The High Court of Jharkhand allowed an appeal filed under Section 173(1) assailing the judgment in which the claim petition was allowed and the insurance company was made liable to pay compensation and held that a valid vehicle insurance policy is mandatory for operating in public places, and failure to have one absolves the insurance company from liability to indemnify the insured in third-party cases, stressing the importance of adhering to Motor Vehicle Act provisions.
Brief Facts:
The petition is filed under Section 173(1) assailing the judgment in which the claim petition was allowed. The deceased along with his grandson was going on the auto rickshaw and the driver lost control of the vehicle due to rash and negligent driving which caused serious injuries to the deceased and later he died. The case was registered against the driver and the chargesheet was submitted against him and the offending vehicle was insured with National Insurance Company Limited. The claimants claimed compensation and the National Insurance Company Limited Specifically denied the insurance of the offending vehicle on the relevant date and time of the accident. The tribunal held that at the time of the accident, the offending vehicle was not insured but decided that the compensation amount was awarded in favour of claimants with the direction to pay the same by the Insurance company and then recover from the owner. Thus, this petition is filed.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the petitioner contended that no policy at all has been issued covering any third-party risk on the date of the alleged accident and no question arises to apply the doctrine of “pay and recover” and the insurance company is entitled to be exonerated from any liability to pay the compensation amount to claimants. It was further contended that the tribunal saddled liability on the shoulder of the insurance company and the award is fit to be modified to the extent of liability of the insurance company against the payment of award amount.
Contentions of the Respondent:
The learned counsel appearing on behalf of the Respondent contended that the provisions of MV Act are welfare legislation and in the interest of justice, the impugned order is justified.
Observations of the court:
The court observed that Section 146 of the MV Act makes the insurance policy of the vehicle compulsory for playing in a public place and Section 147 of the said act deals with requirements of policies and limits of liability, similarly, Section 149 of the said act lays down the duty of the insurer to satisfy the Judgment/Award against persons insured in respect of third party risk and It is also obvious that payment of premium in advance for assuming the risk under the insurance policy certificate is also necessary.
The court further observed that the existence of a valid and effective policy of the vehicle on the date of the accident is sine qua non for attracting the liability of the insurance company to indemnify the insured under contractual obligation, in a case of third-party risk and absence of valid and effective insurance policy issued under the provisions of Motor Vehicle Act, 1988, the insurance company cannot be saddled with liability to satisfy the award against the insured under the provision of Section 149 M.V. Act on doctrine of “pay and recover”.
The court held that the tribunal had failed to take into notice the relevant provisions of the Motor Vehicle Act and arrived at mechanical findings holding the insurance company liable to satisfy the award in favour of claimants and to recover the same from the insured, which is not justified under law and fit to be modified in this appeal.
The decision of the Court:
The court allowed the petition and modified the impugned order.
Case Title: National Insurance Co. Ltd. vs Parijan Bibi and ors.
Coram: Hon’ble Mr. Justice Pradeep Kumar Srivastava
Case No.: M.A. No.341 of 2020
Advocate for the Petitioner: Mrs. Alok Lal, Mr. Santosh Kumar
Advocate for the Respondent: Mr. Sanjay Kumar, Mr. Sanjeev Kumar Singh, Mr. Baibhaw Gahlaut
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