Case Title: The New India Assurance Company Limited AND Sadika & Others
Summary
The Karnataka High Court has ruled that when it cannot establish that a deceased driver of a vehicle had a valid driver’s license, the Claims Tribunal must apply the “pay and recover” principles. The appeal lodged by New India Assurance Company Limited was partially granted by a single judge bench, headed by Justice T.G. Shivashankare Gowda.
The court reevaluated the appropriateness of attaching liability to the insurance company, stating that there was no evidence to suggest negligence or failure to verify the deceased’s license. The court partially granted the appeal and ordered the insurance company to deposit the compensation and retrieve it from the vehicle owner in accordance with the “pay and recovery” principle.
About the case
The Karnataka High Court has ruled that when it cannot be established that the deceased driver of a vehicle involved in a road accident held a valid driver’s license, the Claims Tribunal must apply the “pay and recover” principles by instructing the insurance company to deposit the compensation amount and subsequently recover it from the vehicle owner. The appeal lodged by New India Assurance Company Limited was partially granted by a single judge bench headed by Justice T.G. Shivashankare Gowda. The bench also made alterations to the award rendered by the Commissioner for Workmen’s Compensation, Chitradurga District.
According to the case’s factual matrix, the deceased Ghouse was the driver of a truck that belonged to S.M. Nooruddin. Ghouse decomposed instantly upon the lorry’s capsize. His legal representatives petitioned the Commissioner in accordance with Section 22 of the Workmen Compensation Act for compensation. The Insurance Company opposed the claim; however, the Commissioner granted compensation amounting to Rs. 4,23,580, inclusive of interest. The insurance company argued that the deceased’s driver’s license was not discovered at the location of the crime, and no evidence was presented to the Commissioner concerning the validity of the deceased’s driver’s license. Therefore, it was argued that the proprietor, by permitting an individual to operate the vehicle without a valid driver’s license, contravened the stipulations and provisions of the insurance policy.
The claimants contended that the insurance company bears the primary responsibility of establishing that the deceased did not possess a legitimate driver’s license. The bench acknowledged the presence of an employer-employee relationship and, as such, determined that the petitioners qualify for dependent compensation under Section 22 of the Workmen’s Compensation Act of 1923. As a result, the court affirmed the tribunal’s determination concerning the amount of compensation. The Court reevaluated the appropriateness of attaching liability to the Insurance Company after noting that neither the petitioners nor the owner nor the Insurance Company were able to obtain the deceased’s driver’s license.
It determined, “In the present case, the petitioners assert that the deceased possessed a valid driver’s license; however, no evidence is presented to support this claim.” There is no evidence to suggest that the proprietor was negligent or failed to verify the deceased’s driver’s license, nor is this a case of a counterfeit license. It is appropriate to employ the principle of “restitution and payment” in such a situation. In accordance with this, the court partially granted the appeal and ordered the insurance company to deposit the compensation and subsequently retrieve it from the vehicle owner in accordance with the “pay and recovery” principle.
