and recover' direction is appropriate.
Final Decision
The appeal is dismissed. The judgment and award dated 15.09.2010 passed in MVC No.1030/2009 is confirmed. The insurer is directed to pay the award amount and recover it from the owner.
Law Points
- Pay and recover principle
- Breach of policy condition
- Vicarious liability of owner
- Section 149 Motor Vehicles Act
- 1988
