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If vehicle is registered in India, insurance Company is  liable to pay compensation without any extra premium for extra territorial coverage.-High Court of Punjab and Haryana.

Section 139 of the Motor Vehicle Act empowers the Government of India to make rules regarding the travelling of the vehicles registered in India to other countries. Section 149 (3) makes the Insurance Company liable to satisfy the decree or award for the accidents occurring outside India, even if the same is passed by a foreign Court, but in certain cases there is conflict so as whether the insurance companies are liable to pay for the accident occurring outside India. The landmark judgement passed by the single bench of HON’BLE JUSTICE RAJBIR SEHRAWAT in ANIL KUMAR V ROOP SHARMA & OTHERS (FAO No.152 of 2017) dealt with the issue mentioned above.

In this case the petitioner is the owner of vehicle which went on a tour with almost 54 pilgrims, due to some unfortunate events the vehicle met with an accident in Nepal and all the travelers died. A case was filled the Motor Accident claim tribunals declared that since the accident took place outside the territory of India , the insurance company is not liable to pay the compensation for the damages , aggrieved by this decision the owner of the vehicle( present petitioner filed this petition.

The counsel for the petitioner submits that there was no limitation for use of the vehicle in terms of geographical area; as per the policy issued for this vehicle, the schedule of which is also produced on record along with the cover note .The permit of the said bus, authorized it to travel to area of Nepal. It is further submitted that the issue, whether the claim petition can be filed in India; if the accident occurred in Nepal, has already been considered by this Court in FAO No.429 of 1998 as Sona Devi versus Amit Kumar and others. Counsel for the appellant submits that in that case, the Tribunal held that the claim petition is not maintainable in India, if the accident had taken place out of India. Counsel further submits that since there is no restriction in the policy regarding the use of the vehicle outside geographical territory of India, therefore, the Insurance Company is liable to make the payments.

The learned counsel for the state contended respondent-Insurance Company has submitted that since the policy produced on record is limited to cover the vehicle to be used only in the geographical area of India ,therefore, the Insurance Company is not liable for payment of compensation on account of any accident occurring outside India.

The Hon’ble court analyzed the facts of the present case and the arguments of both the parties and opined that “Motor Vehicles Act has made elaborate provisions regarding compulsory insurance of vehicle qua damage to the third party in any accident involving the insured vehicle at any public place. Likewise, the liability of the Insurance Company to indemnify the insured has also been made compulsory by the Act. There is no provision mentioned in the insurance policy regarding the damage occurring outside the territory of India therefore the company is liable to pay the amount. Hence, the appeal is allowed”

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Judgement Reviewed by Pratikshya Pattnaik