Case Title: INDIWAR PARIJAT v. NATIONAL INSURANCE COMPANY LTD & ORS and other connected matter
Summary
The Delhi High Court ruled that an insurance company has no contractual relationship with the transferee of a negligent vehicle in a road disaster. The court stated that the registered owner cannot absolve themselves of liability by asserting that they transferred the vehicle prior to the accident date. The insurance company’s role is to indemnify losses incurred by victims, who are the primary individual liable. The court also stated that if the registered proprietor attempts to benefit from the contract by indemnifying themselves against liability, they are also responsible for repaying any compensation the insurance company may pay to the victims. The court dismissed the appeal lodged by the motorcycle’s registered proprietor, allowing the insurance company to pursue reimbursement of the minor boy for the claim amount.
About the case
According to the Delhi High Court, in the event of a road disaster, an insurance company has no contractual or other relationship with the transferee of the negligent vehicle. Justice Navin Chawla stated, “The registered owner cannot absolve himself of liability by asserting that he transferred the vehicle in question to a third party prior to the date of the accident.”
The court noted that the role of the insurance company is to indemnify the losses incurred by the victims of the road accident, which are the responsibility of the registered owner of the offending vehicle as the primary individual liable. “Such persons whom the registered owner claims to have transferred the offending vehicle cannot be pursued by the victims of the road accident or the insurance company, and they cannot be required to follow a trail of successive transfers that are not registered with the Registering Authority,” the court ruled. It further stated: “Should the registered proprietor of the negligent vehicle attempt to benefit from the contract by indemnifying themselves against liability, they are also responsible for repaying any compensation the insurance company may pay to the victims of the road accident, provided the insurance company is otherwise entitled to the same.”” In the midst of addressing two appeals filed by the registered owner of a motorbike and a youth operating it that collided with a woman who subsequently died of her injuries, the court rendered these remarks.
They appealed a Motor Accident Claims Tribunal order that awarded the claimants compensation in the amount of Rs. 15,49,324 and ordered the insurance company, National Insurance Company Limited, to pay the amount in the initial instance. Additionally, the tribunal granted the insurance company the right to pursue reimbursement of the compensation amount from the registered owner of the motorbike in which the child was operating at the moment of the collision.
When Justice Chawla observed that a minor was operating the motorbike at the time of the collision, he stated that the registered owner of the vehicle cannot absolve himself of responsibility by claiming to have sold the motorbike prior to the accident date, provided he did not take any additional steps to notify the Registration Authority or the Insurance Company of the sale. “He retains liability for the actions of any third party allowed to use the vehicle by the registered owner, who may be in breach of a sales contract.” “Viciously, the registered owner is liable for the conduct of the third party if that third party again permits a minor or an individual lacking a valid driver’s license to operate the vehicle,” the court stated. As a consequence, the appeal lodged by the motorcycle’s registered proprietor was dismissed by the court. The court vacated the contested award, permitting the insurance company to pursue the minor boy for reimbursement of the claim amount. The court ordered that “the statutory amount deposited by the appellant, Sh.Rohit Rana, plus interest accrued thereon, be released in the appellant’s favor.”
