Title: INDIWAR PARIJAT v. NATIONAL INSURANCE COMPANY LTD & ORS and other connected matter
Summary
The Delhi High Court has ruled that an Insurance Company has no contractual relationship with the transferee of the offending vehicle in a road accident. The court stated that the registered owner cannot absolve himself of liability by claiming that he had transferred the vehicle to a third party prior to the accident. The Insurance Company serves as an indemnifier for the compensation that the registered owner of the offending vehicle is required to provide to the victims. The court also noted that the registered owner is vicariously responsible for the actions of the third party if they permit a minor or a person without a legitimate driving license to operate the vehicle. The court vacated the Impugned Award, enabling the Insurance Company to pursue reimbursement of the claim amount from the minor boy.
About the case
An Insurance Company has no contractual or other relationship with the transferee of the offending vehicle in a road accident, as the Delhi High Court has observed.
“The registered owner cannot absolve himself of liability by claiming that he had transferred the offending vehicle to a third party prior to the date of the accident,” stated Justice Navin Chawla. The court noted that the Insurance Company solely serves as an indemnifier for the compensation that the registered owner of the Offending Vehicle, who is the primary person liable, is required to provide to the victims of the road accident.
The court stated that the victims of the road accident and the Insurance Company are unable to pursue the individuals whom the registered owner claims to have transferred the offending vehicle. Additionally, they cannot be compelled to follow a trail of successive transfers that are not registered with the Registering Authority.
“If the registered owner of the offending vehicle seeks any benefit from the contract in the form of indemnification against liability, the registered owner is also liable to reimburse the compensation that the Insurance Company may pay to the victims of the road accident, if the Insurance Company is otherwise entitled to the same,” it added. The court made the observations while addressing two appeals submitted by the registered owner of a motorcycle and a child who was operating it. The motorcycle collided with a woman, who subsequently passed away due to her injuries.
They objected to an order issued by the Motor Accident Claims Tribunal, which authorized the payment of Rs.15,49,324 in compensation to the claimants. The Insurance Company, National Insurance Company Limited, was obligated to pay the sum at the outset. The Insurance Company was also granted the right to recover the compensation amount from the registered owner of the motorcycle, which the lad was operating at the time of the accident, by the tribunal.
Justice Chawla observed that the motorcycle was being operated by a minor at the time of the accident. He further stated that the registered owner of the vehicle cannot absolve himself of responsibility by claiming that he had sold the bike prior to that date, as he did not take any additional steps to register the sale with the Registration Authority or notify the Registration Authority and the Insurance Company. “The registered owner is still accountable for their actions if they permit a third party, who may be under a contract of sale, to operate the vehicle.” The court stated that the registered owner is vicariously responsible for the actions of the third party if the third person subsequently permits a minor or a person without a legitimate driving license to operate the vehicle.
Consequently, the appeal submitted by the registered proprietor of the motorcycle was denied by the court. It vacated the Impugned Award, thereby enabling the Insurance Company to pursue reimbursement of the claim amount from the minor boy. The court ordered that the appellant, Sh.Rohit Rana, be granted the release of the statutory amount deposited and the interest that has accrued thereon.
