Case Note & Summary
The appeal was filed by the National Insurance Company Limited under Section 173(1) of the Motor Vehicles Act, 1988, challenging the judgment and award dated 18.11.2015 passed by the Additional District and Sessions Judge, Gadag, in MVC No.158/2012. The Tribunal had awarded compensation of Rs.1,70,200/- with interest at 6% p.a. to the claimant, Karisiddappa, for injuries sustained in a motor vehicle accident. The insurer contended that the vehicle involved in the accident did not have a valid permit to ply on the road, and therefore, the insurer should not be held liable. The court considered the issue of whether the absence of a permit absolves the insurer of liability. The court held that the absence of a valid permit constitutes a fundamental breach of the policy conditions. However, following the principle of 'pay and recover', the insurer is liable to pay the compensation to the third-party claimant and may thereafter recover the amount from the owner of the vehicle. The court dismissed the appeal, directing the insurer to pay the compensation and recover the same from the owner in accordance with law.
Headnote
A) Motor Vehicles Act - Insurance - Liability of Insurer - Absence of Valid Permit - The insurer challenged the award on the ground that the vehicle did not have a valid permit. The court held that the absence of a permit is a fundamental breach of policy conditions, but the insurer is liable to pay compensation to the third party and may recover the amount from the owner. (Paras 1-3) B) Motor Vehicles Act - Pay and Recover - Insurer's Right - The court directed the insurer to pay the awarded compensation and then recover the same from the owner of the vehicle in accordance with law. (Para 3)
Issue of Consideration
Whether the insurer can avoid liability on the ground that the vehicle involved in the accident did not have a valid permit to ply on the road.
Final Decision
Appeal dismissed. The insurer is directed to pay the compensation awarded by the Tribunal and may recover the same from the owner of the vehicle in accordance with law.
Law Points
- Motor Vehicles Act
- 1988
- Section 149(2)(a)(i)
- Section 173(1)
- permit requirement
- fundamental breach
- pay and recover
- insurer liability
