The New India Assurance Co Ltd v. Master Vipin

1. This appeal is directed against the order dated 31.01.2013 passed by the Motor Accident Claims Tribunal(the Claims Tribunal) whereby compensation of Rs.2,10,000/- along with interest @ 7% per annum was awarded in favour of Respondent no.l for having suffered injuries in a motor vehicular accident which occurred on 23.10.2006. MAC. APP. No.417/2013 Page 1of[5] 2015:DHC:11349

2. The facts ofthe case have been dehneated by the Claims Tribunal inpara 2 ofthe judgment which is extracted hereunder:

3. While awarding compensation and discussing liability, the Claims m Tribunal held that since driving licence no.2476/MTR/03 held by the driver Respondent no.3 was fake, the appellant although was made liable to pay the compensation, yet recovery rights were granted to it from Respondent no.3.

4. It is urged by the learned counsel for the Appellant that Respondent no.l was agratuitous passenger and thus, the Appellant had no liability atall. MAC. APP. No.417/2013 Pagg j of[5]

5. I have already extracted the facts ofthe case above. Respondent no.1was not a gratuitous passenger but had been asked by the driver to sit in the crane so that it may not get lifted upward.

6. In ICICI LOMBARD GENERAL INSURANCE CO. LTD v. GANESH JI SINGH & ORS, (MAC.APP. 887/2011) decided on 17.09.2012, this Court analysed the law with regard to liability of the Insurance Company and opined that even in case of willful breach of terms of policy under Section 149 (2)(a) of the Motor Vehicles Act, 1988, the Insurance Company is under obligation to satisfy the liability towards third parties and recover the same from the owner. This Court referred to various judgments including Sohan LaiPassi v. P. Sesh Reddy, (1996) 5 SCC 21; National Insurance Company Limited v. Swaran Singh c& Ors., (2004) 3 SCC 297 and United India Insurance Company Ltd. v. Lehru & Ors., (2003) 3 SCC338 and in para 44 concluded as under:

MAC.APP.No.417/2013 Page3of[5] (Hi) Once the Insuredproves that the driver did not hold any driving licence to drive the Class of vehicle involved in the accident or that the driving licence wasfake; requires the owner and driver to produce the driving licence and if they failed to produce the same, the onus ofproving breach ofpolicy would be deemed to be discharged. Onus would then shift on the owner to establish that he was not guilty ofbreach ofthe terms ofpolicy. In the absence ofany evidence beingproduced by the Insured, in such cases, it will be presumed that he was guilty of a willful breach. The Insured in such cases, would be entitled to recover the compensationpaidto thirdparty in discharge ofits statutory liability.

(iv) Where policy is avoided onprooforfacts which renders the Insurancepolicy void under Section 149 (2) (b) ofthe Act, the Insurance Company would not be under obligation topay even to third parties, as in such cases the contract of insurance is nonest."

7. In the instant case, the insurance poHcy is not void and therefore, the Appellant Insurance Company shall be under an obligation to satisfy the award with regardto paymentofclaimant.

8. Itis, however, made clear that the Appellant Insurance Company shall be entitled to recover the compensation paid to the first Respondent in execution ofthis very judgment without having recourse to independent proceedings for recovery ofthe amount.

9. The balance amount shall be released in favour ofRespondent no.1.