Title: National Insurance Co. Ltd. vs. Ravi Prakash Mishra & Anr.
Summary
The Delhi High Court ruled that an insurance company must fulfill its contractual obligations to compensate the owner of an insured vehicle for death or injury. The court ruled that insurance companies are generally not liable under Section 163A or Section 166 of the Motor Vehicles Act, 1988, for the death or physical harm sustained by the borrower, owner, or driver of the covered vehicle. However, the insurance company must be liable to meet such a contractual liability unless the vehicle is covered under the “Comprehensive Policy” or the insurance company undertakes by contract to meet any liability to pay compensation on account of the death or bodily injury suffered by the owner, the borrower, or the driver of the insured vehicle. The court ruled that the claimant would receive the full amount of the deposited funds, along with any interest, and that the insurance company would receive the excess amount, also with interest, from the final judgment. The case involved a claimant who lost both eyes in a motorcycle accident and was permanently disabled.
About the case
According to observations made by the Delhi High Court, an insurance company that agrees to compensate the owner of an insured vehicle for death or injury must fulfill its contractual obligations. According to Justice Navin Chawla, the Insurance Company is generally not liable under Section 163A or Section 166 of the Motor Vehicles Act, 1988, for the death or physical harm sustained by the borrower, owner, or driver of the covered vehicle. “However, the Insurance Company shall be liable to meet such a contractual liability,” the court continued, “unless the vehicle is covered under the “Comprehensive Policy” or the insurance company undertakes by contract to meet any liability to pay compensation on account of the death or bodily injury suffered by the owner, the borrower, or the driver of the insured vehicle.”
While addressing an appeal filed by National Insurance Company Limited contesting a decision reached by the Motor Accident Claims Tribunal in favor of the claimant, Justice Chawla made the remark. According to the claimant’s story, in 2006, he was riding a motorbike for some office work when he had an accident. He claimed that poor vision and thick fog caused him to crash into a divider. He lost both of his eyes in the aforementioned accident, along with a deformed jaw and facial hair. The claimant was 100% permanently disabled, according to the hospital’s Disability Certificate. The insurance company contended that since the claimant was operating the motorcycle-which belonged to the business he was employed by-he had assumed the owner’s role. Additionally, it was argued that since the claimant could not be regarded as a “third party,” the insurance provider was not required to reimburse the claimant under the terms of the “Act Policy.”
Additionally, the insurance company argued that since the driver was hired expressly to drive the insured vehicle, he was in actual possession of it and controlled it as the owner, so it is impossible to say that he is a third party with regard to the insured or borrowed vehicle. However, the claimant contended that the insurer was responsible for paying the compensation if the driver’s insurance premium was properly paid by the vehicle’s owner, regardless of whether the employee was driving the vehicle or it was borrowed. In this instance, the insurance policy only covered liability up to Rs. 1 lakh.
Judge Chawla explained that Section 147(1) of the Motor Vehicles Act, 1988 states that an insurance policy need not cover a liability for death or bodily injury resulting from an employee of a person insured’s employment, with the exception of a liability arising under the Workmen’s Compensation Act, 1923, for death or bodily injury to an employee while driving the vehicle. In this instance, respondent no. 2, who works for the motorcycle’s owner, was operating the vehicle. The “Act Policy” would only provide coverage for liabilities resulting from the 1923 Workmen’s Compensation Act. Therefore, the appellant was not obliged to pay compensation for the injuries experienced by respondent no. 1 beyond the liability arising under the Workmen’s Compensation Act, the court concluded, unless covered by the contractual liability under the insurance policy.
The insurance company’s obligation to compensate the claimant was further limited to Rs. 1 lakh. “Accordingly, the Impugned Award is modified to the extent that the appellant is required to pay the respondent no. 1 an amount of Rs. 1 lakh plus interest at the rate of 9% per annum from the date of the Claim petition filing, which is March 15, 2010, until the date of the appellant’s deposit of the compensation with the learned Tribunal in accordance with this Court’s order dated July 3, 2018,” the court ruled.2018 saw the passing of an interim order requiring the insurance company to deposit the full amount awarded, plus interest, with the Tribunal.
The court ruled that the claimant would receive the full amount of the deposited funds, along with any interest, and that the insurance company would receive the excess amount, also with interest, from the final judgement. Sanjay Rawat, an attorney, represented the insurance provider. Attorney Gaurav Gupta represented the plaintiff in court.
