Insurance company liable to pay compensation even when driver does not have valid licence, may recover from owner later: Madras High Court

The Madras High Court recently ruled that when a claim is made under the Motor Vehicle Act, the insurance company is liable to pay compensation even when the driver of the vehicle did not possess a driver’s license valid. He added that this amount could be recovered later from the owner of the vehicle.

The Madurai bench of Judge Teeka Raman made the above submissions on a motion filed by the owner of the offending vehicle, Thanikodi, against the order made by the Motor Accident Claims Tribunal, Peiyakulam. The Tribunal ruled that the owner of the vehicle was liable for compensation and exonerated the insurance company and granted compensation.

The original claimants are the legal heirs of the deceased. They had filed a claim in the Motor Accident Claims Tribunal, Periyakulam. They claimed that the driver drove the tractor in a reckless and careless manner and without any signal, abruptly turned his vehicle, thus hitting the deceased who was driving a two-wheeler just behind the tractor.

The insurance company, on its meter, said that on the date of the accident, the driver of the accident did not have a driver’s license to drive the vehicle.

On appeal against the exemption, the appellant argued that although the driver of the vehicle in question does not have a driver’s license, the insurance company cannot be exonerated from liability and must pay and recover and pressed on the National Insurance Company Limited v Swaran Singh and others (2004).

The insurance company, on the other hand, relied on the Supreme Court’s decision in Beli Ram vs Rajinder Kumar and another (2020) where the court observed as below –

“Where a tortfeasor has not renewed his driver’s license within 30 days of the expiry of the driver’s license, in accordance with the provisions of the Motor Vehicle Act, the insurance company shall not is not required to pay compensation”, because the owner of the vehicle has breached the insurance conditions by entrusting the vehicle to a person who does not hold a valid driving licence”

The court discussed the law established in United India Insurance Company Ltd v Krishnaveni and others (2020) where the court had clearly stated that where the claim is made under the Workers’ Compensation Act, the insurance company may be exonerated. Here, the employer-employee relationship is an essential element and a prerequisite for maintaining a claim under the law, and for not having a driver’s license, the insurance company can be exonerated. However, when the claim is filed under the Motor Vehicle Act, the insurance company may be required to pay the indemnity and collect the amount from the owner of the vehicle.

The court thus applied the principle of indemnification and recovery and ordered the insurance company to indemnify the family of the deceased and subsequently to recover this sum from the owner of the vehicle according to the methods provided for by law.

Case title: Thanikodi c. Parameswari and others

Case no: 2018 AMC (MD) No. 211

Counsel for the Applicant: Mr. R. Suriyanarayanan

Counsel for the Respondent: MS Anand Chandra Sekar (R1) and MC Karthik (R5)

Quote: 2022 LiveLaw (Mad) 170

Click here to read/download the judgment


Source link

Justin D. O'Neill