The liability of an insurance company to compensate a road accident victim when the terms of the policy have been violated came in for examination again in the Bombay High Court in United India Insurance Co vs Sukumarbai. In several cases; the Supreme Court had asked the insurance company to pay the victim and then recover the amount from the owner or guilty of rash driving. But those orders were passed by the Supreme Court under Article 142 of the Constitution which grants it special powers to do “complete justice”. The question of whether other courts can also pass orders to the insurer to pay and then recover it from the owner or driver of the vehicle which caused the accident is debated.
Case Jaw is often cited from both sides. The Supreme Court has not decided the question finally though it was before it for a long time. In this case, the tribunal followed the Supreme Court, believing that “pay and recover” is the norm. But on appeal by the insurance company, the high court asserted that when the terms of the policy were violated the insurer must be exonerated and the liability fell entirely on the owner or driver.
