The Hindu : National : Pay accident victims even if licence is forged, apex court tells insurance firms

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Pay accident victims even if licence is forged, apex court tells insurance firms

Legal Correspondent

Vehicle owners cannot be expected to make enquiries with RTOs
To avoid liability, the insurer must prove that the insured was negligent

New Delhi: An insurance company is liable to pay compensation to a victim’s family even if the driver of the vehicle involved in the road accident had a fake driving licence, the Supreme Court has held.

A Bench, comprising Justices Arijit Pasayat and P. Sathasivam, quoted an earlier judgment and said: “When the owner [of the vehicle] after verification satisfied himself that the driver had a valid licence and [was] driving the vehicle in question competently at the time of the accident, there would be no breach of Section 149 (2) (a) (ii) of the Motor Vehicles Act [providing grounds for avoiding liability]. In that event, the insurance company would not then be absolved of liability.”

Writing the judgment, Mr. Justice Sathasivam said: “Even in case that the licence was fake, the insurance company would continue to remain liable unless they prove that the owner was aware [of] or noticed that the licence was fake and still permitted him [the driver] to drive.”

Earlier judgment

Quoting an earlier judgment, the Bench said insurance companies could not expect owners to make enquiries with Regional Transport Offices, spread all over the country, whether the licence shown to them was valid or not.

“The MV Act, 1988, providing compulsory insurance of vehicles against third-party risks, is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles.”

To avoid liability, the insurer should prove that the insured was guilty of negligence and failed to exercise reasonable care in fulfilling the policy condition on use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time. In case of third-party risks, the insurer had to indemnify the amount and if so advised to recover the same from the insured, the Bench said.

Instant case

In the instant case, Ramdhan, husband of Premkumari, was killed in an accident while driving a motorcycle. The driver of the truck involved in the accident did not have a valid licence.

The Motor Accident Claims Tribunal, Indore, awarded a compensation of Rs. 2,56,000 payable by the truck owner, and it absolved the insurance company of its liability.

Compensation up

On appeal, the Madhya Pradesh High Court held that the insurance company was not liable to pay, but it enhanced the compensation to Rs.3.50 lakh, to be paid by the vehicle owner.

Disposing of the appeal by the claimants against this judgment, the Bench said the insurance company could recover from the vehicle owner Rs.50,000 already paid to them.

The claimants too could recover the balance amount from the vehicle owner in accordance with law.

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