Reading of Section 140 makes it clear that no fault liability is cast on the owner of the vehicle and not directly on the insurer. This was held in the judgment passed by a single judge bench comprising of HON’BLE MRS. JUSTICE SINDHU SHARMA in the matter of National Insurance Company Ltd V. Feroz-ud-Din & anr [IA No. 01/2018], dealt with an issue where the petitioner filed a petition challenging the award passed by the Motor Accident Claims Tribunal, Doda in the four appeals.
Claimants are grandparents of the deceased whose son was driving the said vehicle on the fateful day and they have filed four claim petitions against DM, National Insurance Company Limited & others for compensation under Sections 166 and 140 of the Motor Vehicle Act, 1998.
Appellant-Insurance Company objected to the claim petitions on the ground that the claim petitions are not maintainable because insurer can only indemnify the insured, who died and in the absence of his legal heirs arrayed as party. Learned Tribunal, while considering the application under Section 140 of the MV Act, found that as the offending vehicle was duly insured with the appellant company, as such, the respondent/insurer is under legal obligation to indemnify the owner and the Tribunal has awarded interim award of Rs. 50,000/- in each claim petitions in favour of the respondents-claimants.
It is argued that the appellant cannot be made liable to pay compensation under no fault liability in the absence of the insured because the Insurance Policy, contract is to indemnify the insured against the third party liability.
Counsel for the appellant while elaborating on the contention, relying on the judgment of Supreme Court in Oriental Insurance Company Ltd. Vs. Sunita Rathi, 1998.
The appeals filed by the Insurance Company involve only a short point relating to its liability under the policy of insurance issued subsequent to the accident, even though it was issued some time later on the same day. In the judgement they relied the High Court stated that, without assigning any reason, has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court, is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basic fallacy in the conclusion reached by the High Court on this point.
After hearing both sides, the Hon’ble High Court of Jammu and Kashmir dismissed the petition and held that Appellant-company is directed to deposit the amount of award passed in all the claim petitions within a period of one month from today, failing which, same will be payable with 12% interest per annum.
Judgement reviewed by – Vaishnavi Raman