Insurance company liable to pay accident victim's kin even if driver's licence has expired, rules Bombay HC

Insurance company liable to pay accident victim's kin even if driver's licence has expired, rules Bombay HC

At the time of the accident, the offending truck was insured with the Insurance Company. There was a contractual liability of the Insurance Company to indemnify the compensation.

Urvi MahajaniUpdated: Thursday, June 01, 2023, 03:33 PM IST
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Representative image | FPJ

The Bombay High Court has ruled that an insurance company is liable to pay compensation to accident victim's kin even if the driving licence of the offending vehicle’s driver has expired, as the expired licence would not make him an “unskilled driver”. Justice SG Dige has directed ICICI Lombard General Insurance Co Ltd to pay compensation to the family of Asha Baviskar, who was killed in an accident in 2011. 

Insurance claim to be paid first, recovered later

The order was passed in April, but the order copy was made available on Thursday. “At the time of the accident, the offending truck was insured with the Insurance Company. There was a contractual liability of the Insurance Company to indemnify the compensation. The driving licence of the driver of the offending vehicle was not renewed at the time of the accident. It doesn’t mean that he was not a skilled driver,” observed the bench. 

It further added that the insurance company can recover the amount from the vehicle’s owner subsequently. “Moreover, it is a settled principle of law that if the driver of the offending vehicle was not holding effective and valid driving licences at the time of the accident, the Insurance Company has to pay compensation first and recover it from the owner of the offending vehicle,” it added. 

Background of the ruling

The HC was hearing an appeal filed by Asha’s husband, Subhash Baviskar and their two sons against the order of the Motor Accidents Claims Tribunal  (MACT), Pune, exonerating the insurance company from paying compensation as the driving licence of the driver of the offending vehicle had expired. MACT had directed the truck owner to pay the compensation. 

On November 23, 2011, Asha and her husband were travelling towards Hadapsar in Pune. She was riding pillion on the motorcycle when a truck rammed into it from behind. Asha fell on the road and came under the left rear wheel of the truck and succumbed to injuries before receiving treatment. 

Contractual liability cannot be ignored

The insurance company opposed the appeal stating that the claimants are only entitled to compensation and they are not supposed to see from whose pocket they are getting compensation. The judges noted that at the time of the accident, the truck was insured and hence there was a contractual liability on the insurance company to indemnify the compensation. Hence, the insurance company has to pay the compensation amount. 

Setting aside the MACT order, the HC said: “The Tribunal has not considered this fact and passed the order mechanically.” The HC has directed the insurance company to pay the compensation within six weeks. The insurance company can recover the amount from the owner of the vehicle, it added. 

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