In two judgments recently the Supreme Court (SC) ruled that in road accidents, insurance companies should pay compensation under the ‘no-fault liability’ clause in the Motor Vehicles Act irrespective of the circumstances of the deaths. In one appeal, Indra Devi vs Bagada Ram, the death was invited by the negligence of the deceased driver himself. The Rajasthan HC asked the recipients of the compensation to return the amount with interest to New India Assurance Co as the claimants were not entitled to the amount.
The SC set aside the high court order and asserted the ‘no-fault liability’ under Section 140 of the Act did not depend upon the conduct of the driver or the victim. In the second case, Eshwarappa vs C. s. Gurushanthappa, the drunk driver and his four friends died while rashly driving to a temple without informing the car owner. The accident tribunal denied any compensation. However, the SC ruled even in such cases, “no-faulty liability’ cannot be avoided. (BS)
Published in The Insurance Times, October 2010
