The Madras High Court has issued a ruling stating that an insurance agent cannot be considered an insurer and therefore cannot be held liable to pay compensation under Section 168 of the Motor Vehicles Act.
The decision came in response to an appeal by an insurance agent who challenged an award passed by the Thanjavur Motor accident claims tribunal, which held the agent responsible for compensating the family members of a deceased individual involved in a two-wheeler accident.
Justice R. Vijayakumar emphasized that Section 168 clearly stipulates that the award amount should be paid by the insurer, owner, or driver of the vehicle involved in the accident, and the agent does not fall under any of these categories. The court held that if the insurance company believes the agent was negligent in remitting the amount, they should initiate separate proceedings rather than involving a third party.
The court further noted that the delay in remittance by the agent was a dispute between the agent and the company and should not impact the liability of the agent in the accident case. The judge clarified that the coverage of the insurance policy begins from the date and time when the premium amount is paid to the authorized agent or the insurance company. Merely because the agent remitted the premium belatedly or the company issued the policy from a future date does not absolve the insurance company from its liability.
In cases of renewal policies, the policy takes effect from the date of premium payment to the authorized agent or the insurance company. The court stated that the insurance company cannot postpone the date of policy commencement after receiving the premium and should not take advantage of the non-issuance or delayed commencement of the policy.
Based on these considerations, the Madras High Court exonerated the insurance agent from liability and instead held the insurance company responsible for paying the compensation awarded by the tribunal in the accident case. The court confirmed the tribunal's award and emphasized that the insurance agent should not have been subjected to the liability imposed by the tribunal, as it was an unnecessary dispute between the agent and the insurance company.
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