Case Note & Summary
The appeal was filed by New India Assurance Co. Ltd. against the judgment and award of the Motor Accidents Claims Tribunal (MACT), Bangalore, in MVC No.2964/2010, dated 19.10.2011. The Tribunal had awarded compensation of Rs.2,11,350/- with interest at 6% per annum on Rs.2,01,350/- (excluding future medical expenses) from the date of petition till payment, making the appellant-insurer, the owner of the bus, and the lessee (BMTC) jointly and severally liable. The claimant, Srinivasa Babu Reddy, was injured on 30.03.2007 when he was hit from behind by a bus while riding his motorcycle. The sole contention raised by the insurer was that its liability was 'contractual' and therefore excluded under proviso (ii) to Section 147(1) of the Motor Vehicles Act, 1988. The court rejected this argument, holding that the proviso excludes only liability arising under a contract of employment, not third-party liability. The court noted that the insurer's liability to third parties is statutory and must be covered under the policy. The appeal was dismissed, and the award of the Tribunal was confirmed.
Headnote
A) Motor Vehicles Act - Insurance - Third-Party Liability - Section 147(1) proviso (ii) - Contractual Liability - The insurer contended that its liability was contractual and thus excluded under proviso (ii) to Section 147(1) of the Motor Vehicles Act, 1988. The court held that the proviso excludes only liability arising under a 'contract of employment' and not third-party liability. The insurer is liable to indemnify the owner/lessee for compensation awarded to a third-party claimant injured in a motor accident. (Paras 1-4) B) Motor Vehicles Act - Insurance - Joint and Several Liability - Section 147 - The Tribunal had made the insurer, owner, and lessee jointly and severally liable for compensation. The High Court upheld this, holding that the insurer's liability to third parties is statutory and not merely contractual, and the proviso (ii) to Section 147(1) does not apply to third-party claims. (Paras 1-4)
Issue of Consideration
Whether the liability of the insurer under a motor vehicle insurance policy is a 'contractual liability' excluded by proviso (ii) to Section 147(1) of the Motor Vehicles Act, 1988, thereby absolving the insurer from indemnifying the owner/lessee in respect of third-party claims.
Final Decision
Appeal dismissed. The judgment and award of the Tribunal dated 19.10.2011 in MVC No.2964/2010 is confirmed. No order as to costs.
Law Points
- Contractual liability
- Third-party liability
- Section 147(1) proviso (ii) Motor Vehicles Act
- 1988
- Joint and several liability
- Insurer's liability
