Case Note & Summary
The appeal arose from a motor accident claim filed by the injured claimant seeking compensation of Rs. 25,00,000/-. On 29.07.2014, the claimant, while proceeding from his house to Adukamparai in his vehicle, was hit by a motorcycle owned and ridden by the first respondent and insured with the second respondent (ICICI Lombard General Insurance Co. Ltd.) near Thorapadi Central Jail Police Training Centre. The claimant sustained multiple injuries. The first respondent remained ex parte before the Tribunal. The Insurance Company contested, denying negligence and contending that the accident was caused by the claimant's own negligence, and further that the first respondent did not possess a valid driving license, thus violating policy conditions. The Tribunal, by judgment dated 22.07.2022 in MCOP No.735 of 2014, held that the accident occurred solely due to the rash and negligent driving of the first respondent. However, it exonerated the Insurance Company from liability on the ground that the owner-cum-rider lacked a valid driving license on the date of the accident. The Tribunal directed the first respondent alone to pay Rs. 1,82,120/- as compensation. Aggrieved by the exoneration of the insurer, the claimant filed the present Civil Miscellaneous Appeal under Section 173 of the Motor Vehicles Act, 1988. Before the High Court, the appellant's counsel contended that the Tribunal committed a serious error by exonerating the insurance company and relied on the Supreme Court's decision in National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, which enunciated the 'pay and recover' principle, holding that even where the insured is in breach of policy conditions, the insurer is liable to indemnify the third-party claimant first and then recover the amount from the insured. The High Court was called upon to decide whether the Tribunal's exoneration of the insurer was legally sustainable in view of the settled law on the point.
Headnote
A) Motor Accident Claims - Liability of Insurer - Exoneration on Ground of Invalid Driving License - Motor Vehicles Act, 1988, Sections 149, 173 - The Tribunal found the accident occurred due to rash and negligent riding by the first respondent but exonerated the insurer on the sole ground that the rider did not hold a valid driving license at the time of the accident. The claimant appealed, arguing that the insurer should be directed to pay and recover the compensation in light of the Apex Court's ruling in National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, which mandates that even in cases of breach of policy conditions, the insurer is liable to pay the third-party claimant and then recover from the insured. (Paras 1-5)
Issue of Consideration
Whether the Tribunal was right in exonerating the insurance company from liability on the ground that the owner-cum-rider did not possess a valid driving license, contrary to the principle of pay and recover.
Law Points
- pay and recover
- liability of insurer despite breach of policy conditions
- driving licence violation
- Section 173 Motor Vehicles Act 1988
- National Insurance Co. Ltd. v. Swaran Singh (2004) 3 SCC 297
