The “pay and recover” principle requiring insurance firms to pay accident claims and then recovering them from vehicle owners cannot be applied in cases where the policies have lapsed, the Bombay high court has said.
The court said the principle can be resorted to when the contract of insurance and the insurer is exonerated from the liability on account of some breach of conditions of insurance or causes like nature. It added it cannot be in cases where no such contract exists.
The court made the observations while hearing an appeal filed by Oriental Insurance Company against a 2014 order of Nashik’s Motor Accident Claims Tribunal holding the insurer jointly liable to pay compensation of ?6.68 lakh to family members of Milind Gaikwad, 27, who had died in a road accident in 2009. Gaikwad was riding a motorcycle when another motorcyclist Uday Pathak collided with him.
Gaikwad’s family staked an accident claim before the tribunal, which held the accident occurred due to Pathak’s rash and negligent driving. The tribunal added Pathak and his insurer Oriental Insurance Company were jointly liable to pay the compensation.
